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, 1996
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 of (I.R.S. Employer
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, 1996, 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.
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SOUTH CAROLINA ELECTRIC & GAS COMPANY
INDEX
PART I. FINANCIAL INFORMATION Page
Item 1. Financial Statements
Consolidated Balance Sheets as of June 30, 1996
and December 31, 1995........................................ 3
Consolidated Statements of Income and Retained Earnings
for the Periods Ended June 30, 1996 and 1995................. 5
Consolidated Statements of Cash Flows for the Periods
Ended June 30, 1996 and 1995................................. 6
Notes to Consolidated Financial Statements..................... 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations....................... 11
PART II. OTHER INFORMATION
Item 1. Legal Proceedings......................................... 16
Item 6. Exhibits and Reports on Form 8-K.......................... 16
Signatures............................................................ 17
Exhibit Index......................................................... 18
2
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PART I
FINANCIAL INFORMATION
SOUTH CAROLINA ELECTRIC & GAS COMPANY
CONSOLIDATED BALANCE SHEETS
As of June 30, 1996 and December 31, 1995
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(Unaudited)
June 30, December 31,
1996 1995
(Thousands of Dollars)
ASSETS
Utility Plant:
Electric............................................. $3,712,410 $3,277,530
Gas.................................................. 322,066 320,847
Transit.............................................. 3,824 3,768
Common............................................... 88,060 91,616
Total.............................................. 4,126,360 3,693,761
Less accumulated depreciation and amortization....... 1,290,552 1,196,279
Total.............................................. 2,835,808 2,497,482
Construction work in progress........................ 250,334 613,683
Nuclear fuel, net of accumulated amortization........ 43,342 46,492
Utility Plant, Net............................... 3,129,484 3,157,657
Nonutility Property and Investments, net of
accumulated depreciation............................. 11,699 11,603
Current Assets:
Cash and temporary cash investments.................. - 6,798
Receivables - customer and other..................... 165,985 154,816
Receivables - affiliated companies................... 669 7,132
Inventories (at average cost):
Fuel............................................... 23,797 35,812
Materials and supplies............................. 47,647 43,583
Prepayments.......................................... 20,020 10,158
Accumulated deferred income taxes.................... 19,420 19,420
Total Current Assets............................. 277,538 277,719
Deferred Debits:
Emission allowances.................................. 30,400 28,514
Unamortized debt expense............................. 10,992 11,445
Unamortized deferred return on plant investment...... 4,246 6,369
Nuclear plant decommissioning fund................... 39,132 36,070
Other................................................ 319,407 273,056
Total Deferred Debits............................ 404,177 355,454
Total................................. $3,822,898 $3,802,433
See notes to consolidated financial statements.
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SOUTH CAROLINA ELECTRIC & GAS COMPANY
CONSOLIDATED BALANCE SHEETS
As of June 30, 1996 and December 31, 1995
(Unaudited)
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June 30, December 31,
1996 1995
(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... 789,831 772,894
Capital stock expense (debit)....................... (5,361) (5,391)
Retained earnings................................... 387,778 366,236
Total Common Equity............................... 1,353,581 1,315,072
Preferred Stock (not subject to purchase or sinking
funds).............................................. 26,027 26,027
Total Stockholders' Investment.................... 1,379,608 1,341,099
Preferred Stock, net (subject to purchase or
sinking funds)........................................ 44,260 46,243
Long-term debt, net..................................... 1,298,497 1,279,379
Total Capitalization............................ 2,722,365 2,666,721
Current Liabilities:
Short-term borrowings................................. 100,000 80,500
Current portion of long-term debt..................... 33,244 36,033
Current portion of preferred stock.................... 2,435 2,439
Accounts payable...................................... 50,513 71,731
Accounts payable - affiliated companies............... 15,374 26,212
Customer deposits..................................... 13,143 12,518
Taxes accrued......................................... 42,896 64,008
Interest accrued...................................... 21,291 21,626
Dividends declared.................................... 35,618 33,126
Other................................................. 12,242 12,507
Total Current Liabilities....................... 326,756 360,700
Deferred Credits:
Accumulated deferred income taxes..................... 501,008 488,310
Accumulated deferred investment tax credits........... 76,695 78,316
Accumulated reserve for nuclear plant decommissioning. 39,132 36,070
Other................................................. 156,942 172,316
Total Deferred Credits.......................... 773,777 775,012
Total ................................. $3,822,898 $3,802,433
See notes to consolidated financial statements.
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SOUTH CAROLINA ELECTRIC & GAS COMPANY
CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
For the Periods Ended June 30, 1996 and 1995
(Unaudited)
<S><C> <C> <C> <C> <C>
Three Months Ended Six Months Ended
June 30, June 30,
1996 1995 1996 1995
(Thousands of Dollars)
OPERATING REVENUES:
Electric.............................. $269,417 $239,037 $531,600 $469,646
Gas................................... 40,256 35,086 131,426 112,210
Transit............................... 893 1,016 1,803 2,043
Total Operating Revenues......... 310,566 275,139 664,829 583,899
OPERATING EXPENSES:
Fuel used in electric generation...... 52,438 39,174 94,114 75,268
Purchased power (including
affiliated purchases)............... 26,825 30,046 51,532 54,527
Gas purchased from affiliate
for resale.......................... 26,832 22,270 82,793 64,554
Other operation....................... 53,611 53,364 105,814 105,609
Maintenance........................... 17,109 14,652 31,355 28,504
Depreciation and amortization......... 33,866 27,665 66,533 55,374
Income taxes.......................... 19,995 16,733 52,458 42,608
Other taxes........................... 20,736 18,082 41,597 37,112
Total Operating Expenses......... 251,412 221,986 526,196 463,556
OPERATING INCOME........................ 59,154 53,153 138,633 120,343
OTHER INCOME:
Allowance for equity funds used
during construction................. 938 2,370 2,191 4,776
Other income (loss), net of
income taxes........................ 313 186 589 49
Total Other Income............... 1,251 2,556 2,780 4,825
INCOME BEFORE INTEREST CHARGES.......... 60,405 55,709 141,413 125,168
INTEREST CHARGES (CREDITS):
Interest expense...................... 26,446 27,461 53,180 54,290
Allowance for borrowed funds
used during construction............ (1,238) (2,622) (3,048) (5,242)
Total Interest Charges, net...... 25,208 24,839 50,132 49,048
NET INCOME.............................. 35,197 30,870 91,281 76,120
Preferred Stock Cash Dividends
(at stated rates)..................... (1,368) (1,430) (2,739) (2,864)
Earnings Available for Common Stock..... 33,829 29,440 88,542 73,256
Retained Earnings at Beginning
of Period............................. 388,150 339,353 366,236 324,101
Common Stock Cash Dividends
Declared.............................. (34,201) (29,699) (67,000) (58,263)
Retained Earnings at End of Period...... $387,778 $339,094 $387,778 $339,094
See notes to consolidated financial statements.
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SOUTH CAROLINA ELECTRIC & GAS COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Periods Ended June 30, 1996 and 1995
(Unaudited)
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Six Months Ended
June 30,
1996 1995
(Thousands of Dollars)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income........................................... $ 91,281 $ 76,120
Adjustments to reconcile net income to net cash
provided from operating activities:
Depreciation and amortization...................... 66,593 55,445
Amortization of nuclear fuel....................... 7,933 9,488
Deferred income taxes, net......................... 12,378 1,255
Deferred investment tax credits, net............... (1,621) (1,614)
Net regulatory asset arising from adoption
of SFAS No. 109.................................. (77) (1,244)
Nuclear refueling accrual.......................... (2,697) 3,479
Allowance for funds used during construction....... (5,239) (10,018)
Unamortized loss on reacquired debt................ 246 (3,966)
Over (under) collections, fuel adjustment clause... 1,436 24,693
Early retirements.................................. (5,920) (16,684)
Emission allowances, net of AFC.................... (1,885) (2,645)
Changes in certain current assets and liabilities:
(Increase) decrease in receivables................ (4,706) 7,352
(Increase) decrease in inventories................ 7,951 (1,317)
Increase (decrease) in accounts payable........... (32,056) (34,189)
Increase (decrease) in taxes accrued.............. (21,112) (23,021)
Increase (decrease) in interest accrued........... (335) 41
Other, net......................................... (14,694) (16,978)
Net Cash Provided From Operating Activities............ 97,476 66,197
CASH FLOWS FROM INVESTING ACTIVITIES:
Utility property additions and construction
expenditures, net of AFC........................... (88,136) (136,423)
Nonutility property and investments.................. (78) (36)
Net Cash Used For Investing Activities................. (88,214) (136,459)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds:
Equity contributions from parent................... 16,967 29,311
First Mortgage Bonds............................... - 100,000
Other long-term debt............................... 30,672 43,053
Repayments:
First and Refunding Mortgage Bonds................. (22,000) (48,779)
Note payable to affiliated companies............... - (19,409)
Repayment of bank loans............................ (1,886) -
Other long-term debt............................... - (386)
Preferred stock.................................... (1,987) (2,094)
Dividend payments:
Common stock....................................... (64,500) (55,563)
Preferred stock.................................... (2,747) (2,906)
Short-term borrowings, net........................... 19,500 -
Fuel and emission allowance financings, net.......... 9,921 26,689
Net Cash Provided From (Used For) Financing Activities. (16,060) 69,916
NET INCREASE (DECREASE) IN CASH AND
TEMPORARY CASH INVESTMENTS........................... (6,798) (346)
CASH AND TEMPORARY CASH INVESTMENTS AT JANUARY 1....... 6,798 346
CASH AND TEMPORARY CASH INVESTMENTS AT JUNE 30......... $ - $ -
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for - Interest (includes capitalized
interest of $3,048 and $5,242)...... $ 52,367 $ 53,501
- Income taxes......................... 38,804 45,027
See notes to consolidated financial statements.
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SOUTH CAROLINA ELECTRIC & GAS COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 1996
(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, 1995. 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. Basis of Accounting
The Company prepares its financial statements in accordance
with the provisions of Statement of Financial Accounting
Standards No. 71 (SFAS 71), "Accounting for the Effects of
Certain Types of Regulations." The accounting standard allows
cost-based rate-regulated utilities, such as the Company, to
recognize in their financial statements revenues and expenses
in different time periods than do enterprises that are not
rate-regulated. As a result, the Company has recorded, as of
June 30, 1996, approximately $236 million and $51 million of
regulatory assets and liabilities, respectively, including
amounts recorded for accumulated deferred income tax assets and
liabilities of approximately $83 million and $50 million,
respectively. The electric regulatory assets of approximately
$130 million (excluding accumulated deferred income tax assets)
are being recovered through rates and, as discussed in Note 2,
the Public Service Commission of South Carolina (PSC) has
approved accelerated recovery of approximately $71 million of
these assets. In the future, as a result of deregulation or
other changes in the regulatory environment, the Company may no
longer meet the criteria for continued application of SFAS 71
and would be required to write off its regulatory assets and
liabilities. Such an event could have a material adverse
effect on the Company's results of operation in the period the
write-off is recorded.
C. Reclassifications
Certain amounts from prior periods have been reclassified to
conform with the 1996 presentation.
7
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2. RATE MATTERS:
With respect to rate matters at June 30, 1996, 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, 1995. On July 10, 1995 the Company filed an
application with the PSC for an increase in retail electric
rates. On January 9, 1996 the PSC issued an order granting the
Company an increase of 7.34% which will produce additional
revenues of approximately $67.5 million annually. The increase
is being implemented in two phases. The first phase, an
increase in revenues of approximately $59.5 million annually
based on a test year, or 6.47%, commenced on January 15, 1996.
The second phase will be implemented in January 1997 and will
produce additional revenues of approximately $8.0 million
annually, or .87% more than current rates. The PSC authorized
a return on common equity of 12.0%. The PSC also approved
establishment of a Storm Damage Reserve Account capped at $50
million and collected through rates over a ten-year period.
Additionally, the PSC approved accelerated recovery of a
significant portion of the Company's electric regulatory assets
(excluding accumulated deferred income tax assets) and the
transition obligation for postretirement benefits other than
pensions, changing the amortization periods to allow recovery
by the end of the year 2000. The Company's request to shift
approximately $257 million of depreciation reserves from
transmission and distribution assets to nuclear production
assets was also approved.
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, 1996
approximately $15.1 million of retained earnings were
restricted as to payment of cash dividends on common stock.
4. COMMITMENTS AND CONTINGENCIES:
With respect to commitments at June 30, 1996, 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, 1995. No significant changes have
occurred with respect to those matters as reported therein,
except with regard to the Calhoun Park area site discussed in
Note 4B below.
Contingencies at June 30, 1996 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 $8.9 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.
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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
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 retroactive
premium assessment not to exceed 7 1/2 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 retroactive premium assessment
would not exceed $8.7 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 material
adverse impact on the Company's financial position and results
of operations.
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, estimates are made of the cost, if any, to
investigate and clean up each site. These estimates are
refined as additional information becomes available; therefore,
actual expenditures could differ significantly from original
estimates. Amounts estimated and accrued to date for site
assessments and cleanup relate primarily to regulated
operations; such amounts are deferred (approximately $16
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. The deferral includes the
costs estimated to be associated with the matters discussed in
the following paragraphs.
The Company owns four decommissioned manufactured gas plant
sites which contain residues of by-product chemicals. The
Company maintains an active review of the sites to monitor the
nature and extent of the residual contamination.
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 investigation process to be compressed
significantly. The PRPs have negotiated an administrative
order by consent for the conduct of a Remedial
Investigation/Feasibility Study and a corresponding Scope of
Work. Field work began in November 1993 and a draft Remedial
Investigation report was submitted to the EPA in February 1995.
The Company is currently resolving the comments of the EPA and
other regulatory agencies related to the draft.
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The Company is also working with the City of Charleston to
investigate possible contamination which may have migrated to
the City's aquarium site from the manufactured gas plant. 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 attributable
to delays resulting from contamination of the Calhoun Park area
site. In May 1996 the City of Charleston and the Company
agreed to settle all environmental claims the City may have
against the Company involving the Calhoun Park area for a
payment of $26 million over four years by the Company to the
City. The settlement was executed by the City of Charleston
and the Company on August 7, 1996 along with a 30-year electric
franchise agreement. The amount of the settlement will be
recovered through rates in the same manner as other amounts
accrued for site assessments and cleanup as discussed above.
The Company does not expect the settlement to have a material
impact on the Company's financial position or results of
operations.
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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 PSC and the Federal
Energy Regulatory Commission (FERC) in response to the changing
environment cannot be predicted. However, recent FERC actions will
likely accelerate competition among electric utilities by providing
for wholesale transmission access. In April 1996 the FERC issued
Order 888, which addresses open access to transmission lines and
stranded cost recovery. Order 888 requires utilities under FERC
jurisdiction that own, control or operate transmission lines to
file nondiscriminatory open access tariffs that offer to others the
same transmission service they provide themselves. The FERC has also
permitted utilities to seek recovery of wholesale stranded costs from
departing customers by direct assignment. Approximately 5%
of the Company's electric revenues is under FERC jurisdiction.
The Company is aggressively pursuing actions to position
itself strategically for the transformed environment. To enhance
its flexibility and responsiveness to change, the Company operates
Strategic Business Units. Maintaining a competitive cost structure
is of paramount importance in the utility's strategic plan. The
Company has undertaken a variety of initiatives, including
reductions in operation and maintenance costs and in staffing
levels. In January 1996 the PSC approved (as discussed under
"Liquidity and Capital Resources") the accelerated recovery of the
Company's electric regulatory assets and the shift of depreciation
reserves from transmission and distribution assets to nuclear
production assets. In May, 1996 the FERC approved the Company's
application establishing open access transmission tariffs and
requesting authorization to sell bulk power to wholesale customers
at market-based rates. The Company believes that these actions as
well as numerous others that have been and will be taken
demonstrate its ability and commitment to succeed in the new
operating environment to come.
Regulated public utilities are allowed to record as assets
some costs that would be expensed by other enterprises. If
deregulation or other changes in the regulatory environment occur,
the Company may no longer be eligible to apply this accounting
treatment and may be required to eliminate such regulatory assets
from its balance sheet. Such an event could have a material
adverse effect on the Company's results of operations in the period
the write-off is recorded. The Company reported approximately $236
million and $51 million of regulatory assets and liabilities,
respectively, including amounts recorded for accumulated deferred
income tax assets and liabilities of approximately $83 million and
$50 million, respectively, on its balance sheet at June 30, 1996.
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Material Changes in Capital Resources and Liquidity
From December 31, 1995 to June 30, 1996
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 generally 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 financial position and results of operations are
affected by its ability to obtain adequate and timely rate relief
and in the future will be dependent on the Company's ability to
compete in a deregulated environment (see "Competition").
On July 10, 1995 the Company filed an application with the
PSC for an increase in retail electric rates. On January 9, 1996
the PSC issued an order granting the Company an increase of 7.34%
which will produce additional revenues of approximately $67.5
million annually. The increase is being implemented in two phases.
The first phase, an increase in revenues of approximately $59.5
million annually based on a test year, or 6.47%, commenced on
January 15, 1996. The second phase will be implemented in January
1997 and will produce additional revenues of approximately $8.0
million annually, or .87% more than current rates. The PSC
authorized a return on common equity of 12.0%. The PSC also
approved establishment of a Storm Damage Reserve Account capped at
$50 million and collected through rates over a ten-year period.
Additionally, the PSC approved accelerated recovery of a
significant portion of the Company's electric regulatory assets
(excluding accumulated deferred income tax assets) and the
remaining transition obligation for postretirement benefits other
than pensions, changing the amortization periods to allow recovery
by the end of the year 2000. The Company's request to shift
approximately $257 million of depreciation reserves from
transmission and distribution assets to nuclear production assets
was also approved.
The following table summarizes how the Company generated funds
for its utility property additions and construction expenditures
during the six months ended June 30, 1996 and 1995:
Six Months Ended
June 30,
1996 1995
(Thousands of Dollars)
Net cash provided from operating activities $ 97,476 $ 66,197
Net cash provided from (used for)
financing activities (16,060) 69,916
Cash and temporary cash investments available
at the beginning of the period 6,798 346
Net cash available for utility property
additions and construction expenditures $ 88,214 $136,459
Funds used for utility property additions
and construction expenditures, net of
noncash allowance for funds used during
construction $ 88,136 $136,423
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On August 7, 1996 the City of Charleston executed 30-year
electric and gas franchise agreements with the Company. In
consideration for the electric franchise agreement, the City will
receive from the Company $25 million paid over seven years and
the Company will donate to the City the existing transit assets
in Charleston. The City has also agreed to settle environmental
claims it may have against the Company involving the Calhoun Park
area, where the Company and its predecessor companies operated a
manufactured gas plant until the 1960's. The Company will pay
the City $26 million over a four-year period to settle all
claims. As part of the environmental settlement, the Company has
agreed to construct an 1100 space parking garage on the Calhoun
Park site and to transfer the facility to the City in exchange
for a 20-year municipal bond backed by revenues from the parking
garage and a mortgage on the parking garage. The total amount of
the bond is not to exceed $16.9 million, the maximum expected
project cost. The Company will contribute up to $500,000 per
year to the City to defray the cost of underground wiring or
other nonstandard service projects within scenic or historic
districts of the City which amounts will be matched by the city
funds. The City has agreed to limit such projects to those which
can be paid for out of a combined pool of funds created by the
Company's and the City's contributions. It is anticipated that
the Company's payments for underground wiring/nonstandard service
will be treated as investments in the electric distribution rate
base by the Company's regulators.
SCANA and Westvaco Corporation have formed a limited
liability company, Cogen South LLC, which will build and operate
a $170 million cogeneration facility at Westvaco's Kraft Division
Paper Mill in North Charleston, S. C. The facility will provide
industrial process steam for the Westvaco paper mill and shaft
horsepower to enable the Company to generate up to 99 megawatts
of electricity. Construction financing is being provided to
Cogen South LLC by banks. In addition to the cogeneration
partnership, Westvaco has entered into a 20-year contract with
the Company for all its electricity requirements at the Company's
standard industrial rate. Construction of the plant is scheduled
to begin in August 1996 and the plant is expected to be
operational in the fall of 1998.
The Company anticipates that the remainder of its 1996 cash
requirements will be met through internally generated funds,
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, 1996 was 3.68.
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.
13
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SOUTH CAROLINA ELECTRIC & GAS COMPANY
Results of Operations
For the Three and Six months ended June 30, 1996
As Compared to the Corresponding Periods in 1995
Earnings and Dividends
Net income for the three and six months ended June 30,
1996 increased approximately $4.4 million and $15.3 million,
respectively, when compared to the corresponding periods in 1995.
Increases in the electric margin more than offset increases in
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 4%
and 8% of income before income taxes for the six months ended June
30, 1996 and 1995, respectively.
On February 20, 1996 the Company's Board of Directors
authorized the payment of a dividend on common stock of
approximately $32.8 million for the quarter ended March 31, 1996.
The dividend was paid on April 1, 1996 to SCANA Corporation.
On April 25, 1996 the Company's Board of Directors authorized
the payment of a dividend on common stock of $34.2 million for the
quarter ended June 30, 1996. The dividend was paid on July 1, 1996
to SCANA Corporation.
Sales Margins
The changes in the electric sales margins for the three and
six months ended June 30, 1996, when compared to the corresponding
periods in 1995, were as follows:
Three Months Six Months
Change % Change Change % Change
(Millions) (Millions)
Electric operating revenues $30.4 12.7 $62.0 13.2
Less: Fuel used in electric
generation 13.3 33.9 18.9 25.0
Purchased power (3.2) (10.7) (3.0) (5.5)
Margin $20.3 12.0 $46.1 13.6
The electric sales margins increased for the three and six
months ended June 30, 1996, when compared to the corresponding
periods in 1995 as a result of the combined impact of weather, the
rate increase received by the Company in January 1996, and economic
growth factors.
14
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The changes in the gas sales margins for the three and six
months ended June 30, 1996, when compared to the corresponding
periods in 1995, were as follows:
Three Months Six Months
Change % Change Change % Change
(Millions) (Millions)
Gas operating revenues $ 5.2 14.7 $19.2 17.1
Less: Gas purchased for resale 4.6 20.5 18.2 28.3
Margin $ 0.6 4.8 $ 1.0 2.1
The gas sales margins increased slightly for the three and six
months ended June 30, 1996, when compared to the corresponding
periods in 1995 primarily as a result of increased firm sales.
Other Operating Expenses
Changes in other operating expenses, including taxes, for the
three and six months ended June 30, 1996, when compared to the
corresponding periods in 1995 are presented in the following table:
Three Months Six Months
Change % Change Change % Change
(Millions) (Millions)
Other operation and maintenance $ 2.7 4.0 $ 3.1 2.3
Depreciation and amortization 6.2 22.4 11.2 20.2
Income taxes 3.3 19.5 9.8 23.1
Other taxes 2.6 14.7 4.5 12.1
Total $14.8 11.4 $28.6 10.6
Other operation and maintenance expenses for the three and six
months ended June 30, 1996 increased from 1995 levels primarily as
a result of higher production costs attributable to the Cope Plant
which was brought on line in January 1996. Increases in
depreciation and amortization expenses for the three and six
months' comparisons reflect the addition of the Cope Plant and
other 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 property additions and higher
millages and assessments.
Interest Charges
Interest expense, excluding the debt component of AFC, for the
three and six months ended June 30, 1996 decreased by approximately
$1.0 million, when compared to the corresponding periods in 1995
primary as a result of reductions in outstanding debt.
15
<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
16
<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 13, 1996 By: s/Jimmy E. Addison
Jimmy E. Addison
Vice President and Controller
(Principal Accounting Officer)
17
<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 31, 1995
(Exhibit 3-G to Form 10-Q for the quarter
ended March 31, 1995, File No. 1-3375)..................... #
H. Articles of Correction - Amendment to Statement
filed March 31, 1995, dated December 13, 1995
(Exhibit 3-H to Form 10-K for the year ended
December 31, 1995, File No. 1-3375)........................ #
I. Articles of Amendment dated December 13, 1995
(Exhibit 3-I to Form 10-K for the year ended
December 31, 1995, File No. 1-3375)........................ #
J. Copy of By-Laws of the Company as revised and
amended on June 18, 1996 (Filed herewith).................. 21
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
# Incorporated herein by reference as indicated.
18
<PAGE>
SOUTH CAROLINA ELECTRIC & GAS COMPANY Sequentially
EXHIBIT INDEX Numbered
Number Pages
4. (Continued)
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
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.
19
<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
20
<PAGE>
EXHIBIT 3-J
BY-LAWS
OF
SOUTH CAROLINA ELECTRIC & GAS COMPANY
AS AMENDED AND ADOPTED
June 18, 1996
21
<PAGE>
ARTICLE I
OFFICES
Section 1. The principal office of the Corporation, which
shall also be designated as its registered office, shall be located
in the City of Columbia, County of Richland, State of South
Carolina.
Section 2. The Corporation may also have offices and
places of business at such other places, within or without the
State of South Carolina, as the Board of Directors may from time to
time determine or the business of the Corporation may require.
ARTICLE II
SEAL
Section 1. The corporate seal shall have inscribed thereon
the name of the Corporation, the year of its organization and the
words "South Carolina". If authorized by the Board of Directors,
the corporate seal may be affixed to any certificates of stock,
bonds, debentures, notes or other engraved, lithographed or printed
instruments, by engraving, lithographing or printing thereon such
seal or a facsimile thereof, and such seal or facsimile thereof so
engraved, lithographed or printed thereon shall have the same force
and effect, for all purposes, as if such corporate seal had been
affixed thereto by indentation.
ARTICLE III
STOCKHOLDERS' MEETINGS
Section 1. Written or printed notices for annual or
special meetings of stockholders shall state the place, day and
hour of such meetings and, in case of special meetings, the purpose
or purposes for which the meetings are called.
Section 2. Annual meetings of stockholders for the
election of Directors and for the transaction of any other business
permitted by law to be transacted at the annual meeting of
stockholders, and all special meetings of stockholders, for that or
any other purpose, shall be held at such time and place as shall be
stated in a notice thereof, or in a duly executed waiver of notice,
or may be held by written consent in lieu of meeting as permitted
by law. At the annual meeting, the stockholders shall elect a
Board of Directors and transact such other business as may properly
be brought before the meeting. All meetings of stockholders shall
be presided over by the Chairman of the Board, if any, or if there
be none, or in his absence, by the Vice Chairman, or if there be
none, or in his absence, by the President or a Vice President.
22
<PAGE>
Section 3. Except as otherwise provided by law, by the
Articles of Incorporation as the same may be amended from time to
time, or by these By-Laws as they may be amended from time to time,
the holders of a majority of the shares of stock of the Corporation
issued and outstanding and entitled to vote thereat, present in
person or represented by proxy, shall constitute a quorum at any
meeting of the stockholders for the transaction of business.
If, however, such quorum shall not be present or represented
at such meeting of the stockholders, the stockholders entitled to
vote thereat, present in person or represented by proxy, shall have
the power, by a majority vote of those present, to adjourn the
meeting from time to time without notice (unless otherwise provided
in Section 8 of this Article III) other than by announcement at the
meeting, until a quorum shall be present or represented. At such
adjourned meeting at which a quorum shall be present or represented
any business may be transacted which may have been transacted at
the meeting as originally noticed provided notice of such adjourned
meeting, when required by Section 8 of this Article III, shall have
been given or waived.
Section 4. At each meeting of the stockholders each
stockholder having the right to vote shall be entitled to vote in
person, or by proxy appointed by written or printed instrument
executed by such stockholder or by his duly authorized attorney or
by telegram or cablegram appearing to have been transmitted by such
stockholder but, except as otherwise provided by statute, no proxy
shall be valid after expiration of eleven months from the date of
its execution. Every proxy shall be dated as of its execution and
no proxy shall be undated or postdated. Every holder of record of
stock having voting power shall be entitled to one vote for every
share of stock standing in his name on the books of the
Corporation. The vote for directors and, upon the demand of any
stockholder or his duly authorized proxy, the vote upon any
question before the meeting shall be by ballot. All elections shall
be decided by a plurality of the votes cast by the holders of the
shares entitled to vote at the meeting of stockholders and except
as otherwise provided by statute or by the Articles of
Incorporation all other questions by a majority of the votes cast
by holders of shares entitled to vote on such question at such
meeting.
Section 5. The Secretary or the agent of the Corporation
having charge of its stock transfer books shall, in advance of each
meeting of stockholders, prepare a complete list of the
stockholders entitled to vote at such meeting of stockholders or
adjournment thereof, which list shall be arranged in alphabetical
order with the address of and the number of shares held by each
23
<PAGE>
stockholder. Unless the record of stockholders kept by the
Secretary or agent of the Corporation having charge of its stock
transfer books readily shows, in alphabetical order or by
alphabetical index, the information required to appear on such a
list of stockholders, such list of stockholders shall, for a period
commencing upon the date when notice of such meeting is given, and
in no event less than 10 days prior to the date of such meeting, be
kept on file at the registered office of the Corporation or at its
principal place of business or at the office of its transfer agent
or registrar, and shall be subject to inspection by any stockholder
at any time during usual business hours. In any event, such list
shall be produced and kept open at the time and place of such
meeting and shall be subject to the inspection of any stockholder
during the whole time of such meeting.
Section 6. Special meetings of the stockholders for any
purpose or purposes, unless otherwise prescribed by statute, may be
called by the Chairman of the Board, by the Vice Chairman of the
Board or by the President, and shall be called by the President or
Secretary at the request in writing of a majority of the Board of
Directors, or at the request in writing of holders of ten per cent
or more of the shares of stock of the Corporation issued and
outstanding and entitled to vote at the proposed meeting. Such
request shall state the purpose or purposes of the proposed
meeting.
Section 7. Business transacted at all special meetings
shall be confined to the objects stated in the call; provided,
however, that if all the stockholders of the Corporation entitled
to vote shall be present in person or by proxy, any business
pertaining to the affairs of the Corporation may be transacted.
Section 8. Notice of annual meetings of stockholders and
notice of any special meeting of stockholders for the election of
directors or for any other purpose, unless otherwise provided by
statute, shall be delivered personally or mailed, not less than ten
nor more than fifty days before the meeting, to each person who
appears on the books of the Corporation as a stockholder entitled
to vote at said meeting. In the event of the adjournment of any
meeting of stockholders, for whatever reason, for 30 days or more,
notice of the adjourned meeting shall be delivered personally or
mailed not less than ten nor more than fifty days before the date
for such adjourned meeting to each person whose name appears on the
books of the Corporation as a stockholder entitled to vote at said
adjourned meeting. Any such notice may be either written or
printed, or partly written and partly printed, and if mailed it
shall be directed to the stockholder at his address as it appears
on the books of the Corporation. Such notice shall briefly state
the business which it is proposed to present or to submit to such
meeting.
24
<PAGE>
ARTICLE IV
DIRECTORS
Section 1. The property and business of the Corporation
shall be managed by its Board of Directors. The number of
directors shall be not more than twenty (20). The directors shall
be elected at the annual meeting of the stockholders or at a
special meeting called for that purpose. Each director shall be
elected to serve until the next annual meeting of stockholders and
thereafter until his successor shall be elected and shall qualify.
Any director may be removed with or without cause, by a vote of the
holders of a majority of the shares then entitled to vote at an
election of directors, provided, however, such removal shall be
subject to the following:
(1) Whenever the shares of a class of stock are
entitled to elect one or more directors, any director so
elected may be removed only by the vote of the holders of
the outstanding shares of that class voting separately as
a class, and
(2) No director who has been elected by cumulative
voting may be removed if the votes cast against his
removal would be sufficient to elect him if then
cumulatively voted at an election of the entire Board of
Directors.
Section 2. In addition to the powers and authorities by
these By-Laws expressly conferred upon them, the Board may exercise
all such power of the Corporation and do all such lawful acts and
things as are not by statute or by the Articles of Incorporation or
by these By-Laws directed or required to be exercised or done by
the stockholders. A director or officer of this Corporation shall
not be disqualified by his office from dealing or contracting with
the Corporation either as a vendor, purchaser or otherwise, nor
shall any transaction or contract of this Corporation be void or
voidable solely by reason of the fact that any director or officer
or any firm of which any director or officer is a member or
employee, or any corporation of which any director or officer is a
shareholder, director, officer or employee, is in any way
interested in such transaction or contract, provided that the
material facts as to such interest and as to such transaction or
contract are disclosed or known to the Board of Directors or the
Executive Committee and noted in their respective minutes, or to
the stockholders entitled to vote with respect thereto, as the case
may be, and that such transaction or contract is or shall be
authorized, ratified or approved either (1) by the vote of a
majority of a quorum of the Board of Directors or of the Executive
Committee, or (2) by a majority of the votes cast by holders of
shares of stock entitled to vote with respect thereto, without
25
<PAGE>
counting (except for quorum purposes) the vote of or shares held or
controlled and voted by, as the case may be, any director so
interested or member or employee of a firm so interested or a
shareholder, director, officer or employee of a corporation so
interested; nor shall any director or officer be liable to account
to the Corporation for any profits realized by and from or through
any such transaction, or contract of this Corporation authorized,
ratified or approved as aforesaid by reason of the fact that he or
any firm of which he is a member or employee, or any corporation of
which he is a shareholder, director, officer or employee was
interested in such transaction or contract.
ARTICLE V
MEETINGS OF THE BOARD
Section 1. The Board of Directors of the Corporation may
hold meetings, both regular and special, either within or without
the State of South Carolina. If so authorized by law, members of
the Board of Directors may participate in a meeting of the Board by
means of telephone conference call or similar communications by
which all persons participating in the meeting may hear each other
at the same time.
Section 2. Regular meetings of the Board may be held
without notice at such time and place as shall from time to time be
designated by the Board.
Section 3. Special meetings of the Board may be called by
the Chairman of the Board, or the Vice Chairman of the Board, if
any, or the President or any two directors and may be held at the
time and place designated in the call and notice of the meeting.
The Secretary or other officer performing his duties shall give
notice either personally or by mail or telegram not less than
twenty-four hours before the meeting. Meetings may be held at any
time and place without notice if all the directors are present or
if those not present sign waivers of notice either before or after
the meeting.
Section 4. At all meetings of the Board a majority of the
total number of directors then in office shall be necessary and
sufficient to constitute a quorum for the transaction of business,
and the act of a majority of the directors present at any meeting
at which there is a quorum shall be the act of the Board of
Directors, except as may be otherwise specifically provided by
statute or by the Articles of Incorporation or by these By-Laws.
26
<PAGE>
Section 5. Any regular or special meeting of the Board may
be adjourned to any other time at the same or any other place by a
majority of the directors present at the meeting, whether or not a
quorum shall be present at such meeting, and no notice of the
adjourned meeting shall be required other than announcement at the
meeting.
Section 6. Whenever, by any provision of law, the vote of
directors at a meeting thereof is required or permitted to be taken
in connection with any corporate action, the meeting and vote of
directors may be dispensed with, if all the directors shall consent
in writing to such corporate action being taken. Such consents
shall be filed with the minutes of meetings of the Board of
Directors.
Section 7. Directors, as such, shall not receive any
stated salary for their services, but, by resolution of the Board
of Directors, a fixed fee and expenses of attendance, if any, may
be allowed for attendance at each regular or special meeting of the
Board (or of any committee of the Board), provided that nothing
herein contained shall be construed to preclude any Director from
serving the Corporation in any other capacity and receiving
compensation therefor.
Section 8. Directors who are salaried officers or
employees of the Corporation or of any affiliated Company and who
are members of the Executive Committee shall receive no
compensation for their services as such members in addition to such
compensation as may be paid to them as officers or directors, but
shall be reimbursed for their reasonable expenses, if any, in
attending meetings of the Executive Committee, or otherwise
performing their duties as members of the Executive Committee.
ARTICLE VI
EXECUTIVE AND OTHER COMMITTEES
Section 1. The Board of Directors may, by vote of a
majority of the full Board, designate three or more of their number
to constitute an Executive Committee, to hold office for one year
and until their respective successors shall be designated. Such
Executive Committee shall advise with and aid the officers of the
Corporation in all matters concerning its interests and the
management of its business, and shall, between sessions of the
Board, except as otherwise provided by law, have all the powers of
the Board of Directors in the management of the business and
affairs of the Corporation, and shall have power to authorize the
seal of the Corporation to be affixed to all papers which may
require it. The taking of any action by the Executive Committee
shall be conclusive evidence that the Board of Directors was not at
the time of such action in session.
27
<PAGE>
The Board of Directors may, by vote of a majority of the full
Board, appoint from among their number, one or more additional
committees, consisting of three or more directors, which shall have
such powers and duties as may be fixed by the resolution of the
Board of Directors appointing such Committee.
Section 2. The Executive Committee shall cause to be kept
regular minutes of its proceedings, which may be transcribed in the
regular minute book of the Corporation, and all such proceedings
shall be reported to the Board of Directors at its next succeeding
meeting, and shall be subject to revision or alteration by the
Board, provided that no rights of third persons shall be affected
by such revision or alteration. A majority of the Executive
Committee shall constitute a quorum at any meeting. The Executive
Committee may take action without a meeting on the written approval
of such action by all the members of the Committee. The Board of
Directors may by vote of a majority of the full Board fill any
vacancies in the Executive Committee. The Executive Committee may,
from time to time, subject to the approval of the Board of
Directors, prescribe rules and regulations for the calling and
conduct of meetings of the Committee, and other matters relating to
its procedure and the exercise of its powers.
Section 3. Other committees appointed by the Board shall
cause to be kept regular minutes of their proceedings and in
general the provisions as to procedure for such committees shall be
that set forth above with respect to the Executive Committee.
ARTICLE VII
OFFICERS
Section 1. The officers of the Corporation shall be
elected by the Board of Directors. They shall include a President,
one or more Vice Presidents, a Secretary, a Treasurer and a
Controller and may include a Chairman of the Board and a Vice
Chairman of the Board. In the event there shall be a Chairman of
the Board and a Vice Chairman of the Board, the Board of Directors
shall designate which of the Chairman of the Board, the Vice
Chairman of the Board or the President shall be the Chief Executive
Officer of the Corporation. If there shall be no Chairman of the
Board or Vice Chairman of the Board, the President shall be the
Chief Executive Officer of the Corporation. Any two or more of
such offices, except those of Treasurer and Controller, may be
occupied by the same person; provided, however, the same person may
not act in more than one capacity where action by two or more
officers is required.
28
<PAGE>
Section 2. The Board of Directors, at its first meeting
after the election of directors by the stockholders, shall elect
from among its members, if it deems proper, a Chairman of the Board
and a Vice Chairman of the Board. It shall also elect a President
and one or more Vice Presidents, a Secretary, a Treasurer and a
Controller, none of whom need be members of the Board.
The Board of Directors, at any meeting, may elect such
additional Vice Presidents, and such Assistant Vice Presidents,
Assistant Secretaries, Assistant Treasurers and Assistant
Controllers, as it shall deem necessary, none of whom need be
members of the Board.
Section 3. The Board of Directors, at any meeting, may
elect or appoint such other officers and agents as it shall deem
necessary. The tenure and duties of such officers and agents shall
be fixed by the Board of Directors or, in the absence of any action
by the Board of Directors so fixing such tenure and duties, the
tenure and duties shall be fixed by the Chief Executive Officer of
the Corporation, or by such officers or department heads to whom he
shall delegate such authority.
Section 4. The salaries and compensation of the officers
of the Corporation and of agents of the Corporation appointed by
the Board shall be fixed by the Board of Directors. The salaries
and compensation of all other employees of the Corporation shall,
in the absence of any action by the Board of Directors, be fixed by
the Chief Executive Officer of the Corporation. No officer
receiving compensation from any affiliated company shall at the
same time be compensated by the Corporation.
Section 5. The officers of the Corporation elected
pursuant to Section 2 of this Article VII shall hold office until
the first meeting of the Board of Directors after the next
succeeding annual meeting of stockholders and until their
successors are elected and qualify in their stead. The Chief
Executive Officer may be removed at any time, with or without
cause, by the affirmative vote of a majority of the total number of
directors then in office. Any other officer or employee of the
Corporation may be removed at any time, with or without cause,
either (a) by vote of a majority of the directors present at any
meeting of the Board of Directors at which a quorum is present, or
(b) by vote of a majority of the members of the Executive
Committee, or (c) by the Chief Executive Officer of the Corporation
or by any officer who shall be exercising the powers of the Chief
Executive Officer of the Corporation, or by any superior of such
employee to whom such power of removal shall be delegated by the
Chief Executive Officer of the Corporation or the officer
exercising the powers of the Chief Executive Officers of the
Corporation.
29
<PAGE>
ARTICLE VIII
CHIEF EXECUTIVE OFFICER
Section 1. The Chief Executive Officer of the Corporation
shall supervise, direct and control the conduct of the business of
the Corporation subject, however, to the general policies
determined by the Board of Directors and the Executive Committee,
if there be one.
He shall be a member of the Executive Committee and all
committees appointed by the Board of Directors, except the Audit
Committee, shall have the general powers and duties usually vested
in the chief executive officer of a corporation, and shall have
such other powers and perform such other duties as may be
prescribed from time to time by law, by the By-Laws, or by the
Board of Directors.
He shall, whenever it may in his opinion be necessary,
prescribe the duties of officers and employees of the Corporation
whose duties are not otherwise defined.
He shall have power to remove at any time, with or without
cause, any employee or officer of the Corporation other than
officers and agents elected or appointed by the Board of Directors.
He may, in accordance with Section 5 of Article VII of these By-
Laws, delegate such power of removal.
ARTICLE IX
CHAIRMAN OF THE BOARD
Section 1. The Chairman of the Board, if there be one,
shall preside at all meetings of the Board of Directors and of the
stockholders, except when by statute the election of a presiding
officer shall be required. He shall, if designated Chief Executive
Officer pursuant to Section 1 of Article VII of these By-Laws, have
all the powers and duties granted and delegated to the Chief
Executive Officer by Section 1 of Article VIII of these By-Laws.
In such event he may sign in the name of and on behalf of the
Corporation any and all contracts, agreements or other instruments
pertaining to matters which arise in the ordinary course of
business of the Corporation and, if authorized by the Board of
Directors or the Executive Committee, may sign in the name of and
on behalf of the Corporation any other contracts, agreements or
instruments of any nature pertaining to the business of the
Corporation. He shall have such other powers and perform such
other duties as may be prescribed from time to time by law, by the
By-Laws or by the Board of Directors.
30
<PAGE>
ARTICLE X
THE VICE CHAIRMAN OF THE BOARD
The Vice Chairman of the Board, if there be one, shall perform
necessary duties of the Chairman in case of the absence or
temporary incapacity of the Chairman. He shall have such other
powers and perform such other duties as may be prescribed from time
to time by law, by the By-Laws or by the Board of Directors.
ARTICLE XI
THE PRESIDENT
Section 1. The President shall, in the absence of the
Chairman and Vice Chairman of the Board, or if there shall be no
Chairman or Vice Chairman of the Board, preside at all meetings of
the Board of Directors and of the stockholders, except when by
statute the election of a presiding officer shall be required.
He shall, if designated Chief Executive Officer of the
Corporation pursuant to Section 1 of Article VII of these By-Laws,
have all the powers and duties granted and delegated to the Chief
Executive Officer by Section 1 of Article VIII of these By-Laws.
In the event there shall be a Chairman of the Board or a Vice
Chairman of the Board who shall have been designated as Chief
Executive Officer of the Corporation pursuant to Section 1 of
Article VII of these By-Laws, then the President shall have such
powers and duties as may be assigned to him by the Chief Executive
Officer. In addition, he shall be a member of the Executive
Committee, and, in the absence or disability of the Chairman of the
Board or the Vice Chairman of the Board, he shall have all the
powers and duties of the Chairman of the Board or the Vice Chairman
of the Board.
He may sign in the name of and on behalf of the Corporation
any and all contracts, agreements or other instruments pertaining
to matters which arise in the ordinary course of business of the
Corporation and, if authorized by the Board of Directors or the
Executive Committee, may sign in the name of and on behalf of the
Corporation any other contracts, agreements or instruments of any
nature pertaining to the business of the Corporation.
He shall have such other powers and perform such other duties
as may be prescribed from time to time by law, by the By-Laws or by
the Board of Directors.
31
<PAGE>
ARTICLE XII
THE VICE PRESIDENT
Section 1. The Vice President shall, in the absence or
disability of the President, perform the duties and exercise the
powers of the President and shall perform such other duties as the
Board of Directors may prescribe.
The Vice President may sign in the name of and on behalf of
the Corporation contracts, agreements, or other instruments
pertaining to matters which arise in the ordinary course of
business of the Corporation, except in cases where the signing
thereof shall be expressly delegated by the Board of Directors or
the Executive Committee to some other officer or agent of the
Corporation. If authorized by the Board of Directors or the
Executive Committee, he may sign in the name of and on behalf of
the Corporation any other contracts, agreements or instruments of
any nature pertaining to the business of the Corporation. He shall
have such other powers and perform such other duties as may be
prescribed from time to time by law, by the By-Laws, or by the
Board of Directors.
If there be more than one Vice President, the Board of
Directors or the Chief Executive Officer of the Corporation shall
assign to such Vice Presidents their respective duties, and the
Board may designate any of such Vice Presidents as Executive Vice
Presidents and Senior Vice Presidents.
ARTICLE XIII
THE SECRETARY
Section 1. The Secretary shall attend all sessions of the
Board and all meetings of the stockholders and record all votes and
the minutes of all proceedings in a book to be kept for that
purpose; and shall perform like duties for the committees appointed
by the Board of Directors when required. He shall give, or cause
to be given, notice of all meetings of the stockholders and of the
Board of Directors, and shall perform such other duties as may be
prescribed by the Board of Directors or Chief Executive Officer,
under whose supervision he shall be. He shall be sworn to the
faithful discharge of his duty. Any records kept by him shall be
the property of the Corporation and shall be restored to the
Corporation in case of his death, resignation, retirement or
removal from office. He or his agent shall be the custodian of the
seal of the Corporation, the stock ledger, stock certificate book
and minute books of the Corporation, and its committees, and other
formal records and documents relating to the corporate affairs of
the Corporation.
32
<PAGE>
Section 2. The Assistant Secretary or Assistant
Secretaries shall assist the Secretary in the performance of his
duties, exercise and perform his powers and duties, in his absence
or disability, and such other powers and duties as may be conferred
or required by the Board.
ARTICLE XIV
THE TREASURER
Section 1. The Treasurer shall have the custody of the
corporate funds and securities and shall keep full and accurate
accounts of receipts and disbursements in books belonging to the
Corporation and shall deposit all moneys and other valuable effects
in the name and to the credit of the Corporation, in such
depositories as may be designated by the Board of Directors or as
may be designated by persons to whom the Board of Directors
delegates such authority.
He shall disburse the funds of the Corporation in such manner
as may be ordered by the Board, taking proper vouchers for such
disbursements, and shall render to the Chief Executive Officer and
directors, at the regular meetings of the Board, or whenever they
may require it, an account of all his transactions as Treasurer and
of the financial condition of the Corporation.
He shall give the Corporation a bond if required by the Board
of Directors in a sum, and with one or more sureties satisfactory
to the Board, for the faithful performance of the duties of his
office, and for the restoration to the Corporation, in case of his
death, resignation, retirement or removal from office, of all
books, papers, vouchers, money and other property of whatever kind
in his possession or under his control belonging to the
Corporation.
Section 2. The Assistant Treasurer or Assistant Treasurers
shall assist the Treasurer in the performance of his duties,
exercise and perform his powers and duties, in his absence or
disability, and such other powers and duties as may be conferred or
required by the Board.
ARTICLE XV
THE CONTROLLER
Section 1. The Controller of the Corporation shall be the
principal accounting officer of the Corporation. He shall have
full control of all the books of the Corporation and keep a true
and accurate record of all property owned by it, of its debts and
of its revenues and expenses, and shall keep all accounting records
of the Corporation other than the record of receipts and
33
<PAGE>
disbursements and those relating to deposit or custody of money and
securities of the Corporation, which shall be kept by the
Treasurer, and shall also make reports to the directors and others
of or relating to the financial condition of the Corporation. He
shall exhibit at all reasonable times his books of account and
records to any director of the Corporation upon application during
business hours at the office of the Corporation where such books of
accounts and records are kept.
He shall perform all duties generally incident to the office
of Controller and shall have such other powers and duties as, from
time to time, may be prescribed by law, by the By-Laws, or by the
Board of Directors.
Section 2. The Assistant Controller or Assistant
Controllers shall assist the Controller in the performance of his
duties, exercise and perform his powers and duties, in his absence
or disability, and such other powers and duties as may be conferred
or required by the Board of Directors.
ARTICLE XVI
VACANCIES
Section 1. If the office of any director becomes vacant by
reason of death, resignation, retirement, disqualification, or
otherwise, the directors then in office, although less than a
quorum, by a majority vote, may elect a successor or successors,
who shall hold office for the unexpired term in respect of which
such vacancy occurred. Notwithstanding anything contained in the
preceding sentence, if a vacancy occurs with respect to a director
elected by the votes of a particular class of stock such vacancy
shall be filled by the remaining director or directors elected by
that class, or by the stockholders of that class, and any vacancy
created by an increase in the number of directors of the
Corporation shall be filled only by election by the stockholders
entitled to vote with respect thereto at an annual meeting or a
special meeting of stockholders called for that purpose. If the
office of any officer of the Company shall become vacant for any
reason, the Board of Directors, by a majority vote of those present
at any meeting at which a quorum is present, may elect a successor
or successors, who shall hold office for the unexpired term in
respect of which such vacancy occurred.
34
<PAGE>
ARTICLE XVII
RESIGNATIONS
Section 1. Any officer or any director of the Corporation
may resign at any time, such resignation to be made in writing and
to take effect from the time of its receipt by the Corporation,
unless some time be fixed in the resignation, and then from that
time. The acceptance of a resignation shall not be required to
make it effective. A vacancy shall be deemed to exist upon receipt
by the Corporation of such written resignation, and a successor
may, then or thereafter, be elected to take office when such
resignation becomes effective.
ARTICLE XVIII
DUTIES OF OFFICERS MAY BE DELEGATED
Section 1. In case of the absence of any officer of the
Corporation, or for any other reason the Board may deem sufficient,
the Board may delegate, for the time being, the powers or duties,
or any of them, of such officers to any other officer or to any
director.
ARTICLE XIX
STOCK OF OTHER CORPORATIONS
Section 1. The Board of Directors shall have the right to
authorize any officer or other person on behalf of the Corporation
to attend, act and vote at meetings, of the stockholders of any
corporation in which the Corporation shall hold stock, and to
exercise thereat any and all the rights and powers incident to the
ownership of such stock and to execute waivers of notice of such
meetings and calls therefor; and authority may be given to exercise
the same either on one or more designated occasions, or generally
on all occasions until revoked by the Board. In the event that the
Board shall fail to give such authority it may be exercised by the
Chief Executive Officer of the Corporation in person or by proxy
appointed by him on behalf of the Corporation.
ARTICLE XX
CERTIFICATES OF STOCK
Section 1. The certificates of stock of the Corporation
shall be entered in the books of the Corporation as they are
issued. No fractional shares of stock shall be issued.
Certificates of stock shall be signed by the Chairman of the Board,
the Vice Chairman of the Board, the President or a Vice President
and by the Secretary, or an Assistant Secretary, and the seal of
the Corporation shall be affixed thereto. Such seal may be
facsimile, engraved or printed. Where any certificate of stock is
signed by a transfer agent or transfer clerk or by a registrar, the
35
<PAGE>
signatures of any such Chairman of the Board, Vice Chairman of the
Board, President, Vice President, Secretary or Assistant Secretary,
upon such stock certificate may be facsimiles, engraved or printed.
In case any such officer who has signed, or whose facsimile
signature has been placed upon, such certificate of stock, shall
have ceased to be such officer before such certificate of stock is
issued, it may be issued by the Corporation with the same effect as
if such officer had not ceased to be such at the date of its issue.
ARTICLE XXI
TRANSFERS OF STOCK
Section 1. Transfer of stock shall be made on the books of
the Corporation only by the person named in the certificate or by
attorney, lawfully constituted in writing, and upon surrender of
the certificate therefor.
ARTICLE XXII
FIXING OF RECORD DATE
Section 1. The Board of Directors is hereby authorized to
fix a time, not less than ten (10) days nor more than fifty (50)
days preceding the date of any meeting of stockholders or the date
fixed for the payment of any dividend or the making of any
distribution, or for the delivery of evidences of rights or
evidences of interests arising out of any change, conversion or
exchange of shares of stock, as a record date for the determination
of the stockholders entitled to notice of and to vote at such
meeting or entitled to receive any such dividend, distribution,
rights or interests, as the case may be; and all persons who are
holders of record of shares of stock at the date so fixed and no
others, shall be entitled to notice of and to vote at such meeting,
and only stockholders of record at such date shall be entitled to
receive any such notice, dividend, distribution, rights or
interests; and the stock transfer books shall not be closed during
any such period.
ARTICLE XXIII
REGISTERED STOCKHOLDERS
Section 1. The Corporation shall be entitled to treat the
holders of record of any share or shares of stock as the holder in
fact thereof and accordingly shall not be bound to recognize any
equitable or other claim to, or interest in, such share on the part
of any other person, whether or not it shall have express or other
notice thereof, save as expressly provided by the statutes of the
State of South Carolina.
36
<PAGE>
ARTICLE XXIV
LOST CERTIFICATES
Section 1. Whenever any stockholder shall desire a new
certificate of stock to replace an original certificate of stock
which has been lost, destroyed or wrongfully taken, he shall make
application to the Corporation for the issuance of a new
certificate or certificates in replacement of the certificate or
certificates which were lost, destroyed or wrongfully taken, and
shall file with the Corporation a good and sufficient indemnity
bond, together with an affidavit stating that the applicant is the
bona fide owner of such share(s) of stock and specifying the
number(s) of the certificate or certificates which were lost,
destroyed or wrongfully taken, the particular circumstances of such
loss, destruction or wrongful taking (including a statement that
the share(s) represented by such certificate or certificates has or
have not been transferred or otherwise disposed of by such
applicant in any manner.)
Upon completion by a stockholder of the requirements set forth
in the preceding paragraph, the Corporation shall issue a
certificate or certificates in replacement of the certificate or
certificates referred to in such stockholder's application if such
application is received by the Corporation before it has notice
that such certificate or certificates has or have been acquired by
a bona fide purchaser.
ARTICLE XXV
INSPECTION OF BOOKS
Section 1. The Board of Directors shall have power to
determine whether and to what extent, and at what time and places
and under what conditions and regulations, the accounts and books
of the Corporation (other than the books required by statute to be
open to the inspection of stockholders), or any of them, shall be
open to the inspection of stockholders, and no stockholder shall
have any right to inspect any account or book or document of the
Corporation, except as such right may be conferred by the statutes
of the State of South Carolina or by resolution of the directors or
of the stockholders.
ARTICLE XXVI
CHECKS, NOTES, BONDS AND OTHER INSTRUMENTS
Section 1. All checks or demands for money and notes of
the Corporation shall be signed by such person or persons (who may
but need not be an officer or officers of the Corporation) as the
Board of Directors may from time to time designate or as may be
designated by persons to whom the Board of Directors delegates such
37
<PAGE>
authority. The Board of Directors shall have authority to make
provision, with proper safeguards, for the signatures to appear on
all checks, including, but not by way of limitation, payroll
checks, to be made by facsimile, whether engraved or printed.
Whenever the seal of this Corporation is to be affixed to any
instrument being executed on behalf of this Corporation, such seal
shall be affixed thereto by the Secretary or an Assistant Secretary
and the fact of such affixation shall be attested to by the person
so affixing the seal.
ARTICLE XXVII
RECEIPT FOR SECURITIES
Section 1. All receipts for stocks, bonds or other
securities received by the Corporation shall be signed by the
Treasurer or an Assistant Treasurer, or by such other person or
persons as the Board of Directors or Executive Committee shall
designate.
ARTICLE XXVIII
FISCAL YEAR
Section 1. The fiscal year shall begin the first day of
January in each year.
ARTICLE XXIX
RESERVES
Section 1. The Board of Directors shall have power to fix
and determine, and from time to time to vary, the amount to be
reserved as working capital; to determine whether any, or if any,
what part of any, surplus shall be declared and paid as dividends,
to determine the date or dates for the declaration or payment of
dividends and to direct and determine the use and disposition of
any surplus, and before payment of any dividend or making any
distribution of surplus there may be set aside out of the surplus
of the Corporation such sum or sums as the directors from time to
time, in their absolute discretion, think proper as a reserve fund
to meet contingencies, or for equalizing dividends, or for
repairing or maintaining any property of the Corporation, or for
such other purpose as the directors shall think conducive to the
interests of the Corporation.
38
<PAGE>
ARTICLE XXX
NOTICES
Section 1. In addition to the telegraphic notice permitted
by Section 3 of Article V of these By-Laws, whenever under the
provisions of these By-Laws notice is required to be given to any
director, officer or stockholder, it shall not be construed to
require personal notice, but such notice may be given in writing,
by mail, by depositing a copy of the same in a post office, letter
box or mail chute, maintained by the Post Office Department, in a
postpaid sealed wrapper, addressed to such stockholder, officer or
director, at his address as the same appears on the books of the
Corporation.
A stockholder, director or officer may waive any notice
required to be given to him under these By-Laws.
ARTICLE XXXI
INSPECTORS OF ELECTION
Section 1. Prior to every meeting of the stockholders the
Board of Directors may appoint any odd number of inspectors of
election to act as inspectors at such meeting. In the event that
inspectors shall not be so appointed, they shall be appointed by
the person presiding at such meeting and if any inspector shall
refuse to serve, or neglect to attend such meeting or his office
becomes vacant, the person presiding at the meeting may appoint
another inspector in his place. The inspectors appointed to act at
any meeting of the stockholders shall, before entering upon the
discharge of their duties, be sworn faithfully to execute the
duties of inspector at such meeting with strict impartiality and
according to the best of their ability.
ARTICLE XXXII
DIRECTOR, OFFICER AND EMPLOYEE INDEMNIFICATION
Section 1. The Corporation shall indemnify any and all of
its employees, officers, or directors, or former officers or
directors (including their heirs, executors, and administrators),
or any person who may have served at its request or by its
election, designation, or request as a member, agent, employee,
director or officer of any other corporation or partner, trustee or
otherwise, of any organization against expenses actually and
necessarily incurred by them in connection with the defense or
settlement of any action, suit or proceeding (which shall include
any threatened, pending, or completed action, suit or proceeding,
whether civil, criminal, administrative, investigative or
arbitrative) in which they, or any of them, are made parties, or a
party, by reason of being or having been agents, employees,
directors or officers of the Corporation, or of such other
39
<PAGE>
organization, except in relation to matters as to which any such
agent, employee, director or officer or former employee, director
or officer or person shall be adjudged in such action, suit or
proceeding to be liable for willful misconduct in the performance
of duty and to such matters, as shall be settled by agreement
predicated on the existence of such liability. Such indemnity
shall be in accordance with a written plan adopted by the Board of
Directors, which plan shall be in accordance with the law of South
Carolina. The indemnification provided hereby shall not be deemed
exclusive of any other right to which anyone seeking
indemnification hereunder may be entitled under any By-Law,
agreement, or otherwise. The Corporation may purchase and maintain
insurance on the behalf of any director, officer, agent, employee
or former employee, director or officer or other person, against
any liability asserted against them and incurred by them.
ARTICLE XXXIII
AMENDMENTS
Section 1. Any of these By-Laws may be altered, amended or
repealed, and/or one or more new By-Laws may be adopted, at a
meeting of the stockholders, by a vote of the holders of a majority
of all shares of stock entitled to vote to elect directors who are
entitled to vote at such meeting, provided that written notice of
such proposed alteration, amendment, repeal and/or adoption, as the
case may be, shall have been given to all such stockholders at
least ten days before such meeting. Any of these By-Laws may also
be altered, amended or repealed, and/or one or more new By-Laws may
be adopted, by the vote of a majority of all directors then in
office, at a meeting of the Board of Directors, provided that the
notice of such meeting includes therein notice of such alteration,
amendment, repeal and/or adoption, as the case may be. At a
meeting thereof, the stockholders, by the vote of the holders of a
majority or by written consent of all shares of stock entitled to
vote to elect directors who are entitled to vote at such meeting,
may repeal any alteration or amendment of these By-Laws made by the
Board of Directors and/or reinstate any of these By-Laws repealed
by the Board of Directors, and/or repeal any new By-Law adopted by
the Board of Directors.
40
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM THE CONSOLIDATED
BALANCE SHEET AS OF JUNE 30, 1996 AND THE CONSOLIDATED STATEMENTS OF INCOME AND
RETAINED EARNINGS AND OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 1996 AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1996
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 3,129,484
<OTHER-PROPERTY-AND-INVEST> 11,699
<TOTAL-CURRENT-ASSETS> 277,538
<TOTAL-DEFERRED-CHARGES> 404,177
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 3,822,898
<COMMON> 181,333
<CAPITAL-SURPLUS-PAID-IN> 784,470
<RETAINED-EARNINGS> 387,778
<TOTAL-COMMON-STOCKHOLDERS-EQ> 1,353,581
44,260
26,027
<LONG-TERM-DEBT-NET> 1,298,497
<SHORT-TERM-NOTES> 100,000
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 33,244
2,435
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 964,854
<TOT-CAPITALIZATION-AND-LIAB> 3,822,898
<GROSS-OPERATING-REVENUE> 310,566
<INCOME-TAX-EXPENSE> 19,995
<OTHER-OPERATING-EXPENSES> 231,417
<TOTAL-OPERATING-EXPENSES> 251,412
<OPERATING-INCOME-LOSS> 59,154
<OTHER-INCOME-NET> 1,251
<INCOME-BEFORE-INTEREST-EXPEN> 60,405
<TOTAL-INTEREST-EXPENSE> 25,208
<NET-INCOME> 35,197
(1,368)
<EARNINGS-AVAILABLE-FOR-COMM> 33,829
<COMMON-STOCK-DIVIDENDS> 34,201
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> 97,476
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
