<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
(X)QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1995
OR
( )TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ............ to ............
Commission file number 1-11429
PUBLIC SERVICE COMPANY OF NORTH CAROLINA, INCORPORATED
(Exact name of registrant as specified in its charter)
NORTH CAROLINA 56-0233140
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
400 COX ROAD, P. O. BOX 1398
GASTONIA, NORTH CAROLINA 28053-1398
(Address of principal executive offices) (Zip Code)
(704) 864-6731
(Registrant's telephone number, including area code)
NONE
(Former name, former address and former fiscal year,
if changed since last report.)
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 such
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.
Number of shares of Common Stock, $1 par value, outstanding
at July 31, 1995 . . . . . . . . . . . . . . . . 18,669,352
<PAGE> 2
PUBLIC SERVICE COMPANY OF NORTH CAROLINA, INCORPORATED
------------------------------------------------------
AND SUBSIDIARIES
----------------
PART I. FINANCIAL INFORMATION
The condensed financial statements included herein have been
prepared by the registrant 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 registrant believes that the disclosures
herein are adequate to make the information presented not misleading.
It is recommended that these condensed financial statements be read
in conjunction with the financial statements and the notes thereto
included in the registrant's latest annual report on Form 10-K.
<PAGE> 3
<TABLE>
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
<CAPTION>
Three Months Ended Nine Months Ended Twelve Months Ended
June 30 June 30 June 30
------------------ ------------------ -------------------
1995 1994 1995 1994 1995 1994
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Operating revenues $ 41,650 $ 48,171 $221,175 $242,847 $252,032 $273,331
Cost of gas 17,414 25,611 106,389 139,425 122,341 157,275
-------- -------- -------- -------- -------- --------
Gross margin 24,236 22,560 114,786 103,422 129,691 116,056
-------- -------- -------- -------- -------- --------
Operating expenses and taxes:
Operating and maintenance 12,903 12,514 38,188 37,588 50,369 49,164
Provision for depreciation 4,581 3,642 13,513 11,264 17,447 14,910
General taxes 2,819 2,939 11,493 12,176 13,882 14,521
Income taxes 338 121 16,310 12,188 14,262 8,661
-------- -------- -------- -------- -------- --------
20,641 19,216 79,504 73,216 95,960 87,256
-------- -------- -------- -------- -------- --------
Operating income 3,595 3,344 35,282 30,206 33,731 28,800
Other income 107 1,587 93 3,546 1,117 3,358
Interest deductions 3,097 3,262 9,604 10,211 12,641 13,703
-------- -------- -------- -------- -------- --------
Net income $ 605 $ 1,669 $ 25,771 $ 23,541 $ 22,207 $ 18,455
======== ======== ======== ======== ======== ========
Average common shares
outstanding 18,587 17,506 18,452 16,617 18,389 16,456
Earnings per share $.03 $.10 $1.40 $1.42 $1.21 $1.12
Cash dividends declared
per share $.2125 $.205 $.6225 $.60 $.8275 $.7975
</TABLE>
<PAGE> 4
<TABLE>
CONSOLIDATED BALANCE SHEETS
(In thousands)
ASSETS
<CAPTION>
Jun 30 Sep 30 Jun 30
1995 1994 1994
-------- -------- --------
<S> <C> <C> <C>
Gas utility plant $554,959 $520,209 $502,728
Less - Accumulated depreciation 163,774 153,308 150,474
-------- -------- --------
391,185 366,901 352,254
-------- -------- --------
Non-utility property, net 949 251 792
-------- -------- --------
Current assets:
Cash and temporary investments 2,581 2,534 14,683
Restricted cash and temporary investments 4,128 12,731 12,585
Receivables, less allowance for
doubtful accounts 12,760 16,649 16,064
Materials and supplies 5,842 6,131 6,103
Stored gas inventory 8,980 14,276 10,848
Deferred gas costs, net - 734 -
Prepayments and other 2,882 2,572 2,690
-------- -------- --------
37,173 55,627 62,973
-------- -------- --------
Deferred charges and other assets 6,199 5,160 5,425
-------- -------- --------
Total $435,506 $427,939 $421,444
======== ======== ========
CAPITALIZATION AND LIABILITIES
Capitalization:
Common equity -
Common stock, $1 par $ 18,603 $ 18,212 $ 18,093
Capital in excess of par value 105,346 100,201 98,783
Retained earnings 56,365 42,142 49,514
-------- -------- --------
180,314 160,555 166,390
Long-term debt 109,140 113,680 121,180
-------- -------- --------
289,454 274,235 287,570
-------- -------- --------
Current liabilities:
Maturities of long-term debt 9,540 5,240 5,240
Accounts payable 13,219 15,656 15,642
Accrued taxes 7,896 5,787 9,908
Customer prepayments and deposits 4,855 5,570 3,204
Cash dividends and interest 5,526 4,973 5,420
Restricted supplier refunds 4,128 12,731 12,585
Deferred gas costs, net 1,298 - 1,962
Other 11,952 11,665 11,091
-------- -------- --------
58,414 61,622 65,052
Interim bank loans 18,500 23,000 -
-------- -------- --------
76,914 84,622 65,052
-------- -------- --------
Accrued pension cost 12,957 15,532 15,029
Deferred investment tax credits 4,553 5,081 4,908
Deferred income taxes, net 51,628 48,469 48,885
-------- -------- --------
Total $435,506 $427,939 $421,444
======== ======== ========
</TABLE>
<PAGE> 5
CONSOLIDATED STATEMENTS OF RETAINED EARNINGS
(In thousands)
Twelve Months Ended
June 30
-------------------
1995 1994
------- -------
Balance beginning of period $49,514 $44,408
Add - Net income 22,207 18,455
Deduct - Common stock dividends
and other 15,356 13,349
------- -------
Balance end of period $56,365 $49,514
======= =======
<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
<CAPTION>
Nine Months Ended Twelve Months Ended
June 30 June 30
----------------- -------------------
1995 1994 1995 1994
------- ------- ------- -------
<S> <C> <C> <C> <C>
Cash Flows From Operating Activities:
Net income $25,771 $23,541 $22,207 $18,455
Adjustments to reconcile net income
to net cash provided by operating
activities -
Depreciation, depletion and other 16,055 14,086 20,821 18,691
Deferred income taxes, net 3,159 2,292 2,743 (1,269)
Gain on sale of propane assets - (3,128) - (3,128)
------- ------- ------- -------
44,985 36,791 45,771 32,749
Change in operating assets and
liabilities:
Receivables, net 2,638 (2,778) 1,894 (1,300)
Inventories 5,586 2,053 2,129 (1,658)
Accounts payable (2,437) (2,065) (2,423) (851)
Accrued pension cost (2,575) 1,506 (2,073) 2,198
Other 2,665 10,224 (682) 11,532
------- ------- ------- -------
50,862 45,731 44,616 42,670
------- ------- ------- -------
Cash Flows From Investing Activities:
Construction expenditures (39,709) (27,113) (58,065) (42,865)
Non-utility and other (1,520) (1,030) (1,298) (563)
Proceeds from sale of propane assets - 12,800 - 12,800
------- ------- ------- -------
(41,229) (15,343) (59,363) (30,628)
------- ------- ------- -------
Cash Flows From Financing Activities:
Issuance of common stock through public
offering, net of expenses - 23,406 - 23,406
Issuance of common stock through
dividend reinvestment, stock purchase
and stock option plans 5,412 5,710 7,000 7,309
Increase (decrease) in interim bank
loans, net (4,500) (33,500) 18,500 (12,500)
Retirement of long-term debt
and common stock (296) (3,724) (7,871) (6,223)
Cash dividends (10,202) (9,516) (14,984) (12,688)
------- ------- ------- -------
(9,586) (17,624) 2,645 (696)
------- ------- ------- -------
Net increase (decrease) in cash and
temporary investments 47 12,764 (12,102) 11,346
Cash and temporary investments
at beginning of period 2,534 1,919 14,683 3,337
------- ------- ------- -------
Cash and temporary investments
at end of period $ 2,581 $14,683 $ 2,581 $14,683
======= ======= ======= =======
Cash paid during the period for:
Interest (net of amount capitalized) $ 9,844 $11,815 $12,164 $13,253
Income taxes 10,669 5,681 13,915 6,912
<PAGE> 6
</TABLE>
NOTES TO FINANCIAL STATEMENTS
1. The accompanying unaudited consolidated financial statements and
notes should be read in conjunction with the financial statements and
notes included in PSNC's 1994 Annual Report. In the opinion of
management, all adjustments necessary for a fair statement of the results
of operations for the interim periods have been recorded. Certain amounts
previously reported have been reclassified to conform with the current
period's presentation.
PSNC's business is seasonal in nature, therefore the financial
results for any interim period are not necessarily indicative of those
which may be expected for the annual period.
<PAGE> 7
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
Changes in Results of Operations
- --------------------------------
(Amounts in thousands except
degree day and customer data) Three Months Ended June 30
-----------------------------------------
Increase
1995 1994 (Decrease) %
-------- -------- --------- ---
Gross margin $ 24,236 $ 22,560 $ 1,676 7
Less - Franchise taxes 1,321 1,528 (207) (14)
-------- -------- ---------
Net margin $ 22,915 $ 21,032 $ 1,883 9
======== ======== =========
Total volume throughput (DT):
Residential 2,522 2,546 (24) (1)
Commercial/small industrial 1,982 1,982 - -
Large commercial/industrial 7,193 7,003 190 3
-------- -------- ---------
11,697 11,531 166 1
======== ======== =========
Raleigh/Durham area degree days:
Actual 216 218 (2) (1)
Normal 255 255 - -
Percent of normal 85% 85%
Weather normalization adjustment
income (refund), net of
franchise taxes $ 1,005 $ 922 $ 83
Customers at end of period:
Residential 245,510 233,063 12,447 5
Commercial/small industrial 29,371 27,858 1,513 5
Large commercial/industrial 388 384 4 1
-------- -------- ---------
275,269 261,305 13,964 5
======== ======== =========
<TABLE>
Net margin for the three months ended June 30, 1995 increased
$1,883,000 as compared to the same period last year. This increase in net
margin is attributable to the items shown below (in thousands):
<CAPTION>
Commercial/ Large
Small Commercial/
Residential Industrial Industrial Other Total
----------- ---------- ---------- ------ ------
<S> <C> <C> <C> <C> <C>
Price variances*-
General rate increase
effective 10/94 $1,337 $ 187 $ (713) $ - $ 811
Cardinal rate increase
effective 1/95 189 128 205 - 522
Volume variances, net 370 58 239 - 667
Other - - - (117) (117)
------ ------ ------ ------ ------
Total $1,896 $ 373 $ (269) $ (117) $1,883
====== ====== ====== ====== ======
</TABLE>
*Includes changes in sales mix.
Positive volume variances occurred during the three-month period due
to increases in all three customer bases, and to an increase in volumes
delivered to certain large commercial/industrial customers due to their
higher operating levels. For residential and commercial/small industrial
customers, the operation of the weather normalization adjustment (WNA)
mechanism generally offsets the volume variance related to the effect that
weather has on throughput. The Cardinal Pipeline was placed into service on
<PAGE> 8
MANAGEMENT'S DISCUSSION (Continued)
December 31, 1994. A hearing was held on January 25, 1995, and new rates
that increased annual revenues by approximately $3,000,000 became
effective the following day.
(Amounts in thousands except
degree day data) Nine Months Ended June 30
-----------------------------------------
Increase
1995 1994 (Decrease) %
-------- -------- -------- ---
Gross margin $114,786 $103,422 $ 11,364 11
Less - Franchise taxes 7,104 7,798 (694) (9)
-------- -------- ---------
Net margin $107,682 $ 95,624 $ 12,058 13
======== ======== =========
Total volume throughput (DT):
Residential 16,529 17,780 (1,251) (7)
Commercial/small industrial 10,471 11,081 (610) (6)
Large commercial/industrial 22,608 21,040 1,568 7
-------- -------- ---------
49,608 49,901 (293) (1)
======== ======== =========
Raleigh/Durham area degree days:
Actual 2,936 3,382 (446) (13)
Normal 3,323 3,323 - -
Percent of normal 88% 102%
Weather normalization adjustment
income (refund), net of
franchise taxes $ 5,800 $ (138) $ 5,938
<TABLE>
Net margin for the nine months ended June 30, 1995 increased
$12,058,000 as compared to the same period last year. This increase in
net margin is attributable to the items shown below (in thousands):
<CAPTION>
Commercial/ Large
Small Commercial/
Residential Industrial Industrial Other Total
----------- ---------- ---------- ------- -------
<S> <C> <C> <C> <C> <C>
Price variances*-
General rate increase
effective 10/94 $ 8,251 $1,720 $(1,557) $ (732) $ 7,682
Cardinal rate increase
effective 1/95 574 327 355 - 1,256
Volume variances, net 1,705 323 1,367 - 3,395
Other - - - (275) (275)
------- ------ ------- ------- -------
Total $10,530 $2,370 $ 165 $(1,007) $12,058
======= ====== ======= ======= =======
* Includes changes in sales mix.
</TABLE>
Positive volume variances occurred during the nine-month period due
to the previously mentioned increase in the customer bases and an increase
in volumes delivered to certain large commercial/industrial customers.
These positive volume variances further show the impact of the WNA
mechanism for PSNC's residential and commercial/small industrial
customers, who experienced a decline in throughput during the period. The
nine-month period also reflects a $732,000 refund ordered by the North
Carolina Utilities Commission (NCUC) in the October 7, 1994 rate case
order that related to income tax credits taken in prior periods.
<PAGE> 9
MANAGEMENT'S DISCUSSION (Continued)
(Amounts in thousands except
degree day data) Twelve Months Ended June 30
-----------------------------------------
Increase
1995 1994 (Decrease) %
-------- -------- --------- ---
Gross margin $129,691 $116,056 $ 13,635 12
Less - Franchise taxes 8,072 8,753 (681) (8)
-------- -------- ---------
Net margin $121,619 $107,303 $ 14,316 13
======== ======== =========
Total volume throughput (DT):
Residential 17,531 18,708 (1,177) (6)
Commercial/small industrial 11,839 12,367 (528) (4)
Large commercial/industrial 29,225 27,060 2,165 8
-------- -------- ---------
58,595 58,135 460 1
======== ======== =========
Raleigh/Durham area degree days:
Actual 2,943 3,392 (449) (13)
Normal 3,341 3,341 - -
Percent of normal 88% 102%
Weather normalization adjustment
income (refund), net of
franchise taxes $ 5,800 $ (138) $ 5,938
<TABLE>
Net margin for the twelve months ended June 30, 1995 increased
$14,316,000 as compared to the same period last year. This increase in
net margin is attributable to the items shown below (in thousands):
<CAPTION>
Commercial/ Large
Small Commercial/
Residential Industrial Industrial Other Total
----------- ---------- ---------- ------ -------
<S> <C> <C> <C> <C> <C>
Price variances*-
General rate increase
effective 10/94 $ 8,251 $1,720 $(1,659) $ (732) $ 7,580
Cardinal rate increase
effective 1/95 574 327 355 1,256
Volume variances, net 1,394 486 1,772 - 3,652
Other - - - 1,828 1,828
------- ------ ------- ------ -------
Total $10,219 $2,533 $ 468 $1,096 $14,316
======= ====== ======= ====== =======
* Includes changes in sales mix.
</TABLE>
Positive volume variances occurred during the twelve-month period due
to the previously mentioned increase in the customer bases and an increase
in volumes delivered to certain large commercial/industrial customers.
These positive volume variances again show the impact of the WNA mechanism
for PSNC's residential and commercial/small industrial customers. The
twelve-month period also reflects the previously mentioned refund ordered
by the NCUC, and includes a $1,225,000 increase in margin due to the
write-off of Southern Expansion costs that occurred in July 1993 (see Note
2 to the financial statements in the 1994 Annual Report).
Operating and maintenance expenses for the three, nine and twelve
months ended June 30, 1995 increased 3%, 2% and 2%, respectively, as
compared to the same periods last year. These increases reflect higher
employee educational expenses and outside consulting services expenses
related to information systems and employee benefits. Total payroll
decreased in comparison to the same periods last year due to the sale of
PSNC's propane operations in June 1994. However, salary expenses included
in operating and maintenance increased due to payroll reallocations
implemented during November 1994 to standardize labor distributions. The
increases for all three periods were partially offset by the
reclassification of certain sales compensation expenses to merchandising
and jobbing. The nine- and twelve-month periods additionally reflect
employee severance expenses related to departmental
<PAGE> 10
MANAGEMENT'S DISCUSSION (Continued)
reorganizations and to fees related to listing on the New York Stock
Exchange. The increases for these two periods were partially offset by
the $750,000 reversal of expenses related to the investigation of former
manufactured gas plant (MGP) sites, originally recorded in fiscal 1992
(see Note 8 to the financial statements in the 1994 Annual Report). Also
offsetting the increases were declines in insurance expenses for the nine
and twelve months of $630,000 and $250,000, respectively. These related
to health and life insurance refunds received due to favorable experience
realized, along with the transfer of a large number of employees to a
less-costly health maintenance organization (HMO) provider.
Depreciation expense increased for the three, nine and twelve months
ended June 30, 1995 due to utility plant additions and to higher
depreciation rates approved in the October 1994 general rate case order.
The increase in income taxes for the nine and twelve months ended June 30,
1995 is due in part to income tax credits recorded in both of the prior
year periods.
Other income for the three, nine and twelve months ended June 30,
1995 decreased $1,480,000, $3,453,000 and $2,241,000, respectively, due
mainly to income recognized from the June 1994 sale of PSNC's propane
subsidiary assets and exploration and development assets. The after-tax
income from the sale of these assets was approximately $1,650,000. In
addition, for the nine- and twelve-month periods ending June 30, 1995,
other income decreased due to the absence of operating income from the
propane subsidiary. These decreases in subsidiary operations for all
periods were partially offset by increased agency fee revenues from PSNC's
gas marketing subsidiary. Income from merchandising operations decreased
due to the previously mentioned reclassification of certain sales
compensation expenses from operating and maintenance expenses for all
three periods presented. Other income during the twelve-month period was
positively impacted by an increase in pipeline capacity sales.
Interest deductions for the three, nine and twelve months ended June
30, 1995 decreased 5%, 6% and 8%, respectively. These decreases are
primarily due to lower interest expense on declining balances in long-term
debt outstanding. For the nine- and twelve-month periods, the decrease
reflects interest capitalized related to the construction of the Cardinal
Pipeline project.
The change in earnings per share for all three periods reflect an
increase of 6%, 11%, and 12% in the average number of common shares
outstanding as compared to the same periods last year. These increases are
primarily due to the May 1994 sale of 1,725,000 new shares of $1 par
common stock.
Changes in Financial Condition
- ------------------------------
The capital expansion program, through the construction of lines,
services, systems, facilities and the purchase of equipment, is designed
to help PSNC meet the growing demand for its product. PSNC's fiscal 1995
construction budget is approximately $54,000,000, compared to actual
construction expenditures for fiscal 1994 of $45,469,000. The
construction program is regularly reviewed by management and is dependent
upon PSNC's continuing ability to generate adequate funds internally and
to sell new issues of debt and equity securities on acceptable terms.
Construction expenditures during the nine and twelve months ended June 30,
1995 were $39,709,000 and $58,065,000, respectively, as compared to
$27,113,000 and $42,865,000 for the same periods a year ago. These
increases are mainly due to construction of the Cardinal Pipeline project.
During the nine and twelve months ended June 30, 1995, construction
expenditures related to the project were $7,290,000 and $15,055,000,
respectively.
<PAGE> 11
MANAGEMENT'S DISCUSSION (Continued)
PSNC generally finances its operations with internally generated
funds, supplemented with bank lines of credit to satisfy seasonal
requirements. PSNC also borrows under its bank lines of credit to finance
portions of its construction expenditures pending refinancing through the
issuance of equity or long-term debt at a later date depending upon prevailing
market conditions. PSNC has committed lines of credit with eight commercial
banks which vary monthly depending upon seasonal requirements. For the
twelve-month period beginning April 1, 1995, lines of credit with these
banks range from a minimum of $22,000,000 to a winter-period maximum of
$72,000,000. PSNC also has uncommitted annual lines of credit with three of
these banks totaling $21,000,000. Lines of credit are evaluated periodically by
management and renegotiated to accommodate anticipated short-term financing
needs. Management believes these lines are currently adequate to finance
a portion of construction expenditures, stored gas inventories and other
corporate needs.
PSNC sold 1,725,000 new shares of $1 par common stock through an
underwritten public offering during May 1994. The net proceeds of
$23,406,000 were used to repay all outstanding short-term indebtedness, to
redeem the outstanding $3,098,000 of First Mortgage Bonds, 9 7/8% Series
H, due 1995, and to help finance a portion of fiscal 1994's construction
expenditures.
Cash and temporary investments at June 30, 1995 decreased $12,102,000
from June 30, 1994. The balance at June 30, 1994 included approximately
$12,800,000 of proceeds from the sale of PSNC's propane assets during June
1994 that were used to help finance a portion of fiscal 1994's
construction expenditures.
At June 30, 1995, restricted cash and temporary investments were
$4,128,000, a decrease from $12,731,000 at September 30, 1994. This net
decrease was due to the deposit of $11,531,000 into the expansion fund in
the Office of the State Treasurer during December 1994. This fund was
created by an order of the NCUC, dated June 3, 1993, for the purpose of
constructing natural gas lines into unserved areas of PSNC's service
territory that otherwise would not be economically feasible to serve.
Since December 1994, PSNC has received supplier refunds totaling
$2,624,000 that will be held for deposit into the expansion fund at a
later date, along with interest earned.
Net accounts receivable decreased $3,304,000 as compared to June 30,
1994. This decrease was due primarily to decreased revenues billed in
June 1995 as compared to June 1994 reflecting a shift from natural gas
purchased and then sold to large commercial/industrial customers to
transportation only. Transportation customers are billed directly by the
supplier for the commodity cost of natural gas transported to them. The
decrease in accounts receivable also reflects a decrease in the wholesale
cost of gas.
Net deferred gas costs fluctuate in response to the operation of
PSNC's Rider D rate mechanism. This mechanism allows PSNC to recover
margin losses on negotiated sales to large commercial and industrial
customers with alternate fuel capability. It also allows PSNC to recover
from customers all prudently incurred gas costs. On a monthly basis, any
difference in amounts paid and collected for these costs is recorded for
subsequent refund to or collection from PSNC's customers. Deferred gas
costs at June 30, 1995 and June 30, 1994 represent net overcollections
from customers of $1,298,000 and $1,962,000, respectively, while deferred
gas costs at September 30, 1994 denote undercollections of $734,000. Both
the nine and twelve months ended June 30, 1995 were affected by an
$8,000,000 refund credited to customers' bills during February 1995 for
overcollections of commodity gas costs. For the nine-month period, this
refund was partially offset by overcollections for demand and storage gas
costs. The variance for the twelve-month period
<PAGE> 12
MANAGEMENT'S DISCUSSION (Continued)
additionally reflects a decline in deferred net income related to PSNC's
capacity release transactions that was partially offset by a net increase
in overcollections for commodity gas costs.
The decrease in accrued pension cost at June 30, 1995 is due to the
March 1995 pension contribution payment of $2,388,000 for the 1993-1994
pension plan year.
<PAGE> 13
<TABLE>
EXHIBIT 11
PUBLIC SERVICE COMPANY OF NORTH CAROLINA, INCORPORATED
COMPUTATION OF EARNINGS PER SHARE
(In thousands, except per share amounts)
<CAPTION>
Three Months Ended Nine Months Ended Twelve Months Ended
June 30 June 30 June 30
------------------ ------------------ -------------------
1995 1994 1995 1994 1995 1994
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net income $ 605 $ 1,669 $ 25,771 $ 23,541 $22,207 $ 18,455
-------- ------- -------- -------- -------- --------
Average common shares outstanding 18,587 17,506 18,452 16,617 18,389 16,456
Additional dilutive effect of
outstanding options (as determined
by the application of the treasury
stock method) 50 53 50 83 50 90
-------- -------- -------- -------- ------- --------
Average common shares outstanding
as adjusted 18,637 17,559 18,502 16,700 18,439 16,546
-------- -------- -------- -------- -------- --------
Earnings per share, as adjusted $ .03 $ .10 $1.39 $1.41 $1.20 $1.12
===== ===== ===== ===== ===== =====
This calculation is submitted in accordance with Regulation S-K item 601(b)(11)
although not required by footnote 2 to paragraph 14 of APB Opinion No. 15 because it results
in dilution of less than 3%.
</TABLE>
<PAGE> 14
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
- --------------------------
None.
Item 2. Changes in Securities
- ------------------------------
None.
Item 3. Defaults Upon Senior Securities
- ----------------------------------------
None.
Item 4. Submission of Matters to a Vote of Security Holders
- ------------------------------------------------------------
None.
Item 5. Other Information
- --------------------------
None.
Item 6. Exhibits and Reports on Form 8-K
- -----------------------------------------
(a) Part I Exhibits:
11 - Statement re: computation of per share earnings.
27 - Financial Data Schedule.
(b) Reports on Form 8-K:
There were no reports on Form 8-K filed during the three months
ended June 30, 1995.
<PAGE> 15
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.
PUBLIC SERVICE COMPANY
OF NORTH CAROLINA, INCORPORATED
---------------------------------------
(Registrant)
Date 8-11-95 Charles E. Zeigler, Jr.
------- ---------------------------------------
Charles E. Zeigler, Jr.
Chairman, President and
Chief Executive Officer
Date 8-11-95 Robert D. Voigt
------- ---------------------------------------
Robert D. Voigt
Senior Vice President - Corporate
Development and Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
This schedule contains summary financial information extracted from the
consolidated financial statements for the nine months ended June 30, 1995.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1995
<PERIOD-END> JUN-30-1995
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 391,185
<OTHER-PROPERTY-AND-INVEST> 949
<TOTAL-CURRENT-ASSETS> 37,173
<TOTAL-DEFERRED-CHARGES> 6,199
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 435,506
<COMMON> 18,603
<CAPITAL-SURPLUS-PAID-IN> 105,346
<RETAINED-EARNINGS> 56,365
<TOTAL-COMMON-STOCKHOLDERS-EQ> 180,314
0
0
<LONG-TERM-DEBT-NET> 109,140
<SHORT-TERM-NOTES> 18,500
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 9,540
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 118,012
<TOT-CAPITALIZATION-AND-LIAB> 435,506
<GROSS-OPERATING-REVENUE> 221,175
<INCOME-TAX-EXPENSE> 16,310
<OTHER-OPERATING-EXPENSES> 63,194
<TOTAL-OPERATING-EXPENSES> 79,504
<OPERATING-INCOME-LOSS> 35,282
<OTHER-INCOME-NET> 93
<INCOME-BEFORE-INTEREST-EXPEN> 35,375
<TOTAL-INTEREST-EXPENSE> 9,604
<NET-INCOME> 25,771
0
<EARNINGS-AVAILABLE-FOR-COMM> 25,771
<COMMON-STOCK-DIVIDENDS> 10,202
<TOTAL-INTEREST-ON-BONDS> 0<F1>
<CASH-FLOW-OPERATIONS> 50,862
<EPS-PRIMARY> 1.40
<EPS-DILUTED> 1.39
<FN>
<F1>This item is not required to be presented in the interim financial statements.
</FN>
</TABLE>
