1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2001
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM _______ TO _______
COMMISSION FILE NUMBER 1-3551
EQUITABLE RESOURCES, INC.
(Exact name of registrant as specified in its charter)
PENNSYLVANIA 25-0464690
(State of incorporation or organization) (IRS Employer Identification No.)
ONE OXFORD CENTRE, SUITE 3300, 301 GRANT STREET, PITTSBURGH, PENNSYLVANIA 15219
(Address of principal executive offices, including zip code)
Registrant's telephone number, including area code: (412) 553-5700
------------
NONE
(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_____
Indicate the number of shares outstanding of each of issuer's classes of common
stock, as of the latest practicable date.
Outstanding at
Class April 30, 2001
----- --------------
Common stock, no par value 32,635,510 shares
2
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
INDEX
Page No.
--------
PART I. FINANCIAL INFORMATION:
Item 1. Financial Statements (Unaudited):
Statements of Consolidated Income for the Three
Months Ended March 31, 2001 and 2000 1
Condensed Consolidated Statements of Cash Flows
for the Three Months Ended March 31, 2001 and 2000 2
Condensed Consolidated Balance Sheets, March 31, 2001,
and December 31, 2000 3 - 4
Notes to Condensed Consolidated Financial Statements 5 - 8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 9 - 22
Item 3. Quantitative and Qualitative Disclosures About Market Risk 22
PART II. OTHER INFORMATION:
Item 6. Exhibits and Reports on Form 8-K 23
SIGNATURE 24
INDEX TO EXHIBITS 25
3
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED INCOME (UNAUDITED)
Three Months Ended
March 31,
2001 2000
------------------------------------
(Thousands except per share amounts)
Operating revenues $851,157 $374,877
Cost of sales 665,566 208,939
-------- --------
Net operating revenues 185,591 165,938
-------- --------
OPERATING EXPENSES:
Operation and maintenance 20,647 19,835
Exploration and production 9,680 10,258
Selling, general and administrative 29,858 30,313
Depreciation, depletion and amortization 17,133 29,784
-------- --------
Total operating expenses 77,318 90,190
-------- --------
Operating income 108,273 75,748
Equity in nonconsolidated subsidiaries:
Westport 10,990 --
Other 1,941 1,434
-------- --------
12,931 1,434
EARNINGS BEFORE INTEREST AND TAXES (EBIT) 121,204 77,182
Interest charges 11,467 15,795
-------- --------
Income before income taxes 109,737 61,387
Income taxes 38,471 22,284
-------- --------
NET INCOME $ 71,266 $ 39,103
======== ========
EARNINGS PER SHARE OF COMMON STOCK:
Basic:
Weighted average common shares outstanding 32,415 32,660
======== ========
Net income $ 2.20 $ 1.20
======== ========
Diluted:
Weighted average common shares outstanding 33,219 33,110
======== ========
Net income $ 2.15 $ 1.18
======== ========
The accompanying notes are an integral part of these
condensed consolidated financial statements
1
4
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Three Months Ended
March 31,
-----------------------------
2001 2000
-----------------------------
(Thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income from continuing operations $ 71,266 $ 39,103
Adjustments to reconcile net income to net cash
provided by operating activities:
Provision for losses on accounts receivable 7,247 3,384
Depreciation, depletion, and amortization 17,133 29,784
Recognition of deferred revenue (19,850) (3,630)
Deferred income taxes (benefits) 787 (1,097)
Increase in undistributed earnings from nonconsolidated investments
(10,335) (957)
Changes in other assets and liabilities 24,648 (14,215)
-------- ---------
Total adjustments 19,630 13,269
Net cash provided by operating activities 90,896 52,372
-------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (14,225) (24,195)
Acquisition of Statoil production assets -- (672,022)
Increase in equity in nonconsolidated investments (711) (2,428)
Proceeds from sale of receivables 29,964 --
Proceeds from sale of property 2,905 498
-------- ---------
Net cash provided by (used in) investing activities 17,933 (698,147)
-------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Dividends paid (9,567) (9,673)
Proceeds from exercises under employee compensation plans 1,574 3,960
(Decrease) increase in short-term loans (66,005) 636,160
-------- ---------
Net cash (used in) provided by financing activities (73,998) 630,447
-------- ---------
Net increase (decrease) in cash and cash equivalents 34,831 (15,328)
Cash and cash equivalents at beginning of period 52,023 18,031
-------- ---------
Cash and cash equivalents at end of period $ 86,854 $ 2,703
======== =========
CASH PAID DURING THE PERIOD FOR:
Interest (net of amount capitalized) $ 13,611 $ 20,855
======== =========
Income taxes (refunded) paid $(12,918) $ 4,304
======== =========
The accompanying notes are an integral part of these
condensed consolidated financial statements
2
5
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
ASSETS March 31, 2001 December 31, 2000
--------------------------------------
(Thousands)
CURRENT ASSETS:
Cash and cash equivalents $ 86,854 $ 52,023
Accounts receivable (less accumulated provision for doubtful
accounts: 2001, $21,893, 2000, $15,413) 329,388 300,399
Unbilled revenues 62,137 80,157
Inventory 29,491 85,246
Deferred purchased gas cost 5,310 13,568
Derivative commodity instruments, at fair value 19,312 31,220
Prepaid expenses and other 19,140 21,123
---------- ----------
Total current assets 551,632 583,736
---------- ----------
INVESTMENT IN NONCONSOLIDATED SUBSIDIARIES 241,697 230,651
---------- ----------
PROPERTY, PLANT AND EQUIPMENT 2,237,030 2,226,421
Less accumulated depreciation and depletion 822,504 806,992
---------- ----------
Net property, plant and equipment 1,414,526 1,419,429
---------- ----------
OTHER ASSETS 175,192 191,098
---------- ----------
Total $2,383,047 $2,424,914
========== ==========
The accompanying notes are an integral part of these
condensed consolidated financial statements
3
6
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
LIABILITIES AND STOCKHOLDERS' EQUITY March 31, 2001 December 31, 2000
---------------------------------------
(Thousands)
CURRENT LIABILITIES:
Current portion of long-term debt $ 10,100 $ 10,100
Current portion of nonrecourse project financing 17,000 461
Short-term loans 236,262 302,267
Accounts payable 239,033 285,723
Prepaid gas forward sale 55,705 55,705
Derivative commodity instrument, at fair value 35,844 30,243
Other current liabilities 181,615 161,082
----------- -----------
Total current liabilities 775,559 845,581
----------- -----------
LONG-TERM DEBT:
Debentures and medium-term notes 271,250 271,250
Nonrecourse project financing -- 16,539
----------- -----------
Total long-term debt 271,250 287,789
DEFERRED AND OTHER CREDITS
Deferred income taxes 258,607 247,833
Deferred investment tax credits 15,147 15,411
Prepaid gas forward sale 139,283 153,589
Deferred revenue 22,886 30,232
Other 26,697 25,784
----------- -----------
Total deferred and other credits 462,620 472,849
----------- -----------
Preferred trust securities 125,000 125,000
CAPITALIZATION:
Common stockholders' equity
Common stock, no par value, authorized 80,000 shares; shares issued March
31, 2001 and December 31, 2000, 37,252
281,183 281,000
Treasury stock, shares at cost March 31, 2001, 4,681; December 31,
2000, 4,713 (150,430) (151,167)
Retained earnings 628,111 563,755
Accumulated other comprehensive (loss) income (10,246) 7
----------- -----------
Total common stockholders' equity 748,618 693,695
----------- -----------
Total $ 2,383,047 $ 2,424,914
=========== ===========
The accompanying notes are an integral part of these
condensed consolidated financial statements
4
7
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
A. The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with generally accepted accounting
principles for interim financial information and with the instructions to
Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not
include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. In the
opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been
included. Operating results for the three- month period ended March 31,
2001 are not necessarily indicative of the results that may be expected
for the year ended December 31, 2001.
The balance sheet at December 31, 2000 has been derived from the audited
financial statements at that date but does not include all of the
information and footnotes required by generally accepted accounting
principles for complete financial statements.
For further information, refer to the consolidated financial statements
and footnotes thereto included in the Equitable Resources' Annual Report
on Form 10-K for the year ended December 31, 2000.
B. Business Combinations - On February 15, 2000, Equitable Resources, Inc.
(Equitable or the Company), through its subsidiary, ERI Investments,
Inc., acquired the Appalachian oil and gas properties of Statoil Energy,
Inc. for $630 million plus working capital adjustments for a total of
$677 million. The Company acquired all of the issued and outstanding
shares and interests of Eastern States Oil & Gas, Inc. and Eastern States
Exploration Co. (collectively "Statoil"), subsidiaries of Statoil Energy,
Inc. The acquisition was initially funded through commercial paper and
was replaced with transactions designed to monetize the oil and gas
properties. This acquisition was accounted for under the purchase method
of accounting. Accordingly, the allocation of the cost of the acquired
assets and liabilities assumed was made on the basis of the estimated
fair value. The consolidated financial statements include the operating
results of these properties from the date of acquisition.
The following summarized unaudited pro forma financial information
assumes that the Statoil acquisition occurred on January 1, 2000.
Adjustments have been made for DD&A and certain other adjustments
together with related income tax effects.
Three Months Ended
March 31,
------------------------
2000
------------------------
(Thousands, except per
share amounts)
Revenue $396,371
=======================
Net income $ 40,126
=======================
Earnings per share:
Basic $ 1.23
=======================
Diluted $ 1.21
=======================
This information is not necessarily indicative of the results the Company
would have obtained had these events actually occurred on January 1,
2000, or of the Company's actual or future results of operations of the
combined companies.
5
8
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
C. Segment Disclosure - The Company reports operations in three segments
which reflect its lines of business. The Equitable Utilities segment's
activities are comprised of the operations of the Company's
state-regulated local distribution company, natural gas transportation,
storage and marketing activities involving the Company's interstate
natural gas pipelines, and supply and transportation services for the
natural gas and electricity markets. The Equitable Production segment's
activities are comprised of the development, production, gathering and
sale of natural gas and oil, and the extraction and sale of natural gas
liquids. The NORESCO segment's activities are comprised of cogeneration
and power plant development, performance contracting, central facility
plant operations, and the development and implementation of energy and
water efficiency programs.
Operating segments are evaluated on their contribution to the Company's
consolidated results, based on earnings before interest and taxes.
Interest charges and income taxes are managed on a consolidated basis and
allocated pro forma to operating segments. Headquarters costs are billed
to operating segments based on a fixed allocation of the annual
headquarters' operating budget. Differences between budget and actual
headquarters expenses are not allocated to operating segments, but
included as a reconciling item to consolidated earnings from continuing
operations.
Three Months Ended
March 31,
-----------------------------
2001 2000
-----------------------------
(Thousands)
REVENUES FROM EXTERNAL CUSTOMERS:
Equitable Utilities $ 731,557 $ 277,711
Equitable Production 85,136 66,566
NORESCO 34,464 30,600
--------- ---------
Total $ 851,157 $ 374,877
========= =========
INTERSEGMENT REVENUES:
Equitable Utilities $ 53,673 $ 30,671
Equitable Production 5,351 7,374
--------- ---------
Total $ 59,024 $ 38,045
========= =========
SEGMENT EARNINGS BEFORE INTEREST AND TAXES:
Equitable Utilities $ 49,230 $ 47,160
Equitable Production 59,546 31,461
NORESCO 2,811 296
--------- ---------
Total operating segments $ 111,587 $ 78,917
========= =========
LESS: RECONCILING ITEMS
Equity earnings in Westport $ 10,990 $ --
Headquarters operating expenses (1,373) (1,735)
Interest expense (11,467) (15,795)
Income tax expenses (38,471) (22,284)
--------- ---------
Net income $ 71,266 $ 39,103
========= =========
6
9
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
C. Segment Disclosure (Continued)
March 31, December 31,
2001 2000
------------------------------
(Thousands)
SEGMENT ASSETS:
Equitable Utilities $1,040,076 $1,115,960
Equitable Production 1,085,619 975,523
NORESCO 151,355 143,030
---------- ----------
Total operating segments 2,277,050 2,234,513
Headquarters assets, including cash and short-term
investments and net intercompany accounts receivable 105,997 190,401
---------- ----------
Total $2,383,047 $2,424,914
========== ==========
D. Cumulative Effect of Change in Accounting.
Accounting Policy for Derivative Instruments - Effective January 1, 2001,
the Company adopted the Financial Accounting Standards Board's (FASB)
Statement of Financial Accounting Standards No. 133, "Accounting for
Derivative Instruments and Hedging Activities" (SFAS 133) as amended by
SFAS 137, "Accounting for Derivative Instruments and Hedging Activities -
Deferral of the Effective Date of FASB Statement No. 133" and by SFAS
138, "Accounting for Certain Derivative Instruments and Certain Hedging
Activities, an amendment of Statement 133." SFAS 133, as amended,
establishes accounting and reporting standards for derivative instruments
and for hedging activities. This statement requires the Company to
recognize all derivatives as either assets or liabilities in the balance
sheet and measure the effectiveness of the hedges, or the degree that the
gain/(loss) for the hedging instrument offsets the loss/(gain) on the
hedged item, at fair value each reporting period. The intended use of the
derivatives and their designation as either a fair value hedge or a cash
flow hedge will determine when the gains or losses on the derivatives are
to be reported in earnings and when they are to be reported as a
component of other comprehensive income, until the hedged item is
recognized in earnings. The ineffective portion of the derivative's
change in fair value is required to be recognized in earnings
immediately. The time value of options, which is excluded from the
assessment of hedge effectiveness, and the amount of the hedge's
ineffectiveness, decreased earnings by $0.8 million and is included in
Operating Revenue in the Statement of Consolidated Income.
Cash Flow Hedges - The derivative financial instruments that comprise the
cumulative effect recorded in other comprehensive income have been
designated and qualify as cash flow hedges. These instruments hedge the
Company's exposure to variability in expected future cash flows and
relate primarily to the Company's use of derivative financial instruments
to manage a portion of the market risk associated with the fluctuations
in the price of natural gas, oil and propane. The asset and liability for
all of the Company's derivative financial instruments was $4.6 million
and $21.8 million, respectively at March 31, 2001, and is reflected on
the Consolidated Balance Sheet as Derivative Commodity Instruments at
fair value.
7
10
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
D. Cumulative Effect of Change in Accounting (Continued)
At March 31, 2001, the Company expects to recognize $26.5 million of net
losses on derivative instruments from accumulated other comprehensive
income to earnings during the next twelve months due to physical
settlements.
The Company has derivatives with maturities that extend through December
2005.
E. Accumulated Other Comprehensive Income (Loss) - The components of
Accumulated Other Comprehensive Income (Loss) are as follows shown net of
tax (in thousands):
Accumulated other comprehensive income, January 1, 2001 $ 7
Cumulative effect of FAS 133 adoption (37,023)
Net change of current period hedging transactions 26,770
--------------
Accumulated other comprehensive loss, March 31, 2001 $ (10,246)
==============
F. In September 2000, the Financial Accounting Standards Board issued
Statement No. 140, "Accounting for Transfers and Servicing of Financial
Assets and Extinguishments of Liabilities," that replaces in its
entirety, FASB Statement No. 125. Although Statement 140 has changed many
of the rules regarding securitizations, it continues to require an entity
to recognize the financial and servicing assets it controls and the
liabilities it has incurred and to derecognize financial assets when
control has been surrendered in accordance with the criteria provided in
the Statement. As required, the Company will apply the new rules
prospectively to transactions beginning in the second quarter 2001. Based
on current circumstances, the Company believes the application of the new
rules will not have a material impact on its financial statements and
footnote disclosures.
G. Reclassification - Certain previously reported amounts have been
reclassified to conform with the 2001 presentation.
H. Stock Split - On April 19, 2001, the Board of Directors of Equitable
Resources declared a two for one stock split subject to regulatory
approval, payable June 11, 2001 to shareholders of record on May 11,
2001. Earnings per share of common stock and weighed average common
shares outstanding have not been adjusted for the two for one stock split
as a result of the pending regulatory approval.
8
11
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
OVERVIEW
Equitable's consolidated net income for the quarter ended March 31, 2001
was $71.3 million, or $2.15 per diluted share, which included $7.1 million, or
$0.22 per diluted share, related to earnings from Westport Resources Corporation
(Westport), compared with net income of $39.1 million, or $1.18 per share, for
the quarter ended March 31, 2000.
The improvement in earnings is mainly attributable to higher commodity
prices, increased throughput at the utility segment, lower depletion expense
primarily due to the June and December 2000 sale of reserves, lower interest
expense primarily due to the pay down of debt with proceeds from the sale of
reserves and the reserve monetizations, and higher margins in the NORESCO
segment. The increase was partially offset by an increased provision for
credit-related reserves in the production and utility segments due to higher
prices.
9
12
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (CONTINUED)
RESULTS OF OPERATIONS
EQUITABLE UTILITIES
Equitable Utilities' operations are comprised of the sale and
transportation of natural gas to retail customers at state-regulated rates,
interstate transportation and storage of natural gas subject to federal
regulation, and the unregulated marketing of natural gas.
THREE MONTHS ENDED
MARCH 31,
-----------------------------
2001 2000
-----------------------------
OPERATIONAL DATA
Capital expenditures $ 7,563 $ 5,390
Operating expenses/net revenues (%) 43.35% 44.65%
FINANCIAL RESULTS (THOUSANDS)
Utility revenues $213,643 $135,366
Marketing revenues 571,587 173,016
-------- --------
Total operating revenues 785,230 308,382
Purchased natural gas costs 698,333 223,180
-------- --------
Net operating revenues 86,897 85,202
Operating and maintenance expense 14,883 14,861
Selling, general and administrative expense 16,499 15,505
Depreciation, depletion and amortization 6,285 7,676
-------- --------
Total expenses 37,667 38,042
-------- --------
EBIT $ 49,230 $ 47,160
======== ========
10
13
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (CONTINUED)
EQUITABLE UTILITIES (CONTINUED)
THREE MONTHS ENDED MARCH 31, 2001
VS. THREE MONTHS ENDED MARCH 31, 2000
Total operating revenues increased $476.8 million, or 154.6%, to $785.2
million for the three months ended March 31, 2001. This increase was primarily
due to higher marketing volumes as a result of the Statoil acquisition and
higher commodity prices. Due to the small margins on these transactions, this
increase had an insignificant impact on EBIT. EBIT increased 4.4% to $49.2
million for the current period compared to $47.2 million for the same period in
2000. The improved results for 2001 are primarily attributable to higher
distribution net revenues, due mainly to colder weather, and lower operating
costs due to 2000 process improvement initiatives. These improvements were
partially offset by increased provisions for doubtful accounts.
In April 2001, a labor settlement involving the Equitrans unit of
Equitable Utilities and members of the local PACE labor union was reached. The
agreement between the Company and the Union resulted in the right to reduce the
current workforce. This reduction will result in a charge that will impact the
second quarter of 2001.
DISTRIBUTION OPERATIONS
THREE MONTHS ENDED
MARCH 31,
2001 2000
-------------------------
OPERATIONAL DATA
Degree days (normal = 3,016) 2,818 2,572
O & M per customer $ 78.78 $ 74.65
Volumes (MMcf)
Residential 13,116 11,733
Commercial and Industrial 10,367 11,541
------- -------
Total gas sales and transportation 23,483 23,274
======= =======
FINANCIAL RESULTS (THOUSANDS)
Net operating revenues $66,502 $60,403
Operating costs 22,443 21,544
Depreciation and amortization 4,274 4,426
------- -------
EBIT $39,785 $34,433
======= =======
THREE MONTHS ENDED MARCH 31, 2001
VS. THREE MONTHS ENDED MARCH 31, 2000
Weather in the distribution service territory during the current period
was 6.6% warmer than normal but 9.6% colder than last year. Total system
throughput increased 0.2 Bcf, versus the same period last year, primarily as a
result of the colder weather. Residential volumes increased by 11.8%, with the
increase being weather related. However, Commercial and Industrial volumes
declined by 10.2% essentially offsetting the residential increases. The decrease
in Commercial and Industrial throughput was due to a reduction in large
industrial customer volumes. The margin from this large industrial business is
low, and it caused a reduction in first quarter gross margin of $0.2 million.
11
14
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (CONTINUED)
EQUITABLE UTILITIES (CONTINUED)
Net operating revenues increased $6.1 million from the same period last
year. This increase is primarily due to the 9.6% colder weather year over year,
and increased natural gas delivery margins.
Total operating expenses for the current period increased $0.7 million
from the same period in 2000. The increase is due principally to a $1.6 million
increase in provisions for doubtful accounts attributable to higher natural gas
prices. These increases were partially offset by the benefit of continued
Utility process improvement initiatives.
PIPELINE OPERATIONS
THREE MONTHS ENDED
MARCH 31,
2001 2000
------------------------
OPERATIONAL DATA
Transportation throughput (MMbtu) 18,486 23,233
FINANCIAL RESULTS (THOUSANDS)
Net operating revenues $18,203 $19,274
Operating costs 6,958 7,053
Depreciation and amortization 1,956 3,204
------- -------
EBIT $ 9,289 $ 9,017
======= =======
THREE MONTHS ENDED MARCH 31, 2001
VS. THREE MONTHS ENDED MARCH 31, 2000
Net operating revenues decreased $1.1 million, or 5.6%, over the 2000
quarter. Pipeline revenues for 2000 include $1.6 million related to the recovery
of stranded costs in rates. Excluding the impact of the rate settlement, net
revenues of $18.2 million for 2001 increased $0.5 million, or 2.8%, over the
$17.7 million for 2000.
Total operating expenses were $8.9 million for the 2001 quarter compared
with operating expenses of $10.3 million for the 2000 quarter. Operating
expenses for 2000 include $1.3 million of amortization expense related to the
recovery of stranded costs in rates. After adjusting for the amortization of
stranded cost recovery, operating expenses at the Pipeline decreased $0.1
million.
Excluding the impact of the rate settlement and amortization expense on
the recovery of stranded costs in rates, EBIT increased $0.6 million, or 6.9%.
This increase was due primarily to a one-time gain recorded on the sale of
extraction facilities.
12
15
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (CONTINUED)
EQUITABLE UTILITIES (CONTINUED)
ENERGY MARKETING
THREE MONTHS ENDED
MARCH 31,
2001 2000
-------------------------
OPERATIONAL DATA
Marketed gas sales (MMBtu) 85,749 60,469
Net operating revenues/MMBtu $0.0256 $0.0914
FINANCIAL RESULTS (THOUSANDS)
Net operating revenues $ 2,192 $ 5,525
Operating costs 1,981 1,769
Depreciation and amortization 55 46
------- -------
EBIT $ 156 $ 3,710
======= =======
THREE MONTHS ENDED MARCH 31, 2001
VS. THREE MONTHS ENDED MARCH 31, 2000
Net operating revenues decreased $3.3 million over the 2000 quarter. The
decrease was primarily due to a loss of $2.6 million on transactions marked to
market that were previously treated as hedges, along with a decrease in unit
margins associated with asset management activity.
Total operating expenses for the first quarter of 2001 increased $0.2
million over the first quarter of 2000. This increase is due principally to an
increase in provisions for doubtful accounts due primarily to higher natural gas
prices.
13
16
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (CONTINUED)
EQUITABLE PRODUCTION
Production operations comprise the production, gathering, transportation
and sale of natural gas. In April 2000, the company merged its Equitable
Production - Gulf business with Westport Oil and Gas Company to form Westport
Resources Corporation (Westport). The operations of Equitable Production - Gulf
through the date of the merger are presented separately from the operations of
Equitable Production (Appalachian).
EQUITABLE PRODUCTION (APPALACHIAN)
In February 2000, Equitable Production acquired the Appalachian
Production assets of Statoil for $630 million plus working capital adjustments
for a total of $677 million. Statoil's operations consisted of approximately 1.2
trillion cubic feet of proved natural gas reserves and 6,500 natural gas wells
in West Virginia, Kentucky, Virginia, Pennsylvania and Ohio.
In the second quarter 2000, Equitable sold 66 Bcfe of reserves to a
partnership for $122.2 million and an interest in the partnership. This volume
represents seven years' production from wells acquired from Statoil that contain
approximately 200 Bcfe of proved reserves. The proceeds from this sale were used
to pay down acquisition-related short-term debt. Equitable estimates that it
will receive $6.0 million in fees for operating the wells and gathering and
marketing the gas on behalf of the purchaser in 2001 based on expected
production volumes.
In December 2000, Equitable sold 133.3 Bcfe of reserves acquired from
Statoil to a trust for proceeds of $255.8 million and a minority interest in the
trust. The proceeds received were used to pay down short-term debt associated
with the Statoil acquisition. Equitable estimates that it will receive $12.0
million in fees for operating the wells and gathering and marketing the gas on
behalf of the purchaser in 2001 based on expected production volumes.
In 2000, the Company entered into two natural gas advance sale contracts
for 48.7 MMcf of reserves. The Company is required to sell and deliver certain
quantities of natural gas during the term of the contracts. The first contract
is for five years with net proceeds of $104.0 million. The second contract is
for three years with net proceeds of $104.8 million. As such, these contracts
are being recognized in income as deliveries occur. The proceeds received were
used to pay down short-term debt associated with the Statoil acquisition.
The net result of the acquisition and subsequent monetizations on first
quarter production and service volumes are as follows: net equity sales of
natural gas and equivalents decreased 5.6 Bcfe, due to the above mentioned
reserve sales that occurred subsequent to the first quarter of 2000; monetized
sales increased 2.8 Bcfe, due to current year sales under the two natural gas
advance sales contracts completed in 2000; and operated and gathered volumes
increased 3.7 Bcfe and 6.0 Bcfe, respectively, as the Statoil properties were
operated for 90 days in 2001 compared to 45 days in 2000.
14
17
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (CONTINUED)
EQUITABLE PRODUCTION (CONTINUED)
THREE MONTHS ENDED
MARCH 31,
2001 2000
------- -------
OPERATIONAL DATA
PRODUCTION:
Net equity sales, natural gas and equivalents (MMcfe) 8,961 14,539
Average (well-head) sales price ($/Mcfe) $ 5.10 $ 2.57
Monetized sales (MMcfe) 5,681 2,854
Average (well-head) sales price ($/Mcfe) $ 4.33 $ 1.78
Company usage (MMcfe) 1,198 1,420
Lease operating expense excluding severance tax ($/Mcfe) $ 0.35 $ 0.31
Severance tax ($/Mcfe) $ 0.23 $ 0.10
Depletion ($/Mcfe) $ 0.39 $ 0.48
PRODUCTIONS SERVICES:
Gathered volumes (MMcfe) 24,755 18,793
Average gathering fee ($/Mcfe) $ 0.65 $ 0.64
Gathering and compression expense ($/Mcfe) $ 0.23 $ 0.26
Gathering and compression depreciation ($/Mcfe) $ 0.11 $ 0.12
Total operated volumes (MMcfe) 22,526 18,812
Volumes handled (MMcfe) 27,857 21,317
Selling, general, and administrative ($/Mcfe handled) $ 0.23 $ 0.23
Capital expenditures (excluding Statoil acquisition) (000's) $ 6,468 $ 9,294
FINANCIAL DATA (THOUSANDS)
Revenue from Production $70,347 $42,472
Services:
Revenue from Gathering Fees 16,502 11,974
Other Revenues 3,638 2,539
------- -------
Total revenues 90,487 56,985
Operating expenses:
Gathering and compression expenses 5,765 4,957
Lease operating expense 5,539 5,895
Severance tax 3,661 1,898
Depreciation, depletion and amortization 9,349 13,868
Selling, general and administrative 6,496 4,846
Exploration including dry hole expense 480 486
------- -------
Total operating expenses 31,290 31,950
Equity from non-consolidated investments 349 --
------- -------
EBIT from operations $59,546 $25,035
======= =======
15
18
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (CONTINUED)
EQUITABLE PRODUCTION (CONTINUED)
THREE MONTHS ENDED MARCH 31, 2001
VS. THREE MONTHS ENDED MARCH 31, 2000
Equitable Production (Appalachian) EBIT for the three months ended March
31, 2001, were $59.5 million compared to $25.0 million for the three months
ended March 31, 2000. The segment's results were favorably affected by higher
market prices for natural gas, higher gathering and service volumes resulting
primarily from the February 2000 Statoil acquisition and subsequent
monetizations and continuing improvements in operating efficiency.
During the three months ended March 31, 2001, the Company's average
well-head sales price realized on produced volumes rose to $4.80 per thousand
cubic feet equivalent (Mcfe), compared to $2.48 per Mcfe in the first quarter of
2000. The $37.2 million increase in revenue due to commodity prices is partially
offset by increases in price related expenses of $1.8 million for severance
taxes, $1.4 million for increased provision for uncollectible accounts, $0.8
million of compression and transportation expenses and $0.2 million of
production service fees.
As described above, a number of significant transactions during 2000
impact the volumes realized in natural gas sales, gathering fees, other revenues
and various operating expenses in the first quarter of 2001 compared to the
first quarter of 2000. Increased production volumes due to a full 3 months
ownership of the Statoil assets (4.3 Bcfe) is offset by the June and December
2000 reserve sales (6.5 Bcfe). In addition, wells shut-in or damaged during the
fourth quarter 2000 work stoppage produced 0.6 Bcfe less in 2001 than for the
comparable period in 2000. The maintenance and repair of these facilities was
completed during March. Production volumes have returned to pre-strike levels in
the month of April. The net reduction of 6.7 Bcfe resulted in a decrease of
$31.2 million in production, $1.6 million in LOE expenses and $2.5 million in
depletion expense in 2001. Gathering fee revenues increases $2.7 million due to
Statoil volumes and $1.9 million due to increased gathering rates for certain
monetized volumes. Gathering and compression expenses increased $1.3 million due
to the additional 45 days ownership of Statoil properties in 2001 and were
unaffected by the monetizations, as the monetized volumes are still gathered and
compressed by the Company.
Operating expenses for the March 2001 quarter were $31.3 million compared
to $32 million last year. Operating expenses were unchanged despite inflationary
pressures on the price of services throughout the industry, resulting from
strong commodity prices. Operating improvements in the Kentucky West pipeline
unit and lower depletion expense and were offset by increased operating costs
from the Statoil acquisition, in addition to the severance tax increases and
increased provision for uncollectible accounts described above.
16
19
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (CONTINUED)
PRODUCTION - GULF OPERATIONS
As described above, the Equitable Production - Gulf operations were
merged into Westport effective April 1, 2000. The following description includes
results prior to the merger.
THREE MONTHS ENDED
MARCH 31, 2000
------------------
OPERATIONAL DATA
Production:
Net sales, natural gas and equivalents (MMcfe) 6,087
Average sales price ($/Mcfe) $ 2.77
LOE ($/Mcfe) $ 0.24
SG&A ($/Mcfe) $ 0.27
Depletion ($/Mcfe) $ 1.11
Capital expenditures (Thousands) $ 9,034
FINANCIAL DATA (THOUSANDS)
Revenue from Production $16,885
Other revenues 70
-------
Total revenues 16,955
Gathering and compression expense 17
Lease operating expense 1,454
Depreciation, depletion and amortization 6,891
Selling, general and administrative expense 1,643
Exploration including dry hole expense 524
-------
Total operating expenses $10,529
-------
EBIT $ 6,426
=======
17
20
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (CONTINUED)
NORESCO
NORESCO provides energy and energy related products and services that are
designed to reduce its customers' operating costs and improve their
productivity. The segment's activities are comprised of private power,
cogeneration, and central plant development, ownership, and operation;
performance contracting; and the development and implementation of energy and
water efficiency programs. NORESCO's customers include governmental,
institutional, commercial, and industrial end-users. NORESCO's energy
infrastructure group develops and operates facilities in the U.S. and operates
private power plants in selected international countries.
NORESCO provides a range of integrated energy management services within
its projects, including: project development, design and engineering analysis;
permitting; construction; equipment procurement; project management; project
financing; project ownership; equipment operation and maintenance; and energy
savings metering, monitoring and verification.
Three Months Ended
March 31,
--------------------------
2001 2000
--------------------------
OPERATIONAL DATA (THOUSANDS)
Revenue backlog, end of period $85,325 $70,078
Construction completed $20,722 $19,991
Capital expenditures $ 194 $ 341
Gross profit margin 23.8% 22.2%
SG&A as a % of revenue 16.1% 21.7%
Development expenses as a % of revenue 3.2% 5.4%
FINANCIAL RESULTS (THOUSANDS)
Energy service contract revenues $34,464 $30,600
Energy service contract costs 26,258 23,804
------- -------
Net operating revenues 8,206 6,796
------- -------
Selling, general and administrative expenses 5,546 6,640
Amortization of goodwill 963 937
Depreciation and depletion 479 357
------- -------
Total expenses 6,988 7,934
Equity earnings of nonconsolidated investments 1,593 1,434
------- -------
EBIT $ 2,811 $ 296
======= =======
18
21
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (CONTINUED)
NORESCO (CONTINUED)
THREE MONTHS ENDED MARCH 31, 2001
VS. THREE MONTHS ENDED MARCH 31, 2000
The NORESCO segment's earnings before interest and taxes increased $2.5
million to $2.8 million from the same period last year. This increase in EBIT is
primarily attributable to increased revenues, higher gross margin and a one time
charge in the first quarter 2000. Total revenue increased by 13% to $34.5
million compared to $30.6 million in 2000, due to increased construction
activity resulting from the segment's backlog increase.
NORESCO's first quarter 2001 gross margin increased to $8.2 million
compared to $6.8 million during the first quarter 2000. Gross margin as a
percentage of revenue increased to 23.8% in the first quarter 2001 compared to
22.2% during the same period in 2000. This positive result was primarily
attributable to a shift towards large projects with higher gross margins and
improved cost controls.
The decrease in operating expenses of $1.1 million, or 16.5%, from $6.6
million incurred during the same period last year is primarily the result of a
$1.0 million charge to earnings in the prior year quarter related to a decision
to exit the international project development business.
Revenue backlog in the current year increased to $85.3 million, a $15.2
million increase from the same period in 2000.
19
22
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (CONTINUED)
CAPITAL RESOURCES AND LIQUIDITY
OPERATING ACTIVITIES
The results of operations of Equitable are impacted by the seasonal
nature of Equitable Utilities' distribution operations and the volatility of oil
and gas commodity prices. In the first quarter 2001, increased distribution
volumes due to colder weather than the prior year quarter favorably affected the
Equitable Utilities' distribution operations. The first quarter 2001 results of
operations for Equitable Utilities and Equitable Production were also impacted
by increased commodity prices, particularly in January 2001.
Cash flow from operating activities in the first quarter 2001 increased
$38.5 million over the prior year first quarter. This increase was primarily
attributable to the increased consolidated net income and the seasonal decrease
in stored gas inventory by the Equitable Utilities Distribution and Marketing
Operations. The cash inflows from operating activities were partially offset by
the increase in accounts receivable by the Utilities Distribution Operations and
Equitable Production due to higher distribution volumes and increased commodity
prices.
Other items affecting net cash flows from operations include the
increased deferred revenue recognition associated with the December 2000 prepaid
gas forward sales and the increased undistributed earnings from nonconsolidated
investments primarily due to the Company's investment in Westport.
INVESTING ACTIVITIES
Cash flows provided by investing activities in the first quarter 2001
were $18.0 million compared to cash used totaling $698.1 million in the year ago
quarter. The fluctuation from prior year was largely due to the first quarter
2000 acquisition of the Appalachian oil and gas properties of Statoil. Capital
expenditures totaled approximately $14 million in the three months ended March
31, 2001, compared to approximately $24 million spent in the same period one
year ago. Expenditures in both years represented growth projects in the
Equitable Production segment, and replacements, improvements and additions to
plant assets in the Equitable Utilities segment. Production accounted for $6.5
million of the expenditures and Utilities approximately $7.6 million in 2001.
The increase in cash provided from investing activities is also
attributable to the first quarter 2001 sale of contract receivables by the
NORESCO segment, the sale of the Utilities Pipeline Operations extraction
facilities and decreased capital expenditures compared to prior year. The
decrease in capital expenditures is related to Equitable's sale of its Gulf of
Mexico operations in April 2000.
FINANCING ACTIVITIES
Cash flows used by financing activities in 2001 totaled $74.0 million
whereas the cash provided by financing activities was $630.4 million. This
fluctuation from prior year is also due to the first quarter 2000 Statoil
acquisition. Equitable continued to reduce its short-term debt in the first
quarter 2001 through the use of cash provided by the operating activities and
the sale of receivables by the NORESCO segment.
Bank loans and commercial paper, supported by available credit, are used
to meet short-term financing requirements. Interest rates on these short-term
loans averaged 5.66% during the three months ended March 31, 2000. The Company
maintains a revolving credit agreement with a group of banks providing $650
million of available credit, which $325 million expires in 2001 and $325 million
in 2003, subject to regulatory approval.
In March 2001, the Company reclassified the nonrecourse project financing
from long-term debt to current liabilities as the Company currently intends to
refinance or restructure the debt within the next twelve months.
The Company has adequate borrowing capacity to meet its financing
requirements.
20
23
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (CONTINUED)
CAPITAL RESOURCES AND LIQUIDITY (CONTINUED)
HEDGING
The Company's overall objective in its hedging program is to protect
earnings from undue exposure to the risk of changing commodity prices. Since it
is primarily a natural gas company, this leads to different approaches to
hedging natural gas than for crude oil and natural gas liquids.
With respect to hedging the Company's exposure to changes in natural gas
commodity prices, management's objective is to provide price protection for the
majority of expected production for the years 2001 and 2002, and over 25% of
expected production for the years 2002 through 2005. Its preference is to use
derivative instruments that create a price floor, in order to provide downside
protection while allowing the Company to participate in upward price movements.
This is accomplished with the use of a mix of costless collars, straight floors
and some fixed price swaps. This mix allows the Company to participate in a
range of prices, while protecting shareholders from significant price
deterioration. During the first quarter of 2001, volatility in the market and
related option pricing caused the Company to utilize price swaps for its
incremental hedging activity.
DIVIDEND
On April 19, 2001, the Board of Directors of Equitable Resources declared
a regular quarterly cash dividend of 32 cents per share (pre-split), an 8.5%
increase, payable June 1, 2001 to shareholders of record on May 11, 2001.
EQUITY IN NONCONSOLIDATED INVESTMENTS
In March 2000, the Company announced the combination of its Production -
Gulf assets with Westport Oil and Gas Company, a private oil and gas exploration
company based in Denver. The transaction was completed on April 10, 2000. The
Company received $50 million in cash and approximately 49% interest in the
combined company, Westport. Equitable currently owns 13.9 million shares, or
approximately 36% interest in the Company. The fair market value of Equitable's
investment in Westport was $292 million as of March 31, 2001 on a pre-tax basis.
The NORESCO segment has equity ownership interests in independent power
plant (IPP) projects located domestically and in select international countries.
Long-term power purchase agreements (PPA's) are signed with the customer whereby
they agree to purchase the energy generated by the plant. The length of these
contracts range from 5 to 30 years. These projects generally are financed on a
project basis with non-recourse financings established at the foreign subsidiary
level.
ACQUISITIONS AND DISPOSITIONS
In February 2000, the Company acquired the Appalachian production assets
of Statoil Energy Inc. for $630 million plus working capital adjustments for a
total of $677 million. The Company initially funded this acquisition through
short-term debt, to be replaced by a combination of financings and cash from
asset sales.
In March 2000, the Company announced the combination of its Gulf
operations with Westport Oil and Gas Company, a private oil and gas exploration
company based in Denver, as stated above.
21
24
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (CONTINUED)
INFORMATION REGARDING FORWARD LOOKING STATEMENTS
Disclosures in this Quarterly Report on Form 10-Q contain certain
forward-looking statements related to such matters as anticipated financial
performance, hedging strategy, and operational matters including labor
relations. The company notes that a variety of factors could cause the company's
actual results to differ materially from the anticipated results or other
expectations expressed in the company's forward-looking statements. The risks
and uncertainties that may affect the operations, performance and results of the
company's business and forward-looking statements include, but are not limited
to, the following: weather conditions, commodity prices for natural gas and
crude oil and associated hedging activities including future changes in the
hedging strategy, availability of financing, changes in interest rates, changes
in the status of labor negotiations, curtailments or disruptions in production,
timing and availability of regulatory and governmental approvals, timing and
extent of the Company's success in acquiring utility companies and natural gas
and crude oil properties, the ability of the Company to discover, develop and
produce reserves, the ability of the Company to acquire and apply technology to
its operations, the impact of competitive factors on profit margins in various
markets in which the Company competes, financial results achieved by Westport
Resources, and other factors discussed in other reports (including Form 10-K)
filed from time to time.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company's primary market risk exposure is the volatility of future
prices for natural gas, crude oil and propane, which can affect the operating
results of Equitable through the Equitable Production segment and the
unregulated marketing group within the Equitable Utilities segment. The Company
uses simple, nonleveraged derivative instruments that are placed with major
institutions whose creditworthiness is continually monitored. The Company also
enters into energy trading contracts to leverage its assets and limit the
exposure to shifts in market prices. The Company's use of these derivative
financial instruments is implemented under a set of policies approved by the
Company's Corporate Risk Committee and Board of Directors.
With respect to energy derivatives held by the Company for purposes other
than trading, during the first quarter of 2001, the Company continued to execute
its hedging strategy by utilizing price swaps with volumes of about 31.4 MMcf of
natural gas. Some of these derivatives have hedged expected equity production
through 2005. As a result of this change, a decrease of 10% in the market of
natural gas and crude oil would increase the fair value of natural gas
instruments by approximately $20.1 million and would increase the fair value of
crude oil instruments by approximately $0.7 million. A 10% decrease would have a
minimal impact on the fair value of the propane instruments.
With respect to derivative contracts held by the Company for trading
purposes, there has not been any material changes regarding quantitative and
qualitative disclosures about market risk regarding the volatility of future
prices for natural gas, crude oil and propane from the information reported in
the Company's 2000 Annual Report on Form 10-K.
22
25
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (CONTINUED)
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
10.1 Equitable Resources, Inc. Directors' Deferred
Compensation Plan (Amended and Restated Effective
December 6, 2000)
10.2 Equitable Resources, Inc. 2001 Short-Term Incentive
Plan
10.3 Equitable Resources, Inc. Deferred Compensation Plan
(Amended and Restated Effective March 1, 2001)
10.4 Equitable Resources, Inc. Production Long-Term
Performance Incentive Plan
(b) Reports on Form 8-K during the quarter ended March 31, 2001:
None.
23
26
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (CONTINUED)
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.
EQUITABLE RESOURCES, INC.
--------------------------------------
(Registrant)
/s/ DAVID L. PORGES
--------------------------------------
David L. Porges
Executive Vice President
and Chief Financial Officer
Date: May 9, 2001
24
27
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (CONTINUED)
INDEX TO EXHIBITS
Exhibit No. Document Description
- --------------------------------------------------------------------------------------------------
10.1 Equitable Resources, Inc. Directors' Deferred Compensation Filed Herewith
Plan (Amended and Restated Effective December 6, 2000).
10.2 Equitable Resources, Inc. Filed Herewith
2001 Short-Term Incentive Plan
10.3 Equitable Resources, Inc. Deferred Compensation Plan Filed Herewith
(Amended and Restated Effective March 1, 2001).
10.4 Equitable Resources, Inc. Production Long-Term Performance Filed Herewith
Incentive Plan
25