SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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 1-3375
South Carolina Electric & Gas Company
(Exact name of registrant as specified in its charter)
South Carolina 57-0248695
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
1426 Main Street, Columbia, South Carolina 29201
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (803) 748-3000
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 .
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents
and reports required to be filed by Section 12, 13 or 15(d) of the
Securities Exchange Act of 1934 subsequent to the distribution of
securities under a plan confirmed by a court. Yes . No .
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
As of June 30, 1995, there were issued and outstanding 40,296,147
shares of the registrant's common stock $4.50 par value,
all of which were held, beneficially and of record, by SCANA Corporation.
1
<PAGE>
SOUTH CAROLINA ELECTRIC & GAS COMPANY
INDEX
PART I. FINANCIAL INFORMATION
Page
Item 1. Financial Statements
Consolidated Balance Sheets as of June 30, 1995
and December 31, 1994.................................. 3
Consolidated Statements of Income and Retained Earnings
for the Periods Ended June 30, 1995 and 1994........... 5
Consolidated Statements of Cash Flows for the Periods
Ended June 30, 1995 and 1994........................... 6
Notes to Consolidated Financial Statements............... 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations................. 9
PART II. OTHER INFORMATION
Item 1. Legal Proceedings................................... 13
Item 6. Exhibits and Reports on Form 8-K.................... 13
Signatures...................................................... 14
Exhibit Index................................................... 15
2
<PAGE>
<TABLE>
PART I
FINANCIAL INFORMATION
SOUTH CAROLINA ELECTRIC & GAS COMPANY
CONSOLIDATED BALANCE SHEETS
As of June 30, 1995 and December 31, 1994
(Unaudited)
<S> <C> <C> <C>
June 30, December 31,
1995 1994
(Thousands of Dollars)
ASSETS
Utility Plant:
Electric............................................. $3,221,573 $3,165,391
Gas.................................................. 307,592 307,929
Transit.............................................. 3,456 3,785
Common............................................... 76,827 77,327
Total.............................................. 3,609,448 3,554,432
Less accumulated depreciation and amortization....... 1,202,107 1,171,758
Total.............................................. 2,407,341 2,382,674
Construction work in progress........................ 636,150 571,867
Nuclear fuel, net of accumulated amortization........ 37,114 43,591
Utility Plant, Net............................... 3,080,605 2,998,132
Nonutility Property and Investments, net of
accumulated depreciation............................. 11,896 11,931
Current Assets:
Cash and temporary cash investments.................. - 346
Receivables - customer and other..................... 126,603 127,679
Receivables - affiliated companies................... 11,846 18,121
Inventories (at average cost):
Fuel............................................... 32,669 31,310
Materials and supplies............................. 43,186 43,228
Prepayments.......................................... 16,502 14,389
Accumulated deferred income taxes.................... 17,931 17,931
Total Current Assets............................. 248,737 253,004
Deferred Debits:
Emission allowances.................................. 22,491 19,409
Unamortized debt expense............................. 11,596 11,690
Unamortized deferred return on plant investment...... 8,492 10,614
Nuclear plant decommissioning fund................... 33,226 30,383
Other................................................ 261,634 251,928
Total Deferred Debits............................ 337,439 324,024
Total................................. $3,678,677 $3,587,091
See notes to consolidated financial statements.
3
<PAGE>
SOUTH CAROLINA ELECTRIC & GAS COMPANY
CONSOLIDATED BALANCE SHEETS
As of June 30, 1995 and December 31, 1994
(Unaudited)
<S> <C> <S> <C> <C> <C>
June 30, December 31,
1995 1994
(Thousands of Dollars)
CAPITALIZATION AND LIABILITIES
Stockholders' Investment:
Common Equity:
Common stock ($4.50 par value)...................... $ 181,333 $ 181,333
Premium on common stock and other paid-in capital... 662,723 633,441
Capital stock expense (debit)....................... (5,412) (5,443)
Retained earnings................................... 339,094 324,101
Total Common Equity............................... 1,177,738 1,133,432
Preferred stock (not subject to purchase or sinking
funds).............................................. 26,027 26,027
Total Stockholders' Investment.................... 1,203,765 1,159,459
Preferred stock, net (subject to purchase or
sinking funds)........................................ 47,543 49,528
Long-term debt, net..................................... 1,348,309 1,231,191
Total Capitalization............................ 2,599,617 2,440,178
Current Liabilities:
Short-term borrowings................................. 100,000 100,000
Notes payable - affiliated companies.................. - 19,409
Current portion of long-term debt..................... 36,592 33,042
Current portion of preferred stock.................... 2,310 2,418
Accounts payable...................................... 43,832 61,466
Accounts payable - affiliated companies............... 16,802 33,357
Customer deposits..................................... 12,687 12,668
Taxes accrued......................................... 23,625 46,646
Interest accrued...................................... 21,575 21,534
Dividends declared.................................... 31,146 28,489
Other................................................. 10,749 15,525
Total Current Liabilities....................... 299,318 374,554
Deferred Credits:
Accumulated deferred income taxes..................... 504,955 503,723
Accumulated deferred investment tax credits........... 79,932 81,546
Accumulated reserve for nuclear plant decommissioning. 33,226 30,383
Other................................................. 161,629 156,707
Total Deferred Credits.......................... 779,742 772,359
Total ................................. $3,678,677 $3,587,091
See notes to consolidated financial statements.
4
<PAGE>
SOUTH CAROLINA ELECTRIC & GAS COMPANY
CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
For the Periods Ended June 30, 1995 and 1994
(Unaudited)
<S> <C> <C> <C> <C> <C>
Three Months Ended Six Months Ended
June 30, June 30,
1995 1994 1995 1994
(Thousands of Dollars)
OPERATING REVENUES:
Electric.................................... $239,037 $225,219 $469,646 $460,108
Gas......................................... 35,086 36,866 112,210 114,278
Transit..................................... 1,016 948 2,043 1,969
Total Operating Revenues............... 275,139 263,033 583,899 576,355
OPERATING EXPENSES:
Fuel used in electric generation............ 39,174 46,940 75,268 87,933
Purchased power (including
affiliated purchases)..................... 30,046 21,824 54,527 50,292
Gas purchased from affiliate
for resale................................ 22,270 24,444 64,554 68,399
Other operation............................. 53,364 53,971 105,609 105,348
Maintenance................................. 14,652 14,972 28,504 29,697
Depreciation and amortization............... 27,665 26,752 55,374 53,442
Income taxes................................ 16,733 13,497 42,608 39,925
Other taxes................................. 18,082 17,317 37,112 34,483
Total Operating Expenses............... 221,986 219,717 463,556 469,519
OPERATING INCOME.............................. 53,153 43,316 120,343 106,836
OTHER INCOME:
Allowance for equity funds used
during construction....................... 2,370 1,911 4,776 3,984
Other income (loss),net of
income taxes.............................. 186 (162) 49 (263)
Total Other Income..................... 2,556 1,749 4,825 3,721
INCOME BEFORE INTEREST CHARGES................ 55,709 45,065 125,168 110,557
INTEREST CHARGES (CREDITS):
Interest expense............................ 27,461 22,396 54,290 44,171
Allowance for borrowed funds
used during construction.................. (2,622) (1,679) (5,242) (3,302)
Total Interest Charges, net............ 24,839 20,717 49,048 40,869
NET INCOME.................................... 30,870 24,348 76,120 69,688
Preferred Stock Cash Dividends
(at stated rates)........................... (1,430) (1,462) (2,864) (3,001)
Earnings Available for Common Stock........... 29,440 22,886 73,256 66,687
Retained Earnings at Beginning
of Period................................... 339,353 307,414 324,101 291,713
Common Stock Cash Dividends
Declared.................................... (29,699) (29,600) (58,263) (57,700)
Retained Earnings at End of Period............ $339,094 $300,700 $339,094 $300,700
See notes to consolidated financial statements.
5
<PAGE>
SOUTH CAROLINA ELECTRIC & GAS COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Periods Ended June 30, 1995 and 1994
(Unaudited)
<S> <C> <C> <C>
Six Months Ended
June 30,
1995 1994
(Thousands of Dollars)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income........................................... $ 76,120 $ 69,688
Adjustments to reconcile net income to net cash
provided from operating activities:
Depreciation and amortization...................... 55,445 53,520
Amortization of nuclear fuel....................... 9,488 8,885
Deferred income taxes, net......................... 1,255 13,167
Deferred investment tax credits, net............... (1,614) (1,292)
Net regulatory asset-adoption of SFAS No. 109...... (1,244) (1,630)
Nuclear refueling accrual.......................... 3,479 3,763
Allowance for funds used during construction....... (10,018) (7,286)
Unamortized loss on reacquired debt................ (3,966) (644)
Over (under) collections, fuel adjustment clause... 24,693 (2,018)
Early retirements.................................. (16,684) -
Emission allowances................................ (3,082) -
Changes in certain current assets and liabilities:
Increase (decrease) in receivables................ 7,352 (21,613)
Increase (decrease) in inventories................ (1,317) 4,387
Decrease in accounts payable...................... (34,189) (21,423)
Decrease in estimated rate refunds and
related interest................................ - (638)
Decrease in taxes accrued......................... (23,021) -
Increase (decrease) in interest accrued........... 41 (17,500)
Other, net........................................ (16,978) 22,292
Net Cash Provided From Operating Activities............ 65,760 101,658
CASH FLOWS FROM INVESTING ACTIVITIES:
Utility property additions and construction
expenditures....................................... (146,004) (193,867)
Nonutility property and investments.................. (36) (322)
Principal noncash items:
Allowance for funds used during construction....... 10,018 7,286
Transfer of assets from SCANA...................... - 6,285
Net Cash Used For Investing Activities................. (136,022) (180,618)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds:
Other long-term debt............................... 43,053 113,500
First Mortgage Bonds............................... 100,000 -
Equity contribution from parent.................... 29,311 24,120
Repayments:
First and Refunding Mortgage Bonds................. (48,779) -
Note payable to affiliated companies............... (19,409) -
Other long-term debt............................... (386) (796)
Preferred stock.................................... (2,094) (2,002)
Dividend payments:
Common stock....................................... (55,563) (56,500)
Preferred stock.................................... (2,906) (3,061)
Short-term borrowings, net........................... - (11)
Fuel financings, net................................. 26,689 7,043
Advances - affiliated companies, net................. - (1,559)
Net Cash Provided From Financing Activities............ 69,916 80,734
NET INCREASE (DECREASE) IN CASH AND
TEMPORARY CASH INVESTMENTS........................... (346) 1,774
CASH AND TEMPORARY CASH INVESTMENTS AT JANUARY 1....... 346 193
CASH AND TEMPORARY CASH INVESTMENTS AT JUNE 30......... $ - $ 1,967
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for - Interest (includes capitalized
interest of $5,242 and $3,302 ...... $ 53,501 $ 66,057
- Income taxes......................... 45,027 29,963
See notes to consolidated financial statements.
</TABLE>
6
<PAGE>
SOUTH CAROLINA ELECTRIC & GAS COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 1995
(Unaudited)
The following notes should be read in conjunction with the
Notes to Consolidated Financial Statements appearing in the
Company's Annual Report on Form 10-K for the year ended
December 31, 1994. These are interim financial statements and,
because of temperature variations between seasons of the year, the
amounts reported in the Consolidated Statements of Income are not
necessarily indicative of amounts expected for the year. In the
opinion of management, the information furnished herein reflects
all adjustments, all of a normal recurring nature, which are
necessary for a fair statement of the results for the interim
periods reported.
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
A. Principles of Consolidation:
The Company, a public utility, is a South Carolina corporation
organized in 1924 and a wholly owned subsidiary of SCANA
Corporation (SCANA), a South Carolina holding company. The
accompanying Consolidated Financial Statements include the
accounts of the Company and South Carolina Fuel Company, Inc.
(Fuel Company), an affiliate. Intercompany balances and
transactions between the Company and Fuel Company have been
eliminated in consolidation.
The Company has entered into agreements with certain affiliates
to purchase gas for resale to its distribution customers and to
purchase electric energy. The Company purchases all of its
natural gas requirements from South Carolina Pipeline
Corporation. The Company purchases all of the electric
generation of Williams Station, which is owned by South
Carolina Generating Company, Inc., under a unit power sales
agreement. Such unit power purchases are included in
"Purchased power."
B. Reclassifications:
Certain amounts from prior periods have been reclassified to
conform with the 1995 presentation.
2. RATE MATTERS:
With respect to rate matters at June 30, 1995, reference is
made to Note 2 of Notes to Consolidated Financial Statements in
the Company's Annual Report on Form 10-K for the year ended
December 31, 1994. On July 10, 1995, the Company filed an
application with the Public Service Commission of South
Carolina (PSC) for an increase in retail electric rates. The
proposed increase of 8.35% would produce additional revenues of
approximately $76.7 million annually, if approved. The Company
has requested that the increase be implemented in two phases.
The first phase, an increase in revenues of approximately $61.8
annually, or 6.73%, would commence at the time the Company's
385 MW generating station currently under construction near
Cope, S. C. begins commercial operation, which is expected in
January 1996. The second phase is planned in January 1997 and
would produce additional revenues of approximately $14.9
million annually, or 1.62% more than current rates. No
assurance can be given as to the adequacy or timing of the rate
relief that will be granted by the PSC. Hearings are scheduled
to begin during November 1995.
3. RETAINED EARNINGS:
The Restated Articles of Incorporation of the Company and the
Indenture underlying certain of its bond issues contain
provisions that may limit the payment of cash dividends on
common stock. In addition, with respect to hydroelectric
projects, the Federal Power Act may require the appropriation
of a portion of the earnings therefrom. At June 30, 1995
approximately $14.5 million of retained earnings were
restricted as to payment of dividends on common stock.
7
<PAGE>
4. COMMITMENTS AND CONTINGENCIES:
With respect to commitments at June 30, 1995, reference is made
to Note 10 of Notes to Consolidated Financial Statements
appearing in the Company's Annual Report on Form 10-K for
the year ended December 31, 1994. No significant changes have
occurred with respect to those matters as reported therein.
Contingencies at June 30, 1995 are as follows:
A. Nuclear Insurance
The Price-Anderson Indemnification Act, which deals with the
Company's public liability for a nuclear incident, currently
establishes the liability limit for third-party claims
associated with any nuclear incident at $9.4 billion. Each
reactor licensee is currently liable for up to $79.3 million
per reactor owned for each nuclear incident occurring at any
reactor in the United States, provided that not more than $10
million of the liability per reactor would be assessed per
year. The Company's maximum assessment, based on its two-
thirds ownership of Summer Station, would be approximately
$52.9 million per incident but not more than $6.7 million per
year.
The Company currently maintains policies (for itself and on
behalf of the PSA) with American Nuclear Insurers (ANI) and
Nuclear Electric Insurance Limited (NEIL) providing combined
primary and excess property and decontamination insurance
coverage of $1.9 billion for any losses at Summer Station. The
Company pays annual premiums and, in addition, could be
assessed a retrospective premium assessment not to exceed 7.5
times its annual premium in the event of property damage loss
to any nuclear generating facility covered under the NEIL
program. Based on the current annual premium, this
retrospective premium assessment would not exceed $8.2 million.
To the extent that insurable claims for property damage,
decontamination, repair and replacement and other costs and
expenses arising from a nuclear incident at Summer Station
exceed the policy limits of insurance, or to the extent such
insurance becomes unavailable in the future, and to the extent
that the Company's rates would not recover the cost of any
purchased replacement power, the Company will retain the risk
of loss as a self-insurer. The Company has no reason to
anticipate a serious nuclear incident at Summer Station. If
such an incident were to occur, it could have a materially
adverse impact on the Company's financial position.
B. Environmental
The Company has an environmental assessment program to identify
and assess current and former operations sites that could
require environmental cleanup. As site assessments are
initiated, an estimate is made of the amount of expenditures,
if any, necessary to investigate and clean up each site. These
estimates are refined as additional information becomes
available; therefore actual expenditures could significantly
differ from the original estimates. Amounts estimated and
accrued to date for site assessment and cleanup relate
primarily to regulated operations; such amounts have been
deferred (approximately $19.5 million) and are being amortized
and recovered through rates over a ten-year period for electric
operations and an eight-year period for gas operations.
In September 1992 the Environmental Protection Agency (EPA)
notified the Company, the City of Charleston and the Charleston
Housing Authority of their potential liability for the
investigation and cleanup of the Calhoun Park Area Site in
Charleston, South Carolina. This site originally encompassed
approximately 18 acres and included properties which were the
locations for industrial operations, including a wood
preserving (creosote) plant and one of the Company's
decommissioned manufactured gas plants. The original scope of
this investigation has been expanded to approximately 30 acres
including adjacent properties owned by the National Park
Service and the City of Charleston, and private properties.
The site has not been placed on the National Priority List, but
may be added before cleanup is initiated. The potentially
responsible parties (PRP) have agreed with the EPA to
participate in an innovative approach to site investigation and
cleanup called "Superfund Accelerated Cleanup Model," allowing
the pre-cleanup site investigations process to be compressed
significantly. The PRPs have negotiated an administrative
order by consent for the conduct of a Remedial
Investigation/Feasibility Study (RI/FS) and a corresponding
Scope of Work. Actual field work began November 1, 1993 after
final approval and authorization was granted by EPA. The
Company is also working with the City of Charleston to
investigate potential contamination from the manufactured gas
plant which may have migrated to the city's aquarium site. In
1994 the City of Charleston notified the Company that it
considers the Company to be responsible for a projected $43.5
million increase in costs of the aquarium project allegedly
attributable to delays resulting from contamination of the
Calhoun Park area site. The Company believes it has
meritorious defenses against this claim and does not expect its
resolution to have a material impact on its future financial
position or results of operations.
8
<PAGE>
SOUTH CAROLINA ELECTRIC & GAS COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
General
Competition
The electric utility industry has begun a major transition
that could lead to expanded market competition and less
regulatory protection. Future deregulation of electric wholesale
and retail markets will create opportunities to compete for new
and existing customers and markets. As a result, profit margins
and asset values of some utilities could be adversely affected.
The pace of deregulation, the future market price of electricity,
and the regulatory actions which may be taken by the Public
Service Commission of South Carolina (PSC) in response to the
changing environment cannot be predicted. However, the Company
is aggressively pursuing actions to position itself strategically
for the transformed environment.
Material Changes in Capital Resources and Liquidity
From December 31, 1994 to June 30, 1995
Liquidity and Capital Resources
The cash requirements of the Company arise primarily from
its operational needs and construction program. The ability of
the Company to replace existing plant investment, as well as to
expand to meet future demands for electricity and gas, will
depend upon its ability to attract the necessary financial
capital on reasonable terms. The Company recovers the costs of
providing services through rates charged to customers. Rates for
regulated services are based on historical costs. As customer
growth and inflation occur and the Company expands its
construction program it is necessary to seek increases in rates.
As a result the Company's future financial position and results
of operations will be impacted by its ability to obtain adequate
and timely rate relief.
On July 10, 1995, the Company filed an application with the
PSC for an increase in retail electric rates. The proposed
increase of 8.35% would produce additional revenues of
approximately $76.7 million annually, if approved. The Company
has requested that the increase be implemented in two phases.
The first phase, an increase in revenues of approximately $61.8
annually, or 6.73%, would commence at the time the Company's 385
MW generating station currently under construction near Cope, S.
C. begins commercial operation, which is expected in January
1996. The second phase is planned in January 1997 and would
produce additional revenues of approximately $14.9 million
annually, or 1.62% more than current rates. No assurance can be
given as to the adequacy or timing of the rate relief that will
be granted by the PSC. Hearings are scheduled to begin during
November 1995.
The following table summarizes how the Company generated
funds for its utility property additions and construction
expenditures during the six months ended June 30, 1995 and 1994:
Six Months Ended
June 30,
1995 1994
(Thousands of Dollars)
Net cash provided from operating activities $ 65,762 $101,658
Net cash provided from financing activities 69,914 80,734
Cash and temporary cash investments available
at the beginning of the period 346 193
Net cash available for utility property
additions and construction expenditures $136,022 $182,585
Funds used for utility property additions
and construction expenditures, net of
noncash allowance for funds used during
construction $135,986 $180,296
9
<PAGE>
On April 5, 1995 the Company issued $100 million of First
Mortgage Bonds, 7 5/8% series due April 1, 2025 to repay short-term
borrowings.
The Company anticipates that the remainder of its 1995 cash
requirements will be met primarily through internally generated
funds, sales of additional securities, additional equity
contributions from SCANA and the incurrence of additional short-
term and long-term indebtedness. The timing and amount of such
financings will depend upon market conditions and other factors.
The ratio of earnings to fixed charges for the twelve months
ended June 30, 1995 was 3.32.
The Company expects that it has or can obtain adequate sources
of financing to meet its cash requirements for the next twelve
months and for the foreseeable future.
Statements of Financial Accounting Standards Not Yet Adopted
The Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be
Disposed of." The provisions of the Statement, which must be
implemented by the Company for the fiscal year beginning January
1, 1996, require the recognition of a loss in the income statement
and related disclosures whenever events or changes in circumstances
indicate that the carrying amount of a long-lived asset may not be
recoverable. The Company does not believe that adoption of the
provisions of the Statement will have any materially adverse impact
on its results of operations or financial position.
10
<PAGE>
SOUTH CAROLINA ELECTRIC & GAS COMPANY
Results of Operations
For the Six months Ended June 30, 1995
As Compared to the Corresponding Period in 1994
Earnings and Dividends
Net income for the three and six months ended June 30, 1995
increased approximately $6.5 million and $6.4 million,
respectively, compared to the corresponding periods in 1994.
Increases in electric and gas margins more than offset increases in
fixed operating costs.
Allowance for funds used during construction (AFC) is a
utility accounting practice whereby a portion of the cost of both
equity and borrowed funds used to finance construction (which is
shown on the balance sheet as construction work in progress) is
capitalized. Both the equity and the debt portions of AFC are
noncash items of nonoperating income which have the effect of
increasing reported net income. AFC represented approximately 8%
and 7% of income before income taxes for the six months ended June
30, 1995 and 1994, respectively.
On February 14, 1995 the Company's Board of Directors
authorized the payment of a dividend on common stock of
approximately $28.6 million for the quarter ended March 31, 1995.
The dividend was paid on April 1, 1995 to SCANA Corporation, the
Company's parent.
On April 27, 1995, the Company's Board of Directors authorized
the payment of a dividend on common stock of $29.7 million for the
quarter ended June 30, 1995. The dividend was paid on July 1, 1995
to SCANA Corporation, the Company's parent.
Sales Margins
The changes in the electric sales margins for the three and
six months ended June 30, 1995, when compared to the corresponding
periods in 1994, were as follows:
Three Months Six Months
Change % Change Change % Change
(Millions) (Millions)
Electric operating revenues $13.8 6.1 $ 9.5 2.0
Less: Fuel used in electric
generation (7.8) (16.5) (12.7) (14.4)
Purchased power 8.2 37.7 4.2 8.4
Margin $13.4 8.5 $18.0 5.6
The electric sales margin increased for the three and six
months ended June 30, 1995 compared to the corresponding periods in
1994 as a result of the combined impact of improved economic
conditions, which resulted in increased electric sales to
commercial and industrial customers, and the base rate increase
received by the Company in mid-1994 which more than offset the
negative impact of milder weather experienced during the first half
of 1995.
The changes in the gas sales margins for the three and six
months ended June 30, 1995, when compared to the corresponding
periods in 1994, were as follows:
Three Months Six Months
Change % Change Change % Change
(Millions) (Millions)
Gas operating revenues $(1.8) (4.8) $(2.1) (1.8)
Less: Gas purchased for resale (2.2) (8.9) (3.9) (5.6)
Margin $ 0.4 3.2 $ 1.8 3.9
11
<PAGE>
The increases in the gas sales margins for the three and six
months reflects increases in interruptible industrial sales.
Other Operating Expenses
Increases (decreases) in other operating expenses, including
taxes, for the three and six months ended June 30, 1995 compared to
the corresponding periods in 1994 are presented in the following
table:
Three Months Six Months
Change % Change Change % Change
(Millions) (Millions)
Other operation and maintenance $(0.9) (1.3) $(0.9) (0.7)
Depreciation and amortization 0.9 3.4 1.9 3.6
Income taxes 3.2 24.0 2.7 6.7
Other taxes 0.8 4.4 2.6 7.6
Total $ 4.0 3.2 $ 6.3 2.4
Other operation and maintenance expenses for the three and six
months ended June 30, 1995 remained slightly below 1994 levels
primarily as a result of lower plant maintenance costs during the
first quarter of 1995 and a reduction in the amortization of
environmental remediation costs during the second quarter of 1995.
Increases in depreciation and amortization expenses for the three
and six months' comparisons reflect additions to plant in service.
The increases in income tax expense for the two periods correspond
to the increases in operating income. The increases in other taxes
reflect higher property taxes resulting from higher millages and
assessments, offset somewhat in the second quarter of 1995 by lower
payroll taxes resulting from early retirements of employees.
Interest Charges
Interest expense, excluding the debt component of AFC, for the
three and six months ended June 30, 1995 increased $4.1 million and
$8.2 million respectively, compared to the corresponding periods of
1994. The increases are due primarily to the issuance of
additional debt, including commercial paper, during the latter part
of 1994 and early 1995.
12
<PAGE>
SOUTH CAROLINA ELECTRIC & GAS COMPANY
Part II
OTHER INFORMATION
Item 1. Legal Proceedings
For information regarding legal proceedings see Note 2 "Rate
Matters" and Note 4 "Commitments and Contingencies" of Notes
to Consolidated Financial Statements.
Items 2, 3, 4 and 5 are not applicable.
Item 6. Exhibits and Reports on Form 8-K
A. Exhibits
Exhibits filed with this Quarterly Report on Form 10-Q
are listed in the following Exhibit Index. Certain of
such exhibits which have heretofore been filed with the
Securities and Exchange Commission and which are
designated by reference to their exhibit numbers in
prior filings are hereby incorporated herein by
reference and made a part hereof.
B. Reports on Form 8-K
None
13
<PAGE>
SOUTH CAROLINA ELECTRIC & GAS COMPANY
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.
SOUTH CAROLINA ELECTRIC & GAS COMPANY
(Registrant)
August 11, 1995 By: s/Jimmy E. Addison
Jimmy E. Addison
Vice President and Controller
(Principal Accounting Officer)
14
<PAGE>
SOUTH CAROLINA ELECTRIC & GAS COMPANY Sequentially
EXHIBIT INDEX Numbered
Number Pages
2. Plan of Acquisition, Reorganization, Arrangement,
Liquidation or Succession
Not Applicable
3. Articles of Incorporation and By-Laws
A. Restated Articles of Incorporation of the
Company as adopted on December 15, 1993
(Exhibit 3-A to Form 10-Q for the quarter
ended June 30, 1994, File No. 1-3375)...................... #
B. Articles of Amendment, dated June 7, 1994,
filed June 9, 1994 (Exhibit 3-B to Form 10-Q
for the quarter ended June 30, 1994, File
No. 1-3375)
C. Articles of Amendment, dated November 9, 1994
(Exhibit 3-C to Form 10-K for the year ended
December 31, 1994, File No. 1-3375)....................... #
D. Articles of Amendment, dated December 9, 1994
(Exhibit 3-D to Form 10-K for the year ended
December 31, 1994, File No. 1-3375)....................... #
E. Articles of Correction, dated January 17, 1995
(Exhibit 3-E to Form 10-K for the year ended
December 31, 1994, File No. 1-3375)....................... #
F. Articles of Amendment, dated January 13, 1995
(Exhibit 3-F to Form 10-K for the year ended
December 31, 1994, File No. 1-3375)....................... #
G. Articles of Amendment, dated March 30, 1995
(Exhibit 3-G to Form 10-Q for the quarter
ended March 31, 1995, File No. 1-3375).................... #
H. Copy of By-Laws of the Company as revised and
amended thru December 15, 1993 (Exhibit 3-AZ to
Form 10-K for the year ended December 31, 1993,
File No. 1-3375).......................................... #
4. Instruments Defining the Rights of Security
Holders, Including Indentures
A. Indenture dated as of January 1, 1945, from the
South Carolina Power Company (the "Power Company")
to Central Hanover Bank and Trust Company, as
Trustee, as supplemented by three Supplemental
Indentures dated respectively as of May 1, 1946,
May 1, 1947 and July 1, 1949 (Exhibit 2-B to
Registration No. 2-26459).................................. #
B. Fourth Supplemental Indenture dated as of April 1,
1950, to Indenture referred to in Exhibit 4A,
pursuant to which the Company assumed said
Indenture (Exhibit 2-C to Registration No. 2-26459)........ #
C. Fifth through Fifty-second Supplemental Indentures
to Indenture referred to in Exhibit 4A dated as
of the dates indicated below and filed as
exhibits to the Registration Statements and
1934 Act reports whose file numbers are set
forth below................................................ #
December 1, 1950 Exhibit 2-D to Registration No. 2-26459
July 1, 1951 Exhibit 2-E to Registration No. 2-26459
June 1, 1953 Exhibit 2-F to Registration No. 2-26459
June 1, 1955 Exhibit 2-G to Registration No. 2-26459
November 1, 1957 Exhibit 2-H to Registration No. 2-26459
September 1, 1958 Exhibit 2-I to Registration No. 2-26459
September 1, 1960 Exhibit 2-J to Registration No. 2-26459
# Incorporated herein by reference as indicated.
15
<PAGE>
SOUTH CAROLINA ELECTRIC & GAS COMPANY Sequentially
EXHIBIT INDEX Numbered
Number Pages
4. (Continued)
June 1, 1961 Exhibit 2-K to Registration No. 2-26459
December 1, 1965 Exhibit 2-L to Registration No. 2-26459
June 1, 1966 Exhibit 2-M to Registration No. 2-26459
June 1, 1967 Exhibit 2-N to Registration No. 2-29693
September 1, 1968 Exhibit 4-O to Registration No. 2-31569
June 1, 1969 Exhibit 4-C to Registration No. 33-38580
December 1, 1969 Exhibit 4-Q to Registration No. 2-35388
June 1, 1970 Exhibit 4-R to Registration No. 2-37363
March 1, 1971 Exhibit 2-B-17 to Registration No. 2-40324
January 1, 1972 Exhibit 4-C to Registration No. 33-38580
July 1, 1974 Exhibit 2-A-19 to Registration No. 2-51291
May 1, 1975 Exhibit 4-C to Registration No. 33-38580
July 1, 1975 Exhibit 2-B-21 to Registration No. 2-53908
February 1, 1976 Exhibit 2-B-22 to Registration No. 2-55304
December 1, 1976 Exhibit 2-B-23 to Registration No. 2-57936
March 1, 1977 Exhibit 2-B-24 to Registration No. 2-58662
May 1, 1977 Exhibit 4-C to Registration No. 33-38580
February 1, 1978 Exhibit 4-C to Registration No. 33-38580
June 1, 1978 Exhibit 2-A-3 to Registration No. 2-61653
April 1, 1979 Exhibit 4-C to Registration No. 33-38580
June 1, 1979 Exhibit 4-C to Registration No. 33-38580
April 1, 1980 Exhibit 4-C to Registration No. 33-38580
June 1, 1980 Exhibit 4-C to Registration No. 33-38580
December 1, 1980 Exhibit 4-C to Registration No. 33-38580
April 1, 1981 Exhibit 4-D to Registration No. 33-49421
June 1, 1981 Exhibit 4-D to Registration No. 2-73321
March 1, 1982 Exhibit 4-D to Registration No. 33-49421
April 15, 1982 Exhibit 4-D to Registration No. 33-49421
May 1, 1982 Exhibit 4-D to Registration No. 33-49421
December 1, 1984 Exhibit 4-D to Registration No. 33-49421
December 1, 1985 Exhibit 4-D to Registration No. 33-49421
June 1, 1986 Exhibit 4-D to Registration No. 33-49421
February 1, 1987 Exhibit 4-D to Registration No. 33-49421
September 1, 1987 Exhibit 4-D to Registration No. 33-49421
January 1, 1989 Exhibit 4-D to Registration No. 33-49421
January 1, 1991 Exhibit 4-D to Registration No. 33-49421
February 1, 1991 Exhibit 4-D to Registration No. 33-49421
July 15, 1991 Exhibit 4-D to Registration No. 33-49421
August 15, 1991 Exhibit 4-D to Registration No. 33-49421
April 1, 1993 Exhibit 4-E to Registration No. 33-49421
July 1, 1993 Exhibit 4-D to Registration No. 33-57955
D. Indenture dated as of April 1, 1993 from South Carolina
Electric & Gas Company to NationsBank of Georgia, National
Association (Filed as Exhibit 4-F to Registration
Statement No. 33-49421)...................................... #
E. First Supplemental Indenture to Indenture referred to
in 4-D dated as of June 1, 1993 (Filed as Exhibit 4-G
to Registration Statement No. 33-49421)...................... #
F. Second Supplemental Indenture to Indenture referred to
in 4-D dated as of June 15, 1993 (Filed as Exhibit 4-G
to Registration Statement No. 33-57955) ..................... #
10. Material Contracts
Not Applicable
11. Statement Re Computation of Per Share Earnings
Not Applicable
# Incorporated herein by reference as indicated.
16
<PAGE>
SOUTH CAROLINA ELECTRIC & GAS COMPANY
Exhibit Index (Continued)
Number
15. Letter Re Unaudited Interim Financial Information
Not Applicable
18. Letter Re Change in Accounting Principles
Not Applicable
19. Report Furnished to Security Holders
Not Applicable
22. Published Report Regarding Matters Submitted to
Vote of Security Holders
Not Applicable
23. Consents of Experts and Counsel
Not Applicable
24. Power of Attorney
Not Applicable
27. Financial Data Schedule (Filed herewith)
99. Additional Exhibits
Not Applicable
17
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM THE CONSOLIDATED
BALANCE SHEET AS OF JUNE 30, 1995 AND THE CONSOLIDATED STATEMENTS OF INCOME AND
RETAINED EARNINGS AND OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 1995 AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> JUN-30-1995
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 3,080,605
<OTHER-PROPERTY-AND-INVEST> 11,896
<TOTAL-CURRENT-ASSETS> 248,737
<TOTAL-DEFERRED-CHARGES> 337,439
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 3,678,677
<COMMON> 181,333
<CAPITAL-SURPLUS-PAID-IN> 657,311
<RETAINED-EARNINGS> 339,094
<TOTAL-COMMON-STOCKHOLDERS-EQ> 1,177,738
47,543
26,027
<LONG-TERM-DEBT-NET> 1,348,309
<SHORT-TERM-NOTES> 100,000
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 36,592
2,310
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 940,158
<TOT-CAPITALIZATION-AND-LIAB> 3,678,677
<GROSS-OPERATING-REVENUE> 275,139
<INCOME-TAX-EXPENSE> 16,733
<OTHER-OPERATING-EXPENSES> 205,253
<TOTAL-OPERATING-EXPENSES> 221,986
<OPERATING-INCOME-LOSS> 53,153
<OTHER-INCOME-NET> 2,556
<INCOME-BEFORE-INTEREST-EXPEN> 55,709
<TOTAL-INTEREST-EXPENSE> 24,839
<NET-INCOME> 30,870
(1,430)
<EARNINGS-AVAILABLE-FOR-COMM> 29,440
<COMMON-STOCK-DIVIDENDS> 29,699
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> 65,760
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
