THIS DOCUMENT IS A COPY OF THE FORM 11-K FILED ON JUNE 30, 2005 PURSUANT TO A
RULE 201 TEMPORARY HARDSHIP EXEMPTION.
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, 2004
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, 2004 and 2003 2
Statement of Changes in Assets Available for Benefits for the Year Ended December 31, 2004 3
Notes to Financial Statements 4 - 11
SUPPLEMENTAL SCHEDULES:
Form 5500, Schedule H, Part IV, Line 4i - Schedule of Assets (Held at End of Year)
as of December 31, 2004 12
Form 5500, Schedule H, Part IV, Line 4j - Schedule of Reportable Transactions
for the Year Ended December 31, 2004 13
Form 5500, Schedule H, Part IV, Question 4a - Delinquent Participant Contributions
for the Year Ended December 31, 2004 14
SIGNATURES 15
EXHIBIT INDEX:
Consent of Independent Registered Public Accounting Firm 16
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 and Participants 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, 2004 and 2003, and the related statement of changes in assets
available for benefits for the year ended December 31, 2004. 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 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. The Plan is not required to have,
nor were we engaged to perform, an audit of its internal control over financial
reporting. Our audits included consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Plan's internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, 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, 2004 and
2003, and the changes in assets available for benefits for the years then ended
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 of (1) assets
(held at end of year) as of December 31, 2004 (2) reportable transactions for
the year ended December 31, 2004 (3) delinquent participant contributions for
the year ended December 31, 2004 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 2004 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 29, 2005
KEYSPAN ENERGY 401(K) PLAN FOR MANAGEMENT EMPLOYEES
STATEMENTS OF ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 2004 AND 2003
- ----------------------------------------------------------------------------------------------------------------------------------
2004 2003
ASSETS:
Participant-directed investments $ 492,546,896 $ 427,196,286
Nonparticipant-directed investments 127,938,127 117,345,785
-------------------------------- -----------------------------
Total investments 620,485,023 544,542,071
-------------------------------- -----------------------------
RECEIVABLES:
Participant contributions 34,365 67,661
Employer contributions 12,696 25,529
-------------------------------- -----------------------------
Total receivables 47,061 93,190
-------------------------------- -----------------------------
ASSETS AVAILABLE FOR BENEFITS $ 620,532,084 $ 544,635,261
================================ =============================
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, 2004
- --------------------------------------------------------------------------------
ADDITIONS TO ASSETS ATTRIBUTED TO: 2004
Net investment income:
Net appreciation in fair value of investments $ 47,322,988
Interest and dividends 16,443,893
-----------------
Net investment income 63,766,881
-----------------
Contributions:
Participants 28,107,921
Employer 11,592,743
Rollovers 795,510
-----------------
Total Contributions 40,496,174
-----------------
Other Additions
Net assets transferred in from the Union Plan 1,794,225
-----------------
Total Additions 106,057,280
DEDUCTIONS FROM ASSETS ATTRIBUTED TO:
Benefits paid to participants (30,128,957)
Plan administration fees (31,500)
-----------------
Total Deductions (30,160,457)
INCREASE IN ASSETS 75,896,823
ASSETS AVAILABLE FOR BENEFITS:
Beginning of Year 544,635,261
-----------------
End of Year $ 620,532,084
=================
See notes to financial statements.
3
KEYSPAN ENERGY 401(k) PLAN FOR MANAGEMENT EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2004 AND 2003 AND FOR THE YEAR ENDED DECEMBER 31, 2004
- --------------------------------------------------------------------------------
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").
Plan Amendments - 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.
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.
4
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.
Effective June 1, 2004, The Committee approved the addition of Seneca Upshur to
the list of Participating Employers in the 401(k) Plan for Management Employees.
The employees are given a match of $0.50 of each $1.00 that they contribute up
to a maximum of 6% of the participant's compensation and are entitled to a 10%
discount on the purchase of Company Common Stock. Prior service time for all
Seneca Upshur employees was recognized for vesting purposes in the Plan.
On December 14, 2004, the Committee approved reducing the involuntary cash-out
threshold from $5,000 to $1,000 effective March 1, 2005.
Contributions -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%) and
contributed to the Plan on the participants' behalf by the Company. Compensation
may not be reduced by an amount greater than the limitation imposed by Section
402(g) of the Internal Revenue Code. 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 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 Company Common Stock and a discount on Company Stock for such
matching contributions 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 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.
5
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 (iv) the disability of the participant if the
participant is receiving disability benefits under Title II of the Social
Security Act. 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, 2004 and 2003, forfeited non-vested accounts totaled $719,212
and $590,460 respectively. These accounts will be used to reduce future employer
contributions and pay Plan administration expenses. During the year ended
December 31, 2004, employer contributions were reduced by $316 from forfeited
non-vested accounts.
Effective with the date of acquisition, an employee who was a participant of
Eastern Enterprises, Colonial Gas and EnergyNorth (and all subsidiaries of the
aforementioned companies that participate in the Plan) will be 100% vested in
matching contributions made on the participant's behalf, including discount on
Company Common Stock and discount on dividends attributable to such stock. An
employee who was hired after this date will be subject to the current KeySpan
vesting schedule.
Investments - All eligible employees have an opportunity to acquire shares of
Company Common Stock ($.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, 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 Mid-Cap Index Fund, and American
Funds Growth Fund of America, Class R-5 Shares. Participants should refer to the
applicable Fund's prospectus for a complete description of the Fund.
On May 21, 2004, The Committee approved the removal of Vanguard U.S. Growth
Fund, the addition of American Funds Growth Fund of America, Class R-5
("American Funds Growth Fund") and the Vanguard Mid-Cap Index Fund. Beginning
August 20, 2004, no new contributions or transfers into Vanguard U.S. Growth
were permitted. Participant contribution allocations to Vanguard U.S. Growth
were redirected to American Funds Growth Fund. Participants were given 90 days
to transfer their Vanguard U.S. Growth balances into other funds in the Plan
otherwise all remaining balances would automatically be transferred to American
Funds Growth Fund.
On November 19, 2004, remaining Vanguard U.S. Growth balances of $5,955,684 were
mapped to American Funds Growth Fund.
The Vanguard Mid-Cap Index was added as an investment option to the Plan to
complement the existing fund line-up.
Liquidation of Funds - During 2004, in an effort to allow participants greater
investment flexibility, the Preferred Stock and Substock funds in the Plan were
liquidated. Proceeds paid to participants were transferred from the respective
funds to the Vanguard Retirement Savings Trust. The funds were immediately
eligible to be transferred to other funds in the Plan. Details regarding the two
liquidations are below.
6
Preferred Stock Fund
- --------------------
On June 30, 2004, KeySpan's Board of Directors authorized the redemption of all
of the outstanding shares of Preferred Stock Series A partially held by the Plan
in the Preferred Stock Fund.
On July 29, 2004, the Preferred Stock Fund was liquidated. At the time of
redemption, 2,601 participants held 32,114 shares. Each participant who held
shares of the preferred stock received the par value of $100 per share plus a 2%
premium for a total of $102 per share. The total redemption amount was
$3,275,582, which included a premium of $64,228. KeySpan paid accrued dividends
through July 29, 2004 of $79,749 ($2.4833 per share).
Sub-Stock Fund
- --------------
On June 29, 2004, The Board of Directors of KeySpan Corporation authorized the
repurchase of all outstanding shares of the subsidiary stock held by the Plan
that were currently allocated to Plan participants. There were 502,169 allocated
shares held in the KeySpan Sub-Stock fund with a fair market value of
$1,027,131.
On October 15, 2004, the Sub-Stock fund was liquidated and the Plan received
total proceeds of $1,350,003 based on an independent third party appraisal of
the value of the allocated Sub-Stock and the cash contribution made to the Plan.
These proceeds were distributed amongst 1,338 active employees.
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 - Upon termination of service, a participant or eligible
beneficiary whose account balance is greater than $5,000, may elect to leave
their balance in the Plan, receive a lump-sum amount equal to the value of the
participant's vested account, elect to receive annual installments or a partial
distribution, or roll over their balance to an Individual Retirement Account or
another qualified plan.
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.
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.
7
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.
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. Valuation of the KeySpan SubStock, which
was not publicly traded, was obtained from independent outside appraisals. The
KeySpan Preferred Stock was not publicly traded, and was recorded at par value
of $100 and paid 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.
Participant loans are valued at outstanding loan balances.
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 and discount on
Company Common Stock.
Payment of Benefits - Benefits to participants are recorded when paid.
8
3. INVESTMENTS
The following investments represent 5% of more of the Plan's assets available as
of December 31, 2004 and 2003:
2004 2003
KeySpan Stock Fund -
*KeySpan Common Stock Fund, 3,256,252 and
3,200,049 units, respectively** $127,938,127 $117,345,785
Common and Collective Trust -
Vanguard Retirement Savings Trust, 110,935,142
and 101,407,274 shares, respectively**
110,935,142 101,407,274
Mutual Funds:
Vanguard PRIMECAP Fund, 1,572,250 and
1,534,446 shares, respectively** 97,951,182 81,387,014
Vanguard 500 Index Fund, 449,286 and
439,388 shares, respectively** 50,158,311 45,111,940
Vanguard Windsor Fund, 2,664,050 and
2,615,251 shares, respectively** 48,139,390 42,523,980
Vanguard Windsor Fund II, 1,438,508 and
1,319,154 shares, respectively** 44,205,357 34,944,392
Vanguard Explorer Fund, 449,657 and
423,947 shares, respectively** 33,530,945 27,819,425
* Non-participant directed
** Permitted party-in-interest
During 2004, the Plan's investment (including gains and losses on
investments bought and sold, as well as held during the year) appreciated
in value by $47,322,988 as follows:
KeySpan Common Stock $8,984,974
KeySpan Preferred Stock 64,228
Mutual Funds 38,273,786
------------------
Net Appreciation of Investments $47,322,988
==================
9
4. NONPARTICIPANT-DIRECTED INVESTMENTS
Information about the assets as of December 31, 2004 and 2003 and the
significant components of changes in assets for the year ended December
31, 2004 relating to the non participant-directed investments is as
follows:
2004
KeySpan Common Stock fund - beginning of year: $117,345,785
Changes in assets:
Net appreciation in fair value of investment 8,984,974
Dividend income 5,762,250
Employer contributions 11,288,744
Participant contributions 12,365,955
Participant loan repayments 2,513,221
Net assets transferred in 303,205
Benefits paid to participants (6,544,943)
Participant loan withdrawals (1,356,623)
Transfers to participant-directed investments (22,724,441)
--------------------------
Net change 10,592,342
--------------------------
KeySpan Common Stock fund - end of year: $127,938,127
==========================
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 for income taxes has
been included in the Plan's financial statements.
6. EXEMPT PARTY-IN-INTEREST 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 exempt
party-in-interest transactions. The Plan's transactions involving Company Common
Stock 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.
10
At December 31, 2004 and 2003, the Plan held 3,256,252 and 3,200,049 units,
respectively, of KeySpan Common Stock, the sponsoring employer, with a cost
basis of $105,037,656 and $99,026,743, respectively. During the year ended
December 31, 2004, the Plan recorded dividend income of $5,762,250.
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. NON EXEMPT PARTY-IN-INTEREST TRANSACTIONS
KeySpan remitted to the trustee certain 2001 contributions for two employees of
KeySpan Home Energy Services New England on April 8, 2005 and a 2002
contribution for one employee of KeySpan Home Energy Services New England on
June 24, 2005. These contributions, totaling $795, were remitted later than
required by D.O.L. Regulation 2510.3-102. The Company forwarded additional funds
totaling $300 to compensate for participants' lost earnings, which were
deposited in the employees' accounts.
9. SUBSEQUENT EVENTS
On January 20, 2005 all participant balances in Vanguard Retirement Savings
Trust, with an expense ratio of 0.30%, were transferred to Vanguard Retirement
Savings Trust V, which offers an expense ratio of 0.25%. The two funds hold
identical investments.
During the 1st quarter of 2005, KeySpan divested of the following five
subsidiaries:
Subsidiary Date of Sale
---------- ------------
Granite State Plumbing January 14, 2005
Northern Peabody January 18, 2005
Delta, Inc. January 21, 2005
Binsky and Synder, Inc. January 31, 2005
WDF Greene, Inc. February 11, 2005
Employees under these subsidiaries are not eligible to contribute to the Plan as
of the respective dates of sale. These employees are considered terminated
participants and have the same distribution options that are available to other
terminated employees. As of December 31, 2004, 333 participants employed with
the above subsidiaries held an aggregate balance of $13,179,310.
11
KEYSPAN ENERGY 401(k) PLAN FOR MANAGEMENT EMPLOYEES
FORM 5500, SCHEDULE H, PART IV, LINE 4i--
SCHEDULE OF ASSETS (HELD AT END OF YEAR)
DECEMBER 31, 2004
- ------------------------------------------------------------------------------------------------------------------------------------
(c) Description of Investment, Including
(b) Identity of Issue, Borrower, Maturity Date, Rate of Interest, (e) Current
(a) Lessor or Similar Party Collateral, Par or Maturity Value (d) Cost Shares Value
* KeySpan Common Stock Fund Common Stock $ 105,037,656 3,256,252 $ 127,938,127
American Funds Growth Fund of America Mutual Fund ** 303,502 8,306,854
Vanguard Funds:
* Vanguard Retirement Savings Trust Common Collective Trust ** 110,935,142 110,935,142
* Vanguard PRIMECAP Fund Mutual Fund ** 1,572,250 97,951,182
* Vanguard 500 Index Fund Mutual Fund ** 449,286 50,158,311
* Vanguard Windsor Fund Mutual Fund ** 2,664,050 48,139,390
* Vanguard Windsor II Fund Mutual Fund ** 1,438,508 44,205,357
* Vanguard Total Bond Market Index Fund Mutual Fund ** 2,751,007 28,252,840
* Vanguard LifeStrategy Moderate Growth Fund Mutual Fund ** 1,511,477 27,070,552
* Vanguard Explorer Fund Mutual Fund ** 449,657 33,530,945
* Vanguard International Growth Fund Mutual Fund ** 692,131 13,053,592
* Vanguard LifeStrategy Growth Fund Mutual Fund ** 476,774 9,554,557
* Vanguard LifeStrategy Conservative Growth Fund Mutual Fund ** 488,734 7,458,081
* Vanguard Mid-Cap Index Fund Mutual Fund ** 201,282 3,148,053
---------
609,702,983
* Participant loans receivable Participant loans (maturing 2005 to 2020 10,782,040
at interest rates of 5% to 10.5%) ** ----------
Total $ 620,485,023
=============
* Permitted party-in-interest.
** Cost information is not required for participant-directed investments and,
therefore, is not included.
12
KEYSPAN ENERGY 401(k) PLAN FOR MANAGEMENT EMPLOYEES
Form 5500, Schedule H, Part IV, Line 4j - Plan # 090899
Schedule of Reportable Transactions EIN # 11-3431358
Year Ended December 31, 2004
- ------------------------------------------------------------------------------------------------------------------------------------
Identity Description of Current Value of Historical
of Party Asset (include interest) Historical Asset on Gain
Involved rate and maturity in the Purchase Price Selling Price Cost of Asset Transaction Date (Loss)
case of a loan)
- ------------------------------------------------------------------------------------------------------------------------------------
The Vanguard Group Vanguard Retirement Savings Trust $35,534,876.97 $35,534,876.97
The Vanguard Group Vanguard Retirement Savings Trust $26,007,009.53 $26,007,009.53 26,007,009.53 $ -
N/A KeySpan Common Stock 32,479,018.73 32,479,018.73
N/A KeySpan Common Stock 30,871,660.08 26,419,824.09 30,871,660.08 4,451,835.99
13
KEYSPAN ENERGY 401(k) PLAN FOR MANAGEMENT EMPLOYEES
FORM 5500 SCHEDULE H, PART IV, LINE 4a -
DELINQUENT PARTICIPANT CONTRIBUTIONS
YEAR ENDED DECEMBER 31, 2004
- --------------------------------- ---------------------------- -- ------------------------------------------------------------------
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
Identity of Employer, Transferred Late to the Plan
Party Involved or Other Party-in-Interest Description of Transactions
$795
KeySpan Corporation Employer/Plan Sponsor KeySpan remitted to the trustee
certain 2001 contributions
for two employees of KeySpan
Home Energy Services New
England on April 8, 2005 and a
2002 contribution for one
employees of KeySpan Home Energy
Services New England on
June 24, 2005. These contributions,
totaling $795, were remitted later
than required by D.O.L. Regulation
2510.3-102. The Company forwarded
additional funds totaling
$300 to compensate for participants'
lost earnings, which were deposited
in the employees' accounts.
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
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Michael J. Taunton
Senior Vice President and Treasurer
KeySpan Corporation
Date: June 29, 2005