-----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, LxoX+ECGXutfwXg3BhsFVgEJMLLmKKGERtZ4ZMlAanoaty1y+LuDYtKN2sId6eyo m2VB9mbyhBge3gQOoVeQRQ== 0000927016-00-001499.txt : 20000501 0000927016-00-001499.hdr.sgml : 20000501 ACCESSION NUMBER: 0000927016-00-001499 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000331 FILED AS OF DATE: 20000428 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ESSEX GAS CO CENTRAL INDEX KEY: 0000046189 STANDARD INDUSTRIAL CLASSIFICATION: NATURAL GAS DISTRIBUTION [4924] IRS NUMBER: 041427020 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-01166 FILM NUMBER: 612637 BUSINESS ADDRESS: STREET 1: C/O BOSTON GAS CO STREET 2: ONE BEACON STREET CITY: BOSTON STATE: MA ZIP: 02108 BUSINESS PHONE: 5083884000 MAIL ADDRESS: STREET 1: C/O BOSTON GAS CO STREET 2: ONE BEACON STREET CITY: BOSTON STATE: MA ZIP: 02108 FORMER COMPANY: FORMER CONFORMED NAME: ESSEX COUNTY GAS COMPANY DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: HAVERHILL GAS CO DATE OF NAME CHANGE: 19830420 10-Q 1 FORM 10-Q FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2000 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 18154 ESSEX GAS COMPANY ------------------------------------------------------ (Exact name of registrant as specified in its charter) MASSACHUSETTS 04-1427020 - ------------------------------ -------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) ONE BEACON STREET, BOSTON, MASSACHUSETTS 02108 ---------------------------------------------- (Address of principal executive offices) (Zip Code) 617-742-8400 -------------------------------------------------- (Registrant's telephone number, including area code) NONE --------------------------------------------------- Former name, former address and former fiscal year, if changed since last report. 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 __ Common stock of Registrant at the date of this report was 100 shares, all held by Eastern Enterprises. FORM 10-Q Page 2 PART I. FINANCIAL INFORMATION ------------------------------ ITEM 1. FINANCIAL STATEMENTS - ----------------------------- Company or group of companies for which report is filed: ESSEX GAS COMPANY ("Company") Consolidated Statements of Earnings - ----------------------------------- (In Thousands) Three Months Ended ------------------ March 31, March 31, 2000 1999 ------- ------- OPERATING REVENUES Cost of gas sold $20,882 $22,049 Operating Margin 8,992 10,001 ------- ------- 11,890 12,048 ------- ------- OPERATING EXPENSES: Operations 1,827 1,977 Maintenance 351 310 Depreciation and amortization 1,742 1,967 Income taxes 2,627 2,501 Taxes, other than income 646 640 ------- ------- Total Operating Expenses 7,193 7,395 ------- ------- OPERATING EARNINGS 4,697 4,653 OTHER EARNINGS, NET 24 49 ------- ------- EARNINGS BEFORE INTEREST EXPENSE 4,721 4,702 ------- ------- INTEREST EXPENSE: Long-term debt 616 616 Other, including amortization of debt expense 59 118 Less-Interest used during Construction (24) (1) ------- ------- Total Interest Expense 651 733 ------- ------- NET EARNINGS $ 4,070 $ 3,969 ======= ======= The accompanying notes are an integral part of these consolidated financial statements. FORM 10-Q Page 3 Essex Gas Company - ----------------- Consolidated Balance Sheets - --------------------------- (In Thousands) March 31, March 31, December 31, 2000 1999 1999 -------- -------- -------- ASSETS GAS PLANT, AT COST $116,283 $112,423 $116,284 Construction work-in-progress 2,062 500 1,192 Less-Accumulated depreciation (35,775) (31,886) (33,846) -------- -------- -------- Net Plant 82,570 81,037 83,630 -------- -------- -------- CURRENT ASSETS: Cash 174 245 122 Accounts receivable less reserves of $896 and $845 at March 31, 2000 and 1999, respectively, and $748 at December 31, 1999 7,987 8,049 3,660 Accounts receivable - affiliates 1,007 2,840 - Accrued utility margin 1,514 2,653 2,414 Deferred gas costs 1,493 - 2,828 Natural gas and other inventories 917 999 1,155 Materials and supplies 471 577 484 Current income taxes - - 913 Prepaid expenses 22 83 25 -------- -------- -------- Total Current Assets 13,585 15,446 11,601 -------- -------- -------- OTHER ASSETS: Unamortized debt expense 667 701 676 Other 1,238 1,400 1,289 -------- -------- -------- Total Other Assets 1,905 2,101 1,965 -------- -------- -------- TOTAL ASSETS $ 98,060 $ 98,584 $ 97,196 ======== ======== ======== The accompanying notes are an integral part of these consolidated financial statements. FORM 10-Q Page 4 Essex Gas Company - ----------------- Consolidated Balance Sheets - ---------------------------
(In Thousands) March 31, March 31, December 31, 2000 1999 1999 --------- --------- ------------ CAPITALIZATION AND LIABILITIES CAPITALIZATION: Common stockholder's investment- Common stock, no par value, 200,000 authorized shares; issued and outstanding 100 shares $27,805 $27,805 $27,805 Unrealized gain on investments available for sale, net 22 10 22 Retained earnings 11,799 11,324 7,729 ------- ------- ------- Total common stockholder's Investment 39,626 39,139 35,556 ------- ------- ------- Long-term obligations less current portion 27,348 28,055 27,365 ------- ------- ------- Total Capitalization 66,974 67,194 62,921 ------- ------- ------- CURRENT LIABILITIES: Current portion of long-term obligations 667 661 665 Gas inventory financing 729 1,021 1,234 Notes payable - 1,850 - Notes payable to parent company 4,000 4,000 4,000 Accounts payable 4,205 2,372 5,042 Accounts payable - affiliate - 30 4,687 Accrued interest 899 1,007 290 Accrued taxes 219 360 54 Accrued income taxes 2,322 578 - Refundable gas costs due customers - 3,014 - Refunds due customers 41 9 55 Other 134 471 148 ------- ------- ------- Total Current Liabilities 13,216 15,373 16,175 ------- ------- ------- RESERVES AND DEFERRED CREDITS: Deferred income taxes 8,677 7,183 8,967 Unamortized investment tax credits 959 1,030 977 Retirement benefit liabilities 7,361 5,609 7,238 Other reserves 873 2,195 918 ------- ------- ------- Total Reserves and Deferred Credits 17,870 16,017 18,100 ------- ------- ------- TOTAL CAPITALIZATION AND LIABILITIES $98,060 $98,584 $97,196 ======= ======= =======
The accompanying notes are an integral part of these consolidated financial statements. FORM 10-Q Page 5 Essex Gas Company - ----------------- Consolidated Statements of Cash Flows - ------------------------------------- (In Thousands) Three Months Ended ---------------------- March 31, March 31, 2000 1999 ---- ---- Cash flows from operating activities: Net Earnings $ 4,070 $ 3,969 Adjustments to reconcile net earnings to cash Provided by operating activities: Depreciation and amortization 1,942 2,049 Deferred income taxes (290) (176) Other changes in assets and liabilities: Accounts receivable (4,327) (6,615) Accounts receivable/payable-affiliates (5,693) - Accrued utility margin 900 (368) Inventory 251 2,711 Accounts payable (837) (204) Refunds due customers (14) (25) Federal and state income taxes 3,235 3,082 Deferred gas costs 1,335 2,815 Other, net 900 (288) ------- ------- Cash provided by operating activities 1,472 6,950 ------- ------- Cash flows from investing activities: Capital expenditures (870) (382) Net cost of removal (30) (10) ------- ------- Cash used for investing activities (900) (392) ------- ------- Cash flows from financing activities: Change in long-term debt (15) - Change in inventory financing (505) (3,324) Change in notes payable - (3,055) ------- ------- Cash Used for Financing Activities (520) (6,379) ------- ------- Increase in cash and cash equivalents 52 179 Cash and cash equivalents at beginning of period 122 66 ------- ------- Cash and cash equivalents at end of period $ 174 $ 245 ======= ======= Supplemental Disclosures of Cash Flow Information: Cash paid (received) during the period for: Interest net of amounts capitalized $ 82 $ 172 Income taxes $ (318) $ (698) The accompanying notes are an integral part of these consolidated financial statements. FORM 10-Q Page 6 ESSEX GAS COMPANY ----------------- NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ------------------------------------------ MARCH 31, 2000 -------------- 1. ACCOUNTING POLICIES AND OTHER INFORMATION ----------------------------------------- General ------- It is the Company's opinion that the financial information contained in this report reflects all adjustments necessary to present a fair statement of results for the periods reported. All of these adjustments are of a normal recurring nature. Results for the periods are not necessarily indicative of results to be expected for the year, due to the seasonal nature of the Company's operations. All accounting policies have been applied in a manner consistent with prior periods. Such financial information is subject to year-end adjustments and annual audit by independent public accountants. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted in this Form 10-Q. Therefore these interim financial statements should be read in conjunction with the Company's 1999 Annual Report filed on Form 10-K with the Securities and Exchange Commission. Merger ------ On November 4, 1999, Eastern Enterprises ("Eastern"), the parent company of Essex Gas, signed a definitive agreement to be acquired by KeySpan Corporation. Subject to receipt of satisfactory regulatory approvals, the transaction is hoped to close in the early fall of 2000. The merger was approved by Eastern's shareholders on April 26, 2000. FORM 10-Q Page 7 Seasonal Aspect --------------- The amount of the Company's natural gas firm throughput for purposes of space heating is directly related to temperature conditions. Consequently, there is less gas throughput during the summer months than during the winter months. In addition, under its seasonal rate structure, the rates charged customers during November through April are higher than those charged during May through October. In order to more properly match depreciation and property tax expense with margin each month, the Company charges to depreciation and property tax expense an amount equal to the percentage of the annual volume of firm gas throughput forecasted for the month, applied to the estimated annual depreciation and property tax expense. Reclassifications ----------------- Certain prior quarter financial statement amounts have been reclassified for consistent presentation with the current year. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND ----------------------------------------------------------------------- RESULTS OF OPERATIONS: ---------------------- RESULTS OF OPERATIONS Net earnings for the first quarter of 2000 were $4.1 million, up $.1 million from net earnings of $4.0 million in the first quarter of 1999. Weather was 5% colder than 1999, but 3.5% warmer than normal. Both operating margin and total operating expenses for the first quarter of 2000 were comparable to 1999. YEAR 2000 ISSUES The Company continued to monitor its systems through the end of the first quarter of 2000, including the quarter closing activity. No significant year 2000 errors or discrepancies were detected and no costs were incurred. The Company will no longer report on Year 2000 issues. FORWARD-LOOKING INFORMATION This report and other Company reports and statements issued or made from time to time contain certain "forward-looking statements" concerning projected future financial performance, expected plans or future operations. The Company cautions that actual results and developments may differ materially from such projections or expectations. FORM 10-Q Page 8 Investors should be aware of important factors that could cause actual results to differ materially from the forward-looking projections or expectations. These factors include, but are not limited to: the impact of any merger-related activities, the ability to successfully integrate natural gas distribution operations, temperatures above or below normal, changes in economic conditions, including interest rates, and regulatory and court decisions and developments with respect to previously disclosed environmental liabilities. Most of these factors are difficult to predict accurately and are generally beyond the control of the Company. LIQUIDITY AND CAPITAL RESOURCES The Company believes that projected cash flow from operations, in combination with currently available resources, is more than sufficient to meet 2000 capital expenditures and working capital requirements, dividend payments and normal debt repayments. The Company expects capital expenditures for 2000 to be approximately $7.5 million. FORM 10-Q Page 9 PART II. OTHER INFORMATION -------------------------- ITEM 1. LEGAL PROCEEDINGS - -------------------------- There are no material pending legal proceedings involving the Company. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS - ------------------------------------------------------------ None. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K - ----------------------------------------- (a) List of Exhibits None. (b) No reports on Form 8-K have been filed during the quarter for which this report is filed. FORM 10-Q Page 10 SIGNATURES - ---------- It is the Company's opinion that the financial information contained in this report reflects all normal, recurring adjustments necessary to present a fair statement of results for the period reported, but such results are not necessarily indicative of results to be expected for the year due to the seasonal nature of the business of the Company. Except as otherwise herein indicated, all accounting policies have been applied in a manner consistent with prior periods. Such financial information is subject to year-end adjustments and an annual audit by independent public accountants. Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Essex Gas Company ------------------------------------------- (Registrant) /s/ Joseph F. Bodanza -------------------------------------------- J.F. Bodanza, Sr. Vice President and Treasurer (Principal Financial and Accounting Officer) Dated: April 28, 2000 --------------------- EX-27 2 FINANCIAL DATA SCHEDULE
UT 3-MOS DEC-31-2000 JAN-01-2000 MAR-31-2000 PER-BOOK 82,570 841 13,585 1,064 0 98,060 27,805 0 11,821 39,626 0 0 26,959 4,729 0 0 600 0 389 67 25,690 98,060 20,882 2,627 13,558 16,185 4,697 24 4,721 651 4,070 0 4,070 0 616 1,472 0.00 0.00
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