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, 1998 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
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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
Incorporation or Organization) Identification No.)
115 Cheshire Road, Pittsfield, MA 01201-1803
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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
----- -----
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, 1998 was $46,983,840.
Total shares of common stock of the Registrant outstanding as of July 31,
1998 were 2,324,930.
Documents Incorporated by Reference:
1. The Berkshire Gas Company's Annual Report to Shareholders for the
fiscal year ended June 30, 1998 (Items 5, 6, 7, and 8 of Part II).
2. The Berkshire Gas Company's definitive Proxy Statement, to be filed on
October 2, 1998, pursuant to Regulation 14A under the Securities and
Exchange Act of 1934 (Items 10, 11, 12 and 13 of Part III).
FORM 10-K
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 10
Legal Proceedings 3 11
Submission of Matters to a Vote of
Security Holders 4 11
Additional Items - 11
(Executive Officers of the Registrant)
PART II
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Market For Registrant's Common Equity and Related
Stockholder Matters 5 13
Selected Financial Data 6 13
Management's Discussion and Analysis of
Financial Condition and Results of Operations 7 13
Financial Statements and Supplementary Data 8 13
Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure 9 13
PART III
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Directors and Executive Officers of the Registrant 10 14
Executive Compensation 11 14
Security Ownership of Certain Beneficial
Owners and Management 12 14
Certain Relationships and Related Transactions 13 14
PART IV
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Exhibits, Independent Auditors' Report on
Supplemental Schedules, Financial Statement
Schedules, and Reports on Form 8-K 14 16
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, eastern New
York and southern Vermont. 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, 1998, 1997 and 1996, residential
consumers accounted for approximately 55%, 55% and 54%; commercial and
industrial consumers accounted for 41%, 40% and 42%; and transportation
consumers accounted for approximately 4%, 5% and 4% of operating revenues,
respectively. Transportation consumers account for approximately 8%, 9%, and
5% of operating margin for fiscal years 1998, 1997 and 1996, 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 1% in 1998 over 1997,
from 33,887 to 34,166. Total Mcf sold and transported decreased from
8,079,811 Mcf in 1997 to 7,356,946 Mcf in 1998 primarily due to 10% warmer
than normal weather. Total natural gas customers by classification at June
30 in each of the previous five years were:
1998 1997 1996 1995 1994
---- ---- ---- ---- ----
Residential 29,911 29,682 29,707 29,565 29,126
Commercial & Industrial 4,255 4,205 4,056 4,031 3,921
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, regulatory changes
have created the competition among existing and new suppliers or marketers
of natural gas. The Company takes a very positive view of the changes
occurring within the natural gas industry. The advent of customer choice
should enhance the value of the Company's products and services. The
Company is taking an active role in the transformation of the industry at
the state level, through participation in collaborative proceedings
involving a wide range of market stakeholders and regulators.
The Company has formed a new division to pursue opportunities spawning
from the transformation of our industry. Berkshire Energy Marketing, in
alliance with Conectiv/CNE Energy Services, LLC, a major regional commodity
provider, will market electricity and fuel oil, as well as natural gas, in
our existing franchise area and nearby regions. The Company will continue
to perform the gas utility distribution function upon the completion of the
corporate restructuring and will remain subject to the regulatory authority
of the DTE.
Rates and Regulations
The Company is subject to the regulatory authority of the
Massachusetts Department of Telecommunications and Energy ("DTE"), formerly
the Massachusetts Department of Public Utilities, 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 with the exception of a revised Interruptible Transportation Rate which
became effective July 1, 1996 and Transportation Terms and Conditions which
became effective November 1, 1996.
Presently, 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
DTE on an individual case basis.
In compliance with requirements set forth by the DTE, the Company
filed revenue-neutral, unbundled rates. The unbundled rates were submitted
in accordance with a request for a Joint Motion for Approval of the
Settlement Agreement ("the Settlement") reached by participants in the
Massachusetts Gas Unbundling Collaborative ("the Collaborative"). The
Settlement resulted from extensive discussions between the Parties to
resolve issues relating to the unbundling of the Company's rates for all
customer classes, as well as cost allocation and rate design. The Parties
supported the DTE's approval of the revised rate schedules with the intent
that new tariffs be implemented for effect November 1, 1998. The Joint
Motion for Approval of the Settlement Agreement was approved on August 14,
1998.
Additionally, on July 10, 1998, the ten investor-owned local
distribution companies filed a Joint Motion for Settlement Agreement ("the
Agreement") with the DTE relating to Model Terms and Conditions for
unbundled gas distribution services as set forth in the agreement. The LDCs
and the Marketer Group have agreed to many sections and have indicated where
further action is required by participants in the Collaborative following
the DTE's decision on capacity assignment and related issues, including
Interruptible Distribution Service.
On July 2, 1998, the DTE issued an Interlocutory Order on Procedural
Schedule. In that order, the DTE agreed to have unbundled rates in place
November 1, 1998. Second, the DTE stated they intend to review and issue a
decision on the Model Terms and Conditions no later than September 30, 1998.
Finally, the DTE intends to issue an order on capacity assignment and cost
responsibility by October 30, 1998. As a result of this schedule, the DTE
found that the introduction of comprehensive unbundling of LDCs services
should be implemented no later than April 1, 1999.
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 DTE 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 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 be
retroactively applied.
During fiscal 1990, the DTE 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, 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 in any one year.
During the year ended June 30, 1998, 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 site #1, which is owned by the Company, and in 1989 with respect
to site #2, which was formerly owned by the Company.
With the review and approval by the Massachusetts Department of
Environmental Protection ("MDEP"), work at site #1 has resulted in proposed
remedial activities which will be pursued in the near future, while site
monitoring will be continuous. Investigative activities are continuing at
site #2.
It is difficult to predict the potential financial impact of these
sites 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.
Beginning in fiscal year 1999, the Company will begin remediation of
site #1 at a projected cost of $1,300,000. Assuming successful
implementation, it is anticipated that through 2012 the level of
expenditures for both 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 for site #2 is developed and approved by MDEP, along with plans
for post remediation monitoring of both sites. The Company's unamortized
costs at June 30, 1998, were $800,000 and should be recovered using the
formula discussed above.
FERC Order 636 provides for 100% recovery by pipelines of any
"Transition Costs" prudently incurred as a result of industry restructuring.
As these costs have been and may be approved in the future, they have been
and will be passed through to the Company as demand charges associated with
the transportation of gas through the pipeline. Under current rate
structures, these costs are recovered through the CGAC.
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 156 employees, approximately 51% 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
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, "Cosmic" (2,682 Mcf/day) and NGC "636"(4,920
Mcf/day); and Tenngasco Corporation(7,599 Mcf/day). The remaining terms of
the Company's gas supply contracts range from approximately three years to
five years.
Under the terms of a fuel purchase agreement executed with U.S.
Generating Company (formerly 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, the Company executed two contracts with Distrigas of
Massachusetts Corporation ("DOMAC") which entitled the Company to receive up
to 5,409 Mcf per day of vaporized Liquified Natural Gas ("LNG"). 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 (U.S. Generating
Company) 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 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 due to degree day severity during
the 1997-98 heating season was 40,110 Mcf, which occurred on December 31,
1997, with an average temperature of 5 degrees Fahrenheit. During the
fiscal year ended June 30, 1998, the Company purchased an aggregate of
5,359,707 Mcf of interstate pipeline natural gas at an average cost of
$4.1532 per Mcf. The average cost in each of the three preceding years
ended June 30 was: 1997 - $4.3635; 1996 - $3.7234; and 1995 - $3.2820. The
composition of gas supply for customer requirements during the fiscal year
ended June 30, 1998, was: 99.96% natural gas and .04% LNG and LPG.
On April 16, 1997, the FERC approved an unopposed settlement offer of
Tennessee Gas Pipeline Company which disposed of 34 FERC dockets and some 39
appeals of FERC orders pending in the D.C. circuit. The settlement
established a cost sharing mechanism between Tennessee and its customers.
As a result of the order, Tennessee implemented a reduced Gas Supply
Realignment ("GSR") surcharge retroactively for the two-year period of
January 1, 1997, through December 31, 1998. On June 30, 1997, the Company
received a refund from Tennessee of $323,456.95 representing excess GSR
surcharges from January through March 1997. The refund is currently being
returned to Berkshire's customers through the Company's CGAC. The GSR
surcharges that remain to be charged to Berkshire by Tennessee through
December 1998 will not significantly affect the Company's competitiveness.
The GSR surcharges will be absorbed by all of Berkshire's customer classes.
Item 2. Properties
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The Company has approximately 669 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 Bond, 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
- --------------------------
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.
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
- ------------------------------------------------------------
On May 8, 1998 a special meeting was held where shareholders voted and
approved the formation of a holding company structure.
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, 1998. 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 has 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 58
Executive Officer
M.J. Marrone Vice President, Treasurer 10-28-87 56
and Chief Financial Officer
R.M. Allessio Vice President, Utility 11-07-97 48
Operations
L.H. Hotman* Vice President, Business 11-07-97 55
Development
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
R.M. Allessio Vice President, Utility Operations; Vice President of
Marketing and Distribution; Director of Marketing and
Distribution; Director of Engineering and Distribution;
Chief Engineer
L.H. Hotman* Vice President, Business Development; Vice President of
Supply, Rates & Planning; Vice President of Supply, Rates
& Marketing
<F*> Resigned effective July 13, 1998
PART II
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Item 5. Market For Registrant's Common Equity and Related Stockholder Matters
- ------------------------------------------------------------------------------
The number of registered common shareholders of record of the
Registrant as of the close of business on July 31, 1998, was 1,920. The
other information required is contained in The Berkshire Gas Company's
Annual Report to Shareholders for the fiscal year ended June 30, 1998,
("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
- --------------------------------
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 and
- ------------------------------------------------------------------------
Results of Operations
- ---------------------
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, 1998, 1997 and 1996, 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
- --------------------
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 Schedules,
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Financial Statement Schedules and Reports on Form 8-K
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(a) 1. Financial Statements
--------------------
The following financial statements and related notes are contained in
the Registrant's Annual Report for the fiscal year ended June 30,
1998, and are incorporated herein by reference.
Report of Independent Auditors.
Statements of Income for the years ended June 30, 1998, 1997 and 1996.
Balance Sheets, June 30, 1998, 1997 and 1996.
Statements of Shareholders' Equity for the years ended June 30, 1998,
1997 and 1996.
Statements of Cash Flows for the years ended June 30, 1998, 1997 and
1996.
Notes to Financial Statements.
Selected Quarterly Financial Data (unaudited) for the years ended June
30, 1998, 1997 and 1996.
2. Independent Auditors' Report on Supplemental Schedules
------------------------------------------------------
Deloitte &
Touche LLP
- ----------- --------------------------------------------
City Place Telephone:(860)280-3000
185 Asylum Street Facsimile:(860)280-3051
Hartford, Connecticut 06103-3402
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, 1998, 1997 and 1996 and for each of the three fiscal years in the
period ended June 30, 1998 and have issued our report thereon dated August
12, 1998;such financial statements and report are included in The Berkshire
Gas Company's 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 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 12, 1998
- --------------
Deloitte Touch
Tohmatsu
International
- --------------
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, 1998 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/ FRANKLIN M. HUNDLEY Director August 26, 1998
- ---------------------------
Franklin M. Hundley
Chairman of the Board
/s/ SCOTT S. ROBINSON Principal Executive August 26, 1998
- --------------------------- Officer; Director
Scott S. Robinson
President and Chief
Executive Officer
/s/ MICHAEL J. MARRONE Principal Financial August 26, 1998
- --------------------------- & Accounting Officer
Michael J. Marrone
Vice President, Treasurer
and Chief Financial Officer
/s/ GEROGE R. BALDWIN Director August 26, 1998
- ---------------------------
George R. Baldwin
/s/ JOHN W. BOND Director August 26, 1998
- ---------------------------
John W. Bond
/s/ PAUL L. GIOIA Director August 26, 1998
- ---------------------------
Paul L. Gioia
/s/ JAMES R. KEYS Director August 26, 1998
- ---------------------------
James R. Keys
/s/ ROBERT B. TRASK Director August 26, 1998
- ---------------------------
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's Registration Statement on Form S-2,
Registration Statement No. 33-83828, and is incorporated herein by
reference thereto.
4(cc) Amendment to the Company's Charter, dated September 10, 1996. Filed
as part of Exhibit 3(i) to the Company's form 10-Q for the fiscal
quarter ended December 13, 1996. File No. 0-1857-3, and incorporated
herein by reference.
4(dd) Senior Note Agreement, dated November 1, 1996, between the Company
and First Colony Life Insurance Company. Filed as Exhibit 4 to the
Company's form 10-Q for the fiscal quarter ended December 31, 1996.
File No. 0-1857-3, and incorporated herein by reference.
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 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(n) 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(o) 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, 1998.
27(a) Financial Data Schedule
Filed Herewith:
Financial Data Schedule for the fiscal year ended June 30, 1998.