SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the Quarter Ended March 31, 1998 Commission File No. 0-1857-3
THE BERKSHIRE GAS COMPANY
Massachusetts 04-1731220
115 Cheshire Road, Pittsfield, Massachusetts 01201-1879
Registrant's telephone number, including Area Code 413:442-1511
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 [ ]
At March 31, 1998, the Registrant had issued and outstanding 2,285,745
shares of Common Stock, par value $2.50.
THE BERKSHIRE GAS COMPANY
STATEMENTS OF INCOME AND RETAINED EARNINGS - Unaudited
- ------------------------------------------------------------------------------
(In Thousands Except Per Share Amounts)
<TABLE>
<CAPTION>
Three Months Ended
3/31/98 3/31/97
-------- --------
<S> <C> <C>
Operating Revenues $ 22,969 $ 21,803
Cost of Gas Sold 11,732 10,667
---------------------
Operating Margin 11,237 11,136
---------------------
Other Operating Expenses 3,477 3,373
Depreciation 1,967 1,901
---------------------
Total 5,444 5,274
---------------------
Utility Operating Income 5,793 5,862
Other Income - Net 567 972
---------------------
Operating and Other Income 6,360 6,834
Interest Expense 1,129 1,118
Other Taxes 812 784
---------------------
Pre-Tax Income 4,419 4,932
Income Taxes 1,680 1,890
---------------------
NET INCOME 2,739 3,042
Retained Earnings at Beginning of Period 7,688 6,823
---------------------
Total 10,427 9,865
---------------------
Dividends Declared:
Preferred Stock 4 5
Common Stock 651 614
---------------------
Total Dividends 655 619
---------------------
Retained Earnings at End of Period $ 9,772 $ 9,246
=====================
Earnings Available for Common Stock $ 2,735 $ 3,037
---------------------
Average Shares of Common Stock Outstanding 2,285.7 2,192.9
---------------------
Basic and Diluted Earnings Per Share of
Common Stock $ 1.20 $ 1.38
=====================
</TABLE>
See Independent Accountants' Review Report and Notes to Financial Statements.
THE BERKSHIRE GAS COMPANY
STATEMENTS OF INCOME AND RETAINED EARNINGS - Unaudited
- ------------------------------------------------------------------------------
(In Thousands Except Per Share Amounts)
<TABLE>
<CAPTION>
Nine Months Ended
3/31/98 3/31/97
-------- --------
<S> <C> <C>
Operating Revenues $ 41,626 $ 38,029
Cost of Gas Sold 20,758 17,949
---------------------
Operating Margin 20,868 20,080
---------------------
Other Operating Expenses 9,498 9,008
Depreciation 3,399 3,240
---------------------
Total 12,897 12,248
---------------------
Utility Operating Income 7,971 7,832
Other Income - Net 1,666 2,135
---------------------
Operating and Other Income 9,637 9,967
Interest Expense 3,387 2,942
Other Taxes 1,481 1,410
---------------------
Pre-Tax Income 4,769 5,615
Income Taxes 1,790 2,157
---------------------
NET INCOME 2,979 3,458
Retained Earnings at Beginning of Period 8,739 7,883
---------------------
Total 11,718 11,341
---------------------
Dividends Declared:
Preferred Stock 12 266
Common Stock 1,934 1,829
---------------------
Total Dividends 1,946 2,095
---------------------
Retained Earnings at End of Period $ 9,772 $ 9,246
=====================
Earnings Available for Common Stock $ 2,967 $ 3,192
---------------------
Average Shares of Common Stock Outstanding 2,255.1 2,176.2
---------------------
Basic and Diluted Earnings Per Share of
Common Stock $ 1.32 $ 1.47
=====================
</TABLE>
See Independent Accountants' Review Report and Notes to Financial Statements.
THE BERKSHIRE GAS COMPANY
STATEMENTS OF INCOME AND RETAINED EARNINGS - Unaudited
- ------------------------------------------------------------------------------
(In Thousands Except Per Share Amounts)
<TABLE>
<CAPTION>
Twelve Months Ended
3/31/98 3/31/97
---------------------
<S> <C> <C>
Operating Revenues $ 52,059 $ 46,915
Cost of Gas Sold 26,019 21,918
---------------------
Operating Margin 26,040 24,997
---------------------
Other Operating Expenses 12,551 11,842
Depreciation 4,179 3,894
---------------------
Total 16,730 15,736
---------------------
Utility Operating Income 9,310 9,261
Other Income - Net 1,887 2,253
---------------------
Operating and Other Income 11,197 11,514
Interest Expense 4,425 3,698
Other Taxes 1,841 1,765
---------------------
Pre-Tax Income 4,931 6,051
Income Taxes 1,854 2,331
---------------------
NET INCOME 3,077 3,720
Retained Earnings at Beginning of Period 9,246 8,397
---------------------
Total 12,323 12,117
---------------------
Dividends Declared:
Preferred Stock 12 438
Common Stock 2,539 2,433
---------------------
Total Dividends 2,551 2,871
---------------------
Retained Earnings at End of Period $ 9,772 $ 9,246
=====================
Earnings Available for Common Stock $ 3,065 $ 3,282
---------------------
Average Shares of Common Stock Outstanding 2,239.3 2,167.4
---------------------
Basic and Diluted Earnings Per Share of
Common Stock $ 1.37 $ 1.51
=====================
</TABLE>
See Independent Accountants' Review Report and Notes to Financial Statements.
THE BERKSHIRE GAS COMPANY
BALANCE SHEETS
- ------------------------------------------------------------------------------
(In Thousands)
<TABLE>
<CAPTION>
March 31, June 30,
1998 1997
----------- ---------
(Unaudited) (Audited)
<S> <C> <C>
ASSETS:
Utility Plant:
Utility Plant - at original cost $ 105,856 $ 101,983
Less: Accumulated Depreciation 31,051 28,343
-----------------------
Utility Plant - Net 74,805 73,640
-----------------------
Other Property:
Other Property - at original cost 12,409 11,983
Less: Accumulated Depreciation 6,350 5,887
-----------------------
Other Property - Net 6,059 6,096
-----------------------
Current Assets:
Cash 447 356
Accounts Receivable
Utility Service (less allowance: Mar. 1998-$1,137;
June 1997-$900) 10,676 6,386
Merchandise & Other (less allowance: Mar. 1998-$108;
June 1997-$121) 1,086 869
Other Receivables 128 332
Inventories (at the lower of average cost or market):
Natural Gas 1,105 1,844
Liquefied Petroleum 101 146
Materials and Supplies 1,581 1,675
Prepayments and Other 590 689
-----------------------
Total Current Assets 15,714 12,297
-----------------------
Deferred Debits:
Unamortized Debt Expense 2,226 2,302
Capital Stock Expense 287 319
Environmental Cleanup Costs 955 819
Other 1,423 1,425
-----------------------
Total Deferred Debits 4,891 4,865
-----------------------
Recoverable Environmental Cleanup Costs 3,290 3,290
-----------------------
TOTAL ASSETS $ 104,759 $ 100,188
=======================
</TABLE>
See Independent Accountants' Review Report and Notes to Financial Statements.
THE BERKSHIRE GAS COMPANY
BALANCE SHEETS
- ------------------------------------------------------------------------------
(In Thousands)
<TABLE>
<CAPTION>
March 31, June 30,
1998 1997
----------- --------
(Unaudited) (Audited)
<S> <C> <C>
CAPITALIZATION AND LIABILITIES
Common Shareholders' Equity:
Common Stock $ 5,715 $ 5,529
Premium on Common Stock 18,241 17,097
Retained Earnings 9,772 8,739
-----------------------
Total Common Shareholders' Equity 33,728 31,365
-----------------------
Redeemable Cumulative Preferred Stock 321 363
-----------------------
Long-Term Debt 40,000 40,000
-----------------------
Current Liabilities:
Notes Payable to Banks 7,825 6,480
Accounts Payable 2,383 3,513
Other Current Liabilities 2,847 4,621
Taxes Accrued 2,526 (96)
Refundable(Recoverable) Gas Costs 452 (1,404)
-----------------------
Total Current Liabilities 16,033 13,114
-----------------------
Other Liabilities 1,799 1,561
-----------------------
Unamortized Investment Tax Credit 1,156 1,209
-----------------------
Deferred Income Taxes 8,432 9,286
-----------------------
Reserve for Recoverable Environmental Cleanup Costs 3,290 3,290
-----------------------
TOTAL CAPITALIZATION AND LIABILITIES $ 104,759 $ 100,188
=======================
</TABLE>
See Independent Accountants' Review Report and Notes to Financial Statements.
THE BERKSHIRE GAS COMPANY
STATEMENTS OF CASH FLOWS - Unaudited
- ------------------------------------------------------------------------------
(In Thousands)
<TABLE>
<CAPTION>
Nine Months Ended
3/31/98 3/31/97
-------- --------
<S> <C> <C>
Cash flows from Operating Activities:
Net Income $ 2,979 $ 3,458
Adjustments to Reconcile Net Income to Net Cash Provided by
Operating Activities:
Depreciation and Amortization 4,125 3,955
Provision for Losses on Accounts Receivable 852 728
Recoverable(Refundable)Gas Costs 1,856 (2,845)
Deferred Income Taxes (854) 1,063
Changes in Assets and Liabilities Which Provided (Used) Cash:
Accounts Receivable (5,359) (6,018)
Other Receivables 204 227
Inventories 878 678
Accounts Payable (1,130) (546)
Taxes Accrued 2,621 1,435
Other (1,571) 1,107
---------------------
Total Adjustments 1,622 (216)
---------------------
Net Cash Provided by Operating Activities 4,601 3,242
---------------------
Cash Flows from Investing Activities:
Construction Expenditures (5,197) (5,737)
---------------------
Cash Flows from Financing Activities:
Dividends Paid (1,946) (2,095)
Proceeds from Issuance of Long-Term Debt 0 16,000
Proceeds from(Payments on)Notes Payable 1,345 (2,455)
Redemption of Preferred Stock (42) (9,360)
Proceeds from Other Stock Transactions 1,330 586
---------------------
Net Cash Provided by Financing Activities 687 2,676
---------------------
Net Increase in Cash 91 181
Cash at Beginning of Period 356 196
---------------------
Cash at End of Period $ 447 $ 377
---------------------
Supplemental Disclosures of Cash Flow Information:
Cash Paid During the Year for:
Interest(net of amount capitalized) $ 3,253 $ 3,157
=====================
Income Taxes(net of refund) $ 352 $ 6
=====================
</TABLE>
See Independent Accountants' Review Report and Notes to Financial Statements.
The Berkshire Gas Company
Notes to Financial Statements
March 31,1998
- ----------------------------------------------------------------------------
(Dollars in Thousands Except Share Amounts)
NOTES:
OTHER FINANCIAL INFORMATION:
The accompanying unaudited financial statements have been prepared in
accordance with the instructions to Form 10-Q and do not include all of the
information and footnotes required by generally accepted accounting
principles for complete financial statements. All adjustments, which in the
opinion of management are necessary for a fair presentation of the
operations for the interim periods presented, have been made. These
adjustments are of a normal recurring nature. The results of operations for
such interim periods are not necessarily indicative of results of operations
for a full year. These financial statements should be read in conjunction
with the summary of accounting policies and notes to financial statements
included in the Company's Annual Report on Form 10-K for the year ended June
30, 1997.
The Company received approval on January 30, 1998 from the Massachusetts
Department of Telecommunications and Energy ("DTE") to proceed with the
process of forming a holding company. The Company's management and Board of
Directors consider it to be in the best interest of Berkshire Gas and its
shareholders to adopt a holding company structure. Berkshire Gas would
become a wholly-owned subsidiary of a new parent company. This reorganization
will require shareholder approval. On February 24, 1998, the Company filed
with the SEC Form S-4 Registration Statement/Proxy. A special meeting of
shareholders is scheduled for Friday May 8, 1998, for the purpose of voting
on this reorganization.
On February 6, 1988, the Company signed an agreement to enter into a
joint venture with a major energy marketer. The affiliation will extend
opportunities to sell a variety of energy services in areas where the
Company now operates.
NEW ACCOUNTING PRONOUNCEMENT:
Effective December 31, 1997, the Company, as required, retroactively
adopted Statement of Financial Accounting Standards No. 128 "Earnings Per
Share" ("SFAS"). The statement established new standards for computing and
presenting earnings per share ("EPS") and requires restatement of prior
years information. As such, EPS for all prior periods presented has been
restated to conform with SFAS 128. Due to the capital structure of the
Company basic and diluted EPS are equal.
Statement of Financial Accounting Standards No. 132, "Employers'
Disclosures about Pensions and other Postretirement Benefits," was issued in
February, 1998. SFAS 132 revised employer's disclosures about pension and
other postretirement benefits, but does not change the measurement or
recognition of those plans. The Statement is effective for the Company's
1999 financial statements, with earlier application permitted. The impact
on the Company's disclosures is not expected to be significant.
CONTINGENCIES:
ENVIRONMENTAL:
Like other companies in the natural gas industry, the company is a
party to governmental actions associated with former gas manufacturing
sites. Management estimates that expenditures to remediate and monitor
known environmental sites will range from $3,290 to $12,302. In accordance
with SFAS No. 5, the Company has recorded the most likely cost of $3,290.
The Company's unamortized cost at March 31, 1998 was $955 and should be
recovered over a seven-year period through the Cost of Gas Adjustment Clause
("CGAC").
Management's Discussion and Analysis of Financial Condition and
Results of Operations
- ----------------------------------------------------------------------------
Results of Operations - Third Quarter Ended March 31, 1998 versus Third
Quarter Ended March 31, 1997
- ----------------------------------------------------------------------------
Berkshire Gas considers Operating Margin (Operating Margin or Gross
Profit = Operating Revenues Net of Cost of Gas Sold) to be a more pertinent
measure of operating results than Operating Revenues. This is due primarily
to the fact that revenues include changes in the cost of natural gas which
must be recovered or returned to customers through the Cost of Gas
Adjustment Clause. Consequently, changes in the cost of gas will affect
revenue levels, but does not have a corresponding affect on income.
Additionally, margins earned on interruptible gas sold and transported are
flowed back to the customers and therefore are not included in income.
Accordingly, the discussion below pertains to Operating Margin.
Operating Margin increased $101,000 or 0.9%, despite warmer weather,
from the three months ended March 31, 1997, primarily due to growth in
commercial volumes and customers.
<TABLE>
<CAPTION>
1998 1997
----------- -----------
<S> <C> <C>
3 Month Firm MCF Sold & Transported 2,559,000 2,642,000
3 Month Operating Margin $11,237,000 $11,136,000
3 Month Average Operating Margin Per Firm MCF $4.39 $4.21
</TABLE>
Other Operating Expenses increased $104,000 or 3.1% from the three
months ended March 31, 1997. The increase is primarily due to higher
professional fees due to the reorganization in response to the deregulation
of the gas industry, increased costs to upgrade technologies and higher
medical benefit costs. Partially offsetting these increases are reductions
in pension costs and meter reading expenses.
Depreciation Expense increased $66,000 due to an increase in the
amount of depreciable assets.
Other Income decreased $405,000 primarily due to lower Propane
revenues reflecting warmer weather as well as lower margins due to market
conditions. Contributing to a lesser extent was lower jobbing revenues and
less interest income from the undercollection of gas costs from customers
through the CGAC.
Dividends on Common Stock increased $37,000 due to an increase in the
number of shares reflecting active shareholder participation in the Dividend
Reinvestment Program ("DRIP").
The Allowance for Doubtful Accounts on Utility Service Accounts
Receivable increased by $237,000 since June 30, 1997, reflecting the current
status of doubtful accounts.
Management's Discussion and Analysis of Financial Condition and
Results of Operations
- ----------------------------------------------------------------------------
Results of Operations - Nine Months Ended March 31, 1998 versus Nine Months
Ended March 31, 1997
- ----------------------------------------------------------------------------
Operating Margin increased $788,000 or 3.9% as compared with the nine
months ended March 31, 1997 for the same reasons as discussed in the Third
Quarter Results.
<TABLE>
<CAPTION>
1998 1997
----------- -----------
<S> <C> <C>
9 Month Firm MCF Sold & Transported 4,983,000 4,989,000
9 Month Operating Margin $20,868,000 $20,080,000
9 Month Average Operating Margin Per Firm MCF $4.18 $4.02
</TABLE>
Other Operating Expenses increased $490,000 or 5.4% from the nine
months ended March 31, 1997. The increase is due to higher Production
Expenses due to the amortization of environmental cleanup costs, higher
Transmission and Distribution Expense due to re-allocation of the work force
and leasing expense due to the change to leasing versus buying vehicles,
higher costs relating to upgrading information systems, increased collection
costs, medical benefit costs, as well as higher Administrative and General
expenses as a result of the reorganization in response to deregulation.
Partially offsetting these increases were lower pension and meter reading
expenses.
Depreciation expense increased $159,000 due to an increase in the
amount of depreciable assets.
Other Income decreased $469,000 or 22.0%, and Dividends on Common
Stock increased $105,000 or 5.7% for the same reasons as discussed in the
Results of Operations - Third Quarter.
Due to the increase of long-term debt used to retire the 8.4%
Preferred Stock series as well as additional short-term borrowings to
finance gas costs, Interest Expense increased $445,000 which was partially
offset by a reduction of $254,000 in the requirements for Preferred Stock
dividends.
Income Taxes decreased $367,000 or 17.0% due to a decrease in Pre-Tax
Income.
Management's Discussion and Analysis of Financial Condition and
Results of Operations
- ----------------------------------------------------------------------------
Results of Operations - Twelve Months Ended March 31, 1998 versus Twelve
Months Ended March 31, 1997
- ----------------------------------------------------------------------------
Earnings available for Common Stock were $3,065,000 for the twelve
months ended March 31, 1998 as compared to $3,282,000 for 1997. The
decrease is primarily due to increased operating expenses and lower other
income caused by a warmer heating season.
Operating Margin increased $1,043,000 or 4.2% from the twelve months
ended March 31, 1997. The Company increased firm volumes sold and
transported through growth in customers and usage, which more than offset
the 7% warmer than normal weather.
<TABLE>
<CAPTION>
1998 1997
----------- -----------
<S> <C> <C>
12 Month Firm MCF Sold & Transported 6,424,000 6,348,000
12 Month Operating Margin $26,040,000 $24,997,000
12 Month Average Operating Margin Per Firm MCF $4.05 $3.94
</TABLE>
Other Operating Expenses rose $709,000 or 6.0% over the twelve months
ended March 31, 1997. The increase is due to Higher Production,
Transmission and Distribution, Customer Accounts and Administrative and
General Expenses. These expenses have increased for the same reasons as
noted above.
Other Income decreased $366,000 or 16.2% from 1997 primarily due to
lower Propane revenues as a result of the substantially warmer weather.
This was partially offset by increased income from Appliance Rentals.
Interest Expense increased $727,000 due to the increase in long-term
debt used to retire the $8,000,000, 8.4% Preferred Stock series and the
associated debt restructuring expenses. As a result of this restructuring
dividends on Preferred Stock decreased by $426,000. A tax savings of
$164,000 was realized from this restructuring.
Dividends declared on Common Stock increased $107,000 due to
additional shares outstanding through the Company's DRIP.
LIQUIDITY AND CAPITAL RESOURCES - MARCH 31, 1998
The Company added approximately $5,197,000 to Plant assets during the
nine months ended March 31, 1998. These construction expenditures primarily
represent investments in new and replacement mains and services.
The capital structure of the Company at March 31, 1998 was 45.6%
Common Equity, 0.4% Preferred Stock and 54.0% Long-Term Debt.
Cash flows from operating activities have increased over the nine
month period ended March 31, 1998, primarily due to the recovery of prior
period gas costs through the CGAC, partially offset by increases in Accounts
Receivable.
The Company initially finances construction expenditures and other
funding needs primarily with short-term bank borrowings, and to a lesser
extent with the reinvestment of dividends.
The Company continually evaluates its short-term borrowing position
and based on prevailing interest rates, market conditions, etc., makes
determinations regarding conversion of short-term borrowings to long-term
debt or equity.
It is management's view that the Company has adequate access to
capital markets and will have sufficient capital resources, both internal
and external, to meet anticipated capital requirements.
Funds for environmental clean-up costs are initially financed through
short-term borrowings and all such costs will be recovered over a seven year
period under a ruling issued by the Massachusetts Department of
Telecommunications and Energy ("DTE"), formerly referred to as the
Massachusetts Department of Public Utilities ("MDPU").
NEW ACCOUNTING PRONOUNCEMENT:
Effective December 31, 1997, the Company, as required, retroactively
adopted Statement of Financial Accounting Standards No. 128 "Earnings Per
Share " ("SFAS"). The statement established new standards for computing and
presenting earnings per share ("EPS") and required restatement of prior
years information. As such, EPS for all prior periods presented have been
restated to conform with SFAS 128. Due to the capital structure of the
Company basic and diluted EPS are equal.
Statement of Financial Accounting Standards No. 132, "Employers'
Disclosures about Pensions and other Postretirement Benefits," was issued in
February, 1998. SFAS 132 revised employer's disclosures about pension and
other postretirement benefits, but does not change the measurement or
recognition of those plans. The Statement is effective for the Company's
1999 financial statements, with earlier application permitted. The impact
on the Company's disclosures is not expected to be significant.
Cautionary Statement for Purposes of the "Safe Harbor" Provisions
of the Private Securities Litigation Reform Act of 1995
This Quarterly Report contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. Actual
results could differ materially from those contemplated by such statements.
Such statements reflect management's current views, are based on many
assumptions and are subject to risks and uncertainties.
Certain important factors which could cause such results to differ
include risks associated with the Company's maintaining contracts with
specific customers, government regulation, the increasingly competitive
nature of the markets in which the Company is engaged, and dependence on key
personnel. These factors are not intended to represent a complete list of
the general or specific risks that may affect the Company.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
- -----------------------------
No developments during the quarter.
Item 2. Changes in Securities
- ---------------------------------
Not Applicable
Item 3. Defaults Upon Senior Securities
- -------------------------------------------
Not Applicable
Item 4. Submission of Matters to a Vote of Security Holders
- ---------------------------------------------------------------
None
Item 5. Other Information
- -----------------------------
The Company received approval on January 30, 1998 from the DTE
to proceed with the process of forming a holding company. The
Company's management and Board of Directors consider it to be in
the best interest of Berkshire Gas and its shareholders to adopt
a holding company structure. Berkshire Gas would become a
wholly-owned subsidiary of a new parent company. This
reorganization will require shareholder approval. On February
24, 1998, the Company filed with the SEC Form S-4 Registration
Statement/Proxy. A special meeting of shareholders is
scheduled for Friday May 8, 1998, for the purpose of voting on
this reorganization.
On February 6, 1988, the Company signed an agreement to enter
into a joint venture with a major energy marketer. The
affiliation will extend opportunities to sell a variety of
energy services in areas where the Company now operates.
Item 6. Exhibits and Reports on Form 8 - K
- ----------------------------------------------
(a) List of Exhibits
Exhibit 27 - Financial Data Schedule
Exhibit 99 - Form S-4 Registration Statement/Proxy filed by
Berkshire Energy Resources on February 24, 1998 (File No.
333-46799) and is incorporated herein by reference.
The balance sheet as of March 31, 1998, the related statements of income and
retained earnings for the three month, nine month and twelve month periods
ended March 31, 1998 and 1997, and the statements of cash flows for the nine
month periods ended March 31, 1998 and 1997 have been reviewed, prior to
filing, by the Registrant's independent public accountants, Deloitte &
Touche LLP, whose report covering their review of the financial statements
is presented below.
Deloitte &
Touche LLP
City Place Telephone:(860) 280-3000
185 Asylum Street Facsimile:(860) 280-3051
Hartford, Connecticut 06103-3402
INDEPENDENT ACCOUNTANTS' REPORT
The Berkshire Gas Company:
We have reviewed the accompanying balance sheet of The Berkshire Gas Company
as of March 31, 1998, the related statements of income and retained
earnings for the three month, nine month and twelve month periods ended
March 31, 1998 and 1997, and the statements of cash flows for the nine month
periods ended March 31, 1998 and 1997. These financial statements are the
responsibility of the Company's management.
We conducted our reviews in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures
to financial data and making inquiries of persons responsible for financial
and accounting matters. It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing standards, the
objective of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such an
opinion.
Based on our reviews, we are not aware of any material modifications that
should be made to such financial statements for them to be in conformity
with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the balance sheet of The Berkshire Gas Company as of June 30,
1997, and the related statements of income and retained earnings and of cash
flows for the year then ended (not presented herein); and in our report
dated August 15, 1997, we expressed an unqualified opinion on those
financial statements. In our opinion, the information set forth in the
accompanying balance sheet as of June 30, 1997 is fairly stated, in all
material respects, in relation to the balance sheet from which it has been
derived.
/s/ Deloitte & Touche LLP
April 29, 1998
SIGNATURES
----------
Pursuant to the requirements of the Securities and Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
THE BERKSHIRE GAS COMPANY
------------------------------------
Registrant
/s/ Michael J. Marrone
------------------------------------
Michael J. Marrone
Vice President, Treasurer & Chief
Financial Officer
Dated: April 30, 1998
<TABLE> <S> <C>
<ARTICLE> UT
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-END> MAR-31-1998
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 74,805
<OTHER-PROPERTY-AND-INVEST> 6,059
<TOTAL-CURRENT-ASSETS> 15,714
<TOTAL-DEFERRED-CHARGES> 4,891
<OTHER-ASSETS> 3,290
<TOTAL-ASSETS> 104,759
<COMMON> 5,715
<CAPITAL-SURPLUS-PAID-IN> 18,241
<RETAINED-EARNINGS> 9,772
<TOTAL-COMMON-STOCKHOLDERS-EQ> 33,728
0
321
<LONG-TERM-DEBT-NET> 40,000
<SHORT-TERM-NOTES> 7,825
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 0
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 22,885
<TOT-CAPITALIZATION-AND-LIAB> 104,759
<GROSS-OPERATING-REVENUE> 41,626
<INCOME-TAX-EXPENSE> 1,790
<OTHER-OPERATING-EXPENSES> 9,498
<TOTAL-OPERATING-EXPENSES> 12,897
<OPERATING-INCOME-LOSS> 7,971
<OTHER-INCOME-NET> 1,666
<INCOME-BEFORE-INTEREST-EXPEN> 9,637
<TOTAL-INTEREST-EXPENSE> 3,387
<NET-INCOME> 2,979
12
<EARNINGS-AVAILABLE-FOR-COMM> 2,967
<COMMON-STOCK-DIVIDENDS> 1,934
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> 4,601
<EPS-PRIMARY> 1.32
<EPS-DILUTED> 0
</TABLE>
