SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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Form 11-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (NO FEE
REQUIRED)
For the year ended December 31, 2003
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from ___________ to _________
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Commission File No. 1-14161
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KeySpan Energy
401(k) Plan For Management Employees
(Full title of the Plan)
KeySpan Corporation
(Name of issuer of the securities held pursuant to the Plan)
One MetroTech Center
Brooklyn, NY 11201-3385
(Address of principal executive office)
KEYSPAN ENERGY 401(k) PLAN FOR MANAGEMENT EMPLOYEES
TABLE OF CONTENTS
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Page
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 1
FINANCIAL STATEMENTS:
Statements of Assets Available for Benefits
as of December 31, 2003 and 2002 2
Statement of Changes in Assets Available for Benefits
for the Year Ended December 31, 2003 3
Notes to Financial Statements 4 - 10
SUPPLEMENTAL SCHEDULES:
Form 5500, Schedule H, Part IV, Line 4i - Schedule of Assets
(Held at End of Year)as of December 31, 2003 11
Form 5500, Schedule H, Part IV, Question 4a -
Delinquent Participant Contributions
for the Year Ended December 31, 2003 12
SIGNATURES 13
EXHIBIT INDEX:
Independent Registered Public Accounting Firm's Consent 14
All other schedules required by Section 2520.103-10 of the Department of Labor's
rules and regulations for reporting and disclosure under the Employee Retirement
Income Security Act of 1974 ("ERISA"), have been omitted because they are not
applicable.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Investment Review Committee of
KeySpan Corporation:
We have audited the accompanying statements of assets available for benefits of
the KeySpan Energy 401(k) Plan for Management Employees (the "Plan") as of
December 31, 2003 and 2002 and the related statement of changes in assets
available for benefits for the year ended December 31, 2003. These financial
statements are the responsibility of the Plan's management. Our responsibility
is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the assets available for benefits of the Plan at December 31, 2003 and
2002, and the changes in assets available for benefits for the year ended
December 31, 2003, in conformity with accounting principles generally accepted
in the United States of America.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules listed in the
Table of Contents are presented for the purpose of additional analysis and are
not a required part of the basic financial statements, but are supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. These schedules are the responsibility of the Plan's management. Such
schedules have been subjected to the auditing procedures applied in our audit of
the basic 2003 financial statements and, in our opinion, are fairly stated in
all material respects when considered in relation to the basic financial
statements taken as a whole.
/s/ Deloitte & Touche LLP
New York, New York
June 28, 2004
KEYSPAN ENERGY 401(K) PLAN FOR MANAGEMENT EMPLOYEES
STATEMENTS OF ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 2003 AND 2002
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ASSETS: 2003 2002
Participant-directed investments, at fair value $427,196,286 $338,880,863
Nonparticipant-directed investments, at fair value 117,345,785 100,665,054
---------------- ----------------
Total Investments 544,542,071 439,545,917
---------------- ----------------
RECEIVABLES:
Participants' contribution 67,661 528,243
Employers' contribution 25,529 220,340
---------------- ----------------
Total Receivables 93,190 748,583
---------------- ----------------
ASSETS AVAILABLE FOR BENEFITS $544,635,261 $440,294,500
================ ================
See notes to financial statements.
2
KEYSPAN ENERGY 401(k) PLAN FOR MANAGEMENT EMPLOYEES
STATEMENT OF CHANGES IN ASSETS AVAILABLE FOR BENEFITS
YEAR ENDED DECEMBER 31, 2003
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ADDITIONS TO ASSETS ATTRIBUTED TO:
Net investment income:
Net appreciation on investments $71,634,445
Interest and dividends 14,715,182
----------------
Net investment income 86,349,627
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Contributions:
Participants 27,176,982
Employer 11,692,090
Rollovers 362,390
----------------
Total Contributions 39,231,462
----------------
Total Additions 125,581,089
DEDUCTIONS FROM ASSETS ATTRIBUTED TO:
Benefits paid to participants (22,059,124)
Net assets transferred in from the Union Plan
818,796
----------------
Total Deductions (21,240,328)
----------------
INCREASE IN ASSETS 104,340,761
ASSETS AVAILABLE FOR BENEFITS:
Beginning of Year 440,294,500
----------------
$544,635,261
End of Year
================
See notes to financial statements.
3
KeySpan Energy 401(k) Plan For Management Employees
NOTES TO FINANCIAL STATEMENTS
AS OF AND FOR THE YEAR ENDED DECEMBER 31, 2003
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1. DESCRIPTION OF THE PLAN
The following description of the KeySpan Energy 401(k) Plan for Management
Employees (the "Plan") available to eligible employees of KeySpan
Corporation (the "Company" or "KeySpan"), provides only general
information. Participants should refer to the Plan Document for a more
complete description of the Plan's provisions.
General - The Plan was approved by the shareholders of the Company at the
annual meeting of shareholders on February 3, 1983. The Plan provides for
eligible employees of the Company and its wholly-owned subsidiaries to
become participants of the Plan. All employees are eligible to participate
in the Plan immediately upon hire. The recordkeeper, custodian and the
trustee of the Plan is the Vanguard Fiduciary Trust Company (the "Vanguard
Group" or "Vanguard"). The Plan is a defined contribution plan and is
subject to Title I of the Employee Retirement Income Security Act of 1974
("ERISA").
On September 30, 1999, the Board of Directors of the Company approved the
amendment and restatement of the Plan. As a result, the assets of the
participants of the former Long Island Lighting Company Capital
Accumulation Plan for Management Employees were merged with the Plan.
The Investment Review Committee (the "Committee"), at the meeting held on
September 20, 2000, approved the merger of the Eastern Enterprises,
Colonial Gas and EnergyNorth 401(k) Plans with the Plan, effective as soon
as practicable, following the date of acquisition.
On April 11, 2001, the Committee approved the new Participating Employer
List resulting from KeySpan's holding company structure and the acquisition
of Eastern Enterprises.
Effective January 1, 2002, the Committee approved the following: 1)
increase the maximum amount that participants can contribute in accordance
with Internal Revenue Service ("IRS") regulations ($11,000 for 2002,
increasing by $1,000 each year until 2006); 2) increase the contribution
limit to 50% of compensation, up to the IRS maximum limit; 3) allow
catch-up contributions for employees age 50 and over; 4) reduce the
hardship withdrawal waiting period from 12 months to 6 months; and 5) a new
Employee Stock Ownership Plan be created within the 401(k), which allows
participants in the Plan to choose to reinvest their dividends in Company
Common Stock or to receive the dividends in cash.
On July 2, 2002, KeySpan sold one of its subsidiaries, Midland Enterprises
LLC, to Ingram Industries, Inc. Employees under this subsidiary were not
eligible to participate in the Plan as of the date of the sale.
Plan Amendments - On December 19, 2002, the Committee approved the granting
of prior service in connection with the employer match, discount
eligibility and vesting for the newly purchased Algonquin LNG, Inc.
On August 1, 2003, KeySpan acquired Bard, Rao + Athanas ("BR+A), a New
England HVAC contracting company. As a result, prior service time for all
BR+A management employees was recognized for vesting purposes in the Plan.
4
Contributions - All eligible employees contributing to the Plan will
receive employer contributions and a 10% discount on the KeySpan Common
Stock Fund ("Company Common Stock") on the first of the month following
completion of three months of service. Additionally, all eligible employees
will receive matching contributions in the Company Common Stock regardless
of where employees choose to invest their contributions. The match and
discount amounts may be transferred out of Company Common Stock
immediately. There are no holding periods or restrictions with respect to
Company Common Stock. All other contributions are participant-directed.
All participants of the Plan may elect to have their compensation reduced
by not less than 1% and no more than 50% (in multiples of 1%), not to
exceed the limitation imposed by Section 402(g) of the Internal Revenue
Code, and contributed to the Plan on the participants' behalf by the
Company. Such contributions reduce the amount of the participants' salary
subject to current Federal income tax and, subject to applicable laws,
state and local income taxes. Such contributions are subject to Social
Security taxes.
All contributions under the Plan are held in a trust fund with trustees who
are appointed by the Board of Directors and are members of the Committee.
The Committee is also the administrative committee of the Plan. The Plan
makes available the funds in which participants may invest. Such investment
options may be changed from time to time.
Rollover Contributions - If a participant of the Plan receives a lump sum
distribution from a qualified savings or profit sharing plan of a previous
employer or plan, a "rollover" contribution by the participant of the
amount of the lump-sum distribution may be made to the Plan.
Participant Accounts - Individual accounts are maintained for each
participant. Each participant's account is credited with the participant's
contribution, the Company's matching contribution and discount on Company
Common Stock, if applicable, and allocations of (1) Company discretionary
contributions and (2) Plan earnings, and charged with an allocation of Plan
losses. Allocations are based on participant earnings or account balances,
as defined. The benefit to which a participant is entitled is the benefit
that can be provided from the participant's vested account as provided in
the plan document.
Vesting and Forfeitures - Participants will be 100% vested in employer
match and discount contributions on the earlier to occur of (i) the
participant's completion of three (3) years of service with the Company,
(ii) the participant's retirement from the Company at age fifty-five or
older or (iii) the death of the participant. A participant will be 100%
vested immediately in his or her deferred cash contributions,
rollover/transfer contributions, and earnings thereon, if any. If a
participant does not vest, such participant will forfeit the match and
discount, and any earnings thereon into a forfeiture account, which is
maintained by Vanguard.
On December 31, 2003 and 2002, forfeited nonvested accounts totaled
$590,460 and $467,639 respectively. These accounts will be used to reduce
future employer contributions. During the year ended December 31, 2003,
employer contributions were reduced by $10,652 from forfeited nonvested
accounts.
Effective with the date of acquisition, an employee who was a participant
of Eastern Enterprises, Colonial Gas and EnergyNorth (and all subsidiaries
of the aforementioned companies that participate in the Plan) will be 100%
vested in matching contributions made on the participant's behalf,
including discount on Company Common Stock and discount on dividends
attributable to such stock. An employee who was hired after this date will
be subject to the current KeySpan vesting schedule.
5
Investments - All eligible employees have an opportunity to acquire shares
of Company Common Stock ($.01 par value) at a 10% discount. In addition to
Company Common Stock, participants may invest in other investment options
(collectively, the "Funds").
At the direction of the participants, Plan assets are invested in the
KeySpan Common Stock Fund, and/or one or more of the following Funds from
the Vanguard Group, namely: Vanguard Windsor Fund, Vanguard 500 Index Fund,
Vanguard Retirement Savings Trust, Vanguard Explorer Fund, Vanguard
LifeStrategy Conservative Growth Fund, Vanguard LifeStrategy Moderate
Growth Fund, Vanguard LifeStrategy Growth Fund, Vanguard Windsor II Fund,
Vanguard PRIMECAP Fund, Vanguard International Growth Fund, Vanguard Total
Bond Market Index Fund, Vanguard U.S. Growth Fund. Participants should
refer to the applicable Fund's prospectus for a complete description of the
Fund.
Participant Loans - Participants may borrow a minimum of $1,000 and a
maximum amount not to exceed the lesser of $50,000 or 50% of the
participants' account balance from the Plan (only employee deferred cash
contributions, rollover/transfer contributions and earnings thereon are
used to determine the maximum loan amount that can be taken). Currently, no
more than two loans are allowed outstanding at the same time. General
purpose loans are payable over a period not to exceed five years, and bear
interest at the prime rate plus 1% (the prime rate at the time the loan is
requested). Currently, participants may also amortize a loan for the
purchase of their primary residence over a fifteen-year period, which also
bears interest at the prime rate plus 1%. The loans are secured by the
participants' interest in the Plan.
Payment of Benefits - On termination of service due to death, disability,
or retirement, a participant may elect to receive either a lump-sum amount
equal to the value of the participant's vested account, or annual
installments. For termination of service for other reasons, a participant
may receive the value of the participant's vested account as a lump-sum
distribution.
Trustees - The Vanguard Group was appointed to act as the trustee under the
Plan to receive and hold Company Common Stock and the investment of
contributions in the other funds as described herein and in the plan
document. Pursuant to a trust document executed by the trustee, the trustee
is subject to the same fiduciary responsibility to the Plan's participants
as an independent trustee. The Investment Review Committee continues to be
the plan administrator and trustee for the KeySpan Energy Preferred and Sub
Stock Funds.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting - The accompanying financial statements have been
prepared in accordance with accounting principles generally accepted in the
United States of America.
Use of Estimates - The preparation of financial statements in conformity
with accounting principles generally accepted in the United States of
America requires management to make estimates and assumptions that affect
the reported amounts of assets available for benefits and changes therein.
Actual results could differ from those estimates.
Risks and Uncertainties - The Plan provides for various investment options.
The Plan's mutual funds invest in various securities including U.S.
Government securities, corporate debt instruments and corporate stocks.
Investment securities, in general, are exposed to various risks such as
interest rate, credit and overall market volatility. Due to the level of
risk associated with certain investment securities, it is reasonably
possible that changes in the values of investment securities will occur in
the near term and that such changes could materially affect participants'
account balances and the amount reported in the statement of assets
available for plan benefits.
6
Investment Valuation and Income Recognition - The Plan's investments are
stated at fair value. Shares of mutual funds are valued at quoted closing
market prices, which represent the net asset value of shares held by the
Plan on the last business day of the year.
Amounts for securities that have no quoted market price represent estimated
fair value. Many factors are considered in arriving at that fair value. The
approximate value of the KeySpan Common Stock Fund is the quoted market
price of the Company's Common Stock. The KeySpan Common Stock fund is
divided into fund units. Each unit represents a portion of ownership in the
fund and consists primarily of shares of Company Common Stock and a small
cash balance so that transactions can be processed daily. Investments in
the KeySpan SubStock, which are not publicly traded, are obtained from
independent outside appraisals. The KeySpan Preferred Stock is not publicly
traded, is recorded at par value of $100 and pays a 6% dividend
semi-annually. Fair value of the common collective trust has been estimated
by Vanguard based on the underlying assets of the portfolio.
Purchases and sales of securities are recorded on a trade-date basis.
Dividend income is recorded on the ex-dividend date. Interest income is
recorded on an accrual basis.
The loans to participants are the total outstanding principal balance due
from participants for loans taken from individual accounts.
Administrative Expenses - Expenses for the administration of the Plan are
paid for either by the plan sponsor or the Plan as stated in the plan
document. KeySpan and its subsidiaries are allocated for their expenses
related to administration of the Plan as well as matching contributions on
Company Common Stock. Discount on Company Common Stock for KeySpan and its
subsidiaries are allocated to KeySpan only.
Payment of Benefits - Benefits to participants are recorded when paid.
7
3. INVESTMENTS
The following investments represent five percent or more of the Plan's
assets available as of December 31, 2003 and 2002:
2003 2002
KeySpan Stock Funds -
*KeySpan Common Stock Fund, 3,200,048 and
2,864,686 units, respectively** $117,345,785 $100,665,054
Common and Collective Trust -
Vanguard Retirement Savings Trust, 101,407,274
and 95,194,237 shares, respectively** 101,407,274 95,194,237
Mutual Funds:
Vanguard PRIMECAP Fund, 1,534,446 and
1,473,990 shares, respectively** 81,387,014 56,984,447
Vanguard 500 Index Fund, 439,388 and
398,537 shares, respectively** 45,111,940 32,341,270
Vanguard Windsor Fund, 2,615,251 and
2,669,752 shares, respectively** 42,523,980 32,037,319
Vanguard Windsor Fund II, 1,319,154 and
1,258,098 shares, respectively** 34,944,392 26,168,436
Vanguard Explorer Fund, 423,947 and
378,596 shares, respectively** 27,819,425 -
Vanguard Total Bond Market Index Fund,
2,638,849 and 2,519,015 shares, respectively** - 26,147,379
*Nonparticipant directed
** Permitted party-in-interest
During 2003, the Plan's investments (including gains and losses on
investments bought and sold, as well as held during the year) appreciated
in value by $71,634,445 as follows:
KeySpan Common Stock $ 6,040,404
KeySpan SubStock 450,003
Mutual Funds 65,144,038
----------------------
$71,634,445
======================
8
4. NONPARTICIPANT-DIRECTED INVESTMENTS
Information about the assets as of December 31, 2003 and 2002 and the
significant components of changes in assets for the year ended December 31,
2003 relating to the non participant-directed investments is as follows:
2003
KeySpan Common Stock fund:
Assets, beginning of year $100,665,054
Changes in assets:
Net appreciation in investment 6,040,404
Dividend income 5,495,428
Employer contributions 11,742,031
Participant contributions 12,060,411
Participant loan repayments 2,781,297
Net assets transferred in (out) (283,387)
Benefits paid to participants (2,802,500)
Participant loan withdrawals (1,195,811)
Transfers to participant-directed investments (17,157,142)
----------------
Net change 16,680,731
----------------
End of year $117,345,785
================
5. FEDERAL INCOME TAX STATUS
The Internal Revenue Service has determined and informed the plan
administrator by a letter dated January 5, 2003, that the Plan is qualified
and the Trust established under the Plan is tax-exempt, under the
appropriate sections of the Internal Revenue Code ("IRC"). The Plan has
been amended since receiving the determination letter; however, the Company
and the plan administrator believe that the Plan is currently designed and
being operated in compliance with the applicable requirements of the IRC.
Therefore, no provision of income taxes has been included in the Plan's
statement of changes in assets available for benefits.
6. RELATED PARTY TRANSACTIONS
Certain Plan investments are shares of mutual funds and a common and
collective trust managed by the asset custodian, trustee, and recordkeeper,
the Vanguard Group, as defined by the Plan and therefore these transactions
qualify as party-in-interest transactions. The Plan's investment in Company
Common Stock during the Plan year ended December 31, 2003 and 2002 are also
party-in-interest transactions. Certain employees and officers of the
Company, who may also be participants in the Plan, perform administrative
services to the Plan at no cost to the Plan. These party-in-interest
transactions are not deemed prohibited because they are covered by
statutory and administrative exemptions from the Code and the rules and
prohibited transactions of ERISA.
9
At December 31, 2003 and 2002, the Plan held 3,200,049 units and 2,864,686
units, respectively, of Common Stock of KeySpan Corporation, the sponsoring
employer, with a cost basis of $99,026,743 and $86,273,695, respectively.
During the year ended December 31, 2003, the Plan recorded dividend income
of $5,495,428.
7. PLAN TERMINATION
Although the Company has not expressed any intent to do so, it may
terminate the Plan at any time. In the event of Plan termination, the
accounts of all participants affected shall become fully vested and
non-forfeitable. Assets remaining in the trust fund will be distributed to
the participants and beneficiaries in proportion to their respective
account balances.
8. NONEXEMPT PARTY-IN-INTEREST TRANSACTION
KeySpan remitted certain December 2003 payroll deductions for the WDF Inc.
subsidiary totaling $7,424 to the trustee on March 2, 2004, which was later
than required by D.O.L. Regulation 2510.3-102. The Company forwarded
additional funds in the amount of $452 to compensate for participants' lost
earnings.
KeySpan remitted certain April 2003 payroll deductions for the Northern
Peabody subsidiary totaling $540 to the trustee on February 13, 2004. The
Company forwarded additional funds in the amount of $138 to compensate for
participants' lost earnings.
9. VOLUNTARY COMPLIANCE RESOLUTION
In May 2004, KeySpan filed an application for a compliance statement from
the Internal Revenue Service under the Voluntary Compliance Resolution
program ("VCR"). The compliance statement was sought with respect to the
following two operational failures:
o Missed payroll deductions for the WDF Inc. subsidiary totaling $7,424
that occurred in the fiscal year 2003, but not reported until 2004,
later than required by D.O.L. Regulation 2510.3-102.
o Missed payroll deductions for the Northern Peabody subsidiary totaling
$540 that occurred in the fiscal year 2003, but not reported until
2004, later than required by D.O.L. Regulation 2510.3-102.
******
10
KEYSPAN ENERGY 401(k) PLAN FOR MANAGEMENT EMPLOYEES
FORM 5500, SCHEDULE H, PART IV, LINE 4i -
SCHEDULE OF ASSETS (HELD AT END OF YEAR)
AS OF DECEMBER 31, 2003
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Identity of Issue, Borrower,
Lessor or Similar Party, and
Description of Investment Including
Maturity Date, Rate of Interest, Collateral, Number of Market
Par or Maturity Value Cost** Units/Shares Value
*KeySpan Common Stock Fund $99,026,743 3,200,049 $117,345,785
*KeySpan Preferred Stock Fund 3,302,035 33,021 3,302,063
*KeySpan SubStock 660,006 660,006 1,350,000
*Vanguard Funds:
Vanguard Retirement Savings Trust 101,407,274 101,407,274
Vanguard PRIMECAP Fund 1,534,446 81,387,014
Vanguard 500 Index Fund 439,388 45,111,940
Vanguard Windsor Fund 2,615,251 42,523,980
Vanguard Windsor II Fund 1,319,154 34,944,392
Vanguard Total Bond Market Index Fund 2,635,849 27,206,536
Vanguard LifeStrategy Moderate Growth Fund 1,387,253 23,042,272
Vanguard Explorer Fund 423,947 27,819,425
Vanguard International Growth Fund 544,697 8,785,966
Vanguard U.S. Growth Fund 482,654 7,317,027
Vanguard LifeStrategy Growth Fund 399,656 7,257,755
Vanguard LifeStrategy Conservative Growth Fund 403,787 5,871,066
------------------
534,672,495
*Participant loans receivable
(maturing 2004 to 2031 at interest rates of 5.0% to 10.5%) $9,869,576
------------------
Total $544,542,071
==================
*Permitted party-in-interest.
**Cost information is not required for participant-directed investments and,
therefore, is not included.
11
KEYSPAN ENERGY 401(k) PLAN FOR MANAGEMENT EMPLOYEES
FORM 5500 SCHEDULE H, PART IV, LINE 4a -
DELINQUENT PARTICIPANT CONTRIBUTIONS
YEAR ENDED DECEMBER 31, 2003
- -------------------------------------------------------------------------------
Question 4a "Did the employer fail to transmit to the Plan any participant
contributions within the time period described in 29 CFR 2510.3-102", was
answered "yes".
Relationship to Plan, Participant Contributions
Employer, Transferred Late to the
Identity of or Other Plan
Party Involved Party-in-Interest Description of Transactions
Employer/ Payroll deductions for the WDF Inc. $7,424
KeySpan Corporation Plan Sponsor subsidiary were not funded by the 15th
business day after the month withheld, as
required by the D.O.L. Regulation
2510.3-102. December 2003 payroll
deductions and lost earnings were invested
on March 2, 2004.
Employer/ Payroll deductions for the Northern Peabody $540
KeySpan Corporation Plan Sponsor subsidiary were not funded by the 15th
business after the month withheld, as
required by the D.O.L. Regulation 2510.3-102.
April 2003 payroll deductions
and lost earnings were invested on
February 13, 2004.
12
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Plan
Committee has duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
KeySpan Energy 401(k) Plan for
Management Employees
BY: /s/ Michael J. Taunton
Michael J. Taunton
Senior Vice President and Treasurer
KeySpan Corporation
Date: June 28, 2004
13
Exhibit 23.1
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM'S CONSENT
We consent to the incorporation by reference in Registration Statement No.
333-40472 of KeySpan Corporation on Form S-8 of our report dated June 28, 2004,
appearing in this Annual Report on Form 11-K of the KeySpan Energy 401(k) Plan
for Management Employees for the year ended December 31, 2003.
/s/ Deloitte & Touche LLP
New York, New York
June 28, 2004
14