PG ENERGY INC.
TABLE OF CONTENTS
PAGE
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Statements of Income for the three
months ended March 31, 1998 and 1997. . . . . . . . . . . 2
Consolidated Balance Sheets as of March 31, 1998
and December 31, 1997 . . . . . . . . . . . . . . . . . . 3
Consolidated Statements of Cash Flows for
the three months ended March 31, 1998 and 1997. . . . . . 5
Notes to Consolidated Financial Statements. . . . . . . . . 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations. . . . . . . . . . . . 9
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . 14
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PART I. FINANCIAL INFORMATION
PG ENERGY INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1998 1997
(Thousands of Dollars)
<S> <C> <C>
OPERATING REVENUES $ 65,015 $ 79,939
Cost of gas 37,825 49,139
OPERATING MARGIN 27,190 30,800
OTHER OPERATING EXPENSES:
Operation 6,763 6,462
Maintenance 1,127 1,126
Depreciation 2,439 2,211
Income taxes 4,196 5,831
Taxes other than income taxes 4,014 4,306
Total other operating expenses 18,539 19,936
OPERATING INCOME 8,651 10,864
OTHER INCOME (DEDUCTIONS), NET (127) 239
INCOME BEFORE INTEREST CHARGES 8,524 11,103
INTEREST CHARGES:
Interest on long-term debt 2,625 2,191
Other interest 124 204
Allowance for borrowed funds used
during construction (23) (66)
Total interest charges 2,726 2,329
NET INCOME 5,798 8,774
DIVIDENDS ON PREFERRED STOCK 321 353
EARNINGS APPLICABLE TO COMMON STOCK $ 5,477 $ 8,421
Earnings per share of common stock $ 1.65 $ 2.54
Weighted average number of shares outstanding 3,317,978 3,314,155
Cash dividends per share $ - $ -
The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>
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PG ENERGY INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
(Thousands of Dollars)
ASSETS
<S> <C> <C>
UTILITY PLANT:
At original cost $ 355,243 $ 351,106
Accumulated depreciation (90,607) (88,129)
264,636 262,977
OTHER PROPERTY AND INVESTMENTS 4,106 4,459
CURRENT ASSETS:
Cash and cash equivalents 1,336 304
Accounts receivable -
Customers 26,409 23,551
Parent 991 -
Affiliates, net 424 63
Others 604 280
Reserve for uncollectible accounts (1,436) (1,168)
Accrued utility revenues 6,801 11,680
Materials and supplies, at average cost 2,911 2,716
Gas held by suppliers, at average cost 7,985 21,933
Deferred cost of gas and supplier refunds, net 1,593 6,316
Prepaid expenses and other 5,506 1,633
53,124 67,308
DEFERRED CHARGES:
Regulatory assets -
Deferred taxes collectible 30,761 30,592
Other 6,316 4,415
Unamortized debt expense 1,116 1,164
Other 175 225
38,368 36,396
TOTAL ASSETS $ 360,234 $ 371,140
The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>
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PG ENERGY INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
(Thousands of Dollars)
CAPITALIZATION AND LIABILITIES
<S> <C> <C>
CAPITALIZATION:
Common shareholder's investment $ 113,215 $ 107,425
Preferred stock of PG Energy -
Not subject to mandatory redemption, net 15,864 15,864
Subject to mandatory redemption 640 640
Long-term debt
Parent 21,000 23,500
Other 105,000 106,000
255,719 253,429
CURRENT LIABILITIES:
Current portion of long-term debt 16,337 24,776
Preferred stock subject to repurchase or
mandatory redemption 80 80
Notes payable 245 2,170
Accounts payable -
Suppliers 9,415 14,515
Parent - 199
Accrued general business and realty taxes 755 2,797
Accrued income taxes 7,685 4,946
Accrued interest 1,266 1,844
Accrued natural gas transition costs 842 1,087
Other 1,092 1,188
37,717 53,602
DEFERRED CREDITS:
Deferred income taxes 52,971 52,207
Unamortized investment tax credits 4,553 4,596
Operating reserves 2,779 2,825
Other 6,495 4,481
66,798 64,109
COMMITMENTS AND CONTINGENCIES (Note 4)
TOTAL CAPITALIZATION AND LIABILITIES $ 360,234 $ 371,140
The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>
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PG ENERGY INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1998 1997
(Thousands of Dollars)
<S> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES:
Net income $ 5,798 $ 8,774
Effects of noncash charges to income -
Depreciation 2,459 2,225
Deferred income taxes, net 595 351
Provisions for self insurance 150 140
Other, net 554 350
Changes in working capital, exclusive of cash
and current portion of long-term debt -
Receivables and accrued utility revenues 618 (9,903)
Gas held by suppliers 13,948 17,391
Accounts payable (4,938) (9,181)
Deferred cost of gas and supplier refunds, net 4,478 8,751
Other current assets and liabilities, net (4,042) 1,295
Other operating items, net (237) (585)
Net cash provided by operating activities 19,383 19,608
CASH FLOW FROM INVESTING ACTIVITIES:
Additions to utility plant (4,477) (6,529)
Acquisition of regulated business - (2,009)
Other, net 33 423
Net cash used for investing activities (4,444) (8,115)
CASH FLOW FROM FINANCING ACTIVITIES:
Issuance of common stock 640 -
Repurchase of preferred stock - (82)
Dividends on common and preferred stock (321) (356)
Repayment of long-term debt (2,500) (2,941)
Net decrease in bank borrowings (11,725) (7,874)
Other, net (1) 38
Net cash used for financing activities (13,907) (11,215)
NET INCREASE IN CASH AND CASH EQUIVALENTS 1,032 278
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 304 690
CASH AND CASH EQUIVALENTS AT END OF YEAR $ 1,336 $ 968
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest (net of amount capitalized) $ 3,187 $ 1,716
Income taxes $ 388 $ 610
The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>
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PG ENERGY INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of the Business. PG Energy Inc. ("PG Energy"), a wholly-owned
subsidiary of Pennsylvania Enterprises, Inc. ("PEI"), and its wholly-owned
subsidiary Honesdale Gas Company ("Honesdale") acquired on February 14, 1997,
are regulated public utilities subject to the jurisdiction of the Pennsylvania
Public Utility Commission (the "PPUC") for rate and accounting purposes.
Together PG Energy and Honesdale distribute natural gas to a thirteen-county
area in northeastern Pennsylvania, a territory that includes the cities of
Scranton, Wilkes-Barre and Williamsport.
Principles of Consolidation. The consolidated financial statements include
the accounts of PG Energy and also its subsidiary, Honesdale, beginning February
14, 1997, the date Honesdale was acquired by PG Energy. All material
intercompany accounts have been eliminated in consolidation.
Both PG Energy and Honesdale (collectively referred to as the "Company") are
subject to the jurisdiction of the PPUC for rate and accounting purposes. The
financial statements of the Company that are incorporated in these consolidated
financial statements have been prepared in accordance with generally accepted
accounting principles, including the provisions of Financial Accounting
Standards Board ("FASB") Statement 71, "Accounting for the Effects of Certain
Types of Regulation," which give recognition to the rate and accounting
practices of regulatory agencies such as the PPUC.
Interim Financial Statements. The interim consolidated financial statements
included herein have been prepared without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain information and
footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been condensed or
omitted pursuant to such rules and regulations, although the Company believes
that the disclosures are adequate to make the information presented not
misleading.
The results for the interim periods are not indicative of the results to be
expected for the year, primarily due to the effect of seasonal variations in
weather on the sale of natural gas. However, in the opinion of management, all
adjustments, consisting of only normal recurring accruals, necessary to present
fairly the results for the interim periods have been reflected in the
consolidated financial statements. It is suggested that these consolidated
financial statements be read in conjunction with the consolidated financial
statements and the notes thereto included in the Company's latest annual report
on Form 10-K.
Use of Accounting Estimates. The preparation of financial statements in
conformity with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. These estimates involve judgments with respect to,
among other things, various future economic factors and regulatory matters which
are difficult to predict and are beyond the control of the Company. Therefore,
actual amounts could differ from these estimates.
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(2) RATE MATTERS
Rate Increase. By Order adopted December 19, 1996, the PPUC approved an
overall 5.3% increase in PG Energy's base gas rates, designed to produce $7.5
million of additional annual revenue, effective January 15, 1997. Under the
terms of the Order, the billing for the impact of the rate increase relative to
PG Energy's residential heating customers, which totaled $1.7 million through
March 31, 1997, was deferred, without carrying charges, until July, 1997.
Gas Cost Adjustments. The provisions of the Pennsylvania Public Utility
Code require that the tariffs of LDCs be adjusted on an annual basis, and, in
the case of larger LDCs such as PG Energy, on an interim basis when
circumstances dictate, to reflect changes in their purchased gas costs. The
procedure includes a process for the reconciliation of actual gas costs incurred
and actual revenues received and also provides for the refund of any
overcollections, plus interest thereon, or the recoupment of any
undercollections of gas costs.
In accordance with these procedures PG Energy has been permitted to make the
following changes since January 1, 1997, to the gas costs contained in its
tariff rates:
[CAPTION]
Change in Calculated
Effective Rate per MCF Increase (Decrease)
Date From To in Annual Revenue
[S] [C] [C] [C]
March 1, 1998 $4.05 $3.95 $ (2,100,000)
December 1, 1997 4.49 4.05 (12,100,000)
March 1, 1997 4.18 4.49 8,300,000
The changes in gas rates on account of purchased gas costs have no effect on
earnings since the change in revenue is offset by a corresponding change in the
cost of gas.
(3) ACCOUNTING CHANGES
Reporting Comprehensive Income. Effective January 1, 1998, the Company
adopted the provisions of FASB Statement 130 "Reporting Comprehensive Income."
However, because there were no items comprising other comprehensive income, the
adoption of FASB 130 had no effect on the Company's financial statements for the
first quarter of 1998.
(4) COMMITMENTS AND CONTINGENCIES
Environmental Matters. PG Energy, like many gas distribution companies,
once utilized manufactured gas plants in connection with providing gas service
to its customers. None of these plants has been in operation since 1972, and
several of the plant sites are no longer owned by PG Energy. Pursuant to the
Comprehensive Environmental Response, Compensation and Liability Act of 1980
("CERCLA"), PG Energy filed notices with the United States Environmental
Protection Agency (the "EPA") with respect to the former plant sites. None of
the sites is or was formerly on the proposed or final National Priorities List.
The EPA has conducted site inspections and made preliminary assessments of each
site and has concluded that no further remedial action is planned.
Notwithstanding this determination by the EPA, some of the sites may ultimately
require remediation. One site that was owned by PG Energy from 1951 to 1967 and
at which it operated a manufactured gas plant from 1951 to 1954 was subject to
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remediation in 1996. The remediation at this site, which was performed by the
party from whom PG Energy acquired the site in 1951, required the removal of
materials from two former gas holders. The cost of such remediation is
purported to have been approximately $525,000, of which the party performing the
remediation is seeking to recover a material portion from PG Energy. PG Energy,
however, believes that any liability it may have with respect to such
remediation would be considerably less than the amount that the other party is
seeking. While the final resolution of the matter is uncertain, PG Energy does
not believe that it will have any material impact on its financial position or
results of operations. Although the conclusion by the EPA that it anticipates
no further remedial action with respect to the sites at which PG Energy operated
manufactured gas plants does not constitute a legal prohibition against further
regulatory action under CERCLA or other applicable federal or state law, the
Company does not believe that additional costs, if any, related to these
manufactured gas plant sites would be material to its financial position or
results of operations since environmental remediation costs generally are
recoverable through rates over a period of time.
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PG ENERGY INC. AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF CONTINUING OPERATIONS
The following table expresses certain items in the consolidated statements
of income of PG Energy Inc. ("PG Energy") as percentages of operating revenues
for each of the three-month periods ended March 31, 1998 and 1997:
[CAPTION]
Three Months Ended
March 31,
1998 1997
[S] [C] [C]
OPERATING REVENUES.................................... 100.0% 100.0%
Cost of gas......................................... 58.2 61.5
OPERATING MARGIN...................................... 41.8 38.5
OTHER OPERATING EXPENSES:
Operation........................................... 10.4 8.1
Maintenance......................................... 1.7 1.4
Depreciation........................................ 3.7 2.7
Income taxes........................................ 6.5 7.3
Taxes other than income taxes....................... 6.2 5.4
Total operating expenses.......................... 28.5 24.9
OPERATING INCOME...................................... 13.3 13.6
OTHER INCOME (DEDUCTIONS), NET........................ (0.2) 0.3
INTEREST CHARGES...................................... (4.2) (2.9)
NET INCOME ........................................... 8.9 11.0
DIVIDENDS ON PREFERRED STOCK.......................... (0.5) (0.5)
EARNINGS APPLICABLE TO COMMON STOCK................... 8.4% 10.5%
o Three Months Ended March 31, 1998, Compared With Three Months Ended
March 31, 1997
Operating Revenues. Operating revenues decreased $14.9 million (18.7%) from
$79.9 million for the quarter ended March 31, 1997, to $65.0 million for the
quarter ended March 31, 1998, primarily as a result of a 1.7 billion cubic feet
(16.2%) decrease in sales by PG Energy to its residential and commercial heating
customers. This reduction in sales was attributable to the unseasonably warm
weather during the quarter and lower levels in PG Energy's gas cost rate (see "-
Rate Matters"). There was a 457 (15.3%) decrease in heating degree days from
2,990 (93.7% of normal) during the first quarter of 1997 to 2,533 (79.4% of
normal) during the first quarter of 1998.
Cost of Gas. The cost of gas decreased $11.3 million (23.0%) from $49.1
million for the first quarter of 1997 to $37.8 million for the first quarter of
1998, primarily because of the aforementioned decrease in sales to PG Energy's
residential and commercial heating customers and lower levels in PG Energy's gas
cost rate (see "-Rate Matters").
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Operating Margin. The operating margin decreased $3.6 million (11.7%) from
$30.8 million in the first quarter of 1997 to $27.2 million in the first quarter
of 1998, primarily because of the aforementioned reduction in sales to
residential and commercial heating customers. As a percentage of operating
revenues, the margin increased from 38.5% in the first quarter of 1997 to 41.8%
in the first quarter of 1998 as a result of the proportionately lower cost of
gas during the period.
Other Operating Expenses. Other operating expenses decreased $1.4 million
(7.0%) from $19.9 million for the quarter ended March 31, 1997, to $18.5 million
for the quarter ended March 31, 1998. This decrease was primarily attributable
to a $1.6 million (28.0%) decrease in income taxes from $5.8 million for the
first quarter of 1997 to $4.2 million for the first quarter of 1998 due to a
decrease in income before income taxes (for this purpose, operating income net
of interest charges), and a $292,000 (6.8%) decrease in taxes other than income
taxes resulting from a lower level of gross receipts tax related to PG Energy's
decrease in sales. The effects of these decreases were partially offset by a
higher level of operation expense and a $228,000 (10.3%) increase in
depreciation expense as a result of additions to PG Energy's utility plant. As
a percentage of operating revenues, other operating expenses increased from
24.9% during the quarter ended March 31, 1997, to 28.5% during the quarter ended
March 31, 1998, primarily as a result of the significant decrease in operating
revenues during the period.
Operating Income. As a result of the above, operating income decreased by
$2.2 million (20.4%) from $10.9 million for the first quarter of 1997 to $8.7
million for the first quarter of 1998, and also decreased as a percentage of
total operating revenues for such periods from 13.6% in the first quarter of
1997 to 13.3% in the first quarter of 1998.
Other Income (Deductions), Net. Other income (deductions), net decreased
$366,000 from income of $239,000 for the three-month period ended March 31,
1997, to a deduction of $127,000 for the three-month period ended March 31,
1998, largely because the first quarter of 1997 included a gain on the
condemnation of certain property for highway construction.
Interest Charges. Interest charges increased by $397,000 (17.0%) from $2.3
million for the first quarter of 1997 to $2.7 million for the first quarter of
1998. This increase was largely attributable to bank borrowings by PG Energy to
finance construction expenditures and for other working capital needs.
Net Income. The decrease in net income of $3.0 million (33.9%) from $8.8
million for the first quarter of 1997 to $5.8 million for the first quarter of
1998, was largely the result of the lower levels of operating and other income
and increased interest charges, as discussed above.
Dividends on Preferred Stock. Dividends on preferred stock decreased
$32,000 (9.1%) from $353,000 for the first quarter of 1997 to $321,000 for the
first quarter of 1998, primarily as a result of the repurchase of 30,560 shares
of PG Energy's 4.10% cumulative preferred stock in 1997.
Earnings Applicable to Common Stock. The decrease in earnings applicable to
common stock of $2.9 million (35.0%) from $8.4 million for the three-month
period ended March 31, 1997, to $5.5 million for the three-month period ended
March 31, 1998, as well as the decrease in earnings per share of common stock of
$.89 (35.0%) from $2.54 per share for the three-month period ended March 31,
1997, to $1.65 per share for the three-month period ended March 31, 1998, were
the result of the reduced net income as discussed above.
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RATE MATTERS
Rate Increase. By Order adopted December 19, 1996, the Pennsylvania Public
Utility Commission (the "PPUC") approved an overall 5.3% increase in PG Energy's
base gas rates, designed to produce $7.5 million of additional annual revenue,
effective January 15, 1997. Under the terms of the Order, the billing for the
impact of the rate increase relative to PG Energy's residential heating
customers, which totaled $1.7 million through March 31, 1997, was deferred,
without carrying charges, until July, 1997.
Proposed Rate Increase. On March 16, 1998, PG Energy filed an application
with the PPUC seeking an increase in its base gas rates, designed to produce
$15.0 million in additional annual revenue, to be effective May 15, 1998. On
April 23, 1998, the PPUC suspended this rate increase for seven months (until
December 15, 1998) in order to investigate the reasonableness of the proposed
rates. It is not presently possible to determine what action the PPUC will
ultimately take in this matter.
Gas Cost Adjustments. The provisions of the Pennsylvania Public Utility
Code require that the tariffs of local gas distribution companies ("LDCs") be
adjusted on an annual basis, and, in the case of larger LDCs such as PG Energy,
on an interim basis when circumstances dictate, to reflect changes in their
purchased gas costs. The procedure includes a process for the reconciliation of
actual gas costs incurred and actual revenues received and also provides for the
refund of any overcollections, plus interest thereon, or the recoupment of any
undercollections of gas costs.
In accordance with these procedures, PG Energy has been permitted to make
the following changes since January 1, 1997, to the gas costs contained in its
gas tariff rates:
[CAPTION]
Change in Calculated
Effective Rate per MCF Increase (Decrease)
Date From To in Annual Revenue
[S] [C] [C] [C]
March 1, 1998 $4.05 $3.95 $ (2,100,000)
December 1, 1997 4.49 4.05 (12,100,000)
March 1, 1997 4.18 4.49 8,300,000
The changes in gas rates on account of purchased gas costs have no effect on
earnings since the change in revenue is offset by a corresponding change in the
cost of gas.
LIQUIDITY AND CAPITAL RESOURCES
Liquidity
The primary capital needs of the Company continue to be the funding of its
construction program and the seasonal funding of its gas purchases and increases
in its customer accounts receivable. The Company's revenues are highly seasonal
and weather-sensitive, with approximately 75% of its revenues normally being
realized in the first and fourth quarters of the calendar year when the
temperatures in its service area are the coldest.
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The cash flow from the Company's operations is generally sufficient to fund
a portion of its construction expenditures. However, to the extent external
financing is required, it is the practice of the Company to use bank borrowings
to fund such expenditures, pending the periodic issuance of stock and long-term
debt. Bank borrowings are also used for the seasonal funding of the Company's
gas purchases and increases in its customer accounts receivable.
In order to temporarily finance construction expenditures and to meet its
seasonal borrowing requirements, the Company has made arrangements for a total
of $79.5 million of unsecured revolving bank credit, which is deemed adequate
for its immediate needs. Specifically, PG Energy currently has eight bank lines
of credit with an aggregate borrowing capacity of $78.5 million which provide
for borrowings at interest rates generally less than prime and which mature at
various times during 1998 and 1999. Honesdale has a $1.0 million revolving bank
line of credit which provides for borrowing at the prime rate (currently 8.50%)
and which matures in June, 1998. The Company intends to renew or replace these
lines of credit as they expire. As of May 1, 1998, the Company had $7.7 million
of borrowings outstanding under these bank lines of credit. In addition, PG
Energy can borrow up to $70.0 million from PEI through December 31, 1999 (at
interest rates generally less than prime), to repay bank borrowings and for
construction expenditures and other working capital requirements, to the extent
that PEI has funds available for lending to PG Energy. As of May 1, 1998, PG
Energy had $21.0 million outstanding under its borrowing arrangement with PEI.
Such interim borrowings by PG Energy from PEI will be repaid with proceeds from
bank borrowings by PG Energy. PG Energy plans to arrange new and replacement
bank lines of credit when the funds that are available for borrowing from PEI
are no longer available and as it requires additional funding for working
capital and other purposes.
The Company believes it will be able to raise in a timely manner such funds
as are required for future construction expenditures, refinancings and other
working capital requirements.
Long-Term Debt and Capital Stock Financings
The Company periodically engages in long-term debt and capital stock
financings in order to obtain funds required for construction expenditures, the
refinancing of existing debt and various working capital purposes. No long-term
debt or capital stock financings were consummated by the Company during the
three-month period ended March 31, 1998.
PG Energy also obtains external funds from the sale of its common stock to
PEI in connection with PEI's Dividend Reinvestment and Stock Purchase Plan (the
"DRP") and Customer Stock Purchase Plan (the "Customer Plan"). During 1998
(through May 1) PG Energy realized $2.6 million and $855,000 from the issuance
of common stock to PEI in connection with the DRP and the Customer Plan,
respectively.
Construction Expenditures and Related Financings
Expenditures for the construction of utility plant totaled $4.4 million
during the first three months of 1998 and are currently estimated to be $31.9
million during the remainder of the year. It is anticipated that such
expenditures will be financed with internally generated funds and bank
borrowings and by the periodic issuance of stock and long-term debt.
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Current Maturities of Long-Term Debt and Preferred Stock
As of March 31, 1998, $16.3 million of long-term debt, and $80,000 of PG
Energy's preferred stock was required to be repaid within twelve months.
Year 2000
The Company is currently replacing its financial and customer information
systems with purchased software packages. The installation of these new systems
will resolve the primary year 2000 issues. The new financial systems are
anticipated to be operational by the end of 1998 and the new customer
information system is now anticipated to be operational in 1999.
The Company has completed a review of the program coding of other
significant in-house developed applications and determined that they are
presently year 2000 compliant. Additionally, the Company is reviewing its
installed base of personal computers to identify non-compliant machines that
would be in service at year 2000. The Company, as a contingency, is also
presently evaluating the feasibility of modifying its existing customer
information system to make it year 2000 compliant in the event its new customer
system is not fully operational in 1999, as now scheduled.
Forward-Looking Statements
Certain statements made above relating to plans, conditions, objectives and
economic performance go beyond historical information and may provide an
indication of future results. To that extent, they are forward-looking
statements within the meaning of Section 21E of the Securities Exchange Act of
1934, and each is subject to factors that could cause actual results to differ
from those in the forward-looking statement, such as the nature of Pennsylvania
legislation restructuring the natural gas industry and general economic
conditions and uncertainties relating to the expansion of the Company's
nonregulated activities. The Company undertakes no obligation to publicly
release any revision to these forward-looking statements to reflect events or
circumstances after the date of this filing.
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PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
27-1 Financial Data Schedule -- filed herewith.
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter for which this report
is filed.
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PG ENERGY INC.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
PG ENERGY INC.
(Registrant)
Date: May 5, 1998 By: /s/ Thomas J. Ward
Thomas J. Ward
Secretary
Date: May 5, 1998 By: /s/ John F. Kell, Jr.
John F. Kell, Jr.
Vice President, Financial Services
(Principal Financial Officer and
Principal Accounting Officer)
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<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
THIS STATEMENT CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEET, STATEMENTS OF INCOME AND CASH FLOW, AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH STATEMENTS.
</LEGEND>
<CIK> 0000077242
<NAME> PG ENERGY INC.
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1998
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 264,636,000
<OTHER-PROPERTY-AND-INVEST> 4,106,000
<TOTAL-CURRENT-ASSETS> 53,124,000
<TOTAL-DEFERRED-CHARGES> 38,368,000
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 360,234,000
<COMMON> 33,332,000
<CAPITAL-SURPLUS-PAID-IN> 33,128,000
<RETAINED-EARNINGS> 46,755,000
<TOTAL-COMMON-STOCKHOLDERS-EQ> 113,215,000
640,000
15,864,000
<LONG-TERM-DEBT-NET> 126,000,000
<SHORT-TERM-NOTES> 245,000
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80,000
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321,000
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</TABLE>
