Form U-3A-2
File No. 69-221
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
FORM U-3A-2
Statement by Holding Company Claiming Exemption
Under Rule U-3A-2 from the Provisions of the Public
Utility Holding Company Act of 1935
PENNSYLVANIA ENTERPRISES, INC.
(Name of Company)
hereby files with the Securities and Exchange Commission, pursuant to Rule 2,
its statement claiming exemption as a holding company from the provisions of the
Public Utility Holding Company Act of 1935, and submits the following
information:
1. Name and Business of Claimant and Subsidiaries
The name of the Claimant is Pennsylvania Enterprises, Inc., a corporation
organized under the laws of the Commonwealth of Pennsylvania having its
principal office at One PEI Center, Wilkes-Barre, Pennsylvania 18711. The
Claimant is a holding company with two groups of operating subsidiaries,
regulated and nonregulated, as follows:
Regulated Subsidiaries
PG Energy Inc. and Honesdale Gas Company PG Energy Inc. ("PG Energy") and
its wholly-owned subsidiary, Honesdale Gas Company ("Honesdale"), both
Pennsylvania corporations having their principal office at One PEI Center,
Wilkes-Barre, Pennsylvania 18711, distribute natural gas to an area in
northeastern Pennsylvania lying within the counties of Luzerne, Lackawanna,
Lycoming, Wyoming, Northumberland, Wayne, Columbia, Union, Montour, Snyder,
Susquehanna, Pike and Clinton, a territory that includes the cities of
Wilkes-Barre, Scranton and Williamsport. As of December 31, 1998, PG Energy and
Honesdale provided service to approximately 152,200 customers.
PG Energy has one additional subsidiary, Penn Gas Development Co., which
is more fully described below. The aggregate total assets of this subsidiary at
December 31, 1998, were less than 0.5% of PG Energy's total assets.
Nonregulated Subsidiaries
Penn Gas Development Co. ("PGD"), a Pennsylvania corporation having its
principal office at One PEI Center, Wilkes-Barre, Pennsylvania 18711, is a
wholly-owned subsidiary of PG Energy. PGD's primary activity was the
encouragement of the sale of natural gas by providing secondary financing to
developers and owners of properties using natural gas. At present, PGD is not
providing any such financing and is inactive.
<PAGE>
NonRegulated Subsidiaries - continued
PG Energy Services Inc. ("Energy Services"), a Pennsylvania corporation
having its principal office at One PEI Center, Wilkes-Barre, Pennsylvania 18711
(formerly known as Pennsylvania Energy Resources, Inc.), markets a broad array
of energy and energy-related products and services, including the sale of
natural gas and electricity to residential, commercial and industrial users, the
sale of propane on both a retail and a wholesale level, and the inspection,
maintenance and servicing of residential and small commercial gas-fired
equipment.
Pennsylvania Energy Resources, Inc., a Pennsylvania corporation having its
principal office at One PEI Center, Wilkes-Barre, Pennsylvania 18711, was formed
as a new subsidiary on April 8, 1997, and is an inactive name-holding
corporation.
Keystone Pipeline Services, Inc. ("Keystone"), a Delaware corporation
having its principal office at One PEI Center, Wilkes-Barre, Pennsylvania 18711,
is a wholly-owned subsidiary of Energy Services. Keystone provides specialized
pipeline distribution services for utilities, including keyhole vacuum
excavation, camera inspection and bridge pipeline rehabilitation, as well as the
installation of mains and services for the natural gas, water and sewer industry
and the installation of fiber optic cable.
Theta Land Corporation ("Theta") is a Pennsylvania corporation having its
principal office at One PEI Center, Wilkes-Barre, Pennsylvania 18711. Theta
provides land management and development services for the land holdings of the
claimant's subsidiaries.
2. Properties of Claimant and Subsidiaries
The Claimant does not own any properties, and its assets consist primarily
of investments in the common stock of its subsidiaries, as described herein. The
natural gas properties of PG Energy and Honesdale consist primarily of 2,439
miles of distribution lines, eleven city gate and 81 major regulating stations,
and miscellaneous related and additional property, all of which are located in
Pennsylvania. Additionally, PG Energy owns approximately 44,000 acres of land,
Theta owns approximately 1,000 acres of land and Power Corp owns approximately
150 acres of land, all of which are in Pennsylvania. Neither PG Energy nor
Honesdale has natural gas producing fields, pipelines receiving gas at the
borders of Pennsylvania or properties located outside of Pennsylvania.
<PAGE>
3. Natural Gas Distributed in 1998
During the calendar year 1998, PG Energy and Honesdale were the only
operating public utility companies of the Claimant and its subsidiaries
distributing natural gas. The following data for the calendar year 1998 relates
to PG Energy and Honesdale:
(a) Natural or manufactured gas distributed in Pennsylvania at retail - 46.0
billion cubic feet (BCF), with associated sales revenue of $157,843,853.
(b) Natural or manufactured gas distributed at retail outside Pennsylvania
- None.
(c) Natural or manufactured gas sold at wholesale outside Pennsylvania or
at the State line - None.
(d) Natural or manufactured gas purchased outside Pennsylvania or at the
State line - 22.8 BCF, with associated expense of $87,865,000.
4. Interest in Exempt Wholesale Generators or Foreign Utility
Companies
In July, 1998, PEI Power Corporation ("Power Corp"), a Pennsylvania
corporation having its principal office at One PEI Center, Wilkes-Barre,
Pennsylvania 18711, began generating and selling electricity. Power Corp is an
exempt wholesale generator within the meaning of the Public Utility Holding
Company Act of 1935, as amended. The following data for the calendar year 1998
relates to Power Corp:
(a) Electricity is generated from natural gas and methane at the following
cogeneration facility:
Archbald Power Plant
170 Power Boulevard
Archbald, PA 18403
(b) Power Corp, a wholly-owned subsidiary of the Claimant, owns the facility.
(c) The Claimant's investment in the common stock of Power Corp totals
$3,967,000. In addition, claimant is the guarantor with respect to $10.0
million of unsecured revolving bank credit which has been secured by Power
Corp and under the terms of which Power Corp had borrowed $8.0 million as
of December 31, 1998.
(d) The total capitalization of Power Corp, including bank borrowings and
advances from the Claimant, was $17,697,618 at December 31, 1998. Its loss
for the year then ended was $591,657.
(e) A contract between Power Corp and Energy Services dated May 7, 1998,
provides for the sale and delivery by Energy Services, and the purchase
and receipt by Power Corp, of certain volumes of natural gas during the
period July, 1998 through September, 1999, at a fixed price per MMBTU
which varies from month to month.
EXHIBIT A
A consolidating statement of income and surplus of the Claimant and its
subsidiary companies for the calendar year 1998, together with a consolidating
balance sheet of the Claimant and its subsidiary companies as of the close of
such calendar year, is filed as Exhibit A hereto.
<PAGE>
EXHIBIT B
A Financial Data Schedule for the Claimant for the calendar year 1998 is
filed as Exhibit B hereto.
EXHIBIT C
Not applicable
The above-named Claimant has caused this statement to be duly executed on
its behalf by its authorized officer on this 1st day of March, 1999.
PENNSYLVANIA ENTERPRISES, INC.
(Name of Claimant)
By /s/ John F. Kell, Jr.
John F. Kell, Jr.
Vice President, Financial Services
Corporate Seal
Attest:
/s/ Donna M. Abdalla
Donna M. Abdalla
Secretary
Name, title, and address of officer to whom notices and correspondence
concerning this statement should be addressed:
Donna M. Abdalla
Secretary
Pennsylvania Enterprises, Inc.
One PEI Center
Wilkes-Barre, PA 18711
Copy to:
Garett J. Albert, Esquire
Hughes Hubbard & Reed LLP
One Battery Park Plaza
New York, New York 10004
<PAGE>
PENNSYLVANIA ENTERPRISES, INC. AND SUBSIDIARIES
Consolidating Statement of Income and Retained Earnings as of December 31, 1998
(Thousands of Dollars)
<TABLE>
<CAPTION>
PG PEI
ENERGY (1) THETA PGES (2) POWER
------------------------ ------------- ------------
------------- --------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
OPERATING REVENUES:
Energy Products and Services -
Regulated $ 158,951 $ -- $ -- $ --
Nonregulated -- -- 35,994 1,507
Pipeline construction and services -- -- 12,215 --
--------- --------- --------- ---------
Total operating revenues 158,951 -- 48,209 1,507
--------- --------- --------- ---------
OPERATING EXPENSES:
Cost of gas and other energy 86,164 -- 31,655 --
Operation and maintenance 29,721 -- 14,412 2,144
Depreciation 9,627 -- 705 114
Income taxes 4,237 -- 455 (419)
Taxes other than income taxes 11,174 -- 181 48
--------- --------- --------- ---------
Total operating expenses 140,923 -- 47,408 1,887
--------- --------- --------- ---------
OPERATING INCOME (LOSS) 18,028 -- 801 (380)
OTHER INCOME (DEDUCTIONS) , NET 651 (116) 162 --
--------- --------- --------- ---------
INCOME (LOSS) BEFORE INTEREST CHARGES 18,679 (116) 963 (380)
--------- --------- --------- ---------
INTEREST CHARGES:
Interest on long-term debt 10,204 -- 204 41
Other interest 398 -- 179 171
Allowance for borrowed funds used during construction (94) -- -- --
--------- --------- --------- ---------
Total interest charges 10,508 -- 383 212
--------- --------- --------- ---------
INCOME (LOSS) BEFORE SUBSIDIARY'S PREFERRED
STOCK DIVIDENDS 8,171 (116) 580 (592)
SUBSIDIARY'S PREFERRED STOCK DIVIDENDS 1,191 -- -- --
--------- --------- --------- ---------
NET INCOME (LOSS) 6,980 (116) 580 (592)
RETAINED EARNINGS (DEFICIT):
Beginning of year 41,606 (10) 2,232 --
Premiums on redemption of preferred stock (1,022) -- -- --
Dividends on common stock (416) -- -- --
--------- --------- --------- ---------
End of year $ 47,148 $ (126) $ 2,812 $ (592)
========= ========= ========= =========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATING
PEI COMBINED ENTRIES CONSOLIDATED
----------- ---------- -------------- ------------
<S> <C> <C> <C> <C> <C> <C>
OPERATING REVENUES: ----------- ---------- -------------- ------------
Energy Products and Services -
Regulated $ -- $ 158,951 $ (227) $ 158,724
Nonregulated -- 37,501 (1,108) 36,393
Pipeline construction and services -- 12,215 -- 12,215
--------- --------- --------- ---------
Total operating revenues -- 208,667 (1,335) 207,332
--------- --------- --------- ---------
OPERATING EXPENSES:
Cost of gas and other energy -- 117,819 (130) 117,689
Operation and maintenance 563 46,840 (1,217) 45,623
Depreciation -- 10,446 -- 10,446
Income taxes (331) 3,942 5 3,947
Taxes other than income taxes 25 11,428 -- 11,428
--------- --------- --------- ---------
Total operating expenses 257 190,475 (1,342) 189,133
--------- --------- --------- ---------
OPERATING INCOME (LOSS) (257) 18,192 7 18,199
OTHER INCOME (DEDUCTIONS) , NET 9,198 9,895 (8,234) 1,661
--------- --------- --------- ---------
INCOME (LOSS) BEFORE INTEREST CHARGES 8,941 28,087 (8,227) 19,860
--------- --------- --------- ---------
INTEREST CHARGES:
Interest on long-term debt 1,283 11,732 (1,051) 10,681
Other interest 148 896 (324) 572
Allowance for borrowed funds used during construction -- (94) -- (94)
--------- --------- --------- ---------
Total interest charges 1,431 12,534 (1,375) 11,159
--------- --------- --------- ---------
INCOME (LOSS) BEFORE SUBSIDIARY'S PREFERRED
STOCK DIVIDENDS 7,510 15,553 (6,852) 8,701
SUBSIDIARY'S PREFERRED STOCK DIVIDENDS -- 1,191 -- 1,191
--------- --------- --------- ---------
NET INCOME (LOSS) 7,510 14,362 (6,852) 7,510
RETAINED EARNINGS (DEFICIT):
Beginning of year 50,295 94,123 (43,828) 50,295
Premiums on redemption of preferred stock (1,022) (2,044) 1,022 (1,022)
Dividends on common stock (12,020) (12,436) 416 (12,020)
--------- --------- --------- ---------
End of year $ 44,763 $ 94,005 $ (49,242) $ 44,763
========= ========= ========= =========
</TABLE>
NOTES:
Individual companies are identified in column headings and elsewhere as
follows: PG ENERGY - PG Energy Inc. THETA - Theta Land Corporation PGES -
PG Energy Services, Inc. PEI POWER - PEI Power Corporation PEI -
Pennsylvania Enterprises, Inc.
(1) Includes the consolidated accounts of Honesdale Gas Company, a wholly-owned
subsidiary of PG Energy Inc.
(2) Includes the consolidated accounts of Keystone Pipeline Services, Inc., a
wholly-owned subsidiary of PG Energy Services, Inc.
<PAGE>
PENNSYLVANIA ENTERPRISES, INC. AND SUBSIDIARIES
Summary of Consolidating Statement of Income
and Retained Earnings Entries as of December 31, 1998
<TABLE>
<CAPTION>
ENTRY TO ENTRY TO ENTRY TO ENTRY TO
ELIMINATE ELIMINATE ELIMINATE ELIMINATE
INTERCOMPANY INTERCOMPANY INTERCOMPANY SUBSIDIARY
INTEREST SALES RENT EARNINGS TOTAL
<S> <C> <C> <C> <C> <C> <C>
OPERATING REVENUES:
Energy Products and Services -
Regulated $ -- $ (191) $ (36) $ -- $ (227)
Nonregulated -- (1,108) -- -- (1,108)
Pipeline construction and services -- -- -- -- --
-------- -------- -------- -------- --------
Total operating revenues -- (1,299) (36) -- (1,335)
-------- -------- -------- -------- --------
OPERATING EXPENSES:
Cost of gas and other energy -- (130) -- -- (130)
Operation and maintenance -- (1,169) (48) -- (1,217)
Depreciation -- -- -- -- --
Income taxes -- -- 5 -- 5
Taxes other than income taxes -- -- -- -- --
-------- -------- -------- -------- --------
Total operating expenses -- (1,299) (43) -- (1,342)
-------- -------- -------- -------- --------
OPERATING INCOME (LOSS) -- -- 7 -- 7
OTHER INCOME (DEDUCTIONS) , NET (1,375) -- (7) (6,852) (8,234)
-------- -------- -------- -------- --------
INCOME (LOSS) BEFORE INTEREST CHARGES (1,375) -- -- (6,852) (8,227)
-------- -------- -------- -------- --------
INTEREST CHARGES:
Interest on long-term debt (1,051) -- -- -- (1,051)
Other interest (324) -- -- -- (324)
Allowance for borrowed funds used during construction -- -- -- -- --
-------- -------- -------- -------- --------
Total interest charges (1,375) -- -- -- (1,375)
-------- -------- -------- -------- --------
INCOME (LOSS) BEFORE SUBSIDIARY'S PREFERRED
STOCK DIVIDENDS -- -- -- (6,852) (6,852)
SUBSIDIARY'S PREFERRED STOCK DIVIDENDS -- -- -- -- --
-------- -------- -------- -------- --------
NET INCOME (LOSS) -- -- -- (6,852) (6,852)
RETAINED EARNINGS (DEFICIT):
Beginning of year -- -- -- (43,828) (43,828)
Premiums on redemption of preferred stock -- -- -- 1,022 1,022
Dividends on common stock -- -- -- 416 416
-------- -------- -------- -------- --------
End of year $ -- $ -- $ -- $(49,242) $(49,242)
======== ======== ======== ======== ========
</TABLE>
<PAGE>
PENNSYLVANIA ENTERPRISES, INC. AND SUBSIDIARIES
Consolidating Balance Sheet as of December 31, 1998
(Thousands of Dollars)
<TABLE>
<CAPTION>
PG PEI
ENERGY (1) THETA PGES (2) POWER
---------- --------- ----------- -----------
---------- --------- ----------- -----------
ASSETS
<S> <C> <C> <C> <C> <C> <C>
UTILITY PLANT:
At original cost $ 376,685 $ -- $ -- $ --
Accumulated depreciation (95,735) -- -- --
--------- --------- --------- ---------
280,950 -- -- --
--------- --------- --------- ---------
OTHER PROPERTY AND INVESTMENTS:
Nonutility property and equipment 4,419 299 11,664 15,506
Accumulated depreciation (469) (58) (4,823) (110)
Other 31 1,924 264 --
--------- --------- --------- ---------
3,981 2,165 7,105 15,396
--------- --------- --------- ---------
CURRENT ASSETS:
Cash and cash equivalents 768 -- 39 --
Restricted cash - common stock subscribed -- -- -- --
Accounts receivable -
Customers 18,475 -- 7,538 246
Affiliates -- 175 63 --
Others 269 1 -- --
Reserve for uncollectible accounts (1,080) -- (385) --
Unbilled revenues 11,472 -- 775 --
Materials and supplies, at average cost 2,758 -- 295 --
Gas held by suppliers, at average cost 22,320 -- 356 --
Deferred cost of gas and supplier refunds, net 6,058 -- -- --
Prepaid income taxes 1,560 (11) 293 7
Prepaid expenses and other 2,582 4 45 82
--------- --------- --------- ---------
65,182 169 9,019 335
--------- --------- --------- ---------
DEFERRED CHARGES:
Regulatory assets -
Deferred taxes collectible 31,097 -- -- --
Other 8,598 -- -- --
Unamortized debt expense 964 -- -- --
Other 25 -- 136 --
--------- --------- --------- ---------
40,684 -- 136 --
--------- --------- --------- ---------
TOTAL ASSETS $ 390,797 $ 2,334 $ 16,260 $ 15,731
========= ========= ========= =========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATING
PEI COMBINED ENTRIES CONSOLIDATED
ASSETS --------- --------- ------------- ------------
--------- --------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
UTILITY PLANT:
At original cost $ -- $ 376,685 $ -- $ 376,685
Accumulated depreciation -- (95,735) -- (95,735)
--------- --------- --------- ---------
-- 280,950 -- 280,950
--------- --------- --------- ---------
OTHER PROPERTY AND INVESTMENTS:
Nonutility property and equipment -- 31,888 (72) 31,816
Accumulated depreciation -- (5,460) -- (5,460)
Other 152,044 154,263 (151,967) 2,296
--------- --------- --------- ---------
152,044 180,691 (152,039) 28,652
--------- --------- --------- ---------
CURRENT ASSETS:
Cash and cash equivalents -- 807 -- 807
Restricted cash - common stock subscribed 452 452 -- 452
Accounts receivable -
Customers -- 26,259 -- 26,259
Affiliates -- 238 (238) --
Others 541 811 -- 811
Reserve for uncollectible accounts -- (1,465) -- (1,465)
Unbilled revenues -- 12,247 -- 12,247
Materials and supplies, at average cost -- 3,053 -- 3,053
Gas held by suppliers, at average cost -- 22,676 -- 22,676
Deferred cost of gas and supplier refunds, net -- 6,058 -- 6,058
Prepaid income taxes 241 2,090 -- 2,090
Prepaid expenses and other -- 2,713 -- 2,713
--------- --------- --------- ---------
1,234 75,939 (238) 75,701
--------- --------- --------- ---------
DEFERRED CHARGES:
Regulatory assets -
Deferred taxes collectible -- 31,097 -- 31,097
Other -- 8,598 -- 8,598
Unamortized debt expense 50 1,014 -- 1,014
Other 29 190 -- 190
--------- --------- --------- ---------
79 40,899 -- 40,899
--------- --------- --------- ---------
TOTAL ASSETS $ 153,357 $ 578,479 $(152,277) $ 426,202
========= ========= ========= =========
</TABLE>
(1) Includes the consolidated accounts of Honesdale Gas Company, a wholly-owned
subsidiary of PG Energy Inc. (2) Includes the consolidated accounts of Keystone
Pipeline Services, Inc., a wholly-owned subsidiary of PG Energy Services Inc.
<PAGE>
PENNSYLVANIA ENTERPRISES, INC. AND SUBSIDIARIES
Summary of Consolidating Balance Sheet Entries as of December 31, 1998
<TABLE>
<CAPTION>
(Thousands of Dollars)
ENTRY TO ENTRY TO ENTRY TO ELIMINATE
ENTRY TO ELIMINATE ELIMINATE INTERCOMPANY
ELIMINATE INTERCOMPANY GAIN ON LONG-TERM DEBT
INVESTMENT IN ACCOUNTS PAYABLE INTERCOMPANY AND ACCRUED
SUBSIDIARIES AND RECEIVABLE SALE OF ASSETS INTEREST TOTAL
------------- ---------------- -------------- -------------- --------
ASSETS
<S> <C> <C> <C> <C> <C> <C>
UTILITY PLANT:
At original cost $ -- $ -- $ -- $ -- $ --
Accumulated depreciation -- -- -- -- --
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
OTHER PROPERTY AND INVESTMENTS:
Nonutility property and equipment -- (72) -- (72)
Accumulated depreciation -- -- -- --
Other (135,849) (9,154) -- (6,964) (151,967)
--------- --------- --------- --------- ---------
(135,849) (9,154) (72) (6,964) (152,039)
--------- --------- --------- --------- ---------
CURRENT ASSETS:
Cash and cash equivalents -- -- -- -- --
Restricted cash - common stock subscribed -- -- -- -- --
Accounts receivable -
Customers -- -- -- -- --
Affiliates -- (238) -- -- (238)
Others -- -- -- -- --
Reserve for uncollectible accounts -- -- -- -- --
Unbilled revenues -- -- -- -- --
Materials and supplies, at average cost -- -- -- -- --
Gas held by suppliers, at average cost -- -- -- -- --
Deferred cost of gas and supplier refunds, net -- -- -- -- --
Prepaid income taxes -- -- -- -- --
Prepaid expenses and other -- -- -- -- --
--------- --------- --------- --------- ---------
-- (238) -- -- (238)
--------- --------- --------- --------- ---------
DEFERRED CHARGES:
Regulatory assets -
Deferred taxes collectible -- -- -- -- --
Other -- -- -- -- --
Unamortized debt expense -- -- -- -- --
Other -- -- -- -- --
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
TOTAL ASSETS $(135,849) $ (9,392) $ (72) $ (6,964) $(152,277)
========= ========= ========= ========= ========
</TABLE>
<PAGE>
PENNSYLVANIA ENTERPRISES, INC. AND SUBSIDIARIES
Consolidating Balance Sheet as of December 31, 1998
(Thousands of Dollars)
<TABLE>
<CAPTION>
PG PEI
ENERGY (1) THETA PGES (2) POWER
----------- ---------- ---------- --------
----------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
CAPITALIZATION AND LIABILITIES
CAPITALIZATION:
Common shareholders' investment $ 126,638 $ 1,539 $ 3,812 $ 3,375
Preferred stock of PG Energy -
Not subject to mandatory redemption, net 4,831 -- -- --
Subject to mandatory redemption 240 -- -- --
Long-term debt 95,000 -- -- 3,000
226,709 1,539 3,812 6,375
CURRENT LIABILITIES:
Current portion of long-term debt 68,248 -- -- --
Notes payable 1,200 -- -- 5,000
Accounts payable -- --
Suppliers 15,659 20 5,624 1,065
Affiliates, net 677 714 4,840 3,161
Accrued general business and realty taxes 1,464 11 271 --
Accrued interest 1,807 -- -- --
Other 1,149 44 606 125
90,204 789 11,341 9,351
DEFERRED CREDITS:
Deferred income taxes 60,211 6 899 --
Unamortized investment tax credits 4,424 -- -- --
Operating reserves 2,836 -- -- --
Other 6,413 -- 208 5
73,884 6 1,107 5
TOTAL CAPITALIZATION AND LIABILITIES $ 390,797 $ 2,334 $ 16,260 $ 15,731
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATING
PEI COMBINED ENTRIES CONSOLIDATED
------- ------------ ------------- ------------
------- ------------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
CAPITALIZATION AND LIABILITIES
CAPITALIZATION:
Common shareholders' investment $ 132,811 $ 268,175 $(135,849) $ 132,326
Preferred stock of PG Energy -
Not subject to mandatory redemption, net -- 4,831 -- 4,831
Subject to mandatory redemption -- 240 -- 240
Long-term debt -- 98,000 -- 98,000
132,811 371,246 (135,849) 235,397
CURRENT LIABILITIES:
Current portion of long-term debt 20,000 88,248 (6,900) 81,348
Notes payable -- 6,200 -- 6,200
Accounts payable
Suppliers 2 22,370 -- 22,370
Affiliates, net -- 9,392 (9,392) --
Accrued general business and realty taxes 18 1,764 -- 1,764
Accrued interest 68 1,875 (64) 1,811
Other -- 1,924 -- 1,924
20,088 131,773 (16,356) 115,417
DEFERRED CREDITS:
Deferred income taxes (193) 60,923 -- 60,923
Unamortized investment tax credits -- 4,424 -- 4,424
Operating reserves -- 2,836 -- 2,836
Other 651 7,277 (72) 7,205
458 75,460 (72) 75,388
TOTAL CAPITALIZATION AND LIABILITIES $ 153,357 $ 578,479 $(152,277) $ 426,202
(1) Includes the consolidated accounts of Honesdale Gas Company, a wholly-owned subsidiary of PG Energy Inc.
(2) Includes the consolidated accounts of Keystone Pipeline Services, Inc., a wholly-owned subsidiary of PG Energy Services Inc.
</TABLE>
<PAGE>
PENNSYLVANIA ENTERPRISES, INC. AND SUBSIDIARIES
Summary of Consolidating Balance Sheet Entries as of December 31, 1998
(Thousands of Dollars)
<TABLE>
<CAPTION>
ENTRY TO ENTRY TO ENTRY TO ELIMINATE
ENTRY TO ELIMINATE ELIMINATE INTERCOMPANY
ELIMINATE INTERCOMPANY GAIN ON LONG-TERM DEBT
INVESTMENT IN ACCOUNTS PAYABLE INTERCOMPANY AND ACCRUED
SUBSIDIARIES AND RECEIVABLE SALE OF ASSETS INTEREST TOTAL
<S> <C> <C> <C> <C> <C> <C>
CAPITALIZATION AND LIABILITIES
CAPITALIZATION:
Common shareholders' investment $(135,849) $ -- $ -- $ -- $(135,849)
Preferred stock of PG Energy -
Not subject to mandatory redemption, net -- -- -- -- --
Subject to mandatory redemption -- -- -- -- --
Long-term debt -- -- -- -- --
(135,849) -- -- -- (135,849)
CURRENT LIABILITIES:
Current portion of long-term debt -- -- -- (6,900) (6,900)
Notes payable -- -- -- -- --
Accounts payable
Suppliers -- -- -- -- --
Affiliates, net -- (9,392) -- -- (9,392)
Accrued general business and realty taxes -- -- -- -- --
Accrued interest -- -- -- (64) (64)
Other -- -- -- -- --
-- (9,392) -- (6,964) (16,356)
DEFERRED CREDITS:
Deferred income taxes -- -- -- -- --
Unamortized investment tax credits -- -- -- -- --
Operating reserves -- -- -- -- --
Other -- -- (72) -- (72)
-- -- (72) -- (72)
TOTAL CAPITALIZATION AND LIABILITIES $(135,849) $ (9,392) $ (72) $ (6,964) $(152,277)
</TABLE>
<TABLE> <S> <C>
<ARTICLE> OPUR3
<CIK> 0000077231
<NAME> PENNSYLVANIA ENTERPRISES INC.
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> DEC-31-1998
<BOOK-VALUE> PER-BOOK
<TOTAL-ASSETS> 426,202,000
<TOTAL-OPERATING-REVENUES> 207,332,000
<NET-INCOME> 7,510,000
</TABLE>
