-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Le82w+/dVbRDz5qBKNwGTZXf4+Vuo/O/DE1N4NBL0YUuYcGABjU2lobJYG6RJBqG ju7qMRPRbIbuOU1+9S8+FQ== 0000091882-00-000003.txt : 20000515 0000091882-00-000003.hdr.sgml : 20000515 ACCESSION NUMBER: 0000091882-00-000003 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20000331 FILED AS OF DATE: 20000512 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: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-03375 FILM NUMBER: 628752 BUSINESS ADDRESS: STREET 1: 1426 MAIN ST CITY: COLUMBIA STATE: SC ZIP: 29201 BUSINESS PHONE: 8032179000 MAIL ADDRESS: STREET 1: 1426 MAIN ST CITY: COLUMBIA STATE: SC ZIP: 29201 10-Q 1 1ST QTR. FORM 10-Q ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarter Ended March 31, 2000 OR ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period from to Commission Registrant, State of Incorporation, I.R.S. Employer File Number Address and Telephone Number Identification No. 1-8809 SCANA Corporation 57-0784499 (A South Carolina Corporation) 1426 Main Street Columbia, South Carolina 29201 (803) 217-9000 1-3375 South Carolina Electric & Gas Company 57-0248695 (A South Carolina Corporation) 1426 Main Street Columbia, South Carolina 29201 (803) 217-9000 Indicate by check mark whether the registrants: (1) have 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 registrants were required to file such reports), and (2) have been subject to such filing requirements for the past 90 days. Yes X No Description of Shares Outstanding Registrant Common Stock at April 28, 2000 SCANA Corporation Without Par Value 104,729,133 South Carolina Electric Par Value $4.50 Per Share 40,296,1471 & Gas Company 1Held, beneficially and of record, by SCANA Corporation. This combined Form 10-Q is separately filed by SCANA Corporation and South Carolina Electric & Gas Company. Information contained herein relating to SCANA Corporation or any of its direct or indirect subsidiaries, other than South Carolina Electric & Gas Company and its consolidated operations, is provided solely by SCANA Corporation and shall be deemed not included in the Form 10-Q of South Carolina Electric & Gas Company. ================================================================================ INDEX Page PART 1. FINANCIAL INFORMATION SCANA Corporation Financial Section......................................... 3 Item 1. Financial Statements Consolidated Balance Sheets as of March 31, 2000 and December 31, 1999... 4 Consolidated Statements of Income and Retained Earnings for the Periods Ended March 31, 2000 and 1999......................................... 6 Consolidated Statements of Cash Flows for the Periods Ended March 31, 2000 and 1999......................................................... 7 Notes to Consolidated Financial Statements.............................. 8 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations............................................14 Item 3. Quantitative and Qualitative Disclosures About Market Risk..........20 South Carolina Electric & Gas Company Financial Section......................22 Item 1. Financial Statements Consolidated Balance Sheets as of March 31, 2000 and December 31, 1999..23 Consolidated Statements of Income and Retained Earnings for the Periods Ended March 31, 2000 and 1999........................................25 Consolidated Statements of Cash Flows for the Periods Ended March 31, 2000 and 1999..............................................26 Notes to Consolidated Financial Statements...............................27 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.............................................31 Item 3. Quantitative and Qualitative Disclosures About Market Risk..........35 PART II. OTHER INFORMATION Item 1. Legal Proceedings...................................................36 Item 6. Exhibits and Reports on Form 8-K....................................36 Signatures...................................................................37 Exhibit Index................................................................39 SCANA CORPORATION FINANCIAL SECTION PART I. FINANCIAL INFORMATION Item 1. Financial Statements SCANA CORPORATION CONSOLIDATED BALANCE SHEETS As of March 31, 2000 and December 31, 1999 (Unaudited) March 31, December 31, - ------------------------------------------------------------ ------------------ 2000 1999 - ------------------------------------------------------------ ------------------ Assets (Millions of Dollars) Utility Plant: Electric $4,629 $4,633 Gas 1,387 632 Other 190 191 - ------------------------------------------------------------- ------------------ Total 6,206 5,456 Less accumulated depreciation and amortization 2,116 1,829 - ------------------------------------------------------------- ------------------ Total 4,090 3,627 Construction work in progress 220 159 Nuclear fuel, net of accumulated amortization 43 41 Acquisition adjustment-gas, net of accumulated amortization 485 22 - ------------------------------------------------------------ ------------------ Utility Plant, Net 4,836 3,851 - ------------------------------------------------------------- ------------------ Nonutility Property, net of accumulated depreciation 62 61 Investments 860 938 - -------------------------------------------------------------------------------- Nonutility Property and Investments, net of accumulated depreciation 922 999 - ------------------------------------------------------------------------------- Current Assets: Cash and temporary cash investments 116 98 Receivables (including unbilled revenues) 423 320 Inventories (at average cost): Fuel 55 79 Materials and supplies 78 55 Prepayments 27 35 Deferred income taxes 16 15 - ------------------------------------------------------------- ------------------ Total Current Assets 705 612 - ------------------------------------------------------------ ------------------ Deferred Debits: Emission allowances 31 30 Environmental 24 25 Nuclear plant decommissioning fund 64 66 Pension asset, net 162 144 Other regulatory assets 167 175 Other 116 111 - ------------------------------------------------------------- ------------------ Total Deferred Debits 549 566 - ----------------------------------------- ------------------- ------------------ Total $6,011 $7,029 ========================================== ================== ================== SCANA CORPORATION CONSOLIDATED BALANCE SHEETS As of March 31, 2000 and December 31, 1999 (Unaudited) March 31, December 31, - -------------------------------------------------------------------------------- 2000 1999 - -------------------------------------------------------------------------------- Capitalization and Liabilities (Millions of Dollars) Stockholders' Investment: Common Equity $ 2,100 $2,099 Preferred stock (not subject to purchase or sinking funds) 106 106 - -------------------------------------------------------------- ----------------- Total Stockholders' Investment 2,206 2,205 Preferred Stock, net (subject to purchase or sinking funds) 11 11 SCE&G-Obligated Mandatorily Redeemable Preferred Securities of SCE&G's Subsidiary Trust, SCE&G Trust I, holding solely $50 million principal amount of the 7.55% Junior Subordinated Debentures of SCE&G, due 2027 50 50 Long-Term Debt, net 2,413 1,563 - -------------------------------------------------------------- ----------------- Total Capitalization 4,680 3,829 - -------------------------------------------------------------- ----------------- Current Liabilities: Short-term borrowings 345 266 Current portion of long-term debt 309 303 Accounts payable 192 189 Customer deposits 20 16 Taxes accrued 51 86 Interest accrued 46 29 Dividends declared 32 31 Other 23 13 - -------------------------------------------------------------- ----------------- Total Current Liabilities 1,018 933 - -------------------------------------------------------------- ----------------- Deferred Credits: Deferred income taxes 861 805 Deferred investment tax credits 118 116 Postretirement benefits 109 98 Reserve for nuclear plant decommissioning 66 64 Other regulatory liabilities 75 64 Other 102 102 - ------------------------------------------------------------- ----------------- Total Deferred Credits 1,331 1,249 - ------------------------------------------------------------- ----------------- Total $7,029 $6,011 ============================================================ ================= See Notes to Consolidated Financial Statements. SCANA CORPORATION CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS For the Periods Ended March 31, 2000 and 1999 (Unaudited) Three Months Ended March 31, ----------------------------------------------------- --------------------- 2000 1999 -------------------------------------------------------------------------- (Millions of Dollars) Operating Revenues: Electric $ 294 $ 266 Gas - Regulated 311 130 Gas - Nonregulated 216 149 Transit - 1 -------------------------------------------------------- ----------------- Total Operating Revenues 821 546 -------------------------------------------------------- ----------------- Operating Expenses: Fuel used in electric generation 70 61 Purchased power 7 4 Gas purchased for resale 379 228 Other operation 90 80 Maintenance 21 18 Depreciation and amortization 55 42 Income taxes 50 21 Other taxes 29 27 -------------------------------------------------------------------------- Total Operating Expenses 701 481 -------------------------------------------------------------------------- Operating Income 120 65 --------------------------------------------------------------------------- Other Income: Allowance for equity funds used during construction 1 1 Other income, net of income taxes 11 8 -------------------------------------------------------- ----------------- Total Other Income 12 9 -------------------------------------------------------- ----------------- Income Before Interest Charges and Preferred Stock Dividends 132 74 -------------------------------------------------------------------------- Interest Charges (Credits): Interest expense on long-term debt 44 31 Other interest expense 11 4 Allowance for borrowed funds used during construction (1) (1) -------------------------------------------------------------------------- Total Interest Charges, Net 54 34 -------------------------------------------------------------------------- Income Before Preferred Dividend Requirements on Mandatorily Redeemable Preferred Securities 78 40 Preferred Dividend Requirement of SCE&G - Obligated Mandatorily Redeemable Preferred Securities 1 1 --------------------------------------------------------- ----------------- Income Before Preferred Stock Cash Dividends of Subsidiary 77 39 Preferred Stock Cash Dividends of Subsidiary (At Stated Rates) (2) (2) --------------------------------------------------------- ----------------- Income Before Cumulative Effect of Accounting Change 75 37 Cumulative Effect of Accounting Change, net of taxes (Note 2) 29 - --------------------------------------------------------------------------- Net Income 104 37 Retained Earnings at Beginning of Period 720 678 Common Stock Cash Dividends Declared (30) (40) ========================================================================== Retained Earnings at End of Period $ 794 $ 675 =========================================================================== Net Income $ 104 $ 37 Weighted Average Number of Common Shares Outstanding (Millions) 104.0 103.6 Earnings Per Weighted Average Share of Common Stock (Basic and Diluted) Before Cumulative Effect of Accounting Change $ .72 $ .36 Cumulative Effect of Accounting Change (Note 2) $ .28 - Earnings Per Weighted Average Share of Common Stock (Basic and Diluted) $ 1.00 $ .36 Cash Dividends Declared Per Share of Common Stock $.2875 $.3850 =========================================================================== See Notes to Consolidated Financial Statements. SCANA CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS For the Periods Ended March 31, 2000 and 1999 (Unaudited) Three Months Ended March 31, - ------------------------------------------------------------------ ------------- 2000 1999 - ------------------------------------------------------------------ ------------- (Millions of Dollars) Cash Flows From Operating Activities: Net income $104 $37 Adjustments to reconcile net income to net cash provided from operating activities, net of effect of subsidiary acquisition: Cumulative effect of accounting change (29) - Depreciation and amortization 55 44 Amortization of nuclear fuel 5 5 Deferred income taxes, net 21 3 Pension asset (18) (6) Other regulatory assets (6) 7 Other regulatory liabilities 7 4 Post-retirement benefits 11 3 Allowance for funds used during construction (2) (3) Over (under) collections, fuel adjustment clauses 14 9 Changes in certain current assets and liabilities: (Increase) decrease in receivables (5) 11 (Increase) decrease in inventories 36 (10) Increase (decrease) in accounts payable (47) (23) Increase (decrease) in taxes accrued (40) (60) Other, net 21 - - ---------------------------------------------------------------------- -------- Net Cash Provided From Operating Activities 127 21 - ---------------------------------------------------------------------- -------- Cash Flows From Investing Activities: Utility property additions and construction expenditures, net of AFC (52) (50) Increase in other property and investments (7) (13) Purchase of subsidiary, net of cash acquired (691) - Sale of subsidiary assets 1 3 - ---------------------------------------------------------------------- -------- Net Cash Used For Investing Activities (749) (60) - ---------------------------------------------------------------------- -------- Cash Flows From Financing Activities: Proceeds: Issuance of First Mortgage Bonds - 99 Issuance of notes and loans 700 - Repayments: Other long-term debt (1) (1) Dividend payments: Common stock (34) (40) Preferred stock of subsidiary (2) (2) Short-term borrowings, net (59) (21) Fuel and emission allowance financings, net - 13 - ---------------------------------------------------------------------- -------- Net Cash Provided From Financing Activities 604 48 - ---------------------------------------------------------------------- -------- Net Increase (Decrease) In Cash And Temporary Cash Investments (18) 9 Cash And Temporary Cash Investments At January 1 116 62 - ---------------------------------------------------------------------- -------- Cash And Temporary Cash Investments At March 31 $ 98 $71 ====================================================================== ======== Supplemental Cash Flow Information: Cash paid for - Interest (includes capitalized interest of $1 for 2000 and 1999) $ 37 $24 - Income taxes 26 5 Noncash investing activities - Unrealized gain/(loss) on securities available for sale, net of (73) 18 taxes In conjunction with the acquisition of Public Service Company of North Carolina, Inc., liabilities were assumed as follows: Fair value of assets acquired $1,171 Cash paid for capital stock (212) Stock issued for consideration (475) -------- Liabilities assumed $ 484 ======= See Notes to Consolidated Financial Statements. SCANA CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS March 31, 2000 (Unaudited) The following notes should be read in conjunction with the Notes to Consolidated Financial Statements appearing in SCANA Corporation's (the Company) Annual Report on Form 10-K for the year ended December 31, 1999. These are interim financial statements, and due to the seasonality of the Company's business, 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 except as described in Notes 2 and 3, which are necessary for a fair statement of the results for the interim periods reported. 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: A. Basis of Accounting The Company accounts for its regulated utility operations, assets and liabilities in accordance with the provisions of Statement of Financial Accounting Standards No. 71 (SFAS 71). The accounting standard requires cost-based rate-regulated utilities to recognize in their financial statements revenues and expenses in different time periods than do enterprises that are not rate-regulated. As a result, the Company has recorded, as of March 31, 2000, approximately $194 million and $75 million of regulatory assets and liabilities, respectively, including amounts recorded for deferred income tax assets and liabilities of approximately $131 million and $48 million, respectively. The electric and gas regulatory assets (excluding deferred income tax assets) of approximately $35 million and $26 million, respectively, are being recovered through rates, and the Public Service Commission of South Carolina (PSC) has approved accelerated recovery of approximately $5 million of the electric regulatory assets. In the future, as a result of deregulation or other changes in the regulatory environment, the Company may no longer meet the criteria for continued application of SFAS 71 and could be required to write off its regulatory assets and liabilities. Such an event could have a material adverse effect on the Company's results of operations in the period that a write-off would be required, but it is not expected that cash flows or financial position would be materially affected. B. Other Comprehensive Income Other comprehensive income includes net income and all other changes in equity except those resulting from investments by and distributions to stockholders. Other comprehensive income of the Company totaled $31 million and $56 million for the three months ended March 31, 2000 and 1999, respectively. For each period, other comprehensive income included net income and unrealized gains/losses on securities available for sale. Accumulated other comprehensive income of the Company totaled $521 million and $286 million at March 31, 2000 and 1999, respectively. C. Reclassifications Certain amounts from prior periods have been reclassified to conform with the 2000 presentation. 2. Cumulative Effect of Accounting Change Effective January 1, 2000 the Company changed its method of accounting for operating revenues from cycle billing to full accrual. The cumulative effect of this change was $29 million, net of tax. Accruing unbilled revenues more closely matches revenues and expenses. Unbilled revenues represent the estimated amount customers will be charged for service received, but that has not yet been billed as of the end of the accounting period. Previously these revenues were recognized as operating revenues as customers were billed. If this method had been applied retroactively, net income would have been $54 million ($0.52 per share) for the three months ended March 31, 1999, compared to $37 million ($0.36 per share) as previously reported. 3. ACQUISITION On February 10, 2000 the Company completed its acquisition of Public Service Company of North Carolina, Inc. (PSNC) in a business combination accounted for as a purchase. PSNC became a wholly owned subsidiary of the Company. PSNC is a public utility engaged primarily in transporting, distributing and selling natural gas to approximately 351,000 residential, commercial and industrial customers in 31 counties in North Carolina. Pursuant to the Agreement and Plan of Merger, PSNC shareholders were paid approximately $212 million in cash and 17,413,013 shares of SCANA common stock. The results of operations of PSNC are included in the accompanying financial statements as of January 1, 2000, the effective date of acquisition . The total cost of acquisition was approximately $700 million, which exceeded the fair value of the net assets by approximately $466 million. The excess is being amortized over 35 years. Operating revenues and net income previously reported by the separate companies and the combined amounts presented in the accompanying Consolidated Statements of Income, including the cumulative effect of accounting change (See Note 2), are as follows: - -------------------------------------------------------------------------------- For the Three Months Ended March 31, 1999 (Dollars in millions, except per share amounts) SCANA PSNC Adjustments1 Combined - -------------------------------------------------------------------------------- Operating revenues $546 $134 $ - $680 Income before cumulative effect 37 22 (11) 48 Cumulative effect of accounting change 17 5 - 22 Net income 54 27 (11) 70 Earnings per share 0.52 1.30 0.67 ================================================================================ 1Adjustments include interest charges (net of income tax effect) on additional debt issued in conjunction with the acquisition and amortization of the acquisition adjustment. 4. RATE MATTERS On December 7, 1999 the North Carolina Utilities Commission (NCUC) issued an order approving the acquisition of PSNC by the Company. As specified in the NCUC order, PSNC will reduce its rates by approximately $2 million ($1 million in August 2000 and another $1 million in August 2001) and has agreed to a five-year moratorium on general rate cases. General rate relief can be obtained during this period to recover costs associated with materially adverse governmental actions and force majeure events. The Carolina Utility Customers Association, Inc. (CUCA) filed an appeal of this order, which is pending in the North Carolina Court of Appeals. While management cannot predict the ultimate outcome of this appeal, management does not expect that such outcome will have a material adverse impact on the Company's financial position, results of operations or cash flows. On October 30, 1998 the NCUC issued an order in PSNC's general rate case filed in April 1998. The order, effective November 1, 1998, granted PSNC additional revenue of $12.4 million and allowed a 9.82 percent overall rate of return on PSNC's net utility investment. It also approved the continuation of the Weather Normalization Adjustment and Rider D Mechanisms and full margin transportation rates. PSNC's Rider D rate mechanism authorizes the recovery of all prudently incurred gas costs from customers on a monthly basis. Any difference in amounts paid and collected for these costs is deferred for subsequent refund to or collection from customers. CUCA, a party to PSNC's general rate case, formally appealed the general rate case order on December 18, 1998. On February 4, 2000 the Supreme Court of North Carolina affirmed the NCUC order. On November 6, 1997 the NCUC issued an order permitting PSNC, on a trial basis, to establish its commodity cost of gas for large commercial and industrial customers on the basis of market prices for natural gas. This procedure allows PSNC to manage its deferred gas costs better by ensuring that the amount paid for natural gas to serve these customers approximates the amount collected from them. PSNC's request for permanent approval of this mechanism was approved by the NCUC in an order issued April 6, 2000. 5. RETAINED EARNINGS: The Restated Articles of Incorporation of the Company do not limit the dividends that may be payable on its common stock. However, the Restated Articles of Incorporation of SCE&G and the Indenture underlying its First and Refunding Mortgage Bonds contain provisions that, under certain circumstances, could limit the payment of cash dividends on its common stock. In addition, with respect to hydroelectric projects, the Federal Power Act requires the appropriation of a portion of certain earnings therefrom. At March 31, 2000, approximately $30.8 million of retained earnings were restricted by this requirement as to payment of cash dividends on SCE&G's common stock. 6. INVESTMENTS IN EQUITY SECURITIES: At March 31, 2000, SCANA Communications Holdings, Inc. (SCH), a wholly owned, indirect subsidiary of SCANA, held the following investments in ITC Holding Company, Inc. (ITC) and its affiliates: o Powertel, Inc. (Powertel) is a publicly traded company that owns and operates personal communications services (PCS) systems in several major Southeastern markets. SCH owns approximately 4.9 million common shares of Powertel at a cost of approximately $74.1 million. Powertel common stock closed at $69.1875 per share on March 31, 2000, resulting in a pre-tax unrealized holding gain of $265.1 million (a decline of $152.7 million from December 31, 1999). Accumulated other comprehensive income includes the after-tax amount of all unrealized holding gains and losses. In addition, SCH owns the following series of non-voting convertible preferred shares, at the approximate cost noted: 100,000 shares series B ($75.1 million); 50,000 shares series D ($22.5 million); and 50,000 shares 6.5 percent series E ($75.0 million). Dividends on preferred series E shares are paid in common shares of Powertel. Preferred series B shares are convertible in March 2002 at a conversion price of $16.50 per common share or approximately 4.5 million common shares. Preferred series D shares are convertible in March 2002 at a conversion price of $12.75 per common share or approximately 1.7 million common shares. Preferred series E shares are convertible in June 2003 at a conversion price of $22.01 per common share or approximately 3.4 million common shares. The market value of the convertible preferred shares of Powertel is not readily determinable. However, as converted, the market value of the underlying common shares for the preferred shares was approximately $672.3 million at March 31, 2000, resulting in an unrecorded pre-tax holding gain of $499.7 million (a decline of $303.0 million from December 31, 1999). o ITC^DeltaCom, Inc. (ITCD) is a fiber optic telecommunications provider. SCH owns approximately 5.1 million common shares of ITCD at a cost of approximately $42.7 million. ITCD common stock closed at $35.625 per share on March 31, 2000, resulting in a pre-tax unrealized holding gain of $139.2 million (an increase of $40.8 million from December 31, 1999). Accumulated other comprehensive income includes the after-tax amount of all unrealized holding gains and losses. In addition, SCH owns 1,480,771 shares of series A preferred stock of ITCD at a cost of approximately $11.2 million. Series A preferred shares are convertible in March 2002 into 2,961,542 shares of ITCD common stock. The market value of series A preferred stock of ITCD is not readily determinable. However, as converted, the market value of the underlying common stock for the series A preferred stock was approximately $105.5 million at March 31, 2000, resulting in an unrecorded pre-tax holding gain of $94.3 million (an increase of $23.7 million from December 31, 1999). o Knology Inc. (Knology), previously Knology Holdings, Inc., is a broad-band service provider of cable, television, telephone and internet services. SCH owns 71,050 units of Knology. Each unit consists of one 11.875% Senior Discount Note due 2007 and one warrant entitling the holder to purchase .003734 shares of preferred stock of Knology. The cost of this investment was approximately $40 million. Prior to February 24, 2000, SCH owned 451,800 shares of series A preferred stock of Knology at a cost of approximately $1.1 million. On February 24, 2000 Knology Holdings, Inc. was spun off from ITC and was renamed Knology, Inc. As a result of this spin off, SCH received 6.8 million shares of Knology Series A preferred stock. The market value of these investments is not readily determinable. o ITC has an ownership interest in several Southeastern communications companies. SCH owns approximately 3.1 million common shares, 645,153 series A convertible preferred shares, and 133,664 series B convertible preferred shares of ITC. These investments cost approximately $5.8 million, $7.2 million, and $4.0 million, respectively. Preferred series A shares are convertible in March 2002 at a conversion price of $13.45 per common share or approximately 2.6 million common shares. Preferred series B shares are convertible in March 2002 into ITC common shares on a four to one basis. The market values of these investments are not readily determinable. 7. CONTINGENCIES: With respect to commitments at March 31, 2000, 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, 1999. Contingencies at March 31, 2000 are as follows: A. Nuclear Insurance The Price-Anderson Indemnification Act, which deals with public liability for a nuclear incident, currently establishes the liability limit for third-party claims associated with any nuclear incident at $9.5 billion. Each reactor licensee is currently liable for up to $88.1 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. SCE&G's maximum assessment, based on its two-thirds ownership of V. C. Summer Nuclear Station (Summer Station), would be approximately $58.7 million per incident, but not more than $6.7 million per year. SCE&G currently maintains policies (for itself and on behalf of the South Carolina Public Service Authority) with Nuclear Electric Insurance Limited (NEIL). These policies covering the nuclear facility for property damage, excess property damage and outage costs permit assessments under certain conditions to cover insurer's losses. Based on the current annual premium, SCE&G's portion of the retroactive premium assessment would not exceed $8.1 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 SCE&G's rates would not recover the cost of any purchased replacement power, SCE&G will retain the risk of loss as a self-insurer. SCE&G has no reason to anticipate a serious nuclear incident at Summer Station. If such an incident were to occur, it could have a material adverse impact on the Company's results of operations, cash flows and financial position. B. Environmental SCE&G has an environmental assessment program to identify and assess current and former operations sites that could require environmental cleanup. As site assessments are initiated, estimates are made of the expenditures, if any, deemed necessary to investigate and clean up each site. These estimates are refined as additional information becomes available; therefore, actual expenditures could differ significantly from the original estimates. Amounts estimated and accrued to date for site assessments and cleanup relate primarily to regulated operations. Such amounts are deferred and amortized with recovery provided through rates. SCE&G has also recovered portions of its environmental liabilities through settlements with various insurance carriers. SCE&G has recovered all amounts previously deferred for its electric operations. SCE&G expects to recover all deferred amounts related to its gas operations by December 2005. Deferred amounts, net of amounts recovered through rates and insurance settlements, totaled $20.5 million at March 31, 2000. The deferral includes the estimated costs associated with the following matters. o In September 1992 the Environmental Protection Agency (EPA) notified SCE&G, 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 encompasses approximately 30 acres and includes properties which were locations for industrial operations, including a wood preserving (creosote) plant, one of SCE&G's decommissioned manufactured gas plants (MGP), properties owned by the National Park Service and the City of Charleston, and private properties. The site has not been placed on the National Priorities List, but may be added in the future. The Potentially Responsible Parties (PRPs) have negotiated an administrative order by consent for the conduct of a Remedial Investigation/Feasibility Study and a corresponding Scope of Work. Field work began in November 1993, and the EPA approved a Remedial Investigation Report in February 1997 and a Feasibility Study Report in June 1998. In July 1998 the EPA approved SCE&G's Removal Action Work Plan for soil excavation. SCE&G completed Phase One of the Removal Action in 1998 at a cost of approximately $1.5 million. Phase Two, which cost approximately $3.5 million, included excavation and installation of several permanent barriers to mitigate coal tar seepage. On September 30, 1998 a Record of Decision was issued which sets forth the EPA's view of the extent of each PRP's responsibility for site contamination and the level to which the site must be remediated. SCE&G estimates that the Record of Decision will result in costs of approximately $13.3 million, of which approximately $4 million remains. On January 13, 1999 the EPA issued a Unilateral Administrative Order for Remedial Design and Remedial Action directing SCE&G to design and carry out a plan of remediation for the Calhoun Park site. The Order is temporarily stayed pending further negotiations between SCE&G and the EPA. However, SCE&G submitted a Comprehensive Remedial Design Work Plan on December 17, 1999 and is proceeding with implementation pending agency approval. In October 1996 the City of Charleston and SCE&G settled all environmental claims the City may have had against SCE&G involving the Calhoun Park area for a payment of $26 million over four years (1996-1999) by SCE&G to the City. SCE&G is recovering the amount of the settlement, which does not encompass site assessment and cleanup costs, through rates in the same manner as other amounts accrued for site assessments and cleanup. As part of the environmental settlement, SCE&G constructed an 1,100 space parking garage on the Calhoun Park site (construction was completed in April 2000) and transferred the facility to the City in exchange for a 20-year municipal bond backed by revenues from the parking garage and a mortgage on the parking garage. The total amount of the bond is still being finalized, but is not to exceed $16.9 million, the maximum expected project cost. o SCE&G owns three other decommissioned MGP sites which contain residues of by-product chemicals. For the site located in Sumter, South Carolina, effective September 15, 1998, SCE&G entered into a Remedial Action Plan Contract with the South Carolina Department of Health and Environmental Control (DHEC) pursuant to which it agreed to undertake a full site investigation and remediation under the oversight of DHEC. Site investigation and characterization are proceeding according to schedule. Upon selection and successful implementation of a site remedy, DHEC will give SCE&G a Certificate of Completion and a covenant not to sue. SCE&G is continuing to investigate the other two sites, and is monitoring the nature and extent of residual contamination. In addition, PSNC owns, or has owned, all or portions of six sites in North Carolina on which MGPs were formerly operated. Intrusive investigation (including drilling, sampling and analysis) has begun at only one site and the remaining sites have been evaluated using historical records and observations of current site conditions. These evaluations have revealed that MGP residuals are present or suspected at several of the sites. The North Carolina Department of Environment and Natural Resources has recommended that no further action be taken with respect to one site. In March and April 1994, an environmental consulting firm retained by PSNC estimated that the aggregate cost of investigating and monitoring the extent of environmental degradation and of implementing remedial procedures with respect to the remaining five sites may range from $3.7 million to $50.1 million over a 30-year period. PSNC is unable to determine the rate at which costs may be incurred over this time period. The estimated cost range has not been discounted to present value. The range includes the cost of investigating and monitoring the sites at the low end of the range and investigating, monitoring and extensively remediating the sites at the high end of the range. PSNC's associated actual costs for these sites will depend on a number of factors, such as actual site conditions, third-party claims and recoveries from other PRPs. An order of the NCUC dated May 11, 1993 authorized deferral accounting for all costs associated with the investigation and remediation of MGP sites. As of March 31, 2000, PSNC has recorded a liability and associated regulatory asset at the minimum amount of the range, or $3.7 million. The NCUC concluded that it is proper and in the public interest to allow recovery of prudently incurred clean-up costs from current customers as reasonable operating expenses even though the MGP sites are not used and useful in providing gas service to current customers. However, the NCUC will not allow recovery of carrying costs on deferred amounts. 8. SEGMENT OF BUSINESS INFORMATION: The Company's reportable segments are listed in the following table. The Consolidated Financial Statements report operating revenues, comprised of reportable segments and the non-reportable transit operations segment. The Company uses operating income to measure profitability for its Electric Operations and Gas Distribution segments. Therefore, net income is not allocated to these segments. The Company uses net income to measure profitability for its Energy Marketing segment, which includes the Company's unregulated gas sales in Georgia. Affiliate revenue is derived from transactions between reportable segments as well as transactions between separate legal entities that are combined into the same reportable segment. Assets for the period ended March 31, 1999 did not change significantly. Disclosure of Reportable Segments (Millions of Dollars) - ------------------------------------- ------------- ------------- ----------- ------- ---------------------------- Electric Gas Gas Energy All Adjustments/ Consolidated March 31, 2000 Operations Distribution Transmission Marketing Other Eliminations Total - ------------------------------------- ------------- ------------- ----------- ------- ---------------------------- External Revenue $294 $255 $56 $217 - - $822 Intersegment Revenue 77 - 62 2 - (141) - Operating Income (Loss) 69 37 5 n/a (1) 10 120 Net Income n/a n/a 4 9 (11) 102 104 Segment Assets 4,778 1,547 246 136 1,156 (834) 7,029 - ------------------------------------- ------------- ------------- ----------- ------- ---------------------------- - ------------------------- ----------- ------------- ------------- ----------------- -------------- --------------- Electric Gas Gas Energy All Adjustments/ Consolidated March 31, 1999 Operations Distribution Transmission Marketing Other Eliminations Total - ------------------------- ----------- ------------- ------------- ----------------- -------------- --------------- External Revenue $266 $86 $44 $149 1 $546 - Intersegment Revenue 68 - 49 - - (117) - Operating Income (Loss) 62 14 4 n/a (1) (14) 65 Net Income n/a n/a 3 (13) - 47 37 Segment Assets 4,642 384 229 82 807 (801) 5,343 - ------------------------- ----------- ------------- ------------- ----------------- -------------- ---------------
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations SCANA CORPORATION MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion should be read in conjunction with Management's Discussion and Analysis of Financial Condition and Results of Operations appearing in SCANA Corporation's (the Company) Annual Report on Form 10-K for the year ended December 31, 1999. Statements included in this discussion and analysis (or elsewhere in this quarterly report) which are not statements of historical fact are intended to be, and are hereby identified as, "forward-looking statements" for purposes of the safe harbor provided by Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and involve a number of risks and uncertainties, and that actual results could differ materially from those indicated by such forward-looking statements. Important factors that could cause actual results to differ materially from those indicated by such forward-looking statements include, but are not limited to, the following: (1) that the information is of a preliminary nature and may be subject to further and/or continuing review and adjustment, (2) changes in the utility regulatory environment, (3) changes in the economy in areas served by SCANA's subsidiaries, (4) the impact of competition from other energy suppliers, (5) the management of the Company's operations, (6) variations in prices of natural gas and fuels used for electric generation, (7) growth opportunities for the Company's regulated and non-regulated subsidiaries, (8) the results of financing efforts, (9) changes in the Company's accounting policies, (10) weather conditions in areas served by the Company's subsidiaries , (11) performance of the telecommunications companies in which the Company has made significant investments, (12) inflation, (13) exposure to environmental issues and liabilities, (14) changes in environmental regulations and (15) the other risks and uncertainties described from time to time in the Company's periodic reports filed with the Securities and Exchange Commission. The Company disclaims any obligation to update any forward-looking statements. MATERIAL CHANGES IN CAPITAL RESOURCES AND LIQUIDITY SINCE DECEMBER 31, 1999 North Carolina Gas Market On February 10, 2000 the Company completed its acquisition of Public Service Company of North Carolina, Inc. (PSNC) in a transaction valued at approximately $900 million, including the assumption of debt. The transaction is being accounted for as a purchase. PSNC is operated as a wholly owned subsidiary of the Company. As a result of the transaction, the Company became a registered public utility holding company under the Public Utilities Holding Company Act of 1935 (PUHCA). Georgia Retail Gas Market During the first quarter of 2000, Energy Marketing's Georgia retail gas operations maintained a base of approximately 431,000 customers, compared to the first quarter of 1999 when the customer base grew from approximately 78,000 at January 1 to approximately 236,000 at March 31. In addition, Georgia retail gas operations reported net income of approximately $8.9 million for the three months ended March 31, 2000, compared to a net loss of approximately $12.5 million for the corresponding period in 1999. This increase resulted from lowering costs and improving efficiency by transitioning from start-up to ongoing operations and from an improved margin on natural gas sales. Due to the seasonality of the retail gas business in Georgia, management anticipates incurring losses through much of the remainder of the year 2000, and breaking even for the year. LIQUIDITY AND CAPITAL RESOURCES On September 14, 1999 the PSC approved an accelerated capital recovery plan for SCE&G's Cope Generating Station. The plan was implemented January 1, 2000 for a three-year period. The PSC approved an accelerated capital recovery methodology wherein SCE&G will increase depreciation of its Cope Generating Station in excess of amounts that would be recorded based upon currently approved depreciation rates. The amount of the accelerated depreciation will be determined by SCE&G based on the level of revenues and operating expenses, not to exceed $36 million annually without the approval of the PSC. Any unused portion of the $36 million in any given year could be carried forward for possible use in the succeeding year. The accelerated capital recovery plan will be accomplished through existing customer rates. On August 7, 1996 the City of Charleston executed 30-year electric and gas franchise agreements with SCE&G. In consideration for the electric franchise agreement, SCE&G is paying the City $25 million over seven years (1996 through 2002) and has donated to the City the existing transit assets in Charleston. The $25 million is included in electric plant-in-service. In settlement of environmental claims the City may have had against SCE&G involving the Calhoun Park area, where SCE&G and its predecessor companies operated a manufactured gas plant until the 1960's, SCE&G paid the City $26 million over a four-year period (1996 through 1999). As part of the environmental settlement, SCE&G constructed an 1,100 space parking garage on the Calhoun Park site (construction was completed in April 2000) and transferred the facility to the City in exchange for a 20-year municipal bond backed by revenues from the parking garage and a mortgage on the parking garage. The total amount of the bond is still being finalized, but is not to exceed $16.9 million, the maximum expected project cost. The following table summarizes how the Company generated funds for property additions and construction expenditures during the three months ended March 31, 2000 and 1999: - ------------------------------------------------------------------------------- Three Months Ended March 31, 2000 1999 - ------------------------------------------------------------------------------- (Millions of Dollars) Net cash provided from operating activities $127 $ 21 Net cash provided from financing activities 604 48 Cash provided from sale of subsidiary assets 1 3 Cash and temporary cash investments available at the beginning of the period 116 62 ================================================================================ Net cash available for property additions and construction $848 $134 expenditures ================================================================================ Funds used for purchase of subsidiary $691 - Funds used for utility property additions and construction expenditures, net of noncash allowance for funds used during construction $ 52 $ 50 ================================================================================ Funds used for nonutility property additions $ 7 $ 13 ================================================================================ On December 1, 1999 SCANA signed a credit agreement with banks for a maximum of $300 million for a three-year term loan, all of which was drawn on February 10, 2000 to consummate SCANA's acquisition of PSNC. On February 8, 2000 SCANA issued $400 million of two-year floating rate notes maturing February 8, 2002. The interest rate on the notes is reset quarterly based on a three-month LIBOR plus 50 basis points. The proceeds from these privately sold notes were used to consummate SCANA's acquisition of PSNC. PSNC has committed lines of credit with three commercial banks totaling $40 million. PSNC also has uncommitted lines of credit totaling $85 million. The Company anticipates that the remainder of its 2000 cash requirements will be met through internally generated funds and the incurrence of additional short-term and long-term debt. The Company anticipates incurring short-term and long-term debt to refinance long-term debt obligations. The timing and amount of such financings will depend upon market conditions and other factors. The Company expects that it has or can obtain adequate sources of financing to meet its projected cash requirements for the next 12 months and for the foreseeable future. The ratio of earnings to fixed charges for the 12 months ended March 31, 2000 was 3.41. Investments in Equity Securities At March 31, 2000, SCANA Communications Holdings, Inc. (SCH), a wholly owned, indirect subsidiary of SCANA, held the following investments in ITC Holding Company, Inc. (ITC) and its affiliates: o Powertel, Inc. (Powertel) is a publicly traded company that owns and operates personal communications services (PCS) systems in several major Southeastern markets. SCH owns approximately 4.9 million common shares of Powertel at a cost of approximately $74.1 million. Powertel common stock closed at $69.1875 per share on March 31, 2000, resulting in a pre-tax unrealized holding gain of $265.1 million (a decline of $152.7 million from December 31, 1999). Accumulated other comprehensive income includes the after-tax amount of all unrealized holding gains and losses. In addition, SCH owns the following series of non-voting convertible preferred shares, at the approximate cost noted: 100,000 shares series B ($75.1 million); 50,000 shares series D ($22.5 million); and 50,000 shares 6.5 percent series E ($75.0 million). Dividends on preferred series E shares are paid in common shares of Powertel. Preferred series B shares are convertible in March 2002 at a conversion price of $16.50 per common share or approximately 4.5 million common shares. Preferred series D shares are convertible in March 2002 at a conversion price of $12.75 per common share or approximately 1.7 million common shares. Preferred series E shares are convertible in June 2003 at a conversion price of $22.01 per common share or approximately 3.4 million common shares. The market value of the convertible preferred shares of Powertel is not readily determinable. However, as converted, the market value of the underlying common shares for the preferred shares was approximately $672.3 million at March 31, 2000, resulting in an unrecorded pre-tax holding gain of $499.7 million (a decline of $303.0 million from December 31, 1999). o ITC^DeltaCom, Inc. (ITCD) is a fiber optic telecommunications provider. SCH owns approximately 5.1 million common shares of ITCD at a cost of approximately $42.7 million. ITCD common stock closed at $35.625 per share on March 31, 2000, resulting in a pre-tax unrealized holding gain of $139.2 million (an increase of $40.8 million from December 31, 1999). Accumulated other comprehensive income includes the after-tax amount of all unrealized holding gains and losses. In addition, SCH owns 1,480,771 shares of series A preferred stock of ITCD at a cost of approximately $11.2 million. Series A preferred shares are convertible in March 2002 into 2,961,542 shares of ITCD common stock. The market value of series A preferred stock of ITCD is not readily determinable. However, as converted, the market value of the underlying common stock for the series A preferred stock was approximately $105.5 million at March 31, 2000, resulting in an unrecorded pre-tax holding gain of $94.3 million (an increase of $23.7 million from December 31, 1999). o Knology Inc. (Knology), previously Knology Holdings, Inc., is a broad-band service provider of cable, television, telephone and internet services. SCH owns 71,050 units of Knology. Each unit consists of one 11.875% Senior Discount Note due 2007 and one warrant entitling the holder to purchase .003734 shares of preferred stock of Knology. The cost of this investment was approximately $40 million. Prior to February 24, 2000, SCH owned 451,800 shares of series A preferred stock of Knology at a cost of approximately $1.1 million. On February 24, 2000 Knology Holdings, Inc. was spun off from ITC and was renamed Knology, Inc. As a result of this spin off, SCH received 6.8 million shares of Knology Series A preferred stock. The market value of these investments is not readily determinable. o ITC has an ownership interest in several Southeastern communications companies. SCH owns approximately 3.1 million common shares, 645,153 series A convertible preferred shares, and 133,664 series B convertible preferred shares of ITC. These investments cost approximately $5.8 million, $7.2 million, and $4.0 million, respectively. Preferred series A shares are convertible in March 2002 at a conversion price of $13.45 per common share or approximately 2.6 million common shares. Preferred series B shares are convertible in March 2002 into ITC common shares on a four to one basis. The market values of these investments are not readily determinable. RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2000 AS COMPARED TO THE CORRESPONDING PERIOD IN 1999 Earnings and Dividends Earnings per share of common stock for the three months ended March 31, 2000 and 1999 were as follows: 2000 1999 ---------------------------------------------------------------------- Earnings derived from: Continuing operations $ .72 $.36 Change in accounting .28 - ====================================================================== Earnings per weighted average share $1.00 $.36 ====================================================================== Earnings from continuing operations increased $.36. This was primarily attributable to improved results of $.21 from the Company's entry into the Georgia retail gas market (earnings of $.09 for 2000 compared to a loss of $.12 for 1999), the Company's acquisition of Public Service Company of North Carolina, Inc. (PSNC) in 2000 ($.18), and improved electric margins ($.10). These increases were partially offset by interest costs associated with the PSNC acquisition ($.09) and other ($.04). Earnings from a change in accounting resulted from the recording of unbilled revenues by SCANA's retail utility subsidiaries (See Note 2 of NOTES TO CONSOLIDATED FINANCIAL STATEMENTS). 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 1% and 5% of income before income taxes for the three months ended March 31, 2000 and 1999, respectively. The Company's Board of Directors declared the following quarterly dividends on common stock: - -------------------- --------------- ------------------ ---------------------- Declaration Dividend Record Payment Date Per Share Date Date - -------------------- --------------- ------------------ ---------------------- February 22, 2000 $.2875 March 10, 2000 April 1, 2000 April 27, 2000 $.2875 June 9, 2000 July 1, 2000 - -------------------- --------------- ------------------ ---------------------- Electric Operations Changes in the electric operations sales margins (including transactions with affiliates) for the three months ended March 31, 2000, when compared to the corresponding period in 1999, were as follows: - --------------------------------------------- ----------------------------- Three Months (Millions of Dollars) Change % Change - --------------------------------------------- -------------- -------------- Electric operating revenue $28.1 10.6 Less: Fuel used in generation 9.0 14.8 Purchased power 3.1 84.0 - --------------------------------------------- -------------- -------------- Margin $16.0 7.9 ============================================= ============== ============== Electric operations sales margins increased for the three months ended March 31, 2000, when compared to the corresponding period in 1999, primarily as a result of more favorable weather and customer growth. Gas Distribution Changes in the gas distribution sales margins (including transactions with affiliates) for the three months ended March 31, 2000, when compared to the corresponding period in 1999, were as follows: - -------------------------------------------------------------------------------- Three Months (Millions of Dollars) 2000 1999 Change % Change - - -------------------------------------------------------------------------------- Gas distribution operating revenue $255.6 $86.1 $169.5 * Less: Gas purchased for resale 152.7 49.1 103.6 * - -------------------------------------------------------------------------------- Margin $102.9 $37.0 $ 65.9 * ================================================================================ * Greater than 100% Gas distribution sales margins for the three months ended March 31, 2000 increased from 1999 levels primarily as a result of the acquisition of PSNC (which contributed $64.2 million to the change). The remaining increase was attributable to more favorable weather and customer growth at SCE&G. Gas Transmission Changes in the gas transmission sales margins (including transactions with affiliates) for the three months ended March 31, 2000, when compared to the corresponding period in 1999, were as follows: - -------------------------------------------------------------------------------- Three Months (Millions of Dollars) 2000 1999 Change % Change - -------------------------------------------------------------------------------- Gas transmission operating revenue $118.0 $93.0 $25.0 26.9 Less: Gas purchased for resale 102.1 80.5 21.6 26.8 - -------------------------------------------------------------------------------- Margin $ 15.9 $12.5 $ 3.4 27.2 ================================================================================ Gas transmission sales margins for the three months ended March 31, 2000 increased from 1999 levels primarily as a result of improved industrial margins due to an improved competitive position relative to alternate fuels. Energy Marketing Changes in the energy marketing sales margins for the three months ended March 31, 2000, when compared to the corresponding period in 1999, were as follows: - ------------------------------------------------------------------------------ Three Months (Millions of Dollars) 2000 1999 Change % Change - ---------------------------------------------------------------- ------------ Gas and electric sales revenue $217.0 $149.5 $67.5 45.2 Less: Gas and electricity purchased for resale 186.0 147.8 38.2 25.8 ================================================================ ============ Margin $ 31.0 $ 1.7 $29.3 * ================================================================ ============ *Greater than 100% Energy marketing sales margins for the three months ended March 31, 2000 increased primarily as a result of improved margins in the Georgia retail natural gas market. See LIQUIDITY AND CAPITAL RESOURCES. Other Operating Expenses Changes in other operating expenses, including taxes, for the three months ended March 31, 2000, when compared to the corresponding period in 1999, were as follows: -------------------------------------------- ---------------------------------- Three Months (Millions of Dollars) 2000 1999 Change % Change -------------------------------------------- ---------------------------------- Other operation and maintenance $110.8 $ 98.0 $12.8 13.1 Depreciation and amortization 54.9 41.9 13.0 30.9 Income taxes 50.3 20.9 29.4 140.7 Other taxes 29.4 27.2 2.2 8.1 -------------------------------------------- ---------------------------------- Total $245.4 $188.0 $57.4 30.5 ============================================ ================================== Other operating expenses for the three months ended March 31, 2000 increased from 1999 levels primarily as a result of the acquisition of PSNC. This acquisition accounted for the following increases: Other operation and maintenance ($16.2 million), Depreciation and amortization ($10.4 million), Income taxes ($17.5 million) and Other taxes ($1.7 million). Apart from the PSNC acquisition, changes in other operating expenses for the three months ended March 31, 2000 compared to the corresponding period for 1999 were as follows: Other operation and maintenance expenses decreased $3.4 million. This decrease was primarily attributable to decreased operating expenses at Energy Marketing ($8.3 million), which were partially offset by higher operating and maintenance expenses at SCE&G. Depreciation and amortization expenses increased $2.6 million due to normal property additions. The increase in income taxes ($12.4 million) primarily reflects the change in operating income. Other Income Other income, net of income taxes, for the three months ended March 31, 2000 increased approximately $2.7 million, when compared to the corresponding period of 1999. This increase was primarily attributable to increased earnings on pension assets. Interest Expense Interest expense, excluding the debt component of AFC, for the three months ended March 31, 2000 increased approximately $19.8 million, when compared to the corresponding period in 1999. The increase was primarily due to the issuance of debt in the first quarter of 2000 to complete the acquisition of PSNC. Item 3. Quantitative and Qualitative Disclosures About Market Risk All financial instruments held by the Company described below are held for purposes other than trading. Interest rate risk - The table below provides information about the Company's financial instruments that are sensitive to changes in interest rates. For debt obligations, the table presents principal cash flows and related weighted average interest rates by expected maturity dates. March 31, 2000 Expected Maturity Date -------- ------------------------------------- ---------- ---------------- (Millions of Dollars) There- Fair Liabilities 2000 2001 2002 2003 2004 After Total Value -------- ---------------- ---------------- ---------- ---------- ---------- Long-Term Debt: Fixed Rate ($) 159.3 38.1 36.8 296.8 186.3 1,276.1 1,993.4 1,835.5 Average Fixed Interest Rate (%) 6.63 7.31 7.22 6.26 7.58 7.35 7.13 Variable Rate ($) 150.0 - 550.0 150.0 - - 850.0 850.0 Average Variable Interest Rate (%) 7.16 - 7.53 8.02 - - 7.45 March 31, 1999 Expected Maturity Date ------- -------- ------------------------------- --------------------------- (Millions of Dollars) There- Fair Liabilities 2000 2001 2002 2003 2004 After Total Value ------- -------- ---------- --------------------------- ---------- ---------- Long-Term Debt: Fixed Rate ($) 213.5 27.5 27.5 284.4 129.4 1,166.7 1,849.0 1,869.2 Average Fixed Interest Rate (%) 5.95 6.86 6.86 6.29 7.52 7.33 7.
While a decrease in interest rates would increase the fair value of debt, it is unlikely that events which would result in a realized loss will occur. In addition, the Company has invested in a telecommunications company approximately $40 million for 11.875% senior discount notes due 2007. The fair value of these notes approximates their carrying value. An increase in market interest rates would result in a decrease in fair value of these notes and a corresponding adjustment, net of tax, to other comprehensive income. Commodity price risk - The table below provides information about the Company's financial instruments that are sensitive to changes in natural gas prices. Weighted average settlement prices are per 10,000 mmbtu. March 31, 2000 Expected Maturity in 2000 Weighted Avg Contract Fair Natural Gas Derivatives: Settlement Price Amount Value - --------------------------- ----------------------------------- -------------- (Millions of Dollars) Future Contracts: Long $2.9741 $ .9 $1.2 Short $3.1770 $2.2 $2.6 SET Futures Contracts (1): Long $2.9553 $ .1 $ .2 Short - - - March 31, 1999 Expected Maturity in 2000 Weighted Avg Contract Fair Natural Gas Derivatives: Settlement Price Amount Value - ------------------------------- ----------------------------------- --------- (Millions of Dollars) Future Contracts: Long $2.4818 $10.2 $10.6 Short $ - $ - $ - SET Futures Contracts (1): None March 31, 1999 Expected Maturity in 1999 Weighted Avg Contract Fair Natural Gas Derivatives: Settlement Price Amount Value - ------------------------------ ------------------------------------------------- (Millions of Dollars) Future Contracts: Long $2.1654 $30.1 $31.6 Short $2.0434 $ 0.2 $ 0.2 SET Futures Contracts (1): None (1) SCANA Energy Trading, LLC (SET) is a 70% owned subsidiary of SCANA Energy Marketing, Inc. Amounts shown are at 100%. Equity price risk - Investments in telecommunications companies' marketable equity securities are carried at their market value of $780.0 million. A ten percent decline in market value would result in a $78.0 million reduction in fair value and a corresponding adjustment, net of tax effect, to the related equity account for unrealized gains/losses, a component of other comprehensive income. SOUTH CAROLINA ELECTRIC & GAS COMPANY FINANCIAL SECTION Item 1. Financial Statements SOUTH CAROLINA ELECTRIC & GAS COMPANY CONSOLIDATED BALANCE SHEETS As of March 31, 2000 and December 31, 1999 (Unaudited) March 31, December 31, - -------------------------------------------------------------------------------- 2000 1999 - ------------------------------------------------------------------------------- Assets (Millions of Dollars) Utility Plant: Electric $4,334 $4,337 Gas 390 392 Other 190 191 - ------------------------------------------------------------------------------- Total 4,914 4,920 Less accumulated depreciation and amortization 1,643 1,611 - ------------------------------------------------------------------------------- Total 3,271 3,309 Construction work in progress 186 149 Nuclear fuel, net of accumulated amortization 41 43 - -------------------------------------------------------------------------------- Utility Plant, Net 3,498 3,501 - -------------------------------------------------------------------------------- Nonutility Property and Investments, net of accumulated depreciation 19 19 - -------------------------------------------------------------------------------- Current Assets: Cash and temporary cash investments 62 78 Receivables (including unbilled revenues) 211 195 Inventories (at average cost): Fuel 28 30 Materials and supplies 47 48 Prepayments 13 8 Deferred income taxes 14 16 - ------------------------------------------------------------------------------- Total Current Assets 375 375 - -------------------------------------------------------------------------------- Deferred Debits: Emission allowances 30 31 Environmental 21 24 Nuclear plant decommissioning fund 66 64 Pension asset, net 154 144 Other regulatory assets 152 162 Other 87 84 - -------------------------------------------------------------------------------- Total Deferred Debits 510 509 - -------------------------------------------------------------------------------- Total $4,402 $4,404 ================================================================================ SOUTH CAROLINA ELECTRIC & GAS COMPANY CONSOLIDATED BALANCE SHEETS As of March 31, 2000 and December 31, 1999 (Unaudited) March 31, December 31, - -------------------------------------------------------------------------------- 2000 1999 - -------------------------------------------------------------------------------- Capitalization and Liabilities (Millions of Dollars) Stockholders' Investment: Common equity $1,601 $1,558 Preferred stock (not subject to purchase or sinking funds) 106 106 - -------------------------------------------------------------------------------- Total Stockholders' Investment 1,707 1,664 Preferred Stock, net (subject to purchase or sinking funds) 11 11 SCE&G-Obligated Mandatorily Redeemable Preferred Securities of SCE&G's Subsidiary Trust, SCE&G Trust I, holding solely $50 million principal amount of the 7.55% Junior Subordinated Debentures of SCE&G, due 2027 50 50 Long-Term Debt, net 1,120 1,121 - -------------------------------------------------------------------------------- Total Capitalization 2,888 2,846 - -------------------------------------------------------------------------------- Current Liabilities: Short-term borrowings 187 213 Current portion of long-term debt 127 128 Accounts payable 64 78 Accounts payable - affiliated companies 24 33 Customer deposits 17 17 Taxes accrued 39 60 Interest accrued 25 22 Dividends declared 34 28 Other 7 10 - -------------------------------------------------------------------------------- Total Current Liabilities 524 589 - -------------------------------------------------------------------------------- Deferred Credits: Deferred income taxes 579 560 Deferred investment tax credits 108 108 Reserve for nuclear plant decommissioning 66 64 Postretirement benefits 99 98 Other regulatory liabilities 67 59 Other 71 80 - -------------------------------------------------------------------------------- Total Deferred Credits 990 969 - -------------------------------------------------------------------------------- Total $4,402 $4,404 ================================================================================ See Notes to Consolidated Financial Statements. SOUTH CAROLINA ELECTRIC & GAS COMPANY CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS For the Periods Ended March 31, 2000 and 1999 (Unaudited) Three Months Ended March 31, - -------------------------------------------------------------------------------- 2000 1999 - -------------------------------------------------------------------------------- (Millions of Dollars) Operating Revenues: Electric $294 $266 Gas 101 86 Transit - 1 - -------------------------------------------------------------------------------- Total Operating Revenues 395 353 - -------------------------------------------------------------------------------- Operating Expenses: Fuel used in electric generation 57 45 Purchased power (including affiliated purchases) 29 28 Gas purchased from affiliate for resale 62 49 Other operation 57 53 Maintenance 18 17 Depreciation and amortization 40 38 Income taxes 29 26 Other taxes 25 25 - -------------------------------------------------------------------------------- Total Operating Expenses 317 281 - -------------------------------------------------------------------------------- Operating Income 78 72 - -------------------------------------------------------------------------------- Other Income: Allowance for equity funds used during construction - 1 Other income, net of income taxes 4 1 - -------------------------------------------------------------------------------- Total Other Income 4 2 - -------------------------------------------------------------------------------- Income Before Interest Charges 82 74 - -------------------------------------------------------------------------------- Interest Charges (Credits): Interest expense on long-term debt 24 23 Other interest expense 3 3 Allowance for borrowed funds used during construction (1) (1) - -------------------------------------------------------------------------------- Total Interest Charges, Net 26 25 - -------------------------------------------------------------------------------- Income Before Preferred Dividend Requirements on Mandatorily Redeemable Preferred Securities 56 49 Preferred Dividend Requirement of SCE&G - Obligated Mandatorily Redeemable Preferred Securities 1 1 - -------------------------------------------------------------------------------- Income Before Cumulative Effect of Accounting Change 55 48 Cumulative Effect of Accounting Change, net of taxes 22 - - -------------------------------------------------------------------------------- Net Income 77 48 Preferred Stock Cash Dividends (At stated rates) (2) (2) - -------------------------------------------------------------------------------- Earnings Available for Common Stock 75 46 Retained Earnings at Beginning of Period 550 491 Common Stock Cash Dividends Declared (32) (36) ================================================================================ Retained Earnings at End of Period $593 $501 ================================================================================ See Notes to Consolidated Financial Statements. SOUTH CAROLINA ELECTRIC & GAS COMPANY CONSOLIDATED STATEMENTS OF CASH FLOWS For the Periods Ended March 31, 2000 and 1999 (Unaudited) Three Months Ended March 31, - ------------------------------------------------------------------ ------------- 2000 1999 - ------------------------------------------------------------------ ------------- (Millions of Dollars) Cash Flows From Operating Activities: Net income $77 $48 Adjustments to reconcile net income to net cash provided from operating activities: Cumulative effect of accounting change (22) - Depreciation and amortization 40 38 Amortization of nuclear fuel 5 5 Deferred income taxes, net 21 22 Pension asset (10) (7) Post retirement benefits 1 3 Other regulatory assets 10 7 Regulatory liabilities 8 4 Allowance for funds used during construction (1) (2) Over (under) collections, fuel adjustment clauses 14 9 Changes in certain current assets and liabilities: (Increase) decrease in receivables 6 14 (Increase) decrease in inventories 3 (15) Increase (decrease) in accounts payable (23) (12) Increase (decrease) in taxes accrued (21) (49) Other, net (30) (33) - -------------------------------------------------------------------------------- Net Cash Provided From Operating Activities 78 32 - -------------------------------------------------------------------------------- Cash Flows From Investing Activities: Utility property additions and construction expenditures, net of AFC (39) (48) - -------------------------------------------------------------------------------- Net Cash Used For Investing Activities (39) (48) - -------------------------------------------------------------------------------- Cash Flows From Financing Activities: Proceeds: Issuance of First Mortgage Bonds - 99 Repayments: Other long-term debt (1) - Dividend payments: Common stock (26) (36) Preferred stock (2) (2) Short-term borrowings, net (26) (48) Fuel and emission allowance financings, net - 13 - -------------------------------------------------------------------------------- Net Cash Provided From (Used For) Financing Activities (55) 26 - -------------------------------------------------------------------------------- Net Increase (Decrease) In Cash And Temporary Cash Investments (16) 10 Cash And Temporary Cash Investments At January 1 78 36 ================================================================================ Cash And Temporary Cash Investments At March 31 $62 $46 ================================================================================ Supplemental Cash Flow Information: Cash paid for - Interest (includes capitalized interest of $1 for 2000 and 1999) $24 $21 - Income taxes 7 4 See Notes to Consolidated Financial Statements. SOUTH CAROLINA ELECTRIC & GAS COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS March 31, 2000 (Unaudited) The following notes should be read in conjunction with the Notes to Consolidated Financial Statements appearing in South Carolina Electric & Gas Company's (the Company) Annual Report on Form 10-K for the year ended December 31, 1999. These are interim financial statements, and 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 except as described in Notes 2 and 3, which are necessary for a fair statement of the results for the interim periods reported. 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: A. Basis of Accounting The Company accounts for its regulated utility operations, assets and liabilities in accordance with the provisions of Statement of Financial Accounting Standards No. 71 (SFAS 71). This accounting standard requires cost-based rate-regulated utilities to recognize in their financial statements revenues and expenses in different time periods than do enterprises that are not rate-regulated. As a result, the Company has recorded, as of March 31, 2000, approximately $175 million and $67 million of regulatory assets and liabilities, respectively, including amounts recorded for deferred income tax assets and liabilities of approximately $121 million and $43 million, respectively. The electric and gas regulatory assets (excluding deferred income tax assets) of approximately $26 million each are being recovered through rates, and the Public Service Commission of South Carolina (PSC) has approved accelerated recovery of approximately $5 million of the electric regulatory assets. In the future, as a result of deregulation or other changes in the regulatory environment, the Company may no longer meet the criteria for continued application of SFAS 71 and could be required to write off its regulatory assets and liabilities. Such an event could have a material adverse effect on the Company's results of operations in the period that a write-off would be required, but it is not expected that cash flows or financial position would be materially affected. B. Reclassifications Certain amounts from prior periods have been reclassified to conform with the 2000 presentation. 2. Cumulative Effect of Accounting Change Effective January 1, 2000 the Company changed its method of accounting for operating revenues from cycle billing to full accrual. The cumulative effect of this change was $22 million, net of tax. Accruing unbilled revenues more closely matches revenues and expenses. Unbilled revenues represent the estimated amount customers will be charged for service received, but that has not yet been billed, as of the end of the accounting period. Previously these revenues were recognized as operating revenues as customers were billed. If this method had been applied retroactively, net income would have been $65 million for the three months ended March 31, 1999, compared to $48 million as previously reported. 3. RETAINED EARNINGS The Restated Articles of Incorporation of the Company and the Indenture underlying its First and Refunding Mortgage Bonds contain provisions that, under certain circumstances, could limit the payment of cash dividends on its common stock. In addition, with respect to hydroelectric projects, the Federal Power Act requires the appropriation of a portion of certain earnings therefrom. At March 31, 2000, approximately $30.8 million of retained earnings were restricted by this requirement as to payment of cash dividends on common stock. 4. CONTINGENCIES With respect to commitments at March 31, 2000, 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, 1999. Contingencies at March 31, 2000 are as follows: A. Nuclear Insurance The Price-Anderson Indemnification Act, which deals with public liability for a nuclear incident, currently establishes the liability limit for third-party claims associated with any nuclear incident at $9.5 billion. Each reactor licensee is currently liable for up to $88.1 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 the V. C. Summer Nuclear Station (Summer Station), would be approximately $58.7 million per incident, but not more than $6.7 million per year. The Company currently maintains policies (for itself and on behalf of the South Carolina Public Service Authority) with Nuclear Electric Insurance Limited (NEIL). These policies covering the nuclear facility for property damage, excess property damage and outage costs permit assessment under certain conditions to cover insurer's losses. Based on the current annual premium, the Company's portion of the retroactive premium assessment would not exceed $8.1 million. To the extent that insurable claims for property damage, decontamination, repair and replacement and other costs and expenses arising from a nuclear incident at Summer Station exceed the policy limits of insurance, or to the extent such insurance becomes unavailable in the future, and to the extent that the Company's rates would not recover the cost of any purchased replacement power, the Company will retain the risk of loss as a self-insurer. The Company has no reason to anticipate a serious nuclear incident at Summer Station. If such an incident were to occur, it could have a material adverse impact on the Company's results of operations, cash flows and 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, estimates are made of the expenditures, if any, deemed necessary to investigate and clean up each site. These estimates are refined as additional information becomes available; therefore, actual expenditures could differ significantly from the original estimates. Amounts estimated and accrued to date for site assessments and cleanup relate primarily to regulated operations. Such amounts are deferred and amortized with recovery provided through rates. The Company has also recovered portions of its environmental liabilities through settlements with various insurance carriers. The Company has recovered all amounts previously deferred for its electric operations. The Company expects to recover all deferred amounts related to its gas operations by December 2005. Deferred amounts, net of amounts recovered through rates and insurance settlements, totaled $20.8 million at March 31, 2000. The deferral includes the estimated costs associated with the following matters. o 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 encompasses approximately 30 acres and includes properties which were locations for industrial operations, including a wood preserving (creosote) plant, one of the Company's decommissioned manufactured gas plants (MGP), properties owned by the National Park Service and the City of Charleston, and private properties. The site has not been placed on the National Priorities List, but may be added in the future. The Potentially Responsible Parties (PRPs) have negotiated an administrative order by consent for the conduct of a Remedial Investigation/Feasibility Study and a corresponding Scope of Work. Field work began in November 1993, and the EPA approved a Remedial Investigation Report in February 1997 and a Feasibility Study Report in June 1998. In July 1998 the EPA approved the Company's Removal Action Work Plan for soil excavation. The Company completed Phase One of the Removal Action in 1998 at a cost of approximately $1.5 million. Phase Two, which cost approximately $3.5 million, included excavation and installation of several permanent barriers to mitigate coal tar seepage. On September 30, 1998 a Record of Decision was issued which sets forth the EPA's view of the extent of each PRP's responsibility for site contamination and the level to which the site must be remediated. The Company estimates that the Record of Decision will result in costs of approximately $13.3 million, of which approximately $4 million remains. On January 13, 1999 the EPA issued a Unilateral Administrative Order for Remedial Design and Remedial Action directing the Company to design and carry out a plan of remediation for the Calhoun Park site. The Order is temporarily stayed pending further negotiations between the Company and the EPA. However, the Company submitted a Comprehensive Remedial Design Work Plan on December 17, 1999 and is proceeding with implementation pending agency approval. In October 1996 the City of Charleston and the Company settled all environmental claims the City may have had against the Company involving the Calhoun Park area for a payment of $26 million over four years (1996-1999) by the Company to the City. The Company is recovering the amount of the settlement, which does not encompass site assessment and cleanup costs, through rates in the same manner as other amounts accrued for site assessments and cleanup. As part of the environmental settlement, the Company constructed an 1,100 space parking garage on the Calhoun Park site (construction was completed in April 2000) and transferred the facility to the City in exchange for a 20-year municipal bond backed by revenues from the parking garage and a mortgage on the parking garage. The total amount of the bond is still being finalized but is not to exceed $16.9 million, the maximum expected project cost. o The Company owns three other decommissioned MGP sites which contain residues of by-product chemicals. For the site located in Sumter, South Carolina, effective September 15, 1998, the Company entered into a Remedial Action Plan Contract with the South Carolina Department of Health and Environmental Control (DHEC) pursuant to which it agreed to undertake a full site investigation and remediation under the oversight of DHEC. Site investigation and characterization are proceeding according to schedule. Upon selection and successful implementation of a site remedy, DHEC will give the Company a Certificate of Completion and a covenant not to sue. The Company is continuing to investigate the other two sites, and is monitoring the nature and extent of residual contamination. 5. SEGMENT OF BUSINESS INFORMATION The Company's reportable segments are listed in the following table. The Company uses operating income to measure profitability for its Electric Operations and Gas Distribution segments. Therefore, net income is not allocated to these segments. Affiliate revenue is derived from transactions between reportable segments as well as transactions between separate legal entities that are combined into the same reportable segment. Assets for the period did not change significantly. Disclosure of Reportable Segments (Millions of Dollars) - ----------------------------------------------- -------------------------------- Electric Gas All Adjustments/ Consolidated March 31, 2000 Operations Distribution Other Eliminations Total - ----------------------------------------------- -------------------------------- External Revenue $294 $101 - - $395 Intersegment Revenue 55 - - (55) - Operating Income (Loss) 65 15 (1) (1) 78 - ----------------------------------------------- -------------------------------- - ------------------------------------ ------------ ---------- ------------------- - --------------------------------------------- ---------------------------------- Electric Gas All Adjustments/ Consolidated March 31, 1999 Operations Distribution Other Eliminations Total - --------------------------------------------- --------------------------------- External Revenue $266 $86 $ 1 - $353 Intersegment Revenue 44 - - (44) - Operating Income (Loss) 60 14 (1) (1) 72 - --------------------------------------------- ---------------------------------- Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations SOUTH CAROLINA ELECTRIC & GAS COMPANY MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion should be read in conjunction with Management's Discussion and Analysis of Financial Condition and Results of Operations appearing in South Carolina Electric & Gas Company's (SCE&G) Annual Report on Form 10-K for the year ended December 31, 1999. Statements included in this discussion and analysis (or elsewhere in this quarterly report) which are not statements of historical fact are intended to be, and are hereby identified as, "forward looking statements" for purposes of the safe harbor provided by Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and involve a number of risks and uncertainties, and that actual results could differ materially from those indicated by such forward-looking statements. Important factors that could cause actual results to differ materially from those indicated by such forward-looking statements include, but are not limited to, the following: (1) that the information is of a preliminary nature and may be subject to further and/or continuing review and adjustment, (2) changes in the utility regulatory environment, (3) changes in the economy in SCE&G's service territory, (4) the impact of competition from other energy suppliers, (5) the management of SCE&G's operations, (6) variations in prices of natural gas and fuels used for electric generation, (7) growth opportunities, (8) the results of financing efforts, (9) changes in SCE&G's accounting policies, (10) weather conditions in areas served by SCE&G, (11) inflation, (12) exposure to environmental issues and liabilities, (13) changes in environmental regulations and (14) the other risks and uncertainties described from time to time in SCE&G's periodic reports filed with the Securities and Exchange Commission. SCE&G disclaims any obligation to update any forward-looking statements. MATERIAL CHANGES IN CAPITAL RESOURCES AND LIQUIDITY SINCE DECEMBER 31, 1999 LIQUIDITY AND CAPITAL RESOURCES On September 14, 1999 the PSC approved an accelerated capital recovery plan for SCE&G's Cope Generating Station. The plan will be implemented beginning January 1, 2000 for a three-year period. The PSC approved an accelerated capital recovery methodology wherein SCE&G will increase depreciation of its Cope Generating Station in excess of amounts that would be recorded based upon currently approved depreciation rates. The amount of the accelerated depreciation will be determined by SCE&G based on the level of revenues and operating expenses, not to exceed $36 million annually without the approval of the PSC. Any unused portion of the $36 million in any given year could be carried forward for possible use in the succeeding year. The accelerated capital recovery plan will be accomplished through existing customer rates. The following table summarizes how SCE&G generated funds for its utility property additions and construction expenditures during the three months ended March 31, 2000 and 1999: - ------------------------------------------------------------------------------- Three Months Ended March 31, 2000 1999 - ------------------------------------------------------------------ ------------- (Millions of Dollars) Net cash provided from operating activities $ 78 $32 Net cash provided from (used for) financing activities (55) 26 Cash and temporary cash investments available at the beginning of the period 78 36 - -------------------------------------------------------------------------------- Net cash available for utility property additions and construction expenditures $101 $94 - -------------------------------------------------------------------------------- Funds used for utility property additions and construction expenditures, net of noncash allowance for funds used during construction $ 39 $48 - -------------------------------------------------------------------------------- Funds used for (provided from) nonutility property additions and investments $ - $ - ================================================================================ SCE&G anticipates that the remainder of its 2000 cash requirements will be met through internally generated funds and the incurrence of additional short-term and long-term debt. The timing and amount of such financings will depend upon market conditions and other factors. SCE&G expects that it has or can obtain adequate sources of financing to meet its projected cash requirements for the next twelve months and for the foreseeable future. The ratio of earnings to fixed charges for the twelve months ended March 31, 2000 was 3.71. RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2000 AS COMPARED TO THE CORRESPONDING PERIOD IN 1999 Earnings and Dividends Net income for the three months ended March 31, 2000 and 1999 were as follows: (Millions of Dollars) 2000 1999 - ---------------------------------------------------------- ------------ Net income derived from: Continuing operations $54.2 $47.8 Change in accounting 22.3 - - ------------------------------------------------- ------------ ------------ Total net income $76.5 $47.8 ================================================= ============ ============ Net income from continuing operations increased $6.4 million. This was primarily attributable to improved electric and gas margins ($17.1 million) and other income which were partially offset by increased other operating expenses ($10.8 million). Earnings from a change in accounting resulted from recording of unbilled revenue (See NOTES TO CONSOLIDATED FINANCIAL STATEMENTS). 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 1% and 3% of income before income taxes for the three months ended March 31, 2000 and 1999 respectively. SCE&G's Board of Directors authorized payment of dividends on common stock held by SCANA, as follows: - -------------------- ----------------- ------------------- ------------------ Declaration Dividend Quarter Payment Date Amount Ended Date - -------------------- ----------------- ------------------- ------------------ February 22, 2000 $32.0 million March 31, 2000 April 1, 2000 April 27, 2000 $32.0 million June 30, 2000 July 1, 2000 - -------------------- ----------------- ------------------- ------------------ Electric Operations Changes in the electric operations sales margins (including transactions with affiliates) for the three months ended March 31, 2000, when compared to the corresponding period in 1999, were as follows: - ------------------------------------------------------------------------------- Three Months Ended (Millions of Dollars) 2000 1999 Change % Change - - ---------------------------------------------------------------------------- Electric operating revenue $294.3 $266.2 $28.1 10.6 Less: Fuel used in generation 57.0 44.6 12.4 27.7 Purchased power 29.0 28.7 0.3 1.2 - ---------------------------------------------------------------------------- Margin $208.3 $192.9 $15.4 8.0 ============================================================================ Electric operations sales margins increased for the three months ended March 31, 2000, when compared to the corresponding period in 1999, primarily as a result of more favorable weather and customer growth. Gas Distribution Changes in the gas distribution sales margins for the three months ended March 31, 2000, when compared to the corresponding period in 1999, were as follows: - ------------------------------------------------------------------------------ Three Months Ended (Millions of Dollars) 2000 1999 Change % Change - ------------------------------------------------------------------------------ Gas operating revenue $100.4 $86.1 $14.3 16.6 Less: Gas purchased for resale 61.7 49.1 12.6 25.6 - ------------------------------------------------------------------------------ Margin $ 38.7 37.0 $ 1.7 4.6 ============================================================================== Gas distribution sales margins for the three months ended March 31, 2000 increased from the corresponding period in 1999 primarily as a result of more favorable weather and customer growth. Other Operating Expenses Changes in other operating expenses, including taxes, for the three months ended March 31, 2000 when compared to the corresponding period in 1999, were as follows: - -------------------------------------------------------------------------------- Three Months Ended (Millions of Dollars) 2000 1999 Change % Change - -------------------------------------------------------------------------------- Other operation and maintenance $ 75.3 $ 70.2 $ 5.1 7.3 Depreciation and amortization 40.4 38.2 2.2 5.6 Income taxes 29.0 26.1 2.9 11.2 Other taxes 25.3 24.7 0.6 2.5 - -------------------------------------------------------------------------------- Total $170.0 $159.2 $10.8 6.8 ================================================================================ Other operation and maintenance expenses for the three months ended March 31, 2000 increased from 1999 levels primarily as a result of increased operating and maintenance costs for electric generation and distribution facilities. The increase in depreciation and amortization expenses resulted from normal property additions. The change in income taxes primarily reflects the change in operating income. Other Income Other income, net of income taxes, for the three months ended March 31, 2000 increased approximately $2.7 million and is primarily due to earnings on pension assets. Item 3. Quantitative and Qualitative Disclosures About Market Risk All financial instruments held by SCE&G described below are held for purposes other than trading. Interest rate risk - The table below provides information about SCE&G's financial instruments that are sensitive to changes in interest rates. For debt obligations, the table presents principal cash flows and related weighted average interest rates by expected maturity dates. March 31, 2000 Expected Maturity Date --------- ---------------------------------- ------ -------------- (Millions of Dollars) There- Fair Liabilities 2000 2001 2002 2003 2004 After Total Value ------------- ---------------------------------------------------- Long-Term Debt: Fixed Rate ($) 127.5 27.6 27.6 129.4 123.9 933.0 1,369.0 1,232.7 Average Interest Rate (%) 6.16 6.73 6.73 6.37 7.52 7.72 7.39 March 31, 1999 Expected Maturity Date --------- ------------- -------------------- --------------------- (Millions of Dollars) There- Fair Liabilities 2000 2001 2002 2003 2004 After Total Value ------- ---------------------------------------------------------- Long-Term Debt: Fixed Rate ($) 122.6 22.6 22.6 124.5 124.5 944.2 1,361.0 1,356.4 Average Interest Rate (%) 7.52 6.72 6.72 7.56 7.52 7.57 7.53
While a decrease in interest rates would increase the fair value of debt, it is unlikely that events which would result in a realized loss will occur. PART II. OTHER INFORMATION Item 1. Legal Proceedings SCANA Corporation: For information regarding legal proceedings see Note 2 "Rate Matters," appearing in the Company's Annual Report on Form 10-K for the year ended December 31, 1999, and Note 7 "Contingencies" of Notes to Consolidated Financial Statements appearing in this Quarterly Report on Form 10-Q. South Carolina Electric & Gas Company: For information regarding legal proceedings see Note 2 "Rate Matters, " appearing in South Carolina Electric & Gas Company's Annual Report on Form 10-K for the year ended December 31, 1999, and Note 4 "Contingencies" of Notes to Consolidated Financial Statements appearing in this Quarterly Report on Form 10-Q. Items 2, 3, 4 and 5 are not applicable for SCANA Corporation or South Carolina Electric & Gas Company. Item 6. Exhibits and Reports on Form 8-K SCANA Corporation and South Carolina Electric & Gas Company: 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 during the first quarter 2000 were as follows: SCANA filed a current report on Form 8-K: Date of report: February 10, 2000 Items reported: Items 5 and 7 SCE&G: None SCANA CORPORATION 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. SCANA CORPORATION (Registrant) May 12, 2000 By: s/M. R. Cannon -------------------- M. R. Cannon Controller (principal accounting officer) 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) May 12, 2000 By: s/Mark R. Cannon Mark R. Cannon Controller (Principal accounting officer) EXHIBIT INDEX Applicable to Exhibit Form 10-Q of No. SCANA SCE&G Description - --- --------- ------------------------------------------------------------- 2.01 X X Agreement and Plan of Merger, dated as of February 16, 1999 as amended and restated as of May 10, 1999, by and among Public Service Company of North Carolina, Incorporated, SCANA Corporation , New Sub I, Inc. and New Sub II, Inc. (Filed as Exhibit 2.1 to Registration Statement No 333-78227) 3.01 X Restated Articles of Incorporation of SCANA as adopted on April 26, 1989 (Filed as Exhibit 3-A to Registration Statement No. 33-49145) 3.02 X Restated Articles of Incorporation of SCE&G, as adopted on December 15, 1993 (Filed as Exhibit 3.01 to Registration Statement No. 333-86387) 3.03 X Articles of Amendment of SCANA, dated April 27, 1995 (Filed as Exhibit 4-B to Registration Statement No. 33-62421) 3.04 X Articles of Amendment of SCE&G, dated June 7, 1994 filed June 9, 1994 (Filed as Exhibit 3.02 to Registration Statement No. 333-86387) 3.05 X Articles of Amendment of SCE&G, dated November 9, 1994(Filed as Exhibit 3.03 to Registration Statement No. 333-86387) 3.06 X Articles of Amendment of SCE&G, dated December 9, 1994 (Filed as Exhibit 3.04 to Registration Statement No. 333-86387) 3.07 X Articles of Correction of SCE&G, dated January 17, 1995 (Filed as Exhibit 3.05 to Registration Statement No. 333-86387) 3.08 X Articles of Amendment of SCE&G, dated January 13, 1995 and filed January 17, 1995 (Filed as Exhibit 3.06 to Registration Statement No. 333-86387) 3.09 X Articles of Amendment of SCE&G, dated March 30, 1995 (Filed as Exhibit 3.07 to Registration Statement No. 333-86387) 3.10 X Articles of Correction of SCE&G - Amendment to Statement filed March 31, 1995, dated December 13, 1995 (Filed as Exhibit 3.08 to Registration Statement No. 333-86387) 3.11 X Articles of Amendment of SCE&G, dated December 13, 1995 (Filed as Exhibit 3.09 to Registration Statement No. 333-86387) 3.12 X Articles of Amendment of SCE&G, dated February 18, 1997 (Filed as Exhibit 3-L to Registration Statement No. 333-24919) 3.13 X Articles of Amendment of SCE&G, dated February 21, 1997 (Filed as Exhibit 3.11 to Registration Statement No. 333-86387) 3.14 X Articles of Amendment of SCE&G, dated April 22, 1997 (Filed as Exhibit 3.12 to Registration Statement No. 333-86387) Applicable to Exhibit Form 10-Q of No. SCANA SCE&G Description 3.15 X Articles of Amendment of SCE&G, dated April 9, 1998 (Filed as Exhibit 3.13 to Registration Statement No. 333-86387) 3.16 X Articles of Amendment of SCE&G, dated May 19, 1999 (Filed as Exhibit 3.16 to Form 10-K for the year ended December 31, 1999) 3.17 X Articles of Amendment of SCE&G, dated August 13, 1999 (Filed as Exhibit 3.17 to Form 10-K for the year ended December 31, 1999) 3.18 X Articles of Amendment of SCE&G, dated March 1, 2000 (Filed as Exhibit 3.18 to Form 10-K for the year ended December 31, 1999) 3.19 X By-Laws of SCANA as revised and amended on February 22, 2000 (Filed as Exhibit 3.19 to Form 10-K for the year ended December 31, 1999) 3.20 X By-Laws of SCE&G as amended and adopted on February 22, 2000 (Filed as Exhibit 3.20 to Form 10-K for the year ended December 31, 1999) 4.01 X Articles of Exchange of South Carolina Electric and Gas Company and SCANA Corporation (Filed as Exhibit 4-A to Post-Effective Amendment No. 1 to Registration Statement No. 2-90438) 4.02 X Indenture dated as of November 1, 1989 between SCANA Corporation and The Bank of New York, as Trustee (Filed as Exhibit 4-A to Registration Statement No. 33-32107) 4.03 X X Indenture dated as of January 1, 1945, between the South Carolina Power Company and Central Hanover Bank and Trust, as Trustee, as supplemented by Supplemental Indentures dated respectively as of May 1, 1946, May 1, 1947 and July 1, 1949 (Filed as Exhibit 2-B to Registration Statement No. 2-26459) 4.04 X X Fourth Supplemental Indenture dated as of April 1, 1950, to Indenture referred to in Exhibit 4.03, pursuant to which SCE&G assumed said Indenture (Filed as Exhibit 2-C to Registration Statement No. 2-26459) 4.05 X X Fifth through Fifty-third Supplemental Indenture referred to in Exhibit 4.03 dated as of the dates indicated below and filed as exhibits to the Registration Statements 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 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 Applicable to Exhibit Form 10-Q of No. SCANA SCE&G Description December 1, 1969 Exhibit 4-O 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 2-B 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 2-A-3 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 May 1, 1999 Exhibit 4.04 to Registration No. 333-86387 4.06 X X 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) 4.07 X X First Supplemental Indenture to Indenture referred to in Exhibit 4.07 dated as of June 1, 1993 (Filed as Exhibit 4-G to Registration Statement No. 33-49421) 4.08 X X Second Supplemental Indenture to Indenture referred to in Exhibit 4.07 dated as of June 15, 1993 (Filed as Exhibit 4-G to Registration Statement No. 33-57955) Applicable to Exhibit Form 10-Q of No. SCANA SCE&G Description 4.09 X X Trust Agreement for SCE&G Trust I (Filed as Exhibit 4-G to SCE&G Form 10-K for the year ended December 31, 1997) 4.10 X X Certificate of Trust for SCE&G Trust I (Filed as Exhibit 4-H to SCE&G Form 10-K for the year ended December 31, 1997) 4.11 X X Junior Subordinated Indenture for SCE&G Trust I (Filed as Exhibit 4-I to SCE&G Form 10-K for the year ended December 31, 1997) 4.12 X X Guarantee Agreement for SCE&G Trust I (Filed as Exhibit 4-J to SCE&G Form 10-K for the year ended December 31, 1997) 4.13 X X Amended and Restated Trust Agreement for SCE&G Trust I (Filed as Exhibit 4-K to SCE&G Form 10-K for the year ended December 31, 1997) 10.01 X SCANA Voluntary Deferral Plan as amended through October 21, 1997 (Filed as Exhibit 10.01(a) to Registration Statement No. 333-86803) 10.02 X X Supplemental Executive Retirement Plan (Filed as Exhibit 10.01(b) to Registration Statement No. 333-86803) 10.03 X SCANA Supplementary Voluntary Deferral Plan as amended and restated through October 21, 1997 (Filed as Exhibit 10-B to SCANA Form 10-K for the year ended December 31, 1997) 10.04 X SCANA Key Executive Severance Benefits Plan as amended and restated effective as of October 21, 1997 (Filed as Exhibit 10.01(c) to Registration Statement No. 333-86803) 10.05 X SCANA Supplementary Key Executive Severance Benefits Plan as amended and restated effective October 21, 1997 (Filed as Exhibit 10.01(d) to Registration Statement No. 333-86803) 10.06 X SCANA Performance Share Plan as amended and restated effective January 1, 1998 (Filed as Exhibit 10.01(e) to Registration Statement No. 333-86803) 10.07 X SCANA Key Employee Retention Plan as amended and restated effective as of October 21, 1997 (Filed as Exhibit 10-E to SCANA Form 10-K for the year ended December 31, 1997) 10.08 X Description of SCANA Whole Life Option (Filed as Exhibit 10-F to SCANA Form 10-K for the year ended December 31, 1991, under cover of Form SE, File No. 1-8809) 10.09 X Description of SCANA Corporation Annual Incentive Plan (Filed as Exhibit 10-G to SCANA Form 10-K for the year ended December 31, 1991, under cover of Form SE, File No. 1-8809) 18.01 X Independent Auditor's Letter regarding change in accounting principles (Filed herewith on page 43) 18.02 X Independent Auditor's Letter regarding change in accounting principles (Filed herewith on page 44) 27.01 X Financial Data Schedule (Filed herewith) 27.02 X Financial Data Schedule (Filed herewith)
EX-18 2 SCANA CORPORATION Exhibit 18.01 Deloitte & Touche LLP Suite 820 1426 Main Street P. O. Drawer 7128 Columbia, South Carolina 29202 May 12, 2000 SCANA Corporation 1426 Main Street Columbia, South Carolina 29201 Dear Sirs/Madams: At your request, we have read the description included in your Quarterly Report on Form 10-Q to the Securities and Exchange Commission for the quarter ended March 31, 2000, of the facts relating to the change in accounting method to record an estimate of unbilled revenues for electricity and gas delivered but not yet billed. We believe, on the basis of the facts so set forth and other information furnished to us by appropriate officials of the Company, that the accounting change described in your Form 10-Q is to an alternative accounting principle that is preferable under the circumstances. We have not audited any consolidated financial statements of SCANA Corporation and its consolidated subsidiaries as of any date or for any period subsequent to December 31, 1999. Therefore, we are unable to express, and we do not express, an opinion on the facts set forth in the above-mentioned Form 10-Q, on the related information furnished to us by officials of the Company, or on the financial position, results of operations, or cash flows of SCANA Corporation and its consolidated subsidiaries as of any date or for any period subsequent to December 31, 1999. Yours truly, s/Deloitte & Touche LLP Deloitte & Touche LLP EX-18 3 SCE&G Exhibit 18.02 Deloitte & Touche LLP Suite 820 1426 Main Street P. O. Drawer 7128 Columbia, South Carolina 29202 May 12, 2000 South Carolina Electric & Gas Company 1426 Main Street Columbia, South Carolina 29201 Dear Sirs/Madams: At your request, we have read the description included in your Quarterly Report on Form 10-Q to the Securities and Exchange Commission for the quarter ended March 31, 2000, of the facts relating to the change in accounting method to record an estimate of unbilled revenues for electricity and gas delivered but not yet billed. We believe, on the basis of the facts so set forth and other information furnished to us by appropriate officials of the Company, that the accounting change described in your Form 10-Q is to an alternative accounting principle that is preferable under the circumstances. We have not audited any consolidated financial statements of South Carolina Electric & Gas Company and its consolidated subsidiaries as of any date or for any period subsequent to December 31, 1999. Therefore, we are unable to express, and we do not express, an opinion on the facts set forth in the above-mentioned Form 10-Q, on the related information furnished to us by officials of the Company, or on the financial position, results of operations, or cash flows of South Carolina Electric & Gas Company and its consolidated subsidiaries as of any date or for any period subsequent to December 31, 1999. Yours truly, s/Deloitte & Touche LLP Deloitte & Touche LLP EX-27 4 SCANA CORPORATION FINANCIAL DATA SCHEDULE WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
UT THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM THE CONSOLIDATED BALANCE SHEET AS OF MARCH 31, 2000 AND THE CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS AND OF CASH FLOWS FOR THE NINE MONTHS ENDED MARCH 31, 2000 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000,000 3-MOS DEC-31-1999 MAR-31-2000 PER-BOOK 4,836 922 705 566 0 7,029 0 1,306 794 2,100 61 106 2,413 345 0 0 309 1 0 0 1,694 7,029 821 50 651 701 120 12 132 54 107 3 104 30 0 127 1.00 1.00
EX-27 5 SCE&G FINANCIAL DATA SCHEDULE
UT THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM THE CONSOLIDATED BALANCE SHEET AS OF MARCH 31, 2000 AND THE CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS AND OF CASH FLOWS FOR THE NINE MONTHS ENDED MARCH 31, 2000 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000,000 3-MOS DEC-31-1999 MAR-31-2000 PER-BOOK 3,498 19 375 510 0 4,402 0 1,008 593 1,601 61 106 1,120 187 0 0 127 1 0 0 1,199 4,402 395 29 288 317 78 4 82 26 78 3 75 32 0 78 0 0
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