FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
/ x / QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31, 1995
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 2-26983
THE PEOPLES GAS LIGHT AND COKE COMPANY
(Exact name of registrant as specified in its charter)
Illinois 36-1613900
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
24th Floor, 130 East Randolph Drive, Chicago, Illinois 60601-6207
(Address of principal executive offices) (Zip Code)
(312) 240-4000
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes / x / No / /
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date:
24,817,566 shares of Common Stock, without par value, outstanding
at April 30, 1995.
<TABLE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
The Peoples Gas Light and Coke Company
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<CAPTION>
Three Six Twelve
Months Ended Months Ended Months Ended
March 31, March 31, March 31,
---------------- ----------------- --------------
1995 1994 1995 1994 1995 1994
------- ------- ------- ------ ------ ------
(Thousands)
<S> <C> <C> <C> <C> <C> <C>
OPERATING REVENUES:
Gas sales $323,673 $457,125 $553,484 $753,101 $795,432 $1,026,865
Transportation of customer-
owned gas 40,729 34,110 69,910 64,244 104,610 99,105
Other 3,746 4,011 11,433 8,098 20,514 16,383
-------- ------- -------- ------- ------- ---------
Total Operating Revenues 368,148 495,246 634,827 825,443 920,556 1,142,353
-------- ------- ------- ------- ------- ---------
OPERATING EXPENSES:
Gas costs 179,067 281,580 302,729 453,258 416,374 588,732
Operation 44,281 53,060 87,210 101,647 181,608 194,728
Maintenance 9,676 8,964 18,383 16,716 36,550 34,005
Depreciation 15,027 14,464 29,813 28,135 59,502 56,060
Taxes - Income 23,477 26,376 35,456 41,221 21,648 31,801
- State & local revenue 42,137 54,730 70,771 90,758 101,785 125,079
- Other 5,139 5,177 9,627 9,466 18,596 18,734
-------- ------- ------- ------- ------- ---------
Total Operating Expenses 318,804 444,351 553,989 741,201 836,063 1,049,139
-------- ------- ------- ------- ------- ---------
OPERATING INCOME 49,344 50,895 80,838 84,242 84,493 93,214
-------- ------- ------- ------- ------- ---------
OTHER INCOME:
Interest income 1,606 768 2,571 944 6,176 1,912
Miscellaneous 367 1,055 831 11,657 2,041 13,117
------- ------ ------- ------ ------- --------
Total Other Income 1,973 1,823 3,402 12,601 8,217 15,029
-------- ------- ------- ------ ------- -------
GROSS INCOME 51,317 52,718 84,240 96,843 92,710 108,243
-------- ------- ------- ------ ------- -------
INCOME DEDUCTIONS:
Interest on long-term debt 9,985 9,792 19,862 18,446 39,447 36,058
Other interest 1,632 740 2,720 2,023 3,331 2,685
Amortization of debt discount
and expense 197 176 372 337 723 651
Miscellaneous 34 34 68 68 136 126
------- ------ ------- ------ ------ ------
Total Income Deductions 11,848 10,742 23,022 20,874 43,637 39,520
------- ------ ------- ------ ------ ------
NET INCOME 39,469 41,976 61,218 75,969 49,073 68,723
------- ------- ------- ------- ------ ------
Preferred stock dividends -- -- -- -- -- 267
------- ------- ------- ------ ------- -------
NET INCOME APPLICABLE
TO COMMON STOCK $ 39,469 $ 41,976 $ 61,218 $ 75,969 $ 49,073 $ 68,456
======= ======= ======= ======= ======= ========
<FN>
The Notes to Consolidated Financial Statements are an integral part of these statements.
</FN>
</TABLE>
<TABLE>
The Peoples Gas Light and Coke Company
CONSOLIDATED BALANCE SHEETS
<CAPTION>
March 31, March 31,
1995 September 30, 1994
(Unaudited) 1994 (Unaudited)
----------- ----------- ----------
(Thousands)
PROPERTIES AND OTHER ASSETS
CAPITAL INVESTMENTS:
<S> <C> <C> <C>
Property, plant and equipment,
at original cost $1,784,962 $1,760,004 $1,728,509
Less - Accumulated depreciation 615,234 596,808 578,891
--------- --------- ---------
Net property, plant and equipment 1,169,728 1,163,196 1,149,618
Other investments 5,865 6,235 8,177
--------- --------- ---------
TOTAL CAPITAL INVESTMENTS - NET 1,175,593 1,169,431 1,157,795
--------- --------- ---------
CURRENT ASSETS:
Cash 34,197 3,173 10,264
Cash equivalents 151,795 54,935 78,866
Other temporary cash investments,
at cost that approximates market value 600 600 600
Trust fund, utility construction -- 31,493 57,234
Receivables -
Customers, net of allowance for
uncollectible accounts of $20,173,
$23,400, and $19,388, respectively 131,018 68,786 212,690
Other 4,632 3,377 9,424
Accrued unbilled revenues 38,879 17,561 44,848
Materials and supplies, at average cost 22,524 21,564 22,731
Gas in storage, at last-in, first-out cost 59,971 123,584 52,915
Gas costs recoverable through rate adjustments 7,986 12,024 19,755
Prepayments 2,847 1,649 2,789
-------- -------- --------
TOTAL CURRENT ASSETS 454,449 338,746 512,116
-------- -------- --------
DEFERRED CHARGES 43,185 40,615 35,788
-------- ------- --------
TOTAL PROPERTIES AND OTHER ASSETS $1,673,227 $1,548,792 $1,705,699
========= ========= =========
<FN>
The Notes to Consolidated Financial Statements are an integral part of
these statements.
</FN>
</TABLE>
<TABLE>
The Peoples Gas Light and Coke Company
CONSOLIDATED BALANCE SHEETS
<CAPTION>
March 31, March 31,
1995 September 30, 1994
(Unaudited) 1994 (Unaudited)
---------- ------------ ----------
(Thousands of Dollars)
CAPITALIZATION AND LIABILITIES
CAPITALIZATION:
<S> <C> <C> <C>
Common Stockholder's Equity:
Common stock, without par value
Authorized - 40,000,000 shares
Outstanding - 24,817,566 shares $ 165,307 $ 165,307 $ 165,307
Retained earnings 399,094 366,168 406,356
-------- -------- --------
Total Common Stockholder's Equity 564,401 531,475 571,663
Long-term debt, exclusive of sinking fund
payments and maturities due within one year 549,150 549,150 549,150
-------- -------- --------
TOTAL CAPITALIZATION 1,113,551 1,080,625 1,120,813
--------- --------- ---------
CURRENT LIABILITIES:
Interim loans 900 900 900
Accounts payable 93,052 95,027 99,658
Dividends payable on common stock 14,146 13,898 13,650
Customer gas service and credit deposits 25,394 39,543 14,788
Accrued taxes 65,754 26,691 85,167
Gas sales revenue refundable through
rate adjustments 58,669 41,167 5,156
Accrued interest 10,230 10,204 9,802
Temporary LIFO liquidation credit 53,308 -- 99,396
--------- --------- ---------
TOTAL CURRENT LIABILITIES 321,453 227,430 328,517
--------- --------- ---------
RESERVES AND DEFERRED CREDITS:
Deferred income taxes - primarily
accelerated depreciation 185,219 176,416 186,307
Investment tax credits being amortized
over the average lives of related property 35,024 35,836 36,673
Other 17,980 28,485 33,389
-------- -------- --------
TOTAL RESERVES AND DEFERRED CREDITS 238,223 240,737 256,369
-------- -------- --------
TOTAL CAPITALIZATION AND LIABILITIES $1,673,227 $1,548,792 $1,705,699
========= ========= =========
<FN>
The Notes to Consolidated Financial Statements are an integral part of
these statements.
</FN>
</TABLE>
<TABLE>
The Peoples Gas Light and Coke Company
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<CAPTION>
Six Months Ended
March 31,
--------------------
1995 1994
-------- --------
(Thousands)
<S> <C> <C>
OPERATING ACTIVITIES:
Net Income $ 61,218 $ 75,969
Adjustments to reconcile net income to net cash:
Depreciation 29,813 28,135
Deferred income taxes and investment tax credits - net 6,878 928
Change in other deferred credits and reserves (9,392) (18,820)
Change in deferred charges (2,570) (9,278)
Other 33 15
Change in current assets and liabilities:
Receivables - net (63,487) (118,458)
Accrued unbilled revenues (21,318) (18,649)
Gas in storage 63,613 66,739
Rate adjustments recoverable or refundable 21,540 21,186
Accounts payable (1,975) (2,024)
Customer gas service and credit deposits (14,149) (23,705)
Accrued taxes 39,063 59,918
Accrued interest 26 1,531
Temporary LIFO liquidation credit 53,308 99,396
Other (2,158) 244
--------- -------
NET CASH PROVIDED BY OPERATING ACTIVITIES 160,443 163,127
--------- -------
INVESTING ACTIVITIES:
Capital expenditures - construction (34,994) (32,308)
Other assets (1,351) (899)
Other capital investments 337 102
-------- -------
NET CASH USED IN INVESTING ACTIVITIES (36,008) (33,105)
-------- -------
FINANCING ACTIVITIES:
Interim loans - net -- (62,300)
Issuance of long-term debt -- 102,000
Trust fund, utility construction 31,493 (57,234)
Redemption of preferred stock -- (3,400)
Dividends paid on common stock (28,044) (27,796)
Dividends paid on preferred stock -- (71)
-------- --------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 3,449 (48,801)
-------- --------
NET INCREASE IN CASH AND CASH EQUIVALENTS 127,884 81,221
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 58,108 7,909
-------- ------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $185,992 $ 89,130
======= =======
<FN>
The Notes to Consolidated Financial Statements are an integral part of
these statements.
</FN>
</TABLE>
The Peoples Gas Light and Coke Company
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. BASIS OF PRESENTATION
The accompanying consolidated financial statements have been
prepared by The Peoples Gas Light and Coke Company (Company) in
conformity with the rules and regulations of the Securities and
Exchange Commission (SEC) and reflect all adjustments that are, in
the opinion of management, necessary to present fairly the results
for the interim periods herein and to prevent the information from
being misleading.
Certain footnote disclosures and other information, normally
included in financial statements prepared in accordance with
generally accepted accounting principles, have been condensed or
omitted from these interim financial statements, pursuant to SEC
rules and regulations. Therefore, the statements should be read in
conjunction with the consolidated financial statements and related
notes contained in the Company's Annual Report on Form 10-K for the
fiscal year ended September 30, 1994.
The business of the Company is influenced by seasonal weather
conditions because a large element of the Company's customer load
consists of gas used for space heating. Weather-related deliveries
can, therefore, have a significant positive or negative impact on
net income. Accordingly, the results of operations for the interim
periods presented are not indicative of the results to be expected
for all or any part of the balance of the current fiscal year.
2. SIGNIFICANT ACCOUNTING POLICIES
2A Revenue Recognition
Gas sales revenues for retail customers are recorded on the
accrual basis for all gas delivered during the month, including
an estimate for gas delivered but unbilled at the end of each
month.
2B Basis of Accounting
The Company accounts for its regulated operations in
accordance with Statement of Financial Accounting Standards
(SFAS) No. 71, "Accounting for the Effects of Certain Types of
Regulation." This standard controls the application of
generally accepted accounting principles for companies whose
rates are determined by an independent regulator. Regulatory
assets represent certain costs which have been or are expected
to be recovered from customers through the ratemaking process.
When such costs occur, they are deferred as assets in the
balance sheet and recorded as expenses when like amounts are
included in rates.
2C Statement of Cash Flows
For purposes of the balance sheet and the statement of cash
flows, the Company considers all short-term liquid investments
with maturities of three months or less to be cash equivalents.
<TABLE>
Income taxes and interest paid (excluding capitalized
interest) were as follows:
<CAPTION>
For the six months
ended March 31, 1995 1994
--------------------------------------------------
(Thousands)
<S> <C> <C>
Income taxes paid $10,435 $22,445
Interest paid 20,989 18,604
</TABLE>
2D Income Taxes
In March 1993, the Company adopted, effective October 1,
1992, the liability method of accounting for deferred income
taxes required by SFAS No. 109, "Accounting for Income
Taxes." Under the liability method, deferred income taxes
have been recorded using currently enacted tax rates for the
differences between the tax basis of assets and liabilities
and the basis reported in the financial statements. Due to
the effects of regulation on the Company, certain adjustments
made to deferred income taxes to reflect the adoption of SFAS
No. 109 are, in turn, debited or credited to regulatory
assets or liabilities. Such adjustments had no material
impact on financial position or results of operations of the
Company.
2E Recovery of Gas Costs, Including Charges for Transition Costs
Under the tariffs of the Company, the difference for any
fiscal year between costs recoverable through the Gas Charge
and revenues billed to customers under the Gas Charge is
refunded or recovered over a 12-month billing cycle beginning
the following January 1. Consistent with these tariff
provisions, such difference for any month is recorded either
as a current liability or as a current asset (with a contra
entry to Gas Costs), and the fiscal year-end balance is
amortized over the 12-month period beginning the following
January 1.
The Illinois Commerce Commission (Commission) conducts
annual proceedings regarding, for each gas utility, the
reconciliation of revenues from the Gas Charge and related
costs incurred for gas. In such proceedings, costs recovered
by a utility through the Gas Charge are subject to challenge.
Such proceedings regarding the Company for fiscal years 1992
through 1995 are currently pending before the Commission.
Pursuant to Federal Energy Regulatory Commission (FERC)
Order No. 636 and successor orders, pipelines are allowed to
recover from their customers so-called transition costs.
These costs arise from the restructuring of pipeline service
obligations required by the 636 Orders. The Company is
currently recovering pipeline charges for transition costs
through the Gas Charge. The Commission entered an order on
March 9, 1994, providing for the full recovery of all such
charges from customers. In September 1994, the Commission
entered orders on rehearing that retained the provision for
full recovery from customers. (See Notes 3A and 3B.)
3. RATES AND REGULATION
3A Utility Rate Proceedings
Rate Filing. On December 16, 1994, the Company filed with the
Commission proposed changes in rates that are designed to
increase annual revenues by about $59.9 million, exclusive of
additional charges for revenue taxes. The Company is seeking a
rate of return on original-cost rate base of 10.03 percent, which
reflects a 12.7 percent cost of common equity.
The Company expects that the Commission, following its usual
practices, will not issue a decision regarding the Company's rate
increase request until November 1995. The Company cannot predict
the outcome of its rate increase request.
Environmental Cost Recovery. In 1992, the Commission issued an
order in its consolidated proceedings, initiated in 1991,
regarding the appropriate ratemaking treatment of environmental
costs relating to past manufactured gas operations incurred by
Illinois utilities, including the Company and North Shore Gas, in
connection with the investigation and treatment of residues
associated with past manufactured gas operations ("environmental
costs"). In its order, the Commission approved rate recovery of
environmental costs over a five-year period, but required the
utilities to "share" the environmental costs by disallowing rate
recovery of carrying charges on unrecovered balances.
Reimbursements of environmental costs from insurance carriers or
other entities are to be netted against costs and reflected in
rates over a five-year period. In 1992, several parties,
including the Company and North Shore Gas, appealed the
Commission's order to the Illinois Appellate Court. In 1993, the
Third District Appellate Court issued its opinion affirming the
Commission's order in the consolidated proceedings, which
decision was subsequently appealed to the Illinois Supreme Court.
In April 1995, the Illinois Supreme Court upheld in part and
reversed in part the Commission's order. The Supreme Court
upheld the Commission in ruling that environmental costs are
recoverable through rates. The Supreme Court also ruled that the
Commission's approval of a rate recovery method called a "rider"
(the method utilized by the Company and North Shore Gas) as the
preferred mechanism for recovery of environmental costs is within
the Commission's authority. The Supreme Court reversed the part
of the Commission's order that required the utilities to share
environmental costs by disallowing recovery of carrying charges
on unrecovered balances. The order was remanded to the
Commission for further proceedings consistent with the Supreme
Court's opinion. Any change made pursuant to the Supreme Court's
decision will have a prospective effect only.
FERC Order No. 636 Cost Recovery. On September 15, 1993, the
Commission entered an order initiating an investigation into the
appropriate means of recovery by Illinois gas utilities of
pipeline charges for FERC Order No. 636 transition costs. The
Commission issued a final order in this proceeding on March 9,
1994. The order provides for the full recovery of transition
costs from the Company's gas service customers and transportation
customers to the extent they contract for firm standby service.
The Citizens Utility Board and State's Attorney of Cook County
filed an application for rehearing of the March 9 order with the
Commission. On May 4, 1994, the Commission granted rehearing,
limited to the question of the allocation of transition costs.
In September 1994, the Commission entered orders on rehearing. In
its orders on rehearing, the Commission continued to provide for
full recovery of transition costs, but directed that, effective
November 1, 1994, gas supply realignment (GSR) costs (one of the
four categories of transition costs) be recovered on a uniform
volumetric basis from all transportation and sales customers. In
December 1994, a group of industrial transportation customers of
Illinois utilities appealed the Commission's orders on rehearing
to the Illinois Appellate Court. Any change made pursuant to the
Illinois Appellate Court's order on appeal would have a
prospective effect only. (See Notes 2E and 3B.)
3B FERC Orders 636, 636-A, and 636-B
In 1992, the FERC issued Order Nos. 636, 636-A, and 636-B.
Numerous appeals of the 636 Orders are pending before the Federal
Circuit Court of Appeal for the D.C. Circuit.
The 636 Orders require substantial restructuring of the
service obligations of interstate pipelines. Among other things,
the 636 Orders mandated "unbundling" of existing pipeline gas
sales services. Further, the 636 Orders provided for mechanisms
for pipelines to recover prudently incurred transition costs
associated with the restructuring process.
The restructured tariffs of Natural Gas Pipeline Company of
America (Natural), the principal pipeline serving the Company,
went into effect December 1, 1993. The restructured tariffs of
other pipelines serving the Company had previously gone into
effect. Several appeals of the orders approving Natural's and
other pipelines' restructured tariffs are pending before the
Federal Circuit Court of Appeal for the D.C. Circuit.
As part of the restructuring process, the Company elected
necessary levels of services from the menu of restructured
services offered by the various pipelines. Also during 1993, the
Company took the steps necessary to obtain reliable gas supply as
a replacement for the bundled merchant service supply which was
no longer available from the interstate pipelines to any
significant extent.
Under the 636 Orders, pipelines must make separate rate
filings to recover transition costs. There are four categories
of such costs, the largest of which for the Company is GSR costs.
The Company is subject to charges for transition cost recovery by
Natural. Charges by Natural for transition costs commenced on
January 1, 1994. On September 29, 1994, the FERC approved a
Stipulation and Agreement (Agreement) filed by Natural. The
Agreement places a cap of approximately $103 million on the
amount of GSR costs recoverable by Natural from the Company.
However, subject to this cap, the level of costs that the Company
will incur is dependent primarily upon the future market price of
natural gas and pipeline negotiations with producers. The
Company is currently recovering transition costs through the Gas
Charge. As of March 31, 1995, the Company has accrued $41.7
million and has made payments of $31.7 million toward the cap.
The 636 Orders are not expected to have a material adverse
effect on financial position or results of operations of the
Company or its subsidiaries. (See Notes 2E and 3A.)
4. ENVIRONMENTAL MATTERS
The Company, its predecessors, and certain former affiliates
operated facilities in the past for manufacturing gas and storing
manufactured gas. In connection with manufacturing and storing
gas, various by-products and waste materials were produced, some
of which might have been disposed of rather than sold. Under
certain laws and regulations relating to the protection of the
environment, the Company might be required to undertake remedial
action with respect to some of these materials, if found at the
sites.
The current owner of a site in McCook, Illinois, near Chicago,
has advised the Company that the owner has found what appear to
be wastes associated with by-products of the gas manufacturing
process under its property. The owner has asserted that these
wastes are the responsibility of the Company. The Company is
currently evaluating this claim.
The Company, in cooperation with the Illinois Environmental
Protection Agency (IEPA), is conducting investigations of certain
sites (a total of 29) to determine whether remedial action might
be necessary. The investigations were initiated pursuant to an
informal request by the IEPA. To the best of the Company's
knowledge, similar informal requests have been made by the IEPA
to other major Illinois gas and electric utilities. The Company
has engaged environmental consulting firms to assist in the
Company's investigations. At this time, except for the 110th
Street Station site (discussed below), it is not known what, if
any, remedial action will be necessary at the sites or, if
necessary, what the cost of any such action would be. As
discussed below, the Company may conduct a remedial
investigation/feasibility study (RI/FS) at the Pitney Court
Station and Division Street sites under the supervision of the
IEPA. In addition, the Company is conducting investigations
under the supervision of the IEPA at the 110th Street Station and
Equitable Distribution Station sites.
In August 1988, the IEPA conducted an inspection at the
Company's Division Street property in Chicago. During the
inspection, the IEPA and the Company took several soil samples
for laboratory analysis. The analysis of the samples collected
by the Company indicates the presence of certain substances
within the soil of the Division Street property that could be
attributable to former manufactured gas operations. The Company
may conduct an RI/FS of the property under the supervision of the
IEPA.
The current owners of a site in Chicago, formerly called
Pitney Court Station, have advised the Company that they found
what appear to be gas manufacturing wastes underneath their
property. The owners have demanded monetary compensation from
the Company because of the presence of such wastes. The Company
has rejected this demand, but may conduct an RI/FS of the site
under the supervision of the IEPA.
The Company has observed what appear to be gas purification
wastes on a site in Chicago, formerly called the 110th Street
Station, and property contiguous thereto. The Company has fenced
the site and the contiguous property and is conducting a study
under the supervision of the IEPA to determine the feasibility of
a limited removal action.
The current owners at a site in Chicago, formerly called South
Station, have advised the Company that they have found what
appear to be gas manufacturing wastes underneath their property.
The owners have demanded monetary compensation from the Company
because of the presence of such wastes. The Company is currently
evaluating this claim.
In 1994, the Company became aware of a planned residential
development at a site in Chicago, formerly called the Equitable
Distribution Station. The Company is conducting a preliminary
investigation to determine whether gas manufacturing wastes are
present at the site.
The Company is accruing and deferring the costs it incurs in
connection with all of the sites, including related legal
expenses, pending recovery through rates or from insurance
carriers or other entities. As of March 31, 1995, the total of
the costs deferred by the Company, net of recoveries, was $10.4
million. This amount includes an estimate of the costs of the
investigations initiated at the request of the IEPA at the sites
referred to above. The amount also includes an estimate of the
costs of remediation at the 110th Street Station site in Chicago,
at the minimum amount of the current estimated range of such
costs. The costs of remediation at the other sites cannot be
determined until more is known about the nature and extent of
contamination and the remedial action, if any, to be required by
the IEPA. While the Company intends to seek contribution from
other entities for the costs incurred at the sites, the full
extent of such contributions cannot be determined at this time.
The Company has filed suit against a number of insurance
carriers for the recovery of environmental costs relating to its
former manufactured gas operations. The suit asks the court to
declare that the insurers are liable under policies in effect
between 1938 and 1985 for costs incurred or to be incurred by the
Company in connection with former manufactured gas sites in
Chicago. The Company is also asking the court to award damages
stemming from the insurers' breach of their contractual
obligation to defend and indemnify the Company against these
costs. At this time, management cannot determine the timing and
extent of the Company's recovery of costs from its insurance
carriers. Accordingly, the costs deferred as of March 31, 1995
have not been reduced to reflect recoveries from insurance
carriers.
Costs incurred by the Company for environmental activities
relating to former manufactured gas operations will be recovered
from insurance carriers or other entities or through rates for
utility service. Accordingly, management believes that the costs
incurred by the Company in connection with the sites will not
have a material adverse effect on financial position or results
of operations. The Company is recovering the costs of
environmental activities relating to its former manufactured gas
operations under rate mechanisms approved by the Commission. As
of March 31, 1995, the Company had recovered $332,000 of such
costs through rates. (See Note 3A for a discussion of
proceedings regarding the recovery of such costs through utility
rates.)
5. GAS OVER-PRESSURE CONDITION
On January 17, 1992, an over-pressure condition occurred in
the gas mains of the Company serving an approximately
one-square-mile area of the Near Northwest Side of the City of
Chicago. The over-pressure condition caused a major explosion
and numerous fires. The Company is aware of four deaths and 14
personal injuries allegedly resulting from the explosion and
fires. The Company also has been informed that damage occurred
in an estimated 28 buildings. There was also damage, such as
broken windows, wall cracks, and water damage, to additional
buildings.
A number of lawsuits have been filed against the Company as a
result of the over-pressure condition. The lawsuits include
wrongful-death claims and several class actions that seek to
certify as a class those persons who suffered bodily harm and/or
property damage. All of the suits allege negligence and seek
compensatory damages. Some of the lawsuits also seek punitive
damages. These suits have not quantified the alleged damages
except for certain amounts that are not material.
In January 1993, the National Transportation Safety Board
(NTSB) completed its report regarding its investigation of the
over-pressure incident that occurred on January 17, 1992. In its
report, the NTSB stated that "the probable cause of the
over-pressure accident and the resulting losses was the failure
of Peoples Gas Light Coke Company to adequately train its gas
operations section employees in recognizing and correctly
responding to abnormal situations, which consequently led to the
failure of the gas operations section crew to properly monitor
and control the pressure of the gas being supplied to the
low-pressure gas system during a routine inspection."
In June 1993, the Staff of the Illinois Commerce Commission
(Commission Staff) released its report concerning the
over-pressure incident. In its report, the Commission Staff
concluded that employee error was the probable cause of the
over-pressurization. The report was critical of the Company's
training of its personnel in its gas operations section and of
some of the Company's practices at the time of the incident.
The Company strongly disagrees with the criticisms by the NTSB
and the Commission Staff of the training given by the Company to
personnel in its gas operations section. The Company also
disagrees with some of the findings and conclusions of the
Commission Staff, including several of the Commission Staff's
findings and its theory, analysis, and conclusions pertaining to
the probable cause of the over-pressurization.
The Company carries substantial insurance coverage. If
liability were found on the part of the Company, management
believes that any costs incurred for damages will be adequately
covered by insurance. However, the Company's primary insurance
carrier has asserted that under Illinois law, liability for
punitive damages is not insurable. The Company has advised the
insurance carrier that it disagrees and intends to assert all of
its rights against the carrier including its right to obtain
recovery for punitive damages, if any. Management is not aware
of any conduct on its part or by employees of the Company that
would give rise to punitive damages under Illinois law.
Accordingly, management believes that the incident will not have
a material adverse effect on financial position or results of
operations of the Company.
6. TAX MATTERS
On September 30, 1993, the Company received notification from
the Internal Revenue Service (IRS) that settlement of past income
tax returns had been reached for fiscal years 1978 through 1990.
The IRS settlement resulted in 1994 payments of principal and
interest to the Company in total amount of approximately $25
million, or $19.4 million after income taxes. The Company
received regulatory authorization to defer the recognition of the
settlement amount in income for fiscal year 1993, and to
recognize its portion of the settlement amount in income for
fiscal years 1994 and 1995. The Company represented to the
Commission that, having received this accounting authorization,
it would not file a request for an increase in base rates before
December 1994. The regulatory treatment of the IRS settlement
having been resolved in November 1993, the Company included
$12.7 million, or $9.7 million after income taxes, in income in
1994. The amount after income taxes was included in Other Income
- - Miscellaneous. At September 30, 1994, approximately $12.7 million
was included in Reserves and Deferred Credits - Other.
As a result of the Commission's accounting authorization, the
fiscal year 1995 portion of the settlement amount for the Company
is being amortized (credited) to operation expense. The effect
is to offset increases in costs that the Company will incur
during the year. In the six months ended March 31, 1995, the
Company amortized approximately $9.5 million, or $7.2 million
after income taxes, leaving a remaining balance of about $3.2
million included in Reserves and Deferred Credits - Other.
7. LONG-TERM DEBT
7A Issuance Of Bonds
On December 22, 1993, the City of Chicago issued $102 million,
in aggregate principal amount, of gas supply revenue bonds ($75
million 5-3/4 percent Series A and $27 million adjustable-rate
Series B), which were collateralized by an equal amount of the
Company's 30-year first mortgage bonds. The proceeds were lent
to the Company for the purpose of financing the construction of
certain facilities within the City. The proceeds were held in a
trust fund until drawn by the Company for reimbursement of
construction expenditures. The final draw occurred in February
1995. All assets financed through this arrangement must be
depreciated on a straight-line basis for tax purposes.
7B Interest-Rate Adjustments
The rate of interest on the City of Joliet 1984 Series C
Bonds, which are secured by the Company's Adjustable-Rate Bonds,
Series W, is subject to adjustment annually on October 1. Owners
of the Series C Bonds have the right to tender such bonds at par
during a limited period prior to that date. The Company is
obligated to purchase any such bonds tendered if they cannot be
remarketed. All Series C Bonds that were tendered prior to
October 1, 1994, have been remarketed. The interest rate on such
bonds is 4.20 percent for the period October 1, 1994, through
September 30, 1995.
The rate of interest on the City of Chicago 1993 Series B
Bonds, which are secured by the Company's Adjustable-Rate Bonds,
Series EE, is subject to adjustment annually on December 1.
Owners of the Series B Bonds have the right to tender such bonds
at par during a limited period prior to that date. The Company
is obligated to purchase any such bonds tendered if they cannot
be remarketed. All Series B Bonds that were tendered prior to
December 1, 1994, have been remarketed. The interest rate on
such bonds is 4.95 percent for the period December 1, 1994,
through November 30, 1995.
SFAS No. 6 sets forth the requirements for excluding from
current liabilities in the Company's financial statements
obligations that would otherwise be considered short-term
obligations. In order to meet these requirements, the Company
established a three year line of credit with The Northern Trust
Company in the amount of $37.4 million. If the Company were
required to purchase all or a part of the aforementioned
adjustable-rate bonds, the Company could draw on the line of
credit to fund such purchase or purchases.
8. POSTEMPLOYMENT BENEFITS
In November 1992, the Financial Accounting Standards Board
(FASB) issued SFAS No. 112, "Employers' Accounting for
Postemployment Benefits." This statement requires the accrual of
certain benefits provided to former or inactive employees after
employment but before retirement. The Company adopted SFAS No.
112 effective October 1, 1994. Implementation of this statement
did not have a material effect on financial position or results
of operations.
Item 2. Management's Discussion and Analysis of Results of
Operations and Financial Condition
RESULTS OF OPERATIONS
Net Income
Net income applicable to common stock decreased $2.5 million,
to $39.5 million, for the three-months ended March 31, 1995, due
mainly to weather that was more than 12 percent warmer than the
year-ago quarter. This decrease was partially offset by lower
operation and maintenance expenses resulting primarily from the
current quarter's benefit of recognizing about $4.3 million after
income taxes from a previously announced federal income tax
settlement. (See Note 6 of the Notes to Consolidated Financial
Statements.) Also favorably impacting the current three-month
period was a decrease in the provision for uncollectible accounts
that was prompted by a drop in revenues.
Net income applicable to common stock decreased $14.8 million,
to $61.2 million, and $19.4 million, to $49.1 million, for the
current six- and 12-month periods, respectively, from the results
of last year's like periods. Results for the current six- and
12-month periods were negatively affected by weather that was 16
percent warmer than the respective prior periods and by the
timing difference in recognizing benefits from the tax
settlement.
<TABLE>
A summary of variations affecting income between periods is
presented below, with explanations of significant differences
following:
<CAPTION>
Three Months Ended Six MonthsEnded 12 Months Ended
March 31, 1995 March 31, 1995 March 31, 1995
Increase/(Decrease) Increase/(Decrease) Increase/(Decrease)
from Prior Period from Prior Period from Prior Period
----------------- ----------------- -----------------
(Thousands of dollars) Amount % Amount % Amount %
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net operating revenues (a) $(11,992) (7.5) $(20,100) (7.1) $(26,145) (6.1)
Operation and
maintenance expenses (8,067) (13.0) (12,770) (10.8) (10,575) (4.6)
Depreciation expense 563 3.9 1,678 6.0 3,442 6.1
Income taxes (2,899) (11.0) (5,765) (14.0) (10,153) (31.9)
Other income 150 8.2 (9,199) (73.0) (6,812) (45.3)
Income deductions 1,106 10.3 2,148 10.3 4,117 10.4
Net Income Applicable
to Common Stock (2,507) (6.0) (14,751) (19.4) (19,383) (28.3)
- ----------------------------------------------------------------------------------------------
<FN>
(a) Operating revenues, net of gas costs and revenue taxes.
</FN>
</TABLE>
Item 2. Management's Discussion and Analysis of Results of
Operations and Financial Condition
Net Operating Revenues
Gross revenues of the Company are affected by changes in the
unit cost of the Company's gas purchases and do not include the
cost of gas supplies for customers who purchase gas directly from
producers and marketers rather than from the Company. The direct
customer purchases have no effect on net income because the
Company provides transportation service for such gas volumes and
recovers margins similar to those applicable to conventional gas
sales. Changes in the unit cost of gas do not significantly
affect net income because the Company's tariffs provide for
dollar-for-dollar recovery of gas costs. (See Note 2E of the
Notes to Consolidated Financial Statements.) The Company's
tariffs also provide for dollar-for-dollar recovery of the cost
of revenue taxes imposed by the State and City.
Since income is not significantly affected by changes in
revenue from customers' gas purchases from producers or marketers
rather than from the Company, changes in gas costs, or changes in
revenue taxes, the discussion below pertains to "net operating
revenues" (operating revenues, net of gas costs and revenue
taxes). The Company considers net operating revenues to be a
more pertinent measure of operating results than gross revenues.
Net operating revenues decreased $12.0 million, to $146.9
million, $20.1 million, to $261.3 million, and $26.1 million, to
$402.4 million, for the three-, six-, and 12-month periods,
respectively. These results were caused by warmer weather in
each of the more recent periods.
See Other Matters - Operating Statistics for details of
selected financial and operating information by gas service
classification.
Operation and Maintenance Expenses
Operation and maintenance expenses decreased $8.1 million, to
$54.0 million, and $12.8 million, to $105.6 million, for the
current three- and six-month periods, respectively, due
principally to recognizing approximately $5.6 million for the
second quarter's portion and $9.5 million for the fiscal 1995 to
date portion of the balance of the IRS settlement. (See Note 6
of the Notes to Consolidated Financial Statements.)
Additionally, the provision for uncollectible accounts decreased
about $2.8 million in the current three- and six-month periods
from the similar prior periods, reflecting the reduction in sales
revenues due to warmer weather.
Operation and maintenance expenses decreased $10.6 million, to
$218.2 million, for the 12-month period, due mainly to
recognizing about $9.5 million for the aforementioned IRS
settlement in the current period. Also, lower group insurance
expenses ($2.5 million) related to reduced SFAS No. 106 costs
based on lower assumed health care costs and a decline in pension
expenses ($1.9 million) principally reflecting a discount rate
change were partially offset by an increase in the provision for
uncollectible accounts ($3.7 million), which includes a $3.7
million increase to adjust the balance sheet allowance.
Depreciation Expense
Depreciation expense increased $563,000, to $15.0 million,
$1.7 million, to $29.8 million, and $3.4 million, to $59.5
million, for the current three-, six-, and 12-month periods,
respectively, due primarily to depreciable property additions.
Income Taxes
Income taxes, exclusive of amounts included in other income
related to an IRS settlement, declined $2.9 million, to $23.5
million, $5.8 million, to $35.5 million, and $10.2 million, to
$21.6 million, in the current three-, six-, and 12-month periods,
due principally to lower pre-tax income.
Other Income
Other income declined $9.2 million, to $3.4 million, for the
current six-month period, due primarily to recognizing one-half
of the IRS settlement of about $9.6 million after income taxes in
last year's similar period. (See Note 6 of the Notes to
Consolidated Financial Statements.)
Other income declined $6.8 million, to $8.2 million, for the
current 12-month period, due mainly to the recognition of the
above-mentioned IRS settlement ($9.6 million after income taxes)
in the prior 12-month period. This decrease was partially offset
by higher interest income reflecting larger cash balances
available for investment.
Income Deductions
Income deductions increased $1.1 million, to $11.8 million,
$2.1 million, to $23.0 million, and $4.1 million, to $43.6
million, for the current three-, six-, and 12-month periods,
respectively, due chiefly to increased interest expense on the
following items: long-term debt, amounts refundable to
customers, and budget accounts. These increased items were
partially offset by decreased interest on short-term borrowings.
Other Matters
Effect of Weather. Weather variations affect the volumes of gas
delivered for heating purposes and, therefore, can have a
significant positive or negative impact on net income and
coverage ratios.
FERC Order 636 Costs. In 1992, the FERC issued Order No. 636 and
successor orders that required substantial restructuring of the
service obligations of interstate pipelines. (See Notes 2E, 3A,
and 3B of the Notes to Consolidated Financial Statements.)
On September 15, 1993, the Commission entered an order
initiating an investigation into the appropriate means of
recovery by Illinois gas utilities of pipeline charges for FERC
Order No. 636 transition costs. The Commission issued its orders
on rehearing in this proceeding in September 1994. (See Notes
2E, 3A, and 3B of the Notes to Consolidated Financial
Statements.)
Postemployment Benefits. In November 1992, the FASB issued SFAS
No. 112. This statement requires the accrual of certain benefits
provided to former or inactive employees after employment but
before retirement. SFAS No. 112 required adoption by the Company
no later than fiscal 1995. (See Note 8 of the Notes to
Consolidated Financial Statements.)
Reengineering Study. The Company is undertaking a major project
to reengineer its business processes with the goal of increasing
efficiency, responsiveness to customer needs, and cost
effectiveness. The project commenced in September 1994 and is
expected to continue for at least two years.
<TABLE>
Operating Statistics. The following table represents gas
distribution margin components:
<CAPTION>
Three Months Ended Six Months Ended Twelve Months Ended
March 31, March 31, March 31,
------------------ ---------------- -------------------
1995 1994 1995 1994 1995 1994
--------- -------- ------ ------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Operating Revenues (thousands):
Gas sales
Residential $267,744 $368,484 $462,767 $616,034 $667,116 $ 844,886
Commercial 46,117 69,681 75,185 108,813 105,450 144,792
Industrial 9,812 18,960 15,532 28,254 22,866 37,187
------- ------- ------- ------- ------- ---------
323,673 457,125 553,484 753,101 795,432 1,026,865
------- ------- ------- ------- ------- ---------
Transportation
Residential 14,178 12,245 24,285 23,035 35,587 34,495
Commercial 17,094 14,470 28,798 26,619 41,950 39,763
Industrial 9,457 7,395 16,827 14,590 27,073 24,847
------- ------- ------- ------- ------- -------
40,729 34,110 69,910 64,244 104,610 99,105
------- ------- ------ ------ ------- -------
Other 3,746 4,011 11,433 8,098 20,514 16,383
------- ------ ------ ------ ------- -------
Total Operating Revenues 368,148 495,246 634,827 825,443 920,556 1,142,353
Gas Costs (179,067) (281,580) (302,729) (453,258) (416,374) (588,732)
Revenues Taxes (42,137) (54,730) (70,771) (90,758) (101,785) (125,079)
-------- -------- -------- -------- -------- --------
Net Operating Revenues $146,944 $158,936 $261,327 $281,427 $402,397 $428,542
======= ======= ======= ======= ======= =======
Deliveries (MMcf):
Sales
Residential 51,752 59,496 83,220 97,734 108,133 126,073
Commercial 9,161 11,626 14,174 18,004 18,735 23,424
Industrial 2,094 3,357 3,141 4,987 4,475 6,541
------- ------- ------- ------- ------- -------
63,007 74,479 100,535 120,725 131,343 156,038
------- ------- ------- ------- ------- -------
Transportation
Residential 10,507 10,534 17,442 18,419 23,510 24,799
Commercial 15,154 15,023 24,772 25,773 35,343 36,008
Industrial 10,262 9,150 18,628 17,392 30,464 28,788
------- ------- ------- ------ ------- ------
35,923 34,707 60,842 61,584 89,317 89,595
------- ------- ------- ------ ------ ------
Total Sales
and Transportation 98,930 109,186 161,377 182,309 220,660 245,633
======= ======== ======= ======= ======= =======
Margin per Mcf
delivered $1.49 $1.46 $1.62 $1.54 $1.82 $1.74
</TABLE>
LIQUIDITY AND CAPITAL RESOURCES
Regulatory Actions. On September 30, 1992, the Commission issued
an order in its consolidated proceedings, initiated in March
1991, regarding the appropriate ratemaking treatment of
environmental costs relating to past manufactured gas operations
incurred by Illinois utilities, including the Company and North
Shore Gas. In its order, the Commission approved rate recovery
of such environmental costs but required that the recovery occur
over a five-year period without recovery of carrying charges on
unrecovered balances. The part of the Commission's order that
disallowed recovery of carrying charges on unrecovered balances
has been reversed on appeal by the Illinois Supreme Court, which
has remanded the case to the Commission. (See Note 3A of the
Notes to Consolidated Financial Statements.)
The Company filed proposed changes in rates with the
Commission in December 1994. (See Note 3A of the Notes to
Consolidated Financial Statements.)
Environmental Matters. The Company is conducting environmental
investigations and work at certain sites that were the location
of former manufactured gas operations. (See Note 4 of the Notes
to Consolidated Financial Statements.)
Over-pressure Condition. On January 17, 1992, an over-pressure
condition occurred in the gas mains of the Company serving an
approximately one-square-mile area of the Near Northwest Side of
the City of Chicago. The over-pressure condition caused a major
explosion and numerous fires. Four deaths, 14 personal injuries,
and extensive property damage allegedly resulted from the
explosion and fires. (See Note 5 of the Notes to Consolidated
Financial Statements.)
Bonds Issued. On December 22, 1993, the City of Chicago issued
$102 million, in aggregate principal amount, of gas supply
revenue bonds, which were collateralized by an equal amount of
the Company's 30-year first mortgage bonds. The proceeds were
lent to the Company for the purpose of financing the construction
of certain facilities within the City. (See Note 7A of the Notes
to Consolidated Financial Statements.)
Additional bonds are issuable by the Company, upon approval by
the Commission, subject to limitations imposed by certain
restrictive provisions of the subsidiaries' open-end mortgages
and supplements thereto. These restrictions are not expected to
have an impact on the Company's ability to issue additional debt,
as needed.
Credit Lines. On July 1, 1994, the Company reduced its lines of
credit to approximately $131 million from $154 million of which
North Shore Gas may borrow up to $30 million. Agreements
covering $93.7 million of the total will expire on June 29, 1995.
The agreement covering the remaining $37.4 million will expire on
January 31, 1997. Such lines of credit cover projected
short-term credit needs of the Company and North Shore Gas and
support the long-term debt treatment of the Company's
adjustable-rate mortgage bonds. (See Note 7B of the Notes to
Consolidated Financial Statements.)
Interest Coverage. The Company's fixed charges coverage ratios
for the 12-months ended March 31, 1995, and for fiscal 1994 and
1993 were 2.63, 3.28, and 3.57, respectively. The decrease in
the ratio for the current 12-months ended primarily reflects
lower pre-tax income. (See Results of Operations - Net Income.)
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
See Note 4 of the Notes to Consolidated Financial Statements
for a discussion pertaining to environmental matters.
See Note 5 of the Notes to Consolidated Financial Statements
for a discussion of an over-pressure condition that occurred on
January 17, 1992, in the Company's gas mains on the Near
Northwest Side of the City of Chicago.
Item 4. Submission of Matters to a Vote of Security Holders
a. 1. The Board of directors acted by written consent
in lieu of meeting on March 22, 1995 to adopt a
resolution amending the Company's Charter to
limit the liability of the Company's directors
and to provide for indemnification and the
advancement of expenses, and to recommend that
the sole shareholder of the Company approve
said resolution.
2. The Company's sole shareholder acted by written
consent in lieu of meeting on March 22, 1995 to
approve and adopt a resolution to amend the
Company's Charter.
3. The Company's sole shareholder acted by written
consent in lieu of an annual meeting of
shareholders on March 30, 1995.
b. On March 30, 1995, the following persons were
elected Directors of the Company by written
consent and comprise the entire Board of Directors
of the Company: Kenneth S. Balaskovits, J. Bruce
Hasch, James Hinchliff, Michael S. Reeves, and
Richard E. Terry.
c. The following matter was voted upon by written
consent in lieu of an annual meeting of
shareholders:
1. The election of nominees for directors who will
serve for a one-year term or until their
respective successors shall be duly elected.
The nominees, all of whom were elected, were as
follows: Kenneth S. Balaskovits, J. Bruce
Hasch, James Hinchliff, Michael S. Reeves, and
Richard E. Terry. The Secretary of the Company
certified the following vote tabulations:
<TABLE>
<CAPTION>
FOR WITHHELD
----------- ----------
<S> <C> <C>
Kenneth S. Balaskovits 24,817,566 0
J. Bruce Hasch 24,817,566 0
James Hinchliff 24,817,566 0
Michael S. Reeves 24,817,566 0
Richard E. Terry 24,817,566 0
</TABLE>
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits
Exhibit
Number Description of Document
--------- ---------------------------------
27 Financial Data Schedule
b. Reports on Form 8-K filed during the quarter ended
March 31, 1995
None.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, as amended, the registrant has duly caused this report to
be signed on its behalf by the undersigned thereunto duly
authorized.
The Peoples Gas Light and Coke Company
---------------------------------------
(Registrant)
May 11, 1995 By: /s/ K. S. BALASKOVITS
- --------------- -------------------------------
(Date) K. S. Balaskovits
Vice President and Controller
(Same as above)
-----------------------------
Principal Accounting Officer
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
CONSOLIDATED STATEMENTS OF INCOME, CONSOLIDATED BALANCE SHEETS,
CONSOLIDATED STATEMENTS OF CASH FLOWS, AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1995
<PERIOD-START> OCT-01-1994
<PERIOD-END> MAR-31-1995
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 1,169,728
<OTHER-PROPERTY-AND-INVEST> 5,865
<TOTAL-CURRENT-ASSETS> 454,449
<TOTAL-DEFERRED-CHARGES> 43,185
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 1,673,227
<COMMON> 165,307
<CAPITAL-SURPLUS-PAID-IN> 0
<RETAINED-EARNINGS> 399,094
<TOTAL-COMMON-STOCKHOLDERS-EQ> 564,401
0
0
<LONG-TERM-DEBT-NET> 549,150
<SHORT-TERM-NOTES> 900
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 0
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 558,776
<TOT-CAPITALIZATION-AND-LIAB> 1,673,227
<GROSS-OPERATING-REVENUE> 634,827
<INCOME-TAX-EXPENSE> 35,456
<OTHER-OPERATING-EXPENSES> 518,533
<TOTAL-OPERATING-EXPENSES> 553,989
<OPERATING-INCOME-LOSS> 80,838
<OTHER-INCOME-NET> 2,962
<INCOME-BEFORE-INTEREST-EXPEN> 83,800
<TOTAL-INTEREST-EXPENSE> 22,582
<NET-INCOME> 61,218
0
<EARNINGS-AVAILABLE-FOR-COMM> 61,218
<COMMON-STOCK-DIVIDENDS> 28,044
<TOTAL-INTEREST-ON-BONDS> 19,862
<CASH-FLOW-OPERATIONS> 160,443
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
