-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, mNSs2Ij/uVtcmPx0fdmr9Dj5bZhvbKoIe44+GZjpmIhmDg2lF8ugwUHydcaez5Z+ i3XQsVd/yMxE9QF0kryaVg== 0000310103-95-000016.txt : 19950517 0000310103-95-000016.hdr.sgml : 19950516 ACCESSION NUMBER: 0000310103-95-000016 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950512 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CONNECTICUT ENERGY CORP CENTRAL INDEX KEY: 0000310103 STANDARD INDUSTRIAL CLASSIFICATION: NATURAL GAS DISTRIBUTION [4924] IRS NUMBER: 060869582 STATE OF INCORPORATION: CT FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-08369 FILM NUMBER: 95537588 BUSINESS ADDRESS: STREET 1: 855 MAIN STREET CITY: BRIDGEPORT STATE: CT ZIP: 06604 BUSINESS PHONE: 2033828111 MAIL ADDRESS: STREET 1: 855 MAIN ST STREET 2: 855 MAIN ST CITY: BRIDGEPORT STATE: CT ZIP: 06604 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1995 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 No. 1-8369 CONNECTICUT ENERGY CORPORATION (Exact name of registrant as specified in its charter) Connecticut 06-0869582 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 855 Main Street Bridgeport, Connecticut 06604 (Address of principal executive offices) (Zip Code) (203) 579-1732 (Registrant's telephone number, including area code) (Former name, former address and former fiscal year, if changed since last report) Indicate by check whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Class Outstanding at May 3, 1995 ----- -------------------------- Common Stock, $1 par value 8,796,070 PART 1. FINANCIAL INFORMATION CONNECTICUT ENERGY CORPORATION ITEM 1. FINANCIAL STATEMENTS CONSOLIDATED STATEMENTS OF INCOME (Dollars in thousands, except per share) (Unaudited)
Three Months Ended Six Months Ended Twelve Months Ended March 31, March 31, March 31, --------------------- --------------------- --------------------- 1995 1994 1995 1994 1995 1994 ---- ---- ---- ---- ---- ---- Operating Revenues..................... $ 103,284 $ 111,838 $ 168,807 $ 178,552 $ 231,128 $ 235,538 Purchased gas.......................... 49,998 61,348 83,275 97,955 112,190 126,608 --------- --------- --------- --------- --------- --------- Gross margin........................... 53,286 50,490 85,532 80,597 118,938 108,930 Operating Expenses: Operations........................... 14,777 14,965 27,914 26,325 51,798 45,461 Maintenance.......................... 1,020 1,357 1,996 2,220 3,811 4,025 Depreciation and depletion........... 3,473 3,269 6,949 6,477 13,503 12,515 Federal and state income taxes....... 8,981 7,507 11,911 10,188 7,125 5,808 Municipal, gross earnings and other taxes........................ 6,047 6,662 9,702 10,585 15,431 16,659 --------- --------- --------- --------- --------- --------- Total operating expenses............... 34,298 33,760 58,472 55,795 91,668 84,468 --------- --------- --------- --------- --------- --------- Operating income....................... 18,988 16,730 27,060 24,802 27,270 24,462 Other deductions, net.................. 165 15 320 247 659 486 Interest Expense and Preferred Stock Dividends: Interest on long-term debt and amortization of debt issue costs... 2,716 2,733 5,432 5,464 10,888 10,564 Other interest and preferred stock dividends, net..................... 392 229 652 340 975 1,156 --------- --------- --------- --------- --------- --------- Total interest expense and preferred stock dividends...................... 3,108 2,962 6,084 5,804 11,863 11,720 --------- --------- --------- --------- --------- --------- Net Income............................. $ 15,715 $ 13,753 $ 20,656 $ 18,751 $ 14,748 $ 12,256 ========= ========= ========= ========= ========= ========= Net income per share................... $ 1.79 $ 1.77 $ 2.37 $ 2.45 $ 1.70 $ 1.63 ========= ========= ========= ========= ========= ========= Dividends paid per share............... $ 0.325 $ 0.32 $ 0.65 $ 0.64 $ 1.30 $ 1.28 --------- --------- --------- --------- --------- --------- Weighted average number of common shares outstanding during period..... 8,755,722 7,781,564 8,732,151 7,638,322 8,679,436 7,535,421 --------- --------- --------- --------- --------- --------- See Notes to Consolidated Financial Statements.
CONNECTICUT ENERGY CORPORATION CONSOLIDATED BALANCE SHEETS (Dollars in thousands)
Mar. 31, Sept. 30, Mar. 31, 1995 1994 1995 ----------- ----------- ----------- (Unaudited) (Unaudited) Assets - ------ Utility Plant: Gross utility plant.............................................................. $344,851 $331,953 $323,799 Less--accumulated depreciation................................................... 102,317 97,458 97,251 -------- -------- -------- Net utility plant.............................................................. 242,534 234,495 226,548 Nonutility property, net......................................................... 2,492 2,492 9 -------- -------- -------- Net utility plant and other property............................................... 245,026 236,987 226,557 -------- -------- -------- Current Assets: Cash and cash equivalents........................................................ 3,968 1,637 5,061 -------- -------- -------- Accounts receivable.............................................................. 57,799 27,445 64,397 Less--allowance for doubtful accounts............................................ 3,818 3,747 4,520 -------- -------- -------- Net accounts receivable............................................................ 53,981 23,698 59,877 -------- -------- -------- Accrued utility revenues, net.................................................... 7,519 2,630 6,822 Unrecovered purchased gas costs.................................................. --- 4,523 --- Inventories...................................................................... 9,255 14,678 8,678 Prepaid expenses................................................................. 1,394 1,847 1,132 -------- -------- -------- Total current assets............................................................... 76,117 49,013 81,570 -------- -------- -------- Deferred Charges: Unamortized debt expenses........................................................ 6,202 6,317 6,437 Unrecovered deferred taxes....................................................... 37,222 35,398 32,702 Other............................................................................ 24,351 25,205 25,955 -------- -------- -------- Total deferred charges............................................................. 67,775 66,920 65,094 -------- -------- -------- Total assets....................................................................... $388,918 $352,920 $373,221 ======== ======== ======== See Notes to Consolidated Financial Statements.
CONNECTICUT ENERGY CORPORATION CONSOLIDATED BALANCE SHEETS (Dollars in thousands)
Mar. 31, Sept. 30, Mar. 31, 1995 1994 1994 ----------- ----------- ----------- (Unaudited) (Unaudited) Capitalization and Liabilities - ------------------------------ Common Shareholders' Equity: Common Stock--par value $1 per share: authorized--20,000,000 shares, issued and outstanding--8,791,211 shares; 8,700,266 shares; 8,573,048 shares.............. $ 8,791 $ 8,700 $ 8,573 Capital in excess of par value................................................... 86,938 85,265 82,965 Retained earnings................................................................ 46,730 31,754 43,279 Adjustment for minimum pension liability......................................... --- --- (108) -------- -------- -------- Total common shareholders' equity.................................................. 142,459 125,719 134,709 -------- -------- -------- Preferred Stock: The Southern Connecticut Gas Company Redeemable Preferred Stock: authorized-- 200,000 shares, par value $100 per share 4.75% cumulative series, none issued authorized--600,000 shares, par value $1 per share, none issued................ --- --- --- Preference Stock: The Southern Connecticut Gas Company: authorized--1,000,000 shares, par value $1 per share, none issued Connecticut Energy Corporation: authorized--1,000,000 shares, par value $1 per share, none issued Preferred stock expense............................................................ --- --- --- -------- -------- -------- Total preferred stock.............................................................. --- --- --- -------- -------- -------- Long-term debt..................................................................... 119,776 119,917 120,371 -------- -------- -------- Total capitalization.............................................................. 262,235 245,636 255,080 -------- -------- -------- Current Liabilities: Short-term borrowings............................................................ 14,000 18,800 9,100 Current maturities of long-term debt............................................. 594 594 595 Accounts payable................................................................ 12,417 10,886 15,930 Refunds due customers............................................................ --- --- 128 Federal, state and deferred income taxes......................................... 13,021 3,565 13,382 Property and other accrued taxes................................................. 8,754 5,289 9,567 Interest payable................................................................. 3,294 3,315 3,353 Customer deposits................................................................ 2,219 1,901 2,348 Refundable purchased gas costs................................................... 6,794 --- 2,495 Other accrued liabilities........................................................ 2,887 4,137 2,748 -------- -------- -------- Total current liabilities.......................................................... 63,980 48,487 59,646 -------- -------- -------- Deferred Credits: Deferred income taxes and investment tax credits................................. 57,864 54,974 51,216 Other............................................................................ 4,839 3,823 7,279 -------- -------- -------- Total capitalization and liabilities............................................... $388,918 $352,920 $373,221 ======== ======== ======== See Notes to Consolidated Financial Statements.
CONNECTICUT ENERGY CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in thousands) (Unaudited)
Six Months Ended Twelve Months Ended Mar. 31, Mar. 31, ------------------ ------------------- 1995 1994 1995 1994 ---- ---- ---- ---- Net cash provided by operating activities: $26,567 $13,350 $33,026 $15,879 ------- ------- ------- ------- Cash flows from investing activities: Capital expenditures................................ (15,111) (11,073) (30,685) (24,309) Proceeds from sale of subsidiaries.................. 3 --- 9 --- Contributions in aid of construction................ 16 24 43 86 Payments for retirement of utility plant............ (237) (381) (635) (652) Other............................................... (50) --- (50) --- ------- ------- ------- ------- Net cash used by investing activities................. (15,379) (11,430) (31,318) (24,875) ------- ------- ------- ------- Cash flows from financing activities: Dividends paid on common stock...................... (5,680) (5,137) (11,297) (9,900) Issuance of common stock............................ 1,764 21,242 4,191 23,459 Issuance of long-term debt.......................... --- --- --- 12,000 Repayments of long-term debt........................ (141) (140) (595) (594) Early redemption of preferred stock................. --- (638) --- (638) (Decrease) increase in short-term borrowings........ (4,800) (14,400) 4,900 (15,800) ------- ------- ------- ------- Net cash (used by) provided by financing activities... (8,857) 927 (2,801) 8,527 ------- ------- ------- ------- Net increase (decrease) in cash and cash equivalents.. 2,331 2,847 (1 093) (469) Cash and cash equivalents at beginning of period...... 1,637 2,214 5,061 5,530 ------- ------- ------- ------- Cash and cash equivalents at end of period............ $ 3,968 $ 5,061 $ 3,968 $ 5,061 ======= ======= ======= ======= Supplemental disclosures of cash flow information: Cash paid during the period for: Interest............................................ $ 6,023 $ 5,710 $11,645 $11,428 Income taxes........................................ $ 2,176 $ 226 $ 6,201 $ 1,650 See Notes to Consolidated Financial Statements.
CONNECTICUT ENERGY CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. The unaudited consolidated financial statements presented herein should be read in conjunction with the consolidated financial statements of Connecticut Energy Corporation ("Company") for the fiscal year ended September 30, 1994 as presented in the Annual Report on Form 10-K . In the opinion of management, the accompanying financial information reflects all adjustments which are necessary to provide a fair presentation of the interim periods shown. All such adjustments are of a normal recurring nature. 2. Because sales of gas for space heating purposes by the registrant's principal subsidiary, The Southern Connecticut Gas Company ("Southern"), are dependent upon weather conditions and typically are greater during the winter months, the results of operations for the six months ended March 31, 1995 are not indicative of the results to be expected for the full fiscal year. 3. Included in other deferred charges are amounts related to the deferral of certain hardship heating customer accounts receivable arrearages totalling $8,428,000, $10,211,000 and $6,553,000 at March 31, 1995, September 30, 1994 and March 31, 1994, respectively; the deferral of certain shortfalls in energy assistance funding related to the 1991/92 and 1992/93 heating seasons amounting to $2,309,000, $2,742,000 and $2,945,000 at March 31, 1995, September 30, 1994 and March 31, 1994, respectively; prepaid pension contributions of $7,599,000, $6,355,000 and $6,355,000 at March 31, 1995, September 30, 1994, and March 31, 1994, respectively, and an intangible pension asset of $101,000, $101,000 and $3,652,000 at March 31, 1995, September 30, 1994 and March 31, 1994, respectively. 4. Included in other deferred credits are amounts related to a minimum pension liability totalling $101,000, $101,000 and $3,816,000 at March 31, 1995, September 30, 1994 and December 31, 1994, respectively. 5. Southern has identified coal tar residue at three sites in Connecticut. This residue results from historic coal gasification operations conducted at those sites by Southern's predecessors from the late 1800s through the first part of this century. Many gas distribution companies throughout the country carried on such gas manufacturing operations during the same period. See section entitled "Environmental Matters" on page 16 for further detail. ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS Net Income - ---------- Connecticut Energy Corporation's ("Company") consolidated net income for the three, six and twelve months ended March 31, 1995 and 1994 is detailed below:
Three Months Ended Six Months Ended Twelve Months Ended March 31, March 31, March 31, ------------------ ---------------- ------------------- (in thousands, except 1995 1994 1995 1994 1995 1994 per share) ---- ---- ---- ---- ---- ---- Net Income $15,715 $13,753 $20,656 $18,751 $14,748 $12,256 ======= ======= ======= ======= ======= ======= Net Income Per Share $ 1.79 $ 1.77 $ 2.37 $ 2.45 $ 1.70 $ 1.63 Weighted Average ======= ======= ======= ======= ======= ======= Shares Outstanding 8,756 7,782 8,732 7,638 8,679 7,535 ------- ------- ------- ------- ------- -------
Factors affecting the increase to net income for the three month period ended March 31, 1995 were additional interruptible margins earned and retained by the Company's wholly-owned subsidiary, The Southern Connecticut Gas Company ("Southern"), primarily due to Southern's ability to serve interruptible customers throughout the winter because of the combination of warm weather and competitive natural gas prices; lower operating expenses primarily in the area of labor costs due to less overtime payments because of the warmer winter weather; and lower gross revenue taxes due to lower revenues. Partially offsetting these decreases were higher operating expenses in the areas of uncollectibles and insurance and increased income taxes due to the combination of higher pre-tax income and a higher effective tax rate. For the six month period ended March 31, 1995, higher margins were principally attributed to the ability to retain additional interruptible margins earned for reasons previously mentioned, a 6.6% rate increase implemented by Southern on December 9, 1993, and the continued conversion of existing non-heating customers to heating customers. Lower gross revenue taxes due to lower revenues combined with lower property taxes partially offset the higher provision for income taxes resulting from a combination of higher pre-tax income and a higher effective tax rate. Margins for the twelve months ended March 31, 1995 were also positively affected by the rate increase implemented by Southern, retention of increased margins on interruptible services and the conversion of non-heating customers to heating customers. Partially offsetting these increases were higher operating expenses predominantly in the areas of uncollectibles, rent and employee benefit costs principally due to the adoption of Statement of Financial Accounting Standards No. 106 ("SFAS 106") as well as higher depreciation expense. Operating Revenues - ------------------ The Company's operating revenues for the three and six months ended March 31, 1995 decreased approximately 8% and 5% when compared to the corresponding periods ended March 31, 1994. These decreases were attributed to lower collections through the operation of Southern's Purchased Gas Adjustment Clause ("PGA") and weather that was approximately 10% and 11% warmer than normal during the three and six months ended March 31, 1995. Partially offsetting these decreases were increases in operating revenues due to the collection of approximately $4,009,000 and $6,198,000 for the three and six months ended March 31, 1995 from firm customers through the Weather Normalization Adjustment Clause ("WNA"). For the three months ended December 31, 1993, the weather was approximately 2% colder than normal which positively affected operating revenues for that period since the WNA was not in effect. For the twelve months ended March 31, 1995, operating revenues were approximately 2% lower when compared with the corresponding 1994 period. The decrease can be principally attributed to the lower collections through the operation of the PGA. For the twelve months ended March 31, 1995, Southern collected approximately $7,041,000 through the operation of the WNA but refunded approximately $3,600,000 for the comparable 1994 period. Total Sales and Transportation Volumes - -------------------------------------- Southern's total volumes of gas sold and transported for the three months ended March 31, 1995 was 17,151 MMcf, which represents a 31% increase over the comparable 1994 period. This increase was primarily attributable to volumes of gas transported in accordance with a special contract for The Connecticut Light and Power Company's ("CL&P") Devon generating station ("Devon Station") which began in July 1994 as well as Southern's ability to sell gas off- system in accordance with the Department of Public Utility Control's ("DPUC") decision regarding the implementation of Federal Energy Regulatory Commission ("FERC") Order No. 636. For the six and twelve months ended March 31, 1995, Southern's total volumes of gas sold and transported of 29,813 MMcf and 41,392 MMcf were approximately 38% and 39% higher, respectively, than the comparable 1994 periods principally due to higher transportation volumes to CL&P's Devon Station and off-system sales volumes. Firm Sales Volumes - ------------------ Firm sales volumes sold by Southern for the three, six and twelve months ended March 31, 1995 decreased approximately 14%, 15% and 14%, respectively, as compared to the corresponding 1994 periods. This decrease was principally due to weather that was approximately 18%, 17% and 15% warmer during the three, six and twelve months ended March 31, 1995, respectively, as compared to the corresponding 1994 periods. Interruptible Sales and Transportation Volumes - ---------------------------------------------- The chart below depicts total volumes of gas both sold to and transported for interruptible customers, off-system sales volumes and transportation volumes under special contract by Southern, as well as gross margins earned and retained due to the margin sharing mechanism on these services:
Three Months Ended Six Months Ended Twelve Months Ended March 31, March 31, March 31, ------------------ ---------------- ------------------- (in thousands) 1995 1994 1995 1994 1995 1994 ---- ---- ---- ---- ---- ---- Gross margin earned $4,114 $1,813 $ 7,066 $3,275 $11,212 $6,077 ====== ====== ======= ====== ======= ====== Gross margin retained $4,103 $1,727 $ 4,819 $2,146 $ 8,019 $4,569 ====== ====== ======= ====== ======= ====== Volumes sold and transported (MMcf) 7,552 1,960 14,545 3,652 21,403 6,524 ------ ------ ------- ------ ------- ------
Margins earned on volumes delivered to interruptible customers vary depending upon the relationship of the market price for alternate fuels to the cost of natural gas and related transportation. Additionally, margins earned, net of gross earnings tax, from interruptible service in excess of an annual target are allocated through a margin sharing mechanism between firm customers and Southern. Margins earned and retained by Southern were higher for the three and six months ended March 31, 1995 as compared with the corresponding 1994 periods principally due to higher levels of interruptible sales and higher per unit margins earned on those sales. Southern's ability to sell and transport gas off-system pursuant to the DPUC'S decision regarding the implementation of FERC Order No. 636 also contributed to increased margins. The increase in margins retained for the twelve months ended March 31, 1995 when compared to the corresponding 1994 period is principally attributable to the increased level of interruptible services experienced during the period, the change in the margin sharing year, an increase in the target margin level from $2,000,000 to $4,000,000 in accordance with the DPUC's decision in Southern's latest rate case and Southern's ability to sell and transport off- system gas. Purchased Gas Expense - --------------------- Purchased gas expense for the three, six and twelve months ended March 31, 1995 decreased approximately 19%, 15% and 11%, respectively, when compared to the corresponding 1994 periods primarily due to lower firm sales volumes during the 1995 periods. This decrease would have been greater but for the suspension of the flow-through of approximately $3,704,000, $8,678,000 and $12,726,000 in interstate pipeline refunds to Southern's customers relating to the recovery of previously deferred transition costs associated with FERC Order 636 implementation by interstate pipelines serving Southern for the three, six and twelve months ended March 31, 1995, respectively. Operations Expense - ------------------ Operations expense for the six and twelve months ended March 31, 1995 increased approximately 6% and 14%, respectively, when compared to the corresponding 1994 periods. For the six months ended March 31, 1995, a higher expense for uncollectible accounts was partially offset by lower expenses in the areas of labor, conservation and insurance. For the twelve months ended March 31, 1995, approximately 60% of the increase in operations expense was the result of a higher expense for uncollectibles. The remainder of the increase in operations expense for the twelve months ended March 31, 1995 was due to higher employee benefit costs relating to the adoption and the current recovery of postretirement health care expenses as well as increases in other operations expenses such as rent, pension costs and other general and administrative expenses. In December 1992, the DPUC allowed Southern to defer certain shortfalls in energy assistance funding from various state and federal agencies related to the 1991/92 and 1992/93 heating seasons. The DPUC's action positively impacted Southern's provision for uncollectible accounts for the fiscal year ended September 30, 1993. Southern has been allowed to recover these costs as well as deferred costs associated with Southern's certified hardship forgiveness program beginning January 1, 1994 in accordance with the DPUC's latest rate decision. Accordingly, included in operations expense for the three, six and twelve months ended March 31, 1995, were approximately $1,371,000, $2,047,000 and $3,027,000, respectively, relating to these amortizations as compared to $747,000 for the comparable 1994 periods. Maintenance Expense - ------------------- Maintenance expense for the three, six and twelve months ended March 31, 1995 decreased approximately 25%, 10% and 5%, respectively, as compared to the same 1994 periods. These decreases were primarily attributable to lower labor and material costs associated with Southern's mains due to a lower level of maintenance activity resulting from the warmer weather experienced during the 1994/95 winter. Depreciation and Depletion - -------------------------- Depreciation expense for the three, six and twelve months ended March 31, 1995 increased approximately 6%, 7% and 8%, respectively, as compared to the corresponding 1994 periods primarily due to additions to plant in service by Southern. Federal and State Income Taxes - ------------------------------ The total provision for federal and state income taxes for the three, six and twelve months ended March 31, 1995 increased approximately 20%, 17% and 23%, respectively, when compared to the corresponding 1994 periods. These increases were primarily due to higher pre-tax income, coupled with a higher effective tax rate, for all 1995 periods due to the flow-through tax effect of the amortization of previously deferred costs. Municipal, Gross Earnings and Other Taxes - ----------------------------------------- Municipal, gross earnings and other taxes decreased for the three, six and twelve months ended March 31, 1995 approximately 9%, 8% and 7%, respectively, when compared to the corresponding 1994 periods. The decreases were primarily due to lower provisions for gross earnings taxes because of lower revenues as well as lower provisions for property taxes. Interest Expense and Preferred Stock Dividends - ---------------------------------------------- Total interest expense and preferred stock dividends increased approximately 5% for the three and six months ended March 31, 1995 as compared to the corresponding 1994 periods. This increase was primarily due to lower amounts of interest income relating to the deferral and current recovery of transition costs arising from the implementation of FERC Order No. 636 by interstate pipelines in addition to higher short-term interest costs due to higher average interest rates during the 1995 periods. Partially offsetting the increase were lower interest costs related to interstate pipeline refunds. LIQUIDITY AND CAPITAL RESOURCES Operating Activities - -------------------- The seasonal nature of Southern's business creates large short- term cash demands primarily to finance gas purchases, customer accounts receivable and certain tax payments. To provide these funds, as well as funds for its capital expenditure program and other corporate purposes, Southern has committed lines of credit with a number of banks totalling $30,000,000 and uncommitted lines of credit with two of its banks totalling $14,000,000, in addition to a revolving credit line agreement for up to $20,000,000 with one of its banks. This latter agreement has a revolving credit feature through December 21, 1996, followed by a term loan period through December 21, 2000. At March 31, 1995, Southern had unused lines of credit of $50,000,000. Because of the availability of short-term credit and the ability to issue long-term debt and additional equity, management believes it has adequate financial flexibility to meet its anticipated cash needs. Operating cash flows for the six months ended March 31, 1995 were positively affected by higher net income, the receipt of approximately $8,678,000 in interstate pipeline refunds utilized to offset previously deferred transition costs and a higher refundable purchased gas cost balance. Operating cash flows for the six months ended March 31, 1995 as compared to the six months ended March 31, 1994 were also positively affected by a lower accounts receivable balance. Operating cash flows for the twelve months ended March 31, 1995 were positively affected by higher net income and the receipt of approximately $12,726,000 in interstate pipeline refunds used to offset previously deferred transition costs. Operating cash flows for the twelve months ended March 31, 1995 as compared to the twelve months ended March 31, 1994 were positively affected by a higher refundable purchased gas cost balance. Investing Activities - -------------------- Capital expenditures approximated $15,095,000 and $11,049,000 for the six months ended March 31, 1995 and 1994, respectively, and $30,642,000 and $24,223,000 for the twelve months ended March 31, 1995 and 1994, respectively. On an annual basis, Southern relies upon cash flows from operating activities to fund a portion of these expenditures, with the remainder funded by short-term borrowings and, at some later date, long-term debt and capital stock financings. FERC Order No. 636 Transition Costs - ----------------------------------- As a result of FERC Order No. 636, costs are being incurred by Southern's interstate pipeline suppliers to convert existing "bundled" sales services to "unbundled" transportation and storage services. These transition costs include: (1) unrecovered gas costs, (2) gas supply realignment costs, (3) stranded investment costs and (4) new facilities costs. As of March 31, 1995, Southern has paid approximately $16,250,000 in transition costs which represents Southern's total expected obligation for transition costs. Of the amount paid, $4,468,000 represents unrecovered gas costs and $11,782,000 represents gas supply realignment costs and stranded investment costs. On July 8, 1994, the DPUC issued a Decision regarding implementation of FERC Order No. 636 by the Connecticut local gas distribution companies. The DPUC prescribed, among other things, various mechanisms for the recovery of deferred transition costs. As of March 31, 1995, Southern has recovered all of its deferred transition costs through the use of the recovery mechanisms allowed by the DPUC. Environmental Matters - --------------------- Southern has identified coal tar residue at three sites in Connecticut resulting from coal gasification operations conducted at those sites by Southern's predecessors from the late 1800s through the first part of this century. Many gas distribution companies throughout the country carried on such gas manufacturing operations during the same period. The coal tar discovered at Southern's three sites is not designated a hazardous material by any federal or Connecticut agency, but some of its constituents are classified as hazardous. On April 27, 1992, Southern notified the Connecticut Department of Environmental Protection ("DEP") and the United States Environmental Protection Agency of the presence of coal tar residue on the three sites. On November 9, 1994, the DEP informed Southern that it had performed a preliminary review of the information provided to it by Southern and had determined that, based on current priorities and limited staff resources, a comprehensive review of site conditions and subsequent participation by the DEP "are not possible at this time". Until the DEP conducts a comprehensive review, no discussions with it addressing the extent, timing and type of remedial action, if any, can occur. Given the DEP's response, management cannot at this time predict the costs of any future site analysis and remediation, if any, nor can it estimate when any such costs, if any, would be incurred. While such future analytical and cleanup costs could possibly be significant, management believes, based upon the provisions of the Partial Settlement in Southern's last rate order, that Southern will be able to recover these costs through its customer rates. Although the method, timing and extent of any recovery remain uncertain, management currently does not expect that the incurrence of such costs will materially adversely impact the Company's financial condition or results of operations. PART II- OTHER INFORMATION Items 1, 2, 3 and 5 are inapplicable. Item 4. Submission of Matters to a Vote of Security-Holders --------------------------------------------------- (a) The annual meeting of the registrant was held on January 31, 1995. (b) Election of Directors: Non- For Against Abstain Vote --- ------- ------- ---- Henry Chauncey, Jr. 7,064,384 111,356 0 0 Richard M. Hoyt 7,064,982 110,758 0 0 Christopher D. Turner 7,073,097 102,643 0 0 (c) Election to employ the firm of Coopers & Lybrand L.L.P. as the independent accountants to audit the books and affairs of the registrant and its subsidiaries for the 1995 fiscal year: Non- For Against Abstain Vote --- ------- ------- ---- Coopers & Lybrand L.L.P. 7,053,465 34,788 87,487 0 Item 6. Exhibits and Reports on Form 8-K -------------------------------- (a) Exhibits: Exhibit 4(a) - The Amended and Restated By-Laws of Connecticut Energy Corporation. Exhibit 4(b) - The Amended and Restated By-Laws of The Southern Connecticut Gas Company. Exhibit 27 - Financial Data Schedule Submitted only in electronic format to the Securities and Exchange Commission. (b) Reports on Form 8-K: There were no reports filed on Form 8-K during the quarter. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. CONNECTICUT ENERGY CORPORATION (Registrant) DATE: May 11, 1995 /s/ Vincent L. Ammann, Jr. ------------ --------------------------- Vincent L. Ammann, Jr. Vice President and Chief Accounting Officer EX-4 2 Effective as of 04/25/95 ------------------------ CONNECTICUT ENERGY CORPORATION (a) AMENDED and RESTATED BY-LAWS ARTICLE 1. Meetings of Shareholders. SECTION 1. Annual Meeting. The annual meeting of the shareholders of the Corporation for the election of Directors and the transaction of any other proper business shall be held on the last Tuesday of January in each year, if not a legal holiday, and, if a legal holiday, then on the next succeeding business day. The annual meeting of the shareholders of the Corporation shall be held within the franchise area of the Company or as designated by the Board of Directors. SECTION 2. Special Meeting. Special meetings of the shareholders may be called at any time by the Chairman of the Board of Directors, the President or by the Board of Directors and shall be held within the Cities of Bridgeport or New Haven or within the franchise area of the Company, as designated in the call for the meeting. SECTION 3. Notice of Meeting. A notice in writing of each meeting of the shareholders, stating the place, day and hour thereof, and -- when such meeting is a special meeting -- the general purpose or purposes for which it is called, shall be given by the Secretary or an Assistant Secretary or the officer or person calling the meeting to each shareholder, by leaving such notice with him or at his residence or usual place of abode, or by mailing a copy thereof addressed to him at his last known post office address as last shown on the stock records of the Company, postage prepaid. Such notice shall be given, in the case of an annual meeting of shareholders, not less than seven days nor more than fifty days before the date of the meeting and, in the case of a special meeting, shall be given at least thirty days before the date of the meeting, unless the Board of Directors, acting by a majority of the directors then in office, shall determine otherwise. No business shall be transacted at any special meeting of shareholders which was not specified in the notice thereof. SECTION 4. Prescribing the date on which shareholders of record shall be entitled to notice and to vote. The Board of Directors of the Corporation, prior to each annual or special meeting of the shareholders of the Corporation, may by resolution fix a date not more than seventy days and not less than ten full days prior to the date of such meeting as of which shareholders of record shall be entitled to notice of such meeting and to vote thereat, and only shareholders of record as of said date shall be entitled to notice of such meeting and to vote thereat. SECTION 5. Voting. At each meeting of shareholders, each shareholder then entitled to vote may vote in person or by proxy, and shall, unless otherwise provided in the Certificate of Incorporation, have one vote for each share of stock registered in such shareholder's name on the record date fixed by the Board of Directors. SECTION 6. Rules of Order. At each meeting of shareholders, the time and manner of discussions shall be as set forth in the applicable provisions of Roberts Rules of Order. ARTICLE 2. Directors. SECTION 1. Number and Election. The business, property and affairs of the Corporation shall be managed by, or under the direction of, its Board of Directors. The number of directors of the Corporation (exclusive of directors (the "Preference Stock Directors") who may be elected by a separate vote of the holders of then outstanding shares of any class or series of Preference Stock) shall be ten. The Board of Directors (exclusive of Preference Stock Directors) shall be divided into three classes, as nearly equal in number as possible. At the annual meeting of shareholders in 1984, one class shall be elected to hold office for a term expiring at the 1985 annual meeting, one class shall be elected to hold office for a term expiring at the 1986 annual meeting, and one class shall be elected to hold office for a term expiring at the 1987 annual meeting. At each annual meeting of shareholders of the Corporation the date of which shall be fixed by or pursuant to the By-Laws of the Corporation, the successors of the class of directors whose terms shall expire at that meeting shall be elected for a term expiring at the annual meeting of shareholders held in the third year following their year of election. Each director shall hold office until his successor shall have been duly elected and qualified. The election of directors need not be by ballot unless the By-Laws so provide. No decrease in the number of directors shall shorten the term of any incumbent director. SECTION 2. Notification of Nominations. Subject to the rights of the holders of any class or series of Preference Stock then outstanding, nominations for the election of directors may be made by the Board of Directors or by any shareholder entitled to vote for the election of directors. Any shareholder entitled to vote for the election of directors at a meeting may nominate persons for election as directors only if written notice of such shareholder's intent to make such nomination is given, either by personal delivery or by United States mail, postage prepaid, to the Secretary of the Corporation not later than (i) with respect to an election to be held at an annual meeting of shareholders, 90 days in advance of such meeting, and (ii) with respect to an election of directors to be held at a special meeting of shareholders, the close of business on the seventh day following the date on which notice of such meeting is first given to shareholders. Each such notice shall set forth: (a) the name and address of the shareholder who intends to make the nomination and of the person or persons to be nominated; (b) a representation that the shareholder is a holder of record of stock of the Corporation entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to nominate the person or persons specified in the notice; (c) a description of all arrangements or understandings between the shareholder and each nominee and any other person or persons (naming such person or persons) pursuant to which the nomination or nominations are to be made by the shareholder; (d) such other information regarding each nominee proposed by such shareholder as would have been required to be included in a proxy statement filed pursuant to the proxy rules of the Securities and Exchange Commission had each nominee been nominated, or intended to be nominated, by the Board of Directors and (e) the consent of each nominee to serve as a director of the Corporation if so elected. The chairman of the meeting may refuse to acknowledge the nomination of any person made without compliance with the foregoing procedure. SECTION 3. Vacancies. Subject to the rights of the holders of any class or series of Preference Stock then outstanding, newly created directorships resulting from any increase in the authorized number of directors or any vacancies in the Board of Directors from death, resignation, retirement, disqualification, removal from office or other cause shall be filled solely by the Board of Directors, acting by the affirmative vote of not less than a majority of the directors then in office, even though less than a quorum of the Board of Directors. Any director so chosen shall hold office until the next election of the class for which such director shall have been chosen and until his successor shall be elected and qualified. The shareholders of the Corporation shall have no right to fill any vacancies, whether resulting from an increase in the authorized number of directors or otherwise. SECTION 4. Removal. Subject to the rights of the holders of any class or series of Preference Stock then outstanding, any director or the entire Board of Directors of the Corporation may be removed only for cause and only by affirmative vote of (1) the Board of Directors, acting by not less than a majority of the Directorships or (2) the holders of 80% of the combined voting power of the then outstanding shares of Voting Stock, voting together as a single class. For the purposes of this Section 4, (1) "cause" shall exist only if a director (i) has been convicted of a felony in a final adjudication or (ii) has been adjudged in a final adjudication to have wilfully engaged in gross misconduct materially and demonstrably injurious to the Corporation, and (2) "final adjudication" shall mean a judgment by a court of competent jurisdiction which becomes final (x) after completion or all proceedings for direct review or (y) after expiration of the time to obtain initial or further direct review, no such review having been taken. SECTION 5. Meetings. Regular meetings of the Board of Directors shall be held on the fourth Tuesday of each calendar month, except for the months of February, June, August and December. The meeting for the month of January shall be held on the last Tuesday immediately after the annual meeting for shareholders. If any such meeting date occurs on a legal holiday, then such meeting shall be held on the next succeeding business day. Special meetings of the Board of Directors may be called by the Chairman of the Board, the President, the Secretary of the Corporation or any three Directors. SECTION 6. Notice of Meeting. Notice of all regular and special meetings of the Board of Directors shall be given to each member of the Board of Directors, at least two days before any such meeting orally, or by mailing at least seven days before to each such member at his last known post office address a written notice thereof, giving the time and place of such meeting. SECTION 7. Quorum. A majority of the number of directorships at the time shall constitute a quorum; and a majority of the Directors in attendance at any meeting of the Board of Directors shall, in the presence of a quorum, decide its action. A minority of the number of directorships at the time present at any regular or special meeting may, in the absence of a quorum, adjourn to a later date but may not transact any business, except as provided in Section 3 of this Article. SECTION 8. Age of Directors. No person shall be elected or re-elected as a Director after attaining the age of seventy years. SECTION 9. Election of Officers. As soon as may be convenient after the annual meeting of the shareholders of the Corporation, the Board of Directors shall meet and elect the officers of the Corporation in accordance with these By-Laws. SECTION 10. Executive Committee. The Board of Directors of the Corporation, by the affirmative vote of Directors holding a majority of the directorships, may elect from its membership an Executive Committee having such number of members as may be prescribed from time to time by the Board of Directors. Members of the Executive Committee may be elected for such terms as may be prescribed by the Board of Directors provided, however, that the term of office of any member of the Executive Committee shall not extend beyond the term for which such member is elected as a Director of the Corporation. The Board of Directors may fill any vacancy in the Executive Committee. During the intervals between the meetings of the Board of Directors, the Executive Committee shall possess and may exercise all of the powers of the Board of Directors in the management and direction of the affairs of the Corporation in all matters in which specific direction shall not be given by the Board of Directors. All action by the Executive Committee shall be reported to the Board of Directors at the next meeting succeeding such action and shall be subject to review and alteration by the Board of Directors, providing that no rights of third parties shall be affected by any such review or alteration Regular minutes of the proceedings of the Executive Committee shall be kept in a book provided for that purpose. The Executive Committee shall determine and fix its rules with respect to meetings and procedure and the number required for a quorum and shall conduct business as provided by such rules. Meetings of the Executive Committee shall be held on such dates as may be fixed from time to time by the Board of Directors and may be called at any time by the Chairman of the Board of Directors or by the President of the Corporation. SECTION 11. Audit Committee. There shall be an Audit Committee having such number of members as prescribed by the Board of Directors from time to time. Members of the Audit Committee shall be Directors who are neither officers nor employees of the Corporation. The Audit Committee shall recommend the employment of independent accountants to audit the financial statements of the Corporation, determine the scope of the audit, confer with the auditors respecting their examination and accounting practices, review the Corporation's financial and accounting practices and controls, and report its doings to the Board of Directors. SECTION 12. Pension Committee There shall be a Pension Committee having such number of members as prescribed by the Board of Directors from time to time. Members of the Pension Committee shall be Directors who are neither officers nor employees of the Corporation. The Pension Committee shall perform the duties specified in the Company's pension plans and other employee benefit plans and such further duties respecting such plans as may be prescribed by law. The Pension Committee shall report its doings to the Board of Directors. SECTION 13. Committees. The Board of Directors may, from time to time, elect or appoint such other committees and prescribe the duties and authority thereof as the Board of Directors may deem necessary or convenient. ARTICLE 3. Officers. SECTION 1. Election and Qualifications. The Directors shall elect annually from their own number a President of the Corporation and may also elect from their own number a Chairman of the Board of Directors and shall elect or appoint a Treasurer and a Secretary and such other officers as the Board of Directors may, from time to time, deem necessary or advisable. No employee of the Corporation who has (a) for the last two consecutive years, held a bona fide executive or high policymaking position with the Corporation (b) become entitled to nonforfeitable annual retirement benefits from the Corporation which equal or exceed, in the aggregate, $44,000 or such other amount as required by law, exclusive of Social Security benefits and (c) attained the age of sixty-five years, shall thereafter be elected an officer of the Corporation. SECTION 2. Term of Office. The term of office of all officers of the Corporation shall be one year and until their respective successors shall have been chosen and qualified; but any officer may be removed from office at any time by the affirmative vote of a majority of the members of the Board of Directors then in office. SECTION 3. Chairman of the Board of Directors. The Chairman of the Board of Directors, if one shall be elected, shall preside at all meetings of the shareholders and of the Board of Directors at which he is present and shall have such powers and duties as may, from time to time, be prescribed by the Board of Directors. The Chairman of the Board of Directors, when designated by said Board as the Chief Executive Officer, shall provide general direction to the activities of the Corporation in conjunction with and acting through the President and shall have the final decision in all matters pertaining to the management of the business of the Corporation, all subject, however, to the control of the Board of Directors. The Chairman of the Board of Directors shall possess the same power as the President to execute on behalf of the Corporation all deeds, leases, conveyances, certificates of stock and contracts. SECTION 4. President. The President shall report to the Chairman of the Board of Directors when such Chairman has been designated by the Board of Directors as the Chief Executive Officer and shall have general supervision of the affairs of the Corporation and over its several officers, subject, however, to the control of the Board of Directors. The President shall have the power to execute all deeds, leases, conveyances, certificates of stock and contracts on behalf of the Company, shall make reports to the Board of Directors and shareholders and shall perform such other duties as are incident to the office of President or are properly required of the President by the Board of Directors. The President, in the absence of the Chairman of the Board, shall preside at all meetings of the shareholders and Board of Directors. The President shall, whenever it may in his opinion be necessary, prescribe the duties of officers and employees of the Corporation where duties are not otherwise prescribed by the Board of Directors. SECTION 5. Vice President and Assistant Vice President. The Vice Presidents and Assistant Vice Presidents shall perform duties as may be prescribed from time to time by the Board of Directors or required by law. SECTION 6. Treasurer. The Treasurer shall plan and direct the collection, receipt, custody and disbursement of funds and the handling of other financial assets. The Treasurer shall direct the Corporation's banking and credit functions and perform such other duties as are commonly incident to the Office of Treasurer or required by law. SECTION 7. Secretary. The Secretary shall attend the meetings of the shareholders, the Board of Directors and Executive Committee and keep minutes thereof. He shall send out notices of all meetings required by law or these By-Laws. He shall have the custody of the papers and books other than books of account and of the seal of the Corporation, and he shall affix the seal to all proper documents and shall attest the same; and he shall perform the usual duties incident to the Office of the Secretary and such other duties as may be prescribed, from time to time, by the Board of Directors or required by law. ARTICLE 4. Seal. The Corporation shall have a common seal, which shall contain the words CONNECTICUT ENERGY CORPORATION in a circle, within which the words and figures Incorporated 1970 Seal shall be contained. ARTICLE 5. Stock Certificates and Transfers SECTION 1. Form. Stock certificates shall be in such form as the Board of Directors may, from time to time, determine and shall be signed by the President and by the Secretary or the Treasurer and sealed with the common seal of the Corporation. When such stock certificates shall be signed by a transfer agent or an assistant transfer agent or a registrar, the respective signatures of such President, Secretary or Treasurer may be facsimiles of such signatures, and the seal of the Corporation may be a facsimile of such seal. SECTION 2. Transfer. Transfer of shares shall be made only upon the books of the Corporation by the registered holder in person or by attorney, duly authorized, and upon surrender of the certificate or certificates for such shares properly assigned for transfer. SECTION 3. Lost or Destroyed Certificates. The holder of any certificate representing shares of stock of the Corporation may notify the Corporation of any loss, theft or destruction thereof, and the Board of Directors may thereupon, in its discretion, cause a new certificate of the same number of shares to be issued to such holder upon satisfactory proof of such loss, theft or destruction, and the deposit of indemnity by way of bond or otherwise, in such form and amount and with such surety or sureties as the Board of Directors may require, to indemnify the Corporation against loss or liability by reason of the issuance of such new certificate. ARTICLE 6. Negotiable Instruments. SECTION 1. Signatures. All bills, notes, checks or other negotiable instruments shall be made in the name of the Corporation and shall be signed by such officer or officers of the Corporation and in such manner as the Board of Directors shall designate. SECTION 2. Endorsements. No officer or agent of this Corporation shall have power to endorse in the name of or on behalf of the Corporation any note, bill of exchange, draft, check or other written instrument for the payment of money--save only for the purpose of collection of said instrument--except upon the express authority of the Directors. ARTICLE 7. Indemnification of Directors, Officer and Employees. The Corporation shall indemnify the persons described in Section 33-320a of the Connecticut General Statutes or the equivalent section of the Connecticut Stock Corporation Act to the full extent and in the manner required by such law. ARTICLE 8. Amendments. Notwithstanding any other provisions in the Certificate of Incorporation or these By-Laws of the Corporation (and notwithstanding the fact that a lesser percentage may be specified by law or the Certificate of Incorporation of the Corporation), these By-Laws may be adopted, repealed or amended only upon the affirmative vote of (i) the holders of 80% of the combined voting power of the then outstanding shares of Voting Stock, voting together as a single class, or (ii) the Board of Directors acting by not less than a majority of the entire Board of Directors. Effective as of 04/25/95 ------------------------ THE SOUTHERN CONNECTICUT GAS COMPANY (b) AMENDED and RESTATED BY-LAWS ARTICLE 1. Meeting of Shareholders. SECTION 1. Annual Meeting. The annual meeting of the shareholders of the Corporation for the election of Directors and the transaction of any other proper business shall be held on the last Tuesday of January in each year, if not a legal holiday, and, if a legal holiday, then on the next succeeding business day. The annual meeting of the shareholders of the Corporation shall be held within the franchise area of the Company or as designated by the Board of Directors. SECTION 2. Special Meeting. Special meetings of the shareholders may be called at any time by the Chairman of the Board of Directors, the President or by the Board of Directors and shall be held within the Cities of Bridgeport or New Haven or within the franchise area of the Company, as designated in the call for the meeting. SECTION 3. Notice of Meeting. A notice in writing of each meeting of the shareholders, stating the place, day and hour thereof, and -- when such meeting is a special meeting -- the general purpose or purposes for which it is called, shall be given by the Secretary or an Assistant Secretary or the officer or person calling the meeting to each shareholder, by leaving such notice with him or at his residence or usual place of abode, or by mailing a copy thereof addressed to him at his last known post office address as last shown on the stock records of the Corporation, postage prepaid, not less than seven days nor more than fifty days before the date of the meeting. SECTION 4. Prescribing the date on which shareholders of record shall be entitled to notice and to vote. The Board of Directors of the Corporation, prior to each annual or special meeting of the shareholders of the Corporation, may by resolution fix a date not more than seventy days and not less than ten full days prior to the date of such meeting as of which shareholders of record shall be entitled to notice of such meeting and to vote thereat, and only shareholders of record as of said date shall be entitled to notice of such meeting and to vote thereat. SECTION 5. Order of Business. So far as consistent with the purpose of the meeting, the order of business at all shareholders' meetings shall be as follows: 1. Roll call of shareholders 2. Reading of Minutes of preceding meeting and action thereon 3. Reports of Directors, Officers and Committees 4. Election of Directors -- if an annual meeting 5. Unfinished business 6. New business. SECTION 6. Rules of Order. At each meeting of shareholders, the time and manner of discussion shall be as set forth in the Roberts Rules of Order. ARTICLE 2. Directors. SECTION 1. Number and Election. The business, property and affairs of the Corporation shall be under the care, control and management of not less than nine nor more than twenty-four Directors who shall be elected annually by the shareholders. SECTION 2. Vacancies. Vacancies in the Board of Directors created by an increase in the number of directorships shall be filled at a meeting of shareholders of the Corporation, and any other vacancies in the Board of Directors, because of death, resignation, or for any other reason, may be filled by the remaining Directors. SECTION 3. Meetings. Regular meetings of the Board of Directors shall be held on the fourth Tuesday of each calendar month, except for the months of February, June, August, October and December. The meeting for the month of January shall be held on the last Tuesday immediately after the annual meeting for shareholders. If any such meeting date occurs on a legal holiday, then such meeting shall be held on the next succeeding business day. Special meetings of the Board of Directors may be called by the Chairman of the Board, the President, the Secretary of the Corporation or any three Directors. SECTION 4. Notice of Meeting. Notice of all regular and special meetings of the Board of Directors shall be given to each member of the Board of Directors, at least two days before any such meeting orally, or by mailing at least seven days before to each such member at his last known post office address a written notice thereof, giving the time and place of such meeting. SECTION 5. Quorum. A majority of the number of directorships at the time shall constitute a quorum; and a majority of the Directors in attendance at any meeting of the Board of Directors shall, in the presence of a quorum, decide its action. A minority of the number of directorships at the time present at any regular or special meeting,may, in the absence of a quorum, adjourn to a later date but may not transact any business. SECTION 6. Age of Directors. No person shall be elected or re-elected as a Director after attaining the age of seventy years. SECTION 7. Election of Officers. As soon as may be convenient after the annual meeting of the shareholders of the Corporation, the Board of Directors shall meet and elect the officers of the Corporation in accordance with the By-Laws. SECTION 8. Executive Committee. The Board of Directors of the Corporation, by the affirmative vote of Directors holding a majority of the directorships, may elect from its membership an Executive Committee having such number of members as may be prescribed from time to time by the Board of Directors. Members of the Executive Committee may be elected for such terms as may be prescribed by the Board of Directors provided, however, that the term of office of any member of the Executive Committee shall not extend beyond the term for which such member is elected as a Director of the Corporation. The Board of Directors may fill any vacancy in the Executive Committee. During the intervals between the meetings of the Board of Directors, the Executive Committee shall possess and may exercise all of the powers of the Board of Directors in the management and direction of the affairs of the Corporation in all matters in which specific direction shall not be given by the Board of Directors. All action by the Executive Committee shall be reported to the Board of Directors at the next meeting succeeding such action and shall be subject to review and alteration by the Board of Directors, providing that no rights of third parties shall be affected by any such review or alteration. Regular minutes of the proceedings of the Executive Committee shall be kept in a book provided for that purpose. The Executive Committee shall determine and fix its rules with respect to meetings and procedure and the number required for a quorum and shall conduct business as provided by such rules. Meetings of the Executive Committee shall be held on such dates as may be fixed from time to time by the Board of Directors and may be called at any time by the Chairman of the Board of Directors or by the President of the Corporation. SECTION 9. Audit Committee. There shall be an Audit Committee having such number of members as prescribed by the Board of Directors from time to time. Members of the Audit Committee shall be Directors who are neither officers nor employees of the Corporation. The Audit Committee shall recommend the employment of independent accountants to audit the financial statements of the Corporation, determine the scope of the audit, confer with the auditors respecting their examination and accounting practices, review the Corporation's financial and accounting practices and controls, and report its doings to the Board of Directors. SECTION 10. Pension Committee. There shall be a Pension Committee having such number of members as prescribed by the Board of Directors from time to time. Members of the Pension Committee shall be Directors who are neither officers nor employees of the Corporation. The Pension Committee shall perform the duties specified in the Company's pension plans and other employee benefit plans and such further duties respecting such plans as may be prescribed by law. The Pension Committee shall report its doings to the Board of Directors. SECTION 11. Committees. The Board of Directors may, from time to time, elect or appoint such committees and prescribe the duties and authority thereof as the Board of Directors may deem necessary or convenient. ARTICLE 3. Officers. SECTION 1. Election and Qualifications. The Directors shall elect annually from their own number a President of the Corporation and may also elect from their own number a Chairman of the Board of Directors and shall elect or appoint one or more Vice Presidents, a Treasurer and a Secretary and such other officers as the Board of Directors may, from time to time, deem necessary or advisable. No employee of the Corporation who has (a) for the last two consecutive years, held a bona fide executive or high policymaking position with the Corporation, (b) become entitled to nonforfeitable annual retirement benefits from the Corporation which equal or exceed, in the aggregate, $44,000 or such other amount as required by law, exclusive of Social Security benefits and (c) attained the age of sixty-five years, shall thereafter be elected an officer of the Corporation. SECTION 2. Term of Office. The term of office of all officers of the Corporation shall be one year and until their respective successors shall have been chosen and qualified; but any officer may be removed from office at any time by the affirmative vote of a majority of the members of the Board of Directors then in office. SECTION 3. Chairman of the Board of Directors. The Chairman of the Board of Directors, if one shall be elected, shall preside at all meetings of the shareholders and of the Board of Directors at which he is present and shall have such powers and duties as may, from time to time, be prescribed by the Board of Directors. The Chairman of the Board of Directors, when designated by said Board as the Chief Executive Officer, shall provide general direction to the activities of the Corporation in conjunction with and acting through the President and shall have the final decision in all matters pertaining to the management of the business of the Corporation, all subject, however, to the control of the Board of Directors. The Chairman of the Board of Directors shall possess the same power as the President to executive on behalf of the Corporation all deeds, leases, conveyances, certificates of stock and contracts. SECTION 4. President. The President shall report to the Chairman of the Board of Directors when such Chairman has been designated by the Board of Directors as the Chief Executive Officer and shall have general supervision of the affairs of the Corporation and over its several officers, subject, however, to the control of the Board of Directors. He shall have the power to execute all deeds, leases, conveyances, certificates of stock and contracts on behalf of the Corporation, shall make reports to the Board of Directors and shareholders and shall perform such other duties as are incident to the office of President or are properly required of him by the Board of Directors. The President, in the absence of the Chairman of the Board, shall preside at all meetings of the shareholders and Board of Directors. The President shall, whenever it may in his opinion be necessary, prescribe the duties of officers and employees of the Corporation where duties are not otherwise prescribed by the Board of Directors. SECTION 5. Executive Vice President. The Executive Vice President shall act as chief assistant to the President of the Corporation. He shall, in the President's absence and subject to the President's direction, exercise the authority and perform all of the duties which the President of the Corporation is authorized by its By-Laws to exercise, or to perform such other duties as may, from time to time, be assigned to the Executive Vice President by the Board, by the Chairman of the Board when designated the Chief Executive Officer or by the President of the Corporation. He is also designated as the Vice President to assume the duties of the President in the absence of the latter, as specified in Article 3, Section 4 of the By-Laws. In the absence of or failure to designate an Executive Vice President, the Senior Vice President shall perform the foregoing duties and have the foregoing authority. SECTION 6. Vice President and Assistant Vice President. The Vice Presidents and Assistant Vice Presidents shall perform duties as may be prescribed from time to time by the Board of Directors or required by law. SECTION 7. Vice President - Finance. The Vice President - Finance shall direct the Corporation's financial and related activities, including supervision of the Corporation's treasury accounts, tax payments and insurance. He shall be responsible for formulating and appraising financial plans to insure provision of adequate funds to meet long-term and short-term requirements and shall perform such other duties as may be prescribed from time to time by the Board of Directors. SECTION 8. Treasurer. The Treasurer shall plan and direct the collection, receipt, custody and disbursement of funds and the handling of other financial assets. The Treasurer shall direct the Corporation's banking and credit functions and perform such other duties as are commonly incident to the Office of the Treasurer or required by law. SECTION 9. Secretary. The Secretary shall attend the meetings of the shareholders, the Board of Directors and Executive Committee and keep minutes thereof. He shall send out notices of all meetings required by law or these By-Laws. He shall have the custody of the papers and books other than books of account and of the seal of the Corporation, and he shall affix the seal to all proper documents and shall attest the same; and he shall perform the usual duties incident to the Office of the Secretary and such other duties as may be prescribed, from time to time, by the Board of Directors or required by law. SECTION 10. Assistant Treasurer. In the absence or disability of the Treasurer, the duties of the Treasurer shall be performed by an Assistant Treasurer. SECTION 11. Assistant Secretary. In the absence or disability of the Secretary, the duties of the Secretary shall be performed by an Assistant Secretary. ARTICLE 4. Seal. The Corporation shall have a common seal, which shall contain the words SOUTHERN CONNECTICUT GAS COMPANY in a circle, within which the words and figures Incorporated 1967 Seal shall be contained. ARTICLE 5. Stock Certificates and Transfers. SECTION 1. Form. Stock certificates shall be in such form as the Board of Directors may, from time to time, determine and shall be signed by the President or any Vice President and by the Secretary or Assistant Secretary or by the Treasurer or Assistant Treasurer and sealed with the common seal of the Corporation. When such stock certificates shall be signed by a transfer agent or an assistant transfer agent or a registrar, the respective signatures of such Chairman of the Board of Directors, President, Vice President, Secretary, Assistant Secretary, Treasurer or Assistant Treasurer may be facsimiles of such signatures, and the seal of the Corporation may be a facsimile of such seal. ARTICLE 6. Negotiable Instruments. SECTION 1. Signatures All bills, notes, checks or other negotiable instruments shall be made in the name of the Corporation and shall be signed by such officer or officers of the Corporation and in such manner as the Board of Directors shall designate. SECTION 2. Endorsements. No officer or agent of this Corporation shall have power to endorse in the name of or on behalf of the Corporation any note, bill of exchange, draft, check or other written instrument for the payment of money--save only for the purpose of collection of said instrument--except upon the express authority of the Directors. ARTICLE 7. Indemnification of Directors, Officers and Employees. The Corporation shall indemnify the persons described in Section 33-320a of the Connecticut General Statutes or the equivalent section of the Connecticut Stock Corporation Act to the full extent and in the manner required by such law. ARTICLE 8. Amendments. These By-Laws may be amended or repealed at any regular of special meeting of the Board of Directors by the vote of a majority of the Directors, provided that notice of the consideration of such amendment or repeal shall be included in the notice of said meeting. EX-27 3
UT 1,000 6-MOS SEP-30-1995 MAR-31-1995 PER-BOOK 242,534 2,492 76,117 67,775 0 388,918 8,791 86,938 46,730 142,459 0 0 119,776 14,000 0 0 594 0 0 0 112,089 388,918 168,807 11,911 46,561 58,472 27,060 (320) 26,740 6,084 20,656 0 20,656 5,680 5,432 26,567 2.37 0
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