Page 1 of 14
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
Quarterly Report Under Section 13 or 15 (d) of
the Securities Exchange Act of 1934
For Quarter Ended June 30, 1995
Commission file number 1-3376-2
THE POTOMAC EDISON COMPANY
(Exact name of registrant as specified in its charter)
Maryland and Virginia 13-5323955
(States of Incorporation) (I.R.S. Employer Identification No.)
10435 Downsville Pike, Hagerstown, Maryland 21740-1766
Telephone number 301-790-3400
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 and (2) has been subject to such filing requirements
for the past 90 days.
At August 11, 1995, 22,385,000 shares of the Common Stock (no par
value) of the registrant were outstanding, all of which are held by
Allegheny Power System, Inc., the Company's parent.
<PAGE>
- 2 -
THE POTOMAC EDISON COMPANY
Form 10-Q for Quarter Ended June 30, 1995
Index
Page
No.
PART I - FINANCIAL INFORMATION:
Statement of income -
Three and six months ended June 30, 1995 and 1994 3
Balance sheet -
June 30, 1995 and December 31, 1994 4
Statement of cash flows -
Six months ended June 30, 1995 and 1994 5
Notes to financial statements 6-7
Management's discussion and analysis of financial
condition and results of operations 8-13
PART II - OTHER INFORMATION 14
<PAGE>
- 3 -
THE POTOMAC EDISON COMPANY
Statement of Income
Three Months Ended Six Months Ended
June 30 June 30
1995 1994 1995 1994
(Thousands of Dollars)
ELECTRIC OPERATING REVENUES:
Residential $ 63 136 $ 61 423 $156 935 $159 500
Commercial 32 566 30 930 69 646 66 910
Industrial 50 227 48 609 98 509 94 670
Nonaffiliated utilities 28 683 24 129 61 138 59 969
Other, including affiliates 6 794 5 955 13 526 13 645
Total Operating Revenues 181 406 171 046 399 754 394 694
OPERATING EXPENSES:
Operation:
Fuel 29 399 33 281 65 226 73 101
Purchased power & exchanges,
net 57 632 51 628 121 352 121 821
Deferred power costs, net 3 260 (679) 7 892 (2 964)
Other 23 449 20 879 46 021 41 237
Maintenance 14 085 14 669 28 556 29 524
Depreciation 17 211 14 910 34 431 29 820
Taxes other than income taxes 11 366 10 953 23 945 23 947
Federal & state income taxes 3 547 4 470 15 891 19 923
Total Operating Expenses 159 949 150 111 343 314 336 409
Operating Income 21 457 20 935 56 440 58 285
OTHER INCOME AND DEDUCTIONS:
Allowance for other than
borrowed funds used during
construction 404 605 1 070 1 818
Other income, net 3 394 2 070 6 090 4 139
Total Other Income and
Deductions 3 798 2 675 7 160 5 957
Income Before Interest
Charges 25 255 23 610 63 600 64 242
INTEREST CHARGES:
Interest on long-term debt 12 846 10 428 24 818 20 828
Other interest 587 549 963 889
Allowance for borrowed funds
used during construction (267) (427) (709) (1 142)
Total Interest Charges 13 166 10 550 25 072 20 575
Income Before Cumulative Effect
of Accounting Change 12 089 13 060 38 528 43 667
Cumulative Effect of Accounting
Change, net - - - 16 471
Net Income $ 12 089 $ 13 060 $ 38 528 $ 60 138
See accompanying notes to financial statements.
<PAGE>
- 4 -
THE POTOMAC EDISON COMPANY
Balance Sheet
June 30, December 31,
1995 1994
(Thousands of Dollars)
ASSETS:
Property, Plant, and Equipment:
At original cost, including $66,121,000
and $76,365,000 under construction $2 013 953 $1 978 396
Accumulated depreciation (703 144) (673 853)
1 310 809 1 304 543
Investments and Other Assets:
Allegheny Generating Company - common
stock at equity 61 177 62 364
Other 996 938
62 173 63 302
Current Assets:
Cash 41 693 2 196
Accounts receivable:
Electric service, net of $1,545,000 and
$1,177,000 uncollectible allowance 65 175 68 714
Affiliated and other 2 745 2 403
Notes receivable from affiliates - 1 900
Materials and supplies - at average cost:
Operating and construction 30 165 27 800
Fuel 23 826 22 316
Prepaid taxes 6 779 13 168
Other 2 906 5 000
173 289 143 497
Deferred Charges:
Regulatory assets 95 083 88 758
Unamortized loss on reacquired debt 19 192 8 344
Other 13 496 21 091
127 771 118 193
Total Assets $1 674 042 $1 629 535
CAPITALIZATION AND LIABILITIES:
Capitalization:
Common stock $ 447 700 $ 447 700
Other paid-in capital 2 756 2 724
Retained earnings 211 476 207 722
661 932 658 146
Preferred stock:
Not subject to mandatory redemption 16 378 36 378
Subject to mandatory redemption - 25 200
Long-term debt 628 851 604 749
1 307 161 1 324 473
Current Liabilities:
Short-term debt 14 750 -
Long-term debt and preferred stock due
within one year 64 157 1 200
Accounts payable 20 342 37 126
Accounts payable to affiliates 11 547 10 485
Taxes accrued:
Federal and state income 2 045 3 565
Other 9 359 11 874
Interest accrued 10 079 9 195
Customer deposits 6 449 6 228
Other 14 368 11 171
153 096 90 844
Deferred Credits and Other Liabilities:
Unamortized investment credit 26 928 28 041
Deferred income taxes 155 100 149 299
Regulatory liabilities 17 074 16 957
0ther 14 683 19 921
213 785 214 218
Total Capitalization and Liabilities $1 674 042 $1 629 535
See accompanying notes to financial statements.
<PAGE>
- 5 -
THE POTOMAC EDISON COMPANY
Statement of Cash Flows
Six Months Ended
June 30
1995 1994
(Thousands of Dollars)
CASH FLOWS FROM OPERATIONS:
Net income $ 38 528 $ 60 138
Depreciation 34 431 29 820
Deferred investment credit and income
taxes, net 4 611 (544)
Deferred power costs, net 7 892 (2 964)
Unconsolidated subsidiaries' dividends in
excess of earnings 1 232 1 130
Allowance for other than borrowed funds used
during construction (1 070) (1 818)
Cumulative effect of accounting change before
income taxes - (26 163)
Changes in certain current assets & liabilities:
Accounts receivable, net, excluding
effect of accounting change 3 197 (164)
Materials and supplies (3 875) (4 396)
Accounts payable (15 722) (5 213)
Taxes accrued (4 035) 11 299
Interest accrued 884 168
Other, net 1 496 4 724
67 569 66 017
CASH FLOWS FROM INVESTING:
Construction expenditures (41 878) (62 698)
Allowance for other than borrowed funds used
during construction 1 070 1 818
(40 808) (60 880)
CASH FLOWS FROM FINANCING:
Retirement of preferred stock (910) -
Issuance of long-term debt 207 018 75 420
Retirement of long-term debt (175 249) (16 000)
Short-term debt, net 14 750 -
Notes receivable from affiliates 1 900 (27 300)
Dividends on capital stock:
Preferred stock (2 091) (2 180)
Common stock (32 682) (35 144)
12 736 (5 204)
NET CHANGE IN CASH AND TEMPORARY CASH
INVESTMENTS 39 497 (67)
Cash and Temporary Cash Investments at January 1 2 196 1 489
Cash and Temporary Cash Investments at June 30 $ 41 693 $ 1 422
Supplemental cash flow information:
Cash paid during the period for:
Interest (net of amount capitalized) $ 24 479 $ 20 150
Income taxes 14 139 14 441
See accompanying notes to financial statements.
<PAGE>
- 6 -
THE POTOMAC EDISON COMPANY
Notes to Financial Statements
1. The Company's Notes to Financial Statements in the Allegheny Power
System companies' combined Annual Report on Form 10-K for the year
ended December 31, 1994, should be read with the accompanying
financial statements and the following notes. With the exception of
the December 31, 1994 balance sheet in the aforementioned annual
report on Form 10-K, the accompanying financial statements appearing
on pages 3 through 5 and these notes to financial statements are
unaudited. In the opinion of the Company, such financial statements
together with these notes thereto contain all adjustments (which
consist only of normal recurring adjustments) necessary to present
fairly the Company's financial position as of June 30, 1995, the
results of operations for the three and six months ended June 30, 1995
and 1994, and cash flows for the six months ended June 30, 1995 and
1994.
2. The Statement of Income reflects the results of past operations and is
not intended as any representation as to future results. For purposes
of the Balance Sheet and Statement of Cash Flows, temporary cash
investments with original maturities of three months or less,
generally in the form of commercial paper, certificates of deposit,
and repurchase agreements, are considered to be the equivalent of
cash.
3. Earnings for the 1994 periods have been restated to reflect
retroactively the effect of an accounting change adopted as of January
1994 to record unbilled revenues.
4. In June 1995, the Company issued $21 million of 6.15%, 20-year
pollution control revenue notes, to refund $21 million of 7.30% Series
B pollution control revenue notes due 2008. These notes will be
refunded in July 1995 but have been extinguished as of the June 30,
1995, balance sheet because funds have been placed in an irrevocable
trust to satisfy the obligation.
The Company issued $65 million of 7.75% and $80 million of 7.625% 30-
year first mortgage bonds in May 1995 to refund $65 million of 9.25%
series due 2019 and $80 million of 9.625% series due 2020,
respectively. The Company also issued $45.5 million of 8% Junior
Subordinated Deferrable Interest Debentures in June 1995 to replace
the following issues of preferred stock: $5 million of $7.00 Series
D, $5 million of $8.32 Series F, $10 million of $8.00 Series G, and
$25.5 million of $7.16 Series J.
5. Other paid in capital increased $32,000 in the six months ended
June 30, 1995, as a result of a gain on reacquired preferred
stock.
<PAGE>
- 7 -
The Company owns 28% of the common stock of Allegheny Generating
Company (AGC), and affiliates of the Company own the remainder. AGC
owns an undivided 40% interest, 840 MW, in the 2,100-MW pumped-storage
hydroelectric station in Bath County, Virginia operated by the 60%
owner, Virginia Power Company, an unaffiliated utility. Following is
a summary of income statement information for AGC:
Three Months Ended Six Months Ended
June 30 June 30
1995 1994 1995 1994
(Thousands of Dollars)
Electric operating revenues $22 061 $21 869 $44 157 $44 300
Operation & maintenance expense 1 571 1 444 3 367 3 277
Depreciation 4 224 4 236 8 448 8 472
Taxes other than income taxes 1 248 1 528 2 547 2 868
Federal income taxes 3 502 3 408 6 725 6 921
Interest charges 4 432 4 487 9 417 8 913
Other income, net (9) (5) (9) (7)
Net income $ 7 093 $ 6 771 $13 662 $13 856
The Company's share of the equity in earnings above was $2.0 million
and $1.9 million for the three months ended June 30, 1995 and 1994,
and $3.8 million and $3.9 million for the six months ended June 30,
1995 and 1994, respectively, and was included in other income, net, on
the Statement of Income.
5. Common stock dividends per share declared and paid during the periods
for which income statements are included are as follows:
1995 1994
1st 2nd 1st 2nd
Quarter Quarter Quarter Quarter
Number of Shares 22 385 000 22 385 000 22 385 000 22 385 000
Amount per Share $.73 $.73 $.78 $.79
Earnings per share are not reported inasmuch as the common stock of
the Company is 100% owned by its parent, Allegheny Power System, Inc.
<PAGE>
- 8 -
THE POTOMAC EDISON COMPANY
Management's Discussion and Analysis of Financial Condition
and Results of Operations
COMPARISON OF SECOND QUARTER AND SIX MONTHS ENDED JUNE 30, 1995
WITH SECOND QUARTER AND SIX MONTHS ENDED JUNE 30, 1994
NET INCOME
Net income for the second quarter of 1995 was $12.1 million compared
with $13.1 million for the corresponding 1994 period. For the first six
months of 1995, net income was $38.5 million compared with $43.7 million
for the corresponding 1994 period, before the cumulative effect of an
accounting change to record unbilled revenues.
The decrease in net income for the second quarter and in income
before cumulative effect of accounting change for the first six months of
1995 reflects increases in depreciation, interest and other expenses
offset in part by retail rate increases from previously reported rate
cases. The first six months also reflects a decrease in kWh sales to
retail customers due to mild weather.
SALES AND REVENUES
Retail kWh sales to commercial and industrial customers in the second
quarter increased 1% and 2%, respectively, and to residential customers
decreased 2%. In the first six months, retail kWh sales to residential
and commercial customers decreased 7% and 2%, respectively, and to
industrial customers increased 3%. Milder weather in the second quarter
and first six months of 1995 as compared to some of the coldest
temperatures ever recorded in much of the Company's service territory
during the first quarter of 1994 resulted in reduced residential kWh
sales. The increase in kWh sales to industrial customers in the second
quarter and first six months of 1995 occurred in almost all industrial
groups, the most significant from paper and aluminum customers. The
increase in revenues from retail customers resulted from the following:
Change from Prior Periods
Quarter Six Months
(Millions of Dollars)
Change in kWh sales $ 1.6 $(6.0)
Fuel and energy cost
adjustment clauses (1) .2 (.9)
Rate changes (2):
Maryland 4.8 12.0
West Virginia .8 1.8
Virginia (1.9) (1.6)
3.7 12.2
Other (.5) (1.3)
$ 5.0 $ 4.0
<PAGE>
- 9 -
(1) Changes in revenues from fuel and energy cost adjustment
clauses have little effect on net income.
(2) Reflects primarily rate increases on an annual basis of
$19.6 million in Maryland effective November 11, 1994
and a $1.5 million annual increase in West Virginia
effective November 11, 1994. This is in addition to
$1.9 million of Clean Air Act Amendments of 1990 (CAAA)
recovery granted effective July 1, 1994 in West
Virginia. These rate increases included recovery of
carrying charges on investment, depreciation, and
operating costs required to comply with Phase I of the
CAAA, and other increasing levels of expense. See page
11 for further information on the West Virginia rate
case.
KWh sales to and revenues from nonaffiliated utilities are comprised
of the following items:
Three Months Ended Six Months Ended
June 30 June 30
1995 1994 1995 1994
KWh sales (in billions):
From Company generation - .1 .1 .2
From purchased power 1.0 .5 2.0 1.6
1.0 .6 2.1 1.8
Revenues (in millions):
From Company generation $ 1.0 $ 2.8 $ 2.5 $ 6.0
From sales of purchased
power 27.7 21.3 58.6 54.0
$28.7 $24.1 $61.1 $60.0
Sales from Company generation decreased because of generating unit
outages which reduced the amount available for sale, and because of
decreased demand and continuing price competition. Sales of purchased
power vary depending on the availability of eastern utilities' generating
equipment, demand for energy, and competition. About 95% of the aggregate
benefits from sales to nonaffiliated utilities is passed on to retail
customers and has little effect on net income.
OPERATING EXPENSES
Fuel expenses for the second quarter and the first six months of 1995
decreased 12% and 11%, respectively. The decrease in fuel expenses was a
result of a 9% decrease in average coal prices in both periods, and a
decrease in kWhs generated of 4% in the second quarter and 2% in the first
six months. The reduced average coal prices are primarily the result of
renegotiations of long-term fuel contracts which reduced fuel prices
effective January 1995. Fuel expenses are primarily subject to deferred
power cost accounting procedures with the result that changes in fuel
expenses have little effect on net income.
<PAGE>
- 10 -
"Purchased power and exchanges, net" represents power purchases from
and exchanges with nonaffiliated utilities, capacity charges paid to
Allegheny Generating Company (AGC) and other transactions with affiliates
made pursuant to a power supply agreement whereby each company uses the
most economical generation available in the Allegheny Power System at any
given time, and is comprised of the following items:
Three Months Ended Six Months Ended
June 30 June 30
1995 1994 1995 1994
(Millions of Dollars)
Nonaffiliated transactions:
Purchased power:
For resale to other
utilities $24.8 $18.7 $ 51.7 $ 47.7
Other 5.1 3.1 8.3 7.3
Power exchanges, net (.9) (.8) .5 .2
Affiliated transactions:
AGC capacity charges 7.0 7.3 14.3 14.6
Other affiliated capacity
charges 11.5 9.9 22.4 18.8
Energy and spinning
reserve charges 10.1 13.4 24.2 33.2
$57.6 $51.6 $121.4 $121.8
The amount of power purchased from nonaffiliated utilities for use by
the Company and for resale to nonaffiliated utilities depends upon the
availability of the Company's generating equipment, transmission capacity,
and fuel, and its cost of generation and the cost of operations of
nonaffiliated utilities from which such purchases are made. The decrease
in energy and spinning reserve charges for the first six months of 1995
was due to a decrease in retail kWh sales. The cost of power purchased
from nonaffiliates for use by the Company, AGC capacity charges in West
Virginia, and affiliated energy and spinning reserve charges are mostly
recovered from customers currently through the regular fuel and energy
cost recovery procedures followed by the Company's regulatory commissions
and is primarily subject to deferred power cost procedures with the result
that changes in such costs have little effect on net income. The primary
reason for the increases in purchases for resale to other utilities is
described under SALES AND REVENUES above.
While the Company does not currently purchase generation from
qualified facilities under the Public Utility Regulatory Policies Act of
1978 (PURPA), an agreement has been reached with one facility to commence
purchasing generation in 1999. This project may significantly increase
the cost of power purchases passed on to customers.
The increases in other operation expense for the second quarter and
six month periods resulted primarily from increased power station
operating costs, including expenses related to the Harrison scrubbers
which became available for service in November 1994, an increase in
research and development expenses due to the timing of payments, and
increases in salaries and wages. For the first six months these increases
were offset in part by environmental liabilities recorded in the first
quarter of 1994.
<PAGE>
- 11 -
Maintenance expenses represent costs incurred to maintain the power
stations, the transmission and distribution (T&D) system, and general
plant, and reflect routine maintenance of equipment and rights-of-way as
well as planned major repairs and unplanned expenditures, primarily from
forced outages at the power stations and periodic storm damage on the T&D
system. The Company is also experiencing, and expects to continue to
experience, increased expenditures due to the aging of its power stations.
Variations in maintenance expense result primarily from unplanned events
and planned major projects, which vary in timing and magnitude depending
upon the length of time equipment has been in service without a major
overhaul and the amount of work found necessary when equipment is
dismantled.
The increases in depreciation expense for the second quarter and
first six months of 1995 resulted from additions to electric plant,
primarily because of the Harrison scrubbers which became available for
service in November 1994, offset in part by a decrease in depreciation
rates in West Virginia concurrent with the West Virginia base rate
increase effective in November 1994.
The net decreases of $.9 million and $4.0 million in federal and
state income taxes for the second quarter and first six month periods,
respectively, resulted primarily from decreases in income before income
taxes.
The combined decreases of $.4 million and $1.2 million in allowance
for funds used during construction (AFUDC) for the second quarter and
first six month periods, respectively, reflect decreases in capital
expenditures upon substantial completion of Phase I of the CAAA.
The increase in other income, net for the second quarter and first
six month periods was due primarily to income from demand-side management
programs and an increase in interest income earned on funds available as
a result of the timing of the debt and preferred stock refinancings in the
second quarter of 1995.
Interest on long-term debt increased $2.4 million for the quarter and
$4.0 million for the first six months due primarily to the timing of the
refinancing of $145 million of first mortgage bonds and $21 million of
pollution control revenue notes, interest related to the issuance of $45.5
million of Junior Subordinated Deferrable Interest Debentures, and new
security issues in 1994. Fluctuations in other interest expense reflect
changes in the level of short-term debt maintained by the Company.
LIQUIDITY AND CAPITAL RESOURCES
The Company's discussion on Liquidity and Capital Resources in the
Allegheny Power System companies' combined Annual Report on Form 10-K for
the year ended December 31, 1994 should be read with the following
information.
<PAGE>
- 12 -
In March 1995, in response to requests for reconsideration of the
rate order to the Company in mid-November 1994, the Public Service
Commission of West Virginia (PSC) ordered a considerable number of changes
from the November order, including reallocations of the rate increases
among customer classes and that certain Harrison scrubber-related expenses
be reviewed as part of the annual Expanded Net Energy Cost (ENEC) review
procedure in June 1995. The PSC later agreed with its staff to delay
implementation of the March 1995 order until completion of the ENEC
review. Following the March 1995 order, the Company petitioned the West
Virginia Supreme Court of Appeals to review the PSC's order as to various
issues, including the low allowed return on equity of 10.85%.
Effective July 1, 1995, following the ENEC review, the PSC reduced
the Company's annual base rates by $.5 million related to scrubber
expenses and stated that those items would be again reviewed in the 1996
ENEC review. On July 10, 1995, the Company filed a petition for
reconsideration related to the scrubber expenses.
The Virginia State Corporation Commission on March 9, 1995, issued an
order in the Company's rate case which authorized an increase in revenues
of about $3 million on an annual basis. The Company had been collecting
higher rates, subject to refund, from its Virginia customers since
November 1994. A refund of revenues collected in excess of the amount
authorized was completed in May 1995, for which adequate reserves had been
provided.
The parties have agreed to settlements, subject to Federal Energy
Regulatory Commission (FERC) approval, in the Company's FERC rate case
filing for wholesale customers, which resulted in an increase in annual
revenues under three-year contracts of about $2.3 million effective on
June 25, 1995.
In the normal course of business, the Company is subject to various
contingencies and uncertainties relating to its operations and
construction programs, including cost recovery in the regulatory process,
laws, regulations and uncertainties related to environmental matters, and
legal actions.
As previously reported, Monongahela Power Company, an affiliated
company, has been named as a defendant along with multiple other
defendants in 2,343 pending asbestos cases involving one or more
plaintiffs, and the Company and its affiliates have been named as
defendants along with multiple other defendants in an additional 813 cases
by one or more plaintiffs, including 815 new cases filed in 1995 to date.
While the cumulative number of claims appears to be significant, previous
cases have been settled for an amount substantially less than the
anticipated cost of defense. Also as previously reported, the Company and
its affiliates and approximately 875 others have been identified by the
Environmental Protection Agency as potentially responsible parties in a
Superfund site subject to cleanup. The Company believes that provisions
for liabilities and insurance recoveries are such that final resolution of
these matters will not have a material effect on its financial position.
<PAGE>
- 13 -
In March 1995, the FERC published a Notice of Proposed Rulemaking
(NOPR) that would mandate sweeping changes to promote increased
competition in the wholesale electric industry. The proposals would
require that utilities file nondiscriminatory open access transmission
tariffs and offer comparable transmission services to eligible third
parties. It also would allow utilities the opportunity to recover
stranded costs. The Company has submitted comments to the FERC.
On May 11, 1995, at the annual meeting of stockholders, the System
announced that it was proceeding with a functional reorganization. As a
result of the reorganization and consolidation efforts currently underway,
staff reductions with possible future layoffs appear to be inevitable.
<PAGE>
- 14 -
THE POTOMAC EDISON COMPANY
Part II--Other Information to Form 10-Q
for Quarter Ended June 30, 1995
ITEM 1. LEGAL PROCEEDINGS
Two previously reported complaints which had been filed with the
PSC by developers of cogeneration projects in Marshall and Barbour
Counties, West Virginia have been dismissed by the PSC.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
27 Financial Data Schedule.
(b) On May 12, 1995, the Company filed a report on Form 8-K including
an exhibit consisting of a supplemental indenture dated as of May
1, 1995.
On May 17, 1995, the Company filed a report on Form 8-K including
an exhibit consisting of a supplemental indenture dated as of May
1, 1995.
On June 30, 1995, the Company filed a report on Form 8-K
including an exhibit consisting of an indenture dated as of May
31, 1995.
Signature
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.
THE POTOMAC EDISON COMPANY
THOMAS J. KLOC
__________________________
Thomas J. Kloc
Controller
(Chief Accounting Officer)
August 11, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<CURRENCY> 0
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1995
<PERIOD-END> JUN-30-1995
<EXCHANGE-RATE> 1
<CASH> 41,693
<SECURITIES> 0
<RECEIVABLES> 69,465
<ALLOWANCES> (1,545)
<INVENTORY> 53,991
<CURRENT-ASSETS> 173,289
<PP&E> 2,013,953
<DEPRECIATION> (703,144)
<TOTAL-ASSETS> 1,674,042
<CURRENT-LIABILITIES> 153,096
<BONDS> 628,851
<COMMON> 447,700
0
16,378
<OTHER-SE> 214,232
<TOTAL-LIABILITY-AND-EQUITY> 1,674,042
<SALES> 399,754
<TOTAL-REVENUES> 399,754
<CGS> 269,047
<TOTAL-COSTS> 327,423
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 25,072
<INCOME-PRETAX> 54,419
<INCOME-TAX> 15,891
<INCOME-CONTINUING> 38,528
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 38,528
<EPS-PRIMARY> 0.00<F1>
<EPS-DILUTED> 0.00<F1>
<FN>
<F1>All common stock is owned by Parent. No EPS required.
</FN>
</TABLE>
