1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 10-Q
(X) QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1995
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 0-753
PENN VIRGINIA CORPORATION
(Exact name of registrant as specified in its charter)
VIRGINIA 23-1184320
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
100 MATSONFORD ROAD SUITE 200 RADNOR, PA 19807
(Address of principal executive offices)
(Zip code)
(610)687-8900
(Registrant's telephone number; including area code)
800 THE BELLEVUE 200 SOUTH BROAD STREET, PHILADELPHIA, PA 19102
(Former name, former address and former fiscal year,
if changed since last report.)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
------- -------
Number of shares of common stock of registrant outstanding
at August 11, 1995: 4,262,240
2
PENN VIRGINIA CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(UNAUDITED)
Three Months Six Months
Ended June 30, Ended June 30,
-------------- --------------
1995 1994 1995 1994
------ ------ ------ ------
Operating revenues:
Sales $ 152 $ 101 $ 372 $ 222
Coal royalties 2,961 3,848 6,129 7,376
Oil and gas sales and
royalties 3,561 4,039 7,352 8,380
Gain on sale of securities 4,106 - 4,106 -
Dividends 592 857 1,217 1,434
Other income, net 814 481 1,354 1,059
------- ------ ------- -------
12,186 9,326 20,530 18,471
-------- ------ ------- -------
Expenses:
Cost of sales 728 801 1,452 1,441
Selling, general and administrative 1,607 1,689 3,451 3,371
Exploration and development 124 185 242 254
Depreciation, depletion and
amortization 1,832 1,481 3,718 3,032
Taxes other than on income 457 355 898 764
Interest 624 420 1,010 874
------- ------- --------- -------
5,372 4,931 10,771 9,736
------- ------- -------- -------
Income from operations 6,814 4,395 9,759 8,735
Income taxes 1,465 1,118 1,768 2,218
------- --------- ------- -------
Net income $ 5,349 $ 3,277 $ 7,991 $ 6,517
======= ======= ======= =======
Income per common share (based on
4,274,326 and 4,279,540 weighted
average shares outstanding in 1995
and 1994, respectively): $ 1.25 $ .76 $ 1.87 $ 1.52
======== ======= ======= =======
See accompanying notes to condensed consolidated financial statements.
3
PENN VIRGINIA CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Thousands of Dollars)
(Unaudited)
June 30, 1995 December 31, 1994
------------- -----------------
ASSETS
------
Current assets
Cash and cash equivalents $ 3,619 $ 7,039
Receivables 3,393 3,286
Current portion of long-term notes receivable 3,646 3,646
Inventory 679 599
Current deferred tax benefit 1,451 1,451
Recoverable income taxes - 1,646
Other 215 249
--------- ---------
Total current assets 13,003 17,916
--------- ---------
Investments 86,425 85,321
Long-term notes receivable, net of current portion 7,209 8,881
Property, plant and equipment (net) 105,432 86,246
Other assets 963 895
--------- ---------
Total assets $ 213,032 $ 199,259
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
Current liabilities
Current installments on long-term debt $ 5,250 $ 7,325
Accounts payable 1,648 4,409
Accrued expenses 4,135 3,913
Deferred income 214 220
Taxes on income 383 -
--------- ---------
Total current liabilities 11,630 15,867
-------- ---------
Other liabilities 7,946 8,237
Deferred taxes 28,938 28,459
Long-term debt, net of current installments 22,000 9,250
Shareholders' Equity
Preferred stock of $100 par value -
authorized 100,000 shares; issued none - -
Common stock of $6.25 par value -
authorized 8,000,000 shares; issued 4,437,517
shares in 1995 and 1994 27,734 27,734
Other paid-in capital 34,793 34,793
Retained earnings 39,722 35,571
--------- ---------
102,249 98,098
Less: 165,277 and 157,977 shares in 1995 and
1994 of common stock held in treasury 7,644 7,435
Guaranteed debt to Employee Stock
Ownership Plan - 300
Add: Unrealized holding gain, net of tax -
investments 47,913 47,083
--------- ---------
Total shareholders' equity 142,518 137,446
--------- ---------
Total liabilities and shareholders' equity $ 213,032 $ 199,259
========= =========
See accompanying notes to condensed consolidated financial statements.
4
PENN VIRGINIA CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Thousands of Dollars)
(UNAUDITED)
Six Months
Ended June 30,
--------------
1995 1994
---- ----
Cash flows from operating activities:
Net cash flows from operating activities $ 5,891 $ 2,259
-------- --------
Cash flows from (used in) investing activities:
Proceeds from the sale of securities 4,278 -
Payment received on long-term notes 2,333 2,057
Proceeds from the sale of fixed assets 117 -
Purchases of property, plant and equipment (22,943) ( 9,277)
---------- ---------
Net cash flows used in investing
activities (16,215) (7,220)
--------- --------
Cash flows from (used in) financing activities:
Dividends paid (3,841) (3,836)
Repayment of long-term borrowings (7,325) (5,525)
Proceeds from long-term borrowings 18,000 -
Purchase of treasury stock (230) -
Reduction in Guaranteed debt to ESOP 300 300
-------- --------
Net cash flows provided (used) by financing 6,904 (9,061)
activities -------- --------
Net (decrease) in cash and cash equivalents (3,420) (14,022)
Cash and cash equivalents - beginning balance 7,039 23,869
-------- --------
Cash and cash equivalents - ending balance $ 3,619 $ 9,847
-------- --------
Supplemental disclosures of cash flow information:
Cash paid to date for:
Interest $ 997 $ 1,097
======== ========
Income taxes $ 373 $ 2,770
======== ========
See accompanying notes to condensed consolidated financial statements.
5
PENN VIRGINIA CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. In the opinion of the Company, the accompanying condensed
consolidated financial statements contain all adjustments
(consisting of only normal recurring accruals) necessary to
present fairly the financial position as of June 30, 1995, and
the results of operations for the three and six months ended
June 30, 1995 and 1994 and cash flows for the six months ended
June 30, 1995 and 1994.
Property, plant and equipment consist of the following:
June 30, 1995 December 31, 1994
------------- -----------------
(In thousands)
Property, plant and equipment $ 143,193 $ 120,251
Less: Accumulated depreciation
and depletion (37,761) (34,005)
--------- ---------
Net property, plant and equipment $ 105,432 $ 86,246
---------- ---------
2. During the first quarter of 1995, the Company completed two
significant asset transactions. The first transaction
consisted of the relinquishment of the West Virginia Hampton
lease by Westmoreland Coal Company. The second transaction
consisted of the acquisition of an oil and gas property
located in West Virginia ("Loup Creek") that increased the
Company's oil and gas reserves by approximately 42 billion
cubic feet (bcf) at a cost of approximately $17 million. This
oil and gas property is contiguous to a previously acquired
oil and gas property in 1992 and will allow access to an
additional gas pipeline transmission system thereby increasing
the marketability of the Company's natural gas reserves.
3. The amortized cost, gross unrealized holding gains and fair
value for available-for-sale securities at June 30, 1995 were
as follows:
Gross
Unrealized
Amortized Holding Fair
Cost Gain Value
--------- ---------- -----
(In thousands)
Available-for-sale:
Westmoreland Coal Company $ 5,263 $ - $ 5,263
Westmoreland Resources, Inc. 4,530 - 4,530
Norfolk Southern Corporation 2,929 73,703 76,632
-------- -------- --------
$ 12,722 $ 73,703 $ 86,425
======== ======== ========
On April 21, 1995 the Company sold 65,000 shares of its
Norfolk Southern Corporation common stock investment for
approximately $4.3 million. On July 7, 1995 the
Company sold an additional 35,000 shares of its Norfolk
Southern Corporation common stock investment for approximately
$2.4 million. The proceeds from these sales were used
for general corporate purposes as well as for working capital
and debt service requirements.
The amortized cost and fair value of notes receivable which
are classified as held-to-maturity securities was $10,855,000
at June 30, 1995.
4. During the first quarter of 1995 the Company executed a new
$20 million
6
loan and agency agreement with First Fidelity Bank as the lead
lender and two other commercial bank lenders. Proceeds from
this facility were used to finance the acquisition of the Loup
Creek oil and gas property and the relinquishment of the
Hampton lease by Westmoreland Coal Company.
As of June 30, 1995, $18 million was outstanding under this
facility and is included with long-term debt on the Company's
balance sheet. The remaining $2 million is available for
future borrowings as deemed necessary by the Company.
7
Management's Discussion and Analysis of
Results of Operations and Financial Condition
Results of operations for the quarter ended June 30, 1995 as compared with the
quarter ended June 30, 1994:
Income from operations before income taxes increased $2,419,000, or
55%, for the second quarter of 1995 compared to the second quarter of 1994.
This increase is composed of a $721,000 decrease in the coal and land segment,
a $907,000 decrease in the oil and gas segment, a $3,783,000 increase in the
investment segment and a $264,000 decrease in general corporate expenses and
interest.
Income taxes increased as a result of an increase in income primarily
due to the gain recognized on the sale of securities in the second quarter of
1995.
Coal and Land
Three Months
Ended June 30,
--------------
1995 1994
---- ----
(Thousands of dollars)
Revenues:
Sales $ 152 $ 101
Royalties 2,961 3,848
Other 488 298
------- -------
Total 3,601 4,247
Expenses:
Cost of sales 12 15
Selling, general and administrative 332 285
Exploration and development 44 51
Depreciation, depletion and amortization 43 43
Taxes other than on income 71 33
------- -------
Total 502 427
------- -------
Operating Profit $ 3,099 $ 3,820
======= =======
The decrease in the coal and land segment operating profit of
$721,000, or 19%, is primarily attributable to decreased coal royalties from
the Company's mineral fee properties located in Virginia and West Virginia.
Partially offsetting this decrease in coal royalty income was an increase in
bulk timber sales of $51,000, an increase in interest income on long-term coal
notes of $118,000 and a gain on the sale of land parcels of $63,000.
Selling, general and administrative expense increased by $47,000
primarily due to increased salary and employee benefits expense. The increase
in taxes other than on income of $38,000 was primarily due to property taxes
relating to the West Virginia Hampton lease relinquishment by Westmoreland Coal
Company that occurred in the first quarter of 1995. Penn Virginia Corporation
received royalties from Westmoreland Coal Company totalling $2,203,000 and
$2,941,000 for the three months ending June 30, 1995 and 1994 respectively.
8
Oil and Gas
Three Months
Ended June 30,
--------------
1995 1994
---- ----
(Thousands of dollars)
Revenues:
Sales $ 3,220 $ 3,579
Royalties 341 460
Other 27 30
------- -------
Total 3,588 4,069
Expenses:
Cost of sales 716 787
Selling, general and administrative 800 662
Exploration and development 82 134
Depreciation, depletion and amortization 1,778 1,426
Taxes other than on income 346 287
------- -------
Total 3,722 3,296
------- -------
Operating Profit (Loss) $ (134) $ 773
========= =======
The decrease in operating profit of $907,000, or 117%, is primarily
due to lower natural gas pricing and higher depletion expense in 1995 versus
1994. Natural gas prices have declined approximately 30% thereby reducing
natural gas sales revenues $359,000 or 10%. In addition, oil and gas
royalties have decreased $119,000, or 26%, primarily due to lower natural gas
prices and a decline in royalty natural gas production volume.
Selling, general and administrative expense increased $138,000, or
21%, primarily due to increases in salary, rent and employee benefits expenses.
The increase in taxes other than on income of $59,000, or 21%, is mainly
attributable to higher severance and property taxes associated with oil and gas
reserve acquisitions made in 1994 and the first half of 1995. Depreciation,
depletion and amortization increased $352,000, or 25%, primarily due to the
effect of lower natural gas pricing and higher natural gas production volumes
on the depletion rate calculation for 1995.
Investments
Three Months
Ended June 30,
--------------
1995 1994
---- ----
(Thousands of dollars)
Revenues:
Dividends $ 592 $ 857
Gain on sale of securities 4,106 -
Other 26 99
------ ------
Total 4,724 956
Expenses:
Selling, general and administrative 3 16
Depreciation - 2
------ ------
Total 3 18
------ ------
Operating Profit $4,721 $ 938
====== ======
The increase in the investment segment operating profit of $3,783,000,
or 403%, is mainly attributable to the gain recognized on the sale of 65,000
shares of the Company's investment in Norfolk Southern Corporation common
stock. Partially offsetting this increase is a decrease in dividend income of
$265,000 primarily due to timing and a reduction in interest income earned on
short-term investments of $73,000.
9
Corporate
General corporate expenses decreased primarily due to the reversal of
$225,000 representing the remaining balance of the corporate office relocation
reserve no longer required. The Company relocated its corporate offices in
June 1995 and subleased its former corporate office space. Interest income
increased $216,000 relating to the 1984-86 Internal Revenue Service audit
refund settlement. Interest expense increased by $204,000 due to additional
first quarter of 1995 borrowings associated with the acquisition of the oil and
gas property located in eastern Kentucky.
Results of operations for the six months ended June 30, 1995 as compared to the
six months ended June 30, 1994:
Income from operations before income taxes increased $1,024,000 or
12%. This increase is comprised of a $817,000 decrease in the coal and land
segment, a $2,094,000 decrease in the oil and gas segment, a $3,722,000
increase in the investment segment and a decrease of $213,000 in general
corporate expenses and interest.
Income taxes decreased $450,000 or 20%. The decrease is primarily due
to lower State income tax expense of $270,000 due to a refund relating to 1994
overpayments made and the estimated decrease in the effective Federal tax rate
due to the effect of an increased dividends received deduction, percentage
depletion and shale tax credits relative to lower estimated annualized
operating income.
Coal and Land
Six Months
Ended June 30,
--------------
1995 1994
---- ----
(Thousands of dollars)
Revenues:
Sales $ 372 $ 222
Royalties 6,129 7,376
Other 972 588
------- -------
Total 7,473 8,186
------- -------
Expenses:
Cost of sales 31 41
Selling, general and administrative 651 594
Exploration and development 96 90
Depreciation, depletion and amortization 65 86
Taxes other than on income 146 74
-------- -------
Total 989 885
------- -------
Operating Profit $ 6,484 $ 7,301
======= =======
The decrease in the coal and land segment operating profit of
$817,000, or 11%, is mainly attributable to decreased coal royalties from the
Company's mineral fee properties located in Virginia and West Virginia.
Partially offsetting this decrease in coal royalty income is an increase in
bulk timber sales of $150,000, an increase in interest income on long-term coal
notes of $236,000 and a gain recognized on the sale of land parcels of
$116,000.
The decrease in depreciation, depletion and amortization of $21,000,
or 24%, is primarily due to the reduction in total coal royalty production
tonnage of 845,000 tons in 1995 versus 1994. Taxes other than on income
increased by $72,000 or 97% due to increased property taxes relating to the
relinquishment of the West Virginia Hampton lease by Westmoreland Coal Company
in the first quarter of 1995.
Penn Virginia Corporation received royalties from Westmoreland Coal
Company totalling $4,481,000 and $5,543,000 for the six months ending June 30,
1995 and 1994 respectively.
10
Oil and Gas
Six Months
Ended June 30,
--------------
1995 1994
---- ----
(Thousands of dollars)
Revenues:
Sales $ 6,663 $ 7,299
Royalties 689 1,081
Other 37 136
------ --------
Total 7,389 8,516
Expenses:
Cost of sales 1,421 1,400
Selling, general and administrative 1,534 1,327
Exploration and development 146 164
Depreciation, depletion and amortization 3,634 2,923
Taxes other than on income 659 613
------- -------
Total 7,394 6,427
------- -------
Operating Profit (Loss) $ (5) $ 2,089
======== =======
The decrease in operating profit of $2,094,000, or 100%, is primarily due
to lower natural gas pricing and higher depletion expense in 1995 versus 1994.
Natural gas prices have declined by approximately 30% thereby reducing natural
gas sales revenues $636,000 or 9%. In addition, oil and gas royalties have
decreased $392,000, or 36%, primarily due to lower natural gas prices and a
decline in royalty natural gas production volumes.
Selling, general and administrative expense increased by $207,000, or 16%,
primarily due to increases in salary, rent and employee-benefits expenses.
Investments
Six Months
Ended June 30,
--------------
1995 1994
---- ----
(Thousands of dollars)
Revenues:
Dividends $ 1,217 $ 1,434
Gain on sale of securities 4,106 -
Other 29 224
------- -------
Total 5,352 1,658
Expenses:
Selling, general and administrative 9 32
Depreciation - 4
Taxes other than on income - 1
------- -------
Total 9 37
------- -------
Operating Profit $ 5,343 $ 1,621
======= =======
The increase in the investment segment operating profit of $3,722,000, or
230%, is mainly attributable to the gain recognized on the sale of 65,000
shares of the Company's investment in Norfolk Southern Corporation common
stock. Partially offsetting this increase is a decrease in dividend income of
$217,000 and a reduction in interest income earned on short-term investments of
$195,000. Selling, general and administrative expense decreased by $23,000 due
to a reduction in salary expense.
Corporate
General corporate expenses decreased primarily due to the reversal of
$225,000 representing the remaining balance of the corporate office relocation
reserve no longer required. The Company relocated its corporate offices in
June 1995 and subleased its former corporate office space. Interest income
increased $216,000 relating to the 1984-86 Internal Revenue Service audit
refund settlement. Interest
11
expense increased by $136,000 due to additional first quarter of 1995
borrowings associated with the acquisition of the oil and gas property located
in West Virginia. In addition, general and administrative expenses increased
$111,000 primarily due to higher legal, salary and consulting expenses.
Financial Condition, Liquidity, Capital Resources and Other Financial Data at
June 30, 1995:
Working capital at June 30, 1995 was $1.4 million compared to $2
million at December 31, 1994. See the Condensed Consolidated Statement of Cash
Flows for details regarding the change. On July 7, 1995 the Company sold an
additional 35,000 shares of Norfolk Southern Corporation common stock for
approximately $2.4 million. The proceeds from this sale were used for general
corporate purposes as well as for working capital and debt service
requirements.
Presently, the Company has $3 million of available debt capacity.
Three factors that could influence future earnings and cash flow of
the Company are coal tonnages mined, natural gas prices and natural gas
shut-ins. The first factor is the number of tons of coal mined from the
Company's mineral fee properties. Westmoreland Coal Company (WCX), our largest
lessee, announced July 31, 1995 that it had reached an agreement with Duke
Power Company whereby Duke would buy out the remaining term of a WCX coal
supply agreement originally entered into on January 1, 1986. The coal shipped
to Duke under this agreement was being mined from the Company's Virginia
mineral fee properties. WCX also disclosed it is negotiating the sale of the
remaining assets of its Virginia operations with A. T. Massey Coal Company,
Inc.
This announced shutdown of WCX's Virginia operations will have a
significant financial impact on Penn Virginia Corporation's 1995 and 1996
earnings and cash flows. The Company estimates a potential decrease in its
1995 coal royalties of $3.1 million if the Virginia coal properties were to
remain idle for the remainder of 1995.
In an effort to diversify the risks associated with having one
principal lessee on the Company's West Virginia coal properties and more fully
exploit the mineable coal reserves the Company obtained the relinquishment of
the WCX Hampton lease in February, 1995. It is the Company's intent to have
several lessees mining coal on this property. Management is currently
evaluating several options from potential coal lessees that could have a
positive impact on coal royalty income in the future.
The second factor is natural gas prices. Since the majority of the
Company's natural gas is sold in the spot market or under contracts less than
one year in duration, future earnings will be directly related to the
fluctuation of those prices. Any sustained decline in these prices could
result in some impairment of oil and gas assets.
As previously disclosed, lower natural gas prices continue to have a
negative impact on revenues, which are down 12% in spite of a 30% increase in
gas volumes produced to date in 1995. In addition, the Company has been
notified by Columbia Gas Transmission Company, which transports the
preponderance of the Company's natural gas, of shut-ins of various parts of its
pipeline transportation system to complete repairs. The Company anticipates
the duration of these shut-ins will be approximately three and one-half months
commencing August 1, 1995. The anticipated economic impact of these shut-ins
is estimated to be a decrease in 1995 natural gas volumes sold of 1.2 billion
cubic feet. Based on current pricing gas revenues are expected to decrease by
approximately $2 million.
In a continuing effort to mitigate the recent decline in natural gas
prices and the scheduled shut-ins by Columbia Gas, the Company has undertaken
several steps. The current year's remaining drilling program has been reduced
and management continues to evaluate ways to further reduce expenses. The
Company
12
anticipates a late 1995 or early 1996 settlement of its claim against Columbia
Gas Transmission Company for approximately $8 million.
The Company continues to evaluate its investment in WCX and any
deterioration in WCX's financial condition that results in the carrying value
for that investment being in excess of fair value could result in additional
losses.
Except for matters discussed above, management is not presently aware
of any trends or demands which exist or uncertainties which are reasonably
likely to result in the Company's liquidity increasing or decreasing in any
material way.
13
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Annual Meeting of the Shareholders of Penn Virginia Corporation
was held May 2, 1995, for the purpose of electing a board of directors for the
ensuing year, the adoption of the 1994 Stock Option Plan, adoption of the 1995
Directors' Stock Option Plan, Amendment to the Articles of Incorporation and to
transact such other business as may properly come before the meeting. Proxies
for the meeting were solicited pursuant to Section 14(a) of the Securities
Exchange Act of 1934 and the results of the election of the board of directors
are as follows:
FOR AGAINST ABSTAINING
---- ------- ----------
Eckhard Albrecht 87.2% 4.7% 8.1%
Lennox K. Black 87.2% 0% 12.8%
John D. Cadigan 87.2% 0% 12.8%
Hans Michael Gaul 87.3% 0% 12.7%
John A. H. Shober 87.1% 0% 12.9%
Frederick C. Witsell, Jr. 87.2% 0% 12.8%
Minturn T. Wright, III 87.2% 0% 12.8%
Additional business transacted at this meeting involved shareholder voting on
the 1994 Stock Option Plan, the 1995 Directors' Stock Option Plan and the
Proposed Amendment to the Articles of Incorporation increasing the outstanding
common shares from 8 to 20 million. The results of the voting are as follows:
FOR AGAINST ABSTAINING
--- ------- ----------
1994 Stock Option Plan 82.2% 16.9% .9%
1995 Directors' Stock Option Plan 82.2% 16.9% .9%
Amendment to the Articles of
Incorporation 60.1% 39.6% .3%
Both the 1994 Stock Option Plan and the 1995 Directors' Option Plan were
approved by the shareholders. The Amendment to the Articles of Incorporation
required two-thirds shareholder approval and therefore was not approved.
No other business at the meeting required a shareholder vote.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
Exhibit 15: Letter Re: Unaudited interim financial
information.
Exhibit 27: Financial data schedule
(b) Reports on Form 8-K:
No reports on Form 8-K were filed for the quarter ended June
30, 1995.
14
REVIEW BY INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT
The accompanying condensed consolidated financial statements have been
reviewed by the Company's independent certified public accountants, KPMG Peat
Marwick LLP in accordance with the established professional standards and
procedures for such a limited review.
15
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.
PENN VIRGINIA CORPORATION
-------------------------
(Registrant)
-----------
Date: August 14, 1995 STEVEN W. THOLEN
--------------- --------------------------------------------
(Steven W. Tholen, Vice President,
Chief Financial Officer
(Principal Financial Officer)
Date: August 14, 1995 WILLIAM M. SWENSON
--------------- ---------------------------------------------
(William M. Swenson, Asst. Controller)
(Principal Accounting Officer)
16
KPMG Peat Marwick LLP
Certified Public Accountants
1600 Market Street
Philadelphia, PA 19103
INDEPENDENT ACCOUNTANTS' REPORT
The Board of Directors
Penn Virginia Corporation
We have reviewed the accompanying condensed consolidated balance sheet of Penn
Virginia Corporation and subsidiaries as of June 30, 1995 and the related
condensed consolidated statements of income for the three and six month periods
ended June 30, 1995 and 1994, and condensed consolidated statement of cash
flows for the six month periods ended June 30, 1995 and 1994. These financial
statements are the responsibility of the Company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical review
procedures to financial data and making inquiries of persons responsible for
financial and accounting matters. It is substantially less in scope than an
audit conducted in accordance with generally accepted auditing standards, the
objective of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the accompanying condensed consolidated financial statements for
them to be in conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of Penn Virginia Corporation and
subsidiaries as of December 31, 1994, and the related consolidated statements
of income, shareholders' equity and cash flows for the year then ended (not
presented herein); and in our report dated March 1, 1995, we expressed an
unqualified opinion on those consolidated financial statements. In our
opinion, the information set forth in the accompanying condensed consolidated
balance sheet as of December 31, 1994, is fairly presented, in all material
respects in relation to the consolidated balance sheet from which it has been
derived.
KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Philadelphia, PA
August 11, 1995
17
EXHIBIT INDEX
Exhibit No. Description
15 Letter re unaudited interim financial information
27 Financial data schedule