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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 June 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 2-23416
BOSTON GAS COMPANY
D/B/A KEYSPAN ENERGY DELIVERY NEW ENGLAND
------------------------------------------
(Exact name of registrant as specified in its charter)
MASSACHUSETTS 04-1103580
- ------------- ---------------
(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 514,184 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:
BOSTON GAS COMPANY
Statements of Operations
- ------------------------
(Unaudited)
(In Thousands)
For the For the
Three Months Ended Six Months Ended
------------------ ----------------
June 30, June 30, June 30, June 30,
2002 2001 2002 2001
------- ------- ------- -------
OPERATING REVENUES $101,771 $ 148,042 $346,062 $549,062
Cost of gas sold 46,885 98,145 180,371 389,892
------- ------- ------- -------
Operating Margin 54,886 49,897 165,691 159,170
------- ------- ------- -------
OPERATING EXPENSES:
Operations and maintenance 39,784 41,099 73,316 77,095
Depreciation and amortization 14,378 13,057 28,756 26,592
Amortization of goodwill - 4,839 - 9,678
Operating Taxes 4,754 5,657 10,214 12,515
------ ------- ------- -------
Total Operating Expenses 58,916 64,652 112,286 125,880
------ ------- ------- -------
OPERATING INCOME (LOSS) (4,030) (14,755) 53,405 33,290
OTHER INCOME, NET 64 71 367 294
------ ----- ------ ------
INCOME (LOSS) BEFORE INTEREST EXPENSE
AND INCOME TAXES (3,966) (14,684) 53,772 33,584
------- -------- ------ ------
INTEREST EXPENSE:
Long-term debt 4,050 4,209 8,248 8,418
Other, including Advance from KeySpan
and Utility Pool Borrowings 12,819 11,582 25,149 20,435
Less - Interest during construction (1,557) (103) (1,756) (190)
------ ------ ------ ------
Total Interest Expense 15,312 15,688 31,641 28,663
------ ------ ------ ------
INCOME TAXES:
Current (2,102) (9,997) 10,536 6,713
Deferred (5,611) (203) (2,354) (1,520)
------- ------- ------ ------
Total Income Taxes (Benefit) (7,713) (10,200) 8,182 5,193
------- -------- ----- -----
NET INCOME (LOSS) (11,565) (20,172) 13,949 (272)
Preferred Stock Dividends 249 274 499 548
------ ------- ------- ------
NET INCOME(LOSS)APPLICABLE TO COMMON STOCK $(11,814) $ (20,446) $ 13,450 $ (820)
======== ========= ========== =======
The accompanying notes are an integral part of these financial statements.
Boston Gas Company
- ------------------
Balance Sheets
- --------------
(Unaudited)
(In Thousands)
June 30, December 31,
2002 2001
----------- -----------
ASSETS
GAS PLANT, at cost $ 1,070,678 $ 1,070,610
Construction work-in-progress 76,605 27,875
Less-Accumulated depreciation (448,519) (425,163)
------- -------
698,764 673,322
------- -------
CURRENT ASSETS:
Cash and cash equivalents 177 3,104
Accounts receivable 89,395 95,393
Allowance for uncollectible accounts (15,512) (14,730)
Accounts receivable - affiliates - 8,851
Accrued utility revenue 11,964 50,693
Deferred gas costs 42,593 15,670
Gas in Storage, at average cost 63,778 79,544
Materials and supplies, at average cost 5,191 3,996
Prepaid expenses 1,209 377
------- -----
198,795 242,898
------- -------
OTHER ASSETS:
Goodwill, net of amortization 790,285 790,285
Regulatory asset - deferred postretirement benefits cost 43,068 42,585
Regulatory asset - deferred environmental 34,347 35,096
Deferred charges and other assets 23,202 21,165
------ ------
890,902 889,131
------- -------
TOTAL ASSETS $1,788,461 $ 1,805,351
========== ==========
The accompanying notes are an integral part of these financial statements.
Boston Gas Company
- ------------------
Balance Sheets
- --------------
(Unaudited)
(In Thousands)
June 30, December 31,
2002 2001
-------------------- ----------------
CAPITALIZATION AND LIABILITIES
CAPITALIZATION:
Common stockholder's investment -
Common stock, $100 par value,
514,184 shares authorized and outstanding $ 51,418 $ 51,418
Amounts in excess of par value 410,575 360,575
Retained earnings (5,916) (19,368)
Accumulated other comprehensive income (450) (692)
--------- ---------
Total Common Stockholder's Investment 455,627 391,933
Cumulative preferred stock, $1 par value,
(liquidation preference, $25 per share)
Authorized shares-1,200,000;
Outstanding shares-622,700 at
June 30, 2002 and December 31, 2001 15,302 15,289
Long-term obligations, less current portion 222,989 223,403
Advance from KeySpan Corporation 650,000 650,000
------- -------
Total Capitalization 1,343,918 1,280,625
--------- ----------
CURRENT LIABILITIES:
Current portion of long-term obligations 815 586
Note payable utility pool 76,117 147,350
Note payable utility pool-gas inventory financing 62,272 85,401
Accounts payable 45,625 99,608
Accounts payable-affiliates 76,733 -
Accrued taxes 4,161 5,740
Accrued income taxes (771) (2,432)
Accrued interest 5,320 11,377
Customer deposits 1,727 1,884
Other current liabilities 827 157
----- ------
272,826 349,671
------- -------
OTHER LIABILITIES:
Deferred income taxes 71,879 73,609
Unamortized investment tax credits 2,135 2,556
Postretirement benefits obligation 53,110 50,901
Environmental liability 31,382 31,878
Other 13,211 16,111
------ ------
171,717 175,055
------- --------
TOTAL CAPITALIZATION AND LIABILITIES $1,788,461 $1,805,351
========== ==========
The accompanying notes are an integral part of these financial statements.
Boston Gas Company
- ------------------
Statements of Cash Flows
- ------------------------
(Unaudited)
(In Thousands)
For The Six Months Ended
------------------------
June 30, June 30,
2002 2001
--------- ---------
Cash flows from operating activities:
Net income (loss) $ 13,949 $ (272)
Adjustments to reconcile net income to
cash provided by (used in) operating activities:
Depreciation and amortization 28,756 36,270
Deferred taxes (2,354) (1,520)
Other changes in assets and liabilities:
Accounts receivable 6,780 (35,173)
Accrued utility revenue 38,729 59,996
Accounts payable-affiliates 85,584 -
Deferred gas costs (26,923) 36,898
Inventory 14,571 (7,662)
Accounts payable (53,983) (37,973)
Accrued interest (6,057) 29,639
Accrued taxes 82 (6,386)
Other (6,393) 21,192
------- ------
Cash provided by operating activities 92,741 95,009
------- ------
Cash flows from investing activities:
Capital expenditures (50,809) (39,030)
-------- --------
Cash used for investing activities (50,809) (39,030)
-------- --------
Cash flows from financing activities:
Changes in advance from KeySpan - 50,000
Capital Contribution from KNE LLC 50,000 -
Changes in notes payable - utility pool (71,233) (33,373)
Changes in gas inventory financing - utility pool (23,127) (24,887)
Dividends paid on common and preferred stock (499) (50,548)
------- --------
Cash provided (used) for financing activities (44,859) (58,808)
-------- -------
Decrease in cash and cash equivalents (2,927) (2,829)
Cash and cash equivalents at beginning of period 3,104 3,916
----- --------
Cash and cash equivalents at end of period $ 177 $ 1,087
======= =========
The accompanying notes are an integral part of these financial statements.
BOSTON GAS COMPANY
------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
UNAUDITED
---------
JUNE 30, 2002
-------------
1. Accounting Policies and Other Information
-----------------------------------------
Boston 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 Boston and 73 other communities in
eastern and central Massachusetts. 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 June 30, 2002, and the results of its operations for the three and
six months ended June 30, 2002 and June 30, 2001, as well as cash flows for
the six months ended June 30, 2002 and June 30, 2001. Results for the
periods are not necessarily indicative of results to be expected for the
year, due to the seasonal nature of the Company's operations. 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 2001 audited financial statements.
2. Recent Accounting Pronouncements
--------------------------------
On January 1, 2002, the Company adopted Statement of Financial Accounting
Standards ("SFAS") No. 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, which was 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
initially will be recorded as a cumulative effect of an accounting change
in the statement of income 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 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. These impairment tests are 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 and was
not recorded in 2002. For the three and six months ended June 30, 2001,
goodwill amortization was $4.8 and $9.7 million, respectively. As required
by SFAS 142, below is a reconciliation of reported net income for the three
and six months ended June 30, 2001 and pro-forma net income, for the same
periods, adjusted for the discontinuance of goodwill amortization.
(In thousands of dollars)
--------------------------------------------------------------------------------------------------------------------
Three Months Three Months Six Months Six Months
Ended Ended Ended Ended
June 30, 2002 June 30, 2001 June 30, 2002 June 30, 2001
-------------------------------------- ----------------- ------------------- ------------------- -------------------
Net income (loss) applicable to
common stock
$(11,814) $(20,446) $13,450 $ (820)
Add back: goodwill amortization
- 4,839 - 9,678
-------------------------------------- ----------------- ------------------- ------------------- -------------------
Adjusted net income (loss)
$(11,814) $(15,607) $13,450 $8,858
-------------------------------------- ----------------- ------------------- ------------------- -------------------
In July of 2001, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 143, "Accounting for Asset Retirement Obligations". The Standard
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 standard
is effective for fiscal years beginning after June 15, 2002, with earlier
application encouraged. The Company is currently evaluating the impact, if
any, that this Statement may have on its results of operations and
financial position.
SFAS No. 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 No. 144
supersedes SFAS No. 121, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to Be Disposed Of" and APB Opinion No. 30,
"Reporting the Results of Operations-Reporting the Effects of Disposal of a
Segment of a Business." SFAS No. 144 retains the fundamental provisions of
SFAS No. 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 results of operations and financial position.
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") operations, including
former operating plants, gas holder locations and satellite disposal sites.
In addition, the Company is aware of 30 other former MGP related sites
within its service territory. At this time, there is substantial
uncertainty as to whether the Company has or shares responsibility for
remediating any of these sites.
At June 30, 2002, the Company estimates the remaining cost of its
MGP-related environmental cleanup activities to be $31.4 million, which
amount has been accrued by the Company as a reasonable estimate of probable
cost for known sites. This amount is reflected on the balance sheet as an
environmental liability. Expenditures incurred to date with respect to
these MGP-related activities total $15.2 million.
By a rate order issued on May 25, 1990, the Massachusetts Department of
Telecommunications and Energy (the "Department") approved the recovery of
all prudently incurred environmental response costs associated with former
MGP related sites over separate, seven-year amortization periods, without a
return on the unamortized balance. The Company has recognized an insurance
receivable of $3.0 million, reflecting a negotiated settlement with an
insurance carrier for MGP-related environmental expense indemnity, and a
regulatory asset of $34.4 million, representing the expected rate recovery
of environmental remediation costs, net of the insurance settlement.
4. Seasonal Aspect
---------------
The gas distribution business is influenced by seasonal weather conditions.
Annual revenues are principally realized during the heating season
(November 1, to April 30) as a result of the large proportion of heating
sales in these months. 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. Workforce Reduction Program
---------------------------
As a result of the acquisition of the Company by KeySpan, the Company
implemented a severance program in an effort to reduce its workforce. In
2000, the Company recorded a liability of $6 million associated with this
severance program. During the year ended December 31, 2001, the Company
paid $1.3 million for this program and reduced this liability by $3.3
million as a result of lower than anticipated costs per employee. This
severance program is targeted to reduce the workforce by 80 employees and
will continue through 2002. Through June 30, 2002, $28,000 of payments were
made for the program leaving a remaining liability of approximately $1.4
million.
6. Related Party Transactions
--------------------------
The Company, and all utility subsidiaries of KeySpan, participate in a
utility money pool established by KeySpan. KeySpan Corporate Services
LLC("KCS"), 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 in the
treasuries 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
through the cost of gas adjustment clause.
7. Regulation
----------
The Company's rates for local transportation service are governed by the
five-year performance-based rate plan (the "Plan") approved by the
Department's 1996 order in D.P.U. 96-50. The Plan expires on October 31,
2002. However, during the second quarter of 2002, the Company filed with
the Department a request to extend the existing performance-based rate plan
for one year. The Attorney General has submitted a letter to the Department
stating his opposition to our request. Our request is currently pending
before the Department.
The Department's Order in D.P.U. 96-50 set the productivity factor at 1.5%
and expanded the service quality penalty beyond the $1 million proposed by
the Company. The Company appealed D.P.U. 96-50 and on January 16, 2001, the
Department limited the maximum service quality adjustment to $1 million and
adjusted the productivity factor to 1.0%, which included a 0.5% accumulated
inefficiencies factor. The Company appealed the imposition of the 0.5%
accumulated inefficiencies adjustment and on March 7, 2002, the Court ruled
in favor of the Company and eliminated this factor.
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 Company's failure to meet the
Department's service quality standards is subject to a maximum penalty
equivalent to 2% of its distribution service revenues. Each measurement
period will be a calendar year. The first measurement period began on
January 1, 2002.
8. Derivatives
-----------
On April 1, 2002, the Company adopted Implementation Issue C16 of Statement
of Financial Accounting Standards No. 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 our physical gas purchase commodity contracts, the
Company determined that certain contracts can no longer be exempted as
normal purchases from the requirements of SFAS 133. As a result, and
effective April 1, 2002, such contracts are required to be recorded on the
Balance Sheet at fair value and had a calculated fair value at that date of
$0.2 million. At June 30, 2002, the fair value of these contracts was $0.2
million. Since these contracts are for the purchase of natural gas sold to
firm gas sales customers, the accounting for these contracts is subject to
SFAS 71. Therefore, changes in the market value of these contracts will be
recorded as a regulatory asset or regulatory liability on the Balance
Sheet.
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS:
RESULTS OF OPERATIONS
Earnings applicable to common stock for the six months ended June 30, 2002 was
$13.5 million. This increase of $14.3 million over the corresponding period in
the prior year is due primarily to an increase in operating margin, a net
decline in operating and maintenance expense, and the discontinuance of goodwill
amortization offset, in part, by higher interest and tax expense.
Operating revenues for the six-month period ended June 30, 2002 declined $203.0
million, or 37%, from the six month period ended June 30, 2001. The decrease was
primarily due to the significant decline in the cost of gas sold to customers.
Cost of gas sold to customers for the six-month period ended June 30, 2002
decreased $209.5 million, or 53.7%, from 2001. This decline was due to both a
decrease in throughput of 30% and a decline in the average commodity price of
gas of 70%. The decline in throughput was due to significantly warmer weather
(12.3%) versus the prior year.
Fluctuations in the cost of gas sold have little or no impact on operating
margin as the gas rate structure includes a gas adjustment clause, pursuant to
which variations between actual gas costs incurred and gas cost billed are
deferred and refunded to or collected from customers in a subsequent period.
Operating margin (revenues less cost of gas sold) for the six-month period ended
June 30, 2002 increased $6.5 million, or 4.1%, from the six month period ended
June 30, 2001. Primarily contributing to the improvement in operating margin
from 2001 was an increase of $8.2 million due to customer additions, an
adjustment in rates ($2.9 million) associated with the Company's
performance-based rate plan (see the Company's 2001 Form 10-K) and an additional
$6.9 million benefit, of which the majority ($5.3 million) is attributable to a
favorable court decision which resulted in the elimination of an "accumulated
inefficiencies factor" (See Item 1 "Legal and Regulatory Proceedings"). These
benefits to operating margin were somewhat offset by a reduction of $12.8
million as a result of lower gas throughput due to the warmer weather.
For the six month period ended June 30, 2002, operating and maintenance expense
declined $3.8 million, or 4.9% against the prior year. This decline was
primarily due to a decrease in bad debt expense as a result of significantly
lower sales (as described above) and cost savings synergies resulting from prior
initiatives.
For the six-month period ended June 30, 2002, depreciation expense increased
$2.2 million, or 8% against the prior year. The increase is due to the Company's
continuing investments in its distribution infrastructure.
In accordance with SFAS 142, as of January 1, 2002, the Company is no longer
amortizing goodwill. For the six-month period ended June 30, 2001, amortization
of goodwill was $9.7 million.
For the six-month period ended June 30, 2002, interest expense on the Company's
long term debt is comparable to the prior year. For the sixth month period ended
June 30, 2002, other interest expense increased $4.7 million, or 23%, versus
2001. This increase primarily resulted from a reduction in interest income
associated with carrying charges on deferred gas costs, offset, in part, by
lower interest rates charged on money pool borrowings. For the six-month period
ended June 30, 2002, interest capitalized for construction increased $1.6
million over the prior year due to the significant increase in construction in
progress over the prior year.
Income tax expense for the six-month period ended June 30, 2002 increased
approximately 59% from 2001. The increase is attributable to higher pre-tax
earnings in 2002. The decline in taxes as a percentage of pre-tax earnings,
however, is attributable to the discontinuance of goodwill amortization. In
2001, goodwill amortization reduced book income, but was added back to taxable
income.
LIQUIDITY AND CAPITAL RESOURCES
On June 30, 2002, the Company received a capital contribution of $50.0 million
from KNE LLC. The proceeds were used to pay down borrowings from the utility
money pool.
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, preferred dividend
payments and normal debt repayments.
The Company expects capital expenditures for 2002 to be approximately $113
million. Actual capital expenditures for the six-month period ended June 30,
2002 were $50.8 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 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 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
In our Report on Form 8-K, dated April 5, 2002, we disclosed that on
March 29, 2002, our Board of Directors, upon recommendation of the
Audit Committee, determined not to renew the engagement of Arthur
Andersen LLP as independent public accountants and appointed Deloitte
Touche LLP as our independent public accountants.
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.
Boston Gas Company
D/B/A KEYSPAN ENERGY DELIVERY NEW ENGLAND
--------------------------------------------------
(Registrant)
/s/Joseph F. Bodanza
-------------------------------------------
J.F. Bodanza, Senior Vice President
Finance, Accounting and Regulatory Affairs
(Principal Financial and Accounting Officer)
Dated: August 14, 2002