SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) November 5, 1996
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CONNECTICUT NATURAL GAS CORPORATION
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(Exact name of registrant as specified in its charter)
Connecticut
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(State or other jurisdiction of incorporation)
1-7727 06-0383860
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(Commission (I.R.S. Employer
File Number) Identification No.)
100 Columbus Boulevard, Hartford, Connecticut 06103
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code
(203) 727-3000
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Item 5. Other Information
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(a) Press Release
Fiscal Year 1996 Earnings
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CTG YEAR-END EARNINGS HIGHER FOR FISCAL YEAR 1996
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HARTFORD, Connecticut, November 5, 1996 --- Connecticut Natural Gas
Corporation (NYSE-CTG) today reported consolidated net income for the
fiscal year ending September 30, 1996 of $18,995,000, up from $17,019,000
for fiscal year 1995. Consolidated earnings per share were $1.87 for
fiscal 1996, compared to $1.71 for the previous year.
Victor H. Frauenhofer, Chairman, President and Chief Executive Officer
said, "We are pleased to report increased earnings for this fiscal year,
which were due in a large part to weather that was 13% colder than fiscal
year 1995. The impact of colder weather resulted in a gain of $.33 per
share in earnings. In addition, increased rates, which were partially in
effect in October of 1995 and were finalized on
February 9, 1996, were a significant contributor to earnings, providing a
net gain of $.24 per share. The Company also increased its equity
ownership in the Iroquois Pipeline to 4.87% in May of 1996, which resulted
in a positive impact on earnings."
Mr. Frauenhofer continued, "As a result of the full impact of deregulation
at the federal level, CTG has undertaken a major initiative to chart a
"Strategic Plan for Future Growth" for the Company during fiscal year
1996."
more...
Connecticut Natural Gas Corporation - News Release
November 5, 1996
Page 2
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"Included in the Plan is a clear focus on all aspects of customer service
through a reorganized Consumer Services Business Unit; a firm commitment to
maximizing throughput through the retention of current large commercial and
industrial customers for firm or transportation services; a restructuring
of the Company's District Heating and Cooling business to effectively
compete in the marketplace; and the aggregation of all nonregulated
activities to establish a total energy services company under The Energy
Network (TEN)," Mr. Frauenhofer concluded.
Connecticut Natural Gas Corporation currently serves 144,000 customers in
22 municipalities in the Greater Hartford area and Greenwich.
Period Ending September 30, 1996
(dollars in thousands except per share data)
Twelve Months Ended Three Months Ended
September 30, September 30,
1996 1995 1996 1995
Consolidated Gross Revenues $ 315,363 $ 275,185 $ 40,341 $ 42,967
Consolidated Net Income/(Loss) $ 18,995 $ 17,019 $ (2,505) $ (1,364)
Balance Available
for Common Stock $ 18,932 $ 16,957 $ (2,521) $ (1,380)
Consolidated Net Income/(Loss)
per Common Share $ 1.87 $ 1.71 $ (.24) $ (.14)
Average Common
Shares Outstanding 10,146,932 9,926,980 10,630,370 9,931,279
Dividends Per Common Share $ 1.50 $ 1.48 $ .38 $ .37
(b) Unaudited financial statements for the fiscal year ending September 30,
1996
"UNAUDITED"
Consolidated Balance Sheets
September 30, 1996 and 1995
(Thousands of Dollars)
Assets
Assets 1996 1995
---- ----
Plant and Equipment:
Plant in service $ 464,377 $ 451,843
Construction work in progress 6,417 3,564
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470,794 455,407
Less-Allowance for depreciation 145,042 133,314
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325,752 322,093
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Investments, at equity 9,914 5,743
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Current Assets:
Cash and cash equivalents 8,515 3,042
Accounts receivable (less allowance for
doubtful accounts of $4,819 in 1996
and $4,590 in 1995) 25,033 26,914
Accrued utility revenue 4,180 5,093
Inventories 15,968 14,511
Prepaid expenses 10,920 6,095
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Total Current Assets 64,616 55,655
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Other Assets:
Unrecovered future taxes 44,812 51,634
Recoverable transition costs 2,858 4,636
Other assets 19,027 25,278
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Total Other Assets 66,697 81,548
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$ 466,979 $ 465,039
========= =========
The accompanying notes are an integral part of these consolidated financial
statements.
"UNAUDITED"
Consolidated Balance Sheets (Concluded)
September 30, 1996 and 1995
(Thousands of Dollars)
Capitalization and Liabilities
Capitalization and Liabilities 1996 1995
---- ----
Capitalization (see accompanying statements):
Common stock equity $ 168,882 $ 150,111
Preferred stock, not subject to
mandatory redemption 899 904
Long-term debt 136,432 150,390
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306,213 301,405
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Current Liabilities:
Current portion of long-term debt 13,968 3,921
Notes payable and commercial paper - 4,200
Accounts payable and accrued expenses 40,721 46,341
Refundable purchased gas costs 6,012 2,300
Accrued taxes - 2,021
Accrued interest 4,479 4,518
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Total Current Liabilities 65,180 63,301
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Deferred Credits:
Deferred income taxes 40,011 37,985
Unfunded deferred income taxes 44,812 51,634
Investment tax credits 3,203 3,423
Refundable taxes 3,445 3,365
Other 4,115 3,926
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Total Deferred Credits 95,586 100,333
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Commitments and Contingencies
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$ 466,979 $ 465,039
========= =========
The accompanying notes are an integral part of these consolidated financial
statements.
"UNAUDITED"
Consolidated Statements of Income
For the Years Ended September 30, 1996, 1995 and 1994
(Thousands of Dollars Except for Per Share Data)
1996 1995 1994
---- ---- ----
Operating Revenues $ 315,363 $ 275,185 $ 290,662
Less: Cost of energy 175,175 147,764 155,547
State gross revenues tax 11,710 11,296 11,863
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Operating Margin 128,478 116,125 123,252
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Operating Expenses:
Operations 49,640 45,311 48,361
Maintenance 8,615 7,917 7,683
Depreciation and amortization 17,765 16,977 15,507
Income taxes 14,364 9,430 13,353
Local property taxes 5,277 5,148 5,259
Other taxes 2,313 2,183 2,177
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97,974 86,966 92,340
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Operating Income 30,504 29,159 30,912
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Other Income/(Deductions),
net of income taxes:
Allowance for equity funds used
during construction 144 106 21
Equity in partnership earnings 2,037 1,032 868
Other income/(deductions) 248 (872) (1,007)
Nonrecurring items 892 3,624 -
Income taxes (1,115) (1,839) (113)
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2,206 2,051 (231)
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Interest and Debt Expense, net:
Interest on long-term debt 11,825 12,158 10,997
Other interest 1,585 1,650 1,573
Allowance for borrowed funds used
during construction (96) (70) (14)
Amortization of debt expense 401 453 422
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13,715 14,191 12,978
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Net Income 18,995 17,019 17,703
Less-Dividends on Preferred Stock 63 62 66
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Net Income Applicable to Common Stock $ 18,932 $ 16,957 $ 17,637
========= ========= =========
The accompanying notes are an integral part of these consolidated
financial statements.
"UNAUDITED"
Consolidated Statements of Income (Concluded)
For the Years Ended September 30, 1996, 1995 and 1994
(Thousands of Dollars Except for Per Share Data)
1996 1995 1994
---- ---- ----
Net Income Applicable to Common Stock $ 18,932 $ 16,957 $ 17,637
========= ========= =========
Average Common Shares Outstanding
During the Period 10,146,932 9,926,980 9,539,695
========== ========= =========
Income Per Average Share of
Common Stock $ 1.87 $ 1.71 $ 1.85
========= ========= =========
Dividend Per Share of Common Stock $ 1.50 $ 1.48 $ 1.48
========= ========= =========
The accompanying notes are an integral part of these consolidated financial
statements.
"UNAUDITED"
Consolidated Statements of Cash Flows
For the Years Ended September 30, 1996, 1995 and 1994
(Thousands of Dollars)
1996 1995 1994
---- ---- ----
Cash Flows from Operations: $ 39,175 $ 53,415 $ 25,708
-------- -------- --------
Cash Flows from Investing Activities:
Capital expenditures (24,281) (26,839) (27,859)
Other investing activities (1,338) (395) (2,669)
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Net cash used in investing activities (25,619) (27,234) (30,528)
-------- -------- --------
Cash Flows from Financing Activities:
Dividends paid (15,491) (14,761) (14,184)
Issuance of common stock 15,557 8,474 -
Other stock activity, net (38) (5) (763)
Issuance of long-term debt - - 20,000
Principal retired on long-term debt (3,911) (3,673) (4,653)
Short-term debt (4,200) (14,300) 4,000
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Net cash provided (used) by
financing activities (8,083) (24,265) 4,400
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Increase (Decrease) in Cash and
Cash Equivalents 5,473 1,916 (420)
Cash and Cash Equivalents at
Beginning of Year 3,042 1,126 1,546
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Cash and Cash Equivalents at
End of Year $ 8,515 $ 3,042 $ 1,126
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The accompanying notes are an integral part of these consolidated financial
statements.
"UNAUDITED"
Consolidated Statements of Cash Flows (Concluded)
For the Years Ended September 30, 1996, 1995 and 1994
(Thousands of Dollars)
1996 1995 1994
---- ---- ----
Schedule Reconciling Earnings to
Cash Flows from Operations:
Income $ 18,995 $ 17,019 $ 17,703
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Adjustments to reconcile income
to net cash:
Depreciation and amortization 17,909 17,216 16,296
Provision for uncollectible
accounts 4,600 4,886 6,582
Deferred income taxes, net 1,886 897 8,538
Equity in partnership earnings (2,037) (1,032) (868)
Cash distributions received from
investments 2,061 336 492
Changes in assets and liabilities:
Accounts receivable (1,640) (5,571) (9,047)
Accrued utility revenue 913 (1,379) 918
Inventories (1,457) 3,815 2,087
Purchased gas costs 3,712 6,069 (7,527)
Prepaid expenses (4,825) 4,012 (6,728)
Accounts payable and accrued expenses (5,902) 7,671 (927)
Other assets/liabilities 4,960 (524) (1,811)
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Total adjustments 20,180 36,396 8,005
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Net cash provided by
operations $ 39,175 $ 53,415 $ 25,708
======== ======== ========
Supplemental Disclosures of Cash Flow
Information:
Cash Paid During the Year for:
Interest $ 12,193 $ 12,446 $ 11,291
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Income taxes $ 17,633 $ 8,967 $ 9,972
======== ======== ========
The accompanying notes are an integral part of these consolidated financial
statements.
Consolidated Statements of Capitalization "UNAUDITED"
September 30, 1996 and 1995
(Thousands of Dollars)
1996 1995
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Common Stock Equity:
Common stock, $3.125 par value, authorized
20,000,000 shares, issued 10,634,496 shares
in 1996 and 9,934,496 shares in 1995,
outstanding 10,620,439 shares in 1996 and
9,931,279 shares in 1995 $ 33,233 $ 31,045
Capital in excess of par value 87,387 74,018
Retained earnings 49,026 45,522
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169,646 150,585
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Less: Unearned compensation - restricted
stock awards (312) (371)
Treasury stock, 14,057 shares in 1996 and
3,217 shares in 1995 (452) (103)
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168,882 150,111
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Preferred Stock, Not Subject to Mandatory
Redemption:
$3.125 par value, 8%, noncallable, authorized
913,832 shares in 1996 and 915,204 shares
in 1995, issued and outstanding 138,360 shares
in 1996 and 139,732 shares in 1995, entitled to
preference on liquidation at $6.25 per share 432 437
$100 par value, callable, authorized 9,999,631
shares in 1996 and 9,999,634 shares in 1995
6% Series B, issued and outstanding 4,667
shares in 1996 and 4,670 shares in 1995 467 467
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899 904
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Long-Term Debt:
First Mortgage Bonds -
8.8% to 9.16%, due 2001 to 2004 28,000 30,000
Industrial Revenue Demand Bonds -
1986 and 1988 series,
weighted average interest rate of
3.589% in 1996 and 3.857% in 1995, due 2006 12,100 12,800
First Mortgage Notes -
10.5%, due 2010 999 1,030
Secured Notes -
9.32%, due 1999 10 -
6.89%, due 2010 13,510 14,075
Secured Term Note, 10.72%, due 1997 781 1,406
Unsecured Medium Term Notes -
6.48%, due 1997 10,000 10,000
7.61% to 7.82%, due 2002 to 2004 20,000 20,000
6.85% to 8.12%, due 2012 to 2014 30,000 30,000
8.96% to 9.1%, due 2016 to 2017 30,000 30,000
8.49%, due 2024 5,000 5,000
Less - Current Maturities (13,968) (3,921)
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136,432 150,390
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$306,213 $301,405
======== ========
The accompanying notes are an integral part of these consolidated financial
statements.
"UNAUDITED"
Consolidated Statements of Common Stock Equity
For the Years Ended September 30, 1996, 1995 and 1994
(Thousands of Dollars Except for Number of Shares)
Common Stock
-------------------- Capital in
Number of Par Excess of Treasury Unearned Retained
Shares Value Par Value Stock Compensation Earnings
---------- ------- ---------- -------- ------------ ---------
Balance at September 30,
1993 9,542,296 $29,820 $66,915 $ - $ (157) $39,744
Net income after
preferred dividends - - - - - 17,637
Purchase of restricted
stock awards - - - - (728) -
Amortization and
adjustment of
restricted shares (3,217) - (258) (103) 728 -
Dividends - - - - - (14,117)
---------- ------- ------- ------ ------ --------
Balance at September 30,
1994 9,539,079 29,820 66,657 (103) (157) 43,264
Public offering 392,200 1,225 7,249 - - -
Net income after
preferred dividends - - - - - 16,957
Amortization and
adjustment of
restricted shares - - 112 - (214) -
Dividends - - - - - (14,699)
---------- ------- ------- ------ ------ --------
Balance at September 30,
1995 9,931,279 31,045 74,018 (103) (371) 45,522
Public offering 700,000 2,188 13,369 - - -
Net income after
preferred dividends - - - - - 18,932
Purchase of restricted
stock awards - - - - (33) -
Amortization and
adjustment of
restricted shares (10,840) - - (349) 92 -
Dividends - - - - - (15,428)
---------- ------- ------- ------ ------ --------
Balance at September 30,
1996 10,620,439 $33,233 $87,387 $ (452) $ (312) $49,026
========== ======= ======= ====== ====== ========
The accompanying notes are an integral part of these consolidated financial
statements.
SIGNATURE
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.
CONNECTICUT NATURAL GAS CORPORATION
Date 11/5/96 S/ Andrew H. Johnson
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(Andrew H. Johnson)
Treasurer and Chief Accounting Officer
(On behalf of the registrant and as Chief
Accounting Officer)