SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1995
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ______________________ to ____________________
Commission file number: 1-4351
SOUTHEASTERN PUBLIC SERVICE COMPANY
(Exact name of registrant as specified in its charter)
Delaware 13-5534018
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2001 N.W. 107th Avenue, Miami, FL 33172
(Address of principal executive offices)(Zip code)
(305) 593-6565
(Registrant's telephone number, including area code)
(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 [ ]
As of July 31, 1995, all of the voting stock of the registrant (consisting
of 1,000 shares of common stock, $1.00 par value) was held by the
registrant's parent, Triarc Companies, Inc., through a wholly-owned
subsidiary.
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
<TABLE>
SOUTHEASTERN PUBLIC SERVICE COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
<CAPTION>
December 31, June 30,
1994 1995
----- -----
(In thousands)
ASSETS (A) (Unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 25,807 $22,403
Restricted cash 6,014 3,514
Marketable securities 9,152 7,588
Note receivable from RC/Arby's Corporation 6,550 --
Receivables, net 5,051 480
Inventories and other current assets 1,247 1,839
-------- --------
Total current assets 53,821 35,824
Due from Triarc Companies, Inc., net 27,769 34,227
Investments in affiliates 83,995 104,833
Properties, net 10,921 --
Unamortized costs in excess of net assets of
acquired companies 7,447 1,609
Other assets 4,416 5,043
-------- --------
$ 188,369 $ 181,536
======== ========
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Current portion of long-term debt $ 51,056 $ 42,543
Accounts payable 1,184 697
Accrued expenses 5,907 1,860
Net current liabilities of discontinued
operations 4,610 4,516
-------- --------
Total current liabilities 62,757 49,616
-------- --------
Long-term debt 567 --
Other liabilities 3,043 1,201
Net non-current liabilities of discontinued
operations 1,360 910
Stockholder's equity:
Common stock 1 1
Additional paid-in capital 120,081 120,081
Retained earnings 786 9,723
Net unrealized gain (loss) on marketable
securities, net of income taxes (226) 4
-------- --------
Total stockholder's equity 120,642 129,809
-------- --------
$ 188,369 $ 181,536
======== ========
<FN>
(A) Derived from the audited consolidated financial statements as of
December 31, 1994.
</TABLE>
See accompanying notes to condensed consolidated financial statements.
<PAGE>
<TABLE>
SOUTHEASTERN PUBLIC SERVICE COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED INCOME STATEMENTS
<CAPTION>
Three months ended Six months ended
June 30, June 30,
-------------------- -----------------
1994 1995 1994 1995
----- ----- ---- ----
(In thousands)
(Unaudited)
<S> <C> <C> <C> <C>
Net sales $ 5,795 $ 5,619 $ 15,618 $ 15,542
-------- -------- -------- --------
Costs and expenses:
Cost of sales 4,751 4,458 11,280 10,993
Selling, general and
administrative 878 838 1,545 1,804
-------- -------- -------- --------
5,629 5,296 12,825 12,797
-------- -------- -------- --------
Operating profit 166 323 2,793 2,745
Other income (expense):
Interest expense (2,029) (1,727) (4,123) (3,560)
Equity in earnings of
affiliates 1,846 4,098 3,777 6,618
Interest income from Triarc
Companies, Inc. and its
subsidiaries 860 1,089 1,711 2,189
Other, net 504 528 1,179 945
-------- -------- -------- --------
Net income $ 1,347 $ 4,311 $5,337 $ 8,937
======== ======== ======== ========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
PAGE
<PAGE>
<TABLE>
SOUTHEASTERN PUBLIC SERVICE COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
<CAPTION>
Six months ended
June 30,
--------------------
1994 1995
----- -----
(In thousands)
(Unaudited)
<S> <C> <C>
Cash flows from operating activities:
Net income $5,337 $ 8,937
Adjustments to reconcile net income to
net cash and cash equivalents provided by
(used in) operating activities:
Depreciation and amortization of properties 571 521
Amortization of deferred financing costs
and original issue discount 726 656
Amortization of costs in excess of net assets
of acquired companies 204 197
Equity in earnings of affiliates (3,777) (6,618)
Interest income from Triarc Companies, Inc.
and its affiliates not realized in cash (1,711) (181)
Other, net (210) (752)
Changes in operating assets and liabilities:
Decrease in:
Restricted cash -- 2,500
Receivables 1,566 1,848
Inventories and other current assets 604 149
Increase (decrease) in:
Accounts payable (1,953) 6
Accrued expenses (3,376) (1,577)
-------- --------
Net cash and cash equivalents provided by
(used in) operating activities (2,019) 5,686
-------- --------
Cash flows from investing activities:
Purchases of marketable securities (7,154) (7,033)
Sales of marketable securities 8,823 8,781
Collection of loan to RC/Arby's Corporation -- 6,550
Capital expenditures (208) (682)
Proceeds from sale of subsidiary -- 730
Increase in amounts due from Triarc
Companies, Inc. -- (241)
Loan to Triarc Companies, Inc. -- (6,191)
Purchase of notes receivable (1,239) --
Other, net 25 (640)
-------- --------
Net cash and cash equivalents provided by
investing activities 247 1,274
-------- --------
Cash flows from financing activities:
Repayments of long-term debt (9,023) (9,042)
Redemption of subsidiary preferred stock (703) --
-------- --------
Net cash and cash equivalents used in
financing activities (9,726) (9,042)
-------- --------
Net cash used in continuing operations (11,498) (2,082)
Net cash provided by (used in) discontinued
operations 3,667 (1,322)
-------- --------
Net decrease in cash and cash equivalents (7,831) (3,404)
Cash and cash equivalents at beginning of period 22,813 25,807
-------- --------
Cash and cash equivalents at end of period $ 14,982 $22,403
======== ========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
<PAGE>
SOUTHEASTERN PUBLIC SERVICE COMPANY AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
June 30, 1995
(Unaudited)
1. Basis of Presentation
Southeastern Public Service Company and subsidiaries (the "Company") is
an indirect wholly-owned (71.1% owned prior to April 14, 1994) subsidiary of
Triarc Companies, Inc. ("Triarc").
The accompanying unaudited condensed consolidated financial statements
of the Company have been prepared in accordance with Rule 10-01 of Regulation
S-X promulgated by the Securities and Exchange Commission and, therefore, do
not include all information and footnotes necessary for a fair presentation
of financial position, results of operations and cash flows in conformity
with generally accepted accounting principles. In the opinion of the
Company, however, the accompanying condensed consolidated financial
statements contain all adjustments, consisting only of normal recurring
adjustments, necessary to present fairly the Company's financial position as
of December 31, 1994 and June 30, 1995, its results of operations for the
three and six-month periods ended June 30, 1994 and 1995 and its cash flows
for the six-month periods ended June 30, 1994 and 1995. This information
should be read in conjunction with the consolidated financial statements and
notes thereto included in the Company's Annual Report on Form 10-K for the
year ended December 31, 1994 ("Form 10-K").
Certain amounts included in the prior period's condensed consolidated
financial statements have been reclassified to conform with the current
periods' presentation.
2. Public Gas Merger
Effective June 29, 1995 Public Gas Company ("Public Gas"), previously a
wholly-owned subsidiary engaged in the liquefied petroleum gas business , was
merged with and into National Propane Corporation ("National Propane"), an
indirect wholly-owned subsidiary of Triarc (the "Merger"). In consideration
for its investment in Public Gas, the Company received 24.8% of the issued
and outstanding shares of common stock of the merged corporation which is a
proportionate share based upon the relative fair values of Public Gas and
National Propane. The Company's investment in National Propane has been
recorded at the $14,220,000 net book value of Public Gas at the date of the
Merger since such merger is a transfer of assets and liabilities in exchange
for shares among a controlled group of companies. Such investment will be
accounted for in accordance with the equity method of accounting. Since the
Company's ownership interest enables it to exert significant influence over
the surviving corporation, the Company has continued to reflect the liquefied
petroleum gas business as a continuing operation.
3. Discontinued Operations
As of June 30, 1995 the Company has completed the sale of substantially
all of its discontinued operations, but there remain, however, certain
environmental and other liabilities to be liquidated (the estimates of which
have been previously accrued) as well as certain contingent assets which may
be collected (the benefits of which have not been recorded). The contingent
assets are principally comprised of two notes from the sale of the
refrigeration business in the remaining amounts as of June 30, 1995 of
$3,934,000 (discounted value $3,242,000) and $3,000,000 (discounted value
$2,506,000). The Company expects the liquidation of the remaining
liabilities associated with the discontinued operations will not have a
material impact on its consolidated financial position or results of
operations.
4. Investments in Affiliates
Investments in affiliates consisted of the following (in thousands):
<TABLE>
<CAPTION>
December 31, June 30,
1994 1995
---- ----
<S> <C> <C>
Graniteville Company $ 83,722 $ 90,528
CFC Holdings Corp. 273 85
National Propane (A) -- 14,220
-------- --------
$ 83,995 $ 104,833
======== ========
<FN>
(A) See Note 2, "Public Gas Merger" for a discussion of the investment in
National Propane.
</TABLE>
Equity in earnings of affiliates consisted of the following (in
thousands):
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30, June 30,
------------------ ------------------
1994 1995 1994 1995
---- ---- ---- ----
<S> <C> <C> <C <C>
Graniteville Company $ 1,769 $ 4,220 $3,575 $ 6,806
CFC Holdings Corp. 77 (122) 202 (188)
-------- -------- -------- --------
$1,846 $4,098 $ 3,777 $6,618
======== ======== ======== ========
</TABLE>
Under its credit facility as amended on August 3, 1995, Graniteville
Company ("Graniteville"), a 50% owned affiliate (49% owned prior to August
30, 1994), is not permitted to pay dividends or make loans or advances to its
stockholders, including the Company, until the outstanding principal balance
of Graniteville's term loan is less than $55,000,000 (the outstanding
principal balance was $86,000,000 as of August 4, 1995 after borrowing an
additional $31,000,000 under the term loan. In accordance with the amended
repayment terms of the term loan, Graniteville is not scheduled to be able to
pay any dividends or make any loans or advances to the Company prior to
December 31, 1998.
Summary consolidated results of operations of Graniteville for the three
and six-month periods ended June 30, 1994 and 1995 are as follows (in
thousands):
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30, June 30,
------------------- -------------------
1994 1995 1994 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Operating revenues $ 143,683 $ 137,792 $273,673 $ 282,848
Operating profit 8,705 7,756 16,366 16,688
Net income 3,611 8,441 7,297 13,613
</TABLE>
5. Income Taxes
There is no provision for income taxes for the three and six-month
periods ended June 30, 1994 and 1995 due to the release of valuation
allowances attributable to the utilization of net operating and other loss
and tax credit carryforwards.
6. Transactions with Affiliates
In August 1994, the Company entered into a credit arrangement with
RC/Arby's Corporation ("RCAC"), an indirect wholly-owned subsidiary of
Triarc, and in accordance therewith received a promissory note from RCAC (the
"RCAC Note") maturing in September 1995 pursuant to which the Company may
lend up to $9,500,000. Loans under the RCAC Note bear interest at 11 7/8%,
payable quarterly. The $6,550,000 outstanding as of December 31, 1994, under
the RCAC Note has been collected as of June 30, 1995; subsequent thereto,
however, the Company loaned $9,500,000 thereunder.
In September 1994, the Company entered into a credit arrangement with
Triarc and in accordance therewith received a demand promissory note from
Triarc (the "Demand Note") pursuant to which the Company may make loans of
unspecified amounts to Triarc. Loans under the Demand Note bear interest at
the prime rate plus 1 1/4%. As of June 30, 1995 the Company had made loans
under the Demand Note of $6,191,000.
During the three and six-month periods ended June 30, 1995 the Company
recorded $105,000 and $371,000, respectively, of interest income on the RCAC
Note and $104,000 and $107,000, respectively, of interest income on the
Demand Note which have been included in "Interest income from Triarc
Companies, Inc. and its subsidiaries" in the condensed consolidated income
statements.
In addition, the Company continues to have certain related party
transactions of the same nature and general magnitude as those described in
Note 17 to the consolidated financial statements contained in the Form 10-K.
7. Contingencies
The Company continues to have legal and environmental contingencies of
the same nature and general magnitude as those described in Note 20 to the
consolidated financial statements contained in Form 10-K.
After considering amounts provided in previous periods, the Company does
not believe that the contingencies referred to above, as well as ordinary
routine litigation, will have a material adverse effect on its consolidated
financial position or results of operations.
<PAGE>
Item 2.
Management's Discussion and Analysis of Financial Condition and Results
of Operations.
INTRODUCTION
The "Management's Discussion and Analysis of Financial Condition and
Results of Operations" included herein should be read in conjunction with
"Item 7. - Management's Discussion and Analysis of Financial Condition and
Results of Operations" in the Annual Report on Form 10-K for the year ended
December 31, 1994 ("Form 10-K") of Southeastern Public Service Company (the
"Company").
RESULTS OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1995 COMPARED WITH SIX MONTHS ENDED JUNE 30, 1994
Net sales decreased $0.1 million to $15.5 million in the six months
ended June 30, 1995 as a result of a $0.3 million reduction in appliance and
service revenue, partially offset by $0.2 million of slightly higher rental
billings for tanks and cylinders.
Operating profit of $2.7 million in the six months ended June 30, 1995
was unchanged from the prior year reflecting a gross profit increase of $0.3
million offset by an increase of $0.3 million in selling, general and
administrative. The increase in gross profit primarily reflects the
aforementioned increase in tank and cylinder rental billings which had no
related incremental cost. Selling, general and administrative increased
primarily due to a $0.1 million increase in management services charged to
the continuing operations of the Company by National Propane Corporation
("National Propane"), an indirect wholly-owned subsidiary of Triarc
Companies, Inc. ("Triarc"), the Company's indirect parent, and general
inflationary increases.
Interest expense decreased $0.6 million to $3.6 million in the six
months ended June 30, 1995 due to a lower level of debt outstanding during
1995 as a result of the annual $9.0 million sinking fund payment made on
February 1, 1995 on the 11 7/8% senior subordinated debentures due February
1, 1998 (the "Debentures").
Equity in earnings of affiliates increased $2.8 million to $6.6 million
in the six months ended June 30, 1995 due to a $3.2 million increase in the
equity in earnings of Graniteville Company ("Graniteville"), partially offset
by a $0.4 million decrease due to the equity in losses of CFC Holdings Corp.
("CFC") compared with income in the 1994 period. Net income at Graniteville
increased $6.3 million during the six months ended June 30, 1995 resulting
from increased operating profit of $0.3 million and increased other income of
$12.4 million less increased interest expense of $2.6 million and higher
income taxes of $3.8 million. The increase in other income reflected (i) an
$11.9 million gain from the sale of excess timberland and (ii) a $1.9 million
insurance recovery relating to fire-damaged equipment, partially offset by a
$1.2 million loss resulting from Graniteville's equity in losses of a
Taiwanese joint venture. Graniteville's interest expense increased
principally due to an increase in interest rates on its floating-rate debt
and, to a lesser extent, to higher borrowing levels.
Interest income from Triarc Companies, Inc. and its subsidiaries
increased $0.5 million to $2.2 million in the six months ended June 30, 1995
of which $0.4 million is due to loans to RC/Arby's Corporation ("RCAC"), a
subsidiary of Triarc, relating to a credit agreement entered into in August
1994 and $0.1 million is due to additional loans to Triarc.
Other, net decreased $0.2 million to $0.9 million of income in the six
months ended June 30, 1995 resulting from a $0.5 million decline from the
sale of marketable securities (reflecting a gain of $0.3 million in the 1994
period and a loss of $0.2 million in the 1995 period), partially offset by a
$0.2 million increase in interest income and a $0.1 million decline in other
expenses.
The Company did not have any provision for income taxes for the six-
month periods ended June 30, 1994 and 1995 due to the release of valuation
allowances attributable to the utilization of net operating and other loss
and tax credit carryforwards.
THREE MONTHS ENDED JUNE 30, 1995 COMPARED WITH THREE MONTHS ENDED JUNE 30,
1994
Net sales decreased $0.2 million to $5.6 million in the three months
ended June 30, 1995 as a result of (i) a $0.1 million reduction in average
selling prices and sales volume of liquefied petroleum gas ("LP Gas") and
(ii) a $0.2 million reduction in appliance and service revenue, all partially
offset by a $0.1 million increase in rental billings for tanks and cylinders.
Operating profit increased $0.2 million to $0.3 million in the three
months ended June 30, 1995 resulting from an increase in gross profit
reflecting the aforementioned increase in tank and cylinder rental billings
which had no related incremental cost.
Interest expense decreased $0.3 million to $1.7 million in the three
months ended June 30, 1995 due to a lower level of debt outstanding during
1995 as a result of the annual $9.0 million sinking fund payment on the
Debentures made on February 1, 1995.
Equity in earnings of affiliates increased $2.3 million to $4.1 million
in the three months ended June 30, 1995 due to a $2.5 million increase in the
equity in earnings of Graniteville, partially offset by a $0.2 million
decrease due to the equity in losses of CFC compared with income in the 1994
period. Net income at Graniteville increased $4.8 million during the 1995
quarter resulting from an increase in other income of $9.6 million less (i) a
$0.9 million decrease in operating profit, (ii) increased interest expense of
$1.0 million and (iii) higher income taxes of $2.9 million. The increase in
other income principally reflected a $10.7 million gain from the sale of
excess timberland, partially offset by a $0.9 million loss resulting from
Graniteville's equity in losses of a Taiwanese joint venture. Graniteville's
interest expense increased due to an increase in interest rates on its
floating-rate debt and, to a lesser extent, to higher borrowing levels.
Interest income from Triarc Companies, Inc. and its subsidiaries
increased $0.2 million to $1.1 million in the three months ended June 30,
1995 of which $0.1 million is due to loans to RCAC relating to a credit
agreement entered into in August 1994 and $0.1 million is due to additional
loans to Triarc.
Other, net of $0.5 million of income in the three months ended June 30,
1995 was unchanged from the prior year.
The Company did not have any provision for income taxes for the three-
month periods ended June 30, 1994 and 1995 due to the release of valuation
allowances attributable to the utilization of net operating and other loss
and tax credit carryforwards.
LIQUIDITY AND CAPITAL RESOURCES
Cash and cash equivalents ("Cash") and marketable securities, excluding
restricted cash, decreased $5.0 million during the six months ended June 30,
1995 to $30.0 million. Such decrease reflects (i) scheduled repayments of
long-term debt of $9.0 million, (ii) a $6.2 million loan to Triarc, (iii) net
Cash used in discontinued operations of $1.3 million and (iv) other investing
activities of $0.8 million, all partially offset by (i) net Cash provided by
operations of $5.7 million and (ii) collection from RCAC of a $6.6 million
loan.
At June 30, 1995 the Company had a receivable from Triarc of $34.2
million including a $26.5 million promissory note (the "Note") and a demand
promissory note (the "Demand Note") with a principal amount of $6.2 million
plus accrued and unpaid interest on the Note and Demand Note of $1.4 million
and $0.1 million, respectively. The Note bears interest at the annual rate
of 13%, payable in cash, and is due on August 1, 1998. The Demand Note bears
interest at the prime rate plus 1 1/4%, payable upon demand in cash.
However, the Company does not expect any cash flows from interest since the
Company expects to be required to make loans to Triarc approximating the
amount of any cash interest received, except in connection with the
anticipated repayment of the Debentures (see below).
On July 22, 1993 the Company's Board of Directors authorized the sale or
liquidation of its utility and municipal services, refrigeration and natural
gas and oil ("NG&O") business segments which have been accounted for as
discontinued operations in the Company's consolidated financial statements.
In February 1995, the Company completed the sale of the stock of the
remaining operations of the NG&O segment for net proceeds of $0.7 million and
as of June 30, 1995 the Company has completed the sale of substantially all
of its discontinued operations. There remain, however, certain environmental
and other liabilities to be liquidated (the estimates of which have been
previously accrued) as well as certain contingent assets which may be
collected (the benefits of which have not been recorded). The contingent
assets are principally comprised of two notes from the sale of the
refrigeration business in the remaining amounts of $3.9 million and $3.0
million with no remaining scheduled collections in 1995.
In addition, on July 22, 1993 the Company's Board of Directors
authorized the sale or liquidation of its LP Gas business, Public Gas Company
("Public Gas"). As previously reported, effective June 29, 1995 Public Gas
was merged with and into National Propane (the "Merger"). In consideration
for its investment in Public Gas, the Company received 24.8% of the issued
and outstanding shares of common stock of the merged corporation which is a
proportionate share based upon the relative fair values of Public Gas and
National Propane. Such investment will be accounted for in accordance with
the equity method of accounting.
In connection with the Merger the Company intends to redeem the
Debentures ($45.0 million principal amount as of June 30, 1995) by December
31, 1995 which is prior to maturity. The Company presently anticipates
financing such redemption with the collection of a minimum of $22.6 million
on the Note, the Company's $7.4 million pro-rata share of a $30.0 million
dividend expected to be declared by National Propane, and the Company's
available Cash and marketable securities ($30.0 million at June 30, 1995).
Although the Company is informed that it is Triarc's intention to repay the
Note, there can be no assurance that Triarc will be able to obtain sufficient
cash to do so. Accordingly, there can also be no assurance that the
Debentures will be redeemed prior to maturity.
On August 3, 1995 Graniteville amended its credit facility agreement.
Under its amended credit facility agreement, Graniteville is not scheduled to
be able to pay any dividends or make any loans or advances to its
stockholders, including the Company, prior to December 31, 1998, and
Graniteville's ability to do so thereafter will be limited. In addition,
under the terms of its bank facility, National Propane is limited in its
ability to pay dividends or make advances to the Company other than $30.0
million of availability, which is restricted to the redemption of the
Debentures (of which $7.4 million will be dividended to the Company and $22.6
million to Triarc). Accordingly, any earnings from the Company's investments
in Graniteville and National Propane will not provide any cash flows to the
Company in 1995.
The Company is required to make an annual $9.0 million sinking fund
payment on the Debentures on February 1 and to pay interest on such
Debentures semi-annually on February 1 and August 1 of each year. On
February 1, 1995 the Company made its $9.0 million sinking fund payment and
on February 1, 1995 and August 1, 1995 the Company made its interest payments
of $3.2 million and $2.7 million, respectively. As previously discussed, the
Company intends to redeem the remaining $45.0 million principal amount of
the Debentures prior to maturity in December 1995.
The indenture pursuant to which the Debentures were issued contains a
provision which limits to $100.0 million the aggregate amount of specified
kinds of indebtedness that the Company and its consolidated subsidiaries can
incur. At June 30, 1995 such indebtedness was $42.5 million resulting in
allowable additional indebtedness, if the Company desired to make such
borrowings and if such financing could be obtained, of $57.5 million.
The Company has $3.5 million of restricted cash of which $2.75 million
supports letters of credit which collateralize certain performance and other
bonds relating to the former utility and municipal services segment and $0.75
million represents funds held in escrow resulting from the sale of the
natural gas and oil business. During the three months ended June 30, 1995,
the restriction on $2.5 million supporting a portion of the letters of credit
collateralizing bonds was removed and such cash is now available for general
corporate purposes. The performance and related warranties secured by the
bonds remaining will not be substantially completed until 1996 with a small
portion extending into 1997. The funds held in escrow, net of charges
thereto, revert to the Company later in August 1995 ($0.25 million) and in
August 1996 ($0.5 million).
The Company had Cash provided by operating activities of $5.7 million
during the six months ended June 30, 1995. Such amount consisted of (i) $8.9
million of net income and (ii) net changes in operating assets and
liabilities of $2.9 million, less net non-cash adjustments of $6.1 million.
Significant cash requirements for the remainder of 1995, excluding
requirements related to the intended redemption of the Debentures discussed
above, will include approximately $3.5 million of Cash to be used by
continuing operations, including $2.7 million of interest paid on August 1,
1995 with respect to the Debentures, and approximately $3.0 million of Cash
to be used by discontinued operations. Other than its Cash and marketable
securities, the Company's only remaining significant sources of Cash
effectively are (i) collections of contingent assets from its discontinued
operations, (ii) a $7.4 million dividend from National Propane which will be
restricted to the redemption of the Debentures and/or (iii) collections on
the intercompany Note and Demand Note. However, the Company believes that
its existing Cash and marketable securities will be more than sufficient to
enable the Company to meet its short-term cash requirements and, assuming the
Company receives $7.4 million of dividends from National Propane and Triarc
repays approximately $22.6 million on the Note, there will be sufficient Cash
and marketable securities to redeem the Debentures by December 31, 1995.
TRENDS
Sales and gross profits up to June 30, 1995 relate entirely to Public
Gas. As a result of the Merger, the Company will have no future sales or
gross profits and significantly lower selling, general and administrative
expenses.
CONTINGENCIES
The Company continues to have legal and environmental contingencies of
the same nature and general magnitude as those described in "Item 7. -
Management's Discussion and Analysis of Financial Condition and Results of
Operations" contained in the Form 10-K. After considering amounts provided
in prior periods, the Company does not believe that the contingencies
referred to above, as well as ordinary routine litigation, will have a
material adverse effect on its consolidated financial position or results of
operations.
<PAGE>
SOUTHEASTERN PUBLIC SERVICE COMPANY AND SUBSIDIARIES
PART II. OTHER INFORMATION
Item 5. Other Information
On June 15, 1995, a newly-formed indirect wholly-owned subsidiary of the
registrant was merged into Public Gas Company ("Public Gas"). As a result of
such merger (the "Public Gas Merger"), each share of common stock of Public
Gas outstanding immediately prior to the time the Public Gas Merger became
effective (other than shares which were held by a subsidiary of the
registrant) was converted into the right to receive $69.92, in cash
(approximately $133,000, in aggregate). As a result of the Public Gas
Merger, the registrant acquired all of the common stock of Public Gas that it
did not own prior to such merger (approximately 0.3%). Thereafter, on June
29, 1995, Public Gas was merged with and into National Propane Corporation,
an indirect wholly-owned subsidiary of Triarc Companies, Inc., the
registrant's indirect parent. As a result of the merger, the shares of
Public Gas held by the registrant were converted, in the aggregate, into
shares representing 24.8% of the outstanding common stock of National Propane
Corporation.
<PAGE>
SOUTHEASTERN PUBLIC SERVICE COMPANY AND SUBSIDIARIES
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.
SOUTHEASTERN PUBLIC SERVICE COMPANY
Date: August 18, 1995 BY: /S/ JOSEPH A. LEVATO
---------------------
Joseph A. Levato
Executive Vice President and
Chief Financial Officer
(On behalf of the Company)
/S/ FRED H. SCHAEFER
---------------------
Fred H. Schaefer
Vice President and
Chief Accounting Officer
(Principal accounting officer)
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
condensed consolidated financial statements included in the accompanying Form
10-Q of Southeastern Public Service Company for the six-month period ended June
30, 1995 and is qualified in its entirety by reference to such Form 10-Q.
</LEGEND>
<CIK> 0000092050
<NAME> SOUTHEASTERN PUBLIC SERVICE COMPANY
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> JUN-30-1995
<CASH> 22,403
<SECURITIES> 7,588
<RECEIVABLES> 480
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 35,824
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 181,536
<CURRENT-LIABILITIES> 49,616
<BONDS> 0
<COMMON> 1
0
0
<OTHER-SE> 129,808
<TOTAL-LIABILITY-AND-EQUITY> 181,536
<SALES> 15,542
<TOTAL-REVENUES> 15,542
<CGS> 10,993
<TOTAL-COSTS> 10,993
<OTHER-EXPENSES> 1,804
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,560
<INCOME-PRETAX> 8,937
<INCOME-TAX> 0
<INCOME-CONTINUING> 8,937
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 8,937
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
