<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form U-3A-2
File No. . . . . .1-14508
Statement by Holding Company Claiming Exemption Under Rule U-3A-2 from the
Provisions of the Public Utility Holding Company Act of 1935
To Be Filed Annually Prior to March 1
KEYSPAN ENERGY CORPORATION
(Name of Company)
hereby files with the Securities and Exchange Commission, pursuant to Rule 2,
its statement claiming exemption as a holding company from the provisions of
the Public Utility Holding Company Act of 1935, and submits the following
information:
1. Name, State of organization, location and nature of business of claimant
and every subsidiary thereof, other than any exempt wholesale generator (EWG)
or foreign utility company in which claimant directly or indirectly holds an
interest.
KeySpan Energy Corporation ("claimant") is a New York corporation
organized in 1996 and has its principal executive office at One
MetroTech Center, Brooklyn, New York 11201.
Claimant's principal business is the ownership of all the outstanding
shares of common stock of The Brooklyn Union Gas Company.
The claimant's principal wholly- and majority-owned subsidiaries,
directly or indirectly owned, are as follows:
(a) The Brooklyn Union Gas Company, a New York corporation ("Brooklyn
Union"), distributes natural gas in the New York City boroughs of
Brooklyn, Staten Island and Queens and is regulated by the Public
Service Commission of the State of New York.
(b) The Houston Exploration Company, a Delaware corporation, is
engaged in the exploration, development and acquisition of
domestic natural gas and oil properties.
(c) Fuel Resources Inc., a Delaware corporation, owns equity interests
in storage fields, and participates in oil and gas investment
opportunities.
(d) North East Transmission Co., Inc., a Delaware corporation, owns an
equity interest in an interstate pipeline.
(e) KeySpan Energy Services Inc., a Delaware corporation, provides
natural gas marketing services.
(f) KeySpan Energy Management Inc., a Delaware corporation, provides
assistance with energy-related projects and offers technical and
maintenance services for commercial and industrial clients.
(g) In addition, claimant either directly or indirectly owns interests
in various other subsidiaries, the operations of which are not
<PAGE>
material. One such subsidiary, KeySpan International Corporation,
is the parent of KeySpan C.I., Ltd., a Cayman Island company, that
owns 24.5% of the voting stock of Phoenix Natural Gas Limited, a
Northern Ireland company, which has claimed foreign utility
company status under Section 33(a) of the Public Utility Holding
Company Act of 1935 and KeySpan C.I. II, Ltd., a Cayman Island
company, that owns 99.9% of the voting stock of its subsidiary
Grupo KeySpan, S. de R.L. de C.V., a Mexican company, which owns a
50% voting interest in Finsa Energeticos, S. de R.L. de C.V., also
a Mexican company, which has claimed foreign utility company
status under Section 33(a) of the Public Utility Holding Company
Act of 1935.
2. A brief description of the properties of claimant and each of its
subsidiary public utility companies used for the generation, transmission, and
distribution of electric energy for sale, or for the production, transmission
and distribution of natural or manufactured gas, indicating the location of
principal generating plants, transmission lines, producing fields, gas
manufacturing plants, and electric and gas distribution facilities, including
all such properties which are outside the State in which claimant and its
subsidiaries are organized and all transmission or pipelines which deliver or
receive electric energy or gas at the borders of such State.
(a) Description of properties of claimant:
The claimant has no properties used for the generation,
production, transmission and distribution of electric energy or
manufactured or natural gas.
(b) Description of properties of claimant's public utility company
subsidiary:
Claimant's wholly-owned subsidiary's public utility company
properties consist primarily of natural gas distribution systems
and related facilities and local offices serving the New York City
boroughs of Brooklyn, Staten Island and Queens. As of September
30, 1997, Brooklyn Union had 3,990 miles of mains and 1,600,000
Mcf. of liquefied natural gas storage capacity. Brooklyn Union is
subject to the regulation of the Public Service Commission of the
State of New York.
3. The following information for the last calendar year with respect to
claimant and each of its subsidiary public utility companies:
(a) Number of kwh. of electric energy sold (at retail or wholesale),
and Mcf. of natural or manufactured gas distributed at retail.
Claimant Subsidiary
KeySpan Energy Corporation The Brooklyn Union Gas Company
None 151,787,261 Mcf.
(b) Number of kwh. of electric energy and Mcf. of natural or
manufactured gas distributed at retail outside the State in which
each company is organized.
None None
2
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(c) Number of kwh. of electric energy and Mcf. of natural or
manufactured gas sold at wholesale outside the State in which each
such company is organized, or at the State line.
None 14,563,272 Mcf.
(d) Number of kwh. of electric energy and Mcf. of natural or
manufactured gas purchased outside the State in which each such
company is organized, or at the State line.
None 155,524,214 Mcf.
4. The following information for the reporting period with respect to
claimant and each interest it holds directly or indirectly in an EWG or a
foreign utility company, stating monetary amounts in United States dollars:
(a) Name, location, business address and description of the facilities
used by the EWG or foreign utility company for the generation,
transmission and distribution of electric energy for sale or for
the distribution at retail of natural or manufactured gas.
None None
(b) Name of each company that holds an interest in such EWG or foreign
utility company; and description of the interest held.
None None
(c) Type and amount of capital invested, directly or indirectly, by
the holding company claiming exemption; any direct or indirect
guarantee of the security of the EWG or foreign utility company by
the holding company claiming exemption; and any debt or other
financial obligation for which there is recourse, directly or
indirectly, to the holding company claiming exemption or another
system company, other than the EWG or foreign utility company.
None None
(d) Capitalization and earnings of the EWG or foreign utility company
during the reporting period.
None None
(e) Identify any service, sales or construction contract(s) between
the EWG or foreign utility company and a system company, and
describe the services to be rendered or goods sold and fees or
revenues under such agreement(s).
None None
3
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EXHIBIT A
A consolidating statement of income and surplus of the claimant and its
subsidiary companies for the last calendar year, together with a consolidating
balance sheet of claimant and its subsidiary companies as of the close of such
calendar year.
The following financial statements of claimant and its subsidiary
companies are attached hereto as Exhibit A on page 9:
Condensed Consolidating Income Statements
(Unaudited) for the Twelve Months Ended
December 31, 1997
Condensed Consolidating Earnings Reinvested
Statements (Unaudited) for the Twelve Months
Ended December 31, 1997
Condensed Consolidating Balance Sheet (Unaudited)
as of December 31, 1997
4
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EXHIBIT B. Financial Data Schedule
If, at the time a report on this form is filed, the registrant is
required to submit this report and any amendments thereto electronically via
EDGAR, the registrant shall furnish a Financial Data Schedule. The Schedule
shall set forth the financial and other data specified below that are
applicable to the registrant on a consolidated basis.
Item No. Caption Heading
1 Total Assets
2 Total Operating Revenues
3 Net Income
5
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EXHIBIT C
An organization chart showing the relationship of each EWG or foreign
utility company to associate companies in the holding-company system.
None
6
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The above-named claimant has caused this statement to be duly executed
on its behalf by its authorized officer on this 26th day of February, 1998.
KEYSPAN ENERGY CORPORATION
--------------------------
(Name of Claimant)
By /s/ Vincent D. Enright
------------------------
Vincent D. Enright
Senior Vice President, Chief
Financial Officer & Chief Accounting
Officer
7
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[Corporate Seal of KeySpan Energy Corporation Appears Here]
CORPORATE SEAL
Attest: /s/ Robert R. Wieczorek
-----------------------
Robert R. Wieczorek
Vice President, Secretary &
Treasurer
Name, title, and address of officer to whom notices and correspondence
concerning this statement should be addressed:
Robert R. Wieczorek Vice President, Secretary & Treasurer
------------------- -------------------------------------
(Name) (Title)
One MetroTech Center, Brooklyn, New York 11201
----------------------------------------------
(Address)
8
<PAGE>
EXHIBIT A
<TABLE>
KeySpan Energy Corporation and Subsidiaries
Condensed Consolidating Income Statement (Unaudited)
For the Twelve Months Ended December 31,1997
($ Millions)
<CAPTION>
The KeySpan
KeySpan Houston KeySpan KeySpan Pipeline, Other Energy
Energy Brooklyn Exploration Marketing International Storage KeySpan Reclassification Corporation
Corporation Union Company Group(1) Corporation(2) and Other(3) Affiliates and Elimination Consolidated
--------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Operating Revenues
Gas sales and
transportation - 1,288.2 - 13.6 - - - 1,301.8
Other retail service - 27.9 - 18.6 - - - 8.5 55.0
Gas production
and other - - 116.3 - - 7.8 13.3 (10.7) 126.7
------------------------------------------------------------------------------ ----------
- 1,316.1 116.3 32.2 - 7.8 13.3 1,483.5
Operating Expenses
Cost of gas - 563.8 - 16.1 - - - 579.9
Operation and
maintenance 0.2 346.4 24.0 20.0 0.6 5.5 11.3 13.3 421.3
Depreciation and
depletion - 59.8 59.1 0.2 - 0.2 0.5 119.8
General taxes 0.4 150.4 0.5 0.3 - 0.2 2.0 0.6 154.4
Federal income tax (0.2) 53.1 10.2 (1.5) - (1.3) 3.1 (4.7) 58.7
------------------------------------------------------------------------------ ----------
Operating Income (0.4) 142.6 22.5 (2.9) (0.6) 3.2 (3.6) 149.4
Other Income 57.0 29.8 1.3 0.2 (0.3) 5.3 5.0 (68.7) 29.6
Minority Interest in
Earnings of Subsidiary - - - - - - (8.0) (8.0)
------------------------------------------------------------------------------ ----------
Net Income (loss) 56.6 172.4 23.8 (2.7) (0.9) 8.5 (6.6) 171.0
Interest Charges
Long-term debt - 36.9 0.6 - - - - 37.5
Other 0.3 6.6 - - - - 0.3 (0.2) 7.0
------------------------------------------------------------------------------ ----------
0.3 43.5 0.6 - - - 0.3 44.5
------------------------------------------------------------------------------ ----------
Net Income (loss) 56.3 128.9 23.2 (2.7) (0.9) 8.5 (6.9) 126.5
Dividends on
Preferred Stock - 0.2 - - - - - 0.2
------------------------------------------------------------------------------ ----------
Income (loss) Applicable
to Common Stock 56.3 128.7 23.2 (2.7) (0.9) 8.5 (6.9) 126.3
============================================================================== ==========
(1) KeySpan Marketing Group consists of KeySpan Energy Services Inc. and KeySpan Energy Management Inc.
(2) KeySpan International Corporation consists of KeySpan C.I., Ltd. and KeySpan C.I. II, Ltd.
(3) Pipeline, Storage and Other consists of North East Transmission Co., Inc. and Fuel Resources Inc.
</TABLE>
9
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<TABLE>
KeySpan Energy Corporation and Subsidiaries
Condensed Consolidating Earnings Reinvested Statement (Unaudited)
For the Twelve Months Ended December 31,1997
($ Millions )
<CAPTION>
The Reclass- KeySpan
KeySpan Houston KeySpan KeySpan Pipeline, Other ification Energy
Energy Brooklyn Exploration Marketing International Storage KeySpan and Corporation
Corporation Union Company Group(1) Corporation(2) and Other(3) Affiliates Elimination Consolidated
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Earnings Reinvested at
Beginning of Period - 382.4 10.8 (1.6) 0.0 19.3 23.7 (52.4) 382.2
Net Income (loss) 56.3 128.9 23.2 (2.7) (0.9) 8.5 16.6 (103.4) 126.5
----------------------------------------------------------------------------- ----------
Total 56.3 511.3 34.0 (4.3) (0.9) 27.8 40.3 508.7
----------------------------------------------------------------------------- ----------
Transfer of
Retained Earnings 396.6 - - - - - - (396.6) 0.0
----------------------------------------------------------------------------- ----------
Dividends
Preferred Stock - 0.2 - - - - - 0.2
Common Stock 19.0 51.9 - - - 7.8 3.9 (8.2) 74.4
----------------------------------------------------------------------------- ----------
Total 19.0 52.1 - - - 7.8 3.9 74.6
----------------------------------------------------------------------------- ----------
Foreign Currency
Translation (0.4) (0.2) - - - - - (0.6)
----------------------------------------------------------------------------- ----------
Earnings Reinvested at
End of Period 433.5 459.0 34.0 (4.3) (0.9) 20.0 36.4 433.5
============================================================================= ==========
(1) KeySpan Marketing Group consists of KeySpan Energy Services Inc. and KeySpan Energy Management Inc.
(2) KeySpan International Corporation consists of KeySpan C.I., Ltd. and KeySpan CI II, Ltd.
(3) Pipeline, Storage and Other consists of North East Transmission Co., Inc. and Fuel Resources Inc.
</TABLE>
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<TABLE>
KeySpan Energy Corporation and Subsidiaries
Condensed Consolidating Balance Sheet (Unaudited)
As of December 31,1997
($ Millions)
<CAPTION>
Reclass- KeySpan
KeySpan The Houston KeySpan KeySpan Pipeline, Other ification Energy
Energy Brooklyn Exploration Marketing International Storage KeySpan and Corporation
Corporation Union Company Group(1) Corporation(2) and Other(3) Affiliates Elimination Consolidated
--------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Assets
Property
Utility, at cost - 1,855.7 - - - - - 1,855.7
Accumulated depreciation - (461.6) - - - - - (461.6)
Gas exploration, production
and other, at cost - - 680.3 2.3 - 1.4 - 684.0
Accumulated depletion - - (236.5) (0.6) - - - (237.1)
-------------------------------------------------------------------------- ------------
- 1,394.1 443.8 1.7 - 1.4 - 1,841.0
-------------------------------------------------------------------------- ------------
Equity Investments in
Energy Services 1,036.5 231.2 - - 53.5 45.2 256.2 (1,524.0) 98.6
-------------------------------------------------------------------------- ------------
Current Assets
Cash and temporary
cash investments 3.0 8.0 4.7 7.4 - 11.7 5.0 39.8
Accounts receivable 2.0 260.1 35.6 12.2 0.2 6.7 6.1 12.6 335.5
Allowance for
uncollectible accounts - (16.8) - - - - - (16.8)
Gas in storage, at average cost - 87.4 - - - - - 87.4
Materials and supplies
at average cost - 10.5 1.3 - - - - 11.8
Prepaid gas costs - 8.5 - - - - - 8.5
Other 0.6 33.6 4.4 12.2 - 9.0 - (2.3) 57.5
-------------------------------------------------------------------------- ------------
5.6 391.3 46.0 31.8 0.2 27.4 11.1 523.7
-------------------------------------------------------------------------- ------------
Deferred Charges - 201.5 1.8 5.8 0.1 - 0.8 (55.7) 154.3
-------------------------------------------------------------------------- ------------
Total 1,042.1 2,218.1 491.6 39.3 53.8 74.0 268.1 2,617.6
========================================================================== ============
(1) KeySpan Marketing Group consists of KeySpan Energy Services Inc. and KeySpan Energy Management Inc.
(2) KeySpan International Corporation consists of KeySpan C.I., Ltd. and KeySpan CI II, Ltd.
(3) Pipeline, Storage and Other consists of North East Transmission Co., Inc. and Fuel Resources Inc.
11
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Capitalization and Liabilities
Capitalization
Common stock,
$.33 1/3 par value stated at 580.6 468.7 222.1 35.8 52.2 39.5 123.1 (941.4) 580.6
Retained earnings 433.5 459.0 34.0 (4.3) (0.9) 20.0 36.4 (544.2) 433.5
-------------------------------------------------------------------------- ------------
Total common equity 1,014.1 927.7 256.1 31.5 51.3 59.5 159.5 1,014.1
Long-term debt - 647.1 113.0 - - - - 760.1
-------------------------------------------------------------------------- ------------
1,014.1 1,574.8 369.1 31.5 51.3 59.5 159.5 1,774.2
-------------------------------------------------------------------------- ------------
Current Liabilities
Accounts payable 1.8 134.6 51.3 7.3 2.5 6.2 8.3 (34.4) 177.6
Dividends payable 19.2 - - - - - - 19.2
Commercial paper and
Notes payable 6.0 34.3 - - - - - 40.3
Taxes accrued 0.4 46.1 - 0.1 - 0.1 - (8.8) 37.9
Customer deposits - 23.2 - - - - - 23.2
Customer budget plan credit - - - - - - - 30.7 30.7
Interest accrued and other 0.5 38.9 - 0.5 - 1.7 (0.9) (1.4) 39.3
-------------------------------------------------------------------------- ------------
27.9 277.1 51.3 7.9 2.5 8.0 7.4 368.2
-------------------------------------------------------------------------- ------------
Deferred Credits and
Other Liabilities
Federal income tax - 230.3 70.7 (0.1) - 6.5 12.7 (28.2) 291.9
Unamortized investment
tax credits - 18.8 - - - - - 18.8
Other 0.1 117.1 0.5 - - - - (41.7) 76.0
-------------------------------------------------------------------------- ------------
0.1 366.2 71.2 (0.1) 0.0 6.5 12.7 386.7
-------------------------------------------------------------------------- ------------
Minority Interest in
Subsidiary Company - - - - - - 88.5 88.5
-------------------------------------------------------------------------- ------------
Total 1,042.1 2,218.1 491.6 39.3 53.8 74.0 268.1 2,617.6
========================================================================== ============
(1) KeySpan Marketing Group consists of KeySpan Energy Services Inc. and KeySpan Energy Management Inc.
(2) KeySpan International Corporation consists of KeySpan C.I., Ltd. and KeySpan CI II, Ltd.
(3) Pipeline, Storage and Other consists of North East Transmission Co., Inc. and Fuel Resources Inc.
</TABLE>
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<TABLE> <S> <C>
<ARTICLE> OPUR3
<CIK> 0001022916
<NAME> KEYSPAN ENERGY CORPORATION
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<BOOK-VALUE> PER-BOOK
<TOTAL-ASSETS> 2,618
<TOTAL-OPERATING-REVENUES> 1,484
<NET-INCOME> 126
</TABLE>
