imm
SAN   FRANCISCO
LOSAN GELES
SEATTLE
PORTLAND,ORE.
NEW YORK
CHICAGO
BOSTON
PHI LADELPHIA
ATLANTA
LONDON
2
n
—I
o
M
CO
cr»
^D
    NJ
— -
_—       »—
—  Co
	
—
—
■
	
~ »—•
—  $*
—
	
.__ ^-i
    U'
Q§
RUSS    BUILDING
SAN FRANCISCO
March 4,  1929
CABLE  ADDRESS
B l_V TH CO
Mr. C. Sumner Greene,
P.O.Box 457,
Carmel,California
Dear Mr.  GreeneI
I am sending you a statistical report on one of your securities in an effort to keep you at all times advised as to conditions
surrounding your holdings:
Cities Service Gas Company First Mortgage Pipe Line 5?$
Bonds, due May 1, 1942, outstanding in the amount of approximately
$24,800,000, are secured by a first mortgage on the pipe line system,
compressors, etc. of the Cities Service Gas Company.
The Cities Service Gas Company was organized in 1927 to
acquire, directly or through its subsidiaries, the gas pipe lines and
practically all other gas properties formerly owned by the Empire Gas
& Fuel Gornpany and its subsidiaries, together with certain other gas
properties. The Empire Gas & Fuel Company is, in turn, a subsidiary
of the Cities Service Company.
The sinking fund calls for the retirement annually of
$625,000 of the bonds and in addition there is a property replacement
fund providing that not less than $375,000 per annum in addition to
the sinking fund be applied to redemption of bonds for capital expenditures, or for certain other purposes.
Detailed earnings of the properties over a period of
years are not available.   For the year 1925 earnings available for
fixed charges on the bonds were $4,529,000; in 1926 they were $4,890,000
and in 1927.$5,351,300. These figures are all before Federal Income Tax,
depreciation and depletion and indicate a wide margin of earnings over
the $1,375,000 annual interest charge on the &|% bonds. However, the
proper allowance for Federal Income Tax, depreciation and depletion
would cut down the margin available for interest considerably and would
indicate interest charges earned in these years about 2§ times* If the
mandatory $625,000 annual sinking fund be added, earnings would cover
total fixed charges in these years on an average of about 5-J to 1-4/5
times. In 1927 the margin would be a little better. 1928 earnings have
not yet been made public.
The Company is bonded up to nearly 50$ of the book value
of the fixed assets and the sinking fund is calculated to retire a little
GREENE & GREENE UBRARY
THE GAMBLE HOUSE
GC?~3r-73»/0J??c*