-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, gVQyrnlxB0l8Xi5pUIxN0QbSOAd20YxJf6e3ax6Q6snAiOMgVsrgEN6cVHeGK/Ax SW2SOZkCl3TMZmT8f4ki9A== 0000091882-95-000009.txt : 19950814 0000091882-95-000009.hdr.sgml : 19950814 ACCESSION NUMBER: 0000091882-95-000009 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950630 FILED AS OF DATE: 19950811 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: SOUTH CAROLINA ELECTRIC & GAS CO CENTRAL INDEX KEY: 0000091882 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC & OTHER SERVICES COMBINED [4931] IRS NUMBER: 570248695 STATE OF INCORPORATION: SC FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-03375 FILM NUMBER: 95561098 BUSINESS ADDRESS: STREET 1: 1426 MAIN ST CITY: COLUMBIA STATE: SC ZIP: 29201 BUSINESS PHONE: 8037483000 MAIL ADDRESS: STREET 1: MAIL CODE 051 CITY: COLUMBIA STATE: SC ZIP: 29218 10-Q 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 1995 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 1-3375 South Carolina Electric & Gas Company (Exact name of registrant as specified in its charter) South Carolina 57-0248695 (State or other jurisdiction (I.R.S. Employer of incorporation or organization) Identification No.) 1426 Main Street, Columbia, South Carolina 29201 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (803) 748-3000 Former name, former address and former fiscal year, if changed since last report. Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X . No . APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS: Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes . No . APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. As of June 30, 1995, there were issued and outstanding 40,296,147 shares of the registrant's common stock $4.50 par value, all of which were held, beneficially and of record, by SCANA Corporation. 1 SOUTH CAROLINA ELECTRIC & GAS COMPANY INDEX PART I. FINANCIAL INFORMATION Page Item 1. Financial Statements Consolidated Balance Sheets as of June 30, 1995 and December 31, 1994.................................. 3 Consolidated Statements of Income and Retained Earnings for the Periods Ended June 30, 1995 and 1994........... 5 Consolidated Statements of Cash Flows for the Periods Ended June 30, 1995 and 1994........................... 6 Notes to Consolidated Financial Statements............... 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations................. 9 PART II. OTHER INFORMATION Item 1. Legal Proceedings................................... 13 Item 6. Exhibits and Reports on Form 8-K.................... 13 Signatures...................................................... 14 Exhibit Index................................................... 15 2 PART I FINANCIAL INFORMATION SOUTH CAROLINA ELECTRIC & GAS COMPANY CONSOLIDATED BALANCE SHEETS As of June 30, 1995 and December 31, 1994 (Unaudited) June 30, December 31, 1995 1994 (Thousands of Dollars) ASSETS Utility Plant: Electric............................................. $3,221,573 $3,165,391 Gas.................................................. 307,592 307,929 Transit.............................................. 3,456 3,785 Common............................................... 76,827 77,327 Total.............................................. 3,609,448 3,554,432 Less accumulated depreciation and amortization....... 1,202,107 1,171,758 Total.............................................. 2,407,341 2,382,674 Construction work in progress........................ 636,150 571,867 Nuclear fuel, net of accumulated amortization........ 37,114 43,591 Utility Plant, Net............................... 3,080,605 2,998,132 Nonutility Property and Investments, net of accumulated depreciation............................. 11,896 11,931 Current Assets: Cash and temporary cash investments.................. - 346 Receivables - customer and other..................... 126,603 127,679 Receivables - affiliated companies................... 11,846 18,121 Inventories (at average cost): Fuel............................................... 32,669 31,310 Materials and supplies............................. 43,186 43,228 Prepayments.......................................... 16,502 14,389 Accumulated deferred income taxes.................... 17,931 17,931 Total Current Assets............................. 248,737 253,004 Deferred Debits: Emission allowances.................................. 22,491 19,409 Unamortized debt expense............................. 11,596 11,690 Unamortized deferred return on plant investment...... 8,492 10,614 Nuclear plant decommissioning fund................... 33,226 30,383 Other................................................ 261,634 251,928 Total Deferred Debits............................ 337,439 324,024 Total................................. $3,678,677 $3,587,091 See notes to consolidated financial statements. 3 SOUTH CAROLINA ELECTRIC & GAS COMPANY CONSOLIDATED BALANCE SHEETS As of June 30, 1995 and December 31, 1994 (Unaudited) June 30, December 31, 1995 1994 (Thousands of Dollars) CAPITALIZATION AND LIABILITIES Stockholders' Investment: Common Equity: Common stock ($4.50 par value)...................... $ 181,333 $ 181,333 Premium on common stock and other paid-in capital... 662,723 633,441 Capital stock expense (debit)....................... (5,412) (5,443) Retained earnings................................... 339,094 324,101 Total Common Equity............................... 1,177,738 1,133,432 Preferred stock (not subject to purchase or sinking funds).............................................. 26,027 26,027 Total Stockholders' Investment.................... 1,203,765 1,159,459 Preferred stock, net (subject to purchase or sinking funds)........................................ 47,543 49,528 Long-term debt, net..................................... 1,348,309 1,231,191 Total Capitalization............................ 2,599,617 2,440,178 Current Liabilities: Short-term borrowings................................. 100,000 100,000 Notes payable - affiliated companies.................. - 19,409 Current portion of long-term debt..................... 36,592 33,042 Current portion of preferred stock.................... 2,310 2,418 Accounts payable...................................... 43,832 61,466 Accounts payable - affiliated companies............... 16,802 33,357 Customer deposits..................................... 12,687 12,668 Taxes accrued......................................... 23,625 46,646 Interest accrued...................................... 21,575 21,534 Dividends declared.................................... 31,146 28,489 Other................................................. 10,749 15,525 Total Current Liabilities....................... 299,318 374,554 Deferred Credits: Accumulated deferred income taxes..................... 504,955 503,723 Accumulated deferred investment tax credits........... 79,932 81,546 Accumulated reserve for nuclear plant decommissioning. 33,226 30,383 Other................................................. 161,629 156,707 Total Deferred Credits.......................... 779,742 772,359 Total ................................. $3,678,677 $3,587,091 See notes to consolidated financial statements. 4 SOUTH CAROLINA ELECTRIC & GAS COMPANY CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS For the Periods Ended June 30, 1995 and 1994 (Unaudited) Three Months Ended Six Months Ended June 30, June 30, 1995 1994 1995 1994 (Thousands of Dollars) OPERATING REVENUES: Electric.................................... $239,037 $225,219 $469,646 $460,108 Gas......................................... 35,086 36,866 112,210 114,278 Transit..................................... 1,016 948 2,043 1,969 Total Operating Revenues............... 275,139 263,033 583,899 576,355 OPERATING EXPENSES: Fuel used in electric generation............ 39,174 46,940 75,268 87,933 Purchased power (including affiliated purchases)..................... 30,046 21,824 54,527 50,292 Gas purchased from affiliate for resale................................ 22,270 24,444 64,554 68,399 Other operation............................. 53,364 53,971 105,609 105,348 Maintenance................................. 14,652 14,972 28,504 29,697 Depreciation and amortization............... 27,665 26,752 55,374 53,442 Income taxes................................ 16,733 13,497 42,608 39,925 Other taxes................................. 18,082 17,317 37,112 34,483 Total Operating Expenses............... 221,986 219,717 463,556 469,519 OPERATING INCOME.............................. 53,153 43,316 120,343 106,836 OTHER INCOME: Allowance for equity funds used during construction....................... 2,370 1,911 4,776 3,984 Other income (loss),net of income taxes.............................. 186 (162) 49 (263) Total Other Income..................... 2,556 1,749 4,825 3,721 INCOME BEFORE INTEREST CHARGES................ 55,709 45,065 125,168 110,557 INTEREST CHARGES (CREDITS): Interest expense............................ 27,461 22,396 54,290 44,171 Allowance for borrowed funds used during construction.................. (2,622) (1,679) (5,242) (3,302) Total Interest Charges, net............ 24,839 20,717 49,048 40,869 NET INCOME.................................... 30,870 24,348 76,120 69,688 Preferred Stock Cash Dividends (at stated rates)........................... (1,430) (1,462) (2,864) (3,001) Earnings Available for Common Stock........... 29,440 22,886 73,256 66,687 Retained Earnings at Beginning of Period................................... 339,353 307,414 324,101 291,713 Common Stock Cash Dividends Declared.................................... (29,699) (29,600) (58,263) (57,700) Retained Earnings at End of Period............ $339,094 $300,700 $339,094 $300,700 See notes to consolidated financial statements. 5 SOUTH CAROLINA ELECTRIC & GAS COMPANY CONSOLIDATED STATEMENTS OF CASH FLOWS For the Periods Ended June 30, 1995 and 1994 (Unaudited) Six Months Ended June 30, 1995 1994 (Thousands of Dollars) CASH FLOWS FROM OPERATING ACTIVITIES: Net income........................................... $ 76,120 $ 69,688 Adjustments to reconcile net income to net cash provided from operating activities: Depreciation and amortization...................... 55,445 53,520 Amortization of nuclear fuel....................... 9,488 8,885 Deferred income taxes, net......................... 1,255 13,167 Deferred investment tax credits, net............... (1,614) (1,292) Net regulatory asset-adoption of SFAS No. 109...... (1,244) (1,630) Nuclear refueling accrual.......................... 3,479 3,763 Allowance for funds used during construction....... (10,018) (7,286) Unamortized loss on reacquired debt................ (3,966) (644) Over (under) collections, fuel adjustment clause... 24,693 (2,018) Early retirements.................................. (16,684) - Emission allowances................................ (3,082) - Changes in certain current assets and liabilities: Increase (decrease) in receivables................ 7,352 (21,613) Increase (decrease) in inventories................ (1,317) 4,387 Decrease in accounts payable...................... (34,189) (21,423) Decrease in estimated rate refunds and related interest................................ - (638) Decrease in taxes accrued......................... (23,021) - Increase (decrease) in interest accrued........... 41 (17,500) Other, net........................................ (16,978) 22,292 Net Cash Provided From Operating Activities............ 65,760 101,658 CASH FLOWS FROM INVESTING ACTIVITIES: Utility property additions and construction expenditures....................................... (146,004) (193,867) Nonutility property and investments.................. (36) (322) Principal noncash items: Allowance for funds used during construction....... 10,018 7,286 Transfer of assets from SCANA...................... - 6,285 Net Cash Used For Investing Activities................. (136,022) (180,618) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds: Other long-term debt............................... 43,053 113,500 First Mortgage Bonds............................... 100,000 - Equity contribution from parent.................... 29,311 24,120 Repayments: First and Refunding Mortgage Bonds................. (48,779) - Note payable to affiliated companies............... (19,409) - Other long-term debt............................... (386) (796) Preferred stock.................................... (2,094) (2,002) Dividend payments: Common stock....................................... (55,563) (56,500) Preferred stock.................................... (2,906) (3,061) Short-term borrowings, net........................... - (11) Fuel financings, net................................. 26,689 7,043 Advances - affiliated companies, net................. - (1,559) Net Cash Provided From Financing Activities............ 69,916 80,734 NET INCREASE (DECREASE) IN CASH AND TEMPORARY CASH INVESTMENTS........................... (346) 1,774 CASH AND TEMPORARY CASH INVESTMENTS AT JANUARY 1....... 346 193 CASH AND TEMPORARY CASH INVESTMENTS AT JUNE 30......... $ - $ 1,967 SUPPLEMENTAL CASH FLOW INFORMATION: Cash paid for - Interest (includes capitalized interest of $5,242 and $3,302 ...... $ 53,501 $ 66,057 - Income taxes......................... 45,027 29,963 See notes to consolidated financial statements.
6 SOUTH CAROLINA ELECTRIC & GAS COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 1995 (Unaudited) The following notes should be read in conjunction with the Notes to Consolidated Financial Statements appearing in the Company's Annual Report on Form 10-K for the year ended December 31, 1994. These are interim financial statements and, because of temperature variations between seasons of the year, the amounts reported in the Consolidated Statements of Income are not necessarily indicative of amounts expected for the year. In the opinion of management, the information furnished herein reflects all adjustments, all of a normal recurring nature, which are necessary for a fair statement of the results for the interim periods reported. 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: A. Principles of Consolidation: The Company, a public utility, is a South Carolina corporation organized in 1924 and a wholly owned subsidiary of SCANA Corporation (SCANA), a South Carolina holding company. The accompanying Consolidated Financial Statements include the accounts of the Company and South Carolina Fuel Company, Inc. (Fuel Company), an affiliate. Intercompany balances and transactions between the Company and Fuel Company have been eliminated in consolidation. The Company has entered into agreements with certain affiliates to purchase gas for resale to its distribution customers and to purchase electric energy. The Company purchases all of its natural gas requirements from South Carolina Pipeline Corporation. The Company purchases all of the electric generation of Williams Station, which is owned by South Carolina Generating Company, Inc., under a unit power sales agreement. Such unit power purchases are included in "Purchased power." B. Reclassifications: Certain amounts from prior periods have been reclassified to conform with the 1995 presentation. 2. RATE MATTERS: With respect to rate matters at June 30, 1995, reference is made to Note 2 of Notes to Consolidated Financial Statements in the Company's Annual Report on Form 10-K for the year ended December 31, 1994. On July 10, 1995, the Company filed an application with the Public Service Commission of South Carolina (PSC) for an increase in retail electric rates. The proposed increase of 8.35% would produce additional revenues of approximately $76.7 million annually, if approved. The Company has requested that the increase be implemented in two phases. The first phase, an increase in revenues of approximately $61.8 annually, or 6.73%, would commence at the time the Company's 385 MW generating station currently under construction near Cope, S. C. begins commercial operation, which is expected in January 1996. The second phase is planned in January 1997 and would produce additional revenues of approximately $14.9 million annually, or 1.62% more than current rates. No assurance can be given as to the adequacy or timing of the rate relief that will be granted by the PSC. Hearings are scheduled to begin during November 1995. 3. RETAINED EARNINGS: The Restated Articles of Incorporation of the Company and the Indenture underlying certain of its bond issues contain provisions that may limit the payment of cash dividends on common stock. In addition, with respect to hydroelectric projects, the Federal Power Act may require the appropriation of a portion of the earnings therefrom. At June 30, 1995 approximately $14.5 million of retained earnings were restricted as to payment of dividends on common stock. 7 4. COMMITMENTS AND CONTINGENCIES: With respect to commitments at June 30, 1995, reference is made to Note 10 of Notes to Consolidated Financial Statements appearing in the Company's Annual Report on Form 10-K for the year ended December 31, 1994. No significant changes have occurred with respect to those matters as reported therein. Contingencies at June 30, 1995 are as follows: A. Nuclear Insurance The Price-Anderson Indemnification Act, which deals with the Company's public liability for a nuclear incident, currently establishes the liability limit for third-party claims associated with any nuclear incident at $9.4 billion. Each reactor licensee is currently liable for up to $79.3 million per reactor owned for each nuclear incident occurring at any reactor in the United States, provided that not more than $10 million of the liability per reactor would be assessed per year. The Company's maximum assessment, based on its two- thirds ownership of Summer Station, would be approximately $52.9 million per incident but not more than $6.7 million per year. The Company currently maintains policies (for itself and on behalf of the PSA) with American Nuclear Insurers (ANI) and Nuclear Electric Insurance Limited (NEIL) providing combined primary and excess property and decontamination insurance coverage of $1.9 billion for any losses at Summer Station. The Company pays annual premiums and, in addition, could be assessed a retrospective premium assessment not to exceed 7.5 times its annual premium in the event of property damage loss to any nuclear generating facility covered under the NEIL program. Based on the current annual premium, this retrospective premium assessment would not exceed $8.2 million. To the extent that insurable claims for property damage, decontamination, repair and replacement and other costs and expenses arising from a nuclear incident at Summer Station exceed the policy limits of insurance, or to the extent such insurance becomes unavailable in the future, and to the extent that the Company's rates would not recover the cost of any purchased replacement power, the Company will retain the risk of loss as a self-insurer. The Company has no reason to anticipate a serious nuclear incident at Summer Station. If such an incident were to occur, it could have a materially adverse impact on the Company's financial position. B. Environmental The Company has an environmental assessment program to identify and assess current and former operations sites that could require environmental cleanup. As site assessments are initiated, an estimate is made of the amount of expenditures, if any, necessary to investigate and clean up each site. These estimates are refined as additional information becomes available; therefore actual expenditures could significantly differ from the original estimates. Amounts estimated and accrued to date for site assessment and cleanup relate primarily to regulated operations; such amounts have been deferred (approximately $19.5 million) and are being amortized and recovered through rates over a ten-year period for electric operations and an eight-year period for gas operations. In September 1992 the Environmental Protection Agency (EPA) notified the Company, the City of Charleston and the Charleston Housing Authority of their potential liability for the investigation and cleanup of the Calhoun Park Area Site in Charleston, South Carolina. This site originally encompassed approximately 18 acres and included properties which were the locations for industrial operations, including a wood preserving (creosote) plant and one of the Company's decommissioned manufactured gas plants. The original scope of this investigation has been expanded to approximately 30 acres including adjacent properties owned by the National Park Service and the City of Charleston, and private properties. The site has not been placed on the National Priority List, but may be added before cleanup is initiated. The potentially responsible parties (PRP) have agreed with the EPA to participate in an innovative approach to site investigation and cleanup called "Superfund Accelerated Cleanup Model," allowing the pre-cleanup site investigations process to be compressed significantly. The PRPs have negotiated an administrative order by consent for the conduct of a Remedial Investigation/Feasibility Study (RI/FS) and a corresponding Scope of Work. Actual field work began November 1, 1993 after final approval and authorization was granted by EPA. The Company is also working with the City of Charleston to investigate potential contamination from the manufactured gas plant which may have migrated to the city's aquarium site. In 1994 the City of Charleston notified the Company that it considers the Company to be responsible for a projected $43.5 million increase in costs of the aquarium project allegedly attributable to delays resulting from contamination of the Calhoun Park area site. The Company believes it has meritorious defenses against this claim and does not expect its resolution to have a material impact on its future financial position or results of operations. 8 SOUTH CAROLINA ELECTRIC & GAS COMPANY MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS General Competition The electric utility industry has begun a major transition that could lead to expanded market competition and less regulatory protection. Future deregulation of electric wholesale and retail markets will create opportunities to compete for new and existing customers and markets. As a result, profit margins and asset values of some utilities could be adversely affected. The pace of deregulation, the future market price of electricity, and the regulatory actions which may be taken by the Public Service Commission of South Carolina (PSC) in response to the changing environment cannot be predicted. However, the Company is aggressively pursuing actions to position itself strategically for the transformed environment. Material Changes in Capital Resources and Liquidity From December 31, 1994 to June 30, 1995 Liquidity and Capital Resources The cash requirements of the Company arise primarily from its operational needs and construction program. The ability of the Company to replace existing plant investment, as well as to expand to meet future demands for electricity and gas, will depend upon its ability to attract the necessary financial capital on reasonable terms. The Company recovers the costs of providing services through rates charged to customers. Rates for regulated services are based on historical costs. As customer growth and inflation occur and the Company expands its construction program it is necessary to seek increases in rates. As a result the Company's future financial position and results of operations will be impacted by its ability to obtain adequate and timely rate relief. On July 10, 1995, the Company filed an application with the PSC for an increase in retail electric rates. The proposed increase of 8.35% would produce additional revenues of approximately $76.7 million annually, if approved. The Company has requested that the increase be implemented in two phases. The first phase, an increase in revenues of approximately $61.8 annually, or 6.73%, would commence at the time the Company's 385 MW generating station currently under construction near Cope, S. C. begins commercial operation, which is expected in January 1996. The second phase is planned in January 1997 and would produce additional revenues of approximately $14.9 million annually, or 1.62% more than current rates. No assurance can be given as to the adequacy or timing of the rate relief that will be granted by the PSC. Hearings are scheduled to begin during November 1995. The following table summarizes how the Company generated funds for its utility property additions and construction expenditures during the six months ended June 30, 1995 and 1994: Six Months Ended June 30, 1995 1994 (Thousands of Dollars) Net cash provided from operating activities $ 65,762 $101,658 Net cash provided from financing activities 69,914 80,734 Cash and temporary cash investments available at the beginning of the period 346 193 Net cash available for utility property additions and construction expenditures $136,022 $182,585 Funds used for utility property additions and construction expenditures, net of noncash allowance for funds used during construction $135,986 $180,296 9 On April 5, 1995 the Company issued $100 million of First Mortgage Bonds, 7 5/8% series due April 1, 2025 to repay short-term borrowings. The Company anticipates that the remainder of its 1995 cash requirements will be met primarily through internally generated funds, sales of additional securities, additional equity contributions from SCANA and the incurrence of additional short- term and long-term indebtedness. The timing and amount of such financings will depend upon market conditions and other factors. The ratio of earnings to fixed charges for the twelve months ended June 30, 1995 was 3.32. The Company expects that it has or can obtain adequate sources of financing to meet its cash requirements for the next twelve months and for the foreseeable future. Statements of Financial Accounting Standards Not Yet Adopted The Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of." The provisions of the Statement, which must be implemented by the Company for the fiscal year beginning January 1, 1996, require the recognition of a loss in the income statement and related disclosures whenever events or changes in circumstances indicate that the carrying amount of a long-lived asset may not be recoverable. The Company does not believe that adoption of the provisions of the Statement will have any materially adverse impact on its results of operations or financial position. 10 SOUTH CAROLINA ELECTRIC & GAS COMPANY Results of Operations For the Six months Ended June 30, 1995 As Compared to the Corresponding Period in 1994 Earnings and Dividends Net income for the three and six months ended June 30, 1995 increased approximately $6.5 million and $6.4 million, respectively, compared to the corresponding periods in 1994. Increases in electric and gas margins more than offset increases in fixed operating costs. Allowance for funds used during construction (AFC) is a utility accounting practice whereby a portion of the cost of both equity and borrowed funds used to finance construction (which is shown on the balance sheet as construction work in progress) is capitalized. Both the equity and the debt portions of AFC are noncash items of nonoperating income which have the effect of increasing reported net income. AFC represented approximately 8% and 7% of income before income taxes for the six months ended June 30, 1995 and 1994, respectively. On February 14, 1995 the Company's Board of Directors authorized the payment of a dividend on common stock of approximately $28.6 million for the quarter ended March 31, 1995. The dividend was paid on April 1, 1995 to SCANA Corporation, the Company's parent. On April 27, 1995, the Company's Board of Directors authorized the payment of a dividend on common stock of $29.7 million for the quarter ended June 30, 1995. The dividend was paid on July 1, 1995 to SCANA Corporation, the Company's parent. Sales Margins The changes in the electric sales margins for the three and six months ended June 30, 1995, when compared to the corresponding periods in 1994, were as follows: Three Months Six Months Change % Change Change % Change (Millions) (Millions) Electric operating revenues $13.8 6.1 $ 9.5 2.0 Less: Fuel used in electric generation (7.8) (16.5) (12.7) (14.4) Purchased power 8.2 37.7 4.2 8.4 Margin $13.4 8.5 $18.0 5.6 The electric sales margin increased for the three and six months ended June 30, 1995 compared to the corresponding periods in 1994 as a result of the combined impact of improved economic conditions, which resulted in increased electric sales to commercial and industrial customers, and the base rate increase received by the Company in mid-1994 which more than offset the negative impact of milder weather experienced during the first half of 1995. The changes in the gas sales margins for the three and six months ended June 30, 1995, when compared to the corresponding periods in 1994, were as follows: Three Months Six Months Change % Change Change % Change (Millions) (Millions) Gas operating revenues $(1.8) (4.8) $(2.1) (1.8) Less: Gas purchased for resale (2.2) (8.9) (3.9) (5.6) Margin $ 0.4 3.2 $ 1.8 3.9 11 The increases in the gas sales margins for the three and six months reflects increases in interruptible industrial sales. Other Operating Expenses Increases (decreases) in other operating expenses, including taxes, for the three and six months ended June 30, 1995 compared to the corresponding periods in 1994 are presented in the following table: Three Months Six Months Change % Change Change % Change (Millions) (Millions) Other operation and maintenance $(0.9) (1.3) $(0.9) (0.7) Depreciation and amortization 0.9 3.4 1.9 3.6 Income taxes 3.2 24.0 2.7 6.7 Other taxes 0.8 4.4 2.6 7.6 Total $ 4.0 3.2 $ 6.3 2.4 Other operation and maintenance expenses for the three and six months ended June 30, 1995 remained slightly below 1994 levels primarily as a result of lower plant maintenance costs during the first quarter of 1995 and a reduction in the amortization of environmental remediation costs during the second quarter of 1995. Increases in depreciation and amortization expenses for the three and six months' comparisons reflect additions to plant in service. The increases in income tax expense for the two periods correspond to the increases in operating income. The increases in other taxes reflect higher property taxes resulting from higher millages and assessments, offset somewhat in the second quarter of 1995 by lower payroll taxes resulting from early retirements of employees. Interest Charges Interest expense, excluding the debt component of AFC, for the three and six months ended June 30, 1995 increased $4.1 million and $8.2 million respectively, compared to the corresponding periods of 1994. The increases are due primarily to the issuance of additional debt, including commercial paper, during the latter part of 1994 and early 1995. 12 SOUTH CAROLINA ELECTRIC & GAS COMPANY Part II OTHER INFORMATION Item 1. Legal Proceedings For information regarding legal proceedings see Note 2 "Rate Matters" and Note 4 "Commitments and Contingencies" of Notes to Consolidated Financial Statements. Items 2, 3, 4 and 5 are not applicable. Item 6. Exhibits and Reports on Form 8-K A. Exhibits Exhibits filed with this Quarterly Report on Form 10-Q are listed in the following Exhibit Index. Certain of such exhibits which have heretofore been filed with the Securities and Exchange Commission and which are designated by reference to their exhibit numbers in prior filings are hereby incorporated herein by reference and made a part hereof. B. Reports on Form 8-K None 13 SOUTH CAROLINA ELECTRIC & GAS COMPANY SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. SOUTH CAROLINA ELECTRIC & GAS COMPANY (Registrant) August 11, 1995 By: s/Jimmy E. Addison Jimmy E. Addison Vice President and Controller (Principal Accounting Officer) 14 SOUTH CAROLINA ELECTRIC & GAS COMPANY Sequentially EXHIBIT INDEX Numbered Number Pages 2. Plan of Acquisition, Reorganization, Arrangement, Liquidation or Succession Not Applicable 3. Articles of Incorporation and By-Laws A. Restated Articles of Incorporation of the Company as adopted on December 15, 1993 (Exhibit 3-A to Form 10-Q for the quarter ended June 30, 1994, File No. 1-3375)...................... # B. Articles of Amendment, dated June 7, 1994, filed June 9, 1994 (Exhibit 3-B to Form 10-Q for the quarter ended June 30, 1994, File No. 1-3375) C. Articles of Amendment, dated November 9, 1994 (Exhibit 3-C to Form 10-K for the year ended December 31, 1994, File No. 1-3375)....................... # D. Articles of Amendment, dated December 9, 1994 (Exhibit 3-D to Form 10-K for the year ended December 31, 1994, File No. 1-3375)....................... # E. Articles of Correction, dated January 17, 1995 (Exhibit 3-E to Form 10-K for the year ended December 31, 1994, File No. 1-3375)....................... # F. Articles of Amendment, dated January 13, 1995 (Exhibit 3-F to Form 10-K for the year ended December 31, 1994, File No. 1-3375)....................... # G. Articles of Amendment, dated March 30, 1995 (Exhibit 3-G to Form 10-Q for the quarter ended March 31, 1995, File No. 1-3375).................... # H. Copy of By-Laws of the Company as revised and amended thru December 15, 1993 (Exhibit 3-AZ to Form 10-K for the year ended December 31, 1993, File No. 1-3375).......................................... # 4. Instruments Defining the Rights of Security Holders, Including Indentures A. Indenture dated as of January 1, 1945, from the South Carolina Power Company (the "Power Company") to Central Hanover Bank and Trust Company, as Trustee, as supplemented by three Supplemental Indentures dated respectively as of May 1, 1946, May 1, 1947 and July 1, 1949 (Exhibit 2-B to Registration No. 2-26459).................................. # B. Fourth Supplemental Indenture dated as of April 1, 1950, to Indenture referred to in Exhibit 4A, pursuant to which the Company assumed said Indenture (Exhibit 2-C to Registration No. 2-26459)........ # C. Fifth through Fifty-second Supplemental Indentures to Indenture referred to in Exhibit 4A dated as of the dates indicated below and filed as exhibits to the Registration Statements and 1934 Act reports whose file numbers are set forth below................................................ # December 1, 1950 Exhibit 2-D to Registration No. 2-26459 July 1, 1951 Exhibit 2-E to Registration No. 2-26459 June 1, 1953 Exhibit 2-F to Registration No. 2-26459 June 1, 1955 Exhibit 2-G to Registration No. 2-26459 November 1, 1957 Exhibit 2-H to Registration No. 2-26459 September 1, 1958 Exhibit 2-I to Registration No. 2-26459 September 1, 1960 Exhibit 2-J to Registration No. 2-26459 # Incorporated herein by reference as indicated. 15 SOUTH CAROLINA ELECTRIC & GAS COMPANY Sequentially EXHIBIT INDEX Numbered Number Pages 4. (Continued) June 1, 1961 Exhibit 2-K to Registration No. 2-26459 December 1, 1965 Exhibit 2-L to Registration No. 2-26459 June 1, 1966 Exhibit 2-M to Registration No. 2-26459 June 1, 1967 Exhibit 2-N to Registration No. 2-29693 September 1, 1968 Exhibit 4-O to Registration No. 2-31569 June 1, 1969 Exhibit 4-C to Registration No. 33-38580 December 1, 1969 Exhibit 4-Q to Registration No. 2-35388 June 1, 1970 Exhibit 4-R to Registration No. 2-37363 March 1, 1971 Exhibit 2-B-17 to Registration No. 2-40324 January 1, 1972 Exhibit 4-C to Registration No. 33-38580 July 1, 1974 Exhibit 2-A-19 to Registration No. 2-51291 May 1, 1975 Exhibit 4-C to Registration No. 33-38580 July 1, 1975 Exhibit 2-B-21 to Registration No. 2-53908 February 1, 1976 Exhibit 2-B-22 to Registration No. 2-55304 December 1, 1976 Exhibit 2-B-23 to Registration No. 2-57936 March 1, 1977 Exhibit 2-B-24 to Registration No. 2-58662 May 1, 1977 Exhibit 4-C to Registration No. 33-38580 February 1, 1978 Exhibit 4-C to Registration No. 33-38580 June 1, 1978 Exhibit 2-A-3 to Registration No. 2-61653 April 1, 1979 Exhibit 4-C to Registration No. 33-38580 June 1, 1979 Exhibit 4-C to Registration No. 33-38580 April 1, 1980 Exhibit 4-C to Registration No. 33-38580 June 1, 1980 Exhibit 4-C to Registration No. 33-38580 December 1, 1980 Exhibit 4-C to Registration No. 33-38580 April 1, 1981 Exhibit 4-D to Registration No. 33-49421 June 1, 1981 Exhibit 4-D to Registration No. 2-73321 March 1, 1982 Exhibit 4-D to Registration No. 33-49421 April 15, 1982 Exhibit 4-D to Registration No. 33-49421 May 1, 1982 Exhibit 4-D to Registration No. 33-49421 December 1, 1984 Exhibit 4-D to Registration No. 33-49421 December 1, 1985 Exhibit 4-D to Registration No. 33-49421 June 1, 1986 Exhibit 4-D to Registration No. 33-49421 February 1, 1987 Exhibit 4-D to Registration No. 33-49421 September 1, 1987 Exhibit 4-D to Registration No. 33-49421 January 1, 1989 Exhibit 4-D to Registration No. 33-49421 January 1, 1991 Exhibit 4-D to Registration No. 33-49421 February 1, 1991 Exhibit 4-D to Registration No. 33-49421 July 15, 1991 Exhibit 4-D to Registration No. 33-49421 August 15, 1991 Exhibit 4-D to Registration No. 33-49421 April 1, 1993 Exhibit 4-E to Registration No. 33-49421 July 1, 1993 Exhibit 4-D to Registration No. 33-57955 D. Indenture dated as of April 1, 1993 from South Carolina Electric & Gas Company to NationsBank of Georgia, National Association (Filed as Exhibit 4-F to Registration Statement No. 33-49421)...................................... # E. First Supplemental Indenture to Indenture referred to in 4-D dated as of June 1, 1993 (Filed as Exhibit 4-G to Registration Statement No. 33-49421)...................... # F. Second Supplemental Indenture to Indenture referred to in 4-D dated as of June 15, 1993 (Filed as Exhibit 4-G to Registration Statement No. 33-57955) ..................... # 10. Material Contracts Not Applicable 11. Statement Re Computation of Per Share Earnings Not Applicable # Incorporated herein by reference as indicated. 16 SOUTH CAROLINA ELECTRIC & GAS COMPANY Exhibit Index (Continued) Number 15. Letter Re Unaudited Interim Financial Information Not Applicable 18. Letter Re Change in Accounting Principles Not Applicable 19. Report Furnished to Security Holders Not Applicable 22. Published Report Regarding Matters Submitted to Vote of Security Holders Not Applicable 23. Consents of Experts and Counsel Not Applicable 24. Power of Attorney Not Applicable 27. Financial Data Schedule (Filed herewith) 99. Additional Exhibits Not Applicable 17 EX-27 2
UT THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM THE CONSOLIDATED BALANCE SHEET AS OF JUNE 30, 1995 AND THE CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS AND OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 6-MOS DEC-31-1994 JUN-30-1995 PER-BOOK 3,080,605 11,896 248,737 337,439 0 3,678,677 181,333 657,311 339,094 1,177,738 47,543 26,027 1,348,309 100,000 0 0 36,592 2,310 0 0 940,158 3,678,677 275,139 16,733 205,253 221,986 53,153 2,556 55,709 24,839 30,870 (1,430) 29,440 29,699 0 65,760 0 0
-----END PRIVACY-ENHANCED MESSAGE-----