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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1993
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from ------
to --------------Commission File Number 1-2297
------
EASTERN ENTERPRISES
-------------------
(Exact Name of Registrant As Specified In Its Charter)
MASSACHUSETTS 04-1270730
(State or Other Jurisdiction of Incorporation or (I.R.S. Employer
Organization) Identification No.)
9 RIVERSIDE ROAD
WESTON, MASSACHUSETTS 02193 (617) 647-2300
(Address of Principal Executive Offices) (Registrant's Telephone Number)
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
Name of Each Exchange
Title of Each Class on Which Registered
--------- --------------------
Common Stock, par value $1.00 per share New York Stock Exchange
Common Stock Purchase Rights, no par value Boston Stock Exchange
Pacific Stock Exchange
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
YES --X-- NO -----
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]
State the aggregate market value of the voting stock held by non-
affiliates of the registrant as of March 10, 1994.
COMMON STOCK, PAR VALUE $1.00 PER SHARE -- $550,397,558
Indicate the number of shares outstanding of the registrant's class of
common stock as of March 10, 1994.
COMMON STOCK, PAR VALUE $1.00 PER SHARE -- 20,967,526 SHARES
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the annual report to shareholders for the year ended December
31, 1993 are incorporated by reference into Parts I and II.
Portions of the 1994 definitive Proxy Statement are incorporated by
reference into Part III.
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PART I
ITEM 1. BUSINESS
1(A) GENERAL DEVELOPMENT OF BUSINESS
Eastern Enterprises ("Eastern") is an unincorporated voluntary association
(commonly referred to as a "Massachusetts business trust") established and
existing under a Declaration of Trust dated July 18, 1929, as from time to
time amended.
Eastern's principal subsidiaries are Boston Gas Company ("Boston Gas"),
Midland Enterprises Inc. ("Midland") and WaterPro Supplies Corporation
("WaterPro"). Another subsidiary, Ionpure Technologies Corporation
("Ionpure"), was sold on December 1, 1993 for an equity interest in United
States Filter Corporation, as described in Note 10 of Notes to Financial
Statements.
Boston Gas distributes natural gas in Boston and 73 other Massachusetts
communities. Midland is engaged in barge transportation, principally on the
Ohio and Mississippi river systems. WaterPro is a wholesale distributor of
water and wastewater system components to contractors and municipal customers
in 23 states.
Eastern provides management and staff services to its operating
subsidiaries. Boston Gas and Midland are financed primarily through their own
funded debt, which is not guaranteed by Eastern. Many of the debt instruments
relating to these borrowings contain restrictive covenants applicable to
Boston Gas and Midland, including restrictions on the payment of dividends to
Eastern. In the opinion of management, none of these restrictions has any
material impact upon the operations of Eastern and its subsidiaries.
1(B) FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS
Information with respect to this item may be found in Note 2 of Notes to
Financial Statements for the year ended December 31, 1993, appearing on pages
36 and 37 of the annual report to shareholders for such year. Such
information is incorporated herein by reference.
1(C) NARRATIVE DESCRIPTION OF BUSINESS
BOSTON GAS COMPANY
Boston Gas is engaged in the distribution, sale and transportation of
natural gas to residential, commercial and industrial customers in the city of
Boston, Massachusetts and 73 other Massachusetts communities.
Gas is sold and transported to "firm" and "non-firm" customers for a
variety of applications. In most cases, firm sales and transportation services
are provided under rate schedules or contracts with customers that do not
contemplate service interruption at any time during the year. Firm sales of
natural gas used for space heating are directly related to weather conditions.
Consequently, variations in weather patterns can have a significant impact on
Boston Gas' revenues and earnings. Boston Gas also provides seasonal firm
sales and transportation services for terms less than 365 days.
Non-firm services include sales and transportation to customers who
typically can use oil or gas interchangeably and special sales for resale to
other gas companies for distribution to their customers. Non-firm sales depend
on gas supply availability, weather conditions and the price of gas in
relation to the price of alternate fuels. Availability of gas supply and
price competition from residual oil are important factors in retaining non-
firm gas sales. Gross margins from non-firm sales and transportation services
are passed back to firm customers through the cost of gas adjustment clause.
This practice enhances Boston Gas' competitive position by reducing gas costs
to firm customers. As an additional incentive to Boston Gas, beginning
November 1, 1993, a portion of gross margins from non-firm sales and
transportation services will be retained if certain levels are attained.
Because the volume of gas sold to firm customers varies greatly between
winter and summer months, Boston Gas customarily incurs seasonal borrowings.
Boston Gas purchases approximately 70% of its pipeline gas supplies
directly from producers and marketers pursuant to long term contracts which
are subject to review and approval by the Massachusetts Department of Public
Utilities ("DPU"). The balance of its pipeline supplies is purchased under
short-term, firm winter service agreements and on a spot basis. These pipeline
supplies are transported on interstate pipeline systems to Boston Gas' service
territory on terms and conditions of service approved by the Federal Energy
Regulatory Commission ("FERC"). Boston Gas has also contracted with pipeline
companies and others for the storage of natural gas and related transportation
from underground storage fields in New York and Pennsylvania. Supplemental
supplies of liquefied natural gas and propane are purchased and produced from
foreign and domestic sources, primarily on a spot basis.
All interstate pipelines serving Boston Gas have implemented service
restructuring plans on terms and conditions approved by FERC pursuant to Order
636, issued in April 1992, which required interstate pipeline companies to
unbundle existing gas service contracts into separate gas sales,
transportation and storage services. Accordingly, Boston Gas' firm bundled
service contract with Tennessee Gas Pipeline Company ("Tennessee") has been
converted to an annual transportation and storage entitlement of 77,800
million cubic feet ("MMCF"). Similarly, its firm bundled service contracts
with Algonquin Gas Transmission Company ("Algonquin") and Texas Eastern
Transmission Corporation ("Texas Eastern") have been converted to annual firm
transportation entitlements of 65,600 MMCF and 100,100 MMCF, respectively.
This transportation capacity is used to transport natural gas from both
producing regions and underground storage facilities. As a result of the
restructuring, Boston Gas holds entitlements to 16,500 MMCF of storage
capacity with Tennessee, Texas Eastern and others. These new transportation
and storage agreements with Algonquin, Tennessee and Texas Eastern have terms
generally expiring no earlier than 1996, 2000 and 2012. In addition, as a
result of industry restructuring, Boston Gas has firm entitlements on
interstate pipelines upstream of these three pipelines with direct access to
supply areas.
In addition to its domestic supply arrangements, Boston Gas has long term
contracts with Canadian gas suppliers for the annual purchase of up to 22,862
MMCF. These contracts expire between 2003 and 2007. Boston Gas has contracted
with Iroquois Gas Transmission System, Tennessee and Algonquin for the
transportation of these supplies to its service territory.
Boston Gas considers the service reliability of its natural gas portfolio
after industry restructuring to be comparable to that existing prior to Order
636. As a result of these changes in federal energy regulation, Boston Gas has
assumed more direct operational responsibility for procuring and arranging
transportation of natural gas supplies. Boston Gas expects that this new
operational responsibility will provide additional opportunities to benefit
from low cost gas and competitive transportation options.
The following table provides statistical information with respect to
Boston Gas' sources of supply and sales during 1991-1993.
YEAR ENDED DECEMBER 31,
------------------------------
1993 1992 1991
---- ---- ----
Gas supply
(Millions of cubic feet @ 1,000 B.T.U.)
Natural gas purchased .................................. 86,276 94,086 77,283
Propane and manufactured gas ........................... 18 50 77
LNG purchased .......................................... 13,375 12,344 11,412
------ ------- ------
Total manufactured and purchased ................... 99,669 106,480 88,772
Deduct:
Net increase (decrease) in storage gas ............. 4,021 5,195 1,034
Company use, unbilled and other .................... 2,552 3,665 3,190
------ ------- ------
Total gas billed ........................................... 93,096 97,620 84,548
------ ------- ------
------ ------- ------
YEAR ENDED DECEMBER 31,
-------------------------------
1993 1992 1991
---- ---- ----
Gas sales and transportation
(Millions of cubic feet @ 1,000 B.T.U.)
Residential
Heating (A)<F1> .................................... 38,126 37,923 32,731
Non-heating ........................................ 3,793 3,906 3,847
Commercial (B)<F2> ..................................... 26,011 25,796 23,614
Industrial -- firm ..................................... 4,955 4,914 4,150
Seasonal firm contracts ................................ 10,022 6,379 --
------- ------- -------
Total firm sales ................................... 82,907 78,918 64,342
Interruptible sales .................................... 8,106 14,456 20,206
Special sales for resale ............................... 2,083 4,246 --
------- ------- -------
Total gas sales ............................................ 93,096 97,620 84,548
Firm transportation .................................... 12,351 7,369 --
Interruptible transportation ........................... 39,304 27,270 31,424
------- ------- -------
Total throughput ........................................... 144,751 132,259 115,972
------- ------- -------
------- ------- -------
Percent of normal billing degree days ...................... 99% 104% 87%
<FN>
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<F1>(A) The heating classification includes all gas sold to customers having
central or space heating.
<F2>(B) The commercial classification includes central-metered apartment houses
and condominiums with five or more units.
Boston Gas relies on supplemental supplies to meet firm sendout
requirements which are greater than its firm pipeline capacity entitlements.
The number of days that peak sendout can be maintained is limited by the
capacity of Boston Gas' storage facilities for supplemental gas supplies and
the rate at which these supplies can be sent out and subsequently replenished.
Boston Gas considers its peak sendout capability fully adequate to meet the
requirements of its firm customers.
During 1993, Boston Gas continued to increase its firm sales and customer
base through marketing programs that emphasize natural gas' competitive price,
efficiency and environmental advantages. Despite the 17-week work stoppage, in
1993 Boston Gas added approximately 1,812 MMCF in firm annual sales to the
commercial and industrial sectors. Clean-burning properties and the absence of
on-site storage problems make natural gas attractive in these sectors, where
Boston Gas' market share is only 22% as compared to a national average of 39%.
Approximately 4,400 residential customers converted to gas for central heating
last year. Approximately 46% of Boston Gas' existing residential customers do
not use gas for central heating.
Boston Gas faces competition with fuel oil and electricity for
residential, commercial and industrial applications. Regulatory changes
affecting pipeline transportation have created the potential for increased
competition among existing and new suppliers of natural gas within Boston Gas'
service area. Boston Gas is well positioned to provide transportation services
to customers who engage in direct purchases of natural gas from others. Rate
design changes approved by the DPU in 1993 provide for margin neutrality
regardless of the customer's decision to purchase gas directly from Boston Gas
or to purchase third-party gas for transportation by Boston Gas.
Boston Gas' operations are subject to Massachusetts statutes applicable to
gas utilities. Rates, the territorial limits of Boston Gas' service area, the
issuance of securities, affiliated party transactions, the purchase of gas and
pipeline safety are regulated by the DPU. Construction of certain facilities
is regulated by the Massachusetts Energy Facilities Siting Board of the DPU.
Municipal, state and federal authorities have jurisdiction over the use of
public ways, land and waters for gas mains and other distribution facilities.
The DPU allowed Boston Gas an annual revenue increase of $37.7 million,
effective November 1, 1993, and also approved several rate design changes that
will reduce the volatility of margins attributable to weather.
The DPU has approved conservation and load management programs for Boston
Gas' residential, commercial and industrial customers. These programs
encourage more efficient gas consumption by subsidizing various conservation
measures. Recovery of costs related to these programs and financial incentives
were authorized by the DPU.
Boston Gas is subject to local, state and federal environmental regulation
of its operations and properties. As described in Note 13 of Notes to
Financial Statements, there are 37 identified former manufactured gas plant
("MGP") sites located within Boston Gas' service territory. Massachusetts
Electric Company, a wholly-owned subsidiary of New England Electric System
("NEES"), has assumed responsibility for remediating one such MGP site in
Lynn, Massachusetts, pursuant to the decision of the First Circuit Court of
Appeals in John S. Boyd, Inc. et. al. v. Boston Gas Company, et al., which
affirmed that NEES and/or its subsidiaries are responsible for remediating the
site as prior owners and operators and that Boston Gas did not assume any
liability for such remediation when it acquired the property from NEES in
1973. Thirteen other former MGP sites within Boston Gas' service territory are
currently owned by Boston Gas, and 10 of such 13 sites were also acquired from
NEES and its subsidiaries. Boston Gas is currently working with the
Massachusetts Department of Environmental Protection to determine the extent
of remediation which may be required at such 13 sites. A 1990 settlement
agreement with the DPU provides for recovery through the cost of gas
adjustment clause of all environmental response costs associated with former
MGP sites over separate, seven-year amortization periods without a return on
the unamortized balance.
Boston Gas and Eastern were granted an intrastate exemption from the
provisions of the Public Utility Holding Company Act of 1935 ("Act") under
Section 3(a)(1) thereof pursuant to an order of the Securities and Exchange
Commission ("SEC") dated February 28, 1955, as amended by orders dated
November 3, 1967 and August 28, 1975. On February 7, 1989, the SEC issued a
proposed rule under the Act which would provide limits for non-utility related
diversification by intrastate public utility holding companies, such as
Eastern, that are exempt under the Act. Since its proposal in 1989, the SEC
has taken no further public action with respect to this proposed rule.
Eastern and Boston Gas cannot predict whether this proposed rule will be
adopted or, if adopted, whether it will affect their exemption under the Act.
Boston Gas has approximately 1,720 employees, of whom 71% are represented
by six local labor unions. In 1993, after a 17-week work stoppage, Boston Gas
entered into a new six-year labor contract with the bargaining units which,
among other things, provides for annual general wage increases of
approximately 4%, updates work rules and changes health care coverage to a
managed program with cost sharing.
Boston Gas' property consists almost entirely of utility property and
franchises, a portion of which is pledged as security for Boston Gas' first
mortgage bonds. Capital expenditures for 1993 totaled $47.1 million,
principally for replacements of and additions to mains, services and meters
and for computer systems.
MIDLAND ENTERPRISES INC.
Midland is primarily engaged through wholly owned subsidiaries in the
operation of a fleet of barges and towboats, principally on the Ohio and
Mississippi rivers and other parts of the inland waterway system, the Gulf
Intracoastal Waterway and the Gulf of Mexico. Midland transports bulk
commodities, a major portion of which is coal. In December 1993 Midland
disposed of its liquid cargo business through the sale of its tank barges, its
liquid transportation contract and the Chotin trade name. Through other
wholly-owned subsidiaries, Midland also performs repair work on marine
equipment and operates two coal terminals, a phosphate terminal and a marine
fuel supply facility. It suspended operations at its barge construction
facility in late 1993.
The following table indicates tonnages and ton miles transported by
Midland for the years 1991-1993:
1993 1992 1991
---- ---- ----
Tonnages (in millions) ........................... 62.5 62.4 60.6
Ton miles (in billions) .......................... 32.2 32.4 32.2
The record tonnage in 1993 increased slightly over 1992 with reduced
tonnage in coal, grain and phosphate more than offset by increased tonnage in
all other commodities. The 3% tonnage increase in 1992 reflected increased
spot coal, iron, scrap and steel and grain volumes. Approximately 2.6% of the
tonnage and 4.7% of the ton miles in 1993 were attributable to the liquid
cargo business sold in December 1993.
Ton miles are the product of tons and distance transported. The small
decrease in ton miles in 1993 reflected lower ton miles from coal, grain and
phosphate, mostly offset by higher ton miles in all other commodities. The
record ton miles in 1992 reflected increased ton miles from grain, aggregates
and ores, partially offset by lower coal ton miles. In addition to changes in
ton miles transported, Midland's revenues and net earnings are affected by
competitive conditions and weather. Due to the freezing of some northern
rivers and waterways during the winter months and increased coal consumption
by electric utilities during the summer months, average winter month revenues
tend to be lower than revenues for the remainder of the year.
The only significant raw material required to operate towboats is diesel
fuel. Diesel fuel is purchased from a variety of sources, and Midland regards
the availability of diesel fuel as adequate for presently planned operations.
Due to the capital-intensive, high-fixed-cost nature of Midland's
business, the negotiation of long-term contracts which facilitate steady and
efficient utilization of equipment is important to profitable operations.
Midland has long-term transportation and terminaling contracts which expire at
various dates from January 1995 through December 2007. During 1993
approximately 41% of Midland's revenues resulted from these contracts. No
customer accounted for 10% or more of Midland's 1993 revenues. A substantial
portion of the contracts provide for rate adjustments based on changes in
various costs, including diesel fuel costs, and contain "force majeure"
clauses which excuse performance by the parties to the contracts when
performance is prevented by circumstances beyond their reasonable control.
Many of these contracts have provisions for termination for specified causes
such as material breach of the contract, environmental restrictions on the
burning of coal, or loss by the customer of an underlying commodity supply
contract. Penalties for termination for such causes are not generally
specified. However, some contracts provide that in the event of an uncured
material breach by Midland which results in the termination of the contract,
Midland would be responsible for reimbursing its customer for the differential
between the contract price and the substituted performance.
The backlog of transportation and terminaling business under long-term
contract is summarized in the next table:
DECEMBER 31,
------------
1993 1992
---- ----
Tons (in millions) ....................................... 165.5 184.5
Revenues (in millions) ................................... $585.5 $773.2
Portions of revenue backlog not expected to be filled
within the current fiscal year ......................... 80% 81%
The 1993 revenue backlog (which is based on contracts that extend beyond
December 31, 1994) is shown at prices current as of December 31, 1993 which
are subject to escalation/de-escalation provisions. Since services under many
of the long-term contracts are based on customer requirements, Midland has
estimated its backlog based on its forecast of the requirements of these long-
term contract customers. About 50% of the decrease in the tonnage backlog is
due to the sale of the liquid barge business and its contract. About 40% of
the revenue backlog at December 31, 1993 is associated with a disputed
contract with Gulf Power Company, for which shipments have been curtailed.
The Interstate Commerce Act, as amended, exempts from regulation water
transportation of dry commodities which were transported in bulk as of June 1,
1939 (including coal, grain, phosphate rock, stone, sand and gravel and ores).
In addition, the Interstate Commerce Act exempts from regulation water
transportation of liquid cargoes in bulk. Approximately 96% of Midland's 1993
tonnage was exempt from regulation by the Interstate Commerce Commission
("ICC"). Regulated commodities include iron and steel products, other
manufactured products, packaged goods and scrap.
Improvements in operating efficiencies have permitted barge operators to
maintain competitive rate structures. Consequently, the barge industry has
been able to retain its competitive position relative to alternate methods of
transportation for bulk commodities when the origin and destination of such
movements are near or contiguous to navigable waterways.
Primary competitors of Midland's barge line subsidiaries include other
barge lines and railroads, including one integrated rail-barge carrier. There
are a number of companies offering transportation services on the waterways
served by Midland, including carriers licensed by the ICC and carriers not so
regulated. Railroads operating in areas served by the inland waterways compete
for cargoes carried by river barges. In many cases, these railroads offer unit
train service (an entire train committed to one customer) and dedicated
equipment service (equipment set aside for the exclusive use of a particular
customer) for coal, grain and other bulk commodities. In addition, rates
charged by both railroads and river barge operators are sometimes designed to
reflect special circumstances and requirements of the individual shippers. As
a result, it is difficult to compare rates charged for movements of the
various commodities between specific points.
Modern diesel-powered towboats such as those which comprise Midland's
towboat fleet are capable of moving approximately 22,500 tons in one tow
(equivalent to 225 one-hundred-ton-capacity railroad cars) on the Ohio River
and the Upper Mississippi River and approximately 60,000 tons (equivalent to
600 one-hundred-ton-capacity railroad cars) on the Lower Mississippi River,
where there are no locks, at average rates per ton mile which are generally
below those charged by Class 1 railroads.
Midland is subject to the provisions of the Federal Water Pollution
Control Act, the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, the Superfund Amendment and Reauthorization Act, the
Resource Conservation and Recovery Act of 1976 and the Oil Pollution Act of
1990, which permit the Coast Guard and the Environmental Protection Agency to
assess penalties for oil, hazardous substance, and hazardous waste discharges.
Compliance with these acts has had no material effect on Midland's capital
expenditures, earnings, or competitive position, and no such effect is
anticipated.
Midland and its subsidiaries have approximately 1,500 employees, of whom
28% are represented by labor unions.
As of December 31, 1993, Midland's floating equipment consisted of 2,461
barges and 91 boats. A substantial portion of this equipment is either
mortgaged to secure Midland's equipment financing obligations or chartered
under long term leases from third parties.
Capital expenditures for Midland in 1993 totaled $14.2 million. These
expenditures were made principally for renewal and replacement of the barge
fleet.
WATER PRODUCTS GROUP
Eastern's Water Products Group consisted of WaterPro Supplies Corporation
and Ionpure Technologies Corporation until December 1, 1993, when Ionpure was
sold to United States Filter Corporation ("U.S. Filter"). Ionpure designs,
manufactures and services ultrapure water purification systems for commercial
and industrial customers worldwide. Since Ionpure was operated for the
account of U.S. Filter after October 1, 1993, its subsequent operating results
have been excluded from Eastern's consolidated results. Eastern's interest in
U.S. Filter is accounted for as a Headquarters investment.
WATERPRO is a wholesale distributor of components for the repair,
improvement and expansion of municipal water supply and wastewater collection
systems. Effective late March, 1994 WaterPro is headquartered in Edina,
Minnesota. It operates 26 branches serving 23 states and has approximately 320
employees.
Pipe, fire hydrants, valves, fittings, meters and other components are
purchased from a variety of sources, including nationally branded products
made by prominent manufacturers. WaterPro regards these sources as adequate
for presently planned operations. Components are warehoused by WaterPro and
then sold to contractors, as well as cities, towns and private water utilities
for new systems, rehabilitation and improvement to existing lines and system
expansion. WaterPro's business is affected by housing starts and related
construction activity, municipal infrastructure spending levels and seasonal
weather conditions.
Competition in WaterPro's business is intense and is based principally on
price, service and product offering.
GENERAL
Certain information with respect to Eastern's compliance with Federal and
state environmental statutes may be found in Item 1(c) under "Boston Gas
Company" and "Midland Enterprises Inc." and Note 13 of the Notes to Financial
Statements of Eastern appearing on pages 42 and 43 of the annual report to
shareholders for the year ended December 31, 1993. Such information is
incorporated herein by reference.
Eastern and its wholly owned subsidiaries employed approximately 3,600
employees at December 31, 1993.
ITEM 2. PROPERTIES
Information with respect to this item may be found in Item 1(c) under
"Boston Gas Company," "Midland Enterprises Inc." and "Water Products Group".
Such information is incorporated herein by reference.
ITEM 3. LEGAL PROCEEDINGS
Information with respect to certain legal proceedings may be found in
Notes 13 and 14 of the Notes to Financial Statements of Eastern appearing on
pages 42 through 43 of the annual report to shareholders for the year ended
December 31, 1993 and in Item 1(c) hereof under "Boston Gas Company" and
"Midland Enterprises, Inc." Such information is incorporated herein by
reference.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matter was submitted to a vote of security holders in the fourth
quarter of 1993.
EXECUTIVE OFFICERS OF THE REGISTRANT
GENERAL
The table below identifies the executive officers of Eastern, who are
appointed annually and serve at the pleasure of the company's trustees.
OFFICE HELD
NAME TITLE AGE SINCE
---- ----- --- -----------
J. Atwood Ives ............ Chairman and Chief Executive Officer 57 1991
Richard R. Clayton ........ President and Chief Operating Officer 55 1991
Walter J. Flaherty ........ Senior Vice President and
Chief Financial Officer 45 1992
Richard J. Klau ........... Senior Vice President - President of
WaterPro Supplies Corporation 45 1991
Chester R. Messer ......... Senior Vice President - President of
Boston Gas Company 52 1988
Fred C. Raskin ............ Senior Vice President - President of
Midland Enterprises Inc. 45 1991
L. William Law, Jr. ....... General Counsel and Secretary 49 1987
BUSINESS EXPERIENCE
Prior to joining Eastern in 1991, J. Atwood Ives was Vice Chairman, Chief
Financial Officer and a member of the Office of the Chairman of General Cinema
Corporation (now Harcourt General, Inc.) and The Neiman Marcus Group, Inc.
Prior to joining Eastern in 1987 as Executive Vice President and Chief
Administrative Officer, Richard R. Clayton was Chairman, President and Chief
Executive Officer of Vermont Castings, Inc. He was Executive Vice President
and Chief Operating Officer of Eastern from 1990 to 1991.
Walter J. Flaherty was Vice President-Marketing, Public Relations and
Rates of Boston Gas from 1986 to 1988 and Senior Vice President-Administration
of Boston Gas from 1988 until joining Eastern in 1991 as its Senior Vice
President and Chief Administrative Officer. He has been an employee of Eastern
or its subsidiaries since 1971.
Richard J. Klau was President of Ionpure from 1989 to 1991. Prior to
joining Ionpure in 1989, he was Vice President and General Manager of the
Process Water Division of Millipore Corporation.
Chester R. Messer was Senior Vice President-Administration of Boston Gas
from 1986 to 1988 and Executive Vice President of Boston Gas in 1988. He was
elected a Senior Vice President of Eastern in 1988, when he became President
of Boston Gas. He has been an employee of Boston Gas since 1963.
Fred C. Raskin was Senior Vice President-Administration of Midland from
1987 to 1988 and Executive Vice President of Midland from 1988 to 1991. He was
elected a Senior Vice President of Eastern in 1991, when he became President
of Midland. He has been an employee of Eastern or its subsidiaries since 1978.
Prior to joining Eastern in 1987 as General Counsel and Secretary, L.
William Law, Jr. was General Counsel and Secretary of Boston Gas. He has been
an employee of Eastern or its subsidiaries since 1975.
PART II.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS
The Company's common stock is traded on the New York, Boston and Pacific
Stock Exchanges (ticker symbol EFU). The approximate number of shareholders at
December 31, 1993 was 6,600.
Information with respect to this item may be found in the sections
captioned "Cash Dividends Per Share" and "Stock Price Range" appearing on page
50 of the annual report to shareholders for the year ended December 31, 1993.
Such information is incorporated herein by reference.
ITEM 6. SELECTED FINANCIAL DATA
Information with respect to this item may be found in the section
captioned "Summary of Operations" appearing on page 48 of the annual report to
shareholders for the year ended December 31, 1993. Such information is
incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Information with respect to this item may be found under the captions,
"1993 Compared to 1992", "1992 Compared to 1991", "Liquidity and Capital
Resources" and "Other Matters" on pages 26 through 30 of the annual report to
shareholders for the year ended December 31, 1993. Such information is
incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Information with respect to this item appears on page F-1 of this report.
Such information is incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
PART III.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information with respect to this item may be found in the section
captioned "Information With Respect to Nominees and Trustees" appearing on
pages 4 through 6 of the 1994 definitive Proxy Statement. Such information is
incorporated herein by reference. See also the item captioned "Executive
Officers of the Registrant" at the end of Part I hereof.
ITEM 11. EXECUTIVE COMPENSATION
Information with respect to this item may be found in the section
captioned "Compensation of Executive Officers" appearing on pages 8 through 12
of the 1994 definitive Proxy Statement. Such information is incorporated
herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Information with respect to this item may be found in the sections
captioned "Information With Respect to Certain Shareholders" appearing on
pages 2 and 3 and "Stock Ownership of Trustees and Executive Officers"
appearing on page 7 of the 1994 definitive Proxy Statement. Such information
is incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information with respect to this item may be found in the last paragraph
in the section captioned "Compensation of Trustees" appearing on page 11 of
the 1994 definitive Proxy Statement. Such information is incorporated herein
by reference.
PART IV.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(A) (1) AND (2) LIST OF FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES
Information with respect to these items appears on page F-1 of this report.
Such information is incorporated herein by reference.
(3) LIST OF EXHIBITS
3.1 --Declaration of Trust of Eastern Enterprises, as amended through April 27,
1989 (filed as Exhibit 3.1 to Quarterly Report of Eastern Enterprises on Form
10-Q for the quarter ended June 30, 1989).*<F1>
3.2 --By-Laws of Eastern Enterprises, as amended through July 23, 1992 (filed as
Exhibit 3.1 to Quarterly Report of Eastern on Form 10-Q for the quarter ended
June 30, 1992).*<F1>
(NOTE: Eastern agrees to furnish to the Securities and Exchange Commission
upon request a copy of any instrument with respect to long-term debt of
Eastern or any of its subsidiaries. Such instruments are not filed herewith
since no such instrument authorizes securities in an amount greater than 10%
of the total assets of Eastern and its subsidiaries on a consolidated basis.)
4.1 --Common Stock Rights Agreement between Eastern and The Bank of New York, dated
as of February 22, 1990, and Exhibits attached thereto (filed as Exhibits to
Form 8-K dated March 1, 1990).*<F1>
10.1 --Gas Transportation Contract between Boston Gas Company and Tennessee Gas
Pipeline Company dated as of September 1, 1993 (filed as Exhibit 10.1 to
Annual Report of Boston Gas Company on Form 10-K for the year ended December
31, 1993 (File no. 2-23416)).*<F1>
10.2 --Gas Transportation Contracts between Boston Gas Company and Texas Eastern
Transmission Corporation dated December 30, 1993 (filed as Exhibits 10.2 and
10.3 to Annual Report of Boston Gas Company on Form 10-K for the year ended
December 31, 1993 (File no. 2-23416)).*<F1>
10.3 --Gas Transportation Contracts between Boston Gas Company and Algonquin Gas
Transmission Company dated December 30, 1993 (filed as Exhibits 10.4 and 10.5
to Annual Report of Boston Gas Company on Form 10-K for the year ended
December 31, 1993 (File no. 2-23416)).*<F1>
10.4 --Gas Sales Contract between Boston Gas Company and Esso Resources Canada,
Limited, dated as of May 1, 1989, as amended, (filed as Exhibits 10.12 and
10.12.1 to the Annual Report of Boston Gas Company on Form 10-K for the year
ended December 31, 1989 (File no. 2-23416)).*<F1>
10.5 --Gas Sales Agreement between Boston Gas Company and Alberta Northeast Gas
Limited, dated as of February 7, 1991 (filed as Exhibit 10.16 to the Annual
Report of Boston Gas Company on Form 10-K for the year ended December 31,
1990 (File no. 2-23416)).*<F1>
10.6 --Firm Gas Transportation Agreement between Boston Gas Company and Iroquois Gas
Transmission System, L.P., dated as of February 7, 1991 (filed as Exhibit
10.17 to the Annual Report of Boston Gas Company on Form 10-K for the year
ended December 31, 1990 (File no. 2-23416)).*<F1>
10.7 --Eastern's Deferred Compensation Plan for Trustees, as amended .(a)<F2>
10.8 --Eastern's 1982 Stock Option Plan, as amended (filed as Exhibit 10.2 to
Quarterly Report of Eastern on Form 10-Q for the quarter ended March 31,
1992).*(a)<F1><F2>
10.9 --Eastern's Supplemental Executive Retirement Plan, as amended.(a)<F2>
10.10 --Trust Agreement between Eastern and Shawmut Bank of Boston, N.A., as amended
(filed as Exhibit 10.12 to the Annual Report of Eastern on Form 10-K for the
year ended December 31, 1990).*(a)<F1><F2>
10.11 --Eastern's Executive Incentive Compensation Plan, as amended (filed as Exhibit
10.3 to Quarterly Report of Eastern on Form 10-Q for the quarter ended March
31, 1992).*(a)<F1><F2>
10.12 --Salary Continuation Agreements between Eastern and certain officers, as
amended (filed as Exhibit 10.13 to the Annual Report of Eastern on Form 10-K
for the year ended December 31, 1991).*(a)<F1><F2>
10.13 --Agreement dated November 27, 1991 between Eastern and J. Atwood Ives (filed
as Exhibit 10.14 to the Annual Report of Eastern on Form 10-K for the year
ended December 31, 1991).*(a)<F1><F2>
10.14 --Agreement dated October 25, 1991 between Eastern and Richard R. Clayton
(filed as Exhibit 10.15 to the Annual Report of Eastern on Form 10-K for the
year ended December 31, 1991).*(a)<F1><F2>
10.15 --Eastern's Headquarters Retirement Plan, as amended and restated (filed as
Exhibit 10.1 to Quarterly Report of Eastern on Form 10-Q for the quarter
ended September 30, 1991).*(a)<F1><F2>
10.16 --Midland Enterprises Inc. Salaried Retirement Plan, as amended and restated
(filed as Exhibit 10.2 to Quarterly Report of Eastern on Form 10-Q for the
quarter ended September 30, 1991).*(a)<F1><F2>
10.17 --Boston Gas Company Retirement Plan, as amended and restated (filed as Exhibit
10.3 to Quarterly Report of Eastern on Form 10-Q for the quarter ended
September 30, 1991).*(a)<F2><F1>
10.18 --Trust Agreement made as of October 2, 1987 between Eastern and The Bank of
New York, as amended (filed as Exhibit 10.19 to the Annual Report of Eastern
on Form 10-K for the year ended December 31, 1990).*(a)<F1><F2>
10.19 --Eastern's Retirement Plan for Non-Employee Trustees, as amended (filed as
Exhibit 10.22 to Annual Report of Eastern on Form 10-K for the year ended
December 31, 1992).*(a)<F1><F2>
10.20 --Eastern's 1992 Restricted Stock Plan (filed as Exhibit 10.1 to Quarterly
Report of Eastern on Form 10-Q for the quarter ended March 31, 1992).*(a)<F1><F2>
10.21 --Eastern's Restricted Stock Plan for Non-Employee Trustees (filed as Exhibit
10.24 to Annual Report of Eastern on Form 10-K for the year ended December
31, 1992).*(a)<F1><F2>
10.22 --Eastern's 1994 Deferred Compensation Plan.(a)<F2>
13.1 --Portions incorporated herein of annual report to shareholders for the year
ended December 31, 1993. With the exception of the information incorporated
by reference in Items 1, 3, 5, 6, 7 and 8 of this Form 10-K, the annual
report to shareholders for the year ended December 31, 1993 is not deemed
filed as a part of this report.
21.1 --Subsidiaries of the registrant.
Eastern will furnish a copy of any exhibit not included herewith to any
holder of Eastern's common stock upon payment of the cost of reproduction and
mailing.
(B) REPORTS ON FORM 8-K
There were no reports on Form 8-K filed in the fourth quarter of 1993.
<F1>
- -------------
<F1> *Not filed herewith. In accordance with Rule 12b-32 of the General Rules
and Regulations under the Securities and Exchange Act of 1934, reference is
made to the document previously filed with the Commission.
<F2> (a) Indicates a Management Contract or Compensatory Plan or Arrangement.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
EASTERN ENTERPRISES
Registrant
By JAMES J. HARPER
-------------------------------------
JAMES J. HARPER
Vice President and Controller
(Chief Accounting Officer)
Date: March 14, 1994.
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities indicated on the 14th day of March, 1994.
SIGNATURE TITLE
--------- -----
J. ATWOOD IVES Chairman and Chief Executive Officer
- ---------------------------------------------------- and Trustee
J. ATWOOD IVES
RICHARD R. CLAYTON President and Chief Operating Officer
- ---------------------------------------------------- and Trustee
RICHARD R. CLAYTON
WALTER J. FLAHERTY Senior Vice President and
- ---------------------------------------------------- Chief Financial Officer
WALTER J. FLAHERTY
NELSON J. DARLING, JR. Trustee
- ----------------------------------------------------
NELSON J. DARLING, JR.
SAMUEL FRANKENHEIM Trustee
- ----------------------------------------------------
SAMUEL FRANKENHEIM
DEAN W. FREED Trustee
- ----------------------------------------------------
DEAN W. FREED
ROBERT P. HENDERSON Trustee
- ----------------------------------------------------
ROBERT P. HENDERSON
LEONARD R. JASKOL Trustee
- ----------------------------------------------------
LEONARD R. JASKOL
THOMAS W. JONES Trustee
- ----------------------------------------------------
THOMAS W. JONES
HAROLD T. MILLER Trustee
- ----------------------------------------------------
HAROLD T. MILLER
WILLIAM J. PRUYN Trustee
- ----------------------------------------------------
WILLIAM J. PRUYN
WILLIAM G. SALATICH Trustee
- ----------------------------------------------------
WILLIAM G. SALATICH
RINA K. SPENCE Trustee
- ----------------------------------------------------
RINA K. SPENCE
LAWRENCE E. THOMPSON Trustee
- ----------------------------------------------------
LAWRENCE E. THOMPSON
(Page F-1)
EASTERN ENTERPRISES AND SUBSIDIARIES
INDEX TO FINANCIAL STATEMENTS AND SCHEDULES
DECEMBER 31, 1993
(SUBMITTED IN ANSWER TO ITEMS 8 AND 14(A)(1) AND (2) OF FORM 10-K,
SECURITIES AND EXCHANGE COMMISSION)
FINANCIAL STATEMENTS
PAGE
----
EASTERN ENTERPRISES AND SUBSIDIARIES:
Report of independent public accountants ............................................ 47*<F1>
Report of independent public accountants on schedules ............................... F-2
Consent of independent public accountants ........................................... F-2
Consolidated:
Statements of operations for each of the three years ended December 31, 1993 ...... 31*<F1>
Balance sheets as of December 31, 1993 and 1992 ................................... 32*<F1>
Statements of cash flows for each of the three years ended December 31, 1993 ...... 34*<F1>
Statements of shareholders' equity for each of the three years ended
December 31, 1993 ............................................................... 35*<F1>
Notes to financial statements ..................................................... 36*<F1>
Unaudited interim financial information for the two years ended December 31, 1993 . 46*<F1>
SCHEDULES (PAGES F-3 THROUGH F-13)
V Property and equipment
VI Accumulated depreciation and amortization of property and equipment
VIII Valuation and qualifying accounts and reserves
IX Short-term borrowings
X Supplementary earnings statement information
Schedules not listed above are omitted as not applicable or not required under
the rules of Regulation S-X.
<FN>
- ---------
<F1>*Incorporated herein by reference to Eastern's annual report to shareholders
for the year ended Decem- ber 31, 1993, incorporated portions of which are
attached to this Form 10-K as Exhibit 13.1. Page references are to such
annual report.
(Page F-2)
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS ON SCHEDULES
TO EASTERN ENTERPRISES:
We have audited, in accordance with generally accepted auditing standards,
the consolidated financial statements included in Eastern Enterprises Annual
Report to Shareholders incorporated by reference in this Form 10-K, and have
issued our report thereon dated February 4, 1994. Our audit was made for the
purpose of forming an opinion on those statements taken as a whole. The
schedules listed in the index on page F-1 are the responsibility of Eastern's
management and are presented for purposes of complying with the Securities and
Exchange Commission's rules and are not part of the basic financial
statements. These schedules have been subjected to the auditing procedures
applied in the audit of the basic financial statements and, in our opinion,
fairly state in all material respects the financial data required to be set
forth therein in relation to the basic financial statements taken as a whole.
ARTHUR ANDERSEN & CO.
Boston, Massachusetts
February 4, 1994
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference of our reports, dated February 4, 1994, included in, and
incorporated by reference into, Eastern Enterprises Annual Report on this Form
10-K for the year ended December 31, 1993, into Eastern's previously filed
Post-Effective Amendment No. 1 to Form S-16 Registration Statement No. 2-71614
on Form S-3 and Form S-8 Registration Statements No. 2-77146, No. 33-19990,
No. 33-40862 and No. 33-56424.
ARTHUR ANDERSEN & CO.
Boston, Massachusetts
March 14, 1994
(Page F-3)
SCHEDULE V
EASTERN ENTERPRISES AND SUBSIDIARIES
PROPERTY AND EQUIPMENT
FOR THE YEAR ENDED DECEMBER 31, 1993
(THOUSANDS)
BALANCE SALES BALANCE
DECEMBER 31, ADDITIONS AND DECEMBER 31,
CLASSIFICATION 1992 AT COST RETIREMENTS OTHER(1)<F1> 1993
-------------- ------------ --------- ----------- -------- ------------
Gas utility --
Land and rights-of-way ....... $ 4,223 $ (161) $ -- $ -- $ 4,062
Structures ................... 29,284 2,462 (516) -- 31,230
Street mains ................. 253,110 13,104 (565) -- 265,649
Transportation equipment ..... 4,761 126 (152) -- 4,735
Other equipment .............. 293,834 21,499 (10,952) -- 304,381
Improvements and replacements
in progress ................ 186 7,945 -- -- 8,131
Miscellaneous property ....... 38,513 2,082 (1,072) -- 39,523
--------- ------ -------- -------- ---------
$ 623,911 $47,057 $(13,257) $ -- $ 657,711
--------- ------ -------- -------- ---------
Marine fleet and facilities --
Land ......................... $ 5,188 $ -- $ (52) $ 23 $ 5,159
Towboats and barges .......... 556,753 13,861 (22,687) 5,278) 542,649
Terminals and other facilities 59,698 330 (2,005) (684) 57,339
--------- ------ -------- -------- ---------
$ 621,639 $14,191 $(24,744) $ (5,939) $ 605,147
--------- ------ -------- -------- ---------
Water products distribution and
manufacturing --
Land ......................... $ 140 $ 172 $ -- $ -- $ 312
Buildings, machinery and
equipment .................. 20,643 891 (24) (16,283) 5,227
Furniture and fixtures ....... 2,231 130 (4) (1,646) 711
Autos and trucks ............. 1,530 118 (114) (595) 939
Improvements and replacements
in progress .................. 460 1,630 -- (2,090) --
--------- ------ -------- -------- ---------
$ 25,004 $ 2,941 $ (142) $(20,614) $ 7,189
--------- ------ -------- -------- ---------
Headquarters --
Land and land improvements ... $ 2,000 $ -- $ -- $ -- $ 2,000
Buildings, machinery and
equipment .................. 2,176 48 (6) 19 2,237
Furniture and fixtures ....... 663 31 (23) (4) 667
Autos and trucks ............. 180 123 (93) -- 210
--------- ------ -------- -------- ---------
$ 5,019 $ 202 $ (122) $ 15 $ 5,114
--------- ------ -------- -------- ---------
Total consolidated ....... $1,275,573 $64,391 $(38,265) $(26,538) $1,275,161
--------- ------ -------- -------- ---------
--------- ------ -------- -------- ---------
<FN>
- ---------
<F1>(1)Water products decreases reflect sale of Ionpure.
(Page F-4)
SCHEDULE V
EASTERN ENTERPRISES AND SUBSIDIARIES
PROPERTY AND EQUIPMENT
FOR THE YEAR ENDED DECEMBER 31, 1992
(THOUSANDS)
BALANCE SALES BALANCE
DECEMBER 31, ADDITIONS AND DECEMBER 31,
CLASSIFICATION 1991 AT COST RETIREMENTS OTHER 1992
-------------- ------------ --------- ----------- ----- ------------
Gas utility --
Land and rights-of-way ........ $ 3,920 $ 303 $ -- $ -- $ 4,223
Structures .................... 23,412 6,065 (193) -- 29,284
Street mains .................. 228,599 25,619 (1,108) -- 253,110
Transportation equipment ...... 6,126 48 (1,413) -- 4,761
Other equipment ............... 271,081 27,639 (4,886) -- 293,834
Improvements and replacements
in progress ................. 35,839 (35,653) -- -- 186
Miscellaneous property ........ 11,398 27,115 -- -- 38,513
--------- ------ ------- ------ ---------
$ 580,375 $51,136 $ (7,600) $ -- $ 623,911
--------- ------ ------- ------ ---------
Marine fleet and facilities --
Land .......................... $ 5,188 $ -- $ -- $ -- $ 5,188
Towboats and barges ........... 538,271 27,634 (2,799) (6,353) 556,753
Terminals and other facilities 59,350 1,693 (403) (942) 59,698
--------- ------ ------- ------ ---------
$ 602,809 $29,327 $ (3,202) $ (7,295) $ 621,639
--------- ------ ------- ------ ---------
Water products distribution and
manufacturing --
Land .......................... $ 140 $ -- $ -- $ -- $ 140
Buildings, machinery and
equipment ................... 14,366 167 (23) 6,133 20,643
Furniture and fixtures ........ 1,858 107 (2) 268 2,231
Autos and trucks .............. 1,522 161 (66) (87) 1,530
Improvements and replacements
in progress ................. 4,695 1,918 -- (6,153) 460
--------- ------ ------- ------ ---------
$ 22,581 $ 2,353 $ (91) $ 161 $ 25,004
--------- ------ ------- ------ ---------
Headquarters --
Land and land improvements .... $ 2,000 $ -- $ -- $ -- $ 2,000
Buildings, machinery and
equipment ................... 2,149 75 (48) -- 2,176
Furniture and fixtures ........ 665 -- (2) -- 663
Autos and trucks .............. 231 -- (51) -- 180
--------- ------ ------- ------ ---------
$ 5,045 $ 75 $ (101) $ -- $ 5,019
--------- ------ ------- ------ ---------
Total consolidated ........ $1,210,810 $82,891 $ (10,994) $(7,134) $1,275,573
--------- ------ ------- ------ ---------
--------- ------ ------- ------ ---------
(Page F-5)
SCHEDULE V
EASTERN ENTERPRISES AND SUBSIDIARIES
PROPERTY AND EQUIPMENT
FOR THE YEAR ENDED DECEMBER 31, 1991
(THOUSANDS)
BALANCE SALES BALANCE
DECEMBER 31, ADDITIONS AND DECEMBER 31,
CLASSIFICATION 1990 AT COST RETIREMENTS OTHER 1991
-------------- ------------ --------- ----------- ----- ------------
Gas utility --
Land and rights-of-way ....... $ 3,920 $ -- $ -- $ -- $ 3,920
Structures ................... 21,828 1,624 (40) -- 23,412
Street mains ................. 210,690 18,890 (981) -- 228,599
Transportation equipment ..... 8,285 155 (2,314) -- 6,126
Other equipment .............. 251,345 26,435 (6,699) -- 271,081
Improvements and replacements
in progress ................ 25,993 9,846 -- -- 35,839
Miscellaneous property ....... 10,977 450 (29) -- 11,398
---------- -------- -------- ------- ----------
$ 533,038 $ 57,400 $(10,063) $ -- $ 580,375
---------- -------- -------- ------- ----------
Marine fleet and facilities --
Land ......................... $ 5,225 $ -- $ (37) $ -- $ 5,188
Towboats and barges .......... 498,892 47,184 (3,804) (4,001) 538,271
Terminals and other facilities 58,211 1,347 (208) -- 59,350
---------- -------- -------- ------- ----------
$ 562,328 $ 48,531 $ (4,049) $(4,001) $ 602,809
---------- -------- -------- ------- ----------
Water products distribution and
manufacturing --
Land ......................... $ 140 $ -- $ -- $ -- $ 140
Buildings, machinery and
equipment .................. 6,669 1,735 13 5,949 14,366
Furniture and fixtures ....... 903 59 (33) 929 1,858
Autos and trucks ............. 926 142 (76) 530 1,522
Improvements and replacements
in progress ................ 7,133 4,015 -- (6,453) 4,695
---------- -------- -------- ------- ----------
$ 15,771 $ 5,951 $ (96) $ 955 $ 22,581
---------- -------- -------- ------- ----------
Headquarters --
Land and land improvements ... $ 2,400 $ -- $ -- $ (400) $ 2,000
Buildings, machinery and
equipment .................. 2,053 96 -- -- 2,149
Furniture and fixtures ....... 616 49 -- -- 665
Autos and trucks ............. 256 58 (83) -- 231
---------- -------- -------- ------- ----------
$ 5,325 $ 203 $ (83) $ (400) $ 5,045
---------- -------- -------- ------- ----------
Total consolidated ....... $1,116,462 $112,085 $(14,291) $(3,446) $1,210,810
---------- -------- -------- ------- ----------
---------- -------- -------- ------- ----------
(Page F-6)
SCHEDULE VI
EASTERN ENTERPRISES AND SUBSIDIARIES
ACCUMULATED DEPRECIATION AND
AMORTIZATION OF PROPERTY AND EQUIPMENT
FOR THE YEAR ENDED DECEMBER 31, 1993
(THOUSANDS)
ADDITIONS
------------------------
CHARGED
BALANCE TO COSTS CHARGED BALANCE
DECEMBER 31, AND TO OTHER SALES AND DECEMBER 31,
CLASSIFICATION 1992 EXPENSES ACCOUNTS RETIREMENTS OTHER\1/<F1> 1993
-------------- ------------ -------- -------- ----------- -------- ------------
Gas utility ................... $182,550 $27,566 $1,921 $(12,426) $ (4,327) $195,284
------- ------ ----- -------- -------- -------
Marine fleet and facilities --
Towboats and barges ......... $248,087 $22,850 $ 693 $(21,533) $ -- $250,097
Terminals and other
facilities................. 36,407 2,439 96 (538) -- 38,404
------- ------ ----- -------- -------- -------
$284,494 $25,289 $ 789 $(22,071) $ -- $288,501
------- ------ ----- -------- -------- -------
Water products distribution and
manufacturing --
Buildings, machinery and
equipment .................. $ 5,363 $ 2,444 $ -- $ (18) $ (5,395) $ 2,394
Furniture and fixtures ...... 822 389 -- (2) (801) 408
Autos and trucks ............ 762 275 -- (80) (390) 567
------- ------ ----- -------- -------- -------
$ 6,947 $ 3,108 $ -- $ (100) $ (6,586) $ 3,369
------- ------ ----- -------- -------- -------
Headquarters --
Buildings, machinery and
equipment .................. $ 1,195 $ 232 $ -- $ -- $ -- $ 1,427
Furniture and fixtures ...... 476 61 (12) -- -- 525
Autos and trucks ............ 132 50 -- (92) -- 90
------- ------ ----- -------- -------- -------
$ 1,803 $ 343 $ (12) $ (92) $ -- $ 2,042
------- ------ ----- -------- -------- -------
Total consolidated ...... $475,794 $56,306 $2,698 $(34,689) $(10,913) $489,196
------- ------ ----- -------- -------- -------
------- ------ ----- -------- -------- -------
<FN>
- ------------
<F1>\1/ Water products decreases reflect sale of Ionpure.
(Page F-7)
SCHEDULE VI
EASTERN ENTERPRISES AND SUBSIDIARIES
ACCUMULATED DEPRECIATION AND
AMORTIZATION OF PROPERTY AND EQUIPMENT
FOR THE YEAR ENDED DECEMBER 31, 1992
(THOUSANDS)
ADDITIONS
-----------------------------
CHARGED
BALANCE TO COSTS CHARGED BALANCE
DECEMBER 31, AND TO OTHER SALES AND DECEMBER 31,
CLASSIFICATION 1991 EXPENSES ACCOUNTS RETIREMENTS OTHER 1992
-------------- ------------ -------- -------- ----------- ----- ------------
Gas utility ............... $173,927 $22,493 $2,018 $ (7,600) $ (8,288) $182,550
-------- ------- ------ --------- --------- --------
Marine fleet and facilities --
Towboats and barges ..... $234,411 $22,143 $ 645 $ (2,759) $ (6,353) $248,087
Terminals and other
facilities ............ 34,250 2,464 104 (411) -- 36,407
-------- ------- ------ --------- -------- --------
$268,661 $24,607 $ 749 $ (3,170) $ (6,353) $284,494
-------- ------- ------ --------- -------- --------
Water products distribution
and manufacturing --
Buildings, machinery and
equipment ............. $ 2,791 $ 2,569 $ 9 $ (6) $ -- $ 5,363
Furniture and fixtures .. 433 380 9 -- -- 822
Autos and trucks ........ 522 287 (15) (32) -- 762
-------- ------- ------ --------- -------- --------
$ 3,746 $ 3,236 $ 3 $ (38) $ -- $ 6,947
-------- ------- ------ --------- -------- --------
Headquarters --
Buildings, machinery and
equipment ............. $ 950 $ 284 $ -- $ (39) $ -- $ 1,195
Furniture and fixtures .. 366 111 -- (1) -- 476
Autos and trucks ........ 116 50 8 (42) -- 132
-------- ------- ------ --------- -------- --------
$ 1,432 $ 445 $ 8 $ (82) $ -- $ 1,803
-------- ------- ------ --------- -------- --------
Total consolidated .... $447,766 $50,781 $2,778 $ (10,890) $(14,641) $475,794
-------- ------- ------ --------- -------- --------
-------- ------- ------ --------- -------- --------
(Page F-8)
SCHEDULE VI
EASTERN ENTERPRISES AND SUBSIDIARIES
ACCUMULATED DEPRECIATION AND
AMORTIZATION OF PROPERTY AND EQUIPMENT
FOR THE YEAR ENDED DECEMBER 31, 1991
(THOUSANDS)
ADDITIONS
-----------------------
CHARGED
BALANCE TO COSTS CHARGED BALANCE
DECEMBER 31, AND TO OTHER SALES AND DECEMBER 31,
CLASSIFICATION 1990 EXPENSES ACCOUNTS RETIREMENTS OTHER 1991
-------------- ------------ -------- -------- ----------- ----- ------------
Gas utility ..................... $167,012 $18,685 $1,866 $(10,063) $(3,573) $173,927
------- ------ ----- ------- ------ -------
Marine fleet and facilities --
Towboats and barges ........... $221,025 $19,868 $ 665 $ (3,146) $(4,001) $234,411
Terminals and other facilities 31,946 2,372 113 (181) -- 34,250
------- ------ ----- ------- ------ -------
$252,971 $22,240 $ 778 $ (3,327) $(4,001) $268,661
------- ------ ----- ------- ------ -------
Water products distribution and
manufacturing --
Buildings, machinery and
equipment .................... $ 1,155 $ 1,795 $ -- $ (163) $ 4 $ 2,791
Furniture and fixtures ........ 115 327 -- (5) (4) 433
Autos and trucks .............. 201 338 -- (17) -- 522
------- ------ ----- ------- ------ -------
$ 1,471 $ 2,460 $ -- $ (185) $ -- $ 3,746
------- ------ ----- ------- ------ -------
Headquarters --
Buildings, machinery and
equipment ................... $ 678 $ 272 $ -- $ -- $ -- $ 950
Furniture and fixtures ........ 260 106 -- -- -- 366
Autos and trucks .............. 162 43 5 (94) -- 116
------- ------ ----- ------- ------ -------
$ 1,100 $ 421 $ 5 $ (94) $ -- $ 1,432
------- ------ ----- ------- ------ -------
Total consolidated ........ $422,554 $43,806 $2,649 $(13,669) $(7,574) $447,766
------- ------ ----- ------- ------ -------
------- ------ ----- ------- ------ -------
(Page F-9)
SCHEDULE VIII
EASTERN ENTERPRISES AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
FOR THE YEAR ENDED DECEMBER 31, 1993
(THOUSANDS)
ADDITIONS DEDUCTIONS
--------------------------- ------------
CHARGES
CHARGED FOR WHICH
BALANCE TO COSTS CHARGED RESERVES BALANCE
DECEMBER 31, AND TO OTHER WERE DECEMBER 31,
DESCRIPTION 1992 EXPENSES ACCOUNTS CREATED 1993
----------- ------------ -------- -------- ------- ------------
Reserves deducted from assets --
Reserves for doubtful accounts . $ 12,630 $ 13,893 $ (402) $(11,655) $ 14,466
-------- -------- ------- -------- --------
-------- -------- ------- -------- --------
Reserves for inventory ......... $ 3,214 $ 1,169 $(2,843) $ (897) $ 643
-------- -------- ------- -------- --------
-------- -------- ------- -------- --------
Reserves for loss on investments $ 19 $ -- $ -- $ -- $ 19
-------- -------- ------- -------- --------
-------- -------- ------- -------- --------
Reserves included in liabilities --
Reserve for post-retirement
health care .................. $103,760 $ 1,364 $ 5,233 $ (5,627) $104,730
Reserve for coal miners retiree
health care .................. -- 70,000 -- -- 70,000
Reserves for employee benefits . 12,425 8,969 (1,978) (8,755) 10,661
Reserves for environmental
expenses ..................... 6,746 5,639 (159) (1,360) 10,866
Reserves for insurance claims .. 9,202 6,369 1,098 (7,502) 9,167
Other .......................... 25,367 8,027 (6,887) (5,253) 21,254
-------- -------- ------- -------- --------
Total liability reserves ... $157,500 $100,368 $(2,693) $(28,497) $226,678
-------- -------- ------- -------- --------
-------- -------- ------- -------- --------
(Page F-10)
SCHEDULE VIII
EASTERN ENTERPRISES AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
FOR THE YEAR ENDED DECEMBER 31, 1992
(THOUSANDS)
ADDITIONS DEDUCTIONS
-------------------------------- ---------------
CHARGES
CHARGED FOR WHICH
BALANCE TO COSTS CHARGED RESERVES BALANCE
DECEMBER 31, AND TO OTHER WERE DECEMBER 31,
DESCRIPTION 1991 EXPENSES ACCOUNTS CREATED 1992
----------- ------------ -------- -------- ------- ------------
Reserves deducted from assets --
Reserves for doubtful accounts ... $ 11,274 $12,739 $ 150 $(11,533) $ 12,630
-------- ------- ------- -------- -------
-------- ------- ------- -------- -------
Reserves for inventory ........... $ 2,712 $ 554 $ -- $ (52) $ 3,214
-------- ------- ------- -------- -------
-------- ------- ------- -------- -------
Reserve for loss on investments .. $ 19 $ -- $ -- $ -- $ 19
-------- ------- ------- -------- -------
-------- ------- ------- -------- -------
Reserves included in liabilities --
Reserves for post-retirement
health care .................... $103,502 $10,258 $ 432 $(10,432) $103,760
Reserves for employee benefits ... 11,608 9,723 (144) (8,762) 12,425
Reserves for environmental
expenses ....................... 7,367 2,500 282 (3,403) 6,746
Reserves for insurance claims .... 10,235 7,032 232 (8,297) 9,202
Other ............................ 14,778 4,783 15,844\1/<F1> (10,038) 25,367
-------- ------- ------- -------- -------
Total liability reserves ..... $147,490 $34,296 $16,646 $(40,932) $157,500
-------- ------- ------- -------- -------
-------- ------- ------- -------- -------
<FN>
- ---------
<F1>\1/SFAS 109 gross up for deferred taxes on regulatory liabilities of Boston
Gas Company.
(Page F-11)
SCHEDULE VIII
EASTERN ENTERPRISES AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
FOR THE YEAR ENDED DECEMBER 31, 1991
(THOUSANDS)
DEDUCTIONS
ADDITIONS --------------
------------------------------ CHARGES
CHARGED FOR WHICH
BALANCE TO COSTS CHARGED RESERVES BALANCE
DECEMBER 31, AND TO OTHER WERE DECEMBER 31,
DESCRIPTION 1990 EXPENSES ACCOUNTS CREATED 1991
----------- ------------ -------- -------- ------- ------------
Reserves deducted from assets --
Reserves for doubtful accounts ..... $ 7,155 $14,152 $ 880 $(10,913) $ 11,274
------- ------- -------- -------- -------
------- ------- -------- -------- -------
Reserves for inventory $ 1,027 $ 1,600 $ 293 $ (208) $ 2,712
------- ------- -------- -------- -------
------- ------- -------- -------- -------
Reserve for loss on investments .... $ 19 $ -- $ -- $ -- $ 19
------- ------- -------- -------- -------
------- ------- -------- -------- -------
Reserves included in liabilities --
Reserves for post-retirement
health care ...................... $ 1,515 $13,266 $ 94,250\1/<F1> $ (5,529) $103,502
Reserves for employee benefits ..... 24,662 9,120 (11,286)\2/<F2> (10,888) 11,608
Reserves for environmental expenses. 4,601 5,410 140 (2,784) 7,367
Reserves for insurance claims ...... 11,141 6,149 1,339 (8,394) 10,235
Other .............................. 15,610 7,493 4,382 (12,707) 14,778
------- ------- -------- -------- -------
Total liability reserves ....... $57,529 $41,438 $ 88,825 $(40,302) $147,490
------- ------- -------- -------- -------
------- ------- -------- -------- -------
<FN>
- ---------
<F1>\1/Health care costs deferred by Boston Gas Company.
<F2>\2/Decrease in pension minimum funding liability.
(Page F-12)
SCHEDULE IX
EASTERN ENTERPRISES AND SUBSIDIARIES
SHORT-TERM BORROWINGS
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
(THOUSANDS)
MAXIMUM AVERAGE WEIGHTED
BALANCE WEIGHTED AMOUNT AMOUNT AVERAGE
AT END AVERAGE OUTSTANDING OUTSTANDING INTEREST RATE
OF INTEREST DURING THE DURING THE DURING THE
YEAR DESCRIPTION PERIOD RATE PERIOD PERIOD(1)<F1> PERIOD(2)<F2>
- ---- ----------- ------ -------- ----------- --------- -------------
1993 ....... Notes payable ................... $106,300 3.5% $110,869 $56,746 3.7%
-------- ---- -------- ------- ----
-------- ---- -------- ------- ----
1992 ....... Notes payable ................... $ 54,944 4.3% $ 73,612 $35,785 5.0%
-------- ---- -------- ------- ----
-------- ---- -------- ------- ----
1991 ....... Notes payable ................... $ 56,418 5.7% $ 56,418 $27,825 7.3%
-------- ---- -------- ------- ----
<FN>
- ---------
<F1>(1) Average daily balances.
<F2>(2) Actual interest incurred divided by average principal amount outstanding
during the period.
(Page F-13)
SCHEDULE X
EASTERN ENTERPRISES AND SUBSIDIARIES
SUPPLEMENTARY EARNINGS STATEMENT INFORMATION
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
(THOUSANDS)
1993 1992 1991
---- ---- ----
Maintenance and repairs ............................. $49,903 $44,917 $43,536
Taxes, other than payroll and
income taxes:
Real estate and personal property ............... $11,016 $ 7,001 $ 6,151
Other ........................................... $ 8,425 $ 6,969 $ 6,695
EXHIBIT INDEX
See Item 14(a)(3), "List of Exhibits," for statement of the location of
exhibits incorporated by reference.
EXHIBIT
-------
3.1 --Declaration of Trust of Eastern Enterprises, as amended through April 27,
1989 (incorporated by reference).
3.2 --By-Laws of Eastern Enterprises, as amended through July 23, 1992
(incorporated by reference).
4.1 --Common Stock Rights Agreement between Eastern and The Bank of New York, dated
as of February 22, 1990, and Exhibits attached thereto (incorporated by
reference).
10.1 --Gas Transportation Contract between Boston Gas Company and Tennessee Gas
Pipeline Company dated as of September 1, 1993 (incorporated by reference).
10.2 --Gas Transportation Contracts between Boston Gas Company and Texas Eastern
Transmission Corporation dated December 30, 1993 (incorporated by reference).
10.3 --Gas Transportation Contracts between Boston Gas Company and Algonquin Gas
Transmission Company dated December 30, 1993 (incorporated by reference).
10.4 --Gas Sales Contract between Boston Gas Company and Esso Resources Canada,
Limited, dated as of May 1, 1989, as amended (incorporated by reference).
10.5 --Gas Sales Agreement between Boston Gas Company and Alberta Northeast Gas
Limited, dated as of February 7, 1991 (incorporated by reference).
10.6 --Firm Gas Transportation Agreement between Boston Gas Company and Iroquois Gas
Transmission System, L.P., dated as of February 7, 1991 (incorporated by
reference).
10.7 --Eastern's Deferred Compensation Plan for Trustees, as amended.
10.8 --Eastern's 1982 Stock Option Plan, as amended (incorporated by reference).
10.9 --Eastern's Supplemental Executive Retirement Plan, as amended.
10.10 --Trust Agreement between Eastern and Shawmut Bank of Boston, N.A., as amended
(incorporated by reference).
10.11 --Eastern's Executive Incentive Compensation Plan, as amended (incorporated by
reference).
10.12 --Salary Continuation Agreements between Eastern and certain officers, as
amended (incorporated by reference).
10.13 --Agreement dated November 27, 1991 between Eastern and J. Atwood Ives
(incorporated by reference).
10.14 --Agreement dated October 25, 1991 between Eastern and Richard R. Clayton
(incorporated by reference).
10.15 --Eastern's Headquarters Retirement Plan, as amended and restated (incorporated
by reference).
10.16 --Midland Enterprises Inc. Salaried Retirement Plan, as amended and restated
(incorporated by reference).
10.17 --Boston Gas Company Retirement Plan, as amended and restated (incorporated by
reference).
10.18 --Trust Agreement made as of October 2, 1987 between Eastern and The Bank of
New York, as amended (incorporated by reference).
10.19 --Eastern's Retirement Plan for Non-Employee Trustees, as amended (incorporated
by reference).
10.20 --Eastern's 1992 Restricted Stock Plan (incorporated by reference).
10.21 --Eastern's Restricted Stock Plan for Non-Employee Trustees (incorporated by
reference).
10.22 --Eastern's 1994 Deferred Compensation Plan.
13.1 --Portions incorporated herein of annual report to shareholders for the year
ended December 31, 1993.
21.1 --Subsidiaries of the registrant.