UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1999
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 1-4169
TEXAS GAS TRANSMISSION CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 61-0405152
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3800 Frederica Street, Owensboro, Kentucky 42301
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (270) 926-8686
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No_
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
1,000 shares as of November 10, 1999
REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTIONS
H(1)(a) and (b) OF FORM 10-Q AND IS THEREFORE FILING THIS FORM
WITH THE REDUCED DISCLOSURE FORMAT.
<PAGE>
TEXAS GAS TRANSMISSION CORPORATION
TABLE OF CONTENTS
Page
Part I. Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets............................. 3
Consolidated Statements of Income....................... 5
Consolidated Statements of Cash Flows................... 6
Condensed Notes to Consolidated Financial Statements.... 7
Item 2. Management's Narrative Analysis of the Results of
Operations.......................................... 11
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K.................... 15
Signature.................................................... 16
Certain matters discussed in this report, excluding historical
information, include forward-looking statements. Although Texas
Gas Transmission Corporation believes such forward-looking
statements are based on reasonable assumptions, no assurance can
be given that every objective will be achieved. Such statements
are made in reliance on the "safe harbor" protections provided
under the Private Securities Reform Act of 1995. Additional
information about issues that could lead to material changes in
performance is contained in Texas Gas Transmission Corporation's
1998 Annual Report on Form 10-K and 1999 First and Second Quarter
Reports on Form 10-Q.
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
TEXAS GAS TRANSMISSION CORPORATION
CONSOLIDATED BALANCE SHEETS
(Thousands of Dollars)
(Unaudited)
<TABLE>
<CAPTION>
September 30, December 31,
ASSETS 1999 1998
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 50 $ 201
Receivables:
Trade 3,157 8,493
Affiliates 888 1,049
Other 1,348 702
Transportation and exchange receivable 3,324 2,807
Advances to affiliates 50,984 82,755
Inventories 15,211 15,341
Deferred income taxes 12,702 14,496
Costs recoverable from customers 13,383 10,085
Gas stored underground 10,409 10,409
Other 2,083 1,676
Total current assets 113,539 148,014
Investments, at cost 360 340
Property, Plant and Equipment, at cost:
Natural gas transmission plant 1,094,901 1,069,259
Less -- Accumulated depreciation and
amortization 141,769 128,759
Property, plant and equipment, net 953,132 940,500
Other Assets:
Gas stored underground 103,389 113,468
Costs recoverable from customers 49,118 52,358
Other 39,936 38,991
Total other assets 192,443 204,817
Total Assets $1,259,474 $1,293,671
</TABLE>
The accompanying condensed notes are an integral part of these
consolidated financial statements.
<PAGE>
TEXAS GAS TRANSMISSION CORPORATION
CONSOLIDATED BALANCE SHEETS
(Thousands of Dollars)
(Unaudited)
<TABLE>
<CAPTION>
September 30, December 31,
LIABILITIES AND STOCKHOLDER'S EQUITY 1999 1998
<S>
Current Liabilities: <C> <C>
Payables:
Trade $ 3,473 $ 3,016
Affiliates 6,753 17,828
Other 3,322 7,026
Gas Payables:
Transportation and exchange 12,599 12,764
Storage 11,109 13,010
Accrued taxes 23,342 22,752
Accrued interest 1,510 6,557
Other accrued liabilities 48,474 48,253
Reserve for regulatory and rate matters - 20,150
Total current liabilities 110,582 151,356
Long-Term Debt 250,937 251,160
Other Liabilities and Deferred Credits:
Deferred income taxes 162,546 156,253
Postretirement benefits other than
pensions 39,254 41,392
Other 51,214 60,213
Total other liabilities and deferred
credits 253,014 257,858
Contingent Liabilities and Commitments
Stockholder's Equity:
Common stock, $1.00 par value, 1,000
shares authorized, issued and
outstanding 1 1
Premium on capital stock and other
paid-in capital 627,046 627,046
Retained earnings 17,894 6,250
Total stockholder's equity 644,941 633,297
Total Liabilities and Stockholder's
Equity $1,259,474 $1,293,671
</TABLE>
The accompanying condensed notes are an integral part of these
consolidated financial statements.
<PAGE>
TEXAS GAS TRANSMISSION CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(Thousands of Dollars)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1999 1998 1999 1998
<S> <C> <C> <C> <C>
Operating Revenues:
Gas transportation $ 51,371 $ 49,065 $189,674 $191,473
Gas sales 136 3,362 385 11,750
Other 895 872 2,684 2,236
Total operating revenues 52,402 53,299 192,743 205,459
Operating Costs and Expenses:
Cost of gas transportation 684 1,402 4,488 11,843
Cost of gas sold 136 3,321 390 11,598
Operation and maintenance 10,407 13,314 33,300 38,960
Administrative and general 12,812 14,107 39,207 41,369
Depreciation and amortization 10,931 10,581 33,068 31,865
Taxes other than income taxes 4,326 3,483 11,869 11,148
Total operating costs and expenses 39,296 46,208 122,322 146,783
Operating Income 13,106 7,091 70,421 58,676
Other Deductions (Income):
Interest expense 5,060 5,238 14,893 15,817
Interest income (887) (1,159) (2,881) (4,019)
Miscellaneous other (income), net (359) (397) (367) (213)
Total other deductions 3,814 3,682 11,645 11,585
Income Before Income Taxes 9,292 3,409 58,776 47,091
Provision for Income Taxes 3,429 1,368 23,132 18,738
Net Income $ 5,863 $ 2,041 $ 35,644 $ 28,353
</TABLE>
The accompanying condensed notes are an integral part of these
consolidated financial statements.
<PAGE>
TEXAS GAS TRANSMISSION CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Thousands of Dollars)
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended September 30,
1999 1998
<S> <C> <C>
OPERATING ACTIVITIES:
Net income $ 35,644 $ 28,353
Adjustments to reconcile to cash
provided from operations:
Depreciation and amortization 33,068 31,865
Provision for deferred income taxes 8,087 1,015
Changes in receivables sold (6,900 (16,400)
Changes in receivables 11,097 17,602
Changes in inventories 130 (447)
Changes in other current assets (2,062) (1,837)
Changes in accounts payable (14,322) (14,081)
Changes in accrued liabilities (26,572) 14,314
Other, including changes in noncurrent
assets and liabilities (908) (14,717)
Net cash provided by operating
activities 37,262 45,667
FINANCING ACTIVITIES:
Dividends and returns of capital (24,000) (39,000)
Net cash (used in) financing
activities (24,000) (39,000)
INVESTING ACTIVITIES:
Property, plant and equipment:
Capital expenditures, net of AFUDC (43,669) (43,254)
Proceeds from sales and salvage values,
net of costs of removal (1,515) 817
Advances to affiliates, net 31,771 35,034
Proceeds from sale of long-term
investments - 620
Net cash (used in) investing
activities (13,413) (6,783)
Decrease in cash and cash equivalents (151) (116)
Cash and cash equivalents at beginning
of period 201 235
Cash and cash equivalents at end of period $ 50 $ 119
</TABLE>
The accompanying condensed notes are an integral part of these
consolidated financial statements.
<PAGE>
TEXAS GAS TRANSMISSION CORPORATION
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
A. Corporate Structure and Control and Basis of Presentation
Corporate Structure and Control
Texas Gas Transmission Corporation and its wholly owned
subsidiary, TGT Enterprises, Inc., (collectively, Texas Gas) are
wholly owned by Williams Gas Pipeline Company, which is a wholly
owned subsidiary of The Williams Companies, Inc. (Williams).
Basis of Presentation
The consolidated financial statements have been prepared from
the books and records of Texas Gas without audit. Certain
information and footnote disclosures normally included in
consolidated financial statements prepared in accordance with
generally accepted accounting principles have been condensed or
omitted. The accompanying unaudited consolidated financial
statements include all adjustments, consisting of only normal
operating adjustments, which, in the opinion of Texas Gas'
management, are necessary to present fairly its financial
position at September 30, 1999, and results of operations for the
three and nine months ended September 30, 1999 and 1998, and cash
flows for the nine months ended September 30, 1999 and 1998.
These consolidated financial statements should be read in
conjunction with the financial statements, notes thereto and
management's narrative analysis contained in Texas Gas' 1998
Annual Report on Form 10-K and Texas Gas' 1999 First and Second
Quarter Reports on Form 10-Q.
Certain reclassifications have been made in the 1998 financial
statements to conform to the 1999 presentation.
Seasonal Variation
Operating income may vary by quarter. Based on current rate
structure, Texas Gas experiences higher operating income in the
first and fourth quarters as compared to the second and third
quarters.
B. Contingent Liabilities and Commitments
Regulatory and Rate Matters and Related Litigation
FERC Order 636
Effective November 1, 1993, Texas Gas restructured its
business to implement the provisions of FERC Order 636, which,
among other things, required pipelines to unbundle their merchant
role from their transportation services. FERC Order 636 also
<PAGE>
provides that pipelines should be allowed the opportunity to
recover all prudently incurred transition costs which, for Texas
Gas, are primarily related to gas supply realignment (GSR) costs
and unrecovered purchased gas costs. Certain aspects of Texas
Gas' FERC Order 636 restructuring are under appeal.
In September 1995, Texas Gas received FERC approval of a
settlement agreement which resolves all issues regarding Texas
Gas' recovery of GSR costs. The settlement provides that Texas
Gas will recover 100 percent of its GSR costs up to $50 million,
will share in costs incurred between $50 million and $80 million
and will absorb any GSR costs above $80 million. Under the
settlement, all challenges to these costs, on the grounds of
imprudence or otherwise, were withdrawn and no future challenges
will be filed. Ninety percent of the cost recovery is collected
through demand surcharges on Texas Gas' firm transportation
services; the remaining ten percent should be recovered from
its interruptible transportation service. Effective July 1,
1997, the FERC allowed Texas Gas to suspend its GSR surcharge
applicable to firm transportation services due to the full
recovery of incurred GSR costs allocated to these services. The
GSR cost increment included in the interruptible transportation
rates, as well as no-notice and firm transportation overrun
rates, remains in effect. To date, Texas Gas has paid $76.2
million and collected $66.4 million, plus interest, related to
GSR. Texas Gas expects to pay no more than $80 million for GSR
costs, primarily as a result of contract terminations, and has
provided reserves for the remaining GSR costs it may be required
to pay, as well as a regulatory asset for the estimated future
amounts recoverable.
General Rate Issues
On April 30, 1997, Texas Gas filed a general rate case (Docket
No. RP97-344) effective November 1, 1997, subject to refund. On
March 20, 1998, Texas Gas filed an offer of settlement. On
November 14, 1998, the FERC issued an "Order Denying Rehearing
and Providing Guidance on Hearing Issues" related to the March
20, 1998, settlement filed in this case. Applications for
hearing of the October 14, 1998, order were due by November 13,
1998 and no such applications were filed. Pursuant to the
provisions of the settlement, the settlement became effective
November 14, 1998, and a filing to implement the settlement was
made on November 30, 1998. Texas Gas had established an adequate
reserve for the difference between collected rates and the
settlement rates. Refunds, including interest, of $17.2 million
were distributed to customers on January 13, 1999. The FERC
issued a letter order on September 15, 1999, which accepted Texas
Gas' final refund report as being in satisfactory compliance with
the settlement. Accordingly, Texas Gas included in the third
quarter of 1999 a total of $7.4 million in operating income in
recognition of the final resolution of its pending rate case
issues.
Royalty Claims and Producer Litigation
In connection with Texas Gas' renegotiations of supply
contracts with producers to resolve take-or-pay and other
contract claims, Texas Gas has entered into certain settlements
which may require the indemnification by Texas Gas of certain
claims for royalties which a producer may be required to pay as a
result of such settlements. Texas Gas has been made aware of
demands on producers for additional royalties and may receive
other demands which could result in claims against Texas Gas
pursuant to the indemnification provision in its settlements.
Indemnification for royalties will depend on, among other things,
the specific lease provisions between the producer and the lessor
and the terms of the settlement between the producer and Texas
Gas.
<PAGE>
Pursuant to such an indemnity, in January 1998, Texas Gas
reimbursed a producer for approximately $1.7 million in costs
paid to settle a take-or-pay royalty claim. On June 1, 1999,
Texas Gas filed to recover approximately $1.3 million (75%) of
the costs pursuant to the provisions of FERC Order 528. The FERC
approved the filing, subject to conditions, which allows for a
surcharge on all mainline throughput beginning July 1, 1999, to
run through a twelve-month period. Texas Gas has provided
reserves for the estimated settlement costs of other royalty
claims and litigation.
Environmental Matters
As of September 30, 1999, Texas Gas had a reserve of
approximately $1.6 million for estimated costs associated with
environmental assessment and remediation, including remediation
associated with the historical use of polychlorinated biphenyls
and hydrocarbons. This estimate depends upon a number of
assumptions concerning the scope of remediation that will be
required at certain locations and the cost of remedial measures
to be undertaken. Texas Gas is continuing to conduct
environmental assessments and is implementing a variety of
remedial measures that may result in increases or decreases in
the total estimated costs.
Texas Gas currently is either named as a potentially
responsible party or has received an information request
regarding its potential involvement at certain Superfund and
state waste disposal sites. The anticipated remediation costs,
if any, associated with these sites have been included in the
reserve discussed above.
Texas Gas considers environmental assessment and remediation
costs and costs associated with compliance with environmental
standards to be recoverable through rates, as they are prudent
costs incurred in the ordinary course of business. The actual
costs incurred will depend on the actual amount and extent of
contamination discovered, the final cleanup standards mandated by
the U.S. Environmental Protection Agency or other governmental
authorities, and other factors.
Other Legal Issues
In 1998, the United States Department of Justice informed
Williams that Jack Grynberg, an individual, had filed claims in
the United States District Court for the District of Colorado
under the False Claims Act against Williams and certain of its
wholly owned subsidiaries including Texas Gas, Williams Gas
Pipelines Central, Inc., Kern River Gas Transmission Company,
Northwest Pipeline Corporation, Williams Gas Pipeline Company,
Transcontinental Gas Pipe Line Corporation, and Williams
Production Company. Mr. Grynberg has also filed claims against
approximately 300 other energy companies and alleges that the
defendants violated the False Claims Act in connection with the
measurement and purchase of hydrocarbons. The relief sought is
an unspecified amount of royalties allegedly not paid to the
federal government, treble damages, a civil penalty, attorneys'
fees, and costs. On April 9, 1999, the United States Department
of Justice announced that it was declining to intervene in any of
the Grynberg qui tam cases; including the actions filed against
the Williams entities in the United States District Court for the
District of Colorado. On October 21, 1999, the Panel on Multi-
District Litigation transferred all of the Grynberg qui tam
cases, including the ones filed against Williams, to the United
States District Court for the District of Wyoming for pre-trial
purposes.
<PAGE>
Summary of Contingent Liabilities and Commitments
While no assurances may be given, Texas Gas does not believe
that the ultimate resolution of the foregoing matters, taken as a
whole and after consideration of amounts accrued, insurance
coverage, potential recovery from customers or other
indemnification arrangements, will have a materially adverse
effect on Texas Gas' future financial position, results of
operations or cash flow requirements.
<PAGE>
Item 2. Management's Narrative Analysis of the Results of Operations
(Filed Pursuant to General Instruction H)
Financial Analysis of Operations
Nine Months Ended September 30, 1999 Compared to
Nine Months Ended September 30, 1998
Operating income was $11.7 million higher for the nine months
ended September 30, 1999, than for the nine months ended
September 30, 1998. The increase in operating income was due
primarily to $7.4 million from the settlement of regulatory and
rate reserves related to its RP97-344 rate case. Operating
income also increased due to recognition of $3.0 million of
previously deferred revenues associated with allocations related
to Texas Gas' January 1999 GSR reconciliation filing with the
FERC and lower operation and maintenance expense, partially
offset by a first quarter 1998 adjustment to estimated GSR costs
of $2.0 million. Compared to 1998, net income was $7.3 million
higher for the same reasons.
Operating revenues decreased $12.7 million primarily
attributable to lower gas sales and discounting of transportation
rates, partially offset by the recognition of deferred revenues
reserve adjustments discussed above. Texas Gas' gas sales result
from requirements to meet its pre-Order 636 gas purchase
commitments, substantially all of which are managed by Texas Gas'
gas marketing affiliate, Williams Energy Services Company, as
exclusive agent for Texas Gas. Although the sales and purchase
commitments remain in Texas Gas' name, their management and any
associated profit or loss is solely the responsibility of the
agent. Therefore, the resulting sales and purchases have no
impact on Texas Gas' results of operations. Total deliveries
were 558.0 TBtu and 550.1 TBtu for the nine months of 1999 and
1998, respectively.
Operating costs and expenses decreased $24.5 million primarily
attributable to lower costs of gas sold; lower costs of gas
transportation, primarily due to termination of contracts for
transportation by others and a 1998 adjustment to GSR costs
discussed above; and lower operation and maintenance expenses,
including a $4.7 million reduction in supplies and expenses.
Financial Condition and Liquidity
Through the years, Texas Gas has consistently maintained its
financial strength and experienced strong operational results.
Williams' ownership of Texas Gas further enhances its financial
and operational strength, as well as allows Texas Gas to take
advantage of new opportunities for growth. Texas Gas expects to
access public and private capital markets, as needed, to finance
its own capital requirements.
As of September 30, 1999, Texas Gas has $100 million of shelf
availability remaining under a Registration Statement filed with
the Securities and Exchange Commission in 1997.
<PAGE>
Texas Gas is a participant with other Williams subsidiaries in
a $1 billion credit agreement under which Texas Gas may borrow up
to $200 million, subject to borrowings by other affiliated
companies. Interest rates vary with current market conditions.
To date, Texas Gas has no amounts outstanding under this
facility.
Texas Gas is a participant in Williams' cash management
program. The advances due Texas Gas by Williams are represented
by demand notes. The interest rate on intercompany demand notes
is the London Interbank Offered Rate on the first day of the
month plus an applicable margin based on the current Standard and
Poor's Rating of the Borrower.
Texas Gas' capital expenditures for the first nine months of
1999 and 1998 were $43.7 and $43.3 million, respectively.
Capital expenditures for 1999 are expected to approximate $80.3
million. Texas Gas' debt as a percentage of total capitalization
at September 30, 1999 and December 31, 1998 was 28.0% and 28.4%,
respectively.
On April 30, 1997, Texas Gas filed a general rate case (Docket
No. RP97-344) effective November 1, 1997, subject to refund. On
March 20, 1998, Texas Gas filed an offer of settlement. On
November 14, 1998, the FERC issued an "Order Denying Rehearing
and Providing Guidance on Hearing Issues" related to the March
20, 1998, settlement filed in this case. Applications for
hearing of the October 14, 1998, order were due by November 13,
1998; no such applications were filed. Pursuant to the
provisions of the settlement, the settlement became effective
November 14, 1998, and a filing to implement the settlement was
made on November 30, 1998. Texas Gas had established an adequate
reserve for the difference between collected rates and the
settlement rates. Refunds, including interest, of $17.2 million
were distributed to customers on January 13, 1999. The FERC
issued a letter order on September 15, 1999, which accepted Texas
Gas' final refund report as being in satisfactory compliance with
the settlement. Accordingly, Texas Gas included in the third
quarter of 1999 a total of $7.4 million in operating income in
recognition of the final resolution of its pending rate case
issues.
Year 2000 Compliance
Williams, including Texas Gas, initiated an enterprise-wide
project in 1997 to address the year 2000 compliance issue for
both traditional information technology areas and non-traditional
areas, including embedded technology that is prevalent
throughout the company. This project focuses on all technology
hardware and software, external interfaces with customers and
suppliers, operations process control, automation and
instrumentation systems, and facility items. The phases of the
project are awareness, inventory and assessment, renovation and
replacement, testing and validation, and contingency planning.
The awareness and inventory/assessment phases of this project as
they relate to both traditional and non-traditional information
technology areas have been completed. During the inventory and
assessment phase, all systems with possible year 2000
implications were inventoried and classified into five
categories: 1) highest, business critical, 2) high, compliance
necessary within a short period of time following January 1,
2000, 3) medium, compliance necessary within 30 days from January
1, 2000, 4) low, compliance desirable but not required, and 5)
unnecessary. Categories 1 through 3 were designated as critical
and are the major focus of this project. Renovation/replacement
and testing/validation of critical systems is complete. Some non-
critical systems may not be compliant by January 1, 2000.
<PAGE>
Texas Gas initiated a formal communications process with other
companies in 1998 to determine the extent to which those
companies are addressing year 2000 compliance. In connection
with this process, Texas Gas sent approximately 1,350 letters and
questionnaires to third parties including customers, vendors and
service providers. Texas Gas is evaluating responses as they are
received or otherwise investigating the status of these
companies' year 2000 compliance efforts. As of September 30,
1999, approximately 37 percent of the companies contacted have
responded and virtually all of these indicated that they are
already compliant or will be compliant on a timely basis. Where
necessary, Texas Gas will be working with key business partners
to reduce the risk of a break in service or supply and with non-
compliant companies to mitigate any material adverse effect on
Texas Gas.
Texas Gas has utilized internal resources to complete the year
2000 compliance project. Texas Gas has a core group of 20 people
involved in this project. This includes four individuals
responsible for coordinating, organizing, managing,
communicating, and monitoring the project and another 16 staff
members responsible for completing the project. Depending on
which phase the project is in and what area is being focused on
at any given point in time, there can be up to an additional 160
employees who are also contributing a portion of their time to
the completion of this project. Costs have been expensed as
incurred. Texas Gas currently estimates the total cost of the
project, including any accelerated system replacements, will
total less than $1 million. Texas Gas will update this estimate
as additional information becomes available. Less than $0.6
million of costs have been incurred through September 30, 1999.
Although all critical systems over which Texas Gas has control
have been tested and are compliant, Texas Gas has identified an
area that would equate to a most reasonably likely worst case
scenario. There is the possibility of service interruptions due
to non-compliance by third parties. For example, power failures
along the communications network or transportation systems could
cause service interruptions. This risk should be minimized by
the enterprise-wide communications effort, evaluation of third-
party compliance plans, and development of contingency plans. It
is not possible to quantify the possible financial impact if this
most reasonably likely worst case scenario were to come to
fruition.
Significant focus on the contingency plan phase of the project
has been taking place in 1999. Guidelines for the contingency
planning process were issued in January 1999. Contingency plans
have been developed for critical business processes, critical
business partners, suppliers and system replacements that
experience significant delays. Texas Gas' contingency plans
include manning all operational stations twenty-four hours a day,
putting extra security measures into place and stocking up on
supplies. In addition, most of Texas Gas' compressor stations
are capable of independently generating electricity in the event
of a loss of electricity, and operation of the pipeline can be
done manually in case there is a loss of telecommunications
capability.
The preceding discussion contains forward-looking statements
including, without limitation, statements relating to Texas Gas'
plans, strategies, objectives, expectations, intentions, and
<PAGE>
adequate resources, that are made pursuant to the "safe harbor"
provisions of the Private
Securities Litigation Reform Act of 1995. Readers are cautioned
that such forward-looking statements contained in the year 2000
update are based on certain assumptions which may vary from
actual results. Due to the general uncertainty inherent in the
year 2000 problem, resulting in large part from the uncertainty
of the year 2000 readiness of third parties, Texas Gas cannot
ensure its ability to timely and cost effectively resolve
problems associated with the year 2000 issue that may affect its
operations and business, or expose it to third-party liability.
<PAGE>
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
* 27.1 Financial Data Schedule for Texas Gas Transmission
Corporation for the nine months ending
September 30, 1999.
(b) Reports on Form 8-K
None
_____________________________
* Filed herewith
<PAGE>
S I G N A T U R E
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.
TEXAS GAS TRANSMISSION CORPORATION
DATE: November 13, 1999 BY: /s/ S. W. Harris
S. W. Harris
Controller and Chief Accounting Officer
[ARTICLE] 5
[CIK] 0000097452
[NAME] TEXAS GAS TRANSMISSION CORPORATION
[MULTIPLIER] 1,000
<TABLE>
<S> <C>
[PERIOD-TYPE] 9-MOS
[FISCAL-YEAR-END] DEC-31-1999
[PERIOD-END] SEP-30-1999
[CASH] 50
[SECURITIES] 0
[RECEIVABLES] 3,157
[ALLOWANCES] 0
[INVENTORY] 15,211
[CURRENT-ASSETS] 113,539
[PP&E] 1,094,901
[DEPRECIATION] 141,769
[TOTAL-ASSETS] 1,259,474
[CURRENT-LIABILITIES] 110,582
[BONDS] 250,937
[PREFERRED-MANDATORY] 0
[PREFERRED] 0
[COMMON] 1
[OTHER-SE] 644,940
[TOTAL-LIABILITY-AND-EQUITY] 1,259,474
[SALES] 385
[TOTAL-REVENUES] 192,743
[CGS] 390
[TOTAL-COSTS] 37,788
[OTHER-EXPENSES] 44,937
[LOSS-PROVISION] 0
[INTEREST-EXPENSE] 14,893
[INCOME-PRETAX] 58,776
[INCOME-TAX] 23,132
[INCOME-CONTINUING] 35,644
[DISCONTINUED] 0
[EXTRAORDINARY] 0
[CHANGES] 0
[NET-INCOME] 35,644
[EPS-BASIC] 0
[EPS-DILUTED] 0
</TABLE>
