-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KgpJ1GEkLxQmIdGa5iraTFb99iGEpcjgtVVHfRjtHYcAyy2AgeFZedNvSm3B76xT hbW8E/QjeDzzBZq2KxefaQ== 0000014525-97-000002.txt : 19970127 0000014525-97-000002.hdr.sgml : 19970127 ACCESSION NUMBER: 0000014525-97-000002 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960930 FILED AS OF DATE: 19970109 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: BROOKLYN UNION GAS CO CENTRAL INDEX KEY: 0000014525 STANDARD INDUSTRIAL CLASSIFICATION: 4924 IRS NUMBER: 110584613 STATE OF INCORPORATION: NY FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-00722 FILM NUMBER: 97503330 BUSINESS ADDRESS: STREET 1: ONE METROTEC CENTER CITY: BROOKLYN STATE: NY ZIP: 11201 BUSINESS PHONE: 7184032000 MAIL ADDRESS: STREET 1: ONE METROTEC CENTER CITY: BROOKLYN STATE: NY ZIP: 11201 10-K/A 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 10-K/A (Mark One) X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended September 30, 1996 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 1-722 THE BROOKLYN UNION GAS COMPANY (Exact name of Registrant as specified in its charter) New York 11-0584613 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) ONE METROTECH CENTER, BROOKLYN, NEW YORK 11201-3850 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code 718-403-2000 Securities registered pursuant to Section 12(b) of the Act: Name of Each Exchange on Title of Each Class Which Registered Common Stock-$.33 1/3 par value New York Stock Exchange Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. (X) Aggregate market value of registrant's voting Common Stock held by non-affiliates as of December 16, 1996 was approximately $1.5 billion. On December 18, 1996 the Company had 49,993,378 shares of Common Stock outstanding. DOCUMENTS INCORPORATED BY REFERENCE Part of Documents Form 10-K Proxy Statement dated December 30, 1996 Part III SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 AMENDMENT TO APPLICATION OR REPORT Filed pursuant to Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 Amendment No. 1 The registrant hereby amends the following items, financial statements, exhibits or other portions of its Annual Report on Form 10-K for the fiscal year ended September 30, 1996 (the "Form 10-K") as set forth in the pages attached hereto: Item 10 - Directors and Executive Officers of the Registrant. Item 11 - Executive Compensation. Item 12 - Security Ownership of Certain Beneficial Owners and Management. Item 14 - Exhibit 99, Shareholder Letter Dated December 30, 1996 Including the Attachment, Announcing the Agreement Dated December 29, 1996 Between the Company, Long Island Lighting Company and NYECO Corp. - Schedule of Valuation and Qualifying Accounts. Part III Item 10. Directors and Executive Officers of the Registrant Information regarding the Company's directors is incorporated herein by reference to pages 2 through 8 of the Company's Proxy Statement, dated December 30, 1996, for its Annual Meeting of Shareholders to be held on February 6, 1997. Information regarding the Company's executive officers, who are elected annually by the directors, is found on page 52 hereof. Item 11. Executive Compensation Information regarding compensation of the Company's executive officers is incorporated herein by reference to pages 8 through 16 of the Company's Proxy Statement, dated December 30, 1996, for its Annual Meeting of Shareholders to be held on February 6, 1997. Item 12. Security Ownership of Certain Beneficial Owners and Management Information regarding beneficial ownership and management ownership is incorporated herein by reference to "Proposal 1 - Election of Directors" in the Company's Proxy Statement, on pages 6 and 7, dated December 30, 1996, for its Annual Meeting of Shareholders to be held on February 6, 1997. Part IV Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K (a) 1. All Financial Statements Page in Form 10-K Report of Independent Public Accountants 26 Summary of Significant Accounting Policies and Basis of Financial Statement Presentation 27 Consolidated Statement of Income for the Years Ended September 30, 1996, 1995 and 1994 30 Consolidated Statement of Retained Earnings for the Years Ended September 30, 1996, 1995 and 1994 30 Consolidated Balance Sheet at September 30, 1996 and 1995 31 Consolidated Statement of Capitalization at September 30, 1996 and 1995 32 Consolidated Statement of Cash Flows for the Years Ended September 30, 1996, 1995 and 1994 33 Notes to Consolidated Financial Statements 34 (a) 2. Financial Statement Schedules The following additional data should be read in conjunction with the financial statements included in Part II, Item 8. Schedules not included herein have been omitted because they are not applicable or the required information is shown in such financial statements or notes thereto. (a) 3. Exhibits (3) Articles of incorporation and by-laws By-laws of the Company, dated February 1, 1996, duly filed in December 1996 as Exhibit 3(b) to KeySpan Energy Corporation's Form S-4. Restated Certificate of Incorporation of the Company filed August 1, 1989, and Certificate of Amendment filed July 2, 1993; incorporated by reference from Exhibit 4(b) to Form S-3 Registration Statement No. 33-50249. (4) Instruments defining the rights of security holders, including indentures: Official Statement, dated December 4, 1985, respective of $125,000,000 of New York State Energy Research and Development Authority Variable Rate Gas Facilities Revenue Bonds Series 1985 I and 1985 II, incorporated by reference from Form 10-K for the year ended September 30, 1985. Participation Agreement, dated as of December 1, 1985, between the New York State Energy Research and Development Authority and The Brooklyn Union Gas Company relating to the Variable Rate Gas Facilities Revenue Bonds Series 1985 I and 1985 II, incorporated by reference from Form 10-K for the year ended September 30, 1985. Indenture of Trust, dated December 1, 1985, between New York State Energy Research and Development Authority and Chemical Bank, as Trustee, relating to the Variable Rate Gas Facilities Revenue Bonds Series 1985 I and 1985 II, incorporated by reference from Form 10-K for the year ended September 30, 1985. Official Statement, dated February 23, 1989, respective of $90,000,000 of the New York State Research and Development Authority Adjustable Rate Gas Facilities Revenue Bonds Series 1989A and Series 1989B, incorporated by reference from Form S-8 Registration Statement No. 33-29898. Participation Agreement, dated as of February 1, 1989, between the New York State Energy Research and Development Authority and The Brooklyn Union Gas Company relating to the Adjustable Rate Gas Facilities Revenue Bonds Series 1989A, incorporated by reference from Form 10-K for the year ended September 30, 1989. Participation Agreement, dated as of February 1, 1989, between the New York State Energy Research and Development Authority and The Brooklyn Union Gas Company relating to the Adjustable Rate Gas Facilities Revenue Bonds Series 1989B, incorporated by reference from Form 10-K for the year ended September 30, 1989. Indenture of Trust, dated February 1, 1989, between the New York State Energy Research and Development Authority and Manufacturers Hanover Trust Company, as Trustee, relating to the Adjustable Rate Gas Facilities Revenue Bonds Series 1989A, incorporated by reference from Form 10-K for the year ended September 30, 1989. Indenture of Trust, dated February 1, 1989, between the New York State Energy Research and Development Authority and Manufacturers Hanover Trust Company, as Trustee, relating to the Adjustable Rate Gas Facilities Revenue Bonds Series 1989B, incorporated by reference from Form 10-K for the year ended September 30, 1989. Official Statement, dated July 24, 1991, respective of $50,000,000 of the New York State Research and Development Authority Gas Facilities Revenue Bonds Series 1991A and $50,000,000 of the New York State Research and Development Authority Gas Facilities Revenue Bonds Series 1991B, incorporated by reference from Form 10-K for the year ended September 30, 1991. Participation Agreement, dated as of July 1, 1991,between the New York State Energy Research and Development Authority and The Brooklyn Union Gas Company relating to the Gas Facilities Revenue Bonds Series 1991A and 1991B, incorporated by reference from Form 10-K for the year ended September 30, 1991. Indenture of Trust, dated as of July 1, 1991, between the New York State Energy Research and Development Authority and Manufacturers Hanover Trust Company, as Trustee, relating to the Gas Facilities Revenue Bonds Series 1991A and 1991B, incorporated by reference from Form 10-K for the year ended September 30, 1991. Official Statement, dated July 23, 1992, respective of $37,500,000 of the New York State Energy Research and Development Authority Gas Facilities Revenue Bonds Series 1993A and $37,500,000 of the New York State Energy Research and Development Authority Gas Facilities Revenue Bonds Series 1993B, incorporated by reference from Form 10-K for the year ended September 30, 1992. Participation Agreement, dated as of July 1, 1992, between the New York State Energy Research and Development Authority and The Brooklyn Union Gas Company relating to the Gas Facilities Revenue Bonds Series 1993A and 1993B, incorporated by reference from Form 10-K for the year ended September 30, 1992. Indenture of Trust, dated as of July 1, 1992, between the New York State Energy Research and Development Authority and Chemical Bank, as Trustee, relating to the Gas Facilities Revenue Bonds Form Series 1993A and 1993B, incorporated by reference from Form 10-K for the year ended September 30, 1992. Official Statement, dated April 29, 1992, respective of $90,000,000 of the New York State Energy Research and Development Authority, 6.75% Gas Facilities Revenue Bonds, replacing $45,000,000 Series 1989A and $45,000,000 Series 1989B, incorporated by reference from Form 10-K for the year ended September 30, 1992. First Supplemental Participation Agreement dated as of May 1, 1992 to Participation Agreement dated February 1, 1989 between the New York State Energy Research and Development Authority and The Brooklyn Union Gas Company relating to Adjustable Rate Gas Facilities Revenue Bonds, Series 1989A & B, incorporated by reference from Form 10-K for the year ended September 30, 1992. First Supplemental Trust Indenture dated as of May 1, 1992 to Trust Indenture dated February 1, 1989 between the New York State Energy Research and Development Authority and Manufacturers Hanover Trust Company, as Trustee, relating to Adjustable Rate Gas Facilities Revenue Bonds, Series 1989A & B, incorporated by reference from Form 10-K for the year ended September 30, 1992. Official Statement, dated July 15, 1993, respective of $25,000,000 of the New York State Energy Research and Development Authority Gas Facilities Revenue Bonds Series D-1 and $25,000,000 of the New York State Energy Research and Development Authority Gas Facilities Revenue Bonds Series D-2, incorporated by reference from Form S-8 Registration Statement No. 33-66182. Participation Agreement, dated July 15, 1993, between the New York State Energy Research and Development Authority and The Brooklyn Union Gas Company relating to the Gas Facilities Revenue Bonds Series D-1 1993 and Series D-2 1993, incorporated by reference from Form S-8 Registration Statement No. 33-66182. Indenture of Trust, dated July 15, 1993, between The New York State Energy Research and Development Authority and Chemical Bank as Trustee, relating to the Gas Facilities Revenue Bonds Series D-1 1993 and Series D-2 1993, incorporated by reference from Form S-8 Registration Statement No. 33-60182. Official Statement, dated July 8, 1993, respective of $55,000,000 of the New York State Energy Research and Development Authority Gas Facilities Revenue Bonds Series C, incorporated by reference from Form 10-K for the year ended September 30, 1993. First Supplemental Participation Agreement dated as of July 1, 1993 to Participation Agreement dated as of June 1, 1990, between the New York State Energy Research and Development Authority and The Brooklyn Union Gas Company relating to Gas Facilities Revenue Bonds Series C, incorporated by reference from Form 10-K for the year ended September 30, 1993. First Supplemental Trust Indenture dated as of July 1, 1993 to Trust Indenture dated as of June 1, 1990 between the New York State Energy Research and Development Authority and Chemical Bank, as Trustee, relating to Gas Facilities Revenue Bonds Series C, incorporated by reference from Form 10-K for the year ended September 30, 1993. Official Statement, dated January 15, 1996, respective of $153,500,000 of the New York State Energy Research and Development Authority, 5 1/2% Gas Facilities Revenue Bonds Series 1996, replacing $98,500,000 Series 1985A and $55,000,000 Series 1985. Participation Agreement, dated January 1, 1996, between the New York Energy Research and Development Authority and The Brooklyn Union Gas Company relating to the Gas Facilities Revenue Bonds Series 1996. Indenture of Trust, dated January 1, 1996, between The New York State Energy Research and Development Authority and Chemical Bank, as Trustee, relating to the Gas Facilities Revenue Bonds Series 1996. (10) Material contracts Deferred Compensation Plan Preamble, dated, December 17, 1986, incorporated by reference from Form 10-K for the year ended September 30, 1987. Corporate Incentive Compensation Plan Description, incorporated by reference from Form 10-K for the year ended September 30, 1989. Marketing Incentive Compensation Plan Description, incorporated by reference from Form 10-K for the year ended September 30, 1989. Deferral Plan for Incentive Awards Description, incorporated by reference from Form 10-K for the year ended September 30, 1989. Agreement of Lease between Forest City Jay Street Associates and The Brooklyn Union Gas Company dated September 15, 1988, incorporated by reference from Form 10-K for the year ended September 30, 1990. Long-Term Performance Incentive Compensation Plan, dated November 15, 1995. (11) Statement re: Computation of per share earnings. See Part II, Item 8., "Financial Statements and Supplementary Data - Consolidated Statement of Income for the Years Ended September 30, 1996, 1995 and 1994," for information required by this item. (12) Statement re: Computation of consolidated ratio of earnings to fixed charges (21) Subsidiaries of the registrant (23) Consents of experts (27) Financial data schedule (99) Shareholder Letter dated December 30, 1996 including the attachment, announcing the agreement dated December 29, 1996 between the Company, Long Island Lighting Company and NYECO Corp. (b) Reports on Form 8-K: There were no reports filed on Form 8-K during the quarter ended September 30, 1996. There was an 8-K filed on December 29, 1996 pertaining to the agreement entered into between the Company, Long Island Lighting Company and NYECO Corp. THE BROOKLYN UNION GAS COMPANY AND SUBSIDIARIES CONSOLIDATED SCHEDULE OF VALUATION AND QUALIFYING ACCOUNTS FOR THE YEARS ENDED SEPTEMBER 30, 1996, 1995 AND 1994 (Thousands of Dollars)
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E Balance at Additions Balance at Beginning Charged to End of Description of Period Expense Deductions Period ______________________________ ____________ ______________ ______________ ______________ Year Ended September 30, 1996 Allowance for uncollectible accounts $13,730 $20,676 $18,790 (a) $15,616 ____________ ______________ ______________ ______________ Reserve for injuries and damages Public Liability $5,900 $5,788 $3,412 (b) $8,276 Workers' Compensation 1,590 450 1,193 (b) 847 ____________ ______________ ______________ ______________ $7,490 $6,238 $4,605 $9,123 ____________ ______________ ______________ ______________ Year Ended September 30, 1995 Allowance for uncollectible accounts $14,963 $17,494 $18,727 (a) $13,730 ____________ ______________ ______________ ______________ Reserve for injuries and damages Public Liability $5,350 $4,368 $3,818 (b) $5,900 Workers' Compensation 1,425 500 335 (b) 1,590 ____________ ______________ ______________ ______________ $6,775 $4,868 $4,153 $7,490 ____________ ______________ ______________ ______________ Year Ended September 30, 1994 Allowance for uncollectible accounts $14,212 $18,737 $17,986 (a) $14,963 ____________ ______________ ______________ ______________ Reserve for injuries and damages $6,816 $3,447 $3,488 (b) $6,775 ____________ ______________ ______________ ______________
(a) Write-off of bad debts, net of recoveries. (b) Cost of injury and damage claims. SIGNATURE Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Dated: January 8, 1997 THE BROOKLYN UNION GAS COMPANY By: /s/ Richard M. Desmond Richard M.Desmond Vice President, Comptroller and Chief Accounting Officer EX-99 2 Exhibit 99 December 30, 1996 Dear Shareholder: I am pleased to announce that on December 29, 1996, Brooklyn Union and the Long Island Lighting Company (LILCO) signed a definitive agreement to merge in a tax-free transaction that will result in a new holding company. A copy of the merger agreement has been filed with the Securities and Exchange Commission. The transaction will be accounted for as a pooling of interests and is anticipated to increase earnings to Brooklyn Union shareholders immediately after completion of the merger. A copy of the full press release is attached to this letter. This proposed transaction has been approved by both companies' boards of directors and will eventually require your approval. Because the combination will result in the formation of a new holding company, Brooklyn Union will not pursue our plans to form the KeySpan Energy Corporation, as we had originally envisioned. Accordingly, the proposal to form that holding company has been withdrawn, although it is extensively discussed in our summary annual report, which was prepared prior to our decision to merge. That holding company proposal, therefore, is not included in the enclosed proxy statement. I am very excited about the proposed merger. The transaction offers shareholders of both companies the opportunity to participate in the significant upside potential of the convergence of gas and electric companies within the energy industry. In particular, our combination with LILCO opens up the huge Long Island market for Brooklyn Union. This market is particularly attractive because there is an extremely low penetration of gas as a percent of the total energy provision in that region. The combination of the two companies will result in substantial synergy savings in excess of $1 billion over ten years, making rates more competitive. In addition, this transaction will help spur increased regional business growth through lower energy prices and enhanced energy-related products and services. As a result, Brooklyn Union shareholders will benefit from the attractive growth prospects resulting from access to more than one million customers in an area with a population of 2.7 million people. I am very enthusiastic about our company's future and am optimistic that we will continue to grow and prosper in the competitive marketplace. Thank you for your continued confidence in Brooklyn Union. Sincerely, s/Robert B. Catell Robert B. Catell Chairman and Chief Executive Officer FOR IMMEDIATE RELEASE Contact for Brooklyn Union: Contact for LILCO: Media: Robert Loftus/Robert Mahony Media: Elaine Davis 718-403-2503/718-403-2522 516-545-5052 Investors: Jan Childress Investors: William Catacosinos, Jr. 718-403-3382 516-545-4688 BROOKLYN UNION AND LILCO ANNOUNCE PLAN TO COMBINE COMPANIES RATE SAVINGS IN EXCESS OF $1.0 BILLION ANTICIPATED New York (December 29, 1996) -- Brooklyn Union Gas Company (NYSE: BU) and The Long Island Lighting Company (LILCO) (NYSE: LIL) announced today that they have signed a definitive agreement to merge in a tax-free transaction resulting in a new holding company. The combined market value of the two companies based on their closing stock prices on Friday, December 27, 1996 is approximately $4 billion. The transaction will be accounted for as a pooling of interests. The proposed transaction, which has been approved by both companies' boards of directors, would unite Brooklyn Union, a gas company with primary operations in gas distribution serving Brooklyn, Queens and Staten Island, with LILCO, an electric and gas company serving Nassau and Suffolk Counties and parts of Queens. The new company, which has not yet been named, will serve approximately 2.2 million customers and have revenues of more than $4.5 billion. Under the terms of the transaction, LILCO shareholders will receive .803 shares of the new holding company's common stock for each share of LILCO they currently hold. Brooklyn Union shareholders will receive one share of the holding company's common stock for each share of Brooklyn Union they currently hold. LILCO shareholders will own approximately 66 percent of the common stock of the new company while Brooklyn Union shareholders will own approximately 34 percent. There are no changes with respect to either company's public debt issues or outstanding preferred stock. Upon completion of the merger, Dr. William J. Catacosinos, currently chairman and chief executive officer of LILCO, will become chairman and chief executive officer of the new holding company; Mr. Robert B. Catell, currently chairman and chief executive officer of Brooklyn Union, will become president and chief operating officer of the new holding company. One year after the closing, Mr. Catell will succeed Dr. Catacosinos as chief executive officer, with Dr. Catacosinos continuing as chairman. The board of directors of the new company will be composed of 15 members, six from Brooklyn Union and six from LILCO and three additional persons previously unaffiliated with either company and jointly selected by them. Dr. Catacosinos said, "The combination of Brooklyn Union and LILCO is positive for our customers, shareholders, and the communities we serve. The consolidation of our neighboring companies will result in synergy savings in excess of $1 billion over ten years, which will provide rate reductions to customers. We will continue our commitment to LILCO's electric customers, specifically to lowering electric rates on Long Island. Together, we can help spur increased regional business growth through lower energy prices and enhanced energy-related products and services. "The combined workforce will allow us to respond more effectively to storm outages. Employees of both our companies will benefit from being part of a larger, more competitive company well- positioned in the emerging energy-services industry. Together, we will be positioned to help our customers find business solutions that optimize a broad array of energy products and services at competitive prices," Dr. Catacosinos added. The companies believe reductions related to synergies can be accomplished without layoffs through attrition and other voluntary separations. Mr. Catell said, "Our combination with LILCO opens up the substantial Long Island market for Brooklyn Union. This market is particularly attractive because there is low penetration of gas as a percent of the total energy provision in that region. Our combined company would have an enhanced ability to provide its broader customer base with competitive energy products and services well into the future. The tradition of quality customer service and community involvement, a hallmark of both Brooklyn Union and LILCO, will continue unabated in the combined entity. Brooklyn Union shareholders should enjoy immediate earnings accretion and benefit from the long-term growth prospects inherent in the combination." Mr. Catell continued, "This transaction offers shareholders of both companies the opportunity to participate in the significant upside potential of the convergence of gas and electric companies within the energy industry. LILCO and Brooklyn Union together will create a platform to market, trade and arrange physical delivery of energy products and services on a large scale to all major market areas. Current and prospective customers will benefit greatly from the opportunity to deal with an energy services company which can offer one-stop shopping for the provision--and management--of their energy needs. Brooklyn Union's subsidiary, KeySpan Energy Management, headquartered in Jericho, New York, already operates throughout the tri-state area and its sister company KeySpan Energy Services sells natural gas to a growing customer base. The ability to offer wraparound individualized services capable of encompassing all customer needs--from management services to choice of fuel and equipment, and ultimately appliance services--means a new day indeed for an entire population of customers in our new market area." The companies noted that they will continue discussions with New York State's Long Island Power Authority (LIPA) with respect to LIPA's proposal to acquire certain LILCO assets, including its regulatory assets. If an agreement with LIPA is reached, the terms of the transaction with Brooklyn Union would be adjusted to reflect that resolution. Brooklyn Union and LILCO will continue to work with LIPA and state officials to substantially reduce rates to Long Island electric customers beyond that which could be achieved by the merger alone. Disposition of any portion of LILCO's assets to LIPA must be agreed to by all three parties. The companies will continue their current dividend policies respectively, until the closing. It is expected that the new company's dividend policy will be determined prior to closing. The merger is conditioned upon the approval of each company's common shareholders and various regulatory agencies including the New York Public Service Commission, the Federal Energy Regulatory Commission and the Securities and Exchange Commission. The companies are hopeful that the regulatory approvals can be obtained in 12 to 18 months. Merrill Lynch & Co. is serving as financial advisor and has provided a fairness opinion to Brooklyn Union. Dillon Read & Co. Inc. is serving as financial advisor and has provided a fairness opinion to LILCO. Brooklyn Union, with approximately 3,000 employees, distributes natural gas in the New York City boroughs of Brooklyn and Staten Island and in two-thirds of the borough of Queens, and serves the growing energy needs of 4 million residents. Brooklyn Union has energy-related investments in gas exploration, production and marketing in the United States and Canada, as well as energy services in the United States, including cogeneration products, pipeline transportation and gas storage. LILCO's 5,400 employees provide electric and gas service to more than 1 million customers in Nassau and Suffolk Counties and on the Rockaway Peninsula in Queens County. LILCO's service territory covers 1,230 square miles with a population of approximately 2.7 million people. The press release includes forward looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. These forward looking statements reflect numerous assumptions, and involve a number of risks and uncertainties. Among the factors that could cause actual results to differ materially are: electric load and customer growth; abnormal weather conditions; available sources and cost of fuel and generating capacity; the speed and degree to which competition enters the power generation, wholesale and retail sectors of the electric utility industry; state and federal regulatory initiatives that increase competition, threaten cost and investment recovery, and impact rate structures; the ability of the combined company to successfully reduce its cost structure; operating performance of nuclear generating facilities, decommissioning costs associated with such facilities; the degree to which the combined company develops nonregulated business ventures; the economic climate and growth in the service territories of the two companies; economies generated by the merger; inflationary trends and interest rates and the other risks detailed from time to time in the two companies' SEC reports. -----END PRIVACY-ENHANCED MESSAGE-----