<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-K/A
(Mark One)
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended September 30, 1996
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 1-722
THE BROOKLYN UNION GAS COMPANY
(Exact name of Registrant as specified in its charter)
New York 11-0584613
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
ONE METROTECH CENTER, BROOKLYN, NEW YORK 11201-3850
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 718-403-2000
Securities registered pursuant to Section 12(b) of the Act:
Name of Each Exchange on
Title of Each Class Which Registered
Common Stock-$.33 1/3 par value New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
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
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein, and
will not be contained, to the best of registrant's knowledge, in
definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K. (X)
Aggregate market value of registrant's voting Common Stock
held by non-affiliates as of December 16, 1996 was approximately
$1.5 billion.
On December 18, 1996 the Company had 49,993,378 shares of
Common Stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Part of
Documents Form 10-K
Proxy Statement dated December 30, 1996 Part III
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
AMENDMENT TO APPLICATION OR REPORT
Filed pursuant to Section 12, 13 or 15(d)
of the Securities Exchange Act of 1934
Amendment No. 1
The registrant hereby amends the following items, financial
statements, exhibits or other portions of its Annual Report on Form
10-K for the fiscal year ended September 30, 1996 (the "Form 10-K")
as set forth in the pages attached hereto:
Item 10 - Directors and Executive Officers of the
Registrant.
Item 11 - Executive Compensation.
Item 12 - Security Ownership of Certain Beneficial Owners
and Management.
Item 14 - Exhibit 99, Shareholder Letter Dated December
30, 1996 Including the Attachment, Announcing
the Agreement Dated December 29, 1996
Between the Company, Long Island Lighting
Company and NYECO Corp.
- Schedule of Valuation and Qualifying Accounts.
<PAGE>
Part III
Item 10. Directors and Executive Officers of the Registrant
Information regarding the Company's directors is
incorporated herein by reference to pages 2 through 8 of the
Company's Proxy Statement, dated December 30, 1996, for its
Annual Meeting of Shareholders to be held on February 6, 1997.
Information regarding the Company's executive officers, who
are elected annually by the directors, is found on page 52
hereof.
Item 11. Executive Compensation
Information regarding compensation of the Company's
executive officers is incorporated herein by reference to pages 8
through 16 of the Company's Proxy Statement, dated December 30,
1996, for its Annual Meeting of Shareholders to be held on
February 6, 1997.
Item 12. Security Ownership of Certain Beneficial Owners and
Management
Information regarding beneficial ownership and management
ownership is incorporated herein by reference to "Proposal 1 -
Election of Directors" in the Company's Proxy Statement, on pages
6 and 7, dated December 30, 1996, for its Annual Meeting of
Shareholders to be held on February 6, 1997.
<PAGE>
Part IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on
Form 8-K
(a) 1. All Financial Statements
Page in
Form 10-K
Report of Independent Public Accountants 26
Summary of Significant Accounting Policies and
Basis of Financial Statement Presentation 27
Consolidated Statement of Income for the Years
Ended September 30, 1996, 1995 and 1994 30
Consolidated Statement of Retained Earnings for
the Years Ended September 30, 1996, 1995
and 1994 30
Consolidated Balance Sheet at September 30, 1996
and 1995 31
Consolidated Statement of Capitalization at
September 30, 1996 and 1995 32
Consolidated Statement of Cash Flows for the
Years Ended September 30, 1996, 1995 and 1994 33
Notes to Consolidated Financial Statements 34
(a) 2. Financial Statement Schedules
The following additional data should be read in conjunction with
the financial statements included in Part II, Item 8. Schedules
not included herein have been omitted because they are not
applicable or the required information is shown in such financial
statements or notes thereto.
<PAGE>
(a) 3. Exhibits
(3) Articles of incorporation and by-laws
By-laws of the Company, dated February 1, 1996, duly filed
in December 1996 as Exhibit 3(b) to KeySpan Energy
Corporation's Form S-4.
Restated Certificate of Incorporation of the Company filed
August 1, 1989, and Certificate of Amendment filed
July 2, 1993; incorporated by reference from Exhibit
4(b) to Form S-3 Registration Statement No. 33-50249.
(4) Instruments defining the rights of security holders,
including indentures:
Official Statement, dated December 4, 1985, respective of
$125,000,000 of New York State Energy Research and
Development Authority Variable Rate Gas Facilities
Revenue Bonds Series 1985 I and 1985 II, incorporated
by reference from Form 10-K for the year ended
September 30, 1985.
Participation Agreement, dated as of December 1, 1985,
between the New York State Energy Research and
Development Authority and The Brooklyn Union Gas
Company relating to the Variable Rate Gas Facilities
Revenue Bonds Series 1985 I and 1985 II, incorporated
by reference from Form 10-K for the year ended
September 30, 1985.
Indenture of Trust, dated December 1, 1985, between New York
State Energy Research and Development Authority and
Chemical Bank, as Trustee, relating to the Variable
Rate Gas Facilities Revenue Bonds Series 1985 I and
1985 II, incorporated by reference from Form 10-K for
the year ended September 30, 1985.
Official Statement, dated February 23, 1989, respective of
$90,000,000 of the New York State Research and
Development Authority Adjustable Rate Gas Facilities
Revenue Bonds Series 1989A and Series 1989B,
incorporated by reference from Form S-8 Registration
Statement No. 33-29898.
Participation Agreement, dated as of February 1, 1989,
between the New York State Energy Research and
Development Authority and The Brooklyn Union Gas
Company relating to the Adjustable Rate Gas Facilities
Revenue Bonds Series 1989A, incorporated by reference
from Form 10-K for the year ended September 30, 1989.
<PAGE>
Participation Agreement, dated as of February 1, 1989,
between the New York State Energy Research and
Development Authority and The Brooklyn Union Gas
Company relating to the Adjustable Rate Gas Facilities
Revenue Bonds Series 1989B, incorporated by reference
from Form 10-K for the year ended September 30, 1989.
Indenture of Trust, dated February 1, 1989, between the
New York State Energy Research and Development
Authority and Manufacturers Hanover Trust Company, as
Trustee, relating to the Adjustable Rate Gas Facilities
Revenue Bonds Series 1989A, incorporated by reference
from Form 10-K for the year ended September 30, 1989.
Indenture of Trust, dated February 1, 1989, between the
New York State Energy Research and Development
Authority and Manufacturers Hanover Trust Company, as
Trustee,
relating to the Adjustable Rate Gas Facilities
Revenue Bonds Series 1989B, incorporated by reference
from Form 10-K for the year ended September 30, 1989.
Official Statement, dated July 24, 1991, respective of
$50,000,000 of the New York State Research and
Development Authority Gas Facilities Revenue Bonds
Series 1991A and $50,000,000 of the New York State
Research and Development Authority Gas Facilities
Revenue Bonds Series 1991B, incorporated by reference
from Form 10-K for the year ended September 30, 1991.
Participation Agreement, dated as of July 1, 1991,between
the New York State Energy Research and Development
Authority and The Brooklyn Union Gas Company relating
to the Gas Facilities Revenue Bonds Series 1991A and
1991B, incorporated by reference from Form 10-K for the
year ended September 30, 1991.
Indenture of Trust, dated as of July 1, 1991, between the
New York State Energy Research and Development
Authority and Manufacturers Hanover Trust Company, as
Trustee, relating to the Gas Facilities Revenue Bonds
Series 1991A and 1991B, incorporated by reference from
Form 10-K for the year ended September 30, 1991.
Official Statement, dated July 23, 1992, respective of
$37,500,000 of the New York State Energy Research and
Development Authority Gas Facilities Revenue Bonds
Series 1993A and $37,500,000 of the New York State
Energy Research and Development Authority Gas
Facilities Revenue Bonds Series 1993B, incorporated by
reference from Form 10-K for the year ended September
30, 1992.
<PAGE>
Participation Agreement, dated as of July 1, 1992, between
the New York State Energy Research and Development
Authority and The Brooklyn Union Gas Company relating
to the Gas Facilities Revenue Bonds Series 1993A and
1993B, incorporated by reference from Form 10-K for the
year ended September 30, 1992.
Indenture of Trust, dated as of July 1, 1992, between the
New York State Energy Research and Development
Authority and Chemical Bank, as Trustee, relating to
the Gas Facilities Revenue Bonds Form Series 1993A and
1993B, incorporated by reference from Form 10-K for the
year ended September 30, 1992.
Official Statement, dated April 29, 1992, respective of
$90,000,000 of the New York State Energy Research and
Development Authority, 6.75% Gas Facilities Revenue
Bonds, replacing $45,000,000 Series 1989A and
$45,000,000 Series 1989B, incorporated by reference
from Form 10-K for the year ended September 30, 1992.
First Supplemental Participation Agreement dated as of May
1, 1992 to Participation Agreement dated February 1,
1989 between the New York State Energy Research and
Development Authority and The Brooklyn Union Gas
Company relating to Adjustable Rate Gas Facilities
Revenue Bonds, Series 1989A & B, incorporated by
reference from Form 10-K for the year ended September
30, 1992.
First Supplemental Trust Indenture dated as of May 1, 1992
to Trust Indenture dated February 1, 1989 between the
New York State Energy Research and Development
Authority and Manufacturers Hanover Trust Company, as
Trustee, relating to Adjustable Rate Gas Facilities
Revenue Bonds, Series 1989A & B, incorporated by
reference from Form 10-K for the year ended September
30, 1992.
Official Statement, dated July 15, 1993, respective of
$25,000,000 of the New York State Energy Research and
Development Authority Gas Facilities Revenue Bonds
Series D-1 and $25,000,000 of the New York State Energy
Research and Development Authority Gas Facilities
Revenue Bonds Series D-2, incorporated by reference
from Form S-8 Registration Statement No. 33-66182.
Participation Agreement, dated July 15, 1993, between the
New York State Energy Research and Development
Authority and The Brooklyn Union Gas Company relating
to the Gas Facilities Revenue Bonds Series D-1 1993 and
Series D-2 1993, incorporated by reference from Form
<PAGE>
S-8 Registration Statement No. 33-66182.
Indenture of Trust, dated July 15, 1993, between The New
York State Energy Research and Development Authority
and Chemical Bank as Trustee, relating to the Gas
Facilities Revenue Bonds Series D-1 1993 and Series D-2
1993, incorporated by reference from Form S-8
Registration Statement No. 33-60182.
Official Statement, dated July 8, 1993, respective of
$55,000,000 of the New York State Energy Research and
Development Authority Gas Facilities Revenue Bonds
Series C, incorporated by reference from Form 10-K for
the year ended September 30, 1993.
First Supplemental Participation Agreement dated as of
July 1, 1993 to Participation Agreement dated as of
June 1, 1990, between the New York State Energy
Research and Development Authority and The Brooklyn
Union Gas Company relating to Gas Facilities Revenue
Bonds Series C, incorporated by reference from Form
10-K for the year ended September 30, 1993.
First Supplemental Trust Indenture dated as of July 1, 1993
to Trust Indenture dated as of June 1, 1990 between the
New York State Energy Research and Development
Authority and Chemical Bank, as Trustee, relating to
Gas Facilities Revenue Bonds Series C, incorporated by
reference from Form 10-K for the year ended September
30, 1993.
Official Statement, dated January 15, 1996, respective of
$153,500,000 of the New York State Energy Research and
Development Authority, 5 1/2% Gas Facilities Revenue
Bonds Series 1996, replacing $98,500,000 Series 1985A
and $55,000,000 Series 1985.
Participation Agreement, dated January 1, 1996, between the
New York Energy Research and Development Authority and
The Brooklyn Union Gas Company relating to the Gas
Facilities Revenue Bonds Series 1996.
Indenture of Trust, dated January 1, 1996, between The New
York State Energy Research and Development Authority
and Chemical Bank, as Trustee, relating to the Gas
Facilities Revenue Bonds Series 1996.
(10) Material contracts
Deferred Compensation Plan Preamble, dated, December 17,
1986, incorporated by reference from Form 10-K for the
year ended September 30, 1987.
<PAGE>
Corporate Incentive Compensation Plan Description,
incorporated by reference from Form 10-K for the year
ended September 30, 1989.
Marketing Incentive Compensation Plan Description,
incorporated by reference from Form 10-K for the year
ended September 30, 1989.
Deferral Plan for Incentive Awards Description, incorporated
by reference from Form 10-K for the year ended
September 30, 1989.
Agreement of Lease between Forest City Jay Street Associates
and The Brooklyn Union Gas Company dated September 15,
1988, incorporated by reference from Form 10-K for the
year ended September 30, 1990.
Long-Term Performance Incentive Compensation Plan, dated
November 15, 1995.
(11) Statement re: Computation of per share earnings. See Part
II, Item 8., "Financial Statements and Supplementary
Data - Consolidated Statement of Income for the Years
Ended September 30, 1996, 1995 and 1994," for
information required by this item.
(12) Statement re: Computation of consolidated ratio of earnings
to fixed charges
(21) Subsidiaries of the registrant
(23) Consents of experts
(27) Financial data schedule
(99) Shareholder Letter dated December 30, 1996 including the
attachment, announcing the agreement dated December 29,
1996 between the Company, Long Island Lighting
Company and NYECO Corp.
(b) Reports on Form 8-K:
There were no reports filed on Form 8-K during the quarter ended
September 30, 1996. There was an 8-K filed on December 29, 1996
pertaining to the agreement entered into between the Company,
Long Island Lighting Company and NYECO Corp.
<PAGE>
THE BROOKLYN UNION GAS COMPANY AND SUBSIDIARIES
CONSOLIDATED SCHEDULE OF VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED SEPTEMBER 30, 1996, 1995 AND 1994
(Thousands of Dollars)
<TABLE>
<CAPTION>
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
Balance at Additions Balance at
Beginning Charged to End of
Description of Period Expense Deductions Period
______________________________ ____________ ______________ ______________ ______________
<S> <C> <C> <C> <C>
Year Ended September 30, 1996
Allowance for uncollectible
accounts $13,730 $20,676 $18,790 (a) $15,616
____________ ______________ ______________ ______________
Reserve for injuries and damages
Public Liability $5,900 $5,788 $3,412 (b) $8,276
Workers' Compensation 1,590 450 1,193 (b) 847
____________ ______________ ______________ ______________
$7,490 $6,238 $4,605 $9,123
____________ ______________ ______________ ______________
Year Ended September 30, 1995
Allowance for uncollectible
accounts $14,963 $17,494 $18,727 (a) $13,730
____________ ______________ ______________ ______________
Reserve for injuries and damages
Public Liability $5,350 $4,368 $3,818 (b) $5,900
Workers' Compensation 1,425 500 335 (b) 1,590
____________ ______________ ______________ ______________
$6,775 $4,868 $4,153 $7,490
____________ ______________ ______________ ______________
Year Ended September 30, 1994
Allowance for uncollectible
accounts $14,212 $18,737 $17,986 (a) $14,963
____________ ______________ ______________ ______________
Reserve for injuries and damages $6,816 $3,447 $3,488 (b) $6,775
____________ ______________ ______________ ______________
</TABLE>
(a) Write-off of bad debts, net of recoveries.
(b) Cost of injury and damage claims.
<PAGE>
SIGNATURE
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the registrant has duly caused this report
to be signed on its behalf by the undersigned hereunto duly
authorized.
Dated: January 8, 1997
THE BROOKLYN UNION GAS COMPANY
By: /s/ Richard M. Desmond
Richard M.Desmond
Vice President, Comptroller
and Chief Accounting Officer
<PAGE>
Exhibit 99
December 30, 1996
Dear Shareholder:
I am pleased to announce that on December 29, 1996, Brooklyn Union
and the Long Island Lighting Company (LILCO) signed a definitive
agreement to merge in a tax-free transaction that will result in a
new holding company. A copy of the merger agreement has been filed
with the Securities and Exchange Commission.
The transaction will be accounted for as a pooling of interests and
is anticipated to increase earnings to Brooklyn Union shareholders
immediately after completion of the merger. A copy of the full
press release is attached to this letter.
This proposed transaction has been approved by both companies'
boards of directors and will eventually require your approval.
Because the combination will result in the formation of a new
holding company, Brooklyn Union will not pursue our plans to form
the KeySpan Energy Corporation, as we had originally envisioned.
Accordingly, the proposal to form that holding company has been
withdrawn, although it is extensively discussed in our summary
annual report, which was prepared prior to our decision to merge.
That holding company proposal, therefore, is not included in the
enclosed proxy statement.
I am very excited about the proposed merger. The transaction
offers shareholders of both companies the opportunity to
participate in the significant upside potential of the convergence
of gas and electric companies within the energy industry. In
particular, our combination with LILCO opens up the huge Long
Island market for Brooklyn Union. This market is particularly
attractive because there is an extremely low penetration of gas as
a percent of the total energy provision in that region. The
combination of the two companies will result in substantial synergy
savings in excess of $1 billion over ten years, making rates more
competitive. In addition, this transaction will help spur
increased regional business growth through lower energy prices and
enhanced energy-related products and services. As a result,
Brooklyn Union shareholders will benefit from the attractive growth
prospects resulting from access to more than one million customers
in an area with a population of 2.7 million people.
<PAGE>
I am very enthusiastic about our company's future and am optimistic
that we will continue to grow and prosper in the competitive
marketplace. Thank you for your continued confidence in Brooklyn
Union.
Sincerely,
s/Robert B. Catell
Robert B. Catell
Chairman and Chief Executive Officer
<PAGE>
FOR IMMEDIATE RELEASE
Contact for Brooklyn Union: Contact for LILCO:
Media: Robert Loftus/Robert Mahony Media: Elaine Davis
718-403-2503/718-403-2522 516-545-5052
Investors: Jan Childress Investors: William
Catacosinos, Jr.
718-403-3382 516-545-4688
BROOKLYN UNION AND LILCO ANNOUNCE PLAN
TO COMBINE COMPANIES
RATE SAVINGS IN EXCESS OF $1.0 BILLION ANTICIPATED
New York (December 29, 1996) -- Brooklyn Union Gas Company (NYSE:
BU) and The Long Island Lighting Company (LILCO) (NYSE: LIL)
announced today that they have signed a definitive agreement to
merge in a tax-free transaction resulting in a new holding company.
The combined market value of the two companies based on their
closing stock prices on Friday, December 27, 1996 is approximately
$4 billion. The transaction will be accounted for as a pooling of
interests.
The proposed transaction, which has been approved by both
companies' boards of directors, would unite Brooklyn Union, a gas
company with primary operations in gas distribution serving
Brooklyn, Queens and Staten Island, with LILCO, an electric and gas
company serving Nassau and Suffolk Counties and parts of Queens.
The new company, which has not yet been named, will serve
approximately 2.2 million customers and have revenues of more than
$4.5 billion.
Under the terms of the transaction, LILCO shareholders will receive
.803 shares of the new holding company's common stock for each
share of LILCO they currently hold. Brooklyn Union shareholders
will receive one share of the holding company's common stock for
each share of Brooklyn Union they currently hold. LILCO
shareholders will own approximately 66 percent of the common stock
of the new company while Brooklyn Union shareholders will own
approximately 34 percent. There are no changes with respect to
either company's public debt issues or outstanding preferred stock.
Upon completion of the merger, Dr. William J. Catacosinos,
currently chairman and chief executive officer of LILCO, will
become chairman and chief executive officer of the new holding
company; Mr. Robert B. Catell, currently chairman and chief
executive officer of Brooklyn Union, will become president and
chief operating officer of the new holding company. One year after
the closing, Mr. Catell will succeed Dr. Catacosinos as chief
executive officer, with Dr. Catacosinos continuing as chairman.
<PAGE>
The board of directors of the new company will be composed of 15
members, six from Brooklyn Union and six from LILCO and three
additional persons previously unaffiliated with either company and
jointly selected by them.
Dr. Catacosinos said, "The combination of Brooklyn Union and LILCO
is positive for our customers, shareholders, and the communities we
serve. The consolidation of our neighboring companies will result
in synergy savings in excess of $1 billion over ten years, which
will provide rate reductions to customers. We will continue our
commitment to LILCO's electric customers, specifically to lowering
electric rates on Long Island. Together, we can help spur
increased regional business growth through lower energy prices and
enhanced energy-related products and services.
"The combined workforce will allow us to respond more effectively
to storm outages. Employees of both our companies will benefit
from being part of a larger, more competitive company well-
positioned in the emerging energy-services industry. Together, we
will be positioned to help our customers find business solutions
that optimize a broad array of energy products and services at
competitive prices," Dr. Catacosinos added.
The companies believe reductions related to synergies can be
accomplished without layoffs through attrition and other voluntary
separations.
Mr. Catell said, "Our combination with LILCO opens up the
substantial Long Island market for Brooklyn Union. This market is
particularly attractive because there is low penetration of gas as
a percent of the total energy provision in that region. Our
combined company would have an enhanced ability to provide its
broader customer base with competitive energy products and services
well into the future. The tradition of quality customer service
and community involvement, a hallmark of both Brooklyn Union and
LILCO, will continue unabated in the combined entity. Brooklyn
Union shareholders should enjoy immediate earnings accretion and
benefit from the long-term growth prospects inherent in the
combination."
Mr. Catell continued, "This transaction offers shareholders of both
companies the opportunity to participate in the significant upside
potential of the convergence of gas and electric companies within
the energy industry. LILCO and Brooklyn Union together will create
a platform to market, trade and arrange physical delivery of energy
products and services on a large scale to all major market areas.
Current and prospective customers will benefit greatly from the
opportunity to deal with an energy services company which can offer
one-stop shopping for the provision--and management--of their
energy needs. Brooklyn Union's subsidiary, KeySpan Energy
Management, headquartered in Jericho, New York, already operates
throughout the tri-state area and its sister company KeySpan Energy
<PAGE>
Services sells natural gas to a growing customer base. The ability
to offer wraparound individualized services capable of encompassing
all customer needs--from management services to choice of fuel and
equipment, and ultimately appliance services--means a new day
indeed for an entire population of customers in our new market
area."
The companies noted that they will continue discussions with New
York State's Long Island Power Authority (LIPA) with respect to
LIPA's proposal to acquire certain LILCO assets, including its
regulatory assets. If an agreement with LIPA is reached, the terms
of the transaction with Brooklyn Union would be adjusted to reflect
that resolution. Brooklyn Union and LILCO will continue to work
with LIPA and state officials to substantially reduce rates to Long
Island electric customers beyond that which could be achieved by
the merger alone. Disposition of any portion of LILCO's assets to
LIPA must be agreed to by all three parties.
The companies will continue their current dividend policies
respectively, until the closing. It is expected that the new
company's dividend policy will be determined prior to closing.
The merger is conditioned upon the approval of each company's
common shareholders and various regulatory agencies including the
New York Public Service Commission, the Federal Energy Regulatory
Commission and the Securities and Exchange Commission. The
companies are hopeful that the regulatory approvals can be obtained
in 12 to 18 months.
Merrill Lynch & Co. is serving as financial advisor and has
provided a fairness opinion to Brooklyn Union. Dillon Read & Co.
Inc. is serving as financial advisor and has provided a fairness
opinion to LILCO.
Brooklyn Union, with approximately 3,000 employees, distributes
natural gas in the New York City boroughs of Brooklyn and Staten
Island and in two-thirds of the borough of Queens, and serves the
growing energy needs of 4 million residents. Brooklyn Union has
energy-related investments in gas exploration, production and
marketing in the United States and Canada, as well as energy
services in the United States, including cogeneration products,
pipeline transportation and gas storage.
LILCO's 5,400 employees provide electric and gas service to more
than 1 million customers in Nassau and Suffolk Counties and on the
Rockaway Peninsula in Queens County. LILCO's service territory
covers 1,230 square miles with a population of approximately 2.7
million people.
The press release includes forward looking statements
within the meaning of Section 21E of the Securities Exchange Act
of 1934. These forward looking statements reflect numerous
assumptions, and
<PAGE>
involve a number of risks and uncertainties. Among the factors
that could cause actual results to differ materially are: electric
load and customer growth; abnormal weather conditions; available
sources and cost of fuel and generating capacity; the speed and
degree to which competition enters the power generation, wholesale
and retail sectors of the electric utility industry; state and
federal regulatory initiatives that increase competition, threaten
cost and investment recovery, and impact rate structures; the
ability of the combined company to successfully reduce its cost
structure; operating performance of nuclear generating facilities,
decommissioning costs associated with such facilities; the degree
to which the combined company develops nonregulated business
ventures; the economic climate and growth in the service
territories of the two companies; economies generated by the
merger; inflationary trends and interest rates and the other risks
detailed from time to time in the two companies' SEC reports.
