U-1034-99 Exhibit 4 Worthan.pdf

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Intermountain Gas Company
Case No.U-I034-99
Exhibit 4
Schedule 1
INTERMOUNTAIN GAS COMPAN Witness:Worthan
($000)
12 Months Ended As Shown
Allowed
Line Order Date:12/12/81 10/31/80 8/23/79 9/30/78 12/19/77
No.U-I034-95 U-I034-88 U-1034-75 U-I034-69 U-1034-65
1 Gross Sales $ 157,433 $ 160,382 $103,460 $ 96,983 $ 89,497
2 Less:cost of gas (125,012)(131,698)(76,931)(70,681)(64,342)
3 Gross Margin 32,421 28,684 26,529 26,302 25,155
4 Operating Expenses:
5 Operation & maintenance 14,823 12,194 10,457 9,804 8,358
6 Depreciation & amort.3,593 3,493 3,261 3,171 3,186
7 General taxes 3,043 2,870 3,091 3,190 3,298
Less:other operating
8 revenues (1,878)(1,893)(1,506 )(1,392)(1,383)
9 Income taxes 4,595 4,203 3,890 4,318 4,497
10 Total 24,176 20,867 19,193 19,091 17,956
11 Utility Operating Income 8,245 7,817 7,336 7,211 7,199
12 Other Income
13 Gross Income 8,245 7,817 7,336 7,211 7,199
14 Interest charges 3,717 3,774 3,594 3,006 3,106
15 Net Income 4,528 4,043 3,742 4,205 4,093
16 Dividend on preferred 586 610 652 741 682
17 Earnings on Common $3,942 $3,433 $3,090 $3,464 .$ 3,411
18 Common Equity Allowed $ 24,573 $ 24,879 $ 24,121 $ 24,415 $ 26,528
19 ROE Allowed 15.75% 14.50% 14.00% 14.00% 13.75%
20 Test Year Ended 9/30/81 6/30/80 1/31/79 9/30/77 4/30/77
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I Intermountain Gas Company
INTERMOUNTAIN GAS COMPAN Case No.U-1034-99
Exhibit 4
I FINANCIAL STATISTICS Schedule 3
Witness:Worthan
I Allowed
Line U-1034-95 U-1034-88 U-1034-75 U-1034-69 U-1034-65No.
I 12/12/81 10/31/81 8/23/79 9/20/78 12/19/77
1 Sales Statistics
2 Gross Margin (000)$32,421 $ 28,684 $ 26,529 $26,302 $25,155
I 3 Therm Sales (000)
4 Residential 59,185 63,953 68,708 74,005 77 ,303
I 5 Commercial 65,424 69,154 74,042 79,432 76,927
6 Industrial 197,136 201,466 209,511 212,734 220,248
7 Sales for resale 1,638
I 8 Total Sales :321,745 3:34 ,573 352,261 366,171 376,116
I 9 Gross Margin (e;/Th)
10 Residential 23.91e;19.83e;18.05e;15.43e;14.72e;
11 Commercial 14.15e;12. He;11.86e;1O.33e;W.17e;
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12 Industrial 4.60e;3.84e;3.31e;3.14e;2.64e;
13 Sales for resale 10.1Oe;
14 Total 10.08e;8.60e;7,50e;7.18e;6.69e;
I Expected Actual
I 12/31/81 10/31/81 8/30/80 9/30/79 12/31/78
15 Gross Margin (000 $28,010 $25,999 $23,677 $26,987 $22,087
I 16 Therm Sales (000)
17 Residential 59,647 56,687 61,614 73,703 66,135
I 18 Commercial 69,711 66,431 69,365 81,204 73,616
19 Industrial 119,824 192,560 195,721 216,234 204,453
20 Sales f or resale
I 21 Total Sales 249,182 315,678 :326, 70~371,141 344 ,204
I 22 Degree Days - % of Normal 109%96%95%109%93%
23 Ave.Utility Equity (000)
I 24 Allowed $24,573 $24,879 $24,121 $24,415 $26,528
25 Actual 27,062 27,156 27,118 26,505 26,186
26 Adjusted 24,751 23,923 23,355 23,677 24,010
I 27 Return on Ave.Utility Eq.
28 Allowed 15.75%14.50%14.00%14,00%13.75%
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29 Actual 10.6%7.6%6.1%11.5%4.7%
30 Adjusted 11.6%8.6%7.1%12.8%5.1%
31 Util.Interest Cov.Ratio
I 32 Allowed 3.5x 3.2x 3. Ix 3.8x 3.8x
33 Actual 3.3x 2.7x 2.5x 3.2x 2. Ix
34 Indenture 2.0x 2.0x 2.0x 2.0x 2.0x
I 35 Unrestr.Ret.Earn.(000)$1,361 $1,242 $2,725 $3,371 $2,023
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INTERMOUNTAIN GAS COMPAN
VARIANCE ANALYSIS
INCOME STATEMNT (000)
ACTUAL/ALLOWED
Line Expected
No,12/31/82 10/31/81
1 Gross Margin Variance $(4,411)$(2,685)
2 Operating Expenses:
3 Operation & maintenance (280)473
4 Depreciation & amortization 188 111
5 General taxes 469 212
Less:other operating
6 revenues (2,082)(139)
7 Income taxes (888)(1,388)
8 Total (2,593)(731)
9 Utility Operating Income (1,818)(1,954)
10 Other income
11 Gross Income (1,818)(1,954)
12 Interest charges (678)(544)
13 Net Income (1,140)(1,410)
14 Dividends on preferred (76)(36)
15 Earnings on Common $ (1.064)$(1.37'!)
Intermountain Gas Company
Case No. U-1034-99
Exhibit 4
Schedule 4
Witness: Worthan
Actual
8/31/80 9/30/79 12/31/78
$(2,852)$ . 685 $(3,068)
538 1,492 1,602
265 199 77
(168)(44)(146)
(434)(241)4
(1,327)(631)(2,652)
(1,126 )(775)(1,115)
1,726 (90)(1,953)
(1,726)(90)(1,953)
(271)384 198
(1,455)(474)(2,151)
(12)(50)41
$(1,443)$(424)$(2,192)
16 Return Deficiency on Avg.Equity
17 Actual 3,9%5.1%5.3%1.6%8.4%
18 Adjusted 4.3%5.7%6.2%1.8%9.1%
19 Earnings Per Share Def ic iency 73ç 95c;$1,00 29ç $1.51
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10
11
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Intermountain Gas Company
Case No. U-1034~99
Exhibit 4
Schedule 5
Witness: Worthan
INTERMOUNTAIN GAS COMPAN
REVENUE STABILIZATION CLAUSE
MINIMU MAGIN CALCULATION
1 Determination of Return on Equity
2
3
Dividend Level + Preferred Redemptions
Book Value Per Share + Attrition
4
5
$1.40 + $.44
(25,934,000 + 1,460,000 Shares)
+ 2%12% Return on Equity
6 Minimum Margin Calculation
7 Average Rate Base X Weighted Cost of Capital & (18% - 12% Return)
8 $74,781,000 X (11.645% - 9.5%) = $1,604,000
9 Reduction in Operating Income + Income Tax Factor
$1,604,000 + ,5049
= $3.177,000
Proposed Gross Margin
Less: Revenue Reduction -
$34 ,908,000
3,177 ,000
Minimum Margin $31. 731.000
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Line
No,
9
10
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Intermountain Gas Company
Case No. U-1034-99
Exhibit 4
Schedule 6
Witness: Worthan
INTERMOUNTAIN GAS COMPAN
REVENUE STABILIZATION CLAUSE
MAIMUM MAGIN CALCULATION
1 Return on Equity
2 20.5%
3 Maximum Margin Calculation
4 Average Rate Base X Weighted Cost of Capital & (20.5% - 18% Return)
5 $74,781,000 X (12.539% - 11.645%) = $669,000
6 Increase in Operating Income + Income Tax Factor
7 $669,000 + .5049
8 = $1.325,000
Proposed Gross Margin - $34,908,000
Plus: Revenue Iricrease - 1,325,000
Maximum Margin $36,233,000