SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-K
(Mark One)
[X] Annual report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 (Fee required)
For the fiscal year ended June 30, 1996 or
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[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
(No fee required)
For the transition period from __________________ to __________________
Commission File Number 0-1857-3
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The Berkshire Gas Company
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(Exact Name of Registrant as Specified in Its Charter)
Massachusetts 04-1731220
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(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
115 Cheshire Road, Pittsfield, MA 01201-1879
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(Address of Principal Executive Offices) (Zip Code)
(413) 442-1511
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(Registrant's Telephone Number, Including Area Code)
Securities registered pursuant to Section 12(b) of the Act:
Name of Each Exchange
Title of Each Class on Which Registered
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- --------------------------------- --------------------------------------
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, Par Value $2.50 Per Share
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(Title of Class)
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
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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. [ ]
Aggregate market value of shares of Common Stock, $2.50 par value of the
Registrant held by non-affiliates as of July 31, 1996 was $33,005,685. Total
shares of common stock of the Registrant outstanding as of July 31, 1996 were
2,161,296.
Documents Incorporated by Reference:
1. The Berkshire Gas Company's Annual Report to Shareholders for the fiscal
year ended June 30, 1996 (Items 5, 6, 7, and 8 of Part II).
2. The Berkshire Gas Company's definitive Proxy Statement, to be filed on
October 11, 1996, pursuant to Regulation 14A under the Securities and
Exchange Act of 1934 (Items 10, 11, 12 and 13 of Part III).
THE BERKSHIRE GAS COMPANY
PART I
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Table of Contents
Item Page
Number Number
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Business 1 3
Properties 2 11
Legal Proceedings 3 12
Submission of Matters to a Vote of
Security Holders 4 12
Additional Items - 12
(Executive Officers of the Registrant)
PART II
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Market For Registrant's Common Equity and Related
Stockholder Matters 5 14
Selected Financial Data 6 14
Management's Discussion and Analysis of
Financial Condition and Results of Operations 7 14
Financial Statements and Supplementary Data 8 14
Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure 9 14
PART III
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Directors and Executive Officers of the Registrant 10 15
Executive Compensation 11 15
Security Ownership of Certain Beneficial
Owners and Management 12 15
Certain Relationships and Related Transactions 13 15
PART IV
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Exhibits, Independent Auditors' Report on
Supplemental Schedules, Financial Statement
Schedules, and Reports on Form 8-K 14 16
PART I
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Item I. Business
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General
The Berkshire Gas Company ("the Company") was incorporated in the
Commonwealth of Massachusetts in 1853 and is a publicly-held utility engaged
in the distribution and sale of natural gas for residential, commercial and
industrial use. The Company also has an appliance rental division that sells
and leases gas burning equipment. Through its Berkshire Propane division, the
Company markets liquefied petroleum gas.
Cautionary Statement for Purposes of the "Safe Harbor" Provisions of
the Private Securities Litigation Reform Act of 1995
This Annual Report contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. Actual
results could differ materially from those contemplated by such statements.
Such statements reflect management's current views, are based on many
assumptions and are subject to risks and uncertainties.
Certain important factors which could cause such results to differ
include risks associated with the Company's maintaining contracts with
specific customers, government regulation, the increasingly competitive nature
of the markets in which the Company is engaged, and dependence on key
personnel. These factors are not intended to represent a complete list of the
general or specific risks that may affect the Company.
Territory Served
The Company's utility service territory includes 19 communities in the
western portion of the Commonwealth of Massachusetts, including the cities of
Pittsfield and North Adams, the towns of Adams, Amherst, Great Barrington,
Greenfield and Williamstown, and twelve smaller municipalities. The
population of the area served is estimated at 190,000 and is primarily
residential in character, but the territory also includes industrial,
agricultural, educational, cultural and resort facilities. The Company also
markets propane throughout the western portion of Massachusetts and eastern
New York state. The Company currently serves over 32,000 natural gas and
5,000 propane customers.
Customers
The largest group of natural gas customers is the residential class.
During the fiscal years ended June 30, 1996, 1995 and 1994, residential
consumers accounted for approximately 54%, 53% and 54%; commercial and
industrial consumers accounted for 42%, 44% and 44%; and transportation
consumers accounted for approximately 4%, 3% and 2% of operating revenues
respectively. Although transportation consumers account for a small percentage
of revenues, they account for approximately 19%, 34%, and 16% of pre-tax
income for fiscal years 1996, 1995 and 1994 respectively. Net income could be
impacted by the loss of one or more significant transportation consumers, who
are all under contracts.
The number of natural gas customers increased 0.6% in 1996 over 1995,
from 31,925 to 32,129 primarily in the residential heating class as a result
of continuing marketing efforts. Total Mcf sold and transported increased
from 7,392,382 Mcf in 1995 to 8,075,347 in 1996, due to colder weather than
1995, particularly during the winter heating season and to increased
transportation and interruptible volumes. In 1996, Mcf sales increased 9.7%
over 1994 due to the same factors as noted above. Total natural gas customers
by classification at June 30 in each of the previous five years were:
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
Residential 28,073 27,894 27,524 27,199 26,734
Commercial & Industrial 4,056 4,031 3,921 3,854 3,773
Competition
Implementation of the Federal Energy Regulatory Commission's ("FERC")
Order 636 has increased the potential for competition in gas procurement,
supply and sale. FERC's actions have sought to encourage competition and
natural gas market efficiency through deregulation and "unbundling of
services" at the interstate pipeline level. This unbundling has changed the
historical relationships, whereby producers sold to pipelines, pipelines sold
to local distribution companies ("LDCs") such as Berkshire Gas and LDCs sold
to end-users. Now LDCs or end-users may utilize pipeline services primarily
for the transportation of gas purchased from third parties.
While historically the Company has been subject to competition from
electricity, oil, propane, coal and other fuels for heating, water heating,
cooking, air conditioning and industrial applications, the regulatory changes
have created the competition among existing and new suppliers or marketers of
natural gas. As a result, the Company is subject to increasing competition
from others to sell natural gas or provide brokerage service to end-users to
whom the Company might otherwise have made sales or provided brokerage
service. Large volume end-users are initially most likely to be the primary
target for third parties seeking to make such sales. When third parties do,
in fact, provide a substantial volume of sales or brokerage service to end-
users located within the Company's service territory, the Company will provide
the local transportation across its distribution system for such third party
sales. At the current time, however, limited third party sales have occurred
in the Company's service territory. Similar opportunities exist for the
Company to market gas to new or existing customers, whether or not they are
located within the Company's service territory.
Rates and Regulations
The Company is subject to the regulatory authority of the Massachusetts
Department of Public Utilities ("MDPU") with respect to various matters,
including rates, financing, certain gas supply contracts, demand-side
management programs and planning and safety matters.
The principal rate classifications are residential, commercial and
industrial. The Company also offers five Quasi-Firm transportation rates for
large end-users as well as interruptible sales and transportation service.
The Company's rate structure is based on the cost of providing service to each
customer class. Current rates became effective January 1, 1994 through a
recalculation of a prior rate increase granted by the MDPU in March 1993. On
May 15, 1995, the Company filed with the MDPU a change in its Transportation
Terms and Conditions to coordinate its balancing and penalty practices with
pipeline standards. At the same time, the Company requested revisions to its
Interruptible Transportation Rate and its five Quasi-Firm Transportation Rates
to be consistent with these new Terms and Conditions. On June 28, 1996, the
MDPU approved the Company's revised Interruptible Transportation Rate but
suspended the approval of the Terms and Conditions and Quasi-Firm
Transportation Rates until January 1, 1997. Current transportation terms and
conditions and rate schedules will remain in effect for all gas transported
until that date.
The Company's residential rates are designed separately for heating and
non-heating purposes. Additionally, for the Company, like most other utility
companies in Massachusetts, subsidized rates are available to residential
customers who qualify for certain government entitlements. These customers
receive a 20% discount from the standard residential rates. The commercial
and industrial rates are based on load factor; that is, the cost is based on
how much gas is consumed and when it is consumed. Those customers who use
more than 30% of their annual usage in the summer are considered high load
factor; those using less than 30% of their annual usage during the summer
season are considered low load factor. There are seven classifications of
load factor rates.
The current firm rate structure is based on seasonal rates, whereby base
rates are higher in the winter (November through April) and lower in the
summer (May through October). In addition to the base rates, the Company has
a seasonal Cost of Gas Adjustment Clause ("CGAC") rate schedule, pursuant to
which the Company recovers (primarily variable) gas costs. Charges under the
CGAC rate schedule are added to the base rates and are designed to recover
higher gas costs in the winter and refund lower gas costs in the summer.
The Company also provides several non-firm and special rates to meet the
varying needs of large customers. These rates include Interruptible Sales
Service whereby a customer is capable of either ceasing operations or
switching to an alternate fuel. Five Quasi-Firm Transportation Rates are
available for large end-users and provide firm transportation and optional
standby service for less than twelve months. Additionally, a Load Management
Rate is available for nonresidential customers who agree to reduce demand to a
predetermined minimum level on peak days. Finally, the Company makes sales to
primarily larger customers under special contracts that reflect charges,
levels, and terms of service different from those under generally available
tariffs. Often arrangements of this nature are made to meet competitive
challenges. Such contracts must be approved by the MDPU on an individual case
basis.
The Company is also subject to standards prescribed by the Secretary of
Transportation under the Natural Gas Pipeline Safety Act of 1968 with respect
to the design, installation, testing, construction and maintenance of pipeline
facilities. The enforcement of these standards has been delegated to the MDPU
which has taken an active role in such enforcement, including the application
of civil penalties and the requirement of remedial programs.
The regulation of prices, terms and conditions of interstate pipeline
transportation and sales of natural gas is subject to the jurisdiction of
FERC. The Company is not under the direct jurisdiction of FERC, but monitors,
and periodically participates in, proceedings before FERC which involve the
Company's pipeline gas suppliers/transporters, the Company's operations, and
other matters pertinent to the Company's business. (See also "Competition".)
Environmental Matters
Federal, state and local laws and regulations establishing standards and
requirements for protection of the environment have increased in number and
scope in recent years. The Company cannot predict the future impact of such
standards and requirements, which are subject to change and can have
retroactive effect.
During fiscal 1990, the MDPU issued a generic ruling on cost recovery
for environmental cleanup costs with respect to former gas manufacturing
sites. Under the ruling, the Company will recover, excluding carrying costs,
the prudently incurred annual cleanup costs over a seven-year period through
the CGAC. This ruling also provides for the sharing of any proceeds received
from insurance carriers equally between the Company and its ratepayers, and
establishes maximum amounts that can be recovered from customers during any
one year.
During the year ended June 30, 1996, the Company continued the analysis
and field review of two parcels of real estate formerly used for gas
manufacturing operations, which had been found to contain coal tar deposits
and other substances associated with by-products of the gas manufacturing
process. The review and assessment process began in 1985 with respect to the
first site, which is owned by the Company, and in 1989 with respect to the
second site which was formerly owned by the Company. With the review and
approval by the Massachusetts Department of Environmental Protection ("MDEP"),
at one site, the investigative activities are continuing, while at the second
site, the investigative work is near completion and remedial alternatives are
being examined. It is difficult to predict the potential financial impact of
required remediation of a site until first,the nature and risk is fully
characterized, and second, the remedial strategies and related technologies
are determined. The general philosophy of the Company is one of source
removal and/or reduction coupled with risk minimization. Assuming successful
implementation, it is anticipated that, through 2011, the level of expenditure
for the sites will range from $3,290,000 to $12,302,000. The Company has
recorded the most likely amount of $3,290,000 in accordance with SFAS No. 5.
Ultimate expenditures cannot be determined until a remedial action plan can be
developed and approved by MDEP. The Company's unamortized costs at June 30,
1996 were $973,000 and should be recovered using the formula discussed above.
Seasonality
The Company's business has a distinct seasonal quality because a large
percentage of its sendout serves residential and commercial heating loads.
Gas operating revenues reflect the seasonal nature of the business. Such
revenues are affected by temperature variations between the heating and non-
heating seasons and by seasonal pricing differentials embodied in the
Company's effective schedule of rates and charges for gas services. (See also
"RATES AND REGULATIONS").
Employee Relations
The Company has 153 employees, approximately 56% of whom are represented
by the United Steelworkers of America, AFL-CIO-CLC, under a contract which
remains in effect until March 31, 2000. Relations with employees are
generally satisfactory.
Gas Supply
In 1992, the FERC issued Order 636 which restructured interstate natural
gas pipeline services. Order 636 required that interstate pipeline companies
unbundle (i.e., separate) their sales, transportation and storage services and
provide all transportation services on a basis that was equal in quality for
gas supplies whether purchased from the pipeline or from any gas supplier.
Ultimately, the Company's customers should benefit over the long-term from the
restructuring undertaken under 636. However, during the near term, the
Company is subject to the pass-through of additional transition costs
associated with the industry restructuring that Tennessee is and will be
incurring.
During fiscal 1994, the Company completed its conversion of firm supply
contracts from its interstate pipeline supplier, Tennessee, to third party
suppliers as mandated by Order 636. The Company's purchases of natural gas
under contracts lasting more than one year are subject to the approval of the
MDPU.
The Company's portfolio of firm natural gas contracts consists of Aquila
Energy Marketing (2,683 Mcf/day); Boundary Gas (1,050 Mcf/day); Natural Gas
Clearinghouse ("NGC") "Cosmic" (2,682 Mcf/day) and NGC "636"(4,920 Mcf/day);
and Tenngasco Corporation("TC")(7,599 Mcf/day). The remaining terms of the
Company's gas supply contracts range from approximately four years to six
years.
Under the terms of a fuel purchase agreement executed with Altresco,
Inc. on December 11, 1992, the Company is entitled to receive gas peaking
service of up to 7,310 Mcf per day during the Winter Period of November 1
through March 31 of each year (not to exceed 307,018 Mcf for each Winter
Period) and back-up gas supplies of up to 30,702 Mcf per day in the event of
proration or curtailment of firm gas supplies (including propane).
In addition, on December 21, 1994, the Company executed two contracts
with Distrigas of Massachusetts Corporation ("DOMAC")which entitled the
Company to receive up to 5,263 Mcf per day of peaking gas. These contracts
are renewable from year to year.
The Company estimates that its supply of natural gas and supplemental
sources under contract are adequate to meet the anticipated needs of the
Company's customers for the foreseeable future. The annual sources of supply
are as follows: firm long-haul pipeline natural gas, including storage gas,
8,459,574 Mcf; natural gas peaking service (Altresco), 307,000 Mcf; ("DOMAC")
1,920,995 Mcf; and Liquefied Petroleum Gas, 13,800 Mcf (daily capability).
Additional pipeline supplies designated as "best efforts" or "interruptible"
are available from time to time, but are subject to daily curtailment at the
suppliers'/transporters' discretion.
The Company has five Liquefied Petroleum Gas ("LPG") plants and one
temporary portable Liquefied Natural Gas ("LNG") vaporizing unit which are
utilized on peak days to supplement the pipeline natural gas supply. By
supplementing its natural gas supply with LPG, the Company is able to meet its
customers' requirements during peak periods. The Company's pipeline
deliveries combined with LPG facilities' storage capacity yield a maximum
daily sendout of approximately 54,900 Mcf. Actual maximum daily sendout
during the 1995-96 heating season was 44,161 Mcf, which occurred on January 5,
1996 with an average temperature of -1 degree Fahrenheit. During the fiscal
year ended June 30, 1996, the Company purchased an aggregate of 5,998,299 Mcf
of interstate pipeline natural gas at an average cost of $3.7234 per Mcf. The
average cost in each of the three preceding years ended June 30 was: 1995 -
$3.2820; 1994 - $3.9725; and 1993 - $3.9881. The composition of gas supply
for customer requirements during the fiscal year ended June 30, 1996 was:
99.7% natural gas and .3% LNG and LPG.
On December 29, 1994, Tennessee filed with the FERC a general rate increase
(Docket RP 95-112) seeking $181 million in additional jurisdictional revenues.
On January 25, 1995, the FERC issued an order which accepted Tennessee's rate
filing, suspended it for five months, and established hearing and technical
conference procedures to address various rate and operational tariff issues.
Intensive rate settlement negotiations were held among the parties from
January through March 1996. On April 5, 1996 Tennessee filed a Stipulation
and Agreement which resolved all outstanding issues in the proceeding. The
Stipulation provides for:(a) a cost of service of $689 million;(b) a
settlement period consisting of two phases, Phase I covering the period July
1, 1995-October 31, 1996 and Phase II beginning November 1, 1996;(c) the
reclassification of $80 million of fixed costs to the commodity component
beginning in Phase II; (d) reduced seasonalized fuel rates beginning in Phase
II; (e) Market Area Storage billing determinants equal to first day
deliverability and 9 Mmdth of storage space inputted for system use, (f) a
rate case effective date moratorium until November 1, 1998; and (g) credits to
various customers on an annual basis for both Phase I and Phase II. On May
30, 1996, the Presiding Judge issued an order certifying the Stipulation to
the FERC. The Stipulation and Agreement awaits approval by the FERC. Upon
receipt of approval, subsequent refunds will be made by Tennessee to its
customers. All such refunds returned to the Company will be returned to the
Company's customers through the Company's CGAC and will effectively reduce the
cost of gas to its customers.
Item 2. Properties
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The Company has approximately 660 miles of distribution mains, the major
portion of which are constructed of coated steel, plastic or cast iron.
Berkshire owns and operates five auxiliary liquefied petroleum gas plants for
supplementing its supply of natural gas. (See "Business - Gas Supply"). The
Company has five terminal stations receiving gas from the interstate pipeline.
All the principal properties of the Company are owned in fee, subject to
the lien of the mortgage securing the Company's First Mortgage Bonds, and are
also subject to covenants, restrictions, easements, leases, rights-of-way and
other similar minor encumbrances or defects common to properties of comparable
size and character; none of which in the opinion of the Company's management
materially interferes with the Company's use of its properties in order to
conduct its business. The Company's gas mains are primarily located under
public highways and streets. Where they are under private property, the
Company has obtained easements or rights-of-way from the record holders of
title. These easements and rights are deemed by the Company to be adequate
for the purposes for which they are being used.
Item 3. Legal Proceedings
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With reference to the matters discussed in Item I "Environmental
Matters", the Company notified its present and former insurance carriers that
it has incurred and will incur further costs associated with the previously-
referenced coal tar deposits, for which it will seek coverage under applicable
insurance policies. No litigation has yet commenced and it is not possible to
determine the extent to which recovery of costs will ultimately be obtained
from such insurance carriers.
Claims against the Company by a general contractor along with the
general contractor's bonding company involved in the construction of a
transportation pipeline for which the Company served as developer have been
resolved. A settlement was approved by the Bankruptcy Court on February 16,
1996 and had no material financial impact on the Company.
The Company is also involved with other legal proceedings incidental to
its business. At the present time the Company cannot predict the outcomes of
these proceedings and also believes that the outcome will not have a material
adverse impact on its overall financial position or results of operations.
Item 4. Submission of Matters To A Vote Of Security Holders
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None.
Additional Items
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Executive Officers of the Registrant
The table set forth below shows the names, titles and ages of all
executive officers of the Registrant as of June 30, 1996. There is no family
relationship among officers of the Registrant. There is no arrangement
between any of the officers and any other person(s) pursuant to which such
officer as or is to be elected as an officer.
Served in This
Name Title Capacity Since Age
- ---- ----- -------------- ---
S.S. Robinson President and Chief 10-28-87 56
Executive Officer
M.J. Marrone Vice President, Treasurer 10-28-87 54
and Chief Financial Officer
L.H. Hotman Vice President of Supply, 10-16-91 53
Rates and Planning
D.P. Atwater Vice President of Customer 11-14-95 47
Services
R.M. Allessio Vice President of Marketing 11-14-95 46
and Distribution
The executive officers are elected annually.
Listed below is a brief account of the business of each of the above
executive officers during the past five years.
Name Capacity in Which Served During Past Five Years
- ---- -----------------------------------------------
S.S. Robinson President and Chief Executive Officer
M.J. Marrone Vice President, Treasurer and Chief Financial Officer
L.H. Hotman Vice President of Supply, Rates & Planning; Vice
President of Supply, Rates & Marketing
D.P. Atwater Vice President of Customer Services; Director of Customer
Services, Manager of Distribution - Engineering
R.M. Allessio Vice President of Marketing and Distribution; Director of
Marketing and Distribution; Director of Engineering and
Distribution; Chief Engineer
PART II
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Item 5. Market For Registrant's Common Equity and Related Stockholder Matters
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The number of registered common shareholders of record of the Registrant
as of the close of business on July 31, 1996 was 1,881. The other information
required is contained in The Berkshire Gas Company's Annual Report to
Shareholders for the fiscal year ended June 30, 1996 ("Registrant's Annual
Report") on page 31, under the heading "Quarterly Financial Information".
This information is hereby incorporated by reference in this report.
Item 6. Selected Financial Data
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The information required is contained in Registrant's Annual Report on
pages 14 - 15, under the heading "10-Year Comparative Summary of Operations
and Statistics". This information is hereby incorporated by reference in this
report.
Item 7. Management's Discussion and Analysis of Financial Condition
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and Results of Operations
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The information required is contained in Registrant's Annual Report on
pages 16 - 18, under the heading "Management's Discussion and Analysis of
Financial Condition and Results of Operations". This information is hereby
incorporated by reference in this report.
Item 8. Financial Statements and Supplementary Data
- ----------------------------------------------------
The information required is contained in Registrant's Annual Report on
pages 19 - 31, in the financial statements of The Berkshire Gas Company for
the years ended June 30, 1996, 1995 and 1994 together with the related notes
to financial statements, under the heading "Independent Auditors' Report", and
under the heading "Quarterly Financial Information". This information is
hereby incorporated by reference in this report.
Item 9. Changes in and Disagreements with Accountants on Accounting
- --------------------------------------------------------------------
and Financial Disclosure
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None.
PART III
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Items 10, 11, 12 and 13
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The information required regarding the Executive Officers of the
Registrant is included in Part I under "Additional Items". Certain other
information called for by Items 10, 11, 12 and 13 has been omitted from this
report pursuant to General Instruction G(3), and is incorporated herein by
reference from the definitive proxy statement to be filed with the Securities
and Exchange Commission pursuant to Regulation 14A not later than 120 days
after the close of the Company's last fiscal year.
PART IV
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Item 14. Exhibits, Independent Auditors' Report on Supplemental
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Schedules, Financial Statement Schedules and Reports on Form 8-K
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(a) 1. Financial Statements
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The following financial statements and related notes are contained
in the Registrant's Annual Report for the fiscal year ended June 30,
1996 and are incorporated herein by reference.
Report of Independent Auditors.
Statements of Income and Retained Earnings for the years ended
June 30, 1996, 1995 and 1994.
Balance Sheets, June 30, 1996, 1995 and 1994.
Statements of Common Shareholders' Equity and Redeemable
Cumulative Preferred Stock, June 30, 1996, 1995 and 1994.
Statements of Cash Flows for the years ended June 30, 1996, 1995
and 1994.
Notes to Financial Statements.
Selected Quarterly Financial Data (unaudited) for the years ended
June 30, 1996, 1995 and 1994.
Item 14. Exhibits, Independent Auditors' Report on Supplemental
- ----------------------------------------------------------------
Schedules, Financial Statement Schedules and Reports on Form 8-K
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Deloitte &
Touche LLP
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City Place Telephone: (203) 280-3000
185 Asylum Street Facsimile: (203) 280-3051
Hartford, Connecticut 06103-3402
2. INDEPENDENT AUDITORS' REPORT ON SUPPLEMENTAL SCHEDULES
To the Shareholders of
The Berkshire Gas Company:
We have audited the financial statements of The Berkshire Gas Company as
of June 30, 1996, 1995 and 1994, and for each of the three fiscal years in the
period ended June 30, 1996 and have issued our report thereon dated August 19,
1996; such financial statements and report are included in The Berkshire Gas
Company's 1996 Annual Report to Shareholders and are incorporated herein by
reference. Our audits also included the financial statement schedules of The
Berkshire Gas Company, listed in item 14. These financial statement schedules
are the responsibility of The Berkshire Gas Company's management. Our
responsibility is to express an opinion based on our audits. In our opinion,
such financial statements schedules, when considered in relation to the basic
financial statements, taken as a whole, present fairly in all material respects
the information set forth therein.
/s/ Deloitte & Touche LLP
August 19, 1996
3. Financial Statement Schedules
-----------------------------
The information called for by this item appears under the caption
"Financial Statement Schedules and Exhibits Filed with Annual Report on Form
10-K" (page 1 hereof). Such information is incorporated by reference herein.
4. Exhibits
--------
The information called for by this item appears under the caption
"Financial Statement Schedules and Exhibits Filed with Annual Report on Form
10-K" (page 1 hereof). Such information is incorporated by reference herein.
(b) Reports on Form 8-K
-------------------
None.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, as amended, the Registrant has caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
Date: August 26, 1996 By: /s/ Scott S. Robinson
----------------------------------
Scott S. Robinson, President & CEO
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this report has been signed below by the following persons in the
capacities on the dates indicated.
Signatures Capacity Date
- ---------- -------- ----
/s/ J.T. Kelly Director August 26, 1996
- -----------------------------
J.T. Kelley
Chairman of the Board
/s/ Scott S. Robinson Principal Executive August 26, 1996
- -----------------------------
Scott S. Robinson Officer; Director
President and Chief
Executive Officer
/s/ Michael J. Marrone Principal Financial August 26, 1996
- -----------------------------
Michael J. Marrone & Accounting Officer
Vice President, Treasurer
and Chief Financial Officer
/s/ George R. Baldwin Director August 26, 1996
- -----------------------------
George R. Baldwin
/s/ John W. Bond Director August 26, 1996
- -----------------------------
John W. Bond
/s/ Paul L. Gioia Director August 26, 1996
- -----------------------------
Paul L. Gioia
/s/ William S. Goedecke Director August 26, 1996
- -----------------------------
William S. Goedecke
/s/ Franklin M. Hundley Director August 26, 1996
- -----------------------------
Franklin M. Hundley
/s/ Robert B. Trask Director August 26, 1996
- -----------------------------
Robert B. Trask
THE BERKSHIRE GAS COMPANY
FINANCIAL STATEMENT SCHEDULES
and
EXHIBITS
Filed With
ANNUAL REPORT ON FORM 10-K
EXHIBIT INDEX
-------------
Certain of the following exhibits are filed herewith or will be filed
herewith by amendment. Certain other of the following exhibits have
heretofore been filed with the Commission and pursuant to Rule 411 are
incorporated herein by reference.
Exhibit
Number Description
- ------- -----------
4(a) First Mortgage Indenture and Deed of Trust, dated as of July 1,
1954, between Pittsfield Coal Gas Company (now The Berkshire Gas
Company) and Chemical Corn Exchange Bank (now Chemical Bank),
Trustee. Filed as Exhibit 4(c) to the Company's Registration
Statement on Form S-1, Registration Statement No. 2-19808, and
incorporated herein by reference.
4(b) First Supplemental Indenture, dated as of June 1, 1956, between the
Company and Chemical Corn Exchange Bank (now Chemical Bank),
Trustee. Filed as Exhibit 4(d) to the Company's Registration
Statement on Form S-1, Registration Statement No. 2-19808, and
incorporated herein by reference.
4(c) Second Supplemental Indenture, dated as of October 1, 1957, between
the Company and Chemical Corn Exchange Bank (now Chemical Bank),
Trustee. Filed as Exhibit 4(e) to the Company's Registration
Statement on Form S-2, Registration Statement No. 2-19808, and
incorporated herein by reference.
4(d) Third Supplemental Indenture, dated as of October 1, 1958, between
the Company and Chemical Corn Exchange Bank (now Chemical Bank),
Trustee. Filed as Exhibit 4(f) to the Company's Registration
Statement on Form S-1, Registration Statement No. 2-19808, and
incorporated herein by reference.
4(e) Fourth Supplemental Indenture, dated as of August 1, 1960, between
the Company and Chemical Bank New York Trust Company (now Chemical
Bank), Trustee. Filed as Exhibit 4(e) to the Company's Registration
Statement on Form S-2, File No. 33-1492, and incorporated herein by
reference.
4(f) Fifth Supplemental Indenture, dated as of June 1, 1962, between the
Company and Chemical Bank New York Trust Company (now Chemical
Bank), Trustee. Filed as Exhibit 4(f) to the Company's Registration
Statement on Form S-2, File No. 33-1492, and incorporated herein by
reference.
4(g) Sixth Supplemental Indenture, dated as of February 1, 1965, between
the Company and Chemical Bank New York Trust Company (now Chemical
Bank), Trustee. Filed as Exhibit 4(g) to the Company's Registration
Statement on Form S-2, File No. 33-1492, and incorporated herein by
reference.
4(h) Seventh Supplemental Indenture, dated as of October 1, 1965, between
the Company and Chemical Bank New York Trust Company (now Chemical
Bank), Trustee. Filed as Exhibit 4(h) to the Company's Registration
Statement on Form S-2, File No. 33-1492, and incorporated herein by
reference.
4(i) Eighth Supplemental Indenture, dated as of September 1, 1967,
between the Company and Chemical Bank New York Trust Company (now
Chemical Bank), Trustee. Filed as Exhibit 4(i) to the Company's
Registration Statement on Form S-2, File No. 33-1492, and
incorporated herein by reference.
4(j) Ninth Supplemental Indenture, dated as of April 1, 1969, between the
Company and Chemical Bank, Trustee. Filed as Exhibit 4(j) to the
Company's Registration Statement on Form S-2, File No. 33-1492, and
incorporated herein by reference.
4(k) Tenth Supplemental Indenture, dated as of March 1, 1972, between the
Company and Chemical Bank, Trustee. Filed as Exhibit 4(k) to the
Company's Registration Statement on Form S-2, File No. 33-1492, and
incorporated herein by reference.
4(l) Eleventh Supplemental Indenture, dated as of April 15, 1975, between
the Company and Chemical Bank, Trustee. Filed as Exhibit 4(l) the
Company's Registration Statement on Form S-2, File No. 33-1492, and
incorporated herein by reference.
4(m) Twelfth Supplemental Indenture, dated as of November 27, 1978,
between the Company and Chemical Bank, Trustee. Filed as Exhibit
4(m) to the Company's Registration Statement on Form S-2, File No.
33-1492, and incorporated herein by reference.
4(n) Thirteenth Supplemental Indenture, dated as of October 15, 1981,
between the Company and Chemical Bank, Trustee. Filed as Exhibit
4(n) to the Company's Registration Statement on Form S-2, File No.
33-1492, and incorporated herein by reference.
4(o) Fourteenth Supplemental Indenture, dated as of August 19, 1983,
between the Company and Chemical Bank, Trustee. Filed as Exhibit
4(o) to the Company's Registration Statement on Form S-2, File No.
33-1492, and incorporated herein by reference.
4(p) Fifteenth Supplemental Indenture, dated as of August 19, 1985,
between the Company and Chemical Bank, Trustee. Filed as Exhibit
4(p) to the Company's Registration Statement on Form S-2,
Registration No. 33-1492, and incorporated herein by reference.
4(q) Sixteenth Supplemental Indenture, dated as of January 1, 1988,
between the Company and Chemical Bank, Trustee. Filed as Exhibit
4(q) to the Company's Registration Statement on Form S-3,
Registration No. 33-27785, and incorporated herein by reference.
4(r) Seventeenth Supplemental Indenture, dated as of February 1, 1989,
between the Company and Chemical Bank, Trustee. Filed as Exhibit
4(r) to the Company's Registration Statement on Form S-3,
Registration Statement No. 33-27785, and incorporated herein by
reference.
4(s) Eighteenth Supplemental Indenture, dated as of September 1, 1991,
between the Company and Chemical Bank, Trustee. Filed as Exhibit
4(x) to the Company's Registration Statement on Form S-3,
Registration Statement No. 33-64302, and incorporated herein by
reference.
4(t) Nineteenth Supplemental Indenture, dated as of September 1, 1992,
between the Company and Chemical Bank, Trustee. Filed as Exhibit
4(z) to the Company's Registration Statement on Form S-3,
Registration Statement No. 33-64302, and incorporated herein by
reference.
4(u) Debenture Indenture, dated as of November 1, 1986, between the
Company and Centerre Trust Company of St. Louis (now Boatmen's Trust
Company), as Trustee. Filed as Exhibit 4(q) to the Company's
Registration Statement on Form S-2, Registration Statement No.
33-9509, and incorporated herein by reference.
4(v) Senior Note Agreement, dated as of July 1, 1990, between the Company
and Allstate Life Insurance Company. Filed as Exhibit 4(w) to the
Company's Registration Statement on Form S-3, Registration Statement
No. 33-64302, and incorporated herein by reference.
4(w) Charter of the Company. Filed as Exhibit 3(a) to the Company's Form
8, amending the Company's Form 10-Q for the fiscal quarter ended
September 30, 1984, File No. 0-1857-3, and incorporated herein by
reference.
4(x) Amendment to the Company's Charter, dated October 30, 1985. Filed
as Exhibit 3(b) to the Company's Registration Statement on Form S-2,
Registration Statement No. 33-1492, and incorporated herein by
reference.
4(y) Amendment to the Company's Charter, dated July 14, 1986. Filed as
Exhibit 3(a) to the Company's Form 10-K for the fiscal year ended
June 30, 1986, File No. 0-1857-3, and incorporated herein by
reference.
4(z) Amendment to the Company's Charter, dated October 28, 1986. Filed
as Exhibit 4(v) to the Company's Registration Statement on Form S-3,
Registration Statement No. 33-27785, and incorporated herein by
reference.
4(aa) Amendment to the Company's Charter, dated June 15, 1992. Filed as
Exhibit 4(y) to the Company's Registration Statement on Form S-3,
Registration Statement No. 33-64302, and incorporated herein by
reference.
4(bb) Amendment to the Company's Charter, dated July 29, 1994. Filed as
Exhibit 4(bb) on the Company Registration Statement on Form S-2,
Registration Statement No. 33-83828, and is incorporated herein by
reference thereto.
10(a) Employment Contract between the Company and Scott S. Robinson.
Filed as Exhibit 10(f) to the Company's Form 10-K for the fiscal
year ended June 30, 1985, File No. 01857-3, and incorporated herein
by reference.
10(b) Contract for the operation and maintenance of a cogeneration
pipeline between the Company and Altresco Financial, Inc., dated
December 11, 1992. Filed as Exhibit 10(n) to the Company's Form
10-K for the fiscal year ended June 30, 1993, File No. 0-18573, and
incorporated herein by reference.
10(c) Year-to-year contract for the purchase of propane gas between the
Company and Enron Gas Liquids, dated June 1, 1993. Filed as
Exhibit 10(c) on the Company Registration Statement on Form S-2,
Registration Statement No. 33-83828, and is incorporated herein by
reference thereto.
10(d) Contract for the transportation of natural gas under IT rate
schedule between the Company and Tennessee Gas Pipeline Company,
contract number 103250-8, dated September 1, 1993. Filed as Exhibit
10(d) on the Company Registration Statement on Form S-2,
Registration Statement No. 33-83828, and is incorporated herein by
reference thereto.
10(e) Contract for the transportation of natural gas under FT-A rate
schedule between the Company and Tennessee Gas Pipeline Company,
contract number 2030, dated September 1, 1993. Filed as Exhibit
10(e) on the Company Registration Statement on Form S-2,
Registration Statement No. 33-83828, and is incorporated herein by
reference thereto.
10(f) Contract for the transportation of natural gas under FT-A rate
schedule between the Company and Tennessee Gas Pipeline Company,
contract number 2064, dated September 1, 1993. Filed as Exhibit
10(f) on the Company Registration Statement on Form S-2,
Registration Statement No. 33-83828, and is incorporated herein by
reference thereto.
10(g) Contract for the transportation of natural gas under FT-A rate
schedule between the Company and Tennessee Gas Pipeline Company,
contract number 779, dated September 1, 1993. Filed as Exhibit
10(g) on the Company Registration Statement on Form S-2,
Registration Statement No. 33-83828, and is incorporated herein by
reference thereto.
10(h) Contract for the transportation of natural gas under CGT-NE rate
schedule between the Company and Tennessee Gas Pipeline Company,
contract number 2063, dated September 1, 1993. Filed as Exhibit
10(h) on the Company Registration Statement on Form S-2,
Registration Statement No. 33-83828, and is incorporated herein by
reference thereto.
10(i) Contract for the purchase of natural gas between the Company and
Tenngasco Corporation, dated September 14, 1993. Filed as Exhibit
10(I) on the Company Registration Statement on Form S-2,
Registration Statement No. 33-83828, and is incorporated herein by
reference thereto.
10(j) Contract for the purchase of natural gas between the Company and
Natural Gas Clearinghouse, dated as of November 1, 1993. Filed as
Exhibit 10(j) on the Company Registration Statement on Form S-2,
Registration Statement No. 33-83828, and is incorporated herein by
reference thereto.
10(k) Gas Storage Agreement between the Company and Tennessee Gas Pipeline
Company, dated as of September 1, 1993. Filed as Exhibit 10(k) on
the Company Registration Statement on Form S-2, Registration
Statement No. 33-83828, and is incorporated herein by reference
thereto.
10(l) Company Corporate Incentive Compensation Plan ("ICP"). Filed as
Exhibit 10(l) on the Company Registration Statement on Form S-2,
Registration Statement No. 33-83828, and is incorporated herein by
reference thereto.
10(m) Severance Agreement, dated September 28, 1993, by and between the
Company and Donald Atwater. Filed as Exhibit 10(m) on the Company
Registration Statement on Form S-2, Registration Statement No. 33-
83828, and is incorporated herein by reference thereto.
10(n) Severance Agreement, dated September 28, 1993, by and between the
Company and Robert M. Allessio. Filed as Exhibit 10(n) on the
Company Registration Statement on Form S-2, Registration Statement
No. 33-83828, and is incorporated herein by reference thereto.
10(o) Severance Agreement, dated October 15, 1993, by and between the
Company and Michael J. Marrone. Filed as Exhibit 10(o) on the
Company Registration Statement on Form S-2, Registration Statement
No. 33-83828, and is incorporated herein by reference thereto.
10(p) Severance Agreement, dated October 15, 1993, by and between the
Company and Leslie H. Hotman. Filed as Exhibit 10(p) on the Company
Registration Statement on Form S-2, Registration Statement No.
33-83828, and is incorporated herein by reference thereto.
10(q) Severance Agreement, dated October 15, 1993, by and between the
Company and Cheryl M. Clark. Filed as Exhibit 10(q) on the Company
Registration Statement on Form S-2, Registration Statement No.
33-83828, and is incorporated herein by reference thereto.
13(a) Annual Report to Shareholders
Filed Herewith:
A copy of the Company's Annual Report to Shareholders for fiscal
year ended June 30, 1996.
27(a) Financial Data Schedule
Filed Herewith:
Financial Data Schedule for the fiscal year ended June 30, 1996.
THE BERKSHIRE GAS COMPANY
OTHER ALLOWANCES
FOR THE YEAR ENDED JUNE 30, 1996
--------------------------------
($000'S)
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
- -----------------------------------------------------------------------------------------------------------------------------
ADDITIONS DEDUCTIONS
------------------------------------------- ------------------------
BALANCE AT CHARGED TO BALANCE
BEGINNING OPERATING PROFIT CHARGED TO OTHER ACCTS. AT CLOSE
-----------------------
DESCRIPTION OF PERIOD & LOSS OR INCOME ACCOUNT AMOUNT DESCRIPTION AMOUNT OF PERIOD
- ----------- ---------- ---------------- ------- ------ ----------- ------ ---------
ALLOWANCES DEDUCTED FROM
ASSETS TO WHICH THEY APPLY
Reserved for bad debts:
Gas Accounts $832 $1,110 App. Rental $ 18 Accts. charged $1,240 $720
off - less
recoveries
Merchandise & 44 Merchandise & 52 Accts. charged 63 33
Jobbing Accts. Jobbing off - less
Operations recoveries
Liq. Petroleum 74 Liq. Petroleum 46 Accts. charged 57 63
Gas Accounts ---- Operations ---- off - less ------ ----
recoveries
TOTAL $950 $1,110 $116 $1,360 $816
==== ====== ==== ====== ====
THE BERKSHIRE GAS COMPANY
OTHER ALLOWANCES
FOR THE YEAR ENDED JUNE 30, 1995
--------------------------------
($000'S)
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
- -----------------------------------------------------------------------------------------------------------------------------
ADDITIONS DEDUCTIONS
------------------------------------------- ------------------------
BALANCE AT CHARGED TO BALANCE
BEGINNING OPERATING PROFIT CHARGED TO OTHER ACCTS. AT CLOSE
-----------------------
DESCRIPTION OF PERIOD & LOSS OR INCOME ACCOUNT AMOUNT DESCRIPTION AMOUNT OF PERIOD
- ----------- --------- ---------------- ------- ------ ----------- ------ ---------
ALLOWANCES DEDUCTED FROM
ASSETS TO WHICH THEY APPLY
Reserved for bad debts:
Gas Accounts $727 $628 App. Rental $ 18 Accts. charged $541 $832
off - less
recoveries
Merchandise & 21 Merchandise & 50 Accts. charged 27 44
Jobbing Accts. Jobbing off - less
Operations recoveries
Liq. Petroleum 68 Liq. Petroleum 45 Accts. charged 39 74
Gas Accounts ---- Operations ---- off - less ---- ----
recoveries
TOTAL $816 $628 $113 $607 $950
==== ==== ==== ==== ====
THE BERKSHIRE GAS COMPANY
OTHER ALLOWANCES
FOR THE YEAR ENDED JUNE 30, 1994
--------------------------------
($000'S)
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
- -----------------------------------------------------------------------------------------------------------------------------
ADDITIONS DEDUCTIONS
------------------------------------------- ------------------------
BALANCE AT CHARGED TO BALANCE
BEGINNING OPERATING PROFIT CHARGED TO OTHER ACCTS. AT CLOSE
-----------------------
DESCRIPTION OF PERIOD & LOSS OR INCOME ACCOUNT AMOUNT DESCRIPTION AMOUNT OF PERIOD
- ----------- --------- ---------------- ------- ------ ----------- ------ ---------
ALLOWANCES DEDUCTED FROM
ASSETS TO WHICH THEY APPLY
Reserved for bad debts:
Gas Accounts $600 $1,176 App. Rental $13 Accts. charged $1,062 $727
off - less
recoveries
Merchandise & 20 Merchandise & 7 Accts. charged 6 21
Jobbing Accts. Jobbing off - less
Operations recoveries
Liq. Petroleum 54 Liq. Petroleum 42 Accts. charged 28 68
Gas Accounts ---- Operations --- off - less ------ ----
recoveries
TOTAL $674 $1,176 $62 $1,096 $816
==== ====== === ====== ====