FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(X) QUARTERLY REPORT PURSUANT
TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended September 30, 2002
-------------------
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 0-10007
COLONIAL GAS COMPANY
D/B/A KEYSPAN ENERGY DELIVERY NEW ENGLAND
-----------------------------------------
(Exact name of registrant as specified in its charter)
MASSACHUSETTS 04-3480443
------------- ------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
ONE BEACON STREET, BOSTON, MASSACHUSETTS 02108
----------------------------------------------
(Address of principal executive offices)
(Zip Code)
617-742-8400
------------
(Registrant's telephone number, including area code)
None
----
Former name, former address and former fiscal year,
if changed since last report.
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
--- ---
Common stock of Registrant at the date of this report was 100 shares, all held
by KeySpan New England, LLC.
The Registrant meets the conditions set forth in General Instruction H(1)(a) and
(b) of Form 10-Q and is filing this Form with the reduced disclosure format.
PART I. FINANCIAL INFORMATION
-----------------------------
ITEM 1. FINANCIAL STATEMENTS
- -----------------------------
Company or group of companies for which report is filed:
COLONIAL GAS COMPANY
Statements of Operations
(Unaudited)
(In Thousands)
For the For the
Three Months Ended Nine Months Ended
------------------ -----------------
September 30, September 30, September 30, September 30,
2002 2001 2002 2001
------- ------- ------- -------
OPERATING REVENUES $18,114 $ 19,482 $135,355 $183,716
Cost of gas sold 11,161 12,919 76,378 120,717
------ ------ ------ -------
Operating Margin 6,953 6,563 58,977 62,999
OPERATING EXPENSES:
Operations and maintenance 6,196 7,176 21,553 22,283
Depreciation and amortization 4,115 3,643 12,046 11,143
Amortization of goodwill - 2,334 - 7,001
Operating taxes 813 1,070 2,957 3,553
------ ------ ------ ------
Total Operating Expenses 11,124 14,223 36,556 43,980
------ ------ ------ ------
OPERATING INCOME (LOSS) (4,171) (7,660) 22,421 19,019
OTHER INCOME (LOSS), NET 34 (4) 27 (75)
----- ----- ------ ------
INCOME (LOSS) BEFORE INTEREST EXPENSE
AND INCOME TAXES (4,137) (7,664) 22,448 18,944
------ ------ ------ ------
INTEREST EXPENSE:
Long-term debt 1,868 2,133 5,951 6,382
Other, including Advance from KeySpan
and Utility Pool Borrowings 4,812 4,050 13,181 12,546
Less - Interest during construction (96) (22) (589) (90)
----- ----- ------ ------
Total Interest Expense 6,584 6,161 18,543 18,838
------ ----- ------ ------
INCOME TAXES:
Current (210) (5,207) 5,084 877
Deferred (4,046) 609 (3,704) 1,759
------ --------- ------ -----
Total Income Taxes (Benefit) (4,256) (4,598) 1,380 2,636
------ ------ ------ -----
NET INCOME (LOSS) $(6,465) $(9,227) $2,525 $(2,530)
======= ====== ======= ======
The accompanying notes are an integral part of these financial statements.
Colonial Gas Company
Balance Sheets
Unaudited
(In Thousands)
September 30, December 31,
2002 2001
----------- ------------
ASSETS
Gas plant, at cost $420,639 $418,099
Construction work-in-progress 24,164 9,763
Less-Accumulated depreciation (143,926) (133,127)
-------- --------
300,877 294,735
-------- --------
CURRENT ASSETS:
Cash and cash equivalents 121 121
Accounts receivable 11,633 23,240
Allowance for uncollectible accounts (2,499) (3,709)
Accounts receivable - affiliates 12,534 25,713
Accrued utility revenue 1,594 19,064
Deferred gas costs 12,850 15,579
Gas in Storage, at average cost 15,693 16,832
Materials and supplies, at average cost 741 695
Prepaid expenses 72 72
------ -------
52,739 97,607
------ -------
OTHER ASSETS:
Goodwill 377,652 377,652
Deferred charges and other assets 6,413 6,998
------- -------
384,065 384,650
------- -------
TOTAL ASSETS $737,681 $776,992
======== ========
The accompanying notes are an integral part of these financial statements.
Colonial Gas Company
Balance Sheets
Unaudited
(In Thousands)
September 30, December 31,
2002 2001
----------------- ----------------
CAPITALIZATION AND LIABILITIES
CAPITALIZATION:
Common stockholder's investment -
Common stock, $1 par value -
Authorized-200,000 shares;outstanding-100 shares $ - $ -
Amounts in excess of par value 269,430 269,430
Retained earnings (6,202) 5,272
Accumulated comprehensive income (3,433) (5,281)
------- --------
Total common stockholder's investment 259,795 269,421
Long-term obligations, less current portion 105,060 120,205
------- --------
Total Capitalization 364,855 389,626
Advance from KeySpan 214,000 200,000
------- -------
Total Capitalization and Advance from KeySpan 578,855 589,626
------- -------
CURRENT LIABILITIES:
Current portion of long-term obligations 171 296
Note payable utility money pool 66,524 68,517
Note payable utility money pool-gas inventory financing 13,766 21,958
Accounts payable 9,382 12,538
Accrued taxes 22 821
Accrued interest 3,107 8,726
Other 883 1,194
------- -------
93,855 114,050
------ -------
OTHER LIABILITIES:
Deferred income taxes 32,682 38,322
Unamortized investment tax credits 2,249 2,402
Postretirement benefits obligation 7,271 6,770
Other 22,769 25,822
------ -------
64,971 73,316
------ -------
TOTAL CAPITALIZATION AND LIABILITIES $737,681 $776,992
======== ========
The accompanying notes are an integral part of these financial statements.
Colonial Gas Company
Statement of Cash Flows
Unaudited
(In Thousands)
For the Nine Months Ended
-------------------------
September 30, September 30,
2002 2001
-------------- ---------------
Cash flows from operating activities:
Net income (Loss) $2,525 $(2,530)
Adjustments to reconcile net income to
cash provided by operating activities:
Depreciation and amortization 12,046 18,144
Deferred taxes (3,704) 1,759
Other changes in assets and liabilities:
Accounts receivable 10,397 12,401
Accounts receivable/payable-affiliates 13,179 (7,712)
Accrued utility revenue 17,470 19,608
Deferred gas costs 2,729 4,261
Gas in Storage 1,093 (7,580)
Accounts payable (3,156) (17,041)
Accrued taxes 75 (170)
Accrued interest (5,619) 14,684
Other (4,032) 3,516
------ ------
Cash provided by operating activities 43,003 39,340
------- ------
Cash flows from investing activities:
Capital expenditures (17,818) (16,836)
------- -------
Cash used for investing activities (17,818) (16,836)
------- -------
Cash flows from financing activities:
Repayment of long-term debt (15,000) -
Repayments of note payable-utility money pool (1,993) (22,655)
Repayments of note payable - utility money pool
-gas inventory financing (8,192) 178
(Repayment) Advance from KeySpan 14,000 (50,000)
Capital Contribution - 50,000
Dividend paid to KeySpan (14,000) -
------- -------
Cash used for financing activities (25,185) (22,477)
------- -------
Increase (decrease) in cash and cash equivalents - 27
Cash and cash equivalents at beginning of period 121 124
-------- -------
Cash and cash equivalents at end of period $ 121 $ 151
========= =======
The accompanying notes are an integral part of these financial statements.
COLONIAL GAS COMPANY
NOTES TO FINANCIAL STATEMENTS
UNAUDITED
September 30, 2002
------------------
1. Accounting Policies and Other Information
-----------------------------------------
Colonial Gas Company d/b/a KeySpan Energy Delivery New England (the
"Company") is a gas distribution company engaged in the transportation
and sale of natural gas to residential, commercial and industrial
customers. The Company's service territory includes 24 municipalities
located northwest of Boston and on Cape Cod. The Company is a
wholly-owned subsidiary of KeySpan New England, LLC ("KNE LLC") and an
indirect wholly-owned subsidiary of KeySpan Corporation ("KeySpan"), a
registered holding company under the Public Utility Holding Company
Act of 1935, as amended.
It is the Company's opinion that the accompanying financial statements
contain all adjustments necessary to present fairly its financial
position as of September 30, 2002, and the results of its operations
for the three and nine months ended September 30, 2002 and September
30, 2001, as well as cash flows for the nine months ended September
30, 2002 and September 30, 2001. Interim results are not necessarily
indicative of results to be expected for the year, due to the seasonal
nature of the Company's operations. Certain reclassifications were
made to conform prior period financial statements with the current
period financial statement presentation. Other than as noted,
adjustments were of a normal recurring nature and accounting policies
have been applied in a manner consistent with prior periods.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities, the disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results
could differ from those estimates.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted in this Form
10-Q. Therefore these interim financial statements should be read in
conjunction with the Company's 2001 Annual Report filed on Form 10-K
with the Securities and Exchange Commission. The December 31, 2001
financial statement information has been derived from the audited
financial statements.
2. Recent Accounting Pronouncements
--------------------------------
On January 1, 2002, the Company adopted Statement of Financial
Accounting Standards ("SFAS") 141, "Business Combinations", and SFAS
142 "Goodwill and Other Intangible Assets". The key concepts from the
two interrelated Statements include mandatory use of the purchase
method when accounting for business combinations, discontinuance of
goodwill amortization, a revised framework for testing goodwill
impairment at a "reporting unit" level, and new criteria for the
identification and potential amortization of other intangible assets.
Other changes to existing accounting standards involve the amount of
goodwill to be used in determining the gain or loss on the disposal of
assets and a requirement to test goodwill for impairment at least
annually.
SFAS 142 allows for various valuation methodologies to test for
impairment, including a discounted cash flow method, as compared to an
undiscounted cash flow method utilized under the previous standard.
Impairment is deemed to exist when the carrying amount of goodwill
exceeds its implied fair value. Upon adoption of SFAS 142, any amounts
impaired were to be recorded as a cumulative effect of an accounting
change in the Statement of Operations, and any impairment thereafter
will be recorded as an operating expense. The discounted cash flow
model requires broad assumptions and significant judgement by
management including, but not limited to, projections of revenues,
working capital, capital expenditures, taxes and the cost of capital.
The Company has completed its impairment tests and determined that no
impairment exists. Fair value was determined using a discounted cash
flow methodology. The test for impairment is required to be performed
upon adoption of SFAS 142 and at least annually thereafter. On an
ongoing basis (absent any impairment indicators), the Company expects
to perform impairment tests during the fourth quarter.
As discussed above, amortization of goodwill has been discontinued
effective January 1, 2002. For the three and nine months ended
September 30, 2001, goodwill amortization was $2.3 and $7.0 million,
respectively. As required by SFAS 142, below is a reconciliation of
reported net income for the three and nine months ended September 30,
2001 and pro-forma net income, for the same periods, adjusted for the
discontinuance of goodwill amortization.
----------------------------------- ----------------------- -------------------- -------------------- -------------------
Three Months Three Months Nine Months Nine Months
Ended Ended Ended Ended
September 30, 2002 September 30, 2001 September 30, 2002 September 30, 2001
----------------------------------- ----------------------- -------------------- -------------------- -------------------
Net Income (Loss) $(6,465) $ (9,227) $ 2,525 $(2,530)
Add back: goodwill amortization
- 2,334 - 7,001
----------------------------------- ----------------------- -------------------- -------------------- -------------------
Adjusted Net Income (Loss) $(6,465) $ (6,893) $ 2,525 $ 4,471
----------------------------------- ----------------------- -------------------- -------------------- -------------------
In July of 2001, the Financial Accounting Standards Board ("FASB")
issued SFAS 143, "Accounting for Asset Retirement Obligations". The
Statement requires entities to record the fair value of a liability
for an asset retirement obligation in the period in which it is
incurred. When the liability is initially recorded, the entity will
capitalize a cost by increasing the carrying amount of the related
long-lived asset. Over time, the liability is accreted to its then
present value, and the capitalized cost is depreciated over the useful
life of the related asset. Upon settlement of the liability, an entity
either settles the obligation for its recorded amount or incurs a gain
or loss upon settlement. The Statement is effective for fiscal years
beginning after June 15, 2002, with earlier application encouraged. We
are currently evaluating the impact, if any, that this Statement will
have on the results of operations and financial position.
SFAS 144, "Accounting for the Impairment or Disposal of Long-Lived
Assets," was effective January 1, 2002, and addresses accounting and
reporting for the impairment or disposal of long-lived assets. SFAS
144 supersedes SFAS 121, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to Be Disposed Of" and APB Opinion
30, "Reporting the Results of Operations-Reporting the Effects of
Disposal of a Segment of a Business." SFAS 144 retains the fundamental
provisions of SFAS 121 and expands the reporting of discontinued
operations to include all components of an entity with operations that
can be distinguished from the rest of the entity and that will be
eliminated from the ongoing operations of the entity in a disposal
transaction. The implementation of this Statement, effective January
1, 2002, did not have an impact on the Company's results of operations
and financial position.
In June of 2002, the FASB issued SFAS 146, "Accounting for Costs
Associated with Exit or Disposal Activities". This Statement addresses
financial accounting and reporting for costs associated with exit or
disposal activities and nullifies Emerging Issues Task Force Issue
94-3, "Liability recognition for Certain Employee Termination Benefits
and Other Costs to Exit an Activity". This Statement is effective for
exit or disposal activities initiated after December 31, 2002 with
early application encouraged.
3. Environmental Matters
---------------------
The Company, like many other companies in the natural gas industry, is
party to governmental proceedings requiring investigation and possible
remediation of former manufactured gas plant ("MGP") and related
sites. The Company may have or share responsibility under applicable
environmental laws for the remediation of one former MGP site and nine
related satellite disposal sites, as well as one non-MGP site and a
federal superfund site.
As of September 30, 2002, the Company estimates the remaining cost of
its MGP-related environmental cleanup activities to be $2.7 million,
which amount has been accrued by the Company as a reasonable estimate
of probable cost for known sites. Expenditures incurred to date with
respect to these MGP-related activities total $13.3 million.
By a rate order issued on May 25, 1990, the Massachusetts Department
of Telecommunications and Energy (the "Department") approved, for
ratemaking purposes, recovery of all prudently incurred environmental
response costs associated with former MGP related sites over a
seven-year period without carrying charges.
The Company has received and responded to Requests for Information
from the U.S. Environmental Protection Agency ("EPA") pursuant to
Section 104 of the Comprehensive Environmental Response, Compensation
and Liability Act ("CERCLA"), regarding one federal superfund site
that the EPA is currently investigating. The Company cannot determine
the amount of its liability at this time.
4. Seasonal Aspect
---------------
The gas distribution business is influenced by seasonal weather
conditions. Annual revenues are principally realized during the
heating season (November 1, through April 30) as a result of the large
proportion of heating sales in these months. In addition, under its
seasonal rate structure, the rates charged to customers during the
heating season are higher than the rates charged during the rest of
the year. Accordingly, results of operations are most favorable in the
first quarter of the Company's fiscal year, followed by the fourth
quarter. Losses are generally incurred in the second and third
quarters.
5. Related Party Transactions
--------------------------
The Company, and all utility subsidiaries of KeySpan, participate in a
utility money pool established by KeySpan. KeySpan Corporate Services,
LLC, a subsidiary service company of KeySpan, administers the money
pool and provides financing to the Company for working capital and gas
inventory. The money pool is funded, in part, through surplus funds of
money pool participants. Interest income or expense is recorded by the
Company for net funds advanced to or borrowed from the money pool at
an interest rate generally equal to KeySpan's short-term borrowing
rate. Interest incurred on gas inventory financing is recovered from
gas sales customers through the cost of gas adjustment clause.
6. Regulation
----------
In 1999, the Department approved a rate plan resulting in a ten-year
freeze of base rates at current levels. Due to the length of the base
rate freeze, the Company was required to discontinue its application
SFAS 71 "Accounting for the Effects of Certain Types of Regulation".
On November 1, 2001, the Department issued an order requiring all
Massachusetts electric and gas utilities to develop service quality
plans effective January 1, 2002. On April 17, 2002, the Department
issued an order approving the Company's service quality plan that was
filed with the Department on March 1, 2002. Service quality will be
tracked and measured against historical benchmarks. The Department may
assess a penalty against a company that fails to meet its service
quality benchmarks. The penalty amount can be up to 2% of the
Company's distribution revenues. Each measurement period will be a
calendar year. The first measurement period began on January 1, 2002.
7. Derivatives
-----------
On April 1, 2002 the Company adopted Implementation Issue C16 of SFAS
133, "Accounting for Derivative Instruments and Hedging Activities" as
amended and interpreted incorporating SFAS 137 and 138 and certain
implementation issues (collectively "SFAS 133"). Issue C16 establishes
new criteria that must be satisfied in order for contracts that
combine a forward contract and a purchased option contract to be
exempted as normal purchases and sales.
Based upon a review of its physical gas purchase commodity contracts,
the Company determined that certain contracts could no longer be
exempted as normal purchases from the requirements of SFAS 133. At
September 30, 2002, the fair value of these contracts was recorded as
a $0.6 million liability. All gas and related transportation costs are
currently recovered from customers through the gas adjustment clause.
Therefore, changes in the market value of these contracts are recorded
as other assets or other liabilities on the Balance Sheet.
8. Long-Term Debt
--------------
On May 20, 2002, pursuant to a put option exercised by the holders,
the Company repaid $15 million for the 6.81% Series A First Mortgage
Secured Medium Term Notes, dated May 19, 1997 that had a maturity date
of May 19, 2027. The Notes were repaid at par and there was no gain or
loss recognized. The Company borrowed the amount needed to redeem
these Notes through the utility money pool.
9. Gas Supply Contracts
--------------------
The Company had a portfolio management contract with El Paso Energy
Marketing Company ("El Paso") under which El Paso provided the
majority of the city gate supply requirements at market prices and
managed certain upstream capacity, underground storage and term supply
contracts for Colonial. The agreement with El Paso expired on October
31, 2002. The Company has negotiated a new portfolio management
agreement with Entergy-Koch to replace the expired El Paso agreement.
The new agreement with Entergy-Koch began on November 1, 2002 and
extends through March 31, 2003.
The Company recently renewed its long-term capacity contracts with
Tennessee Gas Pipeline for the transportation of natural gas to the
Company's distribution territory.
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS:
----------------------
RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2002
Net Income for the nine months ended September 30, 2002 was $2.5
million, an increase of $5.0 million over the $2.5 million net loss
for the corresponding period of the prior year. This increase is
primarily due to the discontinuance of goodwill amortization offset,
in part, by a decline in operating margin.
Operating revenues for the nine-month period ended September 30, 2002
declined $48.4 million, or 26%, from the nine-month period ended
September 30, 2001. The majority of this decline was due to a
significant decrease in the cost of gas sold to customers. Cost of gas
sold for the nine-month period ended September 30, 2002 decreased
$44.3 million, or 37%, from 2001. This decline was due to both a
decrease in throughput of 13% and a decline in the average commodity
price of gas of 25%. Decreased throughput was principally due to
significantly warmer weather (11%).
The Company's gas rate structure includes a gas adjustment clause,
pursuant to which gas costs are recovered in revenues. Further,
variations between actual gas costs incurred and gas cost billed are
deferred and refunded to or collected from customers in a subsequent
period. As a result, fluctuations in the cost of gas sold have little
or no impact on operating margin.
Operating margin (revenues less cost of gas sold) for the nine-month
period ended September 30, 2002 decreased $4 million, or 6%, from the
nine-month period ended September 30, 2001. The decline was primarily
driven by warmer weather ($5.6 million), offset, in part, by an
increase of $1.6 million due to customer growth.
In accordance with SFAS 142, as of January 1, 2002, the Company is no
longer amortizing goodwill. For the nine-month period ended September
30, 2001, amortization of goodwill was $7 million.
Income tax expense for the nine-month period ended September 30, 2002
decreased approximately $1.3 million, or 48%, from 2001. The decrease
is primarily attributable to lower pre-tax earnings before goodwill
amortization expense.
LIQUIDITY AND CAPITAL RESOURCES
As discussed, the Company's revenues, earnings and cash flow are
highly seasonal. Since the majority of its revenues are billed during
the heating season, significant cash flows are generated from late
winter to early summer. Alternatively, in preparation for the upcoming
heating season (i.e. purchasing and storing gas), short-term
borrowings are highest during the late fall and early winter.
The Company believes that projected cash flow from operations, in
combination with currently available resources (i.e. utility money
pool), is sufficient to meet 2002 capital expenditures, working
capital requirements and normal debt repayments.
On March 31, 2002, the Company received an additional advance of $14
million from KeySpan and then paid a dividend to KeySpan of $14
million.
On May 20, 2002, the Company repaid $15 million for the 6.81% Series A
First Mortgage Secured Medium Term Notes. The Company financed this
repayment by borrowing from the money pool. For further details, see
Note 8 to the Financial Statements "Long-Term Debt".
The Company expects capital expenditures for 2002 to be approximately
$25.0 million. Actual capital expenditures for the nine-month period
ending September 30, 2002 were $17.8 million. Capital expenditures are
largely for system expansion associated with customer growth and
improvements to the distribution infrastructure.
FORWARD-LOOKING INFORMATION
Certain statements contained in this Form 10-Q concerning
expectations, beliefs, plans, objectives, goals, strategies, future
events or performance and underlying assumptions and other statements
that are other than statements of historical facts, are
"forward-looking statements" within the meaning of Section 21E of the
Securities Exchange Act of 1934, as amended. Without limiting the
foregoing, all statements relating to our future outlook, anticipated
capital expenditures, future cash flows and borrowings, pursuit of
potential future acquisition opportunities and sources of funding, are
forward-looking statements. Such forward-looking statements reflect
numerous assumptions and involve a number of risks and uncertainties
and actual results may differ materially from those discussed in such
statements. Among the factors that could cause actual results to
differ materially are: general economic conditions, especially in
Massachusetts; available sources and cost of fuel; federal and state
regulatory initiatives that increase competition, threaten cost and
investment recovery, and impact rate structures; the ability of the
Company to successfully reduce its cost structure; inflationary trends
and interest rates; and other risks detailed from time to time in
other reports and other documents filed by the Company with the SEC.
For any of these statements, the Company claims the protection of the
safe harbor for forward-looking information contained in the Private
Securities Litigation Reform Act of 1995, as amended.
PART II. OTHER INFORMATION
--------------------------
ITEM 1. LEGAL PROCEEDINGS
- --------------------------
None
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Within the 90 days prior to the date of this report, the Company carried out an
evaluation, under the supervision and with the participation of the Company's
management, including its Chief Operating Officer and Principal Financial and
Accounting Officer, of the effectiveness of the design and operation of the
Company's disclosure controls and procedures. The Company's disclosure controls
and procedures are designed to ensure that information required to be disclosed
by the Company in its periodic SEC filings is recorded, processed and reported
within the time periods specific in the SEC's rules and forms. Based upon that
evaluation, the Chief Operating Officer and Principal Financial and Accounting
Officer concluded that the Company's disclosure controls and procedures are
effective in timely alerting them to material information relating to the
Company required to be included in its periodic SEC filings.
Changes In Internal Controls
There were no significant changes in the Company's internal controls or in other
factors that could significantly affect these controls subsequent to the date of
their evaluation.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
- -----------------------------------------
(a) List of Exhibits
99.1* Certification pursuant to 18 U.S.C. 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.
99.2* Certification pursuant to 18 U.S.C. 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.
*Filed Herewith
(b) Reports on Form 8-K
None
SIGNATURES
- ----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the Company
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
Colonial Gas Company
D/B/A KEYSPAN ENERGY DELIVERY NEW ENGLAND
-----------------------------------------
(Registrant)
/s/J.F. Bodanza
--------------------------
J.F. Bodanza, Senior Vice President
Finance, Accounting and Regulatory Affairs
(Principal Financial and Accounting Officer)
Dated: November 14, 2002
Certification Pursuant to Rule 13a-14 and 15d-14 of
the Securities and Exchange Act of 1934
I, Nickolas Stavropoulos, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Colonial Gas Company;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly
report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.
Date: November 14, 2002
/s/Nickolas Stavropoulos
- ------------------------
Nickolas Stavropoulos
President and Chief Operating
Officer
Certification Pursuant to Rule 13a-14 and 15d-14 of
the Securities and Exchange Act of 1934
I, Joseph F. Bodanza, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Colonial Gas Company;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly
report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.
Date: November 14, 2002
/s/ Joseph F. Bodanza
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Joseph F. Bodanza
Senior Vice President, Finance,
Accounting and Regulatory Affairs