ML20117G310
| ML20117G310 | |
| Person / Time | |
|---|---|
| Site: | Summer  |
| Issue date: | 12/31/1995 |
| From: | Gressette L, Timmerman W SCANA CORP. |
| To: | |
| Shared Package | |
| ML20117G278 | List: |
| References | |
| NUDOCS 9605210115 | |
| Download: ML20117G310 (42) | |
Text
rympeg m pwg-wmyyrmesmmmm TABLE OF CONTENTSL LetterTo Shareholders "AbostThe Cos;er- b 150th Anniversary :
From its origins in Charleston to its technology of today,SCANA's 1995 annual report chronicles the 2 -
Company's past and present' accomplishments as well
- as future expectations in celsbration of our 150th anniversary in 1996.
1995 Subsidiar 'Hi hli hts l Back cover, top to bottom:
8 Construction of Saluda Dam and Lake Murray - 1929 Gas Streetlight,Circa 1848 gg} gg7 El:ctricTrolley on Columbia's Main Street - 1897 2 .
Columbia Canal Hydroelectric Facility - 1894 -
Front cover: 0E COIS Collage of 1995 Corporate Events / ,
Hurricane Hugo - Artist BillThompson -
@ News and Courier - 1989 Directors Inside panel:
V.C. Summer Nuclear Station - 1984 QR vil Cope Electric Generating Station - 1996 InvestorInformation This annual report was printed on recycled paper.
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Earnings & Dividends Year-End Market Price and Book Value "[f c
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' 0 1993- 1994 1995 1993 1994 1995 C Reported Earnin85 Per Common Share C Market Price per Common Share E Non-Cash Reserve Adjustments at $CANA Petroleum Resources C Book Value per Common Share C DMdends Declared per Common Share
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SCAXA PROFILE Mk m.sk SCANA Corporation, headquartered in Columbia, SC, is a $4.5 billion energy-based holding company with 12 direct wholly owned subsidiaries engaged in electric and natural gas utility operations and other energy-related businesses.
South Carolina Electric & Gas Company (SCE&G), SCANA's principal subsidiary, is a regulated public utility engaged in the generation, transmission, distribution and sale of electricity and in the purchase
, and sale, primarily at retail, of natural gas
+ in South Carolina. SCE&G prosides elec.
tric senice to approximately 484,000
%q customers in a service area that extends i into 24 of South Carolina's 46 counties and covers more than 15,000 square miles in the central, southern and southwestern portions of the state. Natural gas senice is prosided to approximately 244,000 customers over a 20,000 square-mile senice area in 30 counties. Through y , _
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- g- the combined operations of SCE&G and South Carolina ws4pe ; Pipeline Corporation, SCANA's gas transmission subsidiary 4,g, .
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natural gas senices are provided throughout the state or a direct or supplemental basis. SCE&G also prosides urban bus senice in the metropolitan areas of Cohunbia
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and Charleston, South Carolina.
r- SCANA's nonregulated diversified operations extend into 27 states and include exploring for and developing oil and gas pnxiacing properties; marketing nauiral gas and light hydrocarbons; purchasing, storing, distributing and selling propane; providing fiber optic teleconununications, -
video conferencing, specialized mobile radio senices, and wireless personal conununications senices; power plant management and maintenance senices; and appliance maintenance and repair services. At year-end 1995, the Company and its subsidiaries had 4,347 cmployees.
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SCAXA PROFILE SCANA Corporation, headquartered in Columbia, SC, is a $4.5 billion energy-based holding company with 12 direct wholly owned subsidiaries engaged in electric and natural gas utility operations and other energy-related businesses.
South Carolina Electric & Gas Company
- (SCE&G), SCANA's principal subsidiary, is a regulated public utility engaged in the generation, transmission, distribution and sale of electricity and in the purchase 4 and sale, primarily at retail, of natural gas
,M[ in South Carolina. SCE&G prosides elec-4 -; tric senice to approximately 484,000
, customers in a senice area that extends into 24 of South Carolina's 46 counties and covers more than 15,000 square miles in the central, southern and t
_ southwestern portions of the state. Natural gas senice is provided to approximately 244,000 customers over a 20,000 square-mile senice area in 30 counties. Through
' $1[ ~e, Am '
x the combined operations of SCE&G and South Carolina
-~ g yL ? Pipeline Corpomtion, SCANA's gas transmission subsidiary,
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natural gas senices are provided throughout the state on
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a direct or supplemental basis. SCE&G also provides urban bus senice in the metropolitan areas of Columbia and Charleston, South Carolina.
r- SCANA's nonregulated diversified operations extend into 27 states and include exploring for and developing oil and gas producing properties; marketing natuml gas and light hydrocarbons; purchasing, storing, distributing and selling propane; providing fiber optic teleconununications, -
video conferencing, specialized mobile radio senices, and wireless personal communications senices; power plant management and maintenance senices; and appliance maintenance and repair senices. At year <nd 1995, the Company and its subsidiaries had 4.347 employees.
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FINANCIAL AND OP3RA"NG HIGHLIGHTS
% Increase 1995 1994* (Decrease)
(Millions of dollars except statistics and per share amounts)
C2mmon Stock Data '
! Earnings Per Weighted Average Share of Common Stock $ 1.70 $ l.22 39.3 Dividinds Declared Per Share of Common Stock $ l.44 $ l.41 2.1
- BookValue Per Share of Common Stock (Year-End) $ 15.00 $ 14.15 6.0
.' Mar!ct Price Per Share of Common Stock (Year-End) $ 28.625 $ 21.00 36.3 Common Stockholders' Equity (Year-End) $ 1,554.7 $1,359.1 14.4 Common Stock Outstanding:
( Wrighted Average (Thousands) 99,044 94,762 4.5 l Y ar-End (Thousands) 103,624 96,035 7.9 T;td Company Total Operating Revenues $ 1,353.0 $1,322.1 2.3 Total Operating Expenses $ 1,065.5 $ l.062.5 0.3 Nrt income $ 168.3 $ l15.5 45.7 Proptrty Additions and Construction Expenditures $ 324.1 $ 552.0 (41.3)
Utility Plant, Net $ 3,469.0 $ 3,293.7 5.3 El:ctric Operations El:ctric Operating Revenues $ I,006.4 $ 975.4 3.2 Eltctric Operating Income $ 257.1 $ 232.2 10.7 Territorial Sales (Million KWH) 17,583 16,838 4.4 Customers (Year-End) 484,354 476,412 1.7 Gintrating Capability - Net MW (Year-End) 4,282 3,876 10.5 Ttrritorial Peak Demand - Net MW 3,683 3,444 6.9 G*_s Utility Operations Gas Operating Revenues $ 342.7 $ 342.7 -
Gas Optrating income $ 38.0 $ 34.1 I l.4 Salts (Thousand Therms) 882,511 781,109 13.0 Customers (Year-End) 243,523 238.614 2.1
- Prior year information has been restated for the effects of a two-for-one stock split in May 1995 and of a change in accounting principle in the second quarter of 1995 from the successful efforts method of accounting to the full cost method of accounting for the Company's oil and natural gas operations.
.- Return on Common Equity Three Year Cumulative Total Return *
(Year End) (With Dividends Reinvested) <
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1993 T R$d%?2, 1994 1995 1993 1994 1995 sCANA Corporation s&P s00 s&P Electric Utilities
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Fellow Shareholders:
it is with great pleasure that we provide you SCANA Corporation's 1995 Annual Report,which highlights our Company's accomplishments over the past year and celebrates the 150th anniversary of our found;ng in 1846. A brief history of SCANA ,-
since its inception begins on page 4. We ,
hope you will enjoy learning about the '
Company's development from its single- -
product origins to a diversified energy-based holding company. Our story is one of dedi-cation, leadership in technology, economic development, outstanding public service and innovation that is still true of SCANA and all our employees today.
W a nmmerman (left) SCANA's financial performance in 1995 was gratifying for several towrence M. Gressette, A reasons. First, reported earnings rebounded from $1.22 per share in 1994 to $1.70 per share in 1995. Excluding the effects of the accounting restatement associated with the turnaround in our nat-ural gas exploration subsidiary, earnings from ongoing operations were essentially level with 1994 despite significant capital investments made in 1995 to create future growth.
The principal capital expansion project during 1995 was the completion of the Cope Electric Generating Station,which went into commercial operation on january 15,1996.This coal-fired elec-tric generating plant was completed several months ahead of schedule and significantly under budget. A rate proceeding before the Public c vice Commission of South Carolina to include the Cope invest-ant in rates has been successfully completed.The resulting $67.5 m.llion overall increase in retail electric rates included the entire investment in the Cope plant as well as its operating expenses.
Anoser significant capital investment occurred early in 1995, y
t 4* --a when a partnership in which SCANA had invested $53 million suc-
's,;4 cessful;f bid for three PCS (Personal Communications Services)
Wn licenses auctioned by the Federal Commurications Commission.
, 7.. , J This new business,further described on page 12,will provide state _ -
, S ,
9 of-the-art, digital wireless communications services to an area of
- 122,000 square miles with a population of nine million. In -,
February 1996,the partnership merged with InterCel,Inc.,a .
,LETTEFs T0 S HOLDE successful cellular telecommunications company with oper-ations in Georgia, Alabama and Maine,and the combined entity sold $115 million of new common equity together with $200
[: million of debt.SCANA now owns 17 percent of the combined entity. These transactions provide all of the capital necessary to construct the system and provide start-up expenses for the initial build-out of the PCS system.
Underpinning these expansions, our core businesses had an
- excellent year in 1995. Electric sales increased 4.4 percent in 1995 i due to continued customer growth and somewhat more extreme
- weather than in 1994. Natural gas sales increased 13 percent, driven 2
l Fellow Shareholders:
It is with great pleasure that we provide you SCANA Corporation's 1995 Annual Report,which highlights our Company's accomplishments over the past year and celebrates the 150th anniversary of our founding in 1846. A brief history of SCANA i since its inception begins on page 4. We ,
hope you will enjoy learning about the Company's development from its single- -
product origins to a diversified energy-based j holding company.Our story is one of dedi- '
cation, leadership in technology, economic development, outstanding public service and ,
innovation that is still true of SCANA and all our employees today. .
SCANA's financial performance in 1995 was gratifying for several La r mss en reasons. First, reported earnings rebounded from $1.22 per share in 1994 to $1.70 per share in 1995. Excluding the effects of the accounting restatement associated with the turnaround in our nat-ural gas exploration subsidiary, earnings from ongoing operations were essentially level with 1994 despite significant capital investments j maae in 1995 to create future growth.
{ The principal capital expansion project during 1995 was the completion of the Cope Electric Generating Station,which went
! into commercial operation on January 15,1996.This coal-fired elec-tric generating plant was completed several months ahead of schedule and significantly under budget. A rate proceeding before the Public Service Commission of South Carolina to include the Cope invest-j __ ment in rates has been successfully completed.The resulting $67.5
! million overall increase in retail electric rates included the entire L ,'
j " '1 investment in the Cope plant as well as its operating expenses.
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'I l Another significant capital investment occurred early in 1995,
- II " , , fy when a partnership in which SCANA had invested $53 million suc-i m ;g , ,
cessfully bid for three PCS (Personal Communications Services)
I b licenses auctioned by the Federal Communications Commission.
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This new business.further described on page 12,will provide state . -
, g, 1 of-the-art, digital wireless communications services to an area of *
! 122,000 square miles with a population of nine million.In ,
i February 1996,the partnership merged with InterCel,Inc.,a /
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,LL11LniUU T_ TAT DUD Q 11ULuLnu successful cellular telecommunications company with oper-
, ations in Georgia, Alabama and Maine,and the combined i , entity sold $115 million of new common equity together with $200 million of debt.SCANA now owns 17 percent of the combined l entity. These transactions provide all of the capital necessary to l construct the system and provide start-up expenses for the initial build-out of the PCS system.
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- Underpinning these expansions,our core businesses had an excellent year in 1995. Electric sales increased 4.4 pcrcent in 1995 due to continued customer growth and somewhat more extreme weather than in 1994. Natural gas sales increased 13 percent, driven 2
primarily by a~ 19 peretnt increase in salss to industrial taka advantags of thi increas:d pricas for natural gas.Tha
- customers due to the very low price of natural gas during - forward sale of gas reserves entered into last year in most of the year. As you will note in the financial state- order to protect profitability was managed appropriately ments, control over our_ operating and maintenance - as prices began to rise late in the year and had a minimal expenses was excellent as well,with those expense cate- negative impact on earnings.
g':rits seeing an actual decline of I percent when com- -
- parsd to 1993 and 2 percent when compared ~to 1994. .While recent natural gas prices have been at histori-
.Th2V.C. Summer Nuclear Station remained an industry - _ cally high levels,we expect a return to more normal levels, IIndar in the past year,again receiving a superior rating L and our operating strategy is based on these more normal from the Nuclear Regulatory Commission,and also price ranges.We are proceeding with the exploration and .
rectiving the highest possible overall rating from the - development of the acreage in south Louisiana that we. .
.* Institute of Nuclear Power Operators in its latest assess- are jointly explering with American Petrofina. Substantial mint.The fossil generating p5nts achieved availability fac- . seismic data on these properties should become available -
tors well above industry averages. In summary, the core - -in the second quarter of 1996,with drilling beginning ,
. (lictric and gas businesses performed extremely well,as around the start of the fourth quarter. We are very opti- 1 th:y have done for many years, providing a solid base for mistic that this project,in combination with the changes future growth. we have already put into place,will result in good prof-itability.
Our electric operations are the most significant seg-m:nt of our business, representing 69 percent of our In January 1996 we realigned all of our natural gas -
total assets at year-end 1995.The electric industry con- and propane businesses into an overall line-of-business
- tinuss to face significant changes in the regulatory struc- group. This functional grouping will result in improved tura that has traditionally governed its operations. At the marketing focus and profitability through a more cooper-national level, major industrial customers rr oressing for ative and supportive approach._ Asbury H. Gibbes has
. retail wheeling that would allow them to choose their been chosen to lead this group after successful assignments alictric supplier. Conservative members of Congress see as SCANA's General Counsel and prior to that as the thn need to deregulate the industry in order to provide president of SCANA Development Corporation.
market-based competition throughout the nation. The .
1 Fzdiral Energy Regulatory Commission is attempting to At the December meeting of the Board of Directors,
' accomplish the same goal through its regulatory over- W. B.Timmerman was elected President of the Company. _
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sight of wholesale transactions. As might be expected, Bill brings 17 years of sound leadership to this position. .
tha industry is very divided over the pace of change and and his experience in all phases of the energy industry the desired outcome. will help to successfully move the Company into the next I century.1 congratulate Bill on his election and look forward SCANA is engaged in the debate over deregulation to continuing with him to build value for our shareholders. 1 at many levels. Our principal concerns are to ensure the
. fair treatment of our shareholders and residential and in closing,we would be remiss not to mention the commercial customers,while continuing to provide com- contributions of SCANA's 4,300 employees.These active ;
petitive pricing to our industrial customers. We believe employees, together_ with their retired predecessors, col-
. that our very competitive electric rates and the excellence lectively own and vote iI percent of the Company's out- l of our operating record,together with the absence of standing common stock.While images on the historical any significant amount of regulatory assets, mitigate a diorama in this report reflect society's technological >
great deal of the financial risk to the Compaay.In addition, advances,the diligent and excellent work of our employees i tha Company has always shown an ability to adapt and transformed these technologies into valued services for ,
y prosper during its 150-year history. We continue to our customers. By almost any objective measure, SCANA's !
aggressively prepare for the changes to come. businesses are at the forefront due to the efforts of our . !
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employees. It is the quality of our people that will deter-
= _ As previously mentioned,1995 was a turnaround mine our success in the coming years.
- year for our natural gas exploration subsidiary,SCANA -
' Petroleum Resources (SPR). Prices for natural gas were Respectfully submitted, .
extrsmely low during most of the year as measured by historical standards.The last two months of 1995, and the :
first months of 1996, have seen extraordinarily high prices ~~ 4 4- . Nd -- .
dun to the very harsh winter. Against this backdrop of f volatile price swings,SPR has focused on drilling for low- Lawrence M.Gressette,Jr. W. B.Timmerman :
Chairman of the Board President cost reserves, active divestiture of wells with high operat-and Chief Executive Officer ing costs,and adjusting production rates based on prices and individual well profitability. As a result, SPR returned !
to profitability in the third quarter,and has been able to February 20,1996
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Charleston Electric Light Co.
Columbia Gas Light Co.
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chartered to generate and distribute electricityin Columbia.
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The response to Hurricane Hugo, perhaps more than any
- other single event, best exemplifies SCANA's story during its first 150 years.On the night of September 21,1989,the eye of this Category 4 storm came ashore at Charleston, South i - W Carolina,where SCANA began in 1846.With winds approaching l 3 150 miles an hour, Hugo destroyed in just hours an electric l
delivery system that took a hundred years to build.
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! It was a time of disaster,but not of despair.it was,in retro-SPect,a shining moment in SCANA's history. Employees took 0Enric lina6Lives the initiative.They were empowered to find new and better ways to succeed,and they did. All 300,000 customers left without l
power had it back within 17 days. But that accomplishment is just one of the many challenges our employees have met suc-cessfully in the Company's first century and a half of existence, i
K. -
- The history of SCANA is a story of firsts,from hand-lit gas 7t y 3 ...-r streetlights to multi-state, fiber optic networks and personal 9,CWM fur communications services. it is a story of innovation, of people
., eA with the ingenuity,as demonstrated following Hugo, to overcome g..
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seemingly insurmountable problems. It is a story of developing communities, of leadership and shared success. It is the story of
.;k ,' vest 7 SCANA Corporation. -
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$ gas and electricity and provided streetcar services.Their evolution 73*i .d - i
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generally paralleled each other in the developing cities of Charleston.
Columbia and Aiken in mid-19th century South Carolina.
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- is . Up { ' _ y ,[ lt all began in 1846 when local business leaders came y , 4 ,% 7 together to form the Charleston Gas Light Company.Their 1 -
4 . < business was the manufacture of gas from coal, oil and resins. In L'
@ e the spring of 1848.the first gas streetlights appeared. And by the end of the year,485 customers were taking advantage of 1 . ; g-;
this newest luxury.Six years later and a hundred miles to the 4
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Broad Ri er Power Co.
South Carolina Power Co.is ~,.~
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.- changesits name to wJ South Carolina Electric & Gas Co. jhh'
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s created by completion of the Saluda Dam. d dh SCE&G and South Carolina Power Co.
merge under the name 4 '[ggh.Q South Carolina Electric & Gas Co.
. ~ a u- a +~. -w 6sa:.wwaw north, the Columbia Gas Light Company was formed. By Electric trolley lines were the chief source of income the end of 1888,there were gas mains on every principal for these early companies.The utilities created and pro-street in the capital city. meted different entertainment events to increase ridership.
Patrons could choose oceanside concerts on the Isle of I ThoniaS Edison'S invention of the incandescent Palms,or weekly vaudeville performances at a casino in North Columbia.
light bulb in 1879 was a pivotal moment in the utility industry. New companies began to appear, competing to be the first to bring this new invention to the public.The By the turn of the century, mergers meant first electric lights appeared in Charleston in 1882. But it was not until the formation of the Charleston Electric Light fewer but larger utility companies. Demand for electricity Company in 1886 that electric lighting proved successful was Er Wing,and SCANA's early ancestors continued to make their mark with first-time achievements.In 1894, j in Charleston.In 1887,the Congaree Gas & Electric Company formed to generate and distribute electricity in Columbia Water Power Company's powerhouse on the Columbia. Columbia Canal supplied the power for the world's first electrically powered textile mill. j Also during this time the first railway companies emerged: Charleston City Railway Company in 1861 and Mergers accelerated in the early '20s. In 1924,the Columbia Street Railway Company in 1882.By 1893, electric Broad River Power Company organized as a subsidiary of streetcars were rolling in Columbia.They made their debut General Gas & Electric Corporation.The next year it i in Charleston in 1897, bought the electric and gas properties of Columbia Railway, Gas & Electric Company.The new company immediately
, set out on a construction program to add electric gener-ating capacity.
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( y- 31 4. , g 1, 3 ) g' '. , South Carolina Power Company formed in 1926 when TN , ~ - , j
- j m% ' ' - e .- several smaller utility companies consolidated in Charleston.
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Purchased controlling interest in South Carolina Power Company.it then merged with the Augusta-Aiken Railway l & Electric Company, Georgia-Carolina Power Company
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and tne Edisto Public Service Corporation, bringing 13 new 6 Yi.Mr. 4 .7 counties into the Charleston company's service territory.
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, , 4 .a, 4 carrying thousands of soldiers on their way to and away 5
1963 -
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j the first electricity-producing nuclear y {li begins commercialoperation.
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SCE&G acquires Carolina Energies, Inc.
SCE&G SCANA Corporation is
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' gi gdn jgJ reaches 51 billion in assets.
bry effectne December 31.
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from the war theater. But the streetcars were abandoned as obsolete in Columbia in 1936 brought profound and in Charleston in 1938.The rails lay idle g
'M I}le }' Car M untilWorld War ll,when they were taken i e g' 3 ,. changes that continue to shape SCANA up and used as scrap metal in the nation's -d. '
on its 150th anniversary. As a result of the Public Utility Holding Company war effort. y A * '
Act of 1935,which mandated the stream-
' lining of holding companies, General Dtiriilg the next two decades, eubiic utiiities Corporation divested its i ownership of SCE&G through a stock the growth of both companies helped distribution. A similar divestiture was fuel expansion of the state's economy.In -
occurring with South Carolina Power 1927,the LexingtonWater Power Company Company and Commonwealth & Southern received a license to build a dam on the Saluda River Corporation. On Novernber 15,1946,SCE&G became an northwest of Columbia.Saluda Dam,which would create independent entity.That same year it became the first the 50,000-acre Lake Murray,was the largest man-made South Carolina corporation to be listed on the NewYork barrier built for power production in the world when Stock Exchange. Moving aggressively, the company also completed in 1930.In addition,tl.e project provided des- launched plans to purchase South Carolina Power Company perately needed jobs in the lean years leading up to and and consolidate the companies' neighboring service territories.
beyond the stock market crash of 1929 and the beginning of the Great Depression. SCE&G's initial stock offering was issued successfully in May of 1948.The company acquired South Carolina in 1937,the Broad River Power Company changed its Power Company that same month.This met with fierce ,
name to South Carolina Electric & Gas Company,SCANA's resistance from the South Carolina Public Service principal subsidiary still today. Five years later, Lexir.gton Authority,the state-owned public power agency that SCE&G's .,
Water Power Company merged with SCE&G. predecessors had so vigorously opposed a decade earlier. ,
Approval from all required regulatory bodies in hand,the Throughout the difficult economic times of the 1930s companies merged under the name of South Carolina and early '40s, SCE&G and other private utility companies Electric & Gas Company in April 1950.
fought unsuccessfully to prevent the creation of public power companies,a source of continuing debate in modern times.With the outbreak of World War 11, SCE&G and The merger ushered in two decades or generai i
South Carolina Power Company shifted their focus to ,
the energy demands of the war effort. Bus systems in electric or gas rate cases in the 1950s and '60;,even l Charleston and Columbia set records for passengers though SCE&G continued to expand with the construction carried during the war years.
of three major generating plants:Urquhart Station in 1953; McMeekin Station in 1958;and Canadys Station in 1962.
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SCANA celebratesits P g' 1 j
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$4 gp 150th Anniversary.
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SCE&G SCE&G receives is named l'tility of the Year Edison Award forits response
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A new subsidiary, South Carolina Generating inflation in the 1970s plagued all Company,was formed in 1951 to build Urquhart Station. ,
areas of SCE&G's operations.SCE&G's South Carolina Natural Gas Company was established as slowing growth rate and pressures a subsidiary the following year to build lines to distribute from increasing capital costs natural gas. And from 1955-65, the efficiency of SCE&G's l associated with the construction of electric generating plants improved by 19 percent through Williams Station near Charleston I a company-wide commitment to lower costs of service,a and the nuclear plant meant a decade philosophy still embraced today. of rate increases. However, the company's ,
commitment to cost reduction gradually l Following in the tradition of its predecessor companies, lowered rates during the late 1980s.
in 1959 SCE&G took part in another first:The company joined three neighboring utilities to build the first elec. The union that would lead directly to the tricity-producing nuclear power plant in the Southeast. formation of SCANA Corporation occurred The snull,17-megawatt reactor was a prototype model in January 1982.SCE&G and Carolina used for research and was built at Parr,where one of the Energies. Inc. (CEI) announccd jointly that they would company's first hydroelectric plants opened in 1914. merge under the name South Carolina Electric & Gas Company.The merger with CEl.a holding company with six subsidiaries of its own involved in the sale and transmission The Parr prototype reactor first generated of naturai gas and propane, made SCE&G the largest nat-ural gas supplier in South Carolina.
electricity on December 16,1963. It was taken out of service in 1967 after providing extensive research data SCANA Corporation,the diversified holding company
. that laid the foundation for a much larger commercial as it is known today,was formed on December 31,1984.
a nuclear reactor the following decade. That restructuring allowed the corporation to segment its various businesses and diversify into other energy-
! , In June 1971,SCE&G began the licensing process to related enterprises. Ventures into telecommunications and build a nuclear plant two miles from the prototype reac- personal communications services, power plant management, tor site. And in yet another first,SCE&G took on as a natural gas exploration and production, natural gas bro-financial partner its long-standing rival,the South Carolina kering, propane sales and home appliance service contracts Public Service Authority.The public-private partnership opened new markets. Meanwhile, SCANA maintains its made the prc, ject financially feasible. And despite the foundation in the traditional electric and natural gas accident atThree Mile Island in 1979 that led to substantial utility fields.
regulatory delays and subsequent cost increases,theV.C.
Summer Nuclear Station's $1.3 billion price tag was 24 As we head into our 16th decade of doing business, percent less than the average of 13 other nuclear generating SCANA remains committed to one tenet above all else:
facilities constructed over the same period during the Relying on the ingenuity, innovation and determination of 1970s and early '80s. our employees as the keys to continued success.
, 7 l
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South Carolina Electric & Gas Company's fossii piants posted an exceptional system-wide -
Electric Territorial Sales ~ . Performance in 1995.In a survey of I17 member plants by the !
(Billion KWH) , ' Electric Utilities Cost Group,four of SCE&G's five steam plants placed within the top 10 most efficient,while the fifth plant 2o Pl aced 32nd.With one of the most efficient generating systems in the nation,SCE&G conti cost, highly competitive electricity *puesprovider.to strengthen its position a is a 6.9 e6.8 SCE&G also supp[nEey its electric generating capability w js m
", 6 m with the completion and commercial operation in January 1996 '
e a LW plant near the town of Cope in central to of S uth a Carolina.The new 385-megawat{'ntpla was completed four month ,
schedule and millions of; dollars under budget.The addition of -
this facility elevates the ompany's total generating capability to s -
4,282 megawatts. g The need for additional generating capacity was demonstrated on August 14,1995,wh'en SCE&G customers set a new record a f r Peak electric usage of 3,683 megawatts. A new record for 1993 1994 1995 electric usage over a single 24-hour period was also established Residenti=i commercial on the same day. ,
t- Industrial ' ' Sales for Resale in August,SCE&G entered a new business venture with its Other
[arge$g glectric Customer - the U.S. Department of Energy's Savannah River Site (SRS).The two signed an agreement to pri-vatize SRS's power and steam generation and transm!ssion facil-Rock Hill -
ities. Under the agreement, SRS is buying all of its electrical and a majority ofits steam needs from SCE&G.In return,SCE&G is sm,.a s r -
leasing and operating NS's power plant and transmission facilities.The contp hastan estimated annual value of $30 C=' s million, more than doublIthe amount of revenue that Florence - ,
SCE&G had been receiving from DOE. -
Sumter " Myrtle SCE&G continues its efforts to increase efficiency through Beach ' the use of new technologies. During 1995,the company began a pilot program to test a first-of-its-kind,two-way radio meter-p reading system for electric and natural gas customers.This real.
Area 4 time access, WireIess meter-reading system will allow the com-Pany to offer its customers faster and more accurate information.
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.;platurW gas 4er e areasJoget h,er,these projects are expected _ ,
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South Carolina Pipeline Corporation posted record throughput on its intrastate naturai gas system in 1995. Warmer than normal winter weather low-ered natural gas prices,while world-wide demand drove the price of competing fuel oil higher. Hot summer weather led to strong gas sales for peak electric generation.SCPC also benefited from a new focus of marketing gas directly to its industrial cus-tomers by reducing the volume of third-party transportation on its system.
A strong economy also contributed. Many of SCPC's indus-SCPC Total System Throughput trial customers posted record production.SCPC's history of
. (Billion Cubic Feet ) reinvesting in its system to continuously improve service levels paid off as well Existing customers undertook expansions,and major industrial prospects chose South Carolina as the location
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SCPC's history of reinvestment is ongoing with a new 4o __ __ _ expansion project in the Piedmont and Pee Dee sections of the 20 - - -
state that will allow more gas to flow into these growing areas.
SCPC continues to focus on development projects such as this
' to encourage future growth as a strategic partner for economic iN 2 d"$ c. "S progress in South Carolina.
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South Carolina Pipeline Corporation posted record throughput on its intrastate naturai gas system in 1995. Warmer than normal winter weather low-ered natural gas prices,while world-wide demand drove the price of competing fuel oil higher. Hot summer weather led to strong gas sales for peak electric generation.SCPC also benefited from a new focus cf rr.arketing gas directly to its industrial cus-tomers by reducing the volume of third-party transportation on its system.
A strong economy also contributed. Many of SCPC's inrius.
SCPC Total System Throughput trial customers posted record production.SCPC's history of
. (Billion Cubic Feet ) reinvesting in its system to continuously improve service levels paid off as well. Existing customers undertook expansions,and 800 '
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for new facilities.
SCPC's history of reinvestment is ongoing with a new 4o _ _ __ __ expansion project in the Piedmont and Pee Dee sections of the 20 - - - state that will allow more gas to flow into these growing areas.
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SCPC continues to focus on development projects such as this to encourage future growth as a strategic partner for economic
" L" " progress in South Carolina.
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south Texas that produced a combined 18 million cubic SCANA Petroleum Resources,Inc. feet of gas a day during testing and generated leads for several other prospects in the area.In addition,several SCANA's oil and natural gas exploration and develop- joint venture and development prospects were being mir affiliate experienced a year of transition in 1995. A negotiated.
sarmer than normal winter led to declining prices, higher Regardless of the current increase in gas prices,SPR per-unit costs and losses in the first two quarters of the year. remains committed to low-cost operations and the eco-Management responded to these trends by maximizing nomic growth of its reserves through diligent exploration product margin instead of expanding production volumes, and development drilling utilizing the latest in technology.
. Also,a shift was made from acquiring reserves to growing restrves through increased exploration and development
- drilling.This move was highlighted in March with the signing of a five-year goint exploration and development agreement 1995 SPR Natural Gas Production Volumes .
and Market Prices with Fina Oil and Chemical Company covering 400,000 140 52.25 .
acres in south Louisiana.The agreement provides SPR !
with 50 percent interest in one of the largest onshore,3 D 12 ' j 52.00 s:ismic projects in the United States. ing f ,
Consistent with its new strategy, SPR gauged its pro- i- -
1 duction levels around prices that offered the greatest 80 - II "
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margin. Emphasis also was placed or. reducing costs and ?. x l s:lling non-strategic properties.These steps, coupled with higher gas prices, allowed SPR to post a substantial
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- hy $1.50 l 4o rebound in net income in the fourth quarter of 1995. 51.2s Entering 1996,SPR increased gas volumes in response to 20 i highsr prices while keeping production costs down. , ,,,,, i SPR's 3-D seismic prospect acquisition and drilling saw Fin Man AFn Mar suw suo avo ser ocr nov orc I program resulted in two successful exploration wells in m Natural Gas Production (MMCF/ Day) C NYMEX Pr6ce (5/MCF)
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SCANA Energy Marketing,Inc.
Previously known as SCANA Hydrocarbons.Inc.,this will continue to market this facility to create turnover in subsidiary's name was changed in 1995 to better define the inventory and increase throughput. j tha diversified group of products and services it provides With the deregulation of the electric utility industry, l now and in the future. SCANA Energy Marketing is in position to take advantage SCANA Energy Marketing buys and sells natural gas of new markets as they develop by continuing to build on and other light hydrocarbons and provides transportation its reputation as a high-quality marketing company.
and bulk storage of propane.The company markets gas "
produced by third-party suppliers and all of SCANA SCANA Energy Marketing P:troleum Resources' production.SPR gas accounted for (
,, BiHion Cubic Feet)
. about 52 percent of total sales volume in 1995.The com-pany also owns several gas-gathering systems and provides 6o .. - 4. -
entrgy-related risk management services to producers su l and consumers alike. 40 - - '
By streamlining supply purchases and capitalizing on 20 ---
capacity release programs, SCANA Energy Marketing continued its growth in the Southeast and Mid-Continent ,_ w _ _ _
areas of the U.S. Sales outside South Carolina accounted m for 96 percent of total sales volume. u N_ -3 Business opportunities for the company's propane W c#
storage facility continued to improve as well. For the second consecutive year, the cavern was fully leased and reached g Qj, Sh ? o clEp 100 percent of its inventory level. Demand remains strong, with throughput up I1.8 percent over 1994.The company $*s s*. SPR Gas inside Sc Outside sc Third Party
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Suburban achieved this growth through greater l emphasis on merchandising and service through 17 retail
[ stores across the state.
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MPX Systems,Inc.
SCANA's telecommunications subsidiary provides an array of telephone, fiber optic and wireless communications services.
MPX was a principal partner in Powertel PCS Partners, which in the spring of 1995 was awarded licenses to provide Personal Communications Services (PCS) to three major trading .
areas with a population of nine million in the Birmingham, Jacksonville and Memphis areas. Effective February 7,1996, ,
s Powertel was combined with interCel,Inc.and MPX's interest .
therein exchanged for InterCel common stock.The value of MPX's investment in InterCel has grown nearly 40 percent since MPX's initial investment in Powertel.
MPX also has an interest in ITC Holding Company,Inc.,a privately owned venture with six businesses providing local and long distance telephone services, telephone conferencing services and full service networks for cable television.
In addition, MPX owns or manages 2,500 miles of fiber optic lines stretching from the Carolinas to eastTexas and plans to substantially expand the network over the next several years.
MPX also developed and markets a state-of-the-art, two-way mobile radio system to government agencies and other utilities that vastly improves communications during crisis situations.
This system is targeted to have statewide coverage over South Carolina within the next two years.
MPX/InterCel PCS Markets 5 - "'- Csa,4one Huntsvi Greenvil Columbia Birmin Atlanta Charleston jacksonville ackson Mont f TaHh Gainesville Panama City EMEMPHis MARKET E BIRMINGHAM MARKET EJACKsoNVILLE MARKET MPX Owned / Managed Fiber Optic Network Through MPX and its various sernces,5CANA is one of the largest norntelephone businesses in the telecommunications industry.
i MPX Systems,Inc.
SCANA's telecommunications subsidiary provides an array of telephone, fiber optic and wireless communications services.
,4 MPX was a principal partner in Powertel PCS Partners, ,
which in the spring of 1995 was awarded licenses to provide !
Personal Communications Services (PCS) to three major trading ,
areas with a population of nine million in the Birmingham, Jacksonville and Memphis areas. Effective February 7,1996, ,
Powertel was combined with InterCel,Inc.and MPX's interest .
4 therein exchanged for InterCel common stock.The value of i MPX's investment in InterCel has grown nearly 40 percent since l MPX's initial investment in Powertel. l MPX also has an interest in ITC Holding Company,Inc.,a j privately owned venture with six businesses providing local and j long distance telephone services, telephone conferencing services and full service networks for cable television.
In addition,MPX owns or manages 2,500 miles of fiber optic lines stretching from the Carolinas to eastTexas and plans to substantially expand the network over the next several years.
MPX also developed and markets a state-of-the-art,two-way mobile radio system to government agencies and other utilities that vastly improves communications during crisis situations.
This system is targeted to have statewide coverage over South Carolina within the next two years.
MPX/intercel PCS Markets Greenville Huntsville Greenville umbia Birmin Atlanta harleston Jacksonville Jackson -
Tallahassee g Panama City E MEMPHl5 MARKET E BIRMJNGHAM MARKET EJACKsoNvlLt E MARKET MPX Owned / Managed Fiber Optic Network Through MPX and its various services, SCANA is one of the largest non-telephone businesses in the telecommunicauons industry.
ekrVkCCbdT8, InC, provides energy-related products and services beyond the meter, principally through service contracts on home appliances. More than 37,000 South Carolinians are members of ServiceCare,with 65 percent of those joining in 1995. Plans are to expand the ServiceCare program to other areas of North America through franchising agreements,with one such agreement already signed in 1996.
- . Primescuth,InC. is a power plant operation and maintenance contractor.in October 1995,Primesouth took over the operation and maintenance of the electric generating facility at the U.S.
Department of Energy's Savannah River Site.Primesouth contracted the agreement with SCE&G,which assumed control of the facility as part of the government's privatization efforts.
Overall, Primesouth operates and maintains seven projects in The savannah Ibver site) powerhouse is the latest five states that produce more than 450 megawatts of electric project to come under Primesouth s management. generation.
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FINANCIAL REVIEW Company Report On FinancialStatements -.~
15 Independent Auditors' Report 15 Consolidated Financial Statements
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Notes to Consolidated Financial Statements 22 Management's Discussion &
Analysis Of Financial Condition
& Results Of Operations 30 l i Selected Financial Data i Common StockInformation ,.
33 .
14
Company Repoft On Financial Statements l
Independent Auditors' Report j SCANA Corporation (Company) is responsible for SCgTA CORPORATIOR thm preparation and integrity of the financial data included
, in the accompanying Consolidated Financial Statements. We have audited the Consolidated Balance Sheets '
and Consolidated Statements of Capitalization of SCANA Thise statements have been prepared in conformity with Corporation and subsidiaries (Company) as of December 31, gtn: rally accepted accounting principles,as applicable. In 1995 and 1994 and the related Consolidated Statements of situations that prevent exact accounting measurements, income and Retained Earnings and of Cash Flows for informed judgments and estimates have been used.
each of the three years in the period ended December 31, Financial information presented elsewhere in this Annual R: port is consistent with these financial statements. 1995.These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based The Company maintains and relies upon internal on our audits.
accounting controls intended to provide reasonable assurance that transactions are properly recorded in the We conducted our audits in accordance with generally books and records and that assets are protected against accepted auditing standards.Tl'ose standards require that loss or unauthorized use.The degree of internal account-we plan and perform the audit to obtain reasonable ing control is based upon the determination of the appro-assurance about whether the financial statements are free priate balance between the cost incurred in maintaining of material misstatement. An audit includes examining, int:rnal controls and the benefits to be derived. Internal on a test basis, evidence supporting the amounts and dis-accounting controls are supported by written policies and closures in the financial statements. An audit also includes guid: lines and are complemented by the selection, training assessing the accounting principles used and significant and development of professional financial managers and by a staff of internal auditors who conduct internal audits. estimates made by management,as well as evaluating the overall financial statement presentation.We believe that ur audits provide a reasonable basis for our opinion.
The Board of Directors provides oversight for the preparation of the financial statements through its Audit in our opinion, such consolidated financial statements Committee,which is composed entirely of nonemployee present fairly,in all material respects,the financial position directors.The Audit Committee meets periodically with of the Company at December 31,1995 and 1994, and the management and internal auditors to review their activities results of its operations and its cash flows for each of the and responsibilities.The Audit Committee also meets three years in the period ended December 31,1995 in periodically with the Company's independent auditors, conformity with generally accepted accounting principles.
, D loitte & Touche LLP. The internal and independent a
auditors have free access to the Audit Committee to dis. As discussed in Note IB,the financial statements have-cuss internal accounting controls, auditing and financial been restated to reflect the chan<;e from the successful 1 r:portmg matters.
efforts method to the full cost raethod of accounting for the Company's oil and gas operations.
wsC W. B.Timmerman President, Chief Financial Officer and Controller
[kw0 M8 DELOITTE & TOUCHF. LLP February 7,1996 Columbia, South Caretina February 7,1996 15
- CONSOLIDATED BALANCE SHEETS Drctmber 31, 1995 1994 ASSETS (musands of Oaars)
Utility Plant (Notes 1,3 and 4):
ElIctric --
$3,539,068 $3,424,951 Gas . - 484,752 467,576 Transit 3,768 3,785 ,
Common 91,616 77,327 Total - . . 4,1I9,204 3,973,639 .
Liss accumulated depreciation and amortization- 1,367,541 1,333,360 Total 2,751,663 2,640,279 Construction work in progress- 644,661 582.628 Nuclear fuel, net of accumulated amertization . . 46,492 43,591 Acquisition adjustment-gas, net of accumulated amortization 26,172 27,169 Utility Plant, Net 3,468,988 3,293.667 N:nutility Property and investrnents (Net of accumulated d:preciation and depletion)(Note I) 314,207 317,309 Current Assets:
Cash and temporary cash :.nvestments (Note 8) .. 16,082 12,938 R ceivables . 211,173 183,180 inventories (At average cost):
Fuel (Notes 3 and 4) .. . . . 6I,499 60,273 Materials and supplies .- 47,674 47,463 Prepayments . 15,870 19,853 Accumulated deferred income taxes 20,186 18,629 Total Current Assets 372,484 ,
342,336 D firred Debits:
Emission allowances 28,514 19,409 Unamortized debt expense 13,432 13,488 Unamortized deferred return on plant investment (Note 1) 6,369 10,614 Nuclear plant decommissioning fund (Note 1) 36,070 30,383 Other (Notes I and 10) 294,362 289,306 Total Deferred Debits . 378,747 363,200 Total - $4,534,426 $4,316,512 r
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P ^ "'""' FWE)$Ny% "f^ @$VI#7"Wi"M"MW#P@ W w December 31, 1995 1994' CAPITALIZATION AND LIABILITIES (thousands orDoriars)
Stockholders'. Investment:
Common equity (Note 5) ... . $ 1,554,680 $ 1,359,141 Preferred stock (Not subject to purchase or sinking funds) 26,027 26,027 .
Total 5tockholders' investment- 1,580,707 1,385,168 Prefsrred Stock, Net (Subject to purchase or sinking funds)(Notes 6 and 8)- .- 46,243 49,528 -
Long-Term Debt, Net (Notes 3,4 and 8) . 1,588,879 1,548.824 Total Capitalization 3,215,829 2,983,520 Current Liabilities:
Short-term borrowings (Notes 8 and 9)-- l 12,524 171,827 Current portion of long-term debt (Note 3) 40,983 38,055 Current portion of preferred stock (Note 6) 2,439 2,418 Accounts payable 138,778 l 19,963 Customer deposits 13,643 13,768 Taxes accrued 66,914 46,670 Interest accrued 25,884 25,226 Dividends declared 39,056 35,530 Other 14,625 17,220 Total Current L >bilities- 454,846 470,677 Diferred Credits:
Accumulated deferred income taxes (Notes I and 7) 542,022 561,703 Accumulated deferred investment tax credits (Notes I and 7) .. 87,719 91,349 Accumulated reserve for nuclear plant decommissioning (Note 1) 36,070 30,383 Other (Note 1) . 197,940 178,880 Total Deferred Credits . 863,751 862,315 Commitments and Contingencies (Note 10)- - -
Total . $4,534,426 $4,316,512 See Notes to Consokdoted Anancial Statements.
4 4
1 17
CONSOLIDATEDSTATEEEXTS OFIXCOME
- AND RETAINED EARNINGS ,
l For thaYears Ended December 31, 1995 1994 1993 (Thousands of Dollars 1 except per share amounts) l Oper ting Revenues (Notes I and 2): l El:ctric . . . . $ 1,006,420 $ 975,388 $ 940,121 Gas . 342,662 342,672 320,195 Transit . . . . 3,889 4,002 3,85i Total Operating Revenues 1,352,971 1,322,062 1,264,167 -
Cper; ting Expenses: .
~l Full used in electric generation - 227,405 235,136 229,736 *l Purchased power 14,704 20,104 13,057 Gn purchased for resale.- 212,427 220,923 208,695 OthIr operation (Note 1)- 228,682 229,996 223,239 Maintenance (Note 1) 58,432 63,725 67,652 D:preciation and amortization (Note 1) 129,888 119,177 112,844 inc:me taxes (Notes I and 7) 109,949 94,510 90,007 Othtr taxes - 83,970 78,938 73.626 Total Operating Expenses 1,065,457 1,062,509 1,018,856 Opercting income 287,514 259.553 245,311 Other income (Note 1): j OthIr income (loss), net of income taxes. (1,915) (37,925) 18,406 Allowance for equity funds used during construction 9,975 8,176 8,929 j Total Other income 8,060 (29,749) 27,335 (
Incime Before Interest Charges and Preferred Stock Dividends 295,574 229.804 272,646 Int: rest Charges (Credits):
Int: rest on long-term debt, net i16,368 108,804 98,695 Othtr interest expense- 17,102 6,749 8,672 Allowance for borrowed funds used during construction (Note 1)... (11,922) (7,156) (6,178)
Total Interest Charges, Net 121,548 108,397 101,189 income Before Preferred Stock Cash Dividends of Subsidiary.. 174,026 121,407 171,457 j Preferred Stock Cash Dividends of Subsidiary (At stated rates) (5,687) (5,955) (6.217)
N t income 168,339 l 15,452 165,240 Retained Earnings at Beginning ofYear,as previously reported 523,668 506,380 462,893 -
I Adjustments for the Cumulative Effect on Prior !
Y;ars of Applying Retroactively the Full Cost , d Method of Accounting for Oil and Gas (Note 1) (51,297) (15,550) (12,809) r l
, Retained Earnings at Beginning ofYear,as adjusted 472,371 490.830 450,084 i C:mmon Stock Cash Dividends Declared (Note 5) (142,719) (133,911) (124,494)
$ 497,991 $ 472,371 $ 490,830 f
Retained Earnings at End ofYear N;t income $ 168,339 $ l15,452 $ 165,240 Weighted Average Number of Common Shares ;
Outstanding (Thousands) 99,044 94,762 90,407 E rnings PerWeighted Average Share of Commors stock $ 1.70 $ 1.22 $ 1.83 see Notes to comotodated Funanaal statements.
18
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- CONSOLDATED STATEMENTS OF CASE FLOWS For theYears Ended December 31, 1995 1994 1993 Cesh Flows From Operating Activities
- (Thousands of Dollars)
Net income- $ 168,339 $ 115,452 $ 165,240 Adjustments to reconcile net income to net cash provided from operating activities:
Depreciation, depletion and amortization. . 197,735 272,106 163,263 Amortization of nuclear fuel- 20,017 13.487 18,156 -
Deferred income taxes, net (21,969) (9,282) 63,729 Deferred investment tax credits. net (3,630) (3,632) (3,658) '
Net regulatory asset - adoption of SFAS No.109 10,797 (1,951) (31,531) x
, Dividends declared on preferred stock of subsidiary 5,687 5,955 6,217 Allowance for funds used during construction (21,897) (15,332) (15,107)
Unamortized loss on reacquired debt (3,313) (60) (17,063)
Nuclear refueling accrual 6,957 (4,881) (6,086)
Equity in (earnings) losses of investees 666 (230) (319)
Over (under) collections, fuel adjustment clauses 18,986 (16,966) (14,308)
Early retirements (24,823) (7,086) (11,840)
Emission allowances- (9,105) (19,409) -
Changes in certain current assets and liabilities:
(Increase) decrease in receivables .. (27,993) (9,059) (35,244)
(Increase) decrease in inventories (1,437) 2,131 (10,995)
(Increase) decrease in prepayments 3,983 1,973 802 Increase (decrease) in accounts payable 18,815 (19,331) 33,165 Increase (decrease) in estimated rate refunds and related interest . - (2,509) (15,302) increase (decrease) in taxes accrued 20,244 (3,393) (14,941)
Increase (decrease) in interest accrued 658 3,442 (7,511)
Other. net 5,515 (5,5171 _ 22.109 Net Cash Provided From Operating Activities 364,232 295,90rt 288,776 Cash Flows From investing Activities:
Utility property additions and construction expenditures. net of AFC.... (298,480) (389,268) (307,274)
(Increase) decrease in nonutility property and investments:
Acquisition of oil and gas producing properties - - (47,l89 (122,621)
Nonutility property (25,646) (I 15,5C) ; (82,066)
Investments (62,750) (19.006) (4,066)
Sale of real estate assets. 18,528 7'/,439 -
Net Cash Used For investing Activities _ (368,348) (4 U,565) (516.027)
Cesh Flows From Financing Activities:
Proceeds:
Issuance of mortgage bonds-- 99,583 99,207 592.884 issuance of common stock 172,036 63,317 129,066 issuance of notes and loans-- 62,542 60,000 148,059 Issuance of pollution control bonds - 30,000 -
Other long-term debt - -
3,005 Repayments:
Mortgage bonds- (64,779) -
(430,000)
>, Notes (69,444) (75,545) (72,040)
, Other long-term debt (11,300) (230) (1,195)
Preferred stock- (3,264) (3.398) (3,295) -
Dividend payments:
- Common stock (139,297) (131,925) (122,129)
Preferred stock - (5,750) (6,048) (6,247)
Short-term Sorrowings, net (59,303) 128.808 1,863 Fuel and emission allowances financings net 26,236 13,844 (18,948)
Net Cash Provided By Financing Activities 7,260 178,030 221,023 N:t increase (Decrease) in Cash and Temporary Cash investments 3,144 (17,627) (6,228)
Cesh and Temporary Cash investments, January 1 12,938 30,565 36,793 Cesh andTemporary Cash investments, December 31
~
$ 16,082 . ___$ 12,938 _$ 30,565
- ~
~
Supplirheitai Ca h' Flows in~ formation:
Cash paid for - Interest $ 130,495 $ I 10,3*7 $ 113,010
- Income taxes 99,050 90,012 93,337 Noncash Financing Activities:
Department of Energy decontamination and decommissioning obligation - - -
4,965 19 See Notts to Consolndated hnancial Statements.
mpn% + mum &vNN5""?77FfETET@P?S?CWRMK77WNWr#w=-9'%Myynemegg
- CONSOLIDATED STATEMENTS OF CAPITALIZATIOY pecember 31, 1995 1994 Common Equity (Note 5): (m e d orooks)
Common stock,without par value, authorized 150,000,000 shares; issued tnd outstanding, 1995 103,623,863 shares and 1994 - 96,035,020 shares $ 1,056,689 $ 886,770 Retained earnings 497,991 472,371 ,
. Total Common Equity 1,554,680 48% 1,359,141 46%
, South Carolina Electric & Gas Company:
Cumulative Preferred Stock (Not subject to purchase or sinking funds): .
~(
r
$100 ParValue - Authorized 200,000 shares
$50 ParValue . Authorized i25,209 shares Shares Outstanding _ Redemption Price Eventual Series 1995 1994 Currcnt Through Minimum,
$100 Par 8.40% 197,668 197,668 102.80 11 30-96 101.00 19,767 19,767
$50 Par 5.00% 125,209 125,209 52.50 -
52.50 6,260 6,260 Total Preferred Stock (Not subject to purchase or sinking funds) 26,027 1% 26,027 1%
South Carolina Electric & Gas Company: {
. Cumulative Preferred Stock (Subject to purchase or sinking funds)(Notes 6 and 8):
$100 ParValue . Authorized 1,550,000 shares Shares Outstanding Redemption Price Eventual Series. _1995_ _l994_ Current Through Minimum.
7.70% 86,965. 89,984 101.00 -
101.00 8,696 8,998 8.12% 123,045 126,835 102.03 -
102.03 12,305 12,684 21.0,0!p 21gl9 l
$50 ParValue . Authorized 1,614,405 shares Shares Outstaryding _ _ Rede_mption Price 4 Eventual l Series. 1995_ _1994_ Current Through Minimum I 4.50% 17,519 19,088 51.00 -
51.00 876 954 +
, 4.60 % 834 2,334 50.50 -
50.50 42 117 -
4.60%(A) 26,052 28.052 51.00 -
51.00 1,303 1,403 .
4.60%(B) 74,800 78,200 50.50 -
50.50 3,740 3,910 -
5.125% 72,000 73,000 f )
51.00 -
51.00 3,600 3,650 6.00% 83,200 86,400 50.50 -
50.50 4,160 4,320 8.72% 95,985 127,956 51.00 12-31 98 50.00 4,799 6,398 9.40% l 83,219 190,245 51,175 - 51,175 9,161 9,512 j
553 609 605.2_7_5
$25 ParValue Authorized 2,000,000 shares;None outstanding in 1995 and 1994 Tata! Preferred Stock (Subject to purchase or sinking funds) 48,682 51,946 l trss Current portion, including sinking fund requirements 2,439 2,418 Total Preferred Stock, Net (Subject to purchase or sinking funds) 46,243 1% 49,528 2% j 20
m,;m ne m m;a w m t" N N P T W 7 P F N N "7 ] ) 7 E M P P @ p5 D;cimber 31, -
1995 1994 LiniTerm Debt (Notes 3 4 iisd 8): (honds erooson)
SCANA Corporation:
Bank Notes, due 1997 (Various rates between 5.684% and 5.730%, reset quarterly) 60,000 60,000 Medium-Term Notes:
Series Year of Maturity
. 5.76% 1998 20,000 20,000 42,400 7.17% 1999 42,400 6.60% 1999 30,000 30,000
, 6.I5% 2000 20,000 20,000 t- 6.51% 2003 20,000 20,000 South Carolina Electric & Gas Company:
First Mortgage Bonds:
Series Year of Maturity
~
i>'d~ 2000 l00,000 100,000 61/4% 2003 100,000 100,000 7,70% 2004 100,000 100,000 7 I/8% 2013 150,000 150,000 71/2% 2023 150,000 150,000 75/8% 2023 100,000 100,000 75/8% 2025 100300 -
First and Refunding Mortgage Bonds:
Series .
Year of Maturity 47/8% 1995 - 16,000 SA5% 1996 15,000 15,000 6% 1997 15,000 15,000 6 I/2% i998 20,000 20,000 71/4% 2002 30,000 30,000 9% 2006 130,77I I45,000 87/8% 2021 120,450 155,000 Pollution Control Facilities Revenue Bonds:
5.95% Series,due 2003 6,560 6,660 Fairfield County Series 1984,due 2014 (6.50%) 56,820 56,820 Richland County Series 1985, due 2014 (6.50%) 5,210 5,210 Fiirfield County Series 1986,due 20l4 (6.50%) 1,090 1,090 Colleton and Dorchester Counties Series 1987,due 2014 (6.60%) 4,365 4,365 Orangeburg County Series 1994,due 2024 (Daily adjusted rate) 30,000 30,000 Department of Energy Decontamination and Decommissioning Obligation 3,560 3,922 Commercial Paper - l 1,200 Other 3,993 3,294 South Carolina Generating Company.Inc.:
- Berkeley County Pollution Control Facilities Revenue Bonds due 2014 (6.50%) 35,850 35,850 Note,7.78%, due 2011 63,700 67,400 South Carolina Fuel Company,Inc.:
') Commercial Paper 76,830 50,594 South Carolina Pipeline Corporation:
- N tes,6.72%, due 2013 22,500 23,750 SCANA Development Corporation:
Bank Loans - 3,246 T;tal Long-Term Debt 1,634,099 1,591,801 Less - Current maturities, including sinking fund requirements 40,983 38,055
- Unamortized discount 4,237 4,922 Total Long-Term Debt, Net 1,588,879 50% 1,548,824 51%
Total Capitalization $3,215,829 100% $2,983,520 100%
See Notes e Consordned Trad Sunemes 2I
w__m,my-y ,
~
mu . - . .
y NOTES TO CONS 01DATE] FINANCIA1 STATHEXTS Increase (Decrease)
- 1.
SUMMARY
OF SIGNIFICANT ACCOUNTING Year Ended December POLICIES: l994 1793 A. Organization and Principles of Consolidat'on Effect on- 1995 SCANA Corporation (Company),a South Car.slina corporation,is a (Thousands, except per share Amounu) public utility holding company within the meaning of the Public Utility Other income, net of Holding Company Act of 1935 but is exempt from registration under income taxes $(349) $(35,747) $(1,741)
- such Act. The Company,through wholly owned subsidiaries,is Net income (349) (35,747) (2,741)
- predominately engaged in the generation and sale of electricity to Earnings PerWeighted t wholesale and retail customers in South Carolina and in the purthase. Average Share of sala and transportation of natural gas to wholesale and retail customers Comrnon Stock $- $ (.38) $ (.03) '
in South Carolina. The Company is also engaged in other energy-related The balances of retained earnings as c,f December 31,1995,1994 and y busirtsses,such as owning and operating interests in oil and gas 1993 have been reduced for the effect (net of income taxes) of applying properties and natural gas marketing. The Company also provides,in the retroactively the new method of accounting.
South and Southeast, fiber optic communications and, through joint ventures,is developing personal communication services for wireless C. Basis ofAccounting The Company prepares its financial statements in accordance with communications.
Tha accompanying Consolidated Financial Statements reflect the the provisions of Statement of Financial Accounting Standards No.71 consolidation of the accounts of the Company and its wholly owned (SFAS 71)," Accounting for the Effects of CertainTypes of Regulations" The accounting standard allows cost-based rate-regulated utilities,such subsidiaries:
as the Company, to recognize in their financial statements revenues and Regulated utilities South Carolina Electric & Gas Company (SCE&G) expenses in different time periods than do er.terprises that are not rate-South Carolina Fuel Company,Inc. regulated. As a result the Company has recorded,as of December 31 South Carolina Generating Company,Inc.(GENCO) 1995,approximately $116 million and $4 million of regulatory assets and South Carohna Pipeline Corporation (Pipeline Corporation) liabilities, respectively, excluding net accumulated deferred income tax assets of approximately $27 million. As discussed in Note 2A.the Public Nonregulated businesses Service Commission of South Carolina (PSC) has approved accelerated SCANA Petroleum Resources,Inc.(Petroleum Resources)
SCANA Energy Marketing.Inc. recovery of substantially all of SCE&G's electric regulatory assets Suburban Propane Group,Inc. (approximately $84.8 million). In the future,as a result of deregulation or other changes in the regulatory environment,the Company may no MPX Systems.Inc. (MPX)
Primesouth,Inc. longer meet the criteria for continued application of SFAS 71 and would ServiceCare,inc. be required to write off its regulatory assets and liabilities. Such an event l
could have a material adverse effect on the Company's results of
}
SCANA Resources,Inc.
SCANA Development Corporation (in liquidation) operations in the period the write-off is recorded.
Cartain investments are reported using the equity method of D. System of Accounts accounting. Significant intercompany balances and transactions have been The accounting records of the Company's regulated subsidiaries are cdiminated in consolidation in compliance with Statement of Financial maintained in accordance with the Uniform System of Accounts Accounting Standards No. 71 " Accounting for the Effects of Certain prescribed by the Federal Energy Regulatory Commission (FERC) and as Types of Regulation" which provides that profit on intercompany sales to adopted by the PSC.
regulated affiliates are not eliminated if the sales price is reasonable and
- the re recovery of the sales price through the rate-making process is p ant s stated substantially at original cost. The costs of additions, renewals and betterments to utility plant, including direct labor, B. Stock Split and Change in Accounting Principle material and indirect charges for engineering, supervision and an On April 27,1995 the Company's Board of Directors approved a allowance for funds used during construction,are added to utility plant two-for-one split of the Company's common stock effective at the close accounts. The original cost of utility property retired or otherwise of business May 11,1995. The weighted average number of common disposed of is removed from utility plant accounts and generally charged, shar;s outstanding, earnings per weighted average share of common along with the cost of removal,less salvage,to accumulated depreciation.
stock and cash dividends declared per share of common stock have been The costs of repairs, replacements and renewals of items of property ,
restat;d to reflect the stock split for au periods reported. determined to be less than a unit of property are charged to -
I During the second quarter of 1995, Petroleum Resources changed maintenance expense.
.from the successful efforts method to the full cost method of accounting SCE&G, operator of theV. C. Summer Nuclear Station (Summer for its oil and gas operations. The Company believes the full cost Station),and the South Carolina Public Service Authority (PSA) are joint method provides a better matching of revenues and expenses given the owners of Summer Station in the proportions of twethirds and one-change in Petroleum Resources
- primary focus from a purchaser of third,respectively. The parties share the operating costs and energy intir;sts in producing oil and gas properties to a developer of reserves output of the plant in these proportions. Each party,however,provides on its own and others' properties. The financial statements have been ts own financing. Plant-in-service related to SCE&G's portion of r: stated to apply the new method retroactively. The effects of the Summer Station was approximately $925.1 million ano $923.1 million as accounting change on the income statements for the years er.ded of December 31,1995 and loM,respectively. Accumulated depreciation Dec:.mber 31,1995,1994 and 1993,respectively,are as follows: associated with SCE&G's anare of Summer Station was approximately
$261.0 million and $29.9 million as of December 31,1995 and 1994, respectively.(See Note 2A.) SCE&G's share of the direct expenses associated with operating Summer Station is included in "Other operation" and " Maintenance" expenses.
22
F. Allowanca for Funds Used During Construction D;pr ciation,d:pletion and amortization of the carM:e t costs of Allowanc7: for funds used during construction (AFC),a noncash it;m, oil and gas producing properties is provided for on tne units-of-reflects the period cost of capital devoted to plant under construction. production basis. Units-of-production rates are based on estimated This accounting practice results in the inclusion of, as a component of proved reserves.
construction cost.the costs of debt and equity capital dedicated to j, Nuclear Decommissioning construction investment. AFC is included in rate base investment and Decommissioning of Summer Station is presently projected to depreciated as a component of plant cost in establishing rates for utility commence in the year 2022 when the operating license expires. Based services. The Company's regulated subsidiaries calculated AFC using on a 1991 study,the expenditures (on a before-tax basis) related to composite rates of 8.6%,8.5% and 9.3% for 1995,1994 and 1993. SCE&G's share of deco nmissioning activities are estimated in 2022 respectively. These rates do not exceed the maximum allowable rate as dollars assuming a 4.5% annual rate of inflation,to be $545.3 million calculated under FERC Order No.561. Interest on nuclear fuel in including partial reclamation costs. SCE&G is providing for its share of process and sulfur dioxide emission allowances is capitalized at the actual estimated decon.missioning costs of Summer Station over the life of int: rest amount. Summer Station. SCE&G's method of funding deccmmissioning costs is C. Deferred Return on Plant Investment referred to as COMReP (Cost of Money Reduction Plan). Under this Commencing July 1,1987,as approved by a PSC order on that date, plan, funds collected through rates ($3.2 million in each of 1995 and SCE&G ceased the deferral of carrying costs associated with 400 MW of 1994) are used to purchase insurance policies on the lives of certain clectric generating capacity previously ren oved from rate base and began Company personnel Through the purchase of insurance contracts, amortizing the accumulated deferred carrying costs on a straight-line SCE&G is able to take advantage of income tax benefits and accrue basis over a ten-year period. Amortization of deferred carrying costs, earnings on the fund on a tax-deferred basis at a rate higher than can be included in" Depreciation and amortization," was approximately $4.2 achieved using more traditional funding approaches. Amounts for mt!! ion for each of 1995,1994 and 1993. decommissioning collected through electric rates, insurance proceeds.
H. Revenue Recognition and interest on proceeds less expenses are transferred by SCE&G to an Customers' meters are read and bills are rendered on a monthly external trust fund in compliance with the financial assurance cycle basis. Base revenue is recorded during the accounting period in requirements of the Nuclear Regulatory Commission. Management which the meters are read. intends for the fund, including earnings thereon, to provide for all Fuel costs for electric generation are collected through the fuel cost eventual decommissioning expenditures on an after-tax basis. The trust's component in retail electric rates. The fuel cost component contained in sources of decommissioning funds under the COMReP program include electric rates is established by the PSC during semiannual fuel cost investment components of life insurance policy proceeds, retum on hearings. Any difference between actual fuel costs and that contained in investments and the cash transfers from SCE&G described above.
the fuel cost component is deferred and included when determining the SCE&G records its liability for decommissioning costs in deferred credits.
fuel cost component during the next semiannual fuel cost hearing. The staff of the Securities and Exchange Commission has questioned j SCE&G had overcollected through the electric fuel cost component certain of the current accounting practices of the electric utility industry approximately $3 8 million at December 31,1995 and undercollected regarding the recognition, measurement and classification of i approximately $3.5 million at December 31,1994 which are included in decommissioning costs for financial statements of electric utilities with l nuclear generating tacilities. In response to these questions,the Financial j
" Deferred Credits - Other" and" Deferred Debits - Other" respectively.
Customers subject to the gas cost adjustment clause are billed based Accounting Standards Board has agreed to review the accounting for i I
on a fixed cost of gas determined by the PSC during annual gas cost removal costs, including decommissioning. If the current electric utility recovery hearings. Any difference between actual gas cost and that industry accounting practices for such decommissioning are changed:
contained in rates is deferred and included when establishing gas costs (1) annual provisions for decommissioning could increase,and (2) trust during the next annual gas cost recovery hearing. At L>ecember 31,1995 fund income from the external decommissioning trusts could be ,
and 1994 the Company had undercollected through the gas cost recovery reported as investment income rather than as a reduction of l decommissioning expense. ;
procedure approximately $4.6 million and $16.3 million,respectively, !
which are included in" Deferred Debits - Other" Pursuant to the National Energy Policy Act passed by Congress in SCE&G's gas rate schedules for residential,small commercial and 1992.SCE&G has recorded a liability for its estimated share of amos.nts small industrial customers include a weather normalization adjustment, required by the U.S. Department of Energy for its decommissioning fund.
which minimizes fluctuations in gas revenues due to abnormal weather The liability,approximately $3.6 million at December 31,1995,has been conditions. included in"Long-Term Debt, Net" SCE&G will recover the costa ass ciated with this liability through the fuel cost component of its rates:
- 1. Depreciation, Depletion and Amortization acc nh this amount has been deferred and is included in" Deferred Provisions for depreciation are recorded using the straight-line Debits-Other.,.
. method for financial reporting purposes and are based on the estimated sirvice lives of the various classes of property. The composite weighted K. IncomeTaxes average depreciation rates were as follows: The Company and its subsidiaries file a consolidated Federal income tax return. Income taxes are allocated to individual companies based on 1995 1994 1993 their contributions to the consolidated total.
SCE&G 3.02% 3.01% 2.97% As required by Statement of Financial Accounting Standards No.109, GENCO 2.67% 2.70% 2.64 % deferred tax assets and liabilities are recorded for the tax effects of Pipeline Corporation 2.78% 2.79% 2.62% temporary differences between the book basis and tax basis of assets Aggregate cf Above 2.98% 2.98% 2.92% and liabilities at currently enacted tax rates. Deferred tax assets and Iabilities are adjusted for changes in such rates through charges or Nuclear fuel amortization,which is included in" Fuel used in electric credits to regulatory assets or liabilities if they are expected to be gen ration" and is recovered through the fuel cost component of recovered from,or passed through to, customers of the Company's SCE&G's rates,is recorded using the units-of-production method. regulated subsidiaries;otherwise,they are charged or credited to income Provisions for amortization of nuclear fuel include amounts ne;essary to tax expense.
satisfy obligations to the United States Department of Energy under a contract for disposal of spent nuclear fuel. L Pension Expense The acquisition adjustment relating to the purchase of certain gas The Company has a noncontributory defined benefit pension plan properties in 1982 is being amortized over a 40-year period using the covering substantially all permanent employees. Benefits are based on years of accredited service and the employee's average annual base straight-kne method.
23
earnings received during the last three years of employment. The the applicable t + nefits. Prior to 1993 the Company cxpensed these Company's policy has been to fund pension costs accrued to the c: tent benefits,which are primarily health care,as claims were incurred, in its permitted by the applicable Federal income tax regulations as June 1993 electric rate order,the PSC appro',ad the inclusion in rates of determined by an independent actuary. the portion of increased expmses related to electric operations. The Net periodic pension cost for the years ended December 31,1995. Company expensed appmximately $8.5 million and $8.6 million. net of 1994 and 1993 included the following components: payments to current retirees,for the years ended December 31,1995 and 1994,respectively. The PSC has authorized accelerated amortization 1995 1994 1993 of SCE&G's remaining transition obligation for postretirement benefits (Thousands of Do#an) other than pensions related to electric operatio,s. (See Note 2A.)
Servic2 cost-benefits earned Net periodic postretirement benefit cost for the years ended
' during the period $ 5,187 $ 8,684 5 7,629 December 31,1995,1994 and 1993, included the following components:
Interest cost on projected benefit obligation 19,473 21,711 20,413 1995 1994 1993 Adjustments:
- 2,365 (Thousands of Donan)
Return on plan assets (103,874) (50,389) Service cost-benefits earned during Net amortization and deferral 74,769 (29.760) 25.936 the period $ 2,076 $ 2,417 $1,908 Net periodic pension Interest cost on accumulated -
(income) expense
$ (4,445) $ 3,000 $ 3,589 postretirement benefit obligation 7,253 6.644 5,502 Adjustments:
The determination of net periodic pension cost is based upon the Return on plan assets - - -
following assumptions: Amortization of unrecognized transition obligation 3,344 3,344 3,344 1995 1994 1993 Other net amortization and deferral 661 860 -
Annual discount rate 8.0% 7.25% 8.0%
Net periodic postretirement benefit Expected long-term rate of cost $13,334 $13,265 $10,754 return on plan assets 8.0% 8.0% 8.0%
Annual rate of salary increases 2.5% 4.75 % 5.5% The determination of net periodic postretirement benefit cost is based Pon the following assumptions:
The following table sets forth the funded status of the plan at December 31,1995 and 1994: 1995 1994 1993 1995 1994 Annual discount rate 8.0% 7.25% 8.0%
Health care cost trend rate l 1.0% 11.25 % 13.0%
(Thousands o(Donan) Ultimate health care cost trend rate Actuarial present value of benefit obligations:
(to be achieved in 2004) 6.0% 5.25% 6.0%
Vested benefit obligation $ 228,434 $ 205,364 Nonvested benefit obligation 15,540 13,966 The following tabi,e sets forth the funded status of the plan at Accumulated benefit obligation $ 243,974 $ 219,330 December 31,1995 and 1994:
Plan assets at fair value _
1995 1994 (invested primanly in equity (Thousands of Do#an) and debt securities) 447,760 347,702 Accumulated postretirement i Projected benefit obligation $ 284,145 $ 246,318 benefit obligations for:
Plan assets greater than Retirees $ 64,989 $ 59,174 projected benefit obligation 163,615 101,384 Other fully s.ligible participants 6,685 4.995 Unrecognized net transition liability 9,022 I I,307 Other active participants 27,076 24.889 ;
Unrecognized prior service costs 9,660 9,374 Accumulated postretirement benefit I Unrecognized net gain (146,943) (102.284) obligation 98,750 89,058 Pension asset recognized in Plan assets at fair value - -
Consolidated Balance Sheets $ 35,354 $ 19,781 Plan assets less accumulated postretirement bensfit obligation (98,750) (89,058)
The accumulated benefit obligation is based on the plan's benefit Unrecognized net transition liability 58,237 61,581 formulas without considering expected future salary increases. The Unrecognized prior service costs 5,320 3,453 i
following table sets forth the assumptions used in the amounts shown Unrecognized net loss 13,840 11,156 - '
above for the years 1995 and 1994. Postretirement benefit liability recognized 1995 1994 I" " ** *'*"'" *** *
- Annual d" court rate used to determine The accumulated postretirement benefit obligation is based upon the benefit obligations 7.5% 8.0% plan's benefit provisions and the following assumptions:
Assumed annual rate of future salary increases for projected benefit obligation 3.0% 2.5% 1995 1994 The change in the annual discount rate used to determine benefit Assumed health care cost trend rate used to obligations imm 8.0% to 7.5% and the change in the expected salary measure expected costs 10.5% 12.0%
increase rate from 2.5% to 3.0% as of December 31,1995 increased the Ultimate health care cost trend rate (t be achieved in 2004) 5,5% 6.0%
projected benefit obligation and decreased the unrecognized net gain by Annual discount rate 7.5% 8.0%
approximately $28.6 million.
""*' ** 'I'"'"****
in addition to pension benefits,the Company provides certain health care and life insurance benefits to active and retired employees. The costs of postretirement benefits other than peasions are accrued during the years the employees render the service necessary to be eligible for 24
The effect of a one percentage-point increase in the assumed health January 1,1996. The Company does not believe that adoption of the care cost trend rate for each future year on the aggregat] of the servico provisiona of the Statement will have a material impact on its results of and interest cost components of net periodic postretirement benefit operations or financial position. t cost for the year ended December 31,1995 and the accumulated R. Reclassifications
!- postretirement benefit obligation as of December 31,1995 would be to Certain amounts from prior periods have been reclassified to increase such amounts by $203,000 and $3.4 million,respectively. conform with the 1995 presentation.
M. Debt Premium, Discount and Expense, Unamortized Loss on S. Use of Estimates Reacquired Debt The preparation of financial statements in conformity with generally Long-term debt premium, discount and expense are being amortized '
accepted accounting principles requires management to make estimates as components of" Interest on long-term debt. net" over the terms of and assumptions that affect the reported amounts of assets and liabilities the respective debt issues. Gains or losses on reacquired debt that is and disclosure of contingent assets and liabilities at the date of the refirrnced are deferred and amortized over the term of the replacement
! financial statements and the reported amount of revenues and expenses debt.
during the reporting period. Actual results could di#er from those N. Environmental estimates.
The Company has an er vironmental assessment program to identify and assess current and former operations sites that could require 2. RATE MATTERS:
environmental cleanup. As site assessments are initiated an estimate is A. OnJuly 10,1995,SCE&G filed an application with the PSC for an l made of the amount of expenditures,if any,necessary to investigate and increase in retail electric rates. On January 9,1996 the PSC issued an clean up each site. These estimates are refined as additional information order granting SCE&G an increase of 7.34% which will produce
- becomes available;therefore, actual expenditures could differ significantly additional revenues of approximately $67.5 million annually. The increase from the original estimates. Amounts estimated and accrued to date for will be implemented in two phases. The first phase,an increase in sita assessments and cleanup relate primarily to regulated operations; revenues of approximately $59.5 million annually based on a test year,or i
such amounts are deferred and are being amortized and recovered 6.47%, commenced on january 15,1996. The second phase will be through rates over a ten-year period for electric operations and an implemented in January 1997 and will produce additional revenues of cight-year period for gas operations. Such deferred amounts totaled approximately $8.0 million annually,or .87% more than current rates.
$18.0 million and $20.2 million at December 31,1995 and 1994 The PSC authorized a return on common equity of 12.0%. The PSC also respectively,and are included in" Deferred Debits-Other" approved establishment of a Storm Damage Reserve Account capped at
$50 million and collected through rates over a ten-year period.
O. Oil and Gas .
Additionally,the PSC approved accelerated recovery of substantially all of The Company follows the full cost method of accounting for its oil SCE&G's electric regulatory assets (excluding accumulated deferred and gas operations and,accordingly, capitalizes all costs it incurs in the income taxes) and the transition obligation for postretirement benefits acquisition, exploration and development of intet ests in oil and gas other than pensions, changing the amortization periods to allow recovery
- properoes. The Company amortizes capitalized costs on the units-of-by the end of the year 2000. SCE&G's request to shift approximately production method, based on total estimated proved recoverable
. $257 million of depreciation reserves from transmission and distribution reserves. The Company accounts for normal dispositions of interests in assets to nuclear production assets was also approved. ,
j oil and gas properties as adjustments to capitalized costs and does not B. On October 27,1994 the PSC issued an order approving the l recognize any gain or loss.
Company's request to recover through a billing surcharge to its gas !
In addition,the capitalized costs are subject to a" ceiling test" which !
customers the costs of environmental cleanup at the sites of former limits such costs to the aggregate of the estimated present value of manufactured gas plants. The billing surcharge,which was effective with l future net cash flows from proved oil and gas reserves,plus the lower of cost or fair market value of unproved properties. Non-cash write-downs the first billing cycle in November 1994 and is subject to annual review, )
provides for the recovery of approximately $16.2 million representing I j resulting from the applicacon of the ceiling test were $118.2 million and '
substantially all site assessment and cleanup costs for the Company's gas
$94.1 milhon in the years ended December 31,1995 and 1994, operations that had previously been deferred. In October 1995,as a respectively.
. result of the ongoing annual review,the PSC approved the continued use The valuation estimates of interests in oil and natural gas propero.es of the billing surcharge. The balance remaining to be recovered amounts are significantly influenced by oil and natural gas market prices and the '
to approximately $f 4.5 million.
results of recurring reserve studies of such properties. Net income of C. In September 1992 the PSC issued an order granting the the Company may be materially adversely affected by a decline in oil and l Company a $.25 increase in transit fares from $.50 to $.75 in both natural gas prices or reserve esumates.
Columbia and Charleston, South Carolina;however,the PSC also .
P. Temporary Cash Investments required $.40 fares for low-income customers and denied the Company's The Company considers temporary cash investments having original request to reduce the number of routes and frequency of service. The
- maturities of three months or less to be cash equivalents. Temporary new rates were placed into effect in October 1992. The Company cash investments are generally in the form of commercial paper, appealed the PSC's order to the Circuit Court,which on May 23,1995, l . certificates of deposit and repurchase agreements. ordered the case back to the PSC for reconsideration of several issues, Q. Recently issued Accounting Standards including the low-mcome rider program, routing changes,and the $.75
, The Financial Accounting Standards Board has issued Statement of fare. The South Carolina Supreme Court declined to review an appeal of l Financial Accounting Standards No.121," Accounting for the impairment the Circuit Court decision and dismissed the case. Another Petition for l of Long-Lived Assets and for Long-Lived Assets to be Disposed Of" Tie Reconsideration was filed by the PSC and other intervenors,which was i pn> visions of the Statement,which will be implemented by the Company denied by the Circuit Court. Procedural matters in this case are yet to for the fiscal year beginning January 1,1996, require the recognition of s be resolved in the court.
loss in the income statement and related disclosures whenever events cr changes in circumstances indicate that the carrying amount of a long-lived asset may not be recoverable. The Company does not believe that adoption of the provisions of the Statement will have a material impact
, on its results of operations or financial position.
l The Financial Accounting Standards Board issued Statement of l Financial Accounting Standards No.123," Accounting for Stock-Based i Compensation," which will be implemented by the Company on l 25 l
t
3, LCNG-TERM DEDT: Cash dividends on common stock wers declared at an annual rate The annual amounts of long-tam debt maturiti;s, including the Per shara of $144,$1 AI and $i.37 for 1995,1994 and 1993, amounts due under the nuclear and fossil fuel agreement (see Note 4), respectively.
and sinking fund requirements for the years 1996 through 2000 are summarized as follows: 6. PREFERRED STOCK (Subject to Purchase or Sinking Funds):
Y ar Amount Year Amount The call premium of the respective series of preferred stock in no (Thousands of Dollars) case exceeds the amount of the annual dividend. Retirements under 1996 5 40,983 1999 $ 95,013 sinking fund requirements are at par values.
1997 98,202 2000 142,618 The aggregate annual amounts of purchase fund or sinking fund 1998 139,433 requirements for preferred stock for the years 1996 through 2000 are summarized as follows:
Approximately $l7.3 million of the portion oflong-term debt payable in 1996 may be satisfied by either deposit and cancellation of bonds Year Amount . Year Amount ,
issued upon the basis of property additions or bond retirement credits. (Thousands of Dolfors) or by deposit of cash with theTrustee. 1996 $2,439 1999 $2.440 On January 12,1996 the Company arranged for unsecured bank 1997 2.440 2000 2,440 ,
loans totaling $60 milhon,due January 10,1997 at initial interest rates 1998 2.440 between 5.684% and 5.730% subject to reset quarterly at LIBOR plus a spread of nine to fifteen basis points. Proceeds from the loans were The changes in " Total Preferred Stock (Subject to purchase or sinking funds)" during 1995,1994 and 1993 are summarized as follows:
used to repay a W, loan of $60 million due January 12,1996; accordingly, the loan is included in long-term debt at December 31,1995. Number Thousands SCE&G has three-year revolving lines of credit totaling $100 million, of Shares of Dollars in addition to other lines of credit, that provide liquidity for issuance of Balance December 31,1992 940,529 $58,639 commercial paper. The three-year lines of credit provide back-up . Shares Redeemed:
liquidity when commercial paper outstanding is in excess of $100 million. $100 par value (7.374) (737)
Tha long-term nature of the lines of credit allow commercial paper in $50 par value (51,187) (2,558) cxcess of $100 million to be classified as long-term debt. SCE&G had Balance December 31,1993 881,968 55,344 outstanding commercial paper of $1Il.2 million at December 31,1994, Shares Redeemed:
of which $11.2 million was reclassified to long-term debt. $100 par value (8,072) (807)
Substantially all utikty plant and fuel inventories are pledged as $50 par value (51,802) (2,591) collateral in connection with long-term debt. Balance December 31,1994 822,094 51,946 -
8ha Redeen ed:
- 4. FUEL FINANCINGS: , o p,, v (6,809) (681)
Nuclear and fossil fuel inventories and sulfur dioxide emission
$50 par value (51,666) (2,583) allowances are financed through the issuance by Fuel Company of short-Balance December 31,1995 763,619 $48,682 t:rm commen:ial paper. These short-term borrowings are supported by an irrevocable revolving credit agreement which expires July 31,1998.
g g *,
Accordingly,the amounts outstanding have been included in long-term debt. The credit agreement provides for a maximum amount of $125 Total income tax expense for 1995,1994 and 1993 is as follows:
million that may be outstanding at any time.
1995 1994 1993 Commercial paper outstanding totaled $76.8 million and $50.6 million at December 31,1995 and 1994 at weighted average interest rates of Current taxes:
5.76% and 6.06% respectively.
Federal $101,656 $62,033 $59,590 State 16,193 13,178 6,409
- 5. COMMON EQUITY:
Thr changes in" Common Stock" without par value, during 1995, Total current taxes 117,849 75.211 65,999 1994 and 1993 are summarized as follows: Deferred taxes. net Federal (13,878) 10,242 23,219 Number Thousands State (1,224) (86) 6,003 of Shares of Dollars Total deferred taxes 10,156 29,222 (15,102)
Balance December 31,1992 87,821,262 $ 699,003 Investment tax credits: ,
Issuance of common stock 5.417,652 127,662 Amortization of amounts Balance December 31,1993 93,238,914 826,665 deferred (credit) (3,630) (3,631) (3,659)
Issuance of common stock 2.796,106 60,105 Total income tax expense $ 99.117 $81,736 $91,562 Balance December 31,1994 96,035,020 886,770 issuance of common stock 7,588,843 169,919 Balance December 31,1995 103,623,863 $ 1,056,689 Thi Restated Articles of Incorporation of the Company do not limit the dividends that may be payable on its common stock. However,the Restated Articles of Incorporation of SCE&G and the Indenture underlying its First and Refunding Mortgage Bonds contain provisions that,under certain circumstances,could limit the payment of cash dreidends on its common stock. In addition,with respect to hydroelectric projects,the Federal Power Act requires the appropriation of a portion of certain earnings therefrom. At December 31,1995 apprcaimately $14.5 million of retained earnings were restricted by this j requirement as to payment of cash dividends on SCE&G's common stock. i 26 ;
The differenc] in actual income taxes and the income taxes calculated 8, FINANCIAL INSTRUMENTS:
from the application of the statutory Federal income tax rate (35% for The c;rrying amounts and estimated fair values of the Company's 1995,1994 and 1993) to pretax income is reconciled as follows: financial instruments at December 31,1995 and 1994 are as follows:
1995 1994 1993 1995 1994 (Thousands o(Mars) Estimated Estimated Net income $168,339 $115,452 $165.240 Carrying Fair Carrying Fair Totalincome tax expense: Amount Value Amount Value Charged to operating expenses 109,949 94,510 90,007 Charged (credited) to other @usands ofDo#an)
Assets:
income (10,832) (32,022) 79 Cash and temporary Preferred stock dividends 5,687 5,955 6,217 cash investments $ 16,082 $ 16,082 $ 12,9M $ 12,938
_la!pretax income $273,143 $183,895_5261,543 Investments 90,380 105,280 24,d58 40,299 Liabilities:
Income taxes on above at statutory 112,524 1/l,827 Short-term borrowings 112,524 171,827 Federalincome tax rate $ 95,600 $ 64,363 $ 91,540 Long-term debt 1,629,862 1,737,686 f,586.879 1,502.052 Increases (decreases) attributable to: Preferred stock Allowance for equity funds used (subject to purchase during construction (3,491) (2,862) (3,125) 48,682 46,603 51,946 49,348 or sinking funds)
Amortization of deferred return on plant investment 1,486 1,486 1,486 The informa3on presented herein is based on pertinent information Depreciation differences 3,086 2,860 2.794 available to the Company as of December 31,1995 and 1994. Although Amortization of investment tax the Company is not aware of any factors that would significantly affect credits (3,630) (3,631) (3,659) the estimated fair value amounts,such financial instruments have not State income taxes (less Federal been comprehensively revalued since December 31,1995,and the income tax effect) 9,730 8,510 8,068 current estimated fair value may differ significantly from the estimated Deferred income tax flowback at fair value at that date.
higher than statutory rates (3,941) (4,327) (4,411) The following methods and assumptions were used to estimate the I
Alternate fuel production tax credit (850) (1,274) (1,373) fair value of the above classes of financial Instruments:
Other differences, net 1,127 (2,637) (1,234)
Cash and temporary cash investments, including commercial paper, Totalincome tax _ expense $ 99,117 $ 62,488 $ 90,086 repurchase agreements, treasury bills and notes are valued at their carrying amount.
The tax effects of significant temporary differences comprising the Fair values of investments and long-term debt are based on quoted <
Company's net deferred tax liability of $521.8 million at December 31' market prices of the instruments or similar instruments, or for those I 1995 and $543.1 million at December 31,1994 determined in I instruments for which there are no u>ted market prices available, fair accordance with Statement No.109 (see Note IK) are as follows: values are based on net present value calculations. Investments which are not considered to be financial instruments (goodwill) have been 1995 1994 (Thnds gurs) excluded from the carrying amount and estimated fair value. Settlement Deferred tax assets: f long-term debt may not be possible or may not be a prudent Urtmortized investment tax credits $ 54,342 $ 56,588 management decision.
Cycle billing 19,143 17.521 Short-term borrowings are valued at their carrying amount. i Nuclear operations expenses 3,755 206 The fair value of preferred stock (subject to purchase or sinking i Oil and gas pmperties 9,738 - funds) is estimated on the basis of market prices. l Deferred compensation 5,647 5,513 Potential taxes and other expenses that would be incurred in an Other postretirement benefits 6,371 3,187 actual sale or settlement have not been taken into consideration. j Other 7,599 8,392 i Total deferred tax assets 106,595 91.407
- 9. SHORT-TERM BORROWINGS:
The Company pays fees to banks as compensation for its committed Deferred tax liabilities:
lines of credit. Commercial paper borrowings are for 270 days or less.
Property, plant and equipment 592,160 598,313 Details of lines of credit and short-term borrowings, excluding amounts classified as long-term (Notes 3 and 4),at December 31,1995,1994 and eacq ir d e 7 R;s: arch and experimentation 6,196 2,276 1993 and for the years then ended are as follows:
Other 9,203 17,724 1995 1994 1993 Total deferred tax liabilities 628,430 634,481 M# ions of Do#an)
Net deferred tax liability _5521,835 $543,074 Authorized lines of credit at year-end $477.1 $379.1 $335.0 1
~
Unused lines of credit at year-end $470.0 $355.1 $308.0 )
The Internal Revenue Service has examined and closed conschdated Short-term borrowings !
Federal income tax returns of the Company through 1989 and is outstanding at year-end- i currently examining the 1990,1991 and 1992 Federalincome tax Bank loans 5 32,0 $ 71.8 $ 42.0 l returns. Adjustments are currently proposed by the examining agent. Weighted average interest rate 6.21% 6.38% 3.71%
The Company does not anticipate that any adjustments which might Commercial paper $ 80.5 $100.0 $ l .0 r;sult from this examination will have a significant impact on the earnings Weighted average interest rate 5.83% 6.04 % 3.35%
~
or fircncial position of the Company.
l 4
27 l l
1
10, CSMMITMENTS AND CONTINGENCIES; in September 1992 the Environmental Protection Agency (EPA)
A. Construction notified SCE&G,the City of Charleston and the Charlescon Housing SCEAG er.tered into a contract with Duke / Fluor Danielin 1991 to Authority of their potential liability for the investigation and cleanup of design, engineer and build a 385 MW coal-fired electric generating plant the Calhoun Park Area Site in Charleston, South Carolina. This site
- near Cope, South Carolina. Construction of the plant started in originally encompassed approximately eighteen acres and included November 1992. Commercial operation began in January 1996. The Properties which were the locations for industrial operations, including a ccst of the Cope plant, excluding AFC,is $410.9 million. In addition,the wood preserving (creosote) plant and one of SCE&G's decommissioned transmission lines for interconnection with SCE&G's system cost $22.5 manufactured gas plants. The original scope of this investigation has been million. expanded to approximately 30 acres, including adjacent properties Under the Duke / Fluor Daniel contract the aggregate amount of owned by the National Park Service and the City of Charleston,and required minimum payments remaining at December 31,1995 is $4.2 Private properties. The site has not been placed on the National Priority million due in 1996. Thmugh December 31,1995 SCE&G had paid List, but may be added before cleanup is initiated. The potentially
$378.7 million under tne contract, responsible parties (PRP) have agreed with the EPA to participate in an B. Nuclear Insurance inn vative approach to site investigation and cleanup called"Superfund The Price-Anderson Indemnification Act,which deals with public Accelerated Cleanup Modet," allowing the pre-cleanup site investigation liability for a nuclear incident, currently establishes the liability limit for Process to be compressed significantly. The PRPs have negotiated an
' third-party claims associated with any nuclear incident at $8.9 billion. administrative rder by consent for the conduct of a Remedial Each reactor licensee is currently liable for up to $79.3 million per investigation / Feasibility Study (Rl/FS) and a corresponding Scope ofWork.
reactor owned for each nuclear incident occurring at any reactor in the Field work began in November 1993. SCE&G is also working with the United States,provided that not mere than $10 million of the liability per City of Charleston to investigate potential contamination from the reactor would be assessed per year. SCE&G's maximum assessment, manufactured gas plant which may have migrated to the city's aquarium based on its two-thirds ownership of Summer Station,would be site. In 1994 the City of Charleston notified SCE&G that it considers approximately $52.9 million per incident,but not more than $6.7 million SCE&G to be responsible for a $43.5 million increase in costs of the per year, aquarium project attributable to delays resulting from contamination of SCE&G currently maintains policies (for itself and on behalf of the the Calhoun Park Area Site. SCE&G believes it has meritorious defenses against this claim and does not expect its resolution to have a material PSA) with Nuclear Electric Insurance Limited (NEIL) and American Nuclear Insurers (ANI) providing combined property and impact on its financial position or results of operations.
dec:ntamination insurance coverage of $1.9 billion for any losses at D. Oil and Gas Forward Contracts Summer Station. SCE&G pays annual premiums and,in addition,could be in an effort to limit exposure to changing natural gas prices,in assessed a retroactive premium not to exceed 7 t/2 times its annual January 1995 the Company entered into a series of forward contracts premium in the event of property damage loss to any nuclear generating . relating to natural gas production. These forward contracts have the facilities covered under the NEll program. Based on the current annual effect of stabilizing the price that the Company receives on premium,this retroactive premium would not exceed $8.2 million. approximately sixty percent of its forecasted natural gas production for To the extent that insurable claims for property damage, the years 1996-2001. The forward contracts are at an average price of decontamination, repair and replacement and other costs and expenses $1.92 per dekatherm.
arising from a nuclear incident at Summer Station exceed the policy E. MPX Guarantee limits of insurance, or to the extent such insurance becomes unavailable A percentage of the projected annual revenues for the years 1996-in the future,and to the extent that SCE&G's rates would not recover 2003 of curtain fiber optic routes of a joint venture between MPX and a the cost of any purchased replacement power,SCE&G will retain the risk subsidiary of ITC Holding Company,inc.,a Georgia-based of loss as a self-insurer. SCE&G has no reason to anticipate a serious telecommunications holding company,has been guaranteed by MPX.The nuclear incident at Summer Station if such an incident were to occur,it aggregate maximum amount of such guarantee over the eight year could have a material adverse impact on the Company's financial position period is approximately $46.2 million, prior to reduction for revenue
- and results of operations. contracts obtained by the joint venture.
C. Environmental F. Claims and Litigation As described in Note IN of Notes to Consolidated Financial The Company is engaged in various claims and litigation incidental to Staternents, the Company has an environmental assessment program to its business operations which management anticipates will be resolved identify and assess current and former operations sites that could without loss to the Company. No estimate of the range of loss from require environmental cleanup. As site assessments are initiated, these matters can currently be determined.
rstimates are made of the cost,if a.iy,to investigate and clean up each site. These estimates are refined as additional information becomes available;therefore, actual expenditures could differ significantly from original estimates. Amounts estimated and accrued to date for site assessments and cleanup relate primarily to regulated operations; such amounts are deferred and are being amortized and recovered through rates over a ten-year period for electric operations and an eight-year period for gas operations. Such deferred amounts totaled $18.0 million and $20.2 million at December 31,1995 and 1994,respectively.
Estimates to date include, among other items,the costs estimated to be associated with the matters discussed in the following paragraphs.
SCE&G,the Company's principal subsidiary, owns four decommissioned nianufactured gas plant sites which contain residues of by-product chemicals.SCE&G maintains an active review of the sites to monitor the nature and extent of the residual contamination.
28
i1. SEEMENT CF BUSINESS INFORMATION: 1993 Segment information at December 31,1995,1994 and 1993 and for Electric Gas Transit Total the years then ended is as follows:
(Thousands of Do#ars)
- 995 Operating revenues 5 940,121 $320,195 5 3.851 $1,264,167 Electric Gas Transit Total Opwating expenses, excluding depreciation Op_erating revenues $1,006,420 $ 4 64 $ , 89 $1,352,971 Dep ti Operating expenses. amortization 97,849 112,844 14.820 175 naion 638,480 286,C60 10,429 935,569 Total operadng expensa 7W,188 289.756 W I,N 8,856 Depreciation and Operating income (loss) $ 220,933 $ 30.439 $(6,061) 245,31I
~ amortization - 110,865 18,016 1,007 129,888 Total operating expenses 749,345 304,676 11,436 1,065,457 Add Otherincome, net 27,335 ess e gting income (lossL$ 257,075 $ 37,9P6 $ (7,547) 287,514 . f e ck dividends
- I"'**
Add Otherincome, net 8,060 I Less . Interest charges 121,548
. Preferred stock dividends 5,687 Capital expenditures:
Identifiable 5 279,082 5 28,761 $ 604 5 308,447 Net income $ 168,339 Utilized for overall Company operations 13,934 Capital expenditures:
' identifiable $ 253,577 $ 38,718 $ 265 $ 292,560 Total $ 322,381_
Utilized for overall Company operations 27,816 Identifiable assets at Decener 31, M3:
Total 5 320,376 Utility plant, net $2.628,374 $312.437 $ 1,673 $2,942,484 inventories 77,805 22.019 . 463 100,287 gg Total $2.706:179 $334,456 $ 2,136 3,042,771 December 31,1995: _
Utility plant, net . $3,033,887 $337,939 $ 1,878 $3,373,704 Inventories 87,143 15,714 561 103,418 Othe assets 983,930 Total $3,121,030 $353,653 $ 2,439 3,477,122 Total assets $4,026.701 Other assets ' I,057,304 12. QUARTERLY FINANCIAL DATA (Unaudited):
Total assets $4.534,426 g,,5 First Second Third Fourth 1994 Electric Gas Transit Total Quarter Quarter Quarter Quarter Annual Total operating (Thesonds of Do#ars) revenues (000) $344,760 $111,136 $373,476 $323,599 $1,352,971 Operating revenues $ 975388 $342,672 $ 4.002 $1322.062 Operating Operating expenses, income (000) 75,046 61,012 95,438 56,0l8 287,514 excluding depreciation Netincome(000) 51,265 15,586 68,029 33,459 168,339 and amortization 640.528 292,227 10,577 943,332 Earnings per Depreciation and weighted average amortization 102,647 16,304 226 119.177 share of common Total operating expenses 743,175 308,531 10,803 1,062.509 stock as reported .53 .16 .69 .32 1,70 Operating income (loss) ___$
m _
232,213 $ 34.141 $ (6,801) 259.553 g994 Add - Otl'er income, net (29.749) First Second Third Fourth Less Interest charges 108397 Quarter Quarter Quarter Quarter Annual
- Preferred stock dividends 5,955 Total operating Net income $ 115.452 revenues (000) $347,309 $296,046 $361329 $317,378 $1322,062
=
Operating Capital expenditures: income (000) 69398 50,048 86,708 53399 259.553 347 $ 384,433 51,442 30,254 16,701 17,055 115,452 Identifiable $ 364.007 $ 20.079 5 Net income (000)
Earnings per gh a Utilized for overall Company operations 20.167 p $ 404,600 stock as reported .55 32 .18 .17 1.22 Identifiable assets at December 31,1994:
Utility plant. net $2.897,954 $315,746 $ l.791 $3.215,491 Inventories 79,263 17.026 495 96,781 Total $2,977,214 $332,772 $ 2,286 3,312,272 Ochsr assets 1,004.240 Total, assets $4316,512_
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINAN CIAL CONDITION AND RESULTS OF OPERATIONS COMPETITION additional revenues of approximately $67.5 million annually. The increase The electric utility industry has begun a major transition that could will be implemented in two phases. The first phase,an increase in lead to expanded market competition and less regulatory protection. revenues of approximately $59.5 million annually based on a test year,or Future deregulation of electric wholesale and retail markets will create 6.47%, commenced on January 15,1996. The second phase will be opportunities to compete for new and existing customers and markets. implemented in January 1997 and will produce additional revenues of As a result, profit margins and asset values of some utilities could be approximately $8.0 million annually, or .87% more than current rates.
adversely affected. The pace of deregulation. future prices of electricity, The PSC authorized a return on common equity of 12.0%. The PSC also and the regulatory actions which may be taken by the Public Service approved establishment of a Storm Damage Reserve Account capped at Co.mmission of South Carolina (PSC) in response to the changing $50 million and collected through rates over a ten-year period.
environment cannot be predicted. However,the Company is aggressively Additionally,the PSC approved accelerated recovery of substantially all of pursuing actions to position itself strategically for the transformed SCE&G's electric regulatory assets (excluding accumulated deferred .
environment. To enhance its flexibility and responsiveness to change,the income taxes) and the remaining transition obligation for postretirement Company's electric and gas utility,SCE&G, operates Strategic Business benefits other than pensions, changing the amortization periods to allow Units. Maintaining a competitive cost structure is of paramount recovery by the end of the year 2000. SCE&G's request to shift importance in the utility's strategic plan. SCE&G has undertaken a approximately $257 million of depreciation reserves from transmission variety of initiatives, including reductions in operation and maintenance and distribution assets to nuclear production assets was also approved.
costs and in staffing levels. In january 1996 the PSC approved (as The estimated primary cash requirements for 1996, excluding discussed under" Liquidity and Capital Resources") the accelerated requirements for fuel liabilities and short-term borrowings,and the actual recovery of SCE&G's electric regulatory assets and the shift of primary cash requirements for 1995 are as follows:
depreciation reserves from transmission and distribution assets to nu: lear production assets. SCE&G believes that these actions as well as 1996 1995 numerous others that have been and will be taken demonstrate its ability (Thousands o(Do#ars) and commitment to succeed in the new operating environment ta come. Property additions and construction Regulated public utilities are allowed to record as assets some costs expenditures, net of allowance for that would be expensed by other enterprises, if deregulation or other funds used during construction $276,280 $303,081 changes in the regulatory environment occur,the Company may no Nuclear fuel expenditures 21,147 21,045 fonger be eligible to apply this accounting treatment and may be required Maturing obligations, redemptions and to diminate such regulatory assets from its balance sheet. Such an event sinking and purchase fund requirements 26,147 24,008 could have a material adverse effect on the Company's results of Total $323,574 $348,134 operations in the period the write-off is recorded. The Company r: ported approximately $116 million and $4 million of regulatory assets Approximately 56% of total cash requirements (after payment of and liabilities,respectively, excluding amounts related to net accumulated dividends) was provided from internal sources in 1995 as compared to deferred income tax assets of approximately $27 million,on its balance 31% in 1994.
sheet at December 31,1995.
The Company has in effect a medium-term note program for the issuance from time to time of unsecured medium-term debt securities.
LIQUIDITY AND CAPITAL RESOURCES The proceeds from the sales of these securities may be used to fund The cash requirements of the Company arise primarily from SCE&G's additional business activities in nonutility subsidiaries,to reduce short-operational needs, the Company's construction program and the need to ter n debt incurred in connection therewith or for general corporate fund the activities or investments of the Company's nonregulated purposes. At December 31,1995 the Company had $317.6 million subsidiaries. The ability of the Companys regulated subsidiaries to available for issuance, replace existing plant investment,as well as to expand to meet future SCE&G's First and Refunding Mortgage Bond Indenture, dated April I, demand for electricity and gas,will depend upon their ability to attract 1945 (Old Mortgage),contains provisions prohibiting the issuance of the necessary financial capital on reasonable terms. The Company's additional bonds thereunder (Class A Bonds) unless net earnings (as regulated subsidiaries recover the costs of providing services through therein defined) for twelve consecutive months out of the fifteen months rates charged to customers. Rates for regulated services are generally prior to the month of issuance are at least twice the annual interest ,
bas:d on historical costs. As customer growth and inflation occur and requirements on all Class A Bonds to be outstandmg (Bond Ratio). For the regulated subsidiaries expand their construction programs,it is the year ended December 31,1995 the Bond Ratio was 3.97, The necessary to seek increases in rates. As a result,the Company's future issuance of additional Class A Bonds also is restricted to an additional financial position and results of operations will be affected by the principal amount equal to (i) 60% of unfunded net property additions regulated subsidiaries' ability to obtain adequate and timely rate and (which unfunded net property additions totaled approximately $162.3 cther regulatory relief. million at December 31,1995),(ii) retirements of Class A Bonds (which Due to c.ntinuing customer growth SCE&G entered into a contract retirement credits totaled $64.8 rrillion at December 31,1995),and (iii) ,
' with Duke / Fluor Daniel in 1991 to design, engineer and build a 385 MW cash on deposit with theTrustee. !
coal-fired electric generating plant near Cope, South Carolina. SCE&G has a new indenture (New Mortgage) dated April I,1993 Construction of the plant started in November 1992. Commercial covering substantially all of its electric properties under which its future ;
operation began in january 1996. The estimated cost of the Cope plant, mortgage-backed debt (New Bonds) will be issued. New Bonds are l
(xcluding allowance for funds used during construction (AFC),is $410.9 issued under the New Mortgage on the basis of a like principal amount i million. In addition,the transmission lines for interconnection with of Class A Bonds issued under the Old Mortgage which have been l
, SCE&G's system cost $22.5 million, deposited with theTrustee of the New Mortgage (of which $185 million On July 10,1995 SCE&G filed an application with the PSC for an were available for such purpose as of December 31,1995),until such increase in recall electric rates. On january 9,1996 the PSC issued an time as all presently outstanding Class A Bonds are retired. Thereafter, ord;r granting SCE&G an incmase of 7.34% which will produce New bads will be issuable on the basis of property additions in a 30
principal amount equal to 70% of the original cost of electric and The Company expects that it has or can obtain adequate sources of common plant properties (compared to 60% of value for Class A Bonds financing to meet its projected ctsh requirements for the next twelve under the Old Mortgage), cash deposited with the Trustee, and months and for the foreseeable future.
retirement of New Bonds. New Bonds will be issuable under the New Environmental Matters Mortgage only if adjusted net earnings (as therein defined) for twelve The Clean Air Act requires ekctric utilities to reduce substantially consecutive months out of the eighteen months immediately preceding emissions of sulfur dioxide and nitrogen oxide by the year 2000. These the month of issuance are at least twice the annual interest requirements requirements are being phased in over two periods. The first phase had on all outstanding bonds (including Class A Bonds) and New Bonds to be a compliance date ofJanuary 1,1995 and the second, January I,2000.
outstanding (New Bond Ratio). For the year ended December 31.1995 The Company's facilities did not require modifications to meet the the New Bond Ratio was 5.31.
.The following additional financing transactions have occurred since N9ufen'ent5 I e e mPany wm most % men h base H December 31,1994 N9u"mem ugh & Mng of natud gas an&r loww sdur coal n its generating units and the purchase and use of sulfur dioxide
- On January 13,1995 SCANA closed a $60 million unsecured bank loan due January 12,1996,and used the proceeds to pay off loans in a like
" " * * " * * * " ' " ' *" 8" "**"** "8 "*
I **
- reduce nitrogen oxide emissions to the levels required by Phase ll. Air total amount. On January 12,1996 SCANA refinanced the loan with
- *# "I" ** "* ** *E*""* "I'" "*"I"" #*
unsecured bank loans totaling $60 million due January 10,1997 at initial promulgated around the year 2000.
Interest rates between 5.684% and 5.730%, subject to reset quarterly at The Company filed compliance plans related to Phase 11 equirement:
LIBOR plus a spread of nine to fifteen basis points.
with the South Carolina Department of Health and Environmental
- On April 12,1995 SCE&G issued $100 million of First Mortgage Bonds, Control (DHEC) by December 31,1995. The Company cur ently 7 5/8% series due April I,2025 to repay short-term borrowings' estimates that air emissions control equipment will resh capital
- On September 25,1995 SCANA sold 4,500,000 shares of in common expenditures of $122 million over the 1996-2000 period to retrofit stock. Net proceeds were used for the reduction of short-term existing facilities,with increased operation and maintenance costs of indebtedness incurred by the Company for investment m utility plant and approximstely $1 million per year. To meet compliance requirements nonregulated subsidiaries,and for general corporate purposes.
through the year 2005,the Company anticipates total capital Without the consent of at least a majority of the total voting power expenditures of $159 million.
of SCE&G's preferred stock,SCE&G may not issue or assume any The Federal Clean Water Act, as amended, provides for the unsecured indebtedness if,after such issue or assumption,the total imposition of effluent limitations that require various levels of treatment principal amount of all such unsecured indebtedness would exceed 10%
for each wastewater discharge. Under this Act, compliance with of the aggregate principal amount of all of SCE&G's secured indebtedness applicable limitations is achieved under a national permit program.
and capital and surplus;provided,however,that no such consent shall be Discharge permits have been issued for all and renewed for nearly all of required to enter into agreements for payment of principal, interest and SCE&G's and GENCO's generating units. Concurrent with renewal of premium for securities issued for pollution control purpmes.
these permits,the permitting agency has implemented a more rigorous Pursuant to Section 204 of the Federal Power Act SCE8,G nd control program. The Company has been developing compliance plans GENCO must obtain FERC authority to issue short-term indebtedness.
for this program. Amendments to the CleanWater Act proposed in The FERC has authorized SCE&G to issue up to $200 million of Congress include several provisions which. if passed, could prove costly !
unsecured promissory notes or commercial paper with maturity dates to SCE&G. These include limitations to mixing zones and the !
of twelve months or less,but not later than December 31.1997, implementation of technology-based standards.
GENCO has not sought such authorization.
The South Carolina Solid Waste Policy and Management Act of 1991 SCE&G had $165 million authorized and unused lines of credit at directed DHEC to promulgate regulations for the disposal of industrial l December 31,1995. In addition, Fuel Company has a credit agreement solid waste. DHEC has promulgated a proposed regulation,which if f for a maximum of $125 million with the full amount available at :
adopted as a final regulation in its present form,would significantly December 31,1995. The credit agreement supports the issuance of increase SCE&G's and GENCO's costs of construction and operation of short-term commercial paper for the financing of nuclear and fossil fuels existing and future ash management facilities.
and sulfur dioxide emission allowances. Fuel Company commercial paper The Company has an environmental assessment program to iaentify l outstanding at December 31,1995 was $76.8 million. !
and assess current and former operations sites that could require SCE&G's Restated Articles of incorporation prohibit issuance of environmental cleanup. As site assessments are initiated, estimates are additional shares of preferred stock without consent of the preferred made of the cost,if any,to investigate and clean up each site. These stockholders unless net earnings (as defined therein) for the twelve estimates are refined as additional information becomes available; consecutive months immediately preceding the month of issuance are at therefore, actual expenditures could differ significantly from original least one and one-half times the aggregate of allinterest charges and estimates. Amounts estimated and accrued to date for site assessments pmferred stock dividend requirements (Preferred Stock Ratio). For the and cleanup relate primarily to regulated operations; such amounts are year ended December 31.1995 the Preferred Stock Ratio was 2.58.
deferred and are being amortized and recovered through rates over a During 1995 SCANA issued I,434.664 shares of the Con.pany's ten-year period for electric operations and an eight-year period for gas common stock under its investor Plus Plan. in addition, SCANA issued
, operations. Deferred amounts totaled $18.0 million and $20.2 million at 1,630,993 shares of its common stock pursuant to its Stock Purchase-December 31,1995 and 19y4,respectively. Estimates include,among Savings Plan (SPSP). At December 31,1995 SCANA has authorized and other items, the costs associated with the matters discussed in the reserved for issuance,and registered under effective registration following paragraphs, statements,1,506,108 and 2,551,139 shares of common stock pursuant SCE&G,the Company's principal subsidiary, owns four to the investor Plus Plan and the SPSP, respectively.
decommissioned manufactured gas plant sites which contain residues of The Company anticipates that its 1996 cash requirements of $323.6 by-product chemicals. SCE&G maintains an active review of the sites to million will be met through internally generated funds (approximately monitor the nature and extent of the residual contamination.
75%, excluding dividends),the sales of additional equity securities and the in September 1992 the EPA notified SCE&G,the City of Charleston incurrence of additional short-term and long-term indebtedness. The and the Charleston Housing Authority of their potential liability for the timing and amount of such financing will depend upon market conditions investigation and cleanup of the Calhoun Park Area Site in Charleston, and other factors. Actual 1996 expenditures may vary from the South Carolina. This site originally encompassed approximately eighteen estimates set forth above due to factors such as inflation and economic acres and included properties which were the locations for industrial conditions, regulation and legislation, rates of load growth, environmental operations, including a wood preserving (creosote) plant and one of protection standards and the cost and availability of capital. SCE&G's decommissioned manufactured gas plants. The original scope of 31
this investigation has been (xpanded to approximately 30 acr:s. including subsidiary of ITC has been guaranteed by MPX.The aggregate maximum adjacent properties owned by the National Park Service and the City of amount of such guarantee over the eight-year period is approximately l Charleston,and private properties. The site has not been placed on the $46.2 million, prior to reduction for revenue contracts obtained by the National Priority List,but may be added before cleanup is initiated. The joint venture.
potentia!!y responsible parties (PRP) have agreed with the EPA to The Company's net investment in oil and gas properties is subject to participate in an innovative approach to site investigation and cleanup a quarterly ceiling test calculation that limits capitalized costs to the called"Superfund Accelerated Cleanup Model," allowing the pre-cleanup aggregate of the estimated present value of future net cash flows from site investigation process to be compressed significantly. The PRPs have . proved oil and gas reserves plus the lower of cost or fair market value of .
negotiated an administrative order by consent for the conduct of a unproved properties. Carrying values of proved reserves in excess of l Remedial Investigation / Feasibility Study (Rl/FS) and a corresponding Scope the ceiling limitation are expensed currently.
ofWork. Field work began in November 1993. SCE&G is also working in an effort to limit exposure to changing natural gas prices,in january ,
with the City of Charleston to investigate potential contamination from 1995 the Company entered into a series of forward contacts relating to ,
the manufactured gas plant which may have migrated to the city's natural gas production. These forward contracts have the effect of !
aquarium site. In 1994 the City of Charleston notified SCE&G that it stabilizing the price that the Company receives on approximately sixty l considers SCE&G to be responsible for a $43.5 million increase in costs percent of its forecasted natural gas production for the years 1996-2001. '
of the aquarium project attributable to delays resulting from The forward contracts are at an average price of $1.92 per dekatherm.
contamination of the Calhoun Park Area Site. SCE&G believes it has The Company remains exposed to price risk for any production that is j meritorious defenses against this claim and does not expect its resolution not subject to such forward contracts. !
to have a material impact on its financial position or results of operations. Petroleum Resources and Fina Oil and Chemical Company (Fina) have l Regulatory Matters entered into a joint exploration and development agreement providing ,
l SCE&G filed for electric rate reliefin 1995 to encompass primarily f r the exclusive oil and gas development rights on approximately !
' the remaining costs of completing the Cope Generating Station. As I .000 acms of onshore lands owned by Fina inTerrebonne and j discussed under" Liquidity and Capital Resources," the PSC issued an LaFourche Parishes m southern Louisiana. Petroleum Resources and Fina ;
order on january 9,1996 increasing electric retail rates. are continuing an extensive 3-D seismic acquisition program on the j The Company's regulated business operations are likely to be Property. Fina is the operator of the multi-million dollar seismic program impacted by the NEPA and FERC Order No. 636. NEPA is designed to which is financed and owned on a 50-50 basis between the companies, creata a more competitive wholesale power supply market by creating e eum esowces participation ,in the seismic and drilling activity is ,
"cxemot wholesale generators" and by potentially requiring utilities financed primarily with internal cash flows from the existing Petroleum 1 owning transmission facilities to provide transmission access to Resources operations.
wholisalers. Order No. 636 is intended to deregulate the markets for Petroleum Resources' change to the full cost method of accounting int;rstate sales of natural gas by requiring that p!pelines provide during the second quarter of 1995 provides a better matching of transportation services that are equal in quality for all gas suppliers revenues and expenses given the primary focus of Pecroleum Resources I whether the customer purchases gas from the pipeline or another n deveIOP i ng reterves on its own or others properties. In connection supplier, in the opinion of the Company,it will be able to meet with the change, additional reserve adjustments were recorded in the succIssfully the challenges of these altered business climates and does current and restated prior periods. All reserve adjustments were non- i not anticipate there to be any material adverse impact on the resu!ts of cash and had no impact on the liquidity of Petroleum Resources.
l j its operations,its financial position or its business prospects. Statements of Financial Accounting StandardsTo Be Adopted !
Other The Financial Accounting Standards Board issued Statement of MPX,a wholly owned subsidiary of SCANA,through a joint venture Financial Accounting Standards No.121," Accounting for the Impairment with subsidiaries of ITC Holding Company,Inc.(ITC),a Georgia-based f L ng-Lived Assets and for Long-Lived Assets to be Disposed Of." The telecommunications holding company,is constructing a fiber optic network Pmvisions of the Statement,which will be implemented by the Company i
throughTexas Louisiana, Mississippi, Alabama and Georgia. The network, f r the fiscal year beginning January 1,1996, require the recognition of a
! which will consist of more than 900 miles of fiber optic lines, has been I ss in the income statement and related disclosures whenever events or l subst;ntially completed and will cost approximately $73.5 million. MPX changes in circumstances indicate that the carrying amount of a long-has signed a seven-year contract with the State of South Carolina for the lived asset may not be recoverable. The Company does not believe that build-out of the 800 MHz radio system which will allow emergency adoption of the provisions of the Statement will have a materialimpact agencies to establish statewide communications during a disaster. Powertel n its results of operations or financial position.
PCS Partners, LP.(Powertet),a limited partnership that included MPX, The Financial Accounting Standards Board i,ssued Statement of succ:ssfully bid for three personal communications service licenses in the Financial Accounting Standards No.123," Accounting for Stock-Based
! Southeast offered by the Federal Communications Commission for the Compensation," which will be implemented by the Company on I
development of a new generation of wireless communications. Powertel January 1, I 96. The Company does not believe that adoption of the l had winning bids totaling $124.5 million in the FCC's auction for radio Provisions of the Statement will have a material impact on its results of airspats in three MajorTrading Areas (MTA) thac cover parts of six states. Peracons or financial position.
The areas are the jacksonville MTA,a 50-county area of northern Florida
[ and southern Georgia: the Memphis MTA, a 93-county area that includes RESULTS OF OPERATIONS southwestTennessee, northern and middle Mississippi and parts of eastern Earnings and Dividends l Arkansas;and the Birmingham MTA,a 53-county area of Alabama. MPX Earnings per share of common stock, the percent increase (decrease) l held the largest partnership interest,approximately 40%, of Powertet fr m the previous year and the rate of return earned on common equity Powertel signed and consummated a business combination agreement with f r the years 1993 through 1995 were as follows:
InterCti,lnc.,a publicly traded ce!!ular telephone company providing se:victs in Georgia, Alabama and Maine. MPX's interest in the combined 1995 1994 1993
, entity,after giving effect to public offerings of common stock of the Earnings per weighted average share $1,70 $1.22 $1.83 combined entity consummated February 7,1996,is approximately 17%. All Percent increase (decrease) in earnings per share 39.3% (33.3%) 28.9%
new ventures currently capitalize on fiber infrastructure in place and provide for expansion of the network.
, y " * " ,
- A percentage of the projected annual revenues for the years 1996-2003 r nd) 10.8% 8.5% 12.5%
of csrtain fiber optic routes of a joint venture between MPX and a 32 l
_ . - ~ . . _ _ _ . _ . . . . . . . _ . . = _ . . .. __.._- . . . . . _ . . . . . .. _ _ . _ ,
l l
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Santee Cooper One Riverwood Drive
< Moncks Corner South Carolina 29461-2901 f
I l
- 1995 Earnings per share and return on common equity increased Gas Operations primarily ts a result of improved results of operations at Petroleum Gas sales margins for 1995,1994 and 1993 were as follows:
Resources,which recorded net losses of $16.7 million in 1995 and $54.9
~ million in 1994. Higher electric and gas margins and lower operation and 1995 1994____ 1993 maintenance costs,which more than offset the negative impact of higher (Mdlions o(Dollars) fixed costs,also contributed to the favorable earnings performance in Gas operating revenues $342.7 $342.7 $320.2 1995. Less: Gas purchased for resale 212.4 220.9 208.7
- 1994 Earnings per share and return on common equity decreased Margin $130.3 $l21.8 $1 I l.5 primarily due to operations at Petroleum Resources, which reported a net loss of $54.9 million for 1994 as compared to net income of $8.4 million for 1993. The change results primarily from charEes recorded *1995 The gas sales margin increased primarily as a result of lower gas from application of the ceihng test (Note 10). c sts which allowed Pipeline Corporation to compete successfully with The Company's financial statements include AFC. AFC is a utility alternate fuel suPPl iers in industrial markets. A shifting of transportation accounting practice whereby a portion of the cost of both equity and cust mers to the industrial class and an increase in interruptible gas sales also contributed to the improved margin.
borrowed funds used to finance construction (which is shown on the
- balance sheet as construction work in progress) is capitalized. An equity *1994 The gas sales margin increased primarily as a result of lower gas portion of AFC is included in nonoperating income and a debt portion of c sts which allowed Pipeline Corporation to compete successfully with AFC is included in interest charges (credits) as noncash items both of alternate fuel suppliers in industrial markets. Higher oil prices and a which have the effect of increasing reported net income. AFC stronger economy had a positive impact on ,ndustrial i sales which represented approximately 8% of income before income taxes in 1995, increased for both SCE&G and Pipeline Corporation.
8.3% in 1994 and 5.8% in 1993. Increases (decreases) in dekatherm (DT) sales volume by classes, in 1995 SCANA's Board of Directors raised the quarterly cash including transportation gas, are presented in the following table:
dividend on common stock to 36 cents per share from 351/4 cents per Classification 1995 1994 shar2. The increase, effective with the dividend payable on April I,1995.
Residential 802,211 (1.119,442) raised the indicated annual dividend rar< to $1.44 per share from $1.41, Commercial 632,959 275.066 5CANA has increased the dividend rate on its common stock in 42 of Industrial 7,960,434 I I,178.821 the last 43 years. Sale for resale 744,663 (3,965,310)
Electric Operations Transportation gas (8,089,043) (13.475,51 l}
Electric sales margins for 1995,1994 and 1993 were as follows:
Total 2,051,224 (7,106.376) 1995 1994 1993 Other Operating Expenses (Mdlions of Dollars)
+1995 Other operation and maintenance expenses decreased $6.6 Electric operating revenues $ 1,006.4 $975.4 $940.1 million primarily as a result of lower pension costs and lower costs at Less: Fuel used in electric electric generating stations. The increase of $10.7 million in depreciation generation 227.4 235.1 229.7 and amortization expenses is primarily attributable to additions to Purchased power 14.7 20.1 13.1 plant-in-service and the write off of certain software costs. The $15.4 Margin $ 764.3 $720.2 $697.3 million increase in income tax expense corresponds to the increase in operating income. The increase in other taxes of $5.0 million reflects
- 1995 The electric sales margin increased primarily as a result of the higher property taxes resulting from higher millages and assessments combined impact of warmer weather in the third quarter of 1995, colder partially offset by lower payroll taxes resulting from early retirements weather in the fourth quarter of 1995 and the base rate increase of employees.
reciived by the Company in mid 1994. These factors more than offset *1994 Other operation and maintenance expenses increased $2.8 the negative impact of milder weather experienced during the first half of million primarily due to an increase in the costs of postretirement 1995. An increase of 7,942 electric customers to 484,354 total benefits other than pensions which are accrued in accordance with customers contributed to an all-time peak demand record of 3,683 MW Financial Accounting Standards Board Statement No.106. (See Note IL set on August 14,1995, of Notes to Consolidated Financial Statements.) The $6.3 million
- 1994 The increase in the electric sales margin is primarily the result of increase in depreciation and amortization expenses is attributable to an increase in retail electric rates phased in over a two-year period property additions and to increases in depreciation rates. The increase in beginning June 1993 and an increase in industrial sales,which more than other taxes of $5.3 million reflects an increase in SCE&G's property offs!,t the negative impact of a six percent decrease in residential sales of taxes.
Electricity due to milder weather in 1994.
Other income Increases (decreases) in megawatt hou- (MWH) sales volume by Other income, net of taxes, increased approximately $36 million in 1995 classes are presented in the following table:
primarily due to the improved earnings performance of Petroleum Resources as discussed under" Earnings and Dividends."
' Classification 1995 1994 Interest Expense Residential 415,676 (339,620)
+1995 The $17.9 million increase in interest expense, excluding the debt stria C mponent of AFC,is due primardy to the issuance of additional debt, 2
Sals for Resale (excluding interchange) 38,688 18,408 I"'l" ding commercial paper,during the latter part of 1994 and early g9 5*
Oth r 12,776 (6,907)
- 1994 The $8.2 million increase in interest expense, excluding the debt Total territorial 745,263 (42,390) component of AFC,is primarily attributable to the issuance of $100 Int;rchange 24,545 (27,013) million of First Mortgage Bonds in July and $30 million of Pollution Total 769,808 (69,403) Control Facilities Revenue Bonds in November,both to finance utihty construction,and to the issuance of long-term debt during 1993.
33
Warren A. Darby SCANA Energy Marketing,Inc.
SCANA Corporation Seniorvice eresident Gas Operations - SCANA Gas Group Max Earwood Lawrence M.Gressette,Jr. W. Keller Kissam Vice Chairman Chairman of the Board and Vice President Charles A.Rampey,Jr.
Chief Executive Officer (1) - Gas Operations - SCANA Gas Group President William B.Timmerman Fred N. Hanna Jim N.Cantwell President Vice President Vice President
"** " $ *'*I Ctthy B.Novinger B.J. MacInnis SeniorVice President Johnny Kinloch Vice President Administration, Vice President Governmental and Public Affairs Transit and Fleet Maintenance and Community Affairs Suburban Propane Group,Inc.
H. Thomas Arthur,11 Vice President and General Counsel, Neville O.Lorick Dabney L Sharp
~ Assistant Secretary Vice President President Fossil and Hydm Operations Kevin B. Marsh James M. Clark,Jr.
Vice President - Finance, Charles B.McFadden Vice President Chi 2f Financial Officer and Controller (2) Vice President Electric Service MPX Systems,Inc.
Sciton T.Zeigler Vice President (3) S. C. McMeekin,,tr.
Vice President William B.Timmerman Lynn M. Williams Customer Relations President Secretary (4)
Martin K. Phalen Michael D. Blackwell Mtrk R. Cannon Vice President ExecutiveVice President
. Treasurer (5) Human Resources and General Manager (1) Also Chairman and Chief Executive Gary Wlor Officer of all subsidiaries Vice President
- C' "C' (2) Also Chief Financial Officer of all subidiaries Nuclear (3) Also General Counsel of SCE&G Warren A. DarbY President (4) Also Secretary of all subsidiaries Mitchell S.Tibshrany (5) AlsoTreasurer of SCE&G and MPX Vice President judith H. Battle Power Delivery Vice President - Finance and Contmiler Richard E.Batton S uth Carolina Pipeline Vice President PrincipalSubsidiaries ' Corporation Primesouth, Inc. 1
. Scuth Carolina Electric & Gas Max Earwood l Ccmpany Vice Chairman Jeff . Chapman Asbury H. Gibbes Cruce D.Kenyon President Leslie Withycombe President and Chief Operating Officer Group Executive - SCANA Gas Group Controller Gscrge l. Bullwinkel,Jr. George Fasano,Jr.
SeniorVice President Vice President and Controller SCANA Resources,Inc.
- Retail Electric 8.J. MacInnis Bruce D. Kenyon
- J:hn L Skolds Vice President President 5sniorVice President Generation Jtmas H Young,Jr.
SCANA Petroleum SeniorVice President Resources, Inc.
Business Development Max Earwood Jimmy E. Addison Vice Chairman Vice President and Controller Jim N.Cantwell Kristin L Aebersold President ce ms dent Marketing and Econom. ic Development Charles C.Morgar-Controller and Assistant Secretary 34 l _ _ _ _ _ _ - - _ _ _ _ _ _ _ _ _ _
,n -
or .; ,, ,
BOARD OF DIRECTORS Bill L. Amick
& . g Chairman of the Board and Chief Executive Officer hhd .
O Amick Farms,Inc. Batesburg, SC (a vertically integrated broiler operation)
William B.Bookhart,Jr.
- g. .
J Partner f Bookhart Farms Elloree, SC (a general farming business)
William T. Cassels,Jr.
Bill L Amick William B. Bookhart,Jr. William T Cassels,Jr. Chairman of the Board Southeastern Freight Lines.Inc. Columbia, SC (a trucking business)
'g .. .- ['
%-(
Hugh M. Chapman Chairman NationsBank South Atlanta,GA
- f James B. Edwards, D.M.D.
j
/f em ' '
President Medical University of South Carolina Charleston, SC Elaine T. Freeman Hugh M. Chapman James B. Edwards, D.M.D. U ' *
Elaine T. Freeman (a non-profit organization)
O ~k.
. ?- *M -
Lawrence M.Gressette,Jr.
Q Chairman of the Board and Chief Executive Officer SCANA Corporation Columbia, SC
[ f, 7
{ Benjamin A. Hagood Chairman of the Board William M. Bird and Company,Inc. Charleston,SC (a wholesale distributor of floor covering materials)
Y Lawrerece M. Gressette, Jr. Benjamin A. Hagood W. Hayne Hipp fres den anief Executive Officer The Liberty Corporation Greenville, SC E
gg. -
1 (an insurance and broadcasting holding company) 1 Bruce D.Kenyon L .- y" President and Chief Operating Officer s N South Carolina Electric & Gas Company Columbia, SC
/T F.Creighton McMaster President and Manager Winnsboro Petroleum Company Winnsboro SC (a wholesale distributor of petroleum products)
, Bruce D. Kenyon E Creighton McMaster Henry Ponder, Ph.D. Henry Pander, Ph.D.
President Od- A Fisk University Nashville,TN g' Oc
- W 9 John B. Rhodes Chairman and Chief Executive Officer Rhodes Oil Company,Inc. Walterboro,SC
/I
? /I -
( (a distributor of petroleum products)
William B.Timmerman
- President
/ SCANA Corporation Columbia, SC john B. Rhodes William B.Timmerman E. Craig Wall,Jr. E. Craig WalI, Jr.
President DIRECTORS EMERITl: William R. Bruce. Sr., Kenneth W French,J. B. Guess.111. Canal Industries. Inc. Conway, SC jack F. Hassell,Jr., John H. Lumpkin, Sr., Allan C. Mustard Edwin W. Pike,Jr., (a forest products industry) 35 Virgil C. Summer, John A. Warren
BOARD 07 DIRECTORS Bill L Amick O'. Chairman of the Board and Chief Executive Officer O? k* @ Amick Farms,Inc. Batesburg,SC (a vertically integrated bmiler operation)
, c William B.Bookhart,Jr.
Partner
- f. Bookhart Farms Elloree SC
, (a general farming business) s William T. Cassels,Jr.
Bill L Amick William B. Bookhart,Jr. William T Cassels,Jr. Chairman of the Board Southeastern Freight Lines,!nc. Columbia,SC
.. 3 (a trucking business)
- g. -
t: .
'A Hugh M. Chapman 4- -
Chairman e NationsBank South Atlanta.GA ff
- f .
James B. Edwards, D.M.D.
j
/r b r
President Medical University of South Carolina Charleston, SC Elaine T. Freeman Hugh M. Chapman James B. Edwards, D.M.D. Elaine T. Freeman
- O
- g g (a non-profit organization)
O kg -
Lawrence M.Gressette,Jr.
Chairman of the Board and Chief Executive Officer SCANA Corporation Columbia.SC
[ Ag Y
, { Benjamin A.Hagood Chairman of the Board
. William M. Bird and Company,Inc. Charleston,SC (a wholesale distributor of floor covering materials)
Lawnmes M. Gmssette, Jr. Benjamin A.Hagood W. Hayne Hipp *Y s den an ief Executive Officer The Liberty Corporation Greenville, SC E
$ ( ..
(an insurance and broadcasting holding company)
~
a Bruce D.Kenyon
.. President and Chief Operating Officer
~
South Carolina Electric & Gas Company Columbia, SC j F.Creighton McMaster President and Manager Winnsboro Petroleum Company Winnsboro,SC
,, (a wholesale distributor of petroleum products)
, Bruce D. Kenyon F.Creighton McMaster Henry Ponder, Ph.D. Henry Ponder, Ph.D.
President O , ,g . Fisk University Nashville,TN John B. Rhodes Chairman and Chief Executive Officer
,. Rhodes Oil Company,Inc. Walterboro, SC rI (a distributor of petroleum products)
/.I s William B.Timmerman
~
President
.A -
SCANA Corporation Columbia, SC jshn B. Rhod es William B.Timmerman E. Crolg Wall,jr. E. Craig Wall,jr.
President DIRECTOR! EMERITl: William R. Bruce, Sr., Kenneth W. French,J. B. Guess,Ill, Canal Industries, Inc. Conway, SC jack F.Hassoll,Jr., John H. Lumpkin, Sr., Allan C. Mustard, Edwin W. Pike,Jr., (a forest products industry) 35 Virgil C.Su nmer. John A. Warren
SLECTE]FINANC;AL DATA
[or theYears Ended December 31, 1995 1994* 1993* 1992* 1991*
(Thousands of dollars except statistics and per share amounts)
St ttment ofincome Data Optrating Revenues $1,352,971 $ 1,322,062 $ 1,264,167 $ 1,138,375 $1,147,826 Opzrating income 287,514 259,553 245,311 209,780 222,360 Ocher income 8,060 (29,749) 27,335 i1,960 (1,231) nit income 168,339 115,452 165,240 117,667 122,965 Calance Sheet Data Utility Plant, Net $3,468,988 $3.293,667 $3,004.075 $2,810,279 $2,664.651 Total Assets 4,534,426 4,316.512 4,026,701 3.543,057 3,290,668 Capitalization:
Common Equity 1,554,680 1,359 !41 1,317,495 1,149,087 1,0I6,104 Preferred Stock (Not subject to purchase or sinking fund) 26,027 26,027 26,027 26,027 26,027 Prtferred Stock, Net (Subject to purchase or sinking fund) 46,243 49,528 52,840 56.154 59,469 Long-Term Debt, Net 1,588,879 1,548,824 1,424.399 1,204.754 1,122,396 Tota! Capitalization ___, _ __ _ _____,_ ____ $3,215,829 $2,983,520 $2.820,761 $2,436,022 $2.223,996 Common Stock Data Weighted Average Number of Common Shares Outstanding (Thousands) 99,044 94,762 90.407 82,950 80,722 Earnings PerWeighted Average Share of Common Stock $ 1.70 $1.22 $1.83 $1.42 $1.52 Dividends Declared Per Share of Common Stock $ 1,44 $ 1.41 $1.37 $ 1.34 $1.31 Common Shares Outstanding (Year-End) (Thousands) 103,624 96,035 93,239 87.821 81,569 BookValue Per Share of Common Stock (Year-End) $15.00 $14.15 $ 14.13 $13.08 $12.46 Number of Common Shareholders of Record 38,231 39,516 41,564 42,937 42,811 OthIr Statistics E!setric:
Customers (Year-End) 484,354 476.412 468,874 461,900 453,660 Territorial Sales (Million KWH) 17,583 16,838 16,880 15.794 15,695 Residential:
Average annual use per customer (KWH) 13,859 13.048 14.077 13,037 13.246 Average annual rate per KWH 5.0747 $.0743 $.0707 5.0695 $.0700 Generating Capability . Net MW (Year-End) 4,282 3,876 3,864 3,912 3,912 Territorial Peak Demand - Net MW 3,683 3,444 3.557 3.380 3,300 Gas:
Customers (Year-End) 243,523 238,614 234,736 231,153 225,819 Sales (Thousand Therms) 882,511 781,109 717.417 761,721 694,0 1 Residential:
Average annual use per customer (Therms) 570 543 605 577 521 Average annual rate per therm $,82 $.84 $.76 5.74 5.77
- Prior year information has been retroactively restated for the effects of a two-for-one stock split in May 1995 and of a change in accounting principle in the second quarter of 1995 from the succeesful efforts method of accounting to the full cost method of accounting for the Company's oil and natural gas operations, C0YMON STOCI :XF0DIATON 1995 1994 4th 3rd 2sd He 4th 3rd 2id' ist ;
QtL Qtr. Qtr. Qtr. Qtr. Qtr. Qtr. Qtr. I Price Range:(a)
High 28 5/8 24 1/4 23 3/8 22 1/2 22 1/4 23 23 1/4 25 Low 24 1/8 21 1/8 20 3/4 20 1/2 20 1/2 21 3/8 21 22 3/8 )
i (a) As reported on the NewYork Stock Exchange Composite Listing. Information prior to the two-for-one stock split effective in May 1995 has been restated.
!- 36
I INVESEORINFORMATION SCE&G First and Refund.mg Mortgage Bonds changes, direct deposit of dividends,elimi Chemical Bank Annual Afectilig nation of dopiicate mariings,or other CorporateTrust Department - 15th Fioor account services should be directed to 450 West 33rd Street The 1996 Annual Meeting of SCANA the Company's Shareholder Services NewYork,NY 10001 (800) 648-8380 Corporation shareholders is scheduled for Department:
1000 amThursday, April 25 at the Hibernian Auditors By writing: -
Soci:ty Hall,105 Mecong Street in Chadeston, SCANA Corporation SC. A notice of the meeong, pay statement Deloitte & Touche LLP DdPay & nuded to AMa in h Attention: Shareholder Services (054)
Columbia,SC 29218 Certified Public Accountants .
' 1426 Main Street Corporate Oflices $00$"6.58,i (toii f,ee) columbia, SC 2920i SCANA Corporation (803) 733-6817 (in Columbia) -
(803) 343-2344 (fax) Addi tionalInformation 1426 Main Street Columbia,SC 292012845 (803) 748-3000 Publications:The Company provides an Transfer Agent and Registrar inte,im Report to sharehoiders ro, the Stock Exchange Listings first,second and third quarters. A copy of SCANA Corporation maintains shareholder records, issues dividend checks SCANA's 1995 Annual Report on Form SCANA Corporation's common 10-K (as filed with the Securities and and acts as Transfer Agent and Registrar stock is listed on the New York Stock Exchange Commission) and the Statistical for the Company's common stock and Exchange.The trading symbol is SCG.The Supplement to the 1995 Annual Report SCE&G's preferred stock. Shareholders newspaper listing is SCANA- are available without charge. Requests may send stock certificates directly to the for these publications should be directed The 5% Series cumulative preferred Company's Shareholder Services Department stock of South Carolina Electric & Gas to the Investor Relations Department.
for transfer.There is no charge for this Company is also listed on the NewYork internet: A variety of information about service.The Company recommends that Stock Exchange.The trading symbol is SAC the Company, including financial reports, certificates be mailed by registered or cer-Pr.The newspaper listing is SCrE pf SCE&G's press releases,and descriptions of customer tified mail. Signatures required for transfer products and services,is also available on othtr series of preferred stock are not must be guaranteed by an official of a listed and market prices are not published. the World Wide Web through a personal financial institutic*n that is an approved computcr connected to the Internet.
member of a Medallion Signature SCANA's Internet (Home Page) address SCANAInvestorPlus Plan Guarantee Program.
is http://www.scana.com The Plan provides investors a conve- Investor Relations
Contact:
nirnt and economical means of acquiring, Bond Trustee and Paying Agent H.Johnwinn.iii holding and transferring shares of SCANA's Manager - Investor Relations and Questions concerning replacement of Shareholder Services (054) common stock. Participants may purchase interest checks, tax information, transfers (803) 748-3240 additional common shares through auto- (803) 343-2344 (fax) and other bond account information should investors' Association-I r o"
'[* ,"*di$j ds d be directed to the appropriate Bond For information about this organization's Trustee and Paying Agent' activities,please write to:
pref:rred stock and/or by making optional cash payments of up to $100,000 per year. SCE&G First Mortgage Bonds Association of SCANA Corporation
>The Plan also features a direct purchase Bank of NewYork Investors
, provision through which investors can Debt Processing Group c/o Paul Quattlebaum,Jr.
acquire their first shares oi SCANA 101 Barclay Street - 7E 22 Broughton Road -
NewYork,NY 10286 (800) 254-2826 Charleston,SC 29407
' common stock directly from the Company I without brokerage fees. A variety of other services, including direct deposit of dividends Expected 1996 Common Stock Dm. .dend Dates and safekeeping of share certificates,are also available. A Prospectus describing First Second Third Fourth the Plan and enrollment information are Quarter Quarter Quarter Quarter available upon request.
Declaration February 20 April 25 August 21 October 22 Ex-Dividend March 6 September 6 December 6 ShareholderInauiries June 6 2
Record March 8 June 10 September 10 December 10 Questions concerning the SCANA Payment April I july i October I january 1,1997 inv:stor Plus Plan, stock transfer require- Note: Dividend declaration, record and payment dates are subject to the discretion of the Board of mints, replacement of lost or stolen stock Directors. Dates shown are based on the assumption that past patterns will prevail. Dividends on certificates or dividend checks, address SCE&G's preferred stock issues are paid quarterly on the same dates as the common stock dividends.
l Thus report is 6ssued solely for the purpose of prosdmg mformacon.
It is not intended for use in connect on with any sale or purchase of or any sohcotovon of offers to buy or sell, any secuntoes.
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I i SCANA Corporation Columbia, South Carolina 29218
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