----------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
----------------
FORM U5S
ANNUAL REPORT
For the Fiscal Year Ended September 30, 1999
----------------
Filed Pursuant to the
Public Utility Holding Company Act of 1935
by
National Fuel Gas Company
10 Lafayette Square, Buffalo, N.Y. 14203
----------------------------------------
<PAGE>
NATIONAL FUEL GAS COMPANY
-------------------------
FORM U5S - ANNUAL REPORT
------------------------
For the Fiscal Year Ended September 30, 1999
--------------------------------------------
TABLE OF CONTENTS
-----------------
Page
----
ITEM 1. SYSTEM COMPANIES AND INVESTMENTS THEREIN AS OF
SEPTEMBER 30, 1999 3
ITEM 2. ACQUISITIONS OR SALES OF UTILITY ASSETS 9
ITEM 3. ISSUE, SALE, PLEDGE, GUARANTEE OR ASSUMPTION OF
SYSTEM SECURITIES 9
ITEM 4. ACQUISITION, REDEMPTION OR RETIREMENT OF SYSTEM
SECURITIES 10
ITEM 5. INVESTMENTS IN SECURITIES OF NONSYSTEM COMPANIES 11
ITEM 6. OFFICERS AND DIRECTORS
Part I. Names, principal business address and
positions held as of September 30, 1999 12
Part II. Financial connections as of September 30, 1999 16
Part III. Compensation and other related information 16
ITEM 7. CONTRIBUTIONS AND PUBLIC RELATIONS 23
ITEM 8. SERVICE, SALES AND CONSTRUCTION CONTRACTS
Part I. Intercompany sales and services
(1) Salaries of officers of the Registrant 24
(2) Services rendered by Statutory Subsidiaries 25
(3) Services rendered by Registrant 31
Part II. Contracts to purchase services or goods
between any System company and any affiliate 32
Part III. Employment of any person by any System
company for the performance on a continuing
basis of management services 32
ITEM 9. WHOLESALE GENERATORS AND FOREIGN UTILITY COMPANIES 32
ITEM 10. FINANCIAL STATEMENTS AND EXHIBITS
Financial Statements (Index) 37
Exhibits 89
SIGNATURE 99
<PAGE>
ITEM 1. SYSTEM COMPANIES AND INVESTMENTS THEREIN AS OF SEPTEMBER 30, 1999
- ------- -----------------------------------------------------------------
Number of Common Percent of Issuer Owner's
Name of Company Shares Owned Voting Power Book Value Book Value
- --------------- ------------ ------------ ---------- ----------
Registrant: (Thousands of Dollars)
- -----------
National Fuel Gas Company
(Parent, Company or Registrant) - - - -
Statutory Subsidiaries:
- -----------------------
National Fuel Gas Distribution
Corporation (Distribution
Corporation) (Note 1) 2,000 100% $463,631 $463,631
Unsecured Debt (Note 10) - - $363,300 $363,300
National Fuel Gas Supply
Corporation (Supply
Corporation) (Note 2) 1,013,802 100% $266,015 $266,015
Unsecured Debt (Note 10) - - $161,200 $161,200
Seneca Resources Corporation
(Seneca Resources) (Note 3) 100,000 100% $ 85,759 $ 85,759
Unsecured Debt (Note 10) - - $571,100 $571,100
Empire Exploration Company,
Empire 1983 Drilling
Program, Empire 1983
Joint Venture (Note 11) N/A N/A $ 970 $ 970
Highland Land & Minerals, Inc.
(Highland) (Note 4) 4,500 100% $ 5,405 $ 5,405
Unsecured Debt (Note 10) - - $ 50,800 $ 50,800
Utility Constructors, Inc.
(UCI) *(Note 5) 1,000 100% $ 1,544 $ 1,544
Data-Track Account Services,
Inc. (Data-Track) (Note 6) 1,000 100% $ 728 $ 728
Leidy Hub, Inc. (Leidy Hub)
(Note 7) 4,000 100% $ 718 $ 718
Ellisburg-Leidy Northeast
Hub Company (Note 7) N/A 50% $ 117 $ 137
National Fuel Resources, Inc.
(NFR) (Note 8) 10,000 100% $ 13,223 $ 13,223
Horizon Energy Development, Inc.
(Horizon) (Notes 9 and 12-13) 1,250 100% $ 24,395 $ 24,395
Unsecured Debt (Note 10) - - $116,600 $116,600
Sceptre Power Company *(Note 12) N/A 100% $ 3,960 $ 3,960
Horizon Energy Holdings, Inc.
(HEHI)(Note 13) 2,000 100% $116,416 $116,416
Horizon Energy Development
B.V. (HED B.V.)(Note 13) 400 100% $116,416 $116,416
Severoceske teplarny, a.s.
(SCT) (Note 13) 939,203 82.87% $ 46,595 $ 42,999
Unsecured Debt (Note 10) - - $ 4,809 $ 4,809
Teplarna Liberec, a.s.
(TL) (Note 13) 70 70% $ 11,110 $ 9,998
<PAGE>
ITEM 1. SYSTEM COMPANIES AND INVESTMENTS THEREIN AS OF SEPTEMBER 30, 1999
- ------- -----------------------------------------------------------------
(Continued)
-----------
Number of Common Percent of Issuer Owner's
Name of Company Shares Owned Voting Power Book Value Book Value
- --------------- ------------ ------------ ---------- ----------
Registrant: (Thousands of Dollars)
- -----------
Lounske tepelne hospodarstvi, s.r.o.
(LTH) (Note 13) N/A 100% $ 59 $ 59
SCT SoftMaker, s.r.o.
(SM) (Note 13) N/A 100% $ 114 $ 114
Zatecka teplarenska, a.s.
(ZT) (Note 13) 34,200 34% $ 1,312 $ 1,312
Teplo Branany, s.r.o. (TB)
(Note 13) N/A 49% $ 1 $ 1
Jablonecka teplarenska
a realitni, a.s. (JTR)
(Note 13) 198 65.78% $ 6,735 $ 6,735
Unsecured Debt (Note 10) - - $ 2,339 $ 2,339
Prvni severozapadni teplarenska, a.s.
(PSZT)(Note 13) 867,193 86.2% $ 60,213 $ 73,325
Unsecured Debt (Note 10) - - $ 78,733 $ 78,733
ENOP Company, s.r.o.
(ENOP)(Note 13) N/A 100% $ 923 $ 1,035
Horizon Energy Development,
s.r.o. (HED) (Note 13) N/A 100% $ 1,499 $ 1,499
Power Development, s.r.o.
(PD) (Note 13) N/A 100% $ 1,469 $ 1,469
Teplarna Kromeriz a.s.
(Kromeriz) (Note 13) 1,000 100% $ 493 $ 493
Upstate Energy, Inc. (Upstate)
(Note 14) 1,000 100% $ (450) $ (450)
Unsecured Debt (Note 10) - - $ 3,700 $ 3,700
Seneca Independence Pipeline
Company (SIP) (Note 15) 1,000 100% $ 462 $ 462
Unsecured Debt (Note 10) - - $ 9,600 $ 9,600
Niagara Independence Marketing
Company (NIM) (Note 16) 1,000 100% $ 1 $ 1
NFR Power, Inc. (Note 17) 1,000 100% $ (59) $ (59)
Unsecured Debt (Note 10) - - $ 324 $ 324
Notes:
*Inactive subsidiary.
(1) Distribution Corporation is a public utility that sells natural gas and
-------------------------
provides gas transportation service in western New York and northwestern
Pennsylvania.
(2) Supply Corporation is engaged in the transportation and storage of
------------------
natural gas for affiliated and nonaffiliated companies.
(3) Seneca Resources is engaged in the exploration for, and the development
-----------------
and purchase of, natural gas and oil reserves in the Gulf Coast of Texas
and Louisiana, and in California, Wyoming and in the Appalachian region
of the United States. In addition, Seneca Resources is engaged in the
marketing of timber from its Pennsylvania land holdings. At September
30, 1998, HarCor Energy, Inc. (HarCor) was a wholly-owned subsidiary of
Seneca Resources.
<PAGE>
ITEM 1. SYSTEM COMPANIES AND INVESTMENTS THEREIN AS OF SEPTEMBER 30, 1999
- ------- -----------------------------------------------------------------
(Continued)
-----------
Effective August 31, 1999, HarCor was merged into Seneca Resources.
HarCor was engaged in the exploration for, and the development of,
natural gas and oil reserves located primarily in the San Joaquin Basin
in California.
(4) Highland operates several sawmills and kilns in northwestern
--------
Pennsylvania and processes timber from north-central Pennsylvania,
primarily high quality hardwoods.
(5) UCI discontinued its operations (primarily pipeline construction) in
---
1995. Effective October 1, 1999, UCI was merged into Highland.
(6) Data-Track provides collection services (principally issuing collection
----------
notices) primarily for the subsidiaries of the Company.
(7) Leidy Hub is a New York corporation formed to provide various natural
---------
gas hub services to customers in the eastern United States through a 50%
ownership of Ellisburg-Leidy Northeast Hub Company (a Pennsylvania
general partnership).
(8) NFR is engaged in the marketing and brokerage of natural gas and
---
electricity and the performance of energy management services for
industrial, commercial, public authority and residential end-users
throughout the northeastern United States.
(9) Horizon was formed to engage in foreign and domestic energy projects
-------
through investment in various business entities (see Notes 12-13).
(10) Unsecured debt is presented on page 7.
(11) In December 1983, Empire Exploration, Inc. (which was subsequently
merged into Seneca Resources) established a drilling fund through a
series of limited partnerships in which it acts as general partner (See
File No. 70-6909). Empire Exploration, Inc.'s aggregate investment in
all three limited partnerships amounted to $970,150.
(12) Horizon became one of the partners in Sceptre Power Company, a
California general partnership, on September 15, 1995. This partnership
was dissolved as of December 23, 1996 and is currently winding down
operations.
(13) Horizon owns 100% of the capital stock of HEHI, a New York corporation
which owns 100% of HED B.V. HED B.V. in turn owns 100% of the ownership
interests of HED and PD (both Czech corporations). PD owns 100% of the
ownership interests of Kromeriz (also a Czech corporation). HED B.V.
owns 82.87% of SCT (increased from 82.7% at September 30, 1998). SCT
owns 100% of the ownership interests of LTH and SM, 70% of the ownership
interest of TL, 34% of the ownership interest of ZT, 65.78% of the
ownership interest of JTR (increased from 34% at September 30, 1998) and
49% of the ownership interest of TB. All SCT subsidiaries are Czech
corporations or limited liability companies. During the fiscal year
ended September 30, 1999, SCT sold its 100% ownership interests in
Energoservis Liberec, s.r.o., Zkusebna mericu tepla a vodomeru
Litomerice, s.r.o. and AMES MOST, s.r.o. HED B.V. also owns an 86.2%
ownership interest in PSZT which in turn owns 100% of the ownership
interests of ENOP. HED B.V. and its subsidiaries are primarily engaged
in district heating and power generation operations in the Czech
Republic.
(14) Upstate is a New York corporation engaged in wholesale natural gas
-------
marketing and other energy-related activities.
<PAGE>
ITEM 1. SYSTEM COMPANIES AND INVESTMENTS THEREIN AS OF SEPTEMBER 30, 1999
- ------- -----------------------------------------------------------------
(Continued)
-----------
(15) SIP, a Delaware corporation, holds a one-third general partnership
---
interest in Independence Pipeline Company (Independence), a Delaware
general partnership. Independence, after receipt of regulatory
approvals, and upon securing sufficient customer interest, plans to
construct and operate the Independence Pipeline, a 370-mile interstate
pipeline system which would transport about 900,000 dekatherms per day
of natural gas from Defiance, Ohio to Leidy, Pennsylvania.
(16) NIM is a Delaware corporation which owns a one-third general partnership
---
interest in DirectLink Gas Marketing Company, which will engage in
natural gas marketing and related businesses, in part by subscribing for
firm transportation capacity on the Independence Pipeline.
(17) NFR Power, Inc. is a New York corporation capitalized by the Company in
--------------
1999 which, while not actively generating electricity at this time, is
designated as an "exempt wholesale generator" under the Public Utility
Holding Company Act of 1935.
<PAGE>
ITEM 1. SYSTEM COMPANIES AND INVESTMENTS THEREIN AS OF SEPTEMBER 30, 1999
- ------- -----------------------------------------------------------------
(Continued)
-----------
<TABLE>
<CAPTION>
Note (10) Unsecured Debt
Principal Issuer Owner's
Name of Company Amount Book Book
(Issuer) Security Owned by Registrant Owed Value Value
- --------------- ---------------------------- --------- ------ -------
(Thousands of Dollars)
<S> <C> <C> <C> <C>
Distribution
Corporation Intercompany Notes:
6.71% Due February 4, 2000 50,000 50,000 50,000
7.99% Due February 1, 2004 100,000 100,000 100,000
7.46% Due March 30, 2023 49,000 49,000 49,000
8.55% Due July 15, 2024 20,000 20,000 20,000
7.50% Due June 13, 2025 50,000 50,000 50,000
6.26% Due August 12, 2027 30,000 30,000 30,000
5.213% System Money Pool(1) 64,300 64,300 64,300
---------- ---------- ----------
363,300 363,300 363,300
---------- ---------- ----------
Supply
Corporation Intercompany Notes:
7.99% Due February 1, 2004 25,000 25,000 25,000
6.95% Due August 1, 2004 50,000 50,000 50,000
8.55% Due July 15, 2024 30,000 30,000 30,000
6.26% Due August 12, 2027 10,000 10,000 10,000
5.213% System Money Pool(1) 46,200 46,200 46,200
---------- ---------- ----------
161,200 161,200 161,200
---------- ---------- ----------
Seneca
Resources Intercompany Notes:
6.95% Due August 1, 2004 50,000 50,000 50,000
6.39% Due May 27, 2008 120,000 120,000 120,000
6.18% Due March 1, 2009 100,000 100,000 100,000
6.26% Due August 12, 2027 50,000 50,000 50,000
5.213% System Money Pool(1) 251,100 251,100 251,100
---------- ---------- ----------
571,100 571,100 571,100
---------- ---------- ----------
Highland 5.213% System Money Pool(1) 50,800 50,800 50,800
---------- ---------- ----------
Horizon Intercompany Notes:
6.26% Due August 12, 2027 10,000 10,000 10,000
6.39% Due May 27, 2008 80,000 80,000 80,000
5.23% Line of credit 26,600 26,600 26,600
---------- ---------- ----------
116,600 116,600 116,600
---------- ---------- ----------
SCT 7.23%(2) Payable Quarterly
Through June 2006 3,614 3,614 3,614
6.35% Short-Term Bank Loan 1,195 1,195 1,195
---------- ---------- ----------
4,809 4,809 4,809
---------- ---------- ----------
PSZT 7.505% (3) Payable March 2000-
December 2004 47,672 47,672 47,672
13% Due December 1999 8,961 8,961 8,961
Intercompany Demand Note-
7.96125% 22,100 22,100 22,100
---------- ---------- ----------
78,733 78,733 78,733
---------- ---------- ----------
JTR 9.45% (4) Payable Monthly
Through January 2008 1,798 1,798 1,798
0.01% Payable Quarterly
Through December 2007 494 494 494
10.85% (5) Payable Monthly
Through March 2001 47 47 47
---------- ---------- ----------
2,339 2,339 2,339
---------- ---------- ----------
Upstate Energy 5.213% System Money Pool(1) 3,700 3,700 3,700
---------- ---------- ----------
</TABLE>
<PAGE>
ITEM 1. SYSTEM COMPANIES AND INVESTMENTS THEREIN AS OF SEPTEMBER 30, 1999
- ------- -----------------------------------------------------------------
(Concluded)
-----------
<TABLE>
<CAPTION>
Note (10) Unsecured Debt
Principal Issuer Owner's
Name of Company Amount Book Book
(Issuer) Security Owned by Registrant Owed Value Value
-------- ---------------------------- --------- ------ -------
(Thousands of Dollars)
<S> <C> <C> <C>
Seneca
Independence
Pipeline 5.213% System Money Pool(1) 9,600 9,600 9,600
---------- ---------- ----------
NFR Power Inc. Intercompany Demand Note - 5.3% 126 126 126
Intercompany Line of
Credit - 5.3% 198 198 198
---------- ---------- ----------
324 324 324
---------- ---------- ----------
$1,362,505 $1,362,505 $1,362,505
========== ========== ==========
</TABLE>
(1) Interest rate represents weighted average of all short-term securities
outstanding at September 30, 1999, pursuant to System money pool
arrangement, S.E.C. File No. 70-8297 (Release Nos. 25964, 26076 and
26196).
(2) Interest rate is six month PRIBOR (Prague Interbank Offered Rate) plus
0.5%.
(3) Interest rate per the debt agreement is six month PRIBOR (Prague
Interbank Offered Rate) plus 0.475%. However, under the terms of an
interest rate swap, which extends until June 2001, PSZT pays a fixed rate
of 8.31% and receives a floating rate of six month PRIBOR.
<PAGE>
ITEM 2. ACQUISITIONS OR SALES OF UTILITY ASSETS
- ------- ---------------------------------------
None during fiscal year ended September 30, 1999.
ITEM 3. ISSUE, SALE, PLEDGE, GUARANTEE OR ASSUMPTION OF SYSTEM SECURITIES
- ------- -----------------------------------------------------------------
1. Name of Issuer: Horizon Energy Development, Inc.
Description of Security: Line of Credit Agreement with maximum draw of
$40,000,000
Effective Average Interest Rate: 5.23%
Name of Person To Whom Issued: National Fuel Gas Company
End of Year Balance: $26,600,000
Highest Balance During Year: $26,600,000
Exemption: Rule 52
2. Name of Issuer: Prvni severozapadni teplarenska, a.s. (PSZT)
Description of Security: Line of Credit Agreement with maximum draw of
$40,000,000 (issue)
Effective Average Interest Rate: 6 month LIBOR plus 2%
Name of Person To Whom Issued: Horizon Energy Development, Inc.
End of Year Balance: $22,100,000
Highest Balance During Year: $22,100,000
Exemption: Rule 52
3. Name of Issuer: NFR Power, Inc.
Description of Security: Demand Note issued on June 29, 1999 in the
principal amount of $125,931
Interest Rate: Equal to the daily interest rate charged by the National
Fuel Gas System Money Pool
Name of Person To Whom Issued: National Fuel Resources, Inc.
Consideration: $125,931
Exemption: Rule 52
4. Name of Issuer: NFR Power, Inc.
Description of Security: Line of Credit Agreement with maximum draw of
$1,000,000
Effective Average Interest Rate: 5.3%
Name of Person To Whom Issued: National Fuel Resources, Inc.
End of Year Balance: $198,077.11
Highest Balance During Year: $198,077.11
Exemption: Rule 52
<PAGE>
ITEM 4. ACQUISITION, REDEMPTION OR RETIREMENT OF SYSTEM SECURITIES
- ------- ----------------------------------------------------------
FISCAL YEAR ENDED SEPTEMBER 30, 1999
------------------------------------
<TABLE>
<CAPTION>
Name of
Company
Acquiring,
Redeeming Number of Shares or
or Retiring Principal Amount
---------------------------- Commission
Name of Issuer and Title of Issue Securities Acquired Redeemed Retired Consideration Authorization
- --------------------------------- ---------- -------- -------- ------- ------------- -------------
(Thousands of Dollars)
------------------------------------------
Registered Holding Company:
- ---------------------------
<S> <C> <C> <C> <C> <C>
Registrant:
5.58% Note due
March 1, 1999 Registrant $100,000 $100,000 Rule 42
7.25% Note due
July 14, 1999 Registrant 50,000 50,000 Rule 42
6.00% Note due
March 1, 2009 Registrant $100,000 File No. 70-9153
6.82% Note due
August 1, 2004 Registrant 100,000 File No. 70-9153
Subsidiaries of Registered Holding Company:
- -------------------------------------------
Seneca Resources:
6.18% Note maturing Seneca
March 1, 2009 Resources 100,000 100,000 File No. 70-9153
Seneca Resources:
6.95% Note maturing Seneca
August 1, 2004 Resources 50,000 50,000 File No. 70-9153
Supply Corporation:
6.95% Note maturing Supply
August 1, 2004 Corporation 50,000 50,000 File No. 70-9153
Distribution Corporation:
5.72% Note due Distribution
March 1, 1999 Corporation 50,000 50,000 Rule 42
Seneca Resources:
5.72% Note due Seneca
March 1, 1999 Resources 50,000 50,000 Rule 42
Supply Corporation:
7.37% Note due Supply
July 14, 1999 Corporation 50,000 50,000 Rule 42
Supply Corporation:
8.44% Note redeemed Supply
November 19, 1998 Corporation 50,965 53,911 Rule 42
Seneca Resources (HarCor)*:
14.875% Note redeemed Seneca
March 23, 1999 and Resources
July 15, 1999 (HarCor)* 53,726 59,099 Rule 42
</TABLE>
* HarCor was a wholly-owned subsidiary of Seneca Resources until it was merged
into Seneca effective August 31, 1999.
<PAGE>
ITEM 5. INVESTMENTS IN SECURITIES OF NONSYSTEM COMPANIES
- ------- ------------------------------------------------
Number of Aggregate
1. Name of Owner Persons Business of Persons Investment
- ---------------- ------- ------------------- ----------
None.
<PAGE>
ITEM 6. OFFICERS AND DIRECTORS
- ------- ----------------------
Part I. Names, principal business address and positions held as of September
30, 1999
Names of System Companies with Which Connected
----------------------------------------------
<TABLE>
<CAPTION>
National National Highland
Fuel Gas Fuel Gas Seneca Land &
Distribution Supply Resources Minerals,
Registrant Corp. Corp. Corp. Inc.
---------- ------------ -------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
B. J. Kennedy Buffalo, NY (1) | D, COB, CEO, s | D, COB, s | D, COB, s | D, COB, s | s |
- -------------------------------------------------------------------------------------------------------------
B. S. Lee Des Plaines, IL (2) | D, df | - | - | - | - |
- -------------------------------------------------------------------------------------------------------------
G. L. Mazanec Houston, TX (3) | D, df | - | - | - | - |
- -------------------------------------------------------------------------------------------------------------
G. H. Schofield Buffalo, NY (1) | D, df | - | - | - | - |
- -------------------------------------------------------------------------------------------------------------
E. T. Mann Buffalo, NY (1) | D, df | - | - | - | - |
- -------------------------------------------------------------------------------------------------------------
R. T. Brady Buffalo, NY (4) | D, df | - | - | - | - |
- -------------------------------------------------------------------------------------------------------------
W. J. Hill Buffalo, NY (1) | D, df | D | - | - | - |
- -------------------------------------------------------------------------------------------------------------
J. V. Glynn Niagara Falls, NY (14)| D, df | - | - | - | - |
- -------------------------------------------------------------------------------------------------------------
P. C. Ackerman Buffalo, NY (1) | D, P, s | D, s | EVP | D, s | D, s |
- -------------------------------------------------------------------------------------------------------------
J. R. Peterson Buffalo, NY (1) | AS, s | - | GC, s | - | - |
- -------------------------------------------------------------------------------------------------------------
J. A. Beck Houston, TX (5) | - | - | - | D, P, s | P, D |
- -------------------------------------------------------------------------------------------------------------
W. M. Petmecky Houston, TX (5) | - | - | - | SVP, S, s | S |
- -------------------------------------------------------------------------------------------------------------
D. A. Brown Houston, TX (5) | - | - | - | VP, s | - |
- -------------------------------------------------------------------------------------------------------------
G. E. Klefstad Houston, TX (5) | - | - | - | VP, s | - |
- -------------------------------------------------------------------------------------------------------------
E. E. Wassell Houston, TX (5) | - | - | - | VP, s | - |
- -------------------------------------------------------------------------------------------------------------
J. F. McKnight Houston, TX (5) | - | - | - | VP, s | - |
- -------------------------------------------------------------------------------------------------------------
C. H. Friedrich Houston, TX (5) | - | - | - | T, AS, s | T |
- -------------------------------------------------------------------------------------------------------------
B. L. McMahon Santa Paula, CA (6) | - | - | - | VP, s | - |
- -------------------------------------------------------------------------------------------------------------
A. M. Cellino Buffalo, NY (1) | S, s | VP, s | s | s | s |
- -------------------------------------------------------------------------------------------------------------
P. M. Ciprich Buffalo, NY (1) | - | AS, GC, s | - | - | - |
- -------------------------------------------------------------------------------------------------------------
W. E. DeForest Buffalo, NY (1) | - | SVP, D, s | s | s | - |
- -------------------------------------------------------------------------------------------------------------
B. H. Hale Buffalo, NY (1) | - | - | D, SVP, s | - | - |
- -------------------------------------------------------------------------------------------------------------
R. Hare Buffalo, NY (1) | - | - | D, P, s | - | - |
- -------------------------------------------------------------------------------------------------------------
R. J. Kreppel Williamsville, NY (19)| - | - | - | - | - |
- -------------------------------------------------------------------------------------------------------------
J. P. Pawlowski Buffalo, NY (1) | T, s | D, SVP, T, s | T, S, s | s | s |
- -------------------------------------------------------------------------------------------------------------
J. R. Pustulka Buffalo, NY (1) | - | - | VP, s | - | - |
- -------------------------------------------------------------------------------------------------------------
J. D. Ramsdell Buffalo, NY (1) | - | VP, s | - | - | - |
- -------------------------------------------------------------------------------------------------------------
W. A. Ross Buffalo, NY (1) | - | - | D, VP, s | - | - |
- -------------------------------------------------------------------------------------------------------------
D. J. Seeley Buffalo, NY (1) | - | SVP, D, s | s | - | - |
- -------------------------------------------------------------------------------------------------------------
D. F. Smith Buffalo, NY (1) | - | P, D, S, s | - | D | - |
- -------------------------------------------------------------------------------------------------------------
R. J. Tanski Buffalo, NY (1) | - | VP, C, s | s | s | s |
- -------------------------------------------------------------------------------------------------------------
G. T. Wehrlin Buffalo, NY (1) | C, s | SVP, D, s | s | C, s | s |
- -------------------------------------------------------------------------------------------------------------
R. W. Wilcox Buffalo, NY (1) | - | VP, s | s | s | s |
- -------------------------------------------------------------------------------------------------------------
R. J. Wright Buffalo, NY (1) | - | VP, s | - | - | - |
- -------------------------------------------------------------------------------------------------------------
C. M. Carlotti Erie, PA (23)| - | VP, s | - | - | - |
- -------------------------------------------------------------------------------------------------------------
R. T. Evans Houston, TX (5) | - | - | - | AVP, s | - |
- -------------------------------------------------------------------------------------------------------------
T. L. Atkins Houston, TX (5) | - | - | - | AC, s | - |
- -------------------------------------------------------------------------------------------------------------
D. L. DeCarolis Buffalo, NY (1) | - | AVP, s | - | - | - |
- -------------------------------------------------------------------------------------------------------------
J. F. Kronenwetter Buffalo, NY (1) | - | AVP, s | - | - | - |
- -------------------------------------------------------------------------------------------------------------
R. E. Klein Buffalo, NY (1) | - | AC, s | s | s | s |
- -------------------------------------------------------------------------------------------------------------
S. Wagner Buffalo, NY (1) | - | AT, s | s | s | s |
- -------------------------------------------------------------------------------------------------------------
</TABLE>
Position Symbol Key
-------------------
COB - Chairman of the Board of Directors S - Secretary CEO - Chief
Executive Officer AS - Assistant Secretary
P - President C - Controller
EVP - Executive Vice President AC - Assistant Controller
SVP - Senior Vice President D - Director
VP - Vice President s - Salary
AVP - Assistant Vice President T - Treasurer
GC - General Counsel AT - Assistant Treasurer
df - Director's Fees
See page 15 for Notes.
<PAGE>
<TABLE>
<CAPTION>
Data-
Track National Horizon Niagara Seneca
Utility Account Fuel Energy Upstate Indep. Indep. NFR
Constructors Services, Resources, Development, Leidy Hub, Energy Marketing Pipeline Power
Inc. Inc. Inc. Inc.* Inc. ** Inc. Co.*** Co. Inc.
------------ --------- ---------- ------------ ---------- -------- --------- --------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
COB | s | s | s | D | - | D, COB | D, COB | - |
- -------------------------------------------------------------------------------------------------------------
- | - | - | - | - | - | - | - | - |
- -------------------------------------------------------------------------------------------------------------
- | - | - | - | - | - | - | - | - |
- -------------------------------------------------------------------------------------------------------------
- | - | - | - | - | - | - | - | - |
- -------------------------------------------------------------------------------------------------------------
- | - | - | - | - | - | - | - | - |
- -------------------------------------------------------------------------------------------------------------
- | - | - | - | - | - | - | - | - |
- -------------------------------------------------------------------------------------------------------------
- | - | - | - | - | - | - | - | - |
- -------------------------------------------------------------------------------------------------------------
- | - | - | - | - | - | - | - | - |
- -------------------------------------------------------------------------------------------------------------
D | D, P | - | P, D, s | - | - | - | - | - |
- -------------------------------------------------------------------------------------------------------------
- | - | - | - | - | - | - | - | - |
- -------------------------------------------------------------------------------------------------------------
P, D | - | - | - | - | P, D | D, P | - | - |
- -------------------------------------------------------------------------------------------------------------
S | S, T | S, T | - | - | D, S | S | - | S, T |
- -------------------------------------------------------------------------------------------------------------
- | - | - | - | - | - | - | - | - |
- -------------------------------------------------------------------------------------------------------------
- | - | - | - | - | - | - | - | - |
- -------------------------------------------------------------------------------------------------------------
- | - | - | - | - | - | - | - | - |
- -------------------------------------------------------------------------------------------------------------
- | - | - | - | - | - | - | - | - |
- -------------------------------------------------------------------------------------------------------------
T | - | - | - | - | T | T | - | - |
- -------------------------------------------------------------------------------------------------------------
- | - | - | - | - | - | - | - | - |
- -------------------------------------------------------------------------------------------------------------
- | - | s | - | - | - | - | - | - |
- -------------------------------------------------------------------------------------------------------------
- | - | - | - | - | - | - | - | - |
- -------------------------------------------------------------------------------------------------------------
- | - | s | s | D, P, s | - | - | - | - |
- -------------------------------------------------------------------------------------------------------------
- | - | - | VP, s | - | - | - | - | - |
- -------------------------------------------------------------------------------------------------------------
- | - | - | - | - | - | D | - | - |
- -------------------------------------------------------------------------------------------------------------
- | VP | D, P, s | - | - | - | - | - | D, P |
- -------------------------------------------------------------------------------------------------------------
- | - | s | - | - | - | - | - | - |
- -------------------------------------------------------------------------------------------------------------
- | - | - | - | - | - | - | - | - |
- -------------------------------------------------------------------------------------------------------------
- | - | - | - | - | - | - | - | - |
- -------------------------------------------------------------------------------------------------------------
- | - | - | - | - | - | D | - | - |
- -------------------------------------------------------------------------------------------------------------
- | - | - | - | - | - | - | P, S, T | - |
- -------------------------------------------------------------------------------------------------------------
- | D | D | - | - | - | - | - | D |
- -------------------------------------------------------------------------------------------------------------
- | - | s | T, S, s | - | - | - | - | - |
- -------------------------------------------------------------------------------------------------------------
- | D | D, s | VP, s |D, S, T, s | - | - | - | D |
- -------------------------------------------------------------------------------------------------------------
- | - | s | - | - | - | - | - | - |
- -------------------------------------------------------------------------------------------------------------
- | - | - | - | - | - | - | - | - |
- -------------------------------------------------------------------------------------------------------------
- | - | - | - | - | - | - | - | - |
- -------------------------------------------------------------------------------------------------------------
- | - | - | - | - | - | - | - | - |
- -------------------------------------------------------------------------------------------------------------
- | - | - | - | - | - | - | - | - |
- -------------------------------------------------------------------------------------------------------------
- | - | - | - | - | - | - | - | - |
- -------------------------------------------------------------------------------------------------------------
- | - | - | - | - | - | - | - | - |
- -------------------------------------------------------------------------------------------------------------
- | - | - | - | - | - | - | - | - |
- -------------------------------------------------------------------------------------------------------------
- | - | - | s | - | - | - | - | - |
- -------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
* Directors of Horizon's subsidiaries are as follows:
Horizon Energy Holdings, Inc.
Board of Directors and Officers:
P. C. Ackerman (Director and President) Buffalo, NY (1)
B. H. Hale (Vice President) Buffalo, NY (1)
G. T. Wehrlin (Vice President) Buffalo, NY (1)
R. J. Tanski (Secretary and Treasurer) Buffalo, NY (1)
Horizon Energy Development, B.V.
Managing Directors:
B. H. Hale Buffalo, NY (1)
G. T. Wehrlin Buffalo, NY (1)
Hirsch Gebouw (Intra Beheer B.V.) Amsterdam, The Netherlands (8)
Horizon Energy Development, s.r.o.
Managing Director:
B. H. Hale Buffalo, NY (1)
Power Development, s.r.o.
Managing Director:
B. H. Hale Buffalo, NY (1)
Teplarna Kromeriz, a.s.
Directors:
Lubos Jarolimek Prague, Czech Republic (7)
Jan Masinda Prague, Czech Republic (7)
Jiri Hudecek Kromeriz, Czech Republic (24)
Severoceske teplarny, a.s.
Board of Directors:
P. C. Ackerman Buffalo, NY (1)
B. H. Hale Buffalo, NY (1)
Lubos Jarolimek Prague, Czech Republic (7)
B. J. Kennedy Buffalo, NY (1)
Zdenek Kozesnik Most, Czech Republic (15)
R. J. Tanski Buffalo, NY (1)
Josef Vanzura Most, Czech Republic (15)
E. Volkmann Most, Czech Republic (15)
G. T. Wehrlin Buffalo, NY (1)
Teplarna Liberec, a.s.
Board of Directors:
Jiri Drda Liberec, Czech Republic (16)
Lubos Jarolimek Prague, Czech Republic (7)
Jiri Jezek Liberec, Czech Republic (16)
Zdenek Kozesnik Most, Czech Republic (15)
Jan Masinda Prague, Czech Republic (7)
Josef Vanzura Most, Czech Republic (15)
Zateca teplarenska, a.s.
Board of Directors:
Bohuslav Kunes Zatec, Czech Republic (17)
Josef Marik Zatec, Czech Republic (17)
Jiri Sachl Zatec, Czech Republic (17)
SCT SoftMaker, s.r.o.
Executive:
Zdenek Tapsik Most, Czech Republic (18)
Lounske tepelne hospodarstvi, s.r.o.
Statutory Agents:
P. Peterka Louny, Czech Republic (25)
F. Jicha Louny, Czech Republic (25)
See page 15 for Notes
<PAGE>
Teplo Branany, s.r.o.
Managing Directors:
R. Jiruska Branany, Czech Republic (22)
V. Krupka Branany, Czech Republic (22)
Jablonecka teplarenska a realitni, a.s.
Board of Directors:
J. Cerovsky Jablonec, Czech Republic (20)
Josef Vanzura Most, Czech Republic (15)
Lubos Jarolimek Prague, Czech Republic (7)
J. Drabek Jablonec, Czech Republic (20)
Prvni severozapadni teplarenska, a.s.
Board of Directors:
Lubos Jarolimek Prague, Czech Republic (7)
L. Zapletal Most, Czech Republic (21)
B. H. Hale Buffalo, NY (1)
G. T. Wehrlin Buffalo, NY (1)
P. C. Ackerman Buffalo, NY (1)
B. J. Kennedy Buffalo, NY (1)
R. J. Tanski Buffalo, NY (1)
Jiri Sulc Most, Czech Republic (21)
ENOP Company, s.r.o.
Managing Directors:
Miloslav Kaftan Most, Czech Republic (21)
L. Zapletal Most, Czech Republic (21)
Roman Kocar Most, Czech Republic (21)
** Directors of Leidy Hub's sole subsidiary is as follows:
Ellisburg-Leidy Northeast Hub Company
Executive Committee Members:
G. T. Wehrlin Buffalo, NY (1)
B. Heine Buffalo, NY (1)
S. Bergstrom NGC Corporation (9)
E. Werneke NICOR, Inc. (10)
*** NIM's sole subsidiary is the following general partnership:
DirectLink Gas Marketing Company
Management Committee Members:
D. A. Rowekamp Buffalo, NY (1)
J. A. Brett MIDCON (11)
C. Smith ANR (12)
D. Jones Williams (13)
Notes
(1) National Fuel Gas Company, 10 Lafayette Square, Buffalo, New York 14203
(2) Institute of Gas Technology, 1700 So. Mt. Prospect Road, DesPlaines, IL
60018-1804
(3) Duke Energy Corporation, P.O. Box 1642, Houston, TX 77251-1642
(4) Moog Inc., Plant 24/Seneca at Jamison Rd., East Aurora, NY 14052-0018
(5) Seneca Resources Corporation, 1201 Louisiana Street, Suite 400, Houston,
Texas 77002
(6) Seneca Resources Corporation, P.O. Box 630, Santa Paula, CA 93061-0630
(7) Horizon Energy Development, s.r.o., Maiselova 15, Praha 1 - Josefov,
11000, Czech Republic
(8) Intra Beheer B.V., Leidseplein 29, 1017 PS, Amsterdam, The Netherlands
(9) NGC Corporation, 1000 Louisiana Street, Suite 5800, Houston, TX 77002-5050
(10) NICOR, Inc., 1844 Ferry Road, Naperville, IL 60563-9600
(11) MGS Marketing Corp., 3200 Southwest Freeway, Houston, TX 77027
(12) Coastal Gas Marketing DirectLink Corp., 9 Greenway Plaza, 22nd Floor,
Houston, TX 77046
(13) Williams Independence Marketing Company, One Williams Center, Tulsa,
Oklahoma 74172
(14) Maid of the Mist Corporation, 151 Buffalo Avenue, Niagara Falls, New York
14303
(15) Severoceske Teplarny, a.s., Jaroslava Seiferta 2179, 434 01 Most, Czech
Republic
(16) Teplarna Liberec, a.s., Dr. Milady Horakove 641/34a, 460 01 Liberec 4,
Czech Republic
(17) Zatecka teplarenska, a.s., Svatovaclavska 1020, 438 34 Zatec, Czech
Republic
(18) SCT SoftMaker, s.r.o., Seifertova 2179, 434 00 Most, Czech Republic
(19) National Fuel Resources, Inc., 165 Lawrence Bell Drive, Williamsville,
NY 14221
(20) Jablonecka teplarenska a realitni, a.s., Liberecka 104 Jablonec nad Nisou,
Czech Republic
(21) Prvni severozapadni teplarenska, a.s., Komorany, 434 03 Most 3, Czech
Republic
(22) Teplo Branany, s.r.o., Bilinska 76 Branany, Czech Republic
(23) National Fuel Gas Company, 1100 State Street, Erie, PA 16501
(24) Teplarna Kromeriz, Na sadkach 3572, Kromeriz, Czech Republic
(25) Lounske tepelne hospodarstvi, s.r.o., ul. Benese z Loun cp. 185, Louny
<PAGE>
Item 6. OFFICERS AND DIRECTORS (Continued)
- ------- ----------------------------------
Part II. Financial connections as of September 30, 1999:
Position Held Applicable
Name of Officer Name and Location of in Financial Exemption
or Director Financial Institution Institution Rule
- --------------- --------------------- ------------- -----------
R. T. Brady Manufacturers and Traders
Trust Company,
Buffalo, New York Director 70 (a)
M&T Bank Corporation,
Buffalo, New York Director 70 (a)
B. J. Kennedy HSBC USA, Inc.
Buffalo, New York Director 70 (a)
G. L. Mazanec Northern Trust Bank
of Texas,
Dallas, Texas Director 70 (a)
J. V. Glynn M&T Bank Corporation
Buffalo, New York Director 70 (a)
M&T Bank,
Buffalo, New York Director 70 (a)
Part III. Compensation and other related information:
(a) Compensation of Directors and Executive Officers:
The information required by this item appears under "Directors'
Compensation," and "Executive Compensation," on page 6, and pages 8 to 16,
respectively, of National Fuel Gas Company Proxy Statement, dated January 14,
2000, included as exhibit A (3) to this Form U5S and is incorporated herein by
reference.
(b) Interest of executive officers and directors in securities of System
Companies including options or other rights to acquire securities:
The information required by this item appears under "Security Ownership
of Certain Beneficial Owners and Management," on pages 7 and 8 of the National
Fuel Gas Company Proxy Statement, dated January 14, 2000, included as Exhibit
A(3) of this Form U5S and is incorporated herein by reference.
(c) Contracts and Transactions with System Companies:
Exhibit No. in Document
(Incorporated by Reference
as Indicated in Notes)
----------------------
Employment Agreement, dated September 17,
1981, with Bernard J. Kennedy. 10.4 (6)
Tenth Amendment to Employment Agreement
with Bernard J. Kennedy, effective
September 1, 1999. 10.1 (13)
National Fuel Gas Company 1983 Incentive
Stock Option Plan, as amended and restated
through February 18, 1993. 10.2 (5)
<PAGE>
Item 6. OFFICERS AND DIRECTORS (Continued)
- ------ ----------------------------------
Part III. Compensation of Directors and Executive Officers (Continued)
National Fuel Gas Company 1984 Stock Plan, as amended and restated through
February 18,
1993. 10.3 (5)
Amendment to National Fuel Gas Company 1984
Stock Plan, dated December 11, 1996. 10.7 (8)
National Fuel Gas Company 1993 Award and
Option Plan, dated February 18, 1993. 10.1 (5)
Amendment to National Fuel Gas Company 1993
Award and Option Plan, dated October 27,
1995. 10.8 (7)
Amendment to National Fuel Gas Company 1993
Award and Option Plan, dated December 11,
1996. 10.8 (8)
Amendment to National Fuel Gas Company 1993
Award and Option Plan, dated December 18,
1996. 10 (9)
National Fuel Gas Company 1997 Award and
Option Plan. 10.9 (8)
Amended and Restated National Fuel Gas
Company 1997 Award and Option Plan,
dated December 9, 1999 (being submitted
to Shareholder vote at the Annual
Meeting in February 2000). 10.2 (13)
Form of Employment Continuation and
Noncompetition Agreements, dated as of
December 11, 1998, with Philip C. Ackerman,
Walter E. DeForest, Joseph P. Pawlowski,
Dennis J. Seeley, David F. Smith and
Gerald T. Wehrlin. 10.1 (16)
Form of Employment Continuation and
Noncompetition Agreements, dated as of
December 11, 1998, with Bruce H. Hale and
Richard Hare. 10.2 (16)
Form of Employment Continuation and
Noncompetition Agreement, dated as of
December 11, 1998, with James A. Beck. 10.3 (16)
Agreement, dated August 1, 1989, with Richard
Hare. 10-Q (1)
Agreement, dated August 1, 1986, with Joseph
P. Pawlowski. 10.1 (11)
Agreement, dated August 1, 1986, with Gerald
T. Wehrlin 10.2 (11)
<PAGE>
Item 6. OFFICERS AND DIRECTORS (Continued)
- ------------------------------------------
Part III. Compensation of Directors and Executive Officers (Continued)
National Fuel Gas Company Deferred
Compensation Plan, as amended and restated
through May 1, 1994. 10.7 (6)
Amendment to National Fuel Gas Company
Deferred Compensation Plan, dated September
27, 1995. 10.9 (7)
Amendment to National Fuel Gas Company
Deferred Compensation Plan, dated September
19, 1996. 10.10 (8)
National Fuel Gas Company Deferred
Compensation Plan, as amended and restated
through March 20, 1997. 10.3 (11)
Amendment to National Fuel Gas Company
Deferred Compensation Plan, dated June
16, 1997. 10.4 (11)
Amendment No. 2 to the National Fuel
Gas Company Deferred Compensation
Plan, dated March 13, 1998. 10.1 (12)
Amendment to the National Fuel Gas Company
Deferred Compensation Plan, dated
February 18, 1999. 10.1 (14)
National Fuel Gas Company Tophat Plan,
effective March 20, 1997. 10 (10)
Amendment No. 1 to the National Fuel
Gas Company Tophat Plan, dated
April 6, 1998. 10.2 (12)
Amendment No. 2 to the National Fuel Gas
Company Tophat Plan, dated December 10, 1998. 10.1 (15)
National Fuel Gas Company and Participating
Subsidiaries Executive Retirement Plan as
amended and restated through November 1,1995. 10.10 (7)
National Fuel Gas Company and Participating
Subsidiaries 1996 Executive Retirement Plan
Trust Agreement II, dated May 10, 1996. 10.13 (8)
Amendments to National Fuel Gas Company and
Participating Subsidiaries Executive
Retirement Plan, dated September 18, 1997. 10.9 (11)
Amendments to the National Fuel Gas Company
and Participating Subsidiaries Executive
Retirement Plan dated December 10, 1998. 10.2 (15)
Amendments to National Fuel Gas Company
and Participating Subsidiaries Executive
Retirement Plan effective September 16, 1999. 10.15 (13)
<PAGE>
Item 6. OFFICERS AND DIRECTORS (Continued)
- ------------------------------------------
Part III. Compensation of Directors and Executive Officers (Concluded)
Amended and Restated Split Dollar Insurance
and Death Benefit Agreement, dated
September 17, 1997, with Philip C. Ackerman. 10.5 (11)
Amendment Number 1 to Amended and
Restated Split Dollar Insurance and Death
Benefit Agreement by and between National
Fuel Gas Company and Philip C. Ackerman,
dated March 23, 1999. 10.3 (13)
Second Amended and Restated Split Dollar
Insurance Agreement dated August 9, 1999
with Richard Hare. 10.4 (13)
Amended and Restated Split Dollar Insurance
and Death Benefit Agreement,
dated September 15, 1997, with Joseph P.
Pawlowski. 10.7 (11)
Amendment Number 1 to Amended and Restated
Split Dollar Insurance and Death Benefit
Agreement by and Between National Fuel Gas
Company and Joseph P. Pawlowski, dated
dated March 23, 1999. 10.5 (13)
Second Amended and Restated Split Dollar
Insurance Agreement dated June 15, 1999
with Gerald T. Wehrlin. 10.6 (13)
Amended and Restated Split Dollar Insurance
and Death Benefit Agreement dated September
15, 1997 with Walter E. DeForest. 10.7 (13)
Amendment Number 1 to Amended and Restated
Split Dollar Insurance and Death Benefit
Agreement by and Between National Fuel Gas
Company and Walter E. DeForest, dated
March 29, 1999. 10.8 (13)
Amended and Restated Split Dollar Insurance
and Death Benefit Agreement dated September
15, 1997 with Dennis J. Seeley. 10.9 (13)
Amendment Number 1 to Amended and Restated
Split Dollar Insurance and Death Benefit
Agreement by and Between National Fuel Gas
Company and Dennis J. Seeley, dated
March 29, 1999. 10.10 (13)
Split Dollar Insurance and Death Benefit
Agreement dated September 15, 1997
with Bruce H. Hale. 10.11 (13)
<PAGE>
Item 6. OFFICERS AND DIRECTORS (Continued)
- ------------------------------------------
Part III. Compensation of Directors and Executive Officers (Continued)
Amendment Number 1 to Split Dollar
Insurance and Death Benefit Agreement
by and Between National Fuel Gas
Company and Bruce H. Hale, dated
March 29, 1999. 10.12 (13)
Split Dollar Insurance and Death Benefit
Agreement dated September 15, 1997
with David F. Smith. 10.13 (13)
Amendment Number 1 to Split Dollar
Insurance and Death Benefit Agreement
by and Between National Fuel Gas
Company and David F. Smith, dated
March 29, 1999. 10.14 (13)
Death Benefits Agreement, dated August 28,
1991, with Bernard J. Kennedy. 10-TT (2)
Amendment to Death Benefit Agreement of
August 28, 1991, with Bernard J. Kennedy,
dated March 15, 1994. 10.11 (7)
Administrative Rules with Respect to At Risk
Awards under the 1993 Award and Option
Plan. 10.14 (8)
Administrative Rules of the Compensation
Committee of the Board of Directors of
National Fuel Gas Company, as amended and
restated, effective December 10, 1998. 10.3 (15)
Excerpts of Minutes from National Fuel Gas
Company Board of Directors Meeting of
February 20, 1997, regarding the Retirement
Benefits for Bernard J. Kennedy. 10.10 (11)
Excerpts of Minutes from National Fuel Gas
Company Board of Directors Meeting of
March 20, 1997, regarding the Retainer
Policy for Non-Employee Directors. 10.11 (11)
(Notes)
(1) Incorporated by reference from the Exhibit filed with the Annual
Report on Form 10-K for fiscal year ended September 30, 1989 in
File No. 1-3880.
(2) Incorporated by reference from Exhibit filed with the Annual
Report on Form 10-K for fiscal year ended September 30, 1991 in
File No. 1-3880.
(3) Incorporated by reference from Exhibit filed with the Annual
Report on Form 10-K for fiscal year ended September 30, 1992 in
File No. 1-3880.
<PAGE>
Item 6. OFFICERS AND DIRECTORS (Continued)
- ------------------------------------------
Part III. Compensation of Directors and Executive Officers (Continued)
(4) Incorporated by reference from Exhibit filed with the Annual
Report on Form 10-K for fiscal year ended September 30, 1993 in
File No. 1-3880.
(5) Incorporated by reference from Exhibit filed with the Quarterly
Report on Form 10-Q for quarterly period ended March 31, 1993 in
File No. 1-3880.
(6) Incorporated by reference from Exhibit filed with the Annual
Report on Form 10-K for fiscal year ended September 30, 1994 in
File No. 1-3880.
(7) Incorporated by reference from Exhibit filed with the Annual
Report on Form 10-K for fiscal year ended September 30, 1995 in
File No. 1-3880.
(8) Incorporated by reference from Exhibit filed with the Annual
Report on Form 10-K for fiscal year ended September 30, 1996 in
File No. 1-3880.
(9) Incorporated by reference from Exhibit filed with the Quarterly
Report on Form 10-Q for quarterly period ended December 31, 1996
in File No. 1-3880.
(10) Incorporated by reference from Exhibit filed with the Quarterly
Report on Form 10-Q for quarterly period ended June 30, 1997 in
File No. 1-3880.
(11) Incorporated by reference from Exhibit filed with the Annual
Report on Form 10-K for fiscal year ended September 30, 1997 in
File No. 1-3880.
(12) Incorporated by reference from Exhibit filed with the Annual
Report on Form 10-K for fiscal year ended September 30, 1998 in
File No. 1-3880.
(13) Incorporated by reference from Exhibit filed with the Annual
Report on Form 10-K for fiscal year ended September 30, 1999 in
File No. 1-3880.
(14) Incorporated by reference from Exhibit filed with the Quarterly
Report on Form 10-Q for the quarterly period ended March 31, 1999
in File No. 1-3880.
(15) Incorporated by reference from Exhibit filed with the Quarterly
Report on Form 10-Q for the quarterly period ended December 31,
1998 in File No. 1-3880.
(16) Incorporated by reference from Exhibit filed with the Quarterly
Report on Form 10-Q for the quarterly period ended June 30, 1999
in File No. 1-3880.
(d) Indebtedness to System Companies: None
(e) Participation in Bonus and Profit-Sharing Arrangements and Other
Benefits:
The information required by this item appears under "Directors'
Compensation," and "Executive Compensation," on page 6 and pages 8 to 16,
respectively, of the National Fuel Gas Company Proxy Statement, dated
January 14, 2000, included as exhibit A(3) to this Form U5S and
incorporated herein by reference.
<PAGE>
Item 6. OFFICERS AND DIRECTORS (Concluded)
- ------- ----------------------------------
Part III. Compensation of Directors and Executive Officers (Concluded)
(f) Rights to Indemnity:
The information required by this item appears in Article II, Paragraph 8
of the National Fuel Gas Company By-Laws as amended through September 16,
1999. Such By-Laws are listed as Exhibit B(1)(ii) to this Form U5S and
are incorporated herein by reference as indicated.
The Company also purchases directors and officers liability insurance
coverage with an annual aggregate limit of $135 million, and, in
recognition of the scope of the foregoing by-law indemnification, certain
other errors and omissions and general liability insurance coverages
which are applicable to all employees as insureds, including directors
and officers.
<PAGE>
ITEM 7. CONTRIBUTIONS AND PUBLIC RELATIONS
- ------- ----------------------------------
<TABLE>
<CAPTION>
Amount
Name of Recipient Accounts Charged Per Books Fiscal Year Ended
Name of Company or Beneficiary Purpose of Disbursing Company September 30, 1999
--------------- ----------------- ------- -------------------------- ------------------
Tabulation showing expenditures, disbursements, or payments during the year, in
money, goods or services, directly or indirectly to or for the account of:
(1) Any political party, candidate for public office or holder of such office,
or any committee or agent therefor:
<S> <C> <C> <C> <C>
Distribution Corporation N/A *FEDPAC Misc. Income Deductions $7,262
Distribution Corporation N/A *NYPAC Misc. Income Deductions $6,669
Distribution Corporation N/A *PAPAC Misc. Income Deductions $3,697
Supply Corporation N/A *FEDPAC Misc. Income Deductions $5,144
Supply Corporation N/A *NYPAC Misc. Income Deductions $2,191
Supply Corporation N/A *PAPAC Misc. Income Deductions $1,801
* Company labor and expenses relating to administration of political
action funds.
(2) Any citizens group or public relations counsel:
Distribution Corporation Buffalo-Niagara
Partnership Civic Operation Expense $19,281
Distribution Corporation 45 Beneficiaries Civic Operation Expense $29,100
Supply Corporation Buffalo-Niagara
Parntership Civic Operation Expense $16,781
Supply Corporation 26 Beneficiaries Civic Operation Expense $15,295
Seneca Resources 3 Beneficiaries Civic Operation Expense $ 1,323
</TABLE>
The information called for by instruction 2 to Item 7 was compiled, and
memoranda from the applicable System Companies were received and are preserved
by the Registrant.
<PAGE>
ITEM 8. SERVICE, SALES AND CONSTRUCTION CONTRACTS
- ------- -----------------------------------------
Part I. Intercompany sales and services
(1) Salaries of officers of the Registrant
<TABLE>
<CAPTION>
NATIONAL FUEL GAS COMPANY
-------------------------
REPORT OF OFFICERS' SALARIES
----------------------------
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1999
--------------------------------------------
Distribution Supply Seneca Leidy Data-
Parent Corp. Corp. Resources Hub Highland Horizon Track NFR Total
------ ------------ ------ --------- ----- -------- ------- ----- --- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
B. J. Kennedy $80,574 $296,853 $449,520 $10,602 $ - $2,120 $ - $4,240 $4,241 $848,150
P. C. Ackerman 29,738 296,625 67,500 66,487 - 4,950 29,700 - - 495,000
A. M. Cellino 8,013 111,307 33,969 6,488 - 404 - - 69 160,250
J. P. Pawlowski 11,850 145,871 66,410 11,897 - 804 - 5 163 237,000
G. T. Wehrlin 11,850 33,781 15,379 2,755 7,110 186 165,900 1 38 237,000
</TABLE>
<PAGE>
ITEM 8. SERVICE, SALES AND CONSTRUCTION CONTRACTS (Continued)
- ------- -----------------------------------------------------
Part I. Intercompany sales and services (Continued)
(2) Services rendered by Statutory Subsidiaries
<TABLE>
<CAPTION>
DISTRIBUTION CORPORATION
------------------------
REPORT OF INTERCOMPANY SALES AND SERVICES
-----------------------------------------
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1999
--------------------------------------------
(THOUSANDS OF DOLLARS)
----------------------
Common Expenses
-------------------------------------------------------------------------------------
Corporate Materials Industrial Accounts
Receiving Company Executive Purchasing Communications Management Accounting Engineering Payable
- ----------------- --------- ---------- -------------- ---------- ---------- ----------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Supply Corporation $524 $236 $184 $55 $819 $ 75 $210
Seneca Resources 377 - 6 - 156 - -
UCI - - - - - - -
Highland 29 - - - 10 - -
Data-Track - - - - - - -
NFR 5 - - - 2 - -
Leidy Hub - - - - - - -
Horizon - - - - - - -
Parent Company - - - - - - -
NIM - - - - - - -
Upstate Energy - - - - - - -
---- ---- ---- --- ---- ---- ----
$935 $236 $190 $55 $987 $ 75 $210
==== ==== ==== === ==== ==== ====
</TABLE>
<TABLE>
<CAPTION>
Common Expenses
-----------------------------------------------------------------------------------
Data Human Government Benefit
Receiving Company Processing Resources Legal Finance Affair Services CPR
- ----------------- ---------- --------- ----- ------- ---------- -------- ---
<S> <C> <C> <C> <C> <C> <C> <C>
Supply Corporation $282 $248 $ 48 $662 $86 $259 $245
Seneca Resources 14 19 34 102 - 186 -
UCI - - - - - - -
Highland - 2 3 6 - 14 -
Data-Track - - - - - - -
NFR - - - 1 - 3 -
Leidy Hub - - - - - - -
Horizon - - - - - - -
Parent Company - - - - - - -
NIM - - - - - - -
Upstate Energy - - - - - - -
---- ---- ---- ---- --- ---- ----
$296 $269 $ 85 $771 $86 $462 $245
==== ==== ==== ==== === ==== ====
</TABLE>
<TABLE>
<CAPTION>
Common Expenses
------------------
Total Total Total Convenience or Total Service
Common Clearing Direct Accommodation Rendered By
Receiving Company Payroll Expense Charges* Charges* Payments* Statutory Subsidiaries
- ----------------- ------- ------- -------- -------- -------------- ----------------------
<S> <C> <C> <C> <C> <C> <C>
Supply Corporation $184 $4,117 $3,128 $3,664 $10,273 $21,182
Seneca Resources - 894 120 193 1,485 2,692
UCI - - - - 107 107
Highland - 64 12 10 84 170
Data-Track - - - 16 16 32
NFR - 11 23 9 173 216
Leidy Hub - - - 14 - 14
Horizon - - - 413 48 461
Parent Company - - 9 152 57 218
NIM - - - - (3) (3)
Upstate Energy - - - - 4 4
---- ------ ------ ------ ------- -------
$184 $5,086 $3,292 $4,471 $12,244 $25,093
==== ====== ====== ====== ======= =======
</TABLE>
* Analysis of Clearing Charges, Direct Charges & Convenience or Accommodation
Payments is presented on pages 26 and 27.
<PAGE>
ITEM 8. SERVICE, SALES AND CONSTRUCTION CONTRACTS (Continued)
- ------- -----------------------------------------------------
Part I. Intercompany sales and services (Continued)
(2) Services rendered by Statutory Subsidiaries
<TABLE>
<CAPTION>
DISTRIBUTION CORPORATION
------------------------
REPORT OF INTERCOMPANY SALES AND SERVICES
-----------------------------------------
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1999
--------------------------------------------
(THOUSANDS OF DOLLARS)
----------------------
Clearing Charges
---------------------------------------------------------------------------
Material Total
Issue & Data Messenger Clearing
Receiving Company Transfer Telecommunications Rental Postage Processing Expense Charges
- ----------------- -------- ------------------ ------ ------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Supply Corporation $778 $164 $19 $6 $2,065 $ 96 $3,128
Seneca Resources - 25 - - 93 2 120
UCI - - - - - - -
Highland - - - - 6 6 12
Data-Track - - - - - - -
NFR 2 13 - - 1 7 23
Leidy Hub - - - - - - -
Horizon - - - - - - -
Parent Company - - 1 - 8 - 9
NIM - - - - - - -
Upstate Energy - - - - - - -
---- ---- --- -- ------ ---- ------
$780 $202 $20 $6 $2,173 $111 $3,292
==== ==== === == ====== ==== ======
</TABLE>
<TABLE>
<CAPTION>
Direct Charges
----------------------------------------------------------------------------------------
Telecom- Contract Corporate
Receiving Company Land MMD munications Insurance Operations Administration Communication Accounting
- ----------------- ----- --- ----------- --------- ---------- -------------- ------------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Supply Corporation $267 $2 $25 $390 $2,161 $65 $4 $ -
Seneca Resources - - - - 19 - - -
UCI - - - - - - - -
Highland - - - - - - - -
Data-Track - - - - - - - -
NFR - - - - - - - -
Leidy Hub - - - - - - - -
Horizon - - - - - - - 27
Parent Company - - - - - - - 1
NIM - - - - - - - -
Upstate Energy - - - - - - - -
---- -- --- ---- ------ --- -- ---
$267 $2 $25 $390 $2,180 $65 $4 $28
==== == === ==== ====== === == ===
</TABLE>
<TABLE>
<CAPTION>
Direct Charges
------------------------------------------------------------------------------------
Government Gas Revenue OMS
Receiving Company Legal Purchasing Affairs Finance Planning Executive Recovery General
- ----------------- ----- ---------- ---------- ------- -------- --------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Supply Corporation $8 $2 $221 $164 $27 $258 $ - $23
Seneca Resources - - - 32 - 140 - -
UCI - - - - - - - -
Highland - - - - - 10 - -
Data-Track - - - - - - 2 -
NFR 1 - - 6 - 2 - -
Leidy Hub - - - - - 14 - -
Horizon - - - 60 - 326 - -
Parent Company 5 - - 29 - 106 - -
NIM - - - - - - - -
Upstate Energy - - - - - - - -
--- -- ---- ---- --- ---- --- ---
$14 $2 $221 $291 $27 $856 $ 2 $23
=== == ==== ==== === ==== === ===
</TABLE>
<TABLE>
<CAPTION>
Direct Charges
------------------------------------------------------------------------------------
Total
Benefit Credit Quality Direct
Receiving Company Services Administration Engineering Assurance Charges
- ----------------- -------- -------------- ----------- --------- -------
<S> <C> <C> <C> <C> <C>
Supply Corporation $ - $ - $11 $36 $3,664
Seneca Resources 2 - - - 193
UCI - - - - -
Highland - - - - 10
Data-Track - 14 - - 16
NFR - - - - 9
Leidy Hub - - - - 14
Horizon - - - - 413
Parent Company 11 - - - 152
NIM - - - - -
Upstate Energy - - - - -
--- --- --- --- ------
$13 $14 $11 $36 $4,471
=== === === === ======
</TABLE>
<PAGE>
ITEM 8. SERVICE, SALES AND CONSTRUCTION CONTRACTS (Continued)
- ------- -----------------------------------------------------
Part I. Intercompany sales and services (Continued)
(2) Services rendered by Statutory Subsidiaries (Continued)
<TABLE>
<CAPTION>
DISTRIBUTION CORPORATION
------------------------
ANALYSIS OF CONVENIENCE OR ACCOMMODATION PAYMENTS
-------------------------------------------------
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1999
--------------------------------------------
(THOUSANDS OF DOLLARS)
----------------------
Receiving Company
------------------------------------------------------------------
Parent Supply Seneca Data- Leidy
Company Corporation Resources UCI Track Highland NFR Hub Horizon
------- ----------- --------- --- ----- -------- --- --- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Material $ 2 $ 849 $ 1 $ - $ - $ - $ 1 $- $ -
Rents - 174 - - - - - - -
Transportation - 11 - - - - - - -
Utilities - 469 89 - 8 - 26 - -
Contractors &
Outside Services 105 1,495 12 2 3 1 16 - 2
Equipment Purchases
& Rentals 1 663 2 - - - 8 - 2
Employee Benefits 24 3,058 54 - - 7 49 - 24
Office Expense 3 899 15 19 3 1 44 - 6
Dues & Subscriptions 67 308 - - - - - - -
Other Insurance - 2,115 1,278 - - 75 21 - 12
Injuries & Damages - 72 27 83 - - - - -
Other (145) 150 7 3 1 - 8 - 2
Advertising - 10 - - 1 - - - -
Postage - - - - - - - - -
---- ------ ------ ---- --- --- ---- -- ---
$ 57 $10,273 $1,485 $107 $16 $84 $173 $- $48
==== ======= ====== ==== === === ==== == ===
</TABLE>
<TABLE>
<CAPTION>
Receiving Company
Upstate
---------------------------
NIM Energy Total
--- ------ -----
<S> <C> <C> <C>
Material $ - $- $ 853
Rents - - 174
Transportation - - 11
Utilities - - 592
Contractors &
Outside Services - 1 1,637
Equipment Purchases
& Rentals (3) 1 674
Employee Benefits - - 3,216
Office Expense - 2 992
Dues & Subscriptions - - 375
Other Insurance - - 3,501
Injuries & Damages - - 182
Other - - 26
Advertising - - 11
Postage - - -
--- -- -------
$(3) $4 $12,244
==== == =======
</TABLE>
<PAGE>
ITEM 8. SERVICE, SALES AND CONSTRUCTION CONTRACTS (Continued)
- ------- -----------------------------------------------------
Part I. Intercompany sales and services (Continued)
(2) Services rendered by Statutory Subsidiaries (Continued)
<TABLE>
<CAPTION>
SUPPLY CORPORATION
------------------
REPORT OF INTERCOMPANY SALES AND SERVICES
-----------------------------------------
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1999
--------------------------------------------
(THOUSANDS OF DOLLARS)
----------------------
Clearing Accounts Direct Charges
------------------------------------ -----------------------------
Material Total
Production Issue & Rental Clearing Interstate
Receiving Company Clearing Transfer Clear Charges Insurance Marketing Finance
- ----------------- -------- -------- ----- ------- --------- ---------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Distribution Corp. $ - $1,962 $2,700 $4,662 $41 $44 $ -
Seneca Resources 231 (1) - 230 - - -
Horizon - - 15 15 - - 196
Highland - - - - - - -
Data Track - - - - - - -
NFR - - - - - - -
Leidy Hub - - - - - - -
Parent Company - - 7 7 - - -
Upstate Energy - - - - - - -
---- ------ ------ ------ --- --- ----
$231 $1,961 $2,722 $4,914 $41 $44 $196
==== ====== ====== ====== === === ====
</TABLE>
<TABLE>
<CAPTION>
Direct Charges Continued
----------------------------------------------------------------------
Operations,
Construction &
Human Gas Customer
Receiving Company Engineering Resources Land Control Executive Service Legal
- ----------------- ----------- --------- ---- ------- --------- -------- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Distribution Corp. $175 $106 $268 $1,058 $148 $1,974 $29
Seneca Resources - - 36 - 13 60 -
Horizon - - - - 234 - -
Highland - - - - 3 - -
Data Track - - - - 6 - -
NFR - - - - 6 - -
Leidy Hub - - - - - - -
Parent Company - 2 - - 115 - -
Upstate Energy - - - - - - -
---- ---- ---- ------ ---- ------ ---
$175 $108 $304 $1,058 $525 $2,034 $29
==== ==== ==== ====== ==== ====== ===
</TABLE>
Total Services
Total Total Convenience or Rendered By
Direct Clearing Accommodation Statutory
Receiving Company Charges Charges Payments* Subsidiaries
- ----------------- ------- ------- --------- ------------
Distribution Corp. $3,843 $4,662 $1,418 $ 9,923
Seneca Resources 109 230 92 431
Horizon 430 15 4 449
Highland 3 - 16 19
Data Track 6 - 1 7
NFR 6 - 3 9
Leidy Hub - - - -
Parent Company 117 7 34 158
Upstate Energy - - 7 7
------ ------ ------ -------
$4,514 $4,914 $1,575 $11,003
====== ====== ====== =======
* Analysis of Convenience or Accommodation Payments is presented on page 29.
<PAGE>
ITEM 8. SERVICE, SALES AND CONSTRUCTION CONTRACTS (Continued)
- ------- -----------------------------------------------------
Part I. Intercompany sales and services (Continued)
(2) Services rendered by Statutory Subsidiaries (Continued)
SUPPLY CORPORATION
------------------
ANALYSIS OF CONVENIENCE OR ACCOMMODATION PAYMENTS
-------------------------------------------------
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1999
--------------------------------------------
(THOUSANDS OF DOLLARS)
----------------------
Receiving Company
Parent Distribution Seneca Horizon
Company Corporation Resources Energy Highland
------- ----------- --------- ------ --------
Material $ - $ 254 $ 9 $2 $ -
Rents - - - - -
Transportation - 7 - - -
Utilities - 97 - - -
Contractors &
Outside Services - 150 - - -
Equipment Purchases
& Rentals - 297 - - -
Employee Benefits 34 189 5 2 1
Office Expense - 82 4 - -
Dues & Memberships - 37 - - -
Other - 229 74 - 15
Other Insurance - 66 - - -
Postage - 3 - - -
Advertising - 4 - - -
Environmental - 3 - - -
--- ------ --- -- ---
$34 $1,418 $92 $4 $16
=== ====== === == ===
Receiving Company
-----------------------------------------
Data- Upstate
Track NFR Leidy Hub Energy Total
----- --- --------- ------ -----
Material $- $- $- $- $ 265
Rents - - - - -
Transportation - - - 7 14
Utilities - 1 - - 98
Contractors &
Outside Services - - - - 150
Equipment Purchases
& Rentals - - - - 297
Employee Benefits 1 2 - - 234
Office Expense - - - - 86
Dues & Memberships - - - - 37
Other - - - - 318
Other Insurance - - - - 66
Postage - - - - 3
Advertising - - - - 4
Environmental - - - - 3
-- -- -- -- ------
$1 $3 $- $7 $1,575
== == == == ======
<PAGE>
ITEM 8. SERVICE, SALES AND CONSTRUCTION CONTRACTS (Continued)
- ------- -----------------------------------------------------
Part I. Intercompany sales and services (Continued)
(2) Services rendered by Statutory Subsidiaries (Continued)
<TABLE>
<CAPTION>
SENECA RESOURCES
----------------
REPORT OF INTERCOMPANY SALES AND SERVICES
-----------------------------------------
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1999
--------------------------------------------
(THOUSANDS OF DOLLARS)
----------------------
Total
Services
Convenience or Rendered By
Timber Accommodation Statutory
Receiving Company Sales Operations Payments Subsidiaries
- ----------------- ----- ---------- -------- ------------
<S> <C> <C> <C> <C>
Supply Corporation $ - $ 625 $ (8) $ 617
Highland 13,280 - 49 13,329
NFR - 1,928 48 1,976
Upstate Energy - 112 15 127
Parent Company - - 6 6
------- ------ ---- -------
$13,280 $2,665 $110 $16,055
======= ====== ==== =======
</TABLE>
ANALYSIS OF CONVENIENCE OR ACCOMMODATION PAYMENTS
-------------------------------------------------
Receiving Company
Parent Upstate Supply
Company Energy Corporation NFR Highland Total
------- ------ ----------- --- -------- -----
Other $6 $15 $(8) $48 $49 $110
-- --- --- --- --- ----
$6 $15 $(8) $48 $49 $110
== === === === === ====
<PAGE>
ITEM 8. SERVICE, SALES AND CONSTRUCTION CONTRACTS (Continued)
- ------- -----------------------------------------------------
Part I. Intercompany sales and services (Concluded)
(2) Services rendered by Statutory Subsidiaries (Concluded)
HIGHLAND
--------
REPORT OF INTERCOMPANY SALES AND SERVICES
-----------------------------------------
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1999
--------------------------------------------
(THOUSANDS OF DOLLARS)
----------------------
Total Services
Rendered By
Convenience Statutory
Receiving Company Payments Subsidiaries
- ----------------- -------- ------------
Seneca Resources $328 $328
Supply Corporation 3 3
---- ----
$331 $331
==== ====
DATA-TRACK
----------
REPORT OF INTERCOMPANY SALES AND SERVICES
-----------------------------------------
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1999
--------------------------------------------
(THOUSANDS OF DOLLARS)
----------------------
Total Services
Rendered by
Collection Statutory
Receiving Company Services Subsidiaries
- ----------------- -------- ------------
Distribution Corporation $193 $193
National Fuel Resources 15 15
---- ----
$208 $208
==== ====
(3) Services rendered by Registrant
No services were rendered for a charge by the Registrant to any
of its subsidiaries during the fiscal year ended September 30,
1999.
<PAGE>
ITEM 8. SERVICE, SALES AND CONSTRUCTION CONTRACTS (Concluded)
- ------- -----------------------------------------------------
Part II. Contracts to purchase services or goods between any System company and
any affiliate at September 30, 1999:
None
Part III. Employment of any person by any System company for the performance on
a continuing basis of management services:
Description of Contract and Annual
Name Scope of Services Consideration
-------------- --------------------------- -------------
Robert Davis Performs management and $100,000
consulting services for
Highland.
Joseph Maljovec Performs management and $ 63,728
consulting services for
Highland.
ITEM 9. WHOLESALE GENERATORS AND FOREIGN UTILITY COMPANIES
- ------- --------------------------------------------------
Part I. A. Interests in Foreign Utility Companies
1. Severoceske teplarny, a.s. and Teplarna Liberec, a.s.
(a) Severoceske teplarny, a.s. (SCT)
J. Seiferta 2179
434 01 Most
Czech Republic
Teplarna Liberec, a.s. (TL)
Dr. M. Horakove 641/34a
460 01 Liberec
Czech Republic
SCT generates and supplies steam heat to
customers in the Czech Republic. It has been
designated as a foreign utility company
because it owns a 70% interest (common
equity) in TL. TL has been designated as a
foreign utility company because it owns and
operates a 12 MW steam powered electric
generation turbine and sells the electricity
produced at wholesale.
Horizon Energy Development, Inc. (Horizon)
owns 100% of the capital stock of Horizon
Energy Holdings, Inc. ("HEHI") which owns
100% of the capital stock of Horizon Energy
Development B.V. ("HEDBV") which owns 82.87%
of the capital stock of SCT, which owns 70%
of the capital stock of TL.
(b) Horizon owns 100% of the capital stock of
HEHI. Such investment was valued at
$116,416,000 as of September 30, 1999. HEHI
owns 100% of the capital stock of HEDBV.
Such investment was valued at $116,416,000
as of September 30, 1999. HEDBV owned 82.87%
of the capital stock of consolidated SCT and
such investment was valued at $42,999,000 as
of September 30, 1999. SCT owns 70% of the
capital stock of TL. Such investment was
valued at $9,998,000 as of September 30,
1999. The financial statements of Horizon
and its subsidiaries are found on pages 54
through 88 of this Form U5S.
<PAGE>
ITEM 9. WHOLESALE GENERATORS AND FOREIGN UTILITY COMPANIES (Continued)
- ------- --------------------------------------------------------------
There are no debts or other financial
obligations of HEHI, HEDBV, SCT or TL for
which there is recourse, directly or
indirectly, to the registered holding
company or another system company. There are
no direct or indirect guarantees of any
securities of TL by the registered holding
company. There have been no transfers of any
assets from any system company to TL.
(c) The ratio of debt to common equity of SCT
was 11.18% at September 30, 1999. TL had no
debt outstanding at September 30, 1999. The
earnings of SCT and TL for the twelve months
ended September 30, 1999 (net of minority
interest) were $2,692,000 and $468,000,
respectively. The financial statements of
SCT and TL are found on pages 74 through 78
of this Form U5S.
(d) There are management support agreements
between Horizon Energy Development, s.r.o.
(HED) and SCT and TL. Under these
agreements, HED agrees to provide management
services (i.e., strategic, legal, marketing,
public relations and human resource
services) to both SCT and TL. The agreement
with SCT calls for SCT to pay HED CZK
3,000,000 on a quarterly basis. The
agreement with TL also calls for a quarterly
payment of CZK 2,250,000 to HED.
There is a service agreement between SCT and
TL calling for TL to pay SCT CZK 1,500,000
on a monthly basis. The services SCT
provides are similar to those described
above.
2. Prvni severozapadni teplarenska, a.s.
(a) Prvni severozapadni teplarenska, a.s. (PSZT)
Komorany u Mostu
434 03 Most
Czech Republic
PSZT generates and supplies steam heat to
customers in the Czech Republic. PSZT also
generates electric energy for sale. PSZT has
been designated as a foreign utility company
because it owns and operates a coal-fired
electric generation plant with generating
capacity of 236 MW and sells the electricity
it produces at wholesale.
Horizon owns 100% of the capital stock of
HEHI which owns 100% of the capital stock of
HEDBV which owns 86.2% of the capital stock
of PSZT.
(b) Horizon owns 100% of the capital stock of
HEHI. Such investment was valued at
$116,416,000 as of September 30, 1999. HEHI
owns 100% of the capital stock of HEDBV.
Such investment was valued at $116,416,000
at September 30, 1999. As of September 30,
1998, HEDBV owned 86.2% of the capital stock
of PSZT and such investment was valued at
$73,325,000. The financial statements of
Horizon and its subsidiaries are found on
pages 54 through 88 of this Form U5S.
<PAGE>
ITEM 9. WHOLESALE GENERATORS AND FOREIGN UTILITY COMPANIES (Continued)
- ------- --------------------------------------------------------------
As of September 30, 1999 there were no debts
or other financial obligations of HEHI,
HEDBV or PSZT for which there was recourse,
directly or indirectly, to the registered
holding company or another system company
other than amounts lent by Horizon to PSZT
under a loan agreement between those two
parties. At September 30, 1999, PSZT owed
$22,100,000 under the terms of that loan
agreement.
There are no direct or indirect guarantees
of any securities of PSZT by the registered
holding company. There have been no
transfers of any assets from any system
company to PSZT.
(c) The ratio of debt to common equity of PSZT
was 107.38% at September 30, 1999. The
earnings of PSZT for the twelve months ended
September 30, 1999 (net of minority
interest) were $4,402,000. The financial
statements of PSZT are found on pages 79
through 83 of this Form U5S.
(d) There is a management support agreement
between HED and PSZT. Under this agreement,
HED agrees to provide management services
(i.e., strategic, legal, marketing, public
relations and human resource services) to
PSZT. The agreement with PSZT calls for PSZT
to pay HED CZK 4,500,000 on a quarterly
basis.
3. Teplarna Kromeriz, a.s.
(a) Teplarna Kromeriz, a.s. (Kromeriz)
Na Sadkach 3572
767 01 Kromeriz
Czech Republic
Kromeriz generates and supplies steam heat
to customers in the Czech Republic. It has
been designated as a foreign utility company
because it has developed initial plans to
add a 38 MW simple-cycle electric generating
unit at its site.
Horizon owns 100% of the capital stock of
HEHI which owns 100% of the capital stock of
HEDBV which owns 100% of the business shares
of Power Development, s.r.o., (PD)(a limited
liability company) which owns 100% of the
capital stock of Kromeriz.
(b) Horizon owns 100% of the capital stock of
HEHI. Such investment was valued at
$116,416,000 as of September 30, 1999. HEHI
owns 100% of the capital stock of HEDBV.
Such investment was valued at $116,416,000
at September 30, 1999. HEDBV owns 100% of
the business shares of PD. Such investment
was valued at $1,469,000 at September 30,
1999. PD owns 100% of the capital stock of
Kromeriz. Such investment was valued at
$493,000 at September 30, 1999. The
financial statements of Horizon and its
subsidiaries are found on pages 54 through
88 of this Form U5S.
<PAGE>
ITEM 9. WHOLESALE GENERATORS AND FOREIGN UTILITY COMPANIES (Continued)
- ------- --------------------------------------------------------------
There are no debts or other financial
obligations of HEHI, HEDBV, PD or Kromeriz
for which there is recourse, directly or
indirectly, to the registered holding
company or another system company. There are
no direct or indirect guarantees of any
securities of Kromeriz by the registered
holding company. There have been no
transfers of any assets from any system
company to Kromeriz.
(c) Debt to common equity ratio - Not
Applicable.
Kromeriz posted a $146,000 net loss for the
twelve months ended September 30, 1999. The
financial statements of Kromeriz are found
on pages 84 through 88 of this Form U5S.
(d) There is a management support agreement
between HED and Kromeriz. Under this
agreement, HED agrees to provide management
services (i.e., strategic, legal, marketing,
public relations and human resource
services) to Kromeriz. The agreement with
Kromeriz calls for Kromeriz to pay HED CZK
100,000 on a monthly basis.
B. Interests in Exempt Wholesale Generators
(a) NFR Power, Inc. (Power)
165 Lawrence Bell Drive
Suite 120
Williamsville, New York 14221
Power does not yet generate electricity, but
Power has been designated as an exempt
wholesale generator by the Federal Energy
Regulatory Commission. The Registrant owns
100% of the capital stock of Power.
(b) The Registrant owns 100% of the capital
stock of Power. As of September 30, 1999,
such investment was valued at $(59,000). The
financial statements of Power are found on
pages 40 through 53 of this Form U5S.
As of September 30, 1999, there were no
debts or other financial obligations of
Power for which there was recourse, directly
or indirectly, to the registered holding
company or another system company other than
amounts lent by National Fuel Resources,
Inc. to Power under a demand note and a line
of credit agreement between those two
partners. At September 30, 1999, Power owed
$324,000 under those instruments.
There are no direct or indirect guarantees
of any securities of Power by the registered
holding company. There have been no
transfers of any assets from any system
company to Power.
(c) The ratio of debt to common equity of Power
was in excess of 100% at September 30, 1999.
Power posted a net loss of $80,000 for the
twelve months ended September 30, 1999
(Power was capitalized by the Registrant in
June, 1999.). The financial statements of
Power are found on pages 40 through 53 of
this Form U5S.
(d) There are no services, sales or construction
contracts between Power and any system
company.
<PAGE>
ITEM 9. WHOLESALE GENERATORS AND FOREIGN UTILITY COMPANIES (Concluded)
- ------- --------------------------------------------------------------
Part II Relationship of Exempt Wholesale Generators and Foreign
Utility Companies to System Companies
Organization charts showing the relationships of Kromeriz,
SCT, TL, PSZT and Power to system companies are provided as
Exhibits H-1, H-2, H-3 and H-4 to this Form U5S.
Part III Aggregate Investment in Exempt Wholesale Generators and
Foreign Utility Companies
The Registrant's aggregate investment in exempt wholesale
generators and foreign utility companies at September 30, 1999
was $116,758,000. The aggregate investment in foreign utility
companies and exempt wholesale generators was 25.2% of its
aggregate capital investment in Distribution Corporation, the
Registrant's domestic public utility subsidiary. The aggregate
investment amounts used in this calculation represent the
common stock equity of the companies involved.
<PAGE>
ITEM 10. FINANCIAL STATEMENTS AND EXHIBITS
- -------- ---------------------------------
NATIONAL FUEL GAS COMPANY AND SUBSIDIARIES
------------------------------------------
INDEX TO FINANCIAL STATEMENTS
-----------------------------
SEPTEMBER 30, 1999
------------------
Page
----
National Fuel Gas Company and Subsidiaries:
Report of Independent Accountants 39
Consolidating and Consolidated Balance Sheet at September 30, 1999 40-43
Consolidating and Consolidated Statement of Income for the Fiscal
Year Ended September 30, 1999 44-45
Consolidating and Consolidated Statement of Earnings Reinvested in
the Business for the Fiscal Year Ended September 30, 1999 46-47
Consolidating and Consolidated Statement of Cash Flows for the
Fiscal Year Ended September 30, 1999 48-51
Consolidating and Consolidated Statement of Comprehensive Income
for the Fiscal Year Ended September 30, 1999 52-53
Horizon Energy Development, Inc. (Horizon):
Consolidating Balance Sheet at September 30, 1999 54
Consolidating Statement of Income for the Fiscal Year Ended
September 30, 1999 55
Consolidating Statement of Earnings Reinvested in the Business
for the Fiscal Year Ended September 30, 1999 56
Consolidating Statement of Cash Flows for the Fiscal Year
Ended September 30, 1999 57
Consolidating Statement of Comprehensive Income for the Fiscal Year
Ended September 30, 1999 58
Horizon Energy Holdings:
Consolidating Balance Sheet at September 30, 1999 59
Consolidating Statement of Income for the Fiscal Year Ended
September 30, 1999 60
Consolidating Statement of Earnings Reinvested in the Business
for the Fiscal Year Ended September 30, 1999 61
Consolidating Statement of Cash Flows for the Fiscal Year
Ended September 30, 1999 62
Consolidating Statement of Comprehensive Income for the Fiscal Year
Ended September 30, 1999 63
Horizon Energy Development B.V. (Horizon B.V.):
Consolidating Balance Sheet at September 30, 1999 64-65
Consolidating Statement of Income for the Fiscal Year Ended
September 30, 1999 66-67
Consolidating Statement of Earnings Reinvested in the Business
for the Fiscal Year Ended September 30, 1999 68-69
Consolidating Statement of Cash Flows for the Fiscal Year
Ended September 30, 1999 70-71
Consolidating Statement of Comprehensive Income for the Fiscal Year
Ended September 30, 1999 72-73
Severoceske teplarny, a.s. (SCT):
Consolidating Balance Sheet at September 30, 1999 74
Consolidating Statement of Income for the Fiscal Year Ended
September 30, 1999 75
Consolidating Statement of Earnings Reinvested in the Business
for the Fiscal Year Ended September 30, 1999 76
Consolidating Statement of Cash Flows for the Fiscal Year
Ended September 30, 1999 77
Consolidating Statement of Comprehensive Income for the Fiscal Year
Ended September 30, 1999 78
<PAGE>
ITEM 10. FINANCIAL STATEMENTS AND EXHIBITS (Concluded)
- -------- ---------------------------------------------
NATIONAL FUEL GAS COMPANY AND SUBSIDIARIES
------------------------------------------
INDEX TO FINANCIAL STATEMENTS
-----------------------------
SEPTEMBER 30, 1999
------------------
Page
----
Prvni severozapadni teplarenska, a.s. (PSZT):
Consolidating Balance Sheet at September 30, 1999 79
Consolidating Statement of Income for the Fiscal Year Ended
September 30, 1999 80
Consolidating Statement of Earnings Reinvested in the Business
for the Fiscal Year Ended September 30, 1999 81
Consolidating Statement of Cash Flows for the Fiscal Year
Ended September 30, 1999 82
Consolidating Statement of Comprehensive Income for the Fiscal Year
Ended September 30, 1999 83
Power Development, s.r.o. (Power Development):
Consolidating Balance Sheet at September 30, 1999 84
Consolidating Statement of Income for the Fiscal Year Ended
September 30, 1999 85
Consolidating Statement of Earnings Reinvested in the Business
for the Fiscal Year Ended September 30, 1999 86
Consolidating Statement of Cash Flows for the Fiscal Year
Ended September 30, 1999 87
Consolidating Statement of Comprehensive Income for the Fiscal Year
Ended September 30, 1999 88
Notes to Consolidated Financial Statements *
* The Notes to Consolidated Financial Statements included in Item 8 of
National Fuel Gas Company's Form 10-K for the fiscal year ended September
30, 1999, are incorporated herein by reference.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors
and Shareholders of
National Fuel Gas Company
In our opinion, the consolidated financial statements listed in the index
appearing under Item 10 on Pages 37 and 38 present fairly, in all material
respects, the financial position of National Fuel Gas Company and its
subsidiaries at September 30, 1999, and the results of their operations and
their cash flows for the year then ended, in conformity with accounting
principles generally accepted in the United States. These financial statements
are the responsibility of the Company's management; our responsibility is to
express an opinion on these financial statements based on our audit. We
conducted our audit of these statements in accordance with auditing standards
generally accepted in the United States which require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audit provides a reasonable basis for the opinion expressed
above.
Our audit was made for the purpose of forming an opinion on the consolidated
financial statements taken as a whole. The consolidating information on Pages 40
through 88 is presented for purposes of additional analysis rather than to
present financial position, results of operations and cash flows of the
individual companies. Accordingly, we do not express an opinion on the financial
position, results of operations and cash flows of the individual companies.
However, the consolidating information on Pages 40 through 88 has been subjected
to the auditing procedures applied in the audit of the consolidated financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the consolidated financial statements taken as a whole.
PricewaterhouseCoopers LLP
Buffalo, New York
October 25, 1999
<PAGE>
<TABLE>
<CAPTION>
NATIONAL FUEL GAS COMPANY AND SUBSIDIARIES
CONSOLIDATING BALANCE SHEET
AT SEPTEMBER 30, 1999
(THOUSANDS OF DOLLARS)
National National Highland Data-Track
National Fuel Gas Fuel Gas Seneca Leidy Land & Utility Account
Fuel Gas Distribution Supply Resources Hub, Minerals, Constructors, Services,
Company Corp. Corp. Corporation Inc. Inc. Inc. Inc.
-------- ------------ -------- ------------ ----- --------- ------------- ---------
ASSETS
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PROPERTY, PLANT
& EQUIPMENT $ 132 $1,253,968 $747,791 $1,041,230 $ 3 $56,030 $ - $ 69
- -------------
Less: Accumulated
Depreciation,
Depletion and
Amortization 125 334,326 281,267 330,805 3 2,738 - 6
---------- ---------- -------- ---------- ------ ------- ------ ----
7 919,642 466,524 710,425 - 53,292 - 63
---------- ---------- -------- ---------- ------ ------- ------ ----
CURRENT ASSETS:
- ---------------
Cash and Temporary
Cash Investments 7,527 2,079 219 2,029 96 123 145 87
Notes Receivable
-Intercompany 502,300 - - 14,800 700 - - 600
Allowance for
Uncollectible
Accounts - (6,163) - (92) - - - -
Accounts Receivable
-Intercompany 19,532 4,775 9,666 2,018 3 20 4 200
Accounts Receivable 494 51,868 11,939 21,442 - 1,409 125 35
Unbilled Utility
Revenue - 17,368 - - - - - -
Dividends Receivable
-Intercompany 17,289 - - - - - - -
Materials and
Supplies - at
average cost - 3,747 9,756 1,248 - 1,502 - -
Gas Stored
Underground - 31,839 - - - - - -
Unrecovered
Purchased
Gas Costs - 4,576 - - - - - -
Prepayments 574 21,808 4,762 5,443 6 2,410 - -
---------- ---------- -------- ---------- ------ ------- ------ ----
547,716 131,897 36,342 46,888 805 5,464 274 922
---------- ---------- -------- ---------- ------ ------- ------ ----
OTHER ASSETS:
- -------------
Recoverable Future
Taxes - 82,779 4,945 - - - - -
Unamortized Debt
Expense 6,494 11,430 6,563 - - - - -
Other Regulatory
Assets 4,949 14,523 5,742 - - - - -
Deferred Charges 3,056 1,958 4,645 6,642 2 - - -
Investment in
Associated
Companies 873,169 - 61 - - - - -
Notes Receivable -
Intercompany 774,000 - - - - - - -
Other 10,235 15,957 7,666 1,705 137 - 1,802 -
---------- ---------- -------- ---------- ------ ------- ------ ----
1,671,903 126,647 29,622 8,347 139 - 1,802 -
---------- ---------- -------- ---------- ------ ------- ------ ----
$2,219,626 $1,178,186 $532,488 $ 765,660 $ 944 $58,756 $2,076 $985
========== ========== ======== ========== ====== ======= ====== ====
</TABLE>
See Notes to Consolidated Financial Statements included in Item 8 of National
Fuel Gas Company's Form 10-K for the fiscal year ended September 30, 1999,
incorporated herein by reference.
<PAGE>
<TABLE>
<CAPTION>
Horizon
National Energy Seneca Niagara
Fuel Development, Upstate Indep. Indep. NFR Total Before Eliminations Consolidated
Resources, Inc. Energy Pipeline Marketing Power, Eliminations & Adjustments Company and
Inc. (Consolidated) Inc. Company Company Inc. & Adjustments Dr (Cr) Subsidiaries
- --------- -------------- ------- -------- --------- ------ ------------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 786 $283,528 $ - $ - $ - $ - $3,383,537 $ - $3,383,537
297 80,076 - - - - 1,029,643 - 1,029,643
------- -------- ----- ------ --- ---- ---------- ----------- ----------
489 203,452 - - - - 2,353,894 - 2,353,894
------- -------- ----- ------ --- ---- ---------- ----------- ----------
1,348 15,210 7 69 1 15 28,955 267 29,222
1,724 - - - - - 520,124 (520,124) -
(836) (750) - - - - (7,841) - (7,841)
55 - 97 - - - 36,370 (36,370) -
9,220 16,588 2 - - 15 113,137 - 113,137
- 1,306 - - - - 18,674 - 18,674
- - - - - - 17,289 (17,289) -
- 7,134 - - - - 23,387 (37) 23,350
6,250 - 3,010 - - - 41,099 - 41,099
- - - - - - 4,576 - 4,576
(27) 97 - - - - 35,073 (1) 35,072
------- -------- ----- ------ --- ---- ---------- ----------- ----------
17,734 39,585 3,116 69 1 30 830,843 (573,554) 257,289
------- -------- ----- ------ --- ---- ---------- ----------- ----------
- - - - - - 87,724 - 87,724
- - - - - - 24,487 (2,770) 21,717
- - - - - - 25,214 - 25,214
210 - - - - - 16,513 (2,247) 14,266
- - - - - - 873,230 (873,230) -
- - - - - - 774,000 (774,000) -
243 12,005 - 10,404 - 199 60,353 22,129 82,482
------- -------- ------ ------- --- ---- ---------- ----------- ----------
453 12,005 - 10,404 - 199 1,861,521 (1,630,118) 231,403
------- -------- ------ ------- --- ---- ---------- ----------- ----------
$18,676 $255,042 $3,116 $10,473 $ 1 $229 $5,046,258 $(2,203,672) $2,842,586
======= ======== ====== ======= === ==== ========== =========== ==========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NATIONAL FUEL GAS COMPANY AND SUBSIDIARIES
CONSOLIDATING BALANCE SHEET
AT SEPTEMBER 30, 1999
(THOUSANDS OF DOLLARS)
National National Highland Data-Track
National Fuel Gas Fuel Gas Seneca Leidy Land & Utility Account
Fuel Gas Distribution Supply Resources Hub, Minerals, Constructors, Services,
Company Corp. Corp. Corporation Inc. Inc. Inc. Inc.
-------- ----------- -------- ----------- ----- --------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CAPITALIZATION
AND LIABILITIES
- ---------------
CAPITALIZATION:
- ---------------
Common Stock $1 Par
Value; Authorized -
200,000,000 Shares;
Issued and
Outstanding -
38,837,499 Shares $ 38,837 $ - $ - $ - $ - $ - $ - $ -
Capital Stock of
Subsidiaries - 59,170 25,345 500 4 5 1 1
Paid in Capital 431,952 121,668 35,894 104,035 1,365 445 2,559 499
Earnings Reinvested
in the Business 472,517 282,793 204,776 (18,776) (651) 4,955 (1,016) 228
Accumulated Other
Comprehensive
Income (4,013) - - - - - - -
---------- ---------- -------- -------- ------ ------- ------ ----
Total Common
Stock Equity 939,293 463,631 266,015 85,759 718 5,405 1,544 728
Long-Term Debt,
Net of Current
Portion 774,000 983 308 1,730 - - - -
Notes Payable -
Intercompany - 249,000 115,000 320,000 - - - -
---------- ---------- -------- -------- ------ ------- ------ ----
Total Capitalization 1,713,293 713,614 381,323 407,489 718 5,405 1,544 728
---------- ---------- -------- -------- ------ ------- ------ ----
Minority Interest in
Foreign Subsidiaries - - - - - - - -
---------- ---------- -------- -------- ------ ------- ------ ----
CURRENT AND ACCRUED
LIABILITIES:
- ------------
Notes Payable to
Banks and
Commercial Paper 392,300 - - - - - - -
Notes Payable -
Intercompany 17,500 114,300 46,200 251,100 - 50,800 - -
Current Portion of
Long-Term Debt 50,000 352 161 2,231 - - - -
Accounts Payable 141 45,358 12,643 16,355 - 68 32 166
Amounts Payable to
Customers - 5,934 - - - - - -
Accounts Payable -
Intercompany 1,068 13,816 7,089 7,323 20 1,488 (21) 10
Dividends Payable -
Intercompany - 8,700 6,154 2,000 - 200 200 -
Other Accruals and
Current Liabilities 40,212 35,531 10,161 (1,991) 85 90 (45) 86
---------- ---------- -------- -------- ------ ------- ------ ----
501,221 223,991 82,408 277,018 105 52,646 166 262
---------- ---------- -------- -------- ------ ------- ------ ----
DEFERRED CREDITS:
- -----------------
Accumulated Deferred
Income Taxes (835) 142,582 57,290 70,603 121 336 (259) (46)
Taxes Refundable to
Customers - 17,490 (2,676) - - - - -
Unamortized
Investment Tax
Credit - 10,677 330 - - - - -
Other Deferred
Credits 5,947 69,832 13,813 10,550 - 369 625 41
---------- ---------- -------- -------- ------ ------- ------ ----
5,112 240,581 68,757 81,153 121 705 366 (5)
---------- ---------- -------- -------- ------ ------- ------ ----
$2,219,626 $1,178,186 $532,488 $765,660 $ 944 $58,756 $2,076 $985
========== ========== ======== ======== ====== ======= ====== ====
</TABLE>
See Notes to Consolidated Financial Statements included in Item 8 of National
Fuel Gas Company's Form 10-K for the fiscal year ended September 30, 1999,
incorporated herein by reference.
<PAGE>
<TABLE>
<CAPTION>
Horizon
National Energy Seneca Niagara
Fuel Development, Upstate Indep. Indep. NFR Total Before Eliminations Consolidated
Resources, Inc. Energy Pipeline Marketing Power, Eliminations & Adjustments Company and
Inc. (Consolidated) Inc. Company Company Inc. & Adjustments (Dr) Cr Subsidiaries
- ---------- -------------- ------- ------- --------- ------ ------------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ - $ - $ - $ - $ - $ - $ 38,837 $ - $ 38,837
10 5 1 1 1 1 85,045 (85,045) -
3,490 38,245 - - - 20 740,172 (308,220) 431,952
9,723 (9,383) (451) 461 - (80) 945,096 (472,579) 472,517
- (4,472) - - - - (8,485) 4,472 (4,013)
------- -------- ------- ------- --- ---- ---------- ----------- ----------
13,223 24,395 (450) 462 1 (59) 1,800,665 (861,372) 939,293
- 45,722 - - - - 822,743 - 822,743
- 90,000 - - - - 774,000 (774,000) -
------- -------- ------- ------- --- ---- ---------- ----------- ----------
13,223 160,117 (450) 462 1 (59) 3,397,408 (1,635,372) 1,762,036
------- -------- ------- ------- --- ---- ---------- ----------- ----------
- 27,589 - - - - 27,589 - 27,589
------- -------- ------- ------- --- ---- ---------- ----------- ----------
- 1,195 - - - - 393,495 - 393,495
- 26,600 3,700 9,600 - 324 520,124 (520,124) -
- 16,864 - - - - 69,608 - 69,608
1,723 10,396 - - - 7 86,889 (4,142) 82,747
- - - - - - 5,934 - 5,934
247 3,190 123 43 - - 34,396 (34,396) -
35 - - - - - 17,289 (17,289) -
287 3,216 (222) (84) - (43) 87,283 27 87,310
------- -------- ------ ------- --- ---- ---------- ----------- ----------
2,292 61,461 3,601 9,559 - 288 1,215,018 (575,924) 639,094
------- -------- ------ ------- --- ---- ---------- ----------- ----------
(1,013) 5,508 - 452 - - 274,739 269 275,008
- - - - - - 14,814 - 14,814
- - - - - - 11,007 - 11,007
4,174 367 (35) - - - 105,683 7,355 113,038
------- -------- ------ ------- --- ---- ---------- ----------- ----------
3,161 5,875 (35) 452 - - 406,243 7,624 413,867
------- -------- ------ ------- --- ---- ---------- ----------- ----------
$18,676 $255,042 $3,116 $10,473 $ 1 $229 $5,046,258 $(2,203,672) $2,842,586
======= ======== ====== ======= === ==== ========== =========== ==========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NATIONAL FUEL GAS COMPANY AND SUBSIDIARIES
CONSOLIDATING STATEMENT OF INCOME
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1999
(THOUSANDS OF DOLLARS)
National National Highland Data-Track
National Fuel Gas Fuel Gas Seneca Leidy Land & Utility Account
Fuel Gas Distribution Supply Resources Hub, Minerals, Constructors, Services,
Company Corp. Corp. Corporation Inc. Inc. Inc. Inc.
------- ------------ -------- ----------- ------ --------- ------------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
OPERATING REVENUE: $ - $807,355 $168,783 $168,611 $ - $23,318 $ - $184
- ----------------- -------- -------- -------- -------- ---- ------- ----- ----
OPERATING EXPENSE:
- ------------------
Purchased Gas - 399,098 1,395 10,089 - - - -
Fuel Used in Heat and
Electric Generation - - - - - - - -
Operation 3,503 167,675 50,775 45,113 24 19,382 3 188
Maintenance - 13,961 9,855 27 - - - -
Property, Franchise &
Other Taxes 511 72,124 11,960 2,974 2 245 1 -
Depreciation, Depletion
and Amortization 2 34,215 22,691 61,492 - 646 - 6
Income Taxes 632 34,741 22,248 4,847 8 935 228 1
-------- -------- -------- -------- ---- ------- ----- ----
4,648 721,814 118,924 124,542 34 21,208 232 195
-------- -------- -------- -------- ---- ------- ----- ----
Operating Income
(Loss) (4,648) 85,541 49,859 44,069 (34) 2,110 (232) (11)
-------- -------- -------- -------- ---- ------- ----- ----
OTHER INCOME:
- -------------
Unremitted Earnings
of Subsidiaries 45,876 - - - - - - -
Dividends from
Subsidiaries 68,356 - - - - - - -
Interest-Intercompany 75,155 77 - 756 37 - 15 35
Other 3,126 916 2,249 1,557 - 21 367 -
-------- -------- -------- -------- ---- ------- ----- ----
192,513 993 2,249 2,313 37 21 382 35
-------- -------- -------- -------- ---- ------- ----- ----
Income (Loss) Before
Interest Charges
and Minority
Interest in
Foreign
Subsidiaries 187,865 86,534 52,108 46,382 3 2,131 150 24
-------- -------- -------- -------- ---- ------ ----- ----
INTEREST CHARGES:
- -----------------
Interest on Long-Term
Debt 54,501 - - 5,293 - - - -
Interest-Intercompany 1,008 25,336 12,030 30,518 - 805 - -
Other Interest 17,319 4,323 667 - - 1 - -
-------- -------- -------- -------- ---- ------- ----- ----
72,828 29,659 12,697 35,811 - 806 - -
-------- -------- -------- -------- ---- ------- ----- ----
Minority Interest in
Foreign Subsidiaries - - - - - - - -
--------- -------- -------- -------- ---- ------- ----- ----
Net Income (Loss)
Available for
Common Stock $115,037 $ 56,875 $ 39,411 $ 10,571 $ 3 $ 1,325 $ 150 $ 24
======== ======== ======== ======== ==== ======= ===== ====
</TABLE>
See Notes to Consolidated Financial Statements included in Item 8 of National
Fuel Gas Company's Form 10-K for the fiscal year ended September 30, 1999,
incorporated herein by reference.
<PAGE>
<TABLE>
<CAPTION>
Horizon
National Energy Seneca
Fuel Development, Upstate Indep. NFR Total Before Eliminations Consolidated
Resources, Inc. Energy Pipeline Power, Eliminations & Adjustments Company and
Inc. (Consolidated) Inc. Company Inc. & Adjustments (Dr) Cr Subsidiaries
- ---------- -------------- ------ ------- ------ ------------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
$99,089 $107,045 $1,581 $ - $ - $1,375,966 $(112,692) $1,263,274
------- -------- ------ ---- ---- ---------- --------- ----------
90,183 - 1,475 - - 502,240 96,315 405,925
1,472 54,316 - - - 55,788 - 55,788
4,050 26,217 796 4 122 317,852 17,845 300,007
- 38 - - - 23,881 - 23,881
183 3,141 4 - 1 91,146 - 91,146
165 10,473 - - - 129,690 - 129,690
1,138 15 (139) 191 (43) 64,802 (27) 64,829
------- -------- ------ ---- ---- ---------- --------- ----------
97,191 94,200 2,136 195 80 1,185,399 114,133 1,071,266
------- -------- ------ ---- ---- ---------- --------- ----------
1,898 12,845 (555) (195) (80) 190,567 1,441 192,008
------- -------- ------ ---- ---- ---------- --------- ----------
- - - - - 45,876 (45,876) -
- - - - - 68,356 (68,356) -
63 25 - - - 76,163 (76,163) -
327 2,473 395 999 - 12,430 (87) 12,343
------- -------- ------ ---- ---- ---------- --------- ----------
390 2,498 395 999 - 202,825 (190,482) 12,343
------- -------- ------ ---- ---- ---------- --------- ----------
2,288 15,343 (160) 804 (80) 393,392 (189,041) 204,351
------- -------- ------ ---- ---- ---------- --------- ----------
- 5,608 - - - 65,402 - 65,402
193 5,724 100 449 - 76,163 76,163 -
42 119 - - - 22,471 175 22,296
------- -------- ------ ---- ---- ---------- --------- ----------
235 11,451 100 449 - 164,036 76,338 87,698
------- -------- ------ ---- ---- ---------- --------- ----------
- (1,616) - - - (1,616) - (1,616)
------- -------- ------ ---- ---- ---------- --------- ----------
$ 2,053 $ 2,276 $ (260) $355 $(80) $ 227,740 $(112,703) $ 115,037
======= ======== ====== ==== ==== ========== ========= ==========
Basic Earnings Per Common Share
- -------------------------------
Net Income Available for Common Stock $ 2.98
======
Diluted Earnings Per Common Share
- ---------------------------------
Net Income Available for Common Stock $ 2.95
======
Weighted Average Common Shares Outstanding
- ------------------------------------------
Used in Basic Calculation 38,663,981
Used in Diluted Calculation 39,041,728
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NATIONAL FUEL GAS COMPANY AND SUBSIDIARIES
CONSOLIDATING STATEMENT OF EARNINGS REINVESTED IN THE BUSINESS
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1999
(THOUSANDS OF DOLLARS)
National National Highland Data-Track
National Fuel Gas Fuel Gas Seneca Leidy Land & Utility Account
Fuel Gas Distribution Supply Resources Hub, Minerals, Constructors, Services,
Company Corp. Corp. Corporation Inc. Inc. Inc. Inc.
------- ------------ -------- ----------- ----- --------- ------------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
EARNINGS REINVESTED
- -------------------
IN THE BUSINESS
- ---------------
Balance at Beginning
of Year $428,112 $260,718 $189,981 $(21,347) $(654) $4,430 $(1,166) $204
Net Income (Loss)
Available for
Common Stock 115,037 56,875 39,411 10,571 3 1,325 150 24
Dividends on Common
Stock (1999 - $1.83
per share) (70,632) (34,800) (24,616) (8,000) - (800) - -
-------- -------- -------- -------- ----- ------ ------- ----
Balance at End of Year $472,517 $282,793 $204,776 $(18,776) $(651) $4,955 $(1,016) $228
======== ======== ======== ======== ===== ====== ======= ====
</TABLE>
At September 30, 1999
---------------------
Intercompany Eliminations:
- --------------------------
Earnings Reinvested in the Business:
Unremitted Earnings of Subsidiaries
Since Acquisition $476,842
Earnings Reinvested in the Business
of Subsidiaries at Acquisition 7,095
Consolidating Adjustment (11,358)
--------
$472,579
========
Net Income Available for Common Stock:
Subsidiaries-Dividends on
Common Stock $ 68,356
Unremitted Earnings of Subsidiaries 45,876
Consolidating Adjustment (1,529)
--------
$112,703
========
See Notes to Consolidated Financial Statements included in Item 8 of National
Fuel Gas Company's Form 10-K for the fiscal year ended September 30, 1999,
incorporated herein by reference.
<PAGE>
<TABLE>
<CAPTION>
Horizon
National Energy Seneca Niagara
Fuel Development, Upstate Indep. Indep. NFR Total Before Eliminations Consolidated
Resources, Inc. Energy Pipeline Marketing Power, Eliminations & Adjustments Company and
Inc. (Consolidated) Inc. Company Company Inc. & Adjustments (Dr) Cr Subsidiaries
- ---------- -------------- ------ ------- -------- ------ ------------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$7,810 $(11,659) $(191) $106 $ - $ - $ 856,344 $(428,232) $428,112
2,053 2,276 (260) 355 - (80) 227,740 (112,703) 115,037
(140) - - - - - (138,988) 68,356 (70,632)
------ -------- ----- ---- ---- ---- --------- --------- --------
$9,723 $ (9,383) $(451) $461 $ - $(80) $ 945,096 $(472,579) $472,517
====== ======== ===== ==== ==== ==== ========= ========= ========
</TABLE>
<TABLE>
<CAPTION>
ANALYSIS OF INVESTMENTS IN ASSOCIATED COMPANIES AT SEPTEMBER 30, 1999
Par or Earnings Total Investment
Stated Value Reinvested in Unremitted Accumulated in Associated
of Paid the Business Earnings Other Companies
Subsidiary in at Since Comprehensive at
Stock Capital Acquisition Acquisition Income Equity
----------- ------- ----------- ----------- ------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Registrant:
Distribution
Corporation $59,170 $121,668 $4,636 $278,157 $ - $463,631
Supply Corporation 25,345 35,833 2,453 202,323 - 265,954
Seneca Resources 500 104,035 6 (18,782) - 85,759
Leidy Hub 4 1,365 - (651) - 718
Highland 5 445 - 4,955 - 5,405
UCI 1 2,559 - (1,016) - 1,544
Data-Track 1 499 - 228 - 728
NFR 10 3,490 - 9,723 - 13,223
Horizon 5 38,245 - (9,383) (4,472) 24,395
Upstate Energy 1 - - (451) - (450)
Seneca Independence 1 - - 461 - 462
Niagara Independence 1 - - - - 1
NFR Power 1 20 - (80) - (59)
Consolidating
Adjustment - - - 11,358 500 11,858
------- -------- ------ -------- ------- --------
85,045 308,159 7,095 476,842 (3,972) 873,169
Supply Corporation:
Seneca Resources - 61 - - - 61
------- -------- ------ -------- ------- --------
$85,045 $308,220 $7,095 $476,842 $(3,972) $873,230
======= ======== ====== ======== ======= ========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NATIONAL FUEL GAS COMPANY AND SUBSIDIARIES
CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1999
(THOUSANDS OF DOLLARS)
Data-
National National Highland Track
National Fuel Gas Fuel Gas Seneca Leidy Land & Utility Account
Fuel Gas Distribution Supply Resources Hub, Minerals, Constructors Services,
Company Corp. Corp. Corporation Inc. Inc. Inc. Inc.
------- ------------ -------- ----------- ----- --------- ------------ ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
OPERATING ACTIVITIES:
- ---------------------
Net Income (Loss) Available
for Common Stock $115,037 $ 56,875 $39,411 $10,571 $ 3 $1,325 $150 $24
Adjustments to Reconcile Net
Income to Net Cash Provided
by Operating Activities:
Unremitted Earnings of
Subsidiaries (45,876) - - - - - - -
Depreciation, Depletion
and Amortization 2 34,215 22,691 61,492 - 646 - 6
Deferred Income Taxes (171) 1,489 4,671 6,217 5 167 225 (24)
Minority Interest in Foreign
Subsidiaries - - - - - - - -
Other (1,542) 1,026 4,088 (1,574) - - - -
Change in:
Receivables and Unbilled
Utility Revenue (329) (846) (7,608) (7,291) - (765) (92) -
Accounts Receivable-
Intercompany 163 4,867 2,585 (646) - 25 1 (179)
Gas Stored Underground
and Material and Supplies - (2,319) 1,860 (118) - (109) - -
Unrecovered Purchased Gas Costs - 1,740 - - - - - -
Prepayments 106 (9,310) (1,949) (2,062) - (2,252) 14 -
Accounts Payable (191) 18,384 6,154 (1,389) - (32) 30 180
Amounts Payable to Customers - 153 - - - - - -
Accounts Payable-Intercompany (757) (6,448) (2,367) 1,275 4 509 (21) 8
Other Accruals and Current
Liabilities (5,415) 10,846 3,385 5,359 (2) (3) (129) 24
Other Assets (1,556) 10,235 (3,098) (6,529) - - - -
Other Liabilities 2,619 (1,001) 22 6,955 - 306 (44) (9)
-------- -------- ------- -------- ---- ------ ---- ---
Net Cash Provided by
(Used in) Operating
Activities $ 62,090 $119,906 $69,845 $ 72,260 $ 10 $ (183) $134 $30
-------- -------- ------- -------- ---- ------ ---- ---
</TABLE>
See Notes to Consolidated Financial Statements included in Item 8 of National
Fuel Gas Company's Form 10-K for the fiscal year ended September 30, 1999,
incorporated herein by reference.
(Consolidating Statement of Cash Flows continues on pages 50 and 51)
<PAGE>
<TABLE>
<CAPTION>
Horizon
National Energy Seneca Niagara
Fuel Development, Upstate Indep. Indep. NFR Total Before Consolidated
Resources, Inc. Energy Pipeline Marketing Power, Eliminations Eliminations Company and
Inc. (Consolidated) Inc. Company Company Inc. & Adjustments & Adjustments Subsidiaries
- ---------- -------------- ------- ------- --------- ------ ------------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 2,053 $ 2,276 $ (260) $ 355 $ - $(80) $227,740 $(112,703) $115,037
- - - - - - (45,876) 45,876 -
165 10,473 - - - - 129,690 - 129,690
(147) 1,258 - 340 - - 14,030 - 14,030
- 1,616 - - - - 1,616 - 1,616
277 395 - (999) - - 1,671 5,347 7,018
(1,729) 514 - - - (15) (18,161) - (18,161)
(51) 6 (81) - - - 6,690 (6,690) -
(4,173) (702) (2,245) - - - (7,806) - (7,806)
- - - - - - 1,740 - 1,740
79 52 - - - - (15,322) - (15,322)
(423) 1,772 - - - 7 24,492 (1,621) 22,871
- - - - - - 153 - 153
(785) 213 93 18 - - (8,258) 8,258 -
242 (3,483) (116) (30) - (43) 10,635 296 10,931
42 (966) - - - (199) (2,071) 1,165 (906)
3,132 160 (35) - - 1 12,106 (1,107) 10,999
------- ------- ------ ----- ----- ---- -------- --------- --------
$(1,318) $13,584 $(2,644) $(316) $ - $(329) $333,069 $ (61,179) $271,890
------- ------- ------- ----- ----- ------ ---------- --------- --------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NATIONAL FUEL GAS COMPANY AND SUBSIDIARIES
CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1999
(THOUSANDS OF DOLLARS)
Data-
National National Highland Track
National Fuel Gas Fuel Gas Seneca Leidy Land & Utility Account
Fuel Gas Distribution Supply Resources Hub, Minerals, Constructors, Services,
Company Corp. Corp. Corporation Inc. Inc. Inc. Inc.
-------- ------------ -------- ----------- ------ --------- ------------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
INVESTING ACTIVITIES:
- ---------------------
Capital Expenditures $ - $(46,974) $(31,239) $(106,458) $ - $(47,827) $ - $ (69)
Investment in Subsidiaries,
Net of Cash Acquired - - - - - - - -
Investment in Associated
Companies 780 - - - - - - -
Investment in Partnerships - - - - - - - -
Change in Notes and Dividends
Receivable - Intercompany (124,135) - - (3,000) - - 500 100
Other - - 1,079 5,955 - - 176 -
--------- -------- -------- -------- ------ -------- ----- -----
Net Cash Provided by (Used In)
Investing Activities (123,355) (46,974) (30,160) (103,503) - (47,827) 676 31
--------- -------- -------- --------- ------ -------- ----- -----
FINANCING ACTIVITIES:
- ---------------------
Change in Notes Payable to
Banks and Commercial Paper 66,000 - - - - - - -
Change in Notes
Payable-Intercompany 1,300 (39,600) (15,565) 102,200 - 48,800 - -
Capital Contribution - - - - - - (800) -
Net Proceeds from Issuance of
Long-Term Debt 198,217 - - - - - - -
Reduction of Long-Term Debt (150,000) (139) (43) (62,776) - - - -
Proceeds from Issuance of
Common Stock 16,082 - - - - - - -
Dividends Paid on Common Stock (69,878) (34,800) (24,616) (8,000) - (800) - -
Dividends Paid to Minority
Interest - - - - - - - -
--------- -------- -------- --------- ------ -------- ----- -----
Net Cash Provided by (Used in)
Financing Activities 61,721 (74,539) (40,224) 31,424 - 48,000 (800) -
--------- -------- -------- --------- ------ -------- ----- -----
Effect of Exchange Rates
on Cash - - - - - - - -
---------- -------- -------- --------- ------ -------- ----- -----
Net Increase (Decrease) in
Cash and Temporary Cash
Investments 456 (1,607) (539) 181 10 (10) 10 61
Cash and Temporary Cash
Investments at Beginning
of Year 7,071 3,686 758 1,848 86 133 135 26
--------- -------- -------- --------- ------ -------- ----- -----
Cash and Temporary Cash
Investments at End of Year $ 7,527 $ 2,079 $ 219 $ 2,029 $ 96 $ 123 $ 145 $ 87
========= ======== ======== ========= ====== ======== ===== =====
</TABLE>
See Notes to Consolidated Financial Statements included in Item 8 of National
Fuel Gas Company's Form 10-K for the fiscal year ended September 30, 1999,
incorporated herein by reference.
<PAGE>
<TABLE>
<CAPTION>
Horizon
National Energy Seneca Niagara
Fuel Development, Upstate Indep. Indep. NFR Total Before Consolidated
Resources, Inc. Energy Pipeline Marketing Power, Eliminations Eliminations Company and
Inc. (Consolidated) Inc. Company Company Inc. & Adjustments & Adjustments Subsidiaries
- ---------- -------------- ------- ------- --------- ------ ------------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ (302) $(27,637) $ - $ - $ - $ - $(260,506) $ - $(260,506)
- (5,774) - - - - (5,774) - (5,774)
- - - - - - 780 (780) -
- - - (3,633) - - (3,633) - (3,633)
(1,724) 2,500 - - - - (125,759) 125,759 -
- 1,724 - - - - 8,934 (2,247) 6,687
------ -------- ------ -------- ---- ---- --------- --------- ---------
(2,026) (29,187) - (3,633) - - (385,958) 122,732 (263,226)
------ -------- ------ -------- ---- ---- --------- --------- ---------
- 1,195 - - - - 67,195 - 67,195
(2,200) 23,900 2,600 4,000 - 324 125,759 (125,759) -
- - - - - 20 (780) 780 -
- - - - - - 198,217 - 198,217
- (891) - - - - (213,849) - (213,849)
- - - - - - 16,082 (5,347) 10,735
(140) - - - - - (138,234) 68,356 (69,878)
- (246) - - - - (246) - (246)
------ -------- ------ -------- ---- ---- --------- --------- ---------
(2,340) 23,958 2,600 4,000 - 344 54,144 (61,970) (7,826)
------ -------- ------ -------- ---- ---- --------- --------- ---------
- (2,053) - - - - (2,053) - (2,053)
------ -------- ------ -------- ---- ---- --------- --------- ---------
(5,684) 6,302 (44) 51 - 15 (798) (417) (1,215)
7,032 8,908 51 18 1 - 29,753 684 30,437
------ -------- ------ -------- ---- ---- --------- --------- ---------
$1,348 $ 15,210 $ 7 $ 69 $ 1 $ 15 $ 28,955 $ 267 $ 29,222
====== ======== ====== ======== ==== ==== ========= ========= =========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NATIONAL FUEL GAS COMPANY AND SUBSIDIARIES
CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1999
(THOUSANDS OF DOLLARS)
Data-
National National Highland Track
National Fuel Gas Fuel Gas Seneca Leidy Land & Utility Account
Fuel Gas Distribution Supply Resources Hub, Minerals, Constructors, Services,
Company Corp. Corp. Corporation Inc. Inc. Inc. Inc.
-------- ------------ ------- ----------- ----- --------- ------------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Income (Loss) Available
for Common Stock $115,037 $ 56,875 $ 39,411 $ 10,571 $ 3 $ 1,325 $ 150 $ 24
-------- -------- -------- -------- ---- ------- ----- ----
Other Comprehensive Income
(Loss), Before Tax:
Foreign Currency
Translation Adjustment (11,737) - - - - - - -
Unrealized Gain on
Securities Available
for Sale 706 - - - - - - -
-------- -------- -------- -------- ---- ------- ------ ----
Other Comprehensive Income
(Loss), Before Tax (11,031) - - - - - - -
Income Tax Expense Related
to Unrealized Gain on
Securities Available
for Sale 247 - - - - - - -
-------- -------- -------- -------- ---- ------- ------ ----
Other Comprehensive Income
(Loss), Net of Tax (11,278) - - - - - - -
-------- -------- -------- -------- ---- ------- ------ ----
Comprehensive Income $103,759 $ 56,875 $ 39,411 $ 10,571 $ 3 $ 1,325 $ 150 $ 24
======== ======== ======== ======== ==== ======= ====== ====
</TABLE>
See Notes to Consolidated Financial Statements included in Item 8 of National
Fuel Gas Company's Form 10-K for the fiscal year ended September 30, 1999,
incorporated herein by reference.
<PAGE>
<TABLE>
<CAPTION>
Horizon
National Energy Seneca Niagara
Fuel Development, Upstate Indep. Indep. NFR Total Before Eliminations Consolidated
Resources, Inc. Energy Pipeline Marketing Power, Eliminations & Adjustments Company and
Inc. (Consolidated) Inc. Company Company Inc. & Adjustments (Dr) Cr Subsidiaries
- ---------- -------------- ------- ------- --------- ------- ------------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$2,053 $ 2,276 $(260) $355 $ - $(80) $227,740 $(112,703) $ 115,037
------ -------- ----- ---- ---- ---- -------- --------- ---------
- (11,737) - - - - (23,474) 11,737 (11,737)
- - - - - - 706 - 706
----- -------- ------ ------ ---- ---- --------- --------- --------
- (11,737) - - - - (22,768) 11,737 (11,031)
- - - - - - 247 - 247
------ -------- ------ ------ ---- ---- --------- --------- --------
- (11,737) - - - - (23,015) 11,737 (11,278)
------ -------- ------ ------ ---- ---- --------- --------- --------
$2,053 $ (9,461) $ (260) $ 355 $ - $(80) $ 204,725 $(100,966) $103,759
====== ======== ====== ====== ==== ==== ========= ========= ========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
HORIZON ENERGY DEVELOPMENT, INC. AND SUBSIDIARIES
CONSOLIDATING BALANCE SHEET
AT SEPTEMBER 30, 1999
(THOUSANDS OF DOLLARS)
Horizon Horizon
Energy Energy Sceptre Consolidated
Development, Holdings Power Total Before Horizon and
Inc. (Consolidated) Company Eliminations Eliminations Subsidiaries
------------ -------------- ------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
- ------
PROPERTY, PLANT & EQUIPMENT $ - $283,528 $ - $283,528 $ - $283,528
- ---------------------------
Less: Accumulated DD&A - (80,076) - (80,076) - (80,076)
-------- -------- ------- -------- --------- --------
- 203,452 - 203,452 - 203,452
-------- -------- ------- -------- --------- --------
CURRENT ASSETS:
- ---------------
Cash and Temporary Cash Investments 31 15,156 23 15,210 - 15,210
Allowance for Uncollectible Accounts - (750) - (750) - (750)
Accounts Receivable - Intercompany 4,832 - - 4,832 (4,832) -
Accounts Receivable - 16,578 10 16,588 - 16,588
Unbilled Utility Revenue - 1,306 - 1,306 - 1,306
Materials and Supplies - 7,134 - 7,134 - 7,134
Prepayments - 97 - 97 - 97
-------- -------- ------- -------- --------- --------
4,863 39,521 33 44,417 (4,832) 39,585
-------- -------- ------- -------- --------- --------
OTHER ASSETS:
- -------------
Investment in Associated Companies 120,376 - - 120,376 (120,376) -
Other Assets - 12,005 - 12,005 - 12,005
Notes Receivable - Intercompany 22,100 - - 22,100 (22,100) -
Deferred Charges - - - - - -
-------- -------- ------- -------- --------- --------
142,476 12,005 - 154,481 (142,476) 12,005
-------- -------- ------- -------- --------- --------
TOTAL ASSETS $147,339 $254,978 $ 33 $402,350 $(147,308) $255,042
======== ======== ======= ======== ========= ========
CAPITALIZATION & LIABILITIES
- ----------------------------
CAPITALIZATION:
- ---------------
Common Stock $ 5 $ 2 $ - $ 7 $ (2) $ 5
Paid - in - Capital 38,245 114,957 - 153,202 (114,957) 38,245
Capital Contribution from Horizon - - 11,536 11,536 (11,536) -
Earnings Reinvested in the Business (9,383) 5,287 (7,576) (11,672) 2,289 (9,383)
Accumulated Other Comprehensive Income (4,472) (3,830) - (8,302) 3,830 (4,472)
-------- -------- ------- -------- --------- --------
Total Common Stock Equity 24,395 116,416 3,960 144,771 (120,376) 24,395
-------- -------- ------- -------- --------- --------
Long-Term Debt, Net of Current
Portion - 45,722 - 45,722 - 45,722
Notes Payable-Intercompany 90,000 22,100 - 112,100 (22,100) 90,000
-------- -------- ------- -------- --------- --------
Total Capitalization 114,395 184,238 3,960 302,593 (142,476) 160,117
-------- -------- ------- -------- --------- --------
Minority Interest in Foreign
Subsidiaries - 27,589 - 27,589 - 27,589
-------- -------- ------- -------- --------- --------
CURRENT AND ACCRUED LIABILITIES:
- --------------------------------
Notes Payable - Intercompany 26,600 - - 26,600 - 26,600
Notes Payable to Banks - 1,195 - 1,195 - 1,195
Current Portion of Long-Term Debt - 16,864 - 16,864 - 16,864
Accounts Payable 110 10,866 15 10,991 (595) 10,396
Accounts Payable - Intercompany 3,190 4,237 - 7,427 (4,237) 3,190
Other Accruals and Current
Liabilities 3,236 3,903 (3,923) 3,216 - 3,216
-------- -------- ------- -------- --------- --------
33,136 37,065 (3,908) 66,293 (4,832) 61,461
-------- -------- ------- -------- --------- --------
DEFERRED CREDITS:
- -----------------
Accumulated Deferred Income Taxes (532) 6,060 (20) 5,508 - 5,508
Other Deferred Credits 340 26 1 367 - 367
-------- -------- ------- -------- --------- --------
(192) 6,086 (19) 5,875 - 5,875
-------- -------- ------- -------- --------- --------
TOTAL CAPITALIZATION & LIABILITIES $147,339 $254,978 $ 33 $402,350 $(147,308) $255,042
======== ======== ======= ======== ========= ========
</TABLE>
See Notes to Consolidated Financial Statements included in Item 8 of National
Fuel Gas Company's Form 10-K for the fiscal year ended September 30, 1999,
incorporated herein by reference.
<PAGE>
<TABLE>
<CAPTION>
HORIZON ENERGY DEVELOPMENT, INC. AND SUBSIDIARIES
CONSOLIDATING STATEMENT OF INCOME
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1999
(THOUSANDS OF DOLLARS)
Horizon
Energy Horizon Energy Sceptre Consolidated
Development, Holdings Power Total Before Eliminations Horizon and
Inc. (Consolidated) Company Eliminations (Dr) Cr Subsidiaries
------------ -------------- ------- ------------ ------- ------------
<S> <C> <C> <C> <C> <C> <C>
OPERATING REVENUE: $ 60 $107,075 $ - $107,135 $ (90) $107,045
- ----------------- ------- -------- ------- -------- ------- --------
OPERATING EXPENSE:
- ------------------
Fuel Used in Heat and
Electric Generation - 54,316 - 54,316 - 54,316
Operation 2,015 24,290 2 26,307 90 26,217
Maintenance - 38 - 38 - 38
Property, Franchise & Other Taxes 22 3,119 - 3,141 - 3,141
Depreciation, Depletion and
Amortization - 10,473 - 10,473 - 10,473
Income Taxes (2,738) 2,754 (1) 15 - 15
------- -------- ------- -------- ------- --------
(701) 94,990 1 94,290 90 94,200
------- -------- ------- -------- ------- --------
Operating Income (Loss) 761 12,085 (1) 12,845 - 12,845
------- -------- ------- -------- ------- --------
OTHER INCOME:
- -------------
Unremitted Earnings of
Subsidiaries 7,344 - - 7,344 (7,344) -
Interest-Intercompany 25 - - 25 - 25
Other 1 2,472 - 2,473 - 2,473
------- -------- ------- -------- ------- --------
7,370 2,472 - 9,842 (7,344) 2,498
------- -------- ------- -------- ------- --------
Income (Loss) Before
Interest Charges and
Minority Interest in
Foreign Subsidiaries 8,131 14,557 (1) 22,687 (7,344) 15,343
------- -------- ------- -------- ------- --------
INTEREST CHARGES:
- -----------------
Interest on Long-Term Debt - 5,608 - 5,608 - 5,608
Interest-Intercompany 5,724 - - 5,724 - 5,724
Other Interest 131 (12) - 119 - 119
------- -------- ------- -------- ------- --------
5,855 5,596 - 11,451 - 11,451
------- -------- ------- -------- ------- --------
Minority Interest in
Foreign Subsidiaries - (1,616) - (1,616) - (1,616)
------- -------- ------- -------- ------- --------
Net Income (Loss) Available
for Common Stock $ 2,276 $ 7,345 $ (1) $ 9,620 $(7,344) $ 2,276
======= ======== ======= ======== ======= ========
</TABLE>
See Notes to Consolidated Financial Statements included in Item 8 of National
Fuel Gas Company's Form 10-K for the fiscal year ended September 30, 1999,
incorporated herein by reference.
<PAGE>
<TABLE>
<CAPTION>
HORIZON ENERGY DEVELOPMENT, INC. AND SUBSIDIARIES
CONSOLIDATING STATEMENT OF EARNINGS REINVESTED IN THE BUSINESS
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1999
(THOUSANDS OF DOLLARS)
Horizon
Energy Horizon Energy Sceptre Consolidated
EARNINGS REINVESTED Development, Holdings Power Total Before Eliminations Horizon and
IN THE BUSINESS Inc. (Consolidated) Company Eliminations (Dr) Cr Subsidiaries
- ------------------- ------------ -------------- ------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Balance at Beginning of Year $(11,659) $(2,058) $(7,575) $(21,292) $ 9,633 $(11,659)
Net Income (Loss) Available
for Common Stock 2,276 7,345 (1) 9,620 (7,344) 2,276
-------- ------- ------- -------- ------- --------
Balance at End of Year $ (9,383) $ 5,287 $(7,576) $(11,672) $ 2,289 $ (9,383)
======== ======= ======= ======== ======= ========
</TABLE>
See Notes to Consolidated Financial Statements included in Item 8 of National
Fuel Gas Company's Form 10-K for the fiscal year ended September 30, 1999,
incorporated herein by reference.
<PAGE>
<TABLE>
<CAPTION>
HORIZON ENERGY DEVELOPMENT, INC. AND SUBSIDIARIES
CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1999
(THOUSANDS OF DOLLARS)
Horizon
Energy Horizon Energy Sceptre Total Before Eliminations Consolidated
Development, Holdings Power Eliminations and Horizon and
Inc. (Consolidated) Company & Adjustments Adjustments Subsidiaries
------------ -------------- ------- ------------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
- -------------------------------------
Net Income (Loss) $ 2,276 $ 7,345 $ (1) $ 9,620 $ (7,344) $ 2,276
Adjustments to Reconcile Net Income
to Net Cash Provided by Operating
Activities:
Unremitted Earnings of Subsidiaries (7,344) - - (7,344) 7,344 -
Depreciation, Depletion &
Amortization - 10,473 - 10,473 - 10,473
Deferred Income Taxes (379) 1,637 - 1,258 - 1,258
Minority Interest in Foreign
Subsidiaries - 1,616 - 1,616 - 1,616
Other - 395 - 395 - 395
Change in:
Accounts Receivable - Intercompany (751) - - (751) 757 6
Receivables and Unbilled Utility
Revenue - 514 - 514 - 514
Materials and Supplies - (702) - (702) - (702)
Prepayments 3 49 - 52 - 52
Accounts Payable 24 2,417 4 2,445 (673) 1,772
Accounts Payable - Intercompany 213 84 - 297 (84) 213
Other Accruals and Current
Liabilities (578) (2,289) (616) (3,483) - (3,483)
Other Assets - (966) - (966) - (966)
Other Liabilities 305 (145) - 160 - 160
-------- ------- ---- -------- -------- --------
Net Cash Provided by (Used in)
Operations (6,231) 20,428 (613) 13,584 - 13,584
-------- -------- ---- -------- -------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
- -------------------------------------
Capital Expenditures - (27,637) - (27,637) - (27,637)
Change in Notes
Receivable - Intercompany (17,100) - - (17,100) 19,600 2,500
Investment in Associated Companies (635) - - (635) 635 -
Investment in Subsidiaries, Net
of Cash Acquired - (5,774) - (5,774) - (5,774)
Other - 1,724 - 1,724 - 1,724
-------- -------- ---- -------- -------- --------
Net Cash Provided by (Used in)
Investing Activities (17,735) (31,687) - (49,422) 20,235 (29,187)
-------- -------- ---- -------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
- -------------------------------------
Change in Notes Payable to Banks - 1,195 - 1,195 - 1,195
Change in Notes Payable - Intercompany 23,900 19,600 - 43,500 (19,600) 23,900
Capital Contribution - - 635 635 (635) -
Reduction of Long-Term Debt - (891) - (891) - (891)
Dividends Paid to Minority Interest - (246) - (246) - (246)
-------- -------- ---- -------- -------- ---------
Net Cash Provided by (Used in)
Financing Activities 23,900 19,658 635 44,193 (20,235) 23,958
-------- -------- ---- -------- -------- --------
Effect of Exchange Rates on Cash - (2,053) - (2,053) - (2,053)
-------- -------- ---- -------- -------- --------
Net Increase (Decrease) in Cash
and Temporary Cash Investments (66) 6,346 22 6,302 - 6,302
Cash and Temporary Cash Investments
at Beginning of Period 97 8,810 1 8,908 - 8,908
-------- -------- ---- -------- -------- --------
Cash and Temporary Cash Investments
at End of Period $ 31 $ 15,156 $ 23 $ 15,210 $ - $ 15,210
======== ======== ==== ======== ======== ========
</TABLE>
See Notes to Consolidated Financial Statements included in Item 8 of National
Fuel Gas Company's Form 10-K for the fiscal year ended September 30, 1999,
incorporated herein by reference.
<PAGE>
<TABLE>
<CAPTION>
HORIZON ENERGY DEVELOPMENT, INC. AND SUBSIDIARIES
CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1999
(THOUSANDS OF DOLLARS)
Horizon
Energy Horizon Energy Sceptre Total Before Consolidated
Development, Holdings Power Eliminations Eliminations Horizon and
Inc. (Consolidated) Company & Adjustments (Dr) Cr Subsidiaries
------------ -------------- ------- ------------- ------- ------------
<S> <C> <C> <C> <C> <C> <C>
Net Income (Loss) Available for
Common Stock $ 2,276 $ 7,345 $ (1) $ 9,620 $ (7,344) $ 2,276
-------- -------- ----- -------- -------- --------
Other Comprehensive Income (Loss):
Foreign Currency Translation
Adjustment (11,737) (11,737) - (23,474) 11,737 (11,737)
-------- -------- ----- -------- ------- --------
Other Comprehensive Income (Loss) (11,737) (11,737) - (23,474) 11,737 (11,737)
-------- -------- ----- -------- ------- --------
Comprehensive Income $ (9,461) $ (4,392) $ (1) $(13,854) $ 4,393 $ (9,461)
-------- -------- ----- -------- ------- --------
</TABLE>
See Notes to Consolidated Financial Statements included in Item 8 of National
Fuel Gas Company's Form 10-K for the fiscal year ended September 30, 1999,
incorporated herein by reference.
<PAGE>
<TABLE>
<CAPTION>
HORIZON ENERGY HOLDINGS
CONSOLIDATING BALANCE SHEET
AT SEPTEMBER 30, 1999
(THOUSANDS OF DOLLARS)
Consolidated
Horizon Horizon Energy Horizon
Energy Development B.V. Total Before Energy Holdings
Holdings (Consolidated) Eliminations Eliminations and Subsidiaries
-------- -------------- ------------ ------------ ----------------
<S> <C> <C> <C> <C> <C>
ASSETS
- ------
PROPERTY, PLANT & EQUIPMENT $ - $283,528 $283,528 $ - $283,528
- ---------------------------
Less: Accumulated DD&A - (80,076) (80,076) - (80,076)
-------- -------- -------- --------- --------
- 203,452 203,452 - 203,452
-------- -------- -------- --------- --------
CURRENT ASSETS:
- ---------------
Cash and Temporary Cash Investments - 15,156 15,156 - 15,156
Allowance for Uncollectible Accounts - (750) (750) - (750)
Accounts Receivable - 16,578 16,578 - 16,578
Unbilled Utility Revenue - 1,306 1,306 - 1,306
Materials and Supplies - 7,134 7,134 - 7,134
Prepayments - 97 97 - 97
-------- -------- -------- --------- --------
- 39,521 39,521 - 39,521
-------- -------- -------- --------- --------
OTHER ASSETS:
- -------------
Investment in Associated Companies 116,416 - 116,416 (116,416) -
Other Assets - 12,005 12,005 - 12,005
-------- -------- -------- --------- --------
116,416 12,005 128,421 (116,416) 12,005
-------- -------- -------- --------- --------
TOTAL ASSETS $116,416 $254,978 $371,394 $(116,416) $254,978
======== ======== ======== ========= ========
CAPITALIZATION & LIABILITIES
- ----------------------------
CAPITALIZATION:
- ---------------
Common Stock $ 2 $ 29 $ 31 $ (29) $ 2
Paid - in - Capital 114,957 109,822 224,779 (109,822) 114,957
Earnings Reinvested in the Business 5,287 11,037 16,324 (11,037) 5,287
Accumulated Other Comprehensive Income (3,830) (4,472) (8,302) 4,472 (3,830)
-------- -------- -------- --------- --------
Total Common Stock Equity 116,416 116,416 232,832 (116,416) 116,416
Long-Term Debt, Net of Current
Portion - 45,722 45,722 - 45,722
Notes Payable - Intercompany - 22,100 22,100 - 22,100
-------- -------- -------- --------- --------
Total Capitalization 116,416 184,238 300,654 (116,416) 184,238
-------- -------- -------- --------- --------
Minority Interest in Foreign
Subsidiaries - 27,589 27,589 - 27,589
-------- -------- -------- --------- --------
CURRENT AND ACCRUED LIABILITIES:
- --------------------------------
Notes Payable to Banks - 1,195 1,195 - 1,195
Current Portion of Long-Term Debt - 16,864 16,864 - 16,864
Accounts Payable - 10,866 10,866 - 10,866
Accounts Payable - Intercompany - 4,237 4,237 - 4,237
Other Accruals and Current
Liabilities - 3,903 3,903 - 3,903
-------- -------- -------- --------- --------
- 37,065 37,065 - 37,065
-------- -------- -------- --------- --------
DEFERRED CREDITS:
- -----------------
Accumulated Deferred Income Taxes - 6,060 6,060 - 6,060
Other Deferred Credits - 26 26 - 26
-------- -------- -------- --------- --------
- 6,086 6,086 - 6,086
-------- -------- -------- --------- --------
TOTAL CAPITALIZATION & LIABILITIES $116,416 $254,978 $371,394 $(116,416) $254,978
======== ======== ======== ========= ========
</TABLE>
See Notes to Consolidated Financial Statements included in Item 8 of National
Fuel Gas Company's Form 10-K for the fiscal year ended September 30, 1999,
incorporated herein by reference.
<PAGE>
<TABLE>
<CAPTION>
HORIZON ENERGY HOLDINGS
CONSOLIDATING STATEMENT OF INCOME
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1999
(THOUSANDS OF DOLLARS)
Consolidated
Horizon Horizon Energy Horizon Energy
Energy Development B.V. Total Before Eliminations Holdings and
Holdings (Consolidated) Eliminations (Dr) Cr Subsidiaries
-------- -------------- ------------ ------- ------------
<S> <C> <C> <C> <C> <C>
OPERATING REVENUE: $ - $107,075 $107,075 $ - $107,075
- ----------------- ------- -------- -------- ------- --------
OPERATING EXPENSE:
- ------------------
Fuel Used in Heat and
Electric Generation - 54,316 54,316 - 54,316
Operation - 24,290 24,290 - 24,290
Maintenance - 38 38 - 38
Property, Franchise & Other Taxes - 3,119 3,119 - 3,119
Depreciation, Depletion and
Amortization - 10,473 10,473 - 10,473
Income Taxes - 2,754 2,754 - 2,754
------- -------- -------- ------- --------
- 94,990 94,990 - 94,990
------- -------- -------- ------- --------
Operating Income (Loss) - 12,085 12,085 - 12,085
------- -------- -------- ------- --------
OTHER INCOME:
- -------------
Unremitted Earnings of
Subsidiaries 7,345 - 7,345 (7,345) -
Interest-Intercompany - - - - -
Other - 2,472 2,472 - 2,472
------- -------- -------- ------- --------
7,345 2,472 9,817 (7,345) 2,472
------- -------- -------- ------- --------
Income (Loss) Before
Interest Charges and
Minority Interest in
Foreign Subsidiaries 7,345 14,557 21,902 (7,345) 14,557
------- -------- -------- ------- --------
INTEREST CHARGES:
- -----------------
Interest on Long-Term Debt - 5,608 5,608 - 5,608
Interest-Intercompany - - - - -
Other Interest - (12) (12) - (12)
------- -------- -------- ------- --------
- 5,596 5,596 - 5,596
------- -------- -------- ------- --------
Minority Interest in
Foreign Subsidiaries - (1,616) (1,616) - (1,616)
------- -------- -------- ------- --------
Net Income (Loss) Available
for Common Stock $ 7,345 $ 7,345 $ 14,690 $(7,345) $ 7,345
======= ======== ======== ======= ========
</TABLE>
See Notes to Consolidated Financial Statements included in Item 8 of National
Fuel Gas Company's Form 10-K for the fiscal year ended September 30, 1999,
incorporated herein by reference.
<PAGE>
<TABLE>
<CAPTION>
HORIZON ENERGY HOLDINGS
CONSOLIDATING STATEMENT OF EARNINGS REINVESTED IN THE BUSINESS
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1999
(THOUSANDS OF DOLLARS)
Consolidated
Horizon Horizon Energy Horizon Energy
EARNINGS REINVESTED Energy Development B.V. Total Before Eliminations Holdings and
IN THE BUSINESS Holdings (Consolidated) Eliminations (Dr) Cr Subsidiaries
--------------- -------- -------------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Balance at Beginning of Year $(2,058) $ 3,692 $ 1,634 $ (3,692) $ (2,058)
Net Income (Loss) Available
for Common Stock 7,345 7,345 14,690 (7,345) 7,345
------- ------- -------- -------- --------
Balance at End of Year $ 5,287 $11,037 $ 16,324 $(11,037) $ 5,287
======= ======= ======== ======== ========
</TABLE>
See Notes to Consolidated Financial Statements included in Item 8 of National
Fuel Gas Company's Form 10-K for the fiscal year ended September 30, 1999,
incorporated herein by reference.
<PAGE>
<TABLE>
<CAPTION>
HORIZON ENERGY HOLDINGS
CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1999
(THOUSANDS OF DOLLARS)
Consolidated
Horizon Horizon Energy Total Before Horizon Energy
Energy Development B.V. Eliminations Holdings and
Holdings (Consolidated) & Adjustments Eliminations Subsidiaries
-------- -------------- ------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
- -------------------------------------
Net Income (Loss) $ 7,345 $ 7,345 $ 14,690 $ (7,345) $ 7,345
Adjustments to Reconcile Net Income
to Net Cash Provided by Operating
Activities:
Unremitted Earnings of Subsidiaries (7,345) - (7,345) 7,345 -
Depreciation, Depletion &
Amortization - 10,473 10,473 - 10,473
Deferred Income Taxes - 1,637 1,637 - 1,637
Minority Interest in Foreign
Subsidiaries - 1,616 1,616 - 1,616
Other - 395 395 - 395
Change in:
Receivables and Unbilled Utility
Revenue - 514 514 - 514
Materials and Supplies - (702) (702) - (702)
Prepayments - 49 49 - 49
Accounts Payable - 2,417 2,417 - 2,417
Accounts Payable - Intercompany - 84 84 - 84
Other Accruals and Current
Liabilities - (2,289) (2,289) - (2,289)
Other Assets - (966) (966) - (966)
Other Liabilities - (145) (145) - (145)
-------- ------- -------- -------- --------
Net Cash Provided by (Used in)
Operations - 20,428 20,428 - 20,428
-------- -------- -------- -------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
- -------------------------------------
Capital Expenditures - (27,637) (27,637) - (27,637)
Investment in Subsidiaries, Net
of Cash Acquired - (5,774) (5,774) - (5,774)
Other - 1,724 1,724 - 1,724
-------- -------- -------- -------- --------
Net Cash Provided by (Used in)
Investing Activities - (31,687) (31,687) - (31,687)
-------- -------- -------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
- -------------------------------------
Change in Notes Payable to Banks - 1,195 1,195 - 1,195
Change in Notes Payable-Intercompany - 19,600 19,600 - 19,600
Reduction of Long-Term Debt - (891) (891) - (891)
Dividends Paid to Minority Interest - (246) (246) - (246)
-------- -------- -------- -------- ---------
Net Cash Provided by (Used in)
Financing Activities - 19,658 19,658 - 19,658
-------- -------- -------- -------- --------
Effect of Exchange Rates on Cash - (2,053) (2,053) - (2,053)
-------- -------- -------- -------- --------
Net Increase (Decrease) in Cash
and Temporary Cash Investments - 6,346 6,346 - 6,346
Cash and Temporary Cash Investments
at Beginning of Period - 8,810 8,810 - 8,810
-------- -------- -------- -------- --------
Cash and Temporary Cash Investments
at End of Period $ - $ 15,156 $ 15,156 $ - $ 15,156
======== ======== ======== ======== ========
</TABLE>
See Notes to Consolidated Financial Statements included in Item 8 of National
Fuel Gas Company's Form 10-K for the fiscal year ended September 30, 1999,
incorporated herein by reference.
<PAGE>
<TABLE>
<CAPTION>
HORIZON ENERGY HOLDINGS
CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1999
(THOUSANDS OF DOLLARS)
Consolidated
Horizon Horizon Energy Total Before Horizon Energy
Energy Development B.V. Eliminations Eliminations Holdings and
Holdings (Consolidated) & Adjustments (Dr) Cr Subsidiaries
-------- -------------- ------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Net Income Available for
Common Stock $ 7,345 $ 7,345 $ 14,690 $ (7,345) $ 7,345
-------- -------- -------- -------- --------
Other Comprehensive Income (Loss):
Foreign Currency Translation
Adjustment (11,737) (11,737) (23,474) 11,737 (11,737)
-------- -------- -------- ------- --------
Other Comprehensive Income (Loss) (11,737) (11,737) (23,474) 11,737 (11,737)
-------- -------- -------- ------- --------
Comprehensive Income $ (4,392) $ (4,392) $ (8,784) $ 4,392 $ (4,392)
-------- -------- -------- ------- --------
</TABLE>
See Notes to Consolidated Financial Statements included in Item 8 of National
Fuel Gas Company's Form 10-K for the fiscal year ended September 30, 1999,
incorporated herein by reference.
<PAGE>
<TABLE>
<CAPTION>
HORIZON ENERGY DEVELOPMENT, B.V.
CONSOLIDATING BALANCE SHEET
AT SEPTEMBER 30, 1999
(THOUSANDS OF DOLLARS)
Prvni
Severoceske severozapadni
teplarny, a.s. teplarenska, a.s. Power
(SCT) (PSZT) Development Horizon Energy
Horizon B.V. (Consolidated) (Consolidated) (Consolidated) Development, s.r.o.
------------ -------------- -------------- -------------- -------------------
<S> <C> <C> <C> <C> <C>
ASSETS
- ------
PROPERTY, PLANT & EQUIPMENT $ - $ 82,999 $199,152 $1,079 $ 298
- ---------------------------
Less: Accumulated DD&A - (28,004) (51,630) (230) (212)
-------- -------- -------- ------ ------
- 54,995 147,522 849 86
-------- -------- -------- ------ ------
CURRENT ASSETS:
- ---------------
Cash and Temporary Cash Investments 1,188 3,625 9,807 43 493
Allowance for Uncollectible Accounts - (649) (101) - -
Accounts Receivable - Intercompany 60 - - - 486
Accounts Receivable - 12,225 4,192 146 15
Unbilled Utility Revenue - 1,296 10 - -
Materials and Supplies - 5,047 2,087 - -
Prepayments - 39 29 1 28
-------- -------- -------- ------ ------
1,248 21,583 16,024 190 1,022
-------- -------- -------- ------ ------
OTHER ASSETS:
- -------------
Investment in Associated Companies 119,292 - - - -
Other 86 (1,645) 12,031 1,135 398
-------- -------- -------- ------ ------
119,378 (1,645) 12,031 1,135 398
-------- -------- -------- ------ ------
TOTAL ASSETS $120,626 $ 74,933 $175,577 $2,174 $1,506
======== ======== ======== ====== ======
CAPITALIZATION & LIABILITIES
- ----------------------------
CAPITALIZATION:
- ---------------
Common Stock $ 29 $ 38,540 $ 28,938 $ 760 $1,779
Paid - in - Capital 109,822 7,290 35,622 1,562 -
Earnings Reinvested in
the Business 11,037 2,110 8,084 (588) (294)
Accumulated Other Comprehensive
Income (4,472) (4,941) 681 (265) 14
-------- -------- -------- ------ ------
Total Common Stock Equity 116,416 42,999 73,325 1,469 1,499
Long-Term Debt, Net of Current
Portion - 5,201 40,521 - -
Notes Payable - Intercompany - - 22,100 - -
-------- -------- -------- ------ ------
Total Capitalization 116,416 48,200 135,946 1,469 1,499
-------- -------- -------- ------ ------
Minority Interest in Foreign
Subsidiaries - 17,928 9,661 - -
-------- -------- -------- ------ ------
CURRENT AND ACCRUED LIABILITIES:
- --------------------------------
Notes Payable to Banks - 1,195 - - -
Current Portion of Long-Term Debt - 752 16,112 - -
Accounts Payable - 2,916 7,846 515 (45)
Accounts Payable - Intercompany 4,210 - - 207 -
Other Accruals and Current
Liabilities - 2,952 916 (17) 52
-------- -------- -------- ------ ------
4,210 7,815 24,874 705 7
-------- -------- -------- ------ ------
DEFERRED CREDITS:
- -----------------
Accumulated Deferred Income Tax - 964 5,096 - -
Other Deferred Credits - 26 - - -
-------- -------- -------- ------ ------
- 990 5,096 - -
-------- -------- -------- ------ ------
TOTAL CAPITALIZATION & LIABILITIES $120,626 $ 74,933 $175,577 $2,174 $1,506
======== ======== ======== ====== ======
</TABLE>
See Notes to Consolidated Financial Statements included in Item 8 of National
Fuel Gas Company's Form 10-K for the fiscal year ended September 30, 1999,
incorporated herein by reference.
<PAGE>
Consolidated
Total Before Horizon B.V.
Eliminations Eliminations and Subsidiaries
------------ ------------ ----------------
$283,528 $ - $283,528
(80,076) - (80,076)
-------- --------- --------
203,452 - 203,452
-------- --------- --------
15,156 - 15,156
(750) - (750)
546 (546) -
16,578 - 16,578
1,306 - 1,306
7,134 - 7,134
97 - 97
-------- --------- --------
40,067 (546) 39,521
-------- --------- --------
119,292 (119,292) -
12,005 - 12,005
-------- --------- --------
131,297 (119,292) 12,005
-------- --------- --------
$374,816 $(119,838) $254,978
======== ========= ========
$ 70,046 $ (70,017) $ 29
154,296 (44,474) 109,822
20,349 (9,312) 11,037
(8,983) 4,511 (4,472)
-------- --------- --------
235,708 (119,292) 116,416
45,722 - 45,722
22,100 - 22,100
-------- --------- --------
303,530 (119,292) 184,238
-------- --------- --------
27,589 - 27,589
-------- --------- --------
1,195 - 1,195
16,864 - 16,864
11,232 (366) 10,866
4,417 (180) 4,237
3,903 - 3,903
-------- --------- --------
37,611 (546) 37,065
-------- --------- --------
6,060 - 6,060
26 - 26
-------- --------- --------
6,086 - 6,086
-------- --------- --------
$374,816 $(119,838) $254,978
======== ========= ========
<PAGE>
<TABLE>
<CAPTION>
HORIZON ENERGY DEVELOPMENT, B.V.
CONSOLIDATING STATEMENT OF INCOME
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1999
(THOUSANDS OF DOLLARS)
Power
SCT PSZT Development Horizon Energy
Horizon B.V. (Consolidated) (Consolidated) (Consolidated) Development, s.r.o.
------------ -------------- -------------- -------------- -------------------
<S> <C> <C> <C> <C> <C>
OPERATING REVENUE: $ - $ 39,611 $ 65,984 $1,474 $1,374
- ----------------- -------- -------- -------- ------ ------
OPERATING EXPENSE:
- ------------------
Fuel Used in Heat and
Electric Generation - 20,136 33,034 1,146 -
Operation 3 9,091 15,220 468 876
Maintenance - - - 26 12
Property, Franchise & Other Taxes (19) 1,317 1,759 2 60
Depreciation, Depletion and
Amortization - 3,434 6,962 40 37
Income Taxes - 3,041 (287) - -
-------- -------- -------- ------ ------
(16) 37,019 56,688 1,682 985
-------- -------- -------- ------ ------
Operating Income (Loss) 16 2,592 9,296 (208) 389
-------- -------- -------- ------ ------
OTHER INCOME:
- -------------
Unremitted Earnings of
Subsidiaries 7,299 - - - -
Other 32 1,357 1,053 10 20
-------- -------- -------- ------ ------
7,331 1,357 1,053 10 20
-------- -------- -------- ------ ------
Income (Loss) Before
Interest Charges and
Minority Interest in
Foreign Subsidiaries 7,347 3,949 10,349 (198) 409
-------- -------- -------- ------ ------
INTEREST CHARGES:
- -----------------
Interest on Long-Term Debt - 491 5,117 - -
Other Interest 2 (20) - 6 -
-------- -------- -------- ------ ------
2 471 5,117 6 -
-------- -------- -------- ------ ------
Minority Interest in
Foreign Subsidiaries - (786) (830) - -
-------- -------- -------- ------ ------
Net Income (Loss) Available
for Common Stock $ 7,345 $ 2,692 $ 4,402 $ (204) $ 409
======== ======== ======== ====== ======
</TABLE>
See Notes to Consolidated Financial Statements included in Item 8 of National
Fuel Gas Company's Form 10-K for the fiscal year ended September 30, 1999,
incorporated herein by reference.
<PAGE>
Consolidated
Total Before Eliminations Horizon B.V.
Eliminations (Dr) Cr and Subsidiaries
------------ ------------ ----------------
$108,443 $ (1,368) $107,075
-------- -------- --------
54,316 - 54,316
25,658 1,368 24,290
38 - 38
3,119 - 3,119
10,473 - 10,473
2,754 - 2,754
-------- -------- --------
96,358 1,368 94,990
-------- -------- --------
12,085 - 12,085
-------- -------- --------
7,299 (7,299) -
2,472 - 2,472
-------- -------- --------
9,771 (7,299) 2,472
-------- -------- --------
21,856 (7,299) 14,557
-------- -------- --------
5,608 - 5,608
(12) - (12)
-------- -------- --------
5,596 - 5,596
-------- -------- --------
(1,616) - (1,616)
-------- -------- --------
$ 14,644 $ (7,299) $ 7,345
======== ======== ========
<PAGE>
<TABLE>
<CAPTION>
HORIZON ENERGY DEVELOPMENT, B.V.
CONSOLIDATING STATEMENT OF EARNINGS REINVESTED IN THE BUSINESS
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1999
(THOUSANDS OF DOLLARS)
Power
SCT PSZT Development Horizon Energy
Horizon B.V. (Consolidated) (Consolidated) (Consolidated) Development, s.r.o.
------------ -------------- -------------- -------------- -------------------
EARNINGS REINVESTED
IN THE BUSINESS:
- ----------------
<S> <C> <C> <C> <C> <C>
Balance at Beginning of Year $ 3,692 $ 594 $ 3,682 $ (384) $ (703)
Net Income (Loss) Available
For Common Stock 7,345 2,692 4,402 (204) 409
Dividends on Common Stock - (1,176) - - -
-------- -------- -------- ------ ------
Balance at End of Year $ 11,037 $ 2,110 $ 8,084 $ (588) $ (294)
======== ======== ======== ====== ======
</TABLE>
See Notes to Consolidated Financial Statements included in Item 8 of National
Fuel Gas Company's Form 10-K for the fiscal year ended September 30, 1999,
incorporated herein by reference.
<PAGE>
Consolidated
Total Before Eliminations Horizon B.V.
Eliminations (Dr) Cr and Subsidiaries
------------ ------------ ----------------
$ 6,881 $ (3,189) $ 3,692
14,644 (7,299) 7,345
(1,176) 1,176 -
-------- -------- --------
$ 20,349 $ (9,312) $ 11,037
======== ======== ========
<PAGE>
<TABLE>
<CAPTION>
HORIZON ENERGY DEVELOPMENT, B.V.
CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1999
(THOUSANDS OF DOLLARS)
Power
SCT PSZT Development Horizon Energy
Horizon B.V. (Consolidated) (Consolidated) (Consolidated) Development, s.r.o.
------------ -------------- -------------- -------------- -------------------
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM
OPERATING ACTIVITIES:
- ---------------------
Net Income (Loss) $ 7,345 $ 2,692 $ 4,402 $ (204) $ 409
Adjustments to Reconcile Net
Income to Net Cash Provided
by Operating Activities:
Unremitted Earnings of Subsidiaries (7,299) - - - -
Depreciation, Depletion &
Amortization - 3,434 6,962 40 37
Deferred Income Taxes - 503 1,134 - -
Minority Interest in Foreign
Subsidiaries - 786 830 - -
Other - (408) 744 36 23
Change in:
Accounts Receivable - Intercompany - - - - (222)
Receivables and Unbilled Utility
Revenue 3 (218) 659 (4) 74
Materials and Supplies - (221) (481) - -
Prepayments - 25 22 (1) 3
Accounts Payable (110) 814 1,019 858 (21)
Accounts Payable - Intercompany 215 - - (131) 79
Other Accruals and Current
Liabilities (5) 888 (3,199) 20 7
Other Assets (85) (601) 352 (631) (1)
Other Liabilities - (25) - (119) (1)
-------- -------- -------- ------ ------
Net Cash Provided by (Used in)
Operating Activities 64 7,669 12,444 (136) 387
-------- -------- -------- ------ ------
CASH FLOWS FROM INVESTING ACTIVITIES:
- -------------------------------------
Capital Expenditures - (4,517) (23,047) (2) (71)
Dividends Received from Associated
Company 1,177 - - - -
Investment in Subsidiaries, Net of
Cash Acquired (38) (5,736) - - -
Other - 1,718 6 - -
-------- -------- -------- ------ ------
Net Cash Used in Investing
Activities 1,139 (8,535) (23,041) (2) (71)
-------- -------- -------- ------ ------
CASH FLOWS FROM FINANCING ACTIVITIES:
- -------------------------------------
Change in Notes Payable to Banks - 1,195 - - -
Change in Notes Payable - Intercompany - - 19,600 - -
Reduction of Long-Term Debt - (891) - - -
Dividends Paid on Common Stock - (1,423) - - -
-------- -------- -------- ------ ------
Net Cash Provided by (Used in)
Financing Activities - (1,119) 19,600 - -
-------- -------- -------- ------ ------
Effect of Exchange Rates on Cash (15) (1,809) (337) 74 34
-------- -------- -------- ------ ------
Net Increase (Decrease) in Cash
and Temporary Cash Investments 1,188 (3,794) 8,666 (64) 350
Cash and Temporary Cash
Investments at Beginning of Period - 7,419 1,141 107 143
-------- -------- -------- ------ ------
Cash and Temporary Cash
Investments at End of Period $ 1,188 $ 3,625 $ 9,807 $ 43 $ 493
======== ======== ======== ====== ======
</TABLE>
See Notes to Consolidated Financial Statements included in Item 8 of National
Fuel Gas Company's Form 10-K for the fiscal year ended September 30, 1999,
incorporated herein by reference.
<PAGE>
Consolidated
Total Before Horizon B.V.
Eliminations Eliminations and Subsidiaries
------------ ------------ ----------------
$ 14,644 $ (7,299) $ 7,345
(7,299) 7,299 -
10,473 - 10,473
1,637 - 1,637
1,616 - 1,616
395 - 395
(222) 222 -
514 - 514
(702) - (702)
49 - 49
2,560 (143) 2,417
163 (79) 84
(2,289) - (2,289)
(966) - (966)
(145) - (145)
-------- -------- ---------
20,428 - 20,428
-------- -------- ---------
(27,637) - (27,637)
1,177 (1,177) -
(5,774) - (5,774)
1,724 - 1,724
-------- -------- ---------
(30,510) (1,177) (31,687)
-------- -------- ---------
1,195 - 1,195
19,600 - 19,600
(891) - (891)
(1,423) 1,177 (246)
-------- -------- ---------
18,481 1,177 19,658
-------- -------- ---------
(2,053) - (2,053)
-------- -------- ---------
6,346 - 6,346
8,810 - 8,810
-------- -------- ---------
$ 15,156 $ - $ 15,156
======== ======== =========
<PAGE>
<TABLE>
<CAPTION>
HORIZON ENERGY DEVELOPMENT, B.V.
CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1999
(THOUSANDS OF DOLLARS)
Power
SCT PSZT Development Horizon Energy
Horizon B.V. (Consolidated) (Consolidated) (Consolidated) Development, s.r.o.
------------ -------------- -------------- -------------- -------------------
<S> <C> <C> <C> <C> <C>
Net Income (Loss) Available for
Common Stock $ 7,345 $ 2,692 $ 4,402 $(204) $409
-------- ------- ------- ----- ----
Other Comprehensive Income (Loss):
Foreign Currency Translation
Adjustment (11,737) (4,739) (6,910) (140) 68
-------- ------- ------- ----- ----
Other Comprehensive Income (Loss) (11,737) (4,739) (6,910) (140) 68
-------- ------- ------- ----- ----
Comprehensive Income $ (4,392) $(2,047) $(2,508) $(344) $477
======== ======= ======= ===== ====
</TABLE>
See Notes to Consolidated Financial Statements included in Item 8 of National
Fuel Gas Company's Form 10-K for the fiscal year ended September 30, 1999,
incorporated herein by reference.
<PAGE>
Consolidated
Total Before Eliminations Horizon B.V.
Eliminations (Dr) Cr and Subsidiaries
------------ ------------ ----------------
$ 14,644 $(7,299) $ 7,345
-------- ------- --------
(23,458) 11,721 (11,737)
-------- ------- --------
(23,458) 11,721 (11,737)
-------- ------- --------
$ (8,814) $ 4,422 $ (4,392)
======== ======= ========
<PAGE>
<TABLE>
<CAPTION>
SEVEROCESKE TEPLARNY, A.S.
CONSOLIDATING BALANCE SHEET
AT SEPTEMBER 30, 1999
(THOUSANDS OF DOLLARS)
Jablonecka
Teplarenska a Consolidated
Teplarna Realitni, as Total Before SCT and
SCT Liberec (JTR) Eliminations Eliminations Subsidiaries
-------- ------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
- ------
PROPERTY, PLANT & EQUIPMENT $ 64,097 $ 14,666 $ 4,236 $ 82,999 $ - $ 82,999
- ---------------------------
Less: Accumulated DD&A (24,495) (3,237) (272) (28,004) - (28,004)
-------- -------- -------- -------- --------- --------
39,602 11,429 3,964 54,995 - 54,995
-------- -------- -------- -------- --------- --------
CURRENT ASSETS:
- ---------------
Cash and Temporary Cash Investments 1,124 2,241 260 3,625 - 3,625
Allowance for Uncollectible Accounts (222) (426) (1) (649) - (649)
Accounts Receivable - Intercompany 60 - - 60 (60) -
Accounts Receivable 2,425 1,512 8,288 12,225 - 12,225
Unbilled Utility Revenue 544 45 707 1,296 - 1,296
Materials and Supplies 1,854 2,093 1,100 5,047 - 5,047
Prepayments 30 1 8 39 - 39
-------- -------- -------- -------- --------- --------
5,815 5,466 10,362 21,643 (60) 21,583
-------- -------- -------- -------- --------- --------
OTHER ASSETS:
- -------------
Notes Receivable - Intercompany 176 - - 176 (176) -
Investment in Associated Companies 16,733 - - 16,733 (16,733) -
Other Assets (602) (1,084) 41 (1,645) - (1,645)
-------- -------- -------- -------- --------- --------
16,307 (1,084) 41 15,264 (16,909) (1,645)
-------- -------- -------- -------- --------- --------
TOTAL ASSETS $ 61,724 $ 15,811 $ 14,367 $ 91,902 $ (16,969) $ 74,933
======== ======== ======== ======== ========= ========
CAPITALIZATION & LIABILITIES
- ----------------------------
CAPITALIZATION:
- ---------------
Common Stock $ 38,540 $ 17,004 $ 5,407 $ 60,951 $ (22,411) $ 38,540
Paid - in - Capital 7,290 (5,723) 1,132 2,699 4,591 7,290
Earnings Reinvested in the Business 2,110 720 48 2,878 (768) 2,110
Accumulated Other Comprehensive
Income (4,941) (2,003) 148 (6,796) 1,855 (4,941)
-------- -------- -------- -------- --------- --------
Total Common Stock Equity 42,999 9,998 6,735 59,732 (16,733) 42,999
Long-Term Debt, Net of Current
Portion 3,136 - 2,065 5,201 - 5,201
-------- -------- -------- -------- --------- --------
Total Capitalization 46,135 9,998 8,800 64,933 (16,733) 48,200
-------- -------- -------- -------- --------- --------
Minority Interest in Foreign
Subsidiaries 9,642 4,773 3,513 17,928 - 17,928
-------- -------- -------- -------- --------- --------
CURRENT AND ACCRUED LIABILITIES:
- --------------------------------
Notes Payable to Banks 1,195 - - 1,195 - 1,195
Current Portion of Long-Term Debt 478 - 274 752 - 752
Accounts Payable 1,623 270 1,149 3,042 (126) 2,916
Accounts Payable - Intercompany 110 - - 110 (110) -
Other Accruals and Current
Liabilities 1,718 675 559 2,952 - 2,952
-------- -------- -------- -------- --------- --------
5,124 945 1,982 8,051 (236) 7,815
-------- -------- -------- -------- --------- --------
DEFERRED CREDITS:
- -----------------
Accumulated Deferred Income Taxes 797 95 72 964 - 964
Other Deferred Credits 26 - - 26 - 26
-------- -------- -------- -------- --------- --------
823 95 72 990 - 990
-------- -------- -------- -------- --------- --------
TOTAL CAPITALIZATION & LIABILITIES $ 61,724 $ 15,811 $ 14,367 $ 91,902 $ (16,969) $ 74,933
======== ======== ======== ======== ========= ========
</TABLE>
See Notes to Consolidated Financial Statements included in Item 8 of National
Fuel Gas Company's Form 10-K for the fiscal year ended September 30, 1999,
incorporated herein by reference.
<PAGE>
<TABLE>
<CAPTION>
SEVEROCESKE TEPLARNY, A.S.
CONSOLIDATING STATEMENT OF INCOME
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1999
(THOUSANDS OF DOLLARS)
Consolidated
Teplarna Total Before Eliminations SCT and
SCT Liberec JTR Eliminations (Dr) Cr Subsidiaries
------- ------- --- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
OPERATING REVENUE: $24,488 $17,944 $ 311 $42,743 $(3,132) $39,611
----------------- ------- ------- ------- ------- ------- -------
OPERATING EXPENSE:
------------------
Fuel Used in Heat and
Electric Generation 10,821 9,142 173 20,136 - 20,136
Operation 5,270 7,035 (82) 12,223 3,132 9,091
Property, Franchise & Other Taxes 963 360 (6) 1,317 - 1,317
Depreciation, Depletion and
Amortization 2,508 810 116 3,434 - 3,434
Income Taxes 2,673 339 29 3,041 - 3,041
------- ------- ------- ------- ------- -------
22,235 17,686 230 40,151 3,132 37,019
------- ------- ------- ------- ------- -------
Operating Income (Loss) 2,253 258 81 2,592 - 2,592
------- ------- ------- ------- ------- -------
OTHER INCOME:
-------------
Unremitted Earnings of
Subsidiary 516 - - 516 (516) -
Other 1,082 273 2 1,357 - 1,357
------- ------- ------- ------- ------- -------
1,598 273 2 1,873 (516) 1,357
------- ------- ------- ------- ------- -------
Income (Loss) Before
Interest Charges and
Minority Interest in
Foreign Subsidiaries 3,851 531 83 4,465 (516) 3,949
------- ------- ------- ------- ------- -------
INTEREST CHARGES:
----------------
Interest on Long-Term Debt 491 - - 491 - 491
Other Interest - (34) 14 (20) - (20)
------- ------- ------- ------- ------- -------
491 (34) 14 471 - 471
------- ------- ------- ------- ------- -------
Minority Interest in
Foreign Subsidiaries (668) (97) (21) (786) - (786)
------- ------- ------- ------- ------- -------
Net Income (Loss) Available
for Common Stock $ 2,692 $ 468 $ 48 $ 3,208 $ (516) $ 2,692
======= ======= ======= ======= ======= =======
</TABLE>
See Notes to Consolidated Financial Statements included in Item 8 of
National Fuel Gas Company's Form 10-K for the fiscal year ended September
30, 1999, incorporated herein by reference.
<PAGE>
<TABLE>
<CAPTION>
SEVEROCESKE TEPLARNY, A.S.
CONSOLIDATING STATEMENT OF EARNINGS REINVESTED IN THE BUSINESS
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1999
(THOUSANDS OF DOLLARS)
Consolidated
EARNINGS REINVESTED Teplarna Total Before Eliminations SCT and
IN THE BUSINESS SCT Liberec JTR Eliminations (Dr) Cr Subsidiaries
- ------------------- -------- -------- ----- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Balance at Beginning of Year $ 594 $ 252 $ - $ 846 $ (252) $ 594
Net Income (Loss) Available
for Common Stock 2,692 468 48 3,208 (516) 2,692
Dividends on Common Stock (1,176) - - (1,176) - (1,176)
-------- ------- ---- -------- ------- --------
Balance at End of Year $ 2,110 $ 720 $ 48 $ 2,878 $ (768) $ 2,110
======== ======= ==== ======== ======= ========
</TABLE>
See Notes to Consolidated Financial Statements included in Item 8 of National
Fuel Gas Company's Form 10-K for the fiscal year ended September 30, 1999,
incorporated herein by reference.
<PAGE>
<TABLE>
<CAPTION>
SEVEROCESKE TEPLARNY, A.S.
CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1999
(THOUSANDS OF DOLLARS)
Total Before Consolidated
Teplarna Eliminations SCT and
SCT Liberec JTR & Adjustments Eliminations Subsidiaries
-------- ------- --- ------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
- -------------------------------------
Net Income (Loss) $ 2,692 $ 468 $ 48 $ 3,208 $ (516) $ 2,692
Adjustments to Reconcile Net Income
to Net Cash Provided by Operating
Activities:
Unremitted Earnings of Subsidiaries (516) - - (516) 516 -
Depreciation, Depletion &
Amortization 2,508 810 116 3,434 - 3,434
Deferred Income Taxes 373 106 24 503 - 503
Minority Interest in Foreign
Subsidiaries 668 97 21 786 - 786
Other (349) (59) - (408) - (408)
Change in:
Receivables and Unbilled Utility
Revenue 239 (450) (7) (218) - (218)
Accounts Receivable - Intercompany (46) - - (46) 46 -
Materials and Supplies (42) (45) (134) (221) - (221)
Prepayments 27 - (2) 25 - 25
Accounts Payable 463 182 257 902 (88) 814
Accounts Payable - Intercompany 101 - - 101 (101) -
Other Accruals and Current
Liabilities 550 458 (120) 888 - 888
Other Assets (512) (89) - (601) - (601)
Other Liabilities (25) - - (25) - (25)
-------- ------- ------- -------- -------- --------
Net Cash Provided by (Used in)
Operating Activities 6,131 1,478 203 7,812 (143) 7,669
-------- -------- ------- -------- -------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
- -------------------------------------
Capital Expenditures (3,092) (1,424) (1) (4,517) - (4,517)
Change in Notes
Receivable - Intercompany 43 - - 43 (43) -
Investment in Subsidiary, Net of
Cash Acquired (5,843) - - (5,843) 107 (5,736)
Other 1,627 91 - 1,718 - 1,718
-------- -------- ------- -------- -------- --------
Net Cash Used in Investing
Activities (7,265) (1,333) (1) (8,599) 64 (8,535)
-------- -------- ------- -------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
- -------------------------------------
Change in Notes Payable to Banks 1,195 - - 1,195 - 1,195
Change in Notes Payable - Intercompany - (186) - (186) 186 -
Reduction of Long-Term Debt (871) - (20) (891) - (891)
Dividends Paid on Common Stock (1,423) - - (1,423) - (1,423)
-------- -------- ------- -------- -------- ---------
Net Cash Provided by (Used in)
Financing Activities (1,099) (186) (20) (1,305) 186 (1,119)
-------- -------- ------- -------- -------- --------
Effect of Exchange Rates on Cash (1,643) (136) (30) (1,809) - (1,809)
-------- -------- ------- -------- -------- --------
Net Increase (Decrease) in Cash
and Temporary Cash Investments (3,876) (177) 152 (3,901) 107 (3,794)
Cash and Temporary Cash Investments
at Beginning of Period
(at Acquisition for JTR) 5,000 2,418 108 7,526 (107) 7,419
-------- -------- ------- -------- -------- --------
Cash and Temporary Cash Investments
at End of Period $ 1,124 $ 2,241 $ 260 $ 3,625 $ - $ 3,625
======== ======== ======= ======== ======== ========
</TABLE>
See Notes to Consolidated Financial Statements included in Item 8 of National
Fuel Gas Company's Form 10-K for the fiscal year ended September 30, 1999,
incorporated herein by reference.
<PAGE>
<TABLE>
<CAPTION>
SEVEROCESKE TEPLARNY, A.S.
CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1999
(THOUSANDS OF DOLLARS)
Consolidated
EARNINGS REINVESTED Teplarna Total Before Eliminations SCT and
IN THE BUSINESS SCT Liberec JTR Eliminations (Dr) Cr Subsidiaries
- ------------------- -------- -------- ----- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Net Income Available for
Common Stock $ 2,692 $ 468 $ 48 $ 3,208 $ (516) $ 2,692
Other Comprehensive Income (Loss):
Foreign Currency Translation
Adjustment (4,739) (1,243) 148 (5,834) 1,095 (4,739)
-------- ------- ---- -------- ------- --------
Other Comprehensive Income (Loss) (4,739) (1,243) 148 (5,834) 1,095 (4,739)
-------- ------- ---- -------- ------- --------
Comprehensive Income (Loss) $ (2,047) $ (775) $196 $ (2,626) $ 579 $ (2,047)
======== ======= ==== ======== ======= ========
</TABLE>
See Notes to Consolidated Financial Statements included in Item 8 of National
Fuel Gas Company's Form 10-K for the fiscal year ended September 30, 1999,
incorporated herein by reference.
<PAGE>
<TABLE>
<CAPTION>
PRVNI SEVEROZAPADNI TEPLARENSKA, A.S.
CONSOLIDATING BALANCE SHEET
AT SEPTEMBER 30, 1999
(THOUSANDS OF DOLLARS)
Consolidated
Total Before PSZT and
PSZT ENOP Eliminations Eliminations Subsidiary
-------- ---- ------------ ------------ ----------
<S> <C> <C> <C> <C> <C>
ASSETS
- ------
PROPERTY, PLANT & EQUIPMENT $199,074 $ 78 $199,152 $ - $199,152
- ---------------------------
Less: Accumulated DD&A (51,604) (26) (51,630) - (51,630)
-------- -------- -------- --------- --------
147,470 52 147,522 - 147,522
-------- -------- -------- --------- --------
CURRENT ASSETS:
- ---------------
Cash and Temporary Cash Investments 9,789 18 9,807 - 9,807
Allowance for Uncollectible Accounts (101) - (101) - (101)
Accounts Receivable 3,050 1,142 4,192 - 4,192
Unbilled Utility Revenue 10 - 10 - 10
Materials and Supplies 2,087 - 2,087 - 2,087
Prepayments 29 - 29 - 29
-------- -------- -------- --------- --------
14,864 1,160 16,024 - 16,024
-------- -------- -------- ---------- --------
OTHER ASSETS:
- -------------
Investment in Associated Company 1,035 - 1,035 (1,035) -
Other Assets 11,919 112 12,031 - 12,031
-------- -------- -------- --------- --------
12,954 112 13,066 (1,035) 12,031
-------- -------- -------- --------- --------
TOTAL ASSETS $175,288 $ 1,324 $176,612 $ (1,035) $175,577
======== ======== ======== ========= ========
CAPITALIZATION & LIABILITIES
- ----------------------------
CAPITALIZATION:
- ---------------
Common Stock $ 28,938 $ 3 $ 28,941 $ (3) $ 28,938
Paid - in - Capital 35,622 883 36,505 (883) 35,622
Earnings Reinvested in the Business 8,084 139 8,223 (139) 8,084
Accumulated Other Comprehensive Income 681 10 691 (10) 681
-------- -------- -------- --------- --------
Total Common Stock Equity 73,325 1,035 74,360 (1,035) 73,325
Long-Term Debt, Net of Current
Portion 40,521 - 40,521 - 40,521
Notes Payable-Intercompany 22,100 - 22,100 - 22,100
-------- -------- -------- --------- --------
Total Capitalization 135,946 1,035 136,981 (1,035) 135,946
-------- -------- -------- --------- --------
Minority Interest in Foreign
Subsidiaries 9,661 - 9,661 - 9,661
-------- -------- -------- --------- --------
CURRENT AND ACCRUED LIABILITIES:
- --------------------------------
Current Portion of Long-Term Debt 16,112 - 16,112 - 16,112
Accounts Payable 7,723 123 7,846 - 7,846
Other Accruals and Current
Liabilities 750 166 916 - 916
-------- -------- -------- --------- --------
24,585 289 24,874 - 24,874
-------- -------- -------- --------- --------
DEFERRED CREDITS:
- -----------------
Accumulated Deferred Income Taxes 5,096 - 5,096 - 5,096
-------- -------- -------- --------- --------
5,096 - 5,096 - 5,096
-------- -------- -------- --------- --------
TOTAL CAPITALIZATION & LIABILITIES $175,288 $ 1,324 $176,612 $ (1,035) $175,577
======== ======== ======== ========= ========
</TABLE>
See Notes to Consolidated Financial Statements included in Item 8 of National
Fuel Gas Company's Form 10-K for the fiscal year ended September 30, 1999,
incorporated herein by reference.
<PAGE>
<TABLE>
<CAPTION>
PRVNI SEVEROZAPADNI TEPLARENSKA, A.S.
CONSOLIDATING STATEMENT OF INCOME
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1999
(THOUSANDS OF DOLLARS)
Consolidated
Total Before Eliminations PSZT and
PSZT ENOP Eliminations (Dr) Cr Subsidiary
------- ------- ------------ ------------ ----------
<S> <C> <C> <C> <C> <C>
OPERATING REVENUE: $67,944 $ 6,250 $74,194 $(8,210) $65,984
----------------- ------- ------- ------- ------- -------
OPERATING EXPENSE:
------------------
Fuel Used in Heat and
Electric Generation 33,034 - 33,034 - 33,034
Operation 17,868 5,562 23,430 8,210 15,220
Property, Franchise & Other Taxes 1,390 369 1,759 - 1,759
Depreciation, Depletion and
Amortization 6,935 27 6,962 - 6,962
Income Taxes (462) 175 (287) - (287)
------- ------- ------- ------- -------
58,765 6,133 64,898 8,210 56,688
------- ------- ------- ------- -------
Operating Income (Loss) 9,179 117 9,296 - 9,296
------- ------- ------- ------- -------
OTHER INCOME:
-------------
Unremitted Earnings of
Subsidiary 117 - 117 (117) -
Other 1,053 - 1,053 - 1,053
------- ------- ------- ------- -------
1,170 - 1,170 (117) 1,053
------- ------- ------- ------- -------
Income (Loss) Before
Interest Charges and
Minority Interest in
Foreign Subsidiary 10,349 117 10,466 (117) 10,349
------- ------- ------- ------- -------
INTEREST CHARGES:
-----------------
Interest on Long-Term Debt 5,117 - 5,117 - 5,117
------- ------- ------- ------- -------
5,117 - 5,117 - 5,117
------- ------- ------- ------- -------
Minority Interest in
Foreign Subsidiary (830) - (830) - (830)
------- ------- ------- ------- -------
Net Income (Loss) Available
for Common Stock $ 4,402 $ 117 $ 4,519 $ (117) $ 4,402
======= ======= ======= ======= =======
</TABLE>
See Notes to Consolidated Financial Statements included in Item 8 of
National Fuel Gas Company's Form 10-K for the fiscal year ended September
30, 1999, incorporated herein by reference.
<PAGE>
<TABLE>
<CAPTION>
PRVNI SEVEROZAPADNI TEPLARENSKA, A.S.
CONSOLIDATING STATEMENT OF EARNINGS REINVESTED IN THE BUSINESS
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1999
(THOUSANDS OF DOLLARS)
Consolidated
EARNINGS REINVESTED Total Before Eliminations PSZT and
IN THE BUSINESS PSZT ENOP Eliminations (Dr) Cr Subsidiary
- --------------- -------- ------- ------------ ------------ ----------
<S> <C> <C> <C> <C> <C>
Balance at Beginning of Year $ 3,682 $ 22 $ 3,704 $ (22) $ 3,682
Net Income (Loss) Available
for Common Stock 4,402 117 4,519 (117) 4,402
-------- ------- -------- ------- --------
Balance at End of Year $ 8,084 $ 139 $ 8,223 $ (139) $ 8,084
======== ======= ======== ======= ========
</TABLE>
See Notes to Consolidated Financial Statements included in Item 8 of National
Fuel Gas Company's Form 10-K for the fiscal year ended September 30, 1999,
incorporated herein by reference.
<PAGE>
<TABLE>
<CAPTION>
PRVNI SEVEROZAPADNI TEPLARENSKA, A.S.
CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1999
(THOUSANDS OF DOLLARS)
Total Before Eliminations Consolidated
Eliminations and PSZT and
PSZT ENOP & Adjustments Adjustments Subsidiary
-------- -------- ------------- ----------- ----------
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
- -------------------------------------
Net Income (Loss) $ 4,402 $ 117 $ 4,519 $ (117) $ 4,402
Adjustments to Reconcile Net Income
to Net Cash Provided by Operating
Activities:
Unremitted Earnings of Subsidiary (117) - (117) 117 -
Depreciation, Depletion &
Amortization 6,935 27 6,962 - 6,962
Deferred Income Taxes 1,134 - 1,134 - 1,134
Minority Interest in Foreign
Subsidiary 830 - 830 - 830
Other 738 6 744 - 744
Change in:
Receivables and Unbilled Utility
Revenue 960 (301) 659 - 659
Materials and Supplies (481) - (481) - (481)
Prepayments 22 - 22 - 22
Accounts Payable 1,032 (13) 1,019 - 1,019
Other Accruals and Current
Liabilities (3,470) 271 (3,199) - (3,199)
Other Assets 352 - 352 - 352
-------- ------- -------- -------- --------
Net Cash Provided by
Operating Activities 12,337 107 12,444 - 12,444
-------- -------- -------- -------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
- -------------------------------------
Capital Expenditures (22,967) (80) (23,047) - (23,047)
Other 6 - 6 - 6
-------- -------- -------- -------- --------
Net Cash Used in Investing
Activities (22,961) (80) (23,041) - (23,041)
-------- -------- -------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
- -------------------------------------
Change in Notes Payable - Intercompany 19,600 - 19,600 - 19,600
-------- -------- -------- -------- ---------
Net Cash Used in Financing
Activities 19,600 - 19,600 - 19,600
-------- -------- -------- -------- --------
Effect of Exchange Rates on Cash (325) (12) (337) - (337)
-------- -------- -------- -------- --------
Net Increase in Cash
and Temporary Cash Investments 8,651 15 8,666 - 8,666
Cash and Temporary Cash Investments
at Beginning of Period 1,138 3 1,141 - 1,141
-------- -------- -------- -------- --------
Cash and Temporary Cash Investments
at End of Period $ 9,789 $ 18 $ 9,807 $ - $ 9,807
======== ======== ======== ======== ========
</TABLE>
See Notes to Consolidated Financial Statements included in Item 8 of National
Fuel Gas Company's Form 10-K for the fiscal year ended September 30, 1999,
incorporated herein by reference.
<PAGE>
<TABLE>
<CAPTION>
PRVNI SEVEROZAPADNI TEPLARENSKA, A.S.
CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1999
(THOUSANDS OF DOLLARS)
Consolidated
EARNINGS REINVESTED Total Before PSZT and
IN THE BUSINESS PSZT ENOP Eliminations Eliminations Subsidiary
- --------------- -------- ------- ------------ ------------ ----------
<S> <C> <C> <C> <C> <C>
Net Income Available for
Common Stock $ 4,402 $ 117 $ 4,519 $ (117) $ 4,402
Other Comprehensive Income (Loss):
Foreign Currency Translation
Adjustment (6,910) (101) (7,011) 101 (6,910)
-------- ------- -------- ------- --------
Other Comprehensive Income (Loss) (6,910) (101) (7,011) 101 (6,910)
-------- ------- -------- ------- --------
Comprehensive Income (Loss) $ (2,508) $ 16 $ (2,492) $ (16) $ (2,508)
======== ======= ======== ======= ========
</TABLE>
See Notes to Consolidated Financial Statements included in Item 8 of National
Fuel Gas Company's Form 10-K for the fiscal year ended September 30, 1999,
incorporated herein by reference.
<PAGE>
<TABLE>
<CAPTION>
POWER DEVELOPMENT, S.R.O.
CONSOLIDATING BALANCE SHEET
AT SEPTEMBER 30, 1999
(THOUSANDS OF DOLLARS)
Consolidated
Power
Power Teplarna Total Before Development
Development Kromeriz Eliminations Eliminations and Subsidiary
----------- -------- ------------ ------------ --------------
<S> <C> <C> <C> <C> <C>
ASSETS
- ------
PROPERTY, PLANT & EQUIPMENT $ - $1,079 $1,079 $ - $1,079
- ---------------------------
Less: Accumulated DD&A - (230) (230) - (230)
------ ------ ------ ------- ------
- 849 849 - 849
------ ------ ------ ------- ------
CURRENT ASSETS:
- ---------------
Cash and Temporary Cash Investments 2 41 43 - 43
Accounts Receivable - Intercompany 733 - 733 (733) -
Accounts Receivable - 146 146 - 146
Prepayments - 1 1 - 1
------ ------ ------ ------- ------
735 188 923 (733) 190
------ ------ ------ ------- ------
OTHER ASSETS:
- -------------
Other Assets 1,005 623 1,628 (493) 1,135
------ ------ ------ ------- ------
TOTAL ASSETS $1,740 $1,660 $3,400 $(1,226) $2,174
====== ====== ====== ======= ======
CAPITALIZATION & LIABILITIES
- ----------------------------
CAPITALIZATION:
- ---------------
Common Stock $ 760 $ 36 $ 796 $ (36) $ 760
Paid - in - Capital 1,562 845 2,407 (845) 1,562
Earnings Reinvested in the Business (588) (337) (925) 337 (588)
Accumulated Other Comprehensive Income (265) (51) (316) 51 (265)
------ ------ ------ ------- ------
Total Capitalization 1,469 493 1,962 (493) 1,469
------ ------ ------ ------- ------
CURRENT AND ACCRUED LIABILITIES:
- --------------------------------
Accounts Payable 65 166 231 284 515
Accounts Payable - Intercompany 206 1,018 1,224 (1,017) 207
Other Accruals and Current
Liabilities - (17) (17) - (17)
------ ------ ------ ------- ------
271 1,167 1,438 (733) 705
------ ------ ------ ------- ------
TOTAL CAPITALIZATION & LIABILITIES $1,740 $1,660 $3,400 $(1,226) $2,174
====== ====== ====== ======= ======
</TABLE>
See Notes to Consolidated Financial Statements included in Item 8 of National
Fuel Gas Company's Form 10-K for the fiscal year ended September 30, 1999,
incorporated herein by reference.
<PAGE>
<TABLE>
<CAPTION>
POWER DEVELOPMENT, S.R.O.
CONSOLIDATING STATEMENT OF INCOME
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1999
(THOUSANDS OF DOLLARS)
Consolidated
Power
Power Teplarna Total Before Eliminations Development
Development Kromeriz Eliminations (Dr) Cr and Subsidiary
----------- -------- ------------ ------------ --------------
<S> <C> <C> <C> <C> <C>
OPERATING REVENUE: $ 1 $1,473 $1,474 $ - $1,474
- ----------------- ----- ------ ------ ----- ------
OPERATING EXPENSE:
- ------------------
Fuel Used in Heat and
Electric Generation - 1,146 1,146 - 1,146
Operation 59 409 468 - 468
Maintenance - 26 26 - 26
Property, Franchise & Other Taxes - 2 2 - 2
Depreciation, Depletion and
Amortization - 40 40 - 40
----- ------ ------ ----- ------
59 1,623 1,682 - 1,682
----- ------ ------ ----- ------
Operating Income (Loss) (58) (150) (208) - (208)
----- ------ ------ ----- ------
OTHER INCOME:
- -------------
Unremitted Earnings of
Subsidiary (146) - (146) 146 -
Other - 10 10 - 10
----- ------ ------ ----- ------
(146) 10 (136) 146 10
----- ------ ------ ----- ------
Income (Loss) Before
Interest Charges (204) (140) (344) 146 (198)
----- ------ ------ ----- ------
INTEREST CHARGES:
- ----------------
Other Interest - 6 6 - 6
----- ------ ------ ----- ------
- 6 6 - 6
----- ------ ------ ----- ------
Net Income (Loss) Available
for Common Stock $(204) $ (146) $ (350) $ 146 $ (204)
===== ====== ====== ===== ======
</TABLE>
See Notes to Consolidated Financial Statements included in Item 8 of National
Fuel Gas Company's Form 10-K for the fiscal year ended September 30, 1999,
incorporated herein by reference.
<PAGE>
<TABLE>
<CAPTION>
POWER DEVELOPMENT, S.R.O.
CONSOLIDATING STATEMENT OF EARNINGS REINVESTED IN THE BUSINESS
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1999
(THOUSANDS OF DOLLARS)
Consolidated
Power
EARNINGS REINVESTED Power Teplarna Total Before Eliminations Development
IN THE BUSINESS Development Kromeriz Eliminations (Dr) Cr and Subsidiary
- --------------- ----------- -------- ------------ ------- --------------
<S> <C> <C> <C> <C> <C>
Balance at Beginning of Year $(384) $(191) $(575) $191 $(384)
Net Income (Loss) Available
for Common Stock (204) (146) (350) 146 (204)
----- ----- ----- ---- -----
Balance at End of Year $(588) $(337) $(925) $337 $(588)
===== ===== ===== ==== =====
</TABLE>
See Notes to Consolidated Financial Statements included in Item 8 of National
Fuel Gas Company's Form 10-K for the fiscal year ended September 30, 1999,
incorporated herein by reference.
<PAGE>
<TABLE>
<CAPTION>
POWER DEVELOPMENT, S.R.O.
CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1999
(THOUSANDS OF DOLLARS)
Consolidated
Power
Power Teplarna Total Before Development
Development Kromeriz Eliminations Eliminations and Subsidiary
----------- -------- ------------ ------------ --------------
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
- -------------------------------------
Net Income (Loss) $(204) $(146) $(350) $ 146 $(204)
Adjustments to Reconcile Net Income
to Net Cash Provided by Operating
Activities:
Unremitted Earnings of Subsidiary 146 - 146 (146) -
Depreciation, Depletion &
Amortization - 40 40 - 40
Other - 36 36 - 36
Change in:
Accounts Receivable - Intercompany 688 - 688 (688) -
Accounts Receivable - (4) (4) - (4)
Prepayments - (1) (1) - (1)
Accounts Payable (7) (22) (29) 887 858
Accounts Payable - Intercompany (12) 80 68 (199) (131)
Other Accruals and Current
Liabilities - 20 20 - 20
Other Assets (631) - (631) - (631)
Other Liabilities - (119) (119) - (119)
----- ----- ----- ----- -----
Net Cash Provided by (Used in)
Operating Activities (20) (116) (136) - (136)
----- ----- ----- ----- -----
CASH FLOWS FROM INVESTING ACTIVITIES:
- -------------------------------------
Capital Expenditures - (2) (2) - (2)
----- ----- ----- ----- -----
Net Cash Used in Investing
Activities - (2) (2) - (2)
----- ----- ----- ----- -----
CASH FLOWS FROM FINANCING ACTIVITIES:
- -------------------------------------
Capital Contributions - - - - -
----- ----- ----- ----- -----
Net Cash Provided by
Financing Activities - - - - -
----- ----- ----- ----- -----
Effect of Exchange Rates on Cash - 74 74 - 74
----- ----- ----- ----- -----
Net Increase in Cash and
Temporary Cash Investments (20) (44) (64) - (64)
Cash and Temporary Cash Investments
at Beginning of Period 22 85 107 - 107
----- ----- ----- ----- ------
Cash and Temporary Cash Investments
at End of Period $ 2 $ 41 $ 43 $ - $ 43
===== ===== ===== ===== =====
</TABLE>
See Notes to Consolidated Financial Statements included in Item 8 of National
Fuel Gas Company's Form 10-K for the fiscal year ended September 30, 1999,
incorporated herein by reference.
<PAGE>
<TABLE>
<CAPTION>
POWER DEVELOPMENT, S.R.O.
CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1999
(THOUSANDS OF DOLLARS)
Consolidated
Power
EARNINGS REINVESTED Power Teplarna Total Before Eliminations Development
IN THE BUSINESS Development Kromeriz Eliminations (Dr) Cr and Subsidiary
- --------------- ----------- -------- ------------ ------- --------------
<S> <C> <C> <C> <C> <C>
Net Income (Loss) Available for
Common Stock $(204) $(146) $(350) $146 $(204)
Other Comprehensive Income (Loss):
Foreign Currency Translation
Adjustment (140) (19) (159) 19 (140)
----- ----- ----- ---- -----
Other Comprehensive Income (Loss) (140) (19) (159) 19 (140)
----- ----- ----- ---- -----
Comprehensive Income (Loss) $(344) $(165) $(509) $165 $(344)
===== ===== ===== ==== =====
</TABLE>
See Notes to Consolidated Financial Statements included in Item 8 of National
Fuel Gas Company's Form 10-K for the fiscal year ended September 30, 1999,
incorporated herein by reference.
<PAGE>
EXHIBITS
A. *(1) Annual Report on Form 10-K for fiscal year ended September 30,
1999 filed December 21, 1999 (File No. 1-3880).
(2) National Fuel Gas Company 1999 Annual Report to Shareholders
(paper copy submitted under cover of Form SE).
*(3) National Fuel Gas Company Proxy Statement, dated and filed
January 14, 2000 (File No. 1-03880).
B. Articles of Incorporation, By-Laws and Partnership Agreements.
(1) National Fuel Gas Company
*i Restated Certificate of Incorporation of National Fuel
Gas Company, dated September 21, 1998 (Exhibit 3.1,
Form 10-K for fiscal year ended September 30, 1998 in
File No. 1-3880).
*ii National Fuel Gas Company By-Laws as amended on
September 16, 1999 (Exhibit 3.1, Form 10-K for the
fiscal year ended September 30, 1999 in File No.
1-3880).
(2) National Fuel Gas Distribution Corporation
i By-Laws, as amended March 11, 1998. Designated as
Exhibit EX-99-1 for EDGAR purposes.
*ii Restated Certificate of Incorporation of National Fuel
Gas Distribution Corporation, dated May 9, 1988
(Exhibit B-1 in File No. 70-7478).
(3) National Fuel Gas Supply Corporation
*i By-Laws, as amended (Exhibit (3)i, Form U5S for
fiscal year ended September 30, 1989).
*ii Articles of Incorporation of United Natural Gas
Company, dated February 1, 1886 (Exhibit (3)ii, Form
U5S for fiscal year ended September 30, 1984).
*iii Certificate of Merger and Consolidation dated January
2, 1951 (Exhibit (3)iii, Form U5S for fiscal year
ended September 30, 1984).
*iv Joint Agreement and Plan of Merger, dated June 18,
1974 (Exhibit (3)iv, Form U5S for fiscal year ended
September 30, 1987).
*v Certificate of Merger and Plan of Merger of Penn-York
Energy Corporation and National Fuel Gas Supply
Corporation dated April 1, 1994 (Exhibit (3)v,
designated as Exhibit EX-99-3 for EDGAR purposes, Form
U5S for fiscal year ended September 30, 1994).
* Incorporated herein by reference as indicated.
<PAGE>
EXHIBITS (Continued)
(4) Leidy Hub, Inc. (Formerly Enerop Corporation)
*i By-Laws (Exhibit A-15, File No. 70-7478).
ii Restated Certificate of Incorporation of Enerop
Corporation dated October 15, 1993. Designated as
Exhibit Ex-99-2 for EDGAR purposes.
*iii Action by Board of Directors to amend the By-Laws
dated October 10, 1993 (Exhibit (4)iii, designated as
Exhibit EX-3 for EDGAR purposes, Form U5S for fiscal
year ended September 30, 1993).
*iv Partnership Agreement between Leidy Hub, Inc. and Hub
Services, Inc. dated September 1, 1994 (Exhibit (4)iv,
designated as Exhibit EX-99-1 for EDGAR purposes, Form
U5S for fiscal year ended September 30, 1994).
*v Ellisburg-Leidy Northeast Hub Company Admission
Agreement dated June 12, 1995 (Exhibit (4)v,
designated as Exhibit EX-99-1 for EDGAR purposes, Form
U5S for fiscal year ended September 30, 1995).
*vi Letter Agreement between Leidy Hub, Inc. and Hub
Services, Inc. dated June 12, 1995 (Exhibit (4)vi,
designated as Exhibit EX-99-2 for EDGAR purposes, Form
U5S for fiscal year ended September 30, 1995).
*vii Consent and waiver by Leidy Hub, Inc. dated June 12,
1995 (Exhibit (4)vii, designated as Exhibit EX-99-3
for EDGAR purposes, Form U5S for fiscal year ended
September 30, 1995).
(5) Seneca Resources Corporation
*i By-Laws, as amended (Exhibit (5)i, Form U5S for fiscal
year ended September 30, 1989).
*ii Articles of Incorporation of Mars Natural Gas Company
dated March 29, 1913 (Exhibit (5)ii, Form U5S for
fiscal year ended September 30, 1984).
*iii Secretary's Certificate dated January 4, 1918 (Exhibit
(5)iii, Form U5S for fiscal year ended September 30,
1984).
*iv Articles of Amendment, dated March 30, 1955 (Exhibit
(5)iv, Form U5S for fiscal year ended September 30,
1984).
*v Certificate of Amendment changing name of the Mars
Company to Seneca Resources Corporation, January 29,
1976 (Exhibit (5)v, Form U5S for fiscal year ended
September 30, 1984).
* Incorporated herein by reference as indicated.
<PAGE>
EXHIBITS (Continued)
*vi Certificate of Merger and Plan of Merger of Seneca
Resources Corporation and Empire Exploration, Inc.
dated April 29, 1994 (Exhibit (5)vi, designated as
Exhibit EX-99-2 for EDGAR purposes, Form U5S for
fiscal year ended September 30, 1994).
vii Articles of Merger and Plan of Merger of HarCor
Energy, Inc. with and into Seneca Resources
Corporation, filed August 31, 1999. Designated as
Exhibit EX-99-3 for EDGAR purposes.
viii Certificate of Ownership and Merger merging HarCor
Energy, Inc. into Seneca Resources Corporation filed
August 31, 1999. Designated as Exhibit EX-99-4 for
EDGAR purposes.
*(6) Limited Partnership Agreement dated November 28, 1983, between
Empire Exploration, Inc. (now Seneca Resources Corporation) as
general partner and Herman P. Loonsk as limited partner
(Exhibit (8), Form U5S for fiscal year ended September 30,
1984).
*(7) Empire 1983 Drilling Program, Limited Partnership Agreement,
dated November 28, 1983, between Empire Exploration, Inc.,
(now Seneca Resources Corporation) as general partner and
those parties collectively called limited partners (Exhibit
(9), Form U5S for fiscal year ended September 30, 1984).
*(8) Empire 1983 Joint Venture Agreement dated December 6, 1983
between Empire Exploration, Inc. (now Seneca Resources
Corporation) and Empire 1983 Drilling Program (Exhibit (10),
Form U5S for fiscal year ended September 30, 1984).
(9) Highland Land & Minerals, Inc.
*i Certificate of Incorporation, dated August 19, 1982
(Exhibit (11)i, Form U5S for fiscal year ended
September 30, 1985).
*ii By-Laws (Exhibit (11) ii, Form U5S for fiscal year
ended September 30, 1987).
iii Articles of Merger and Plan of Merger of Utility
Constructors, Inc. into Highland Land & Minerals, Inc.
filed October 1, 1999. Designated as Exhibit EX-99-5
for EDGAR purposes.
(10) Utility Constructors, Inc.
*i Articles of Incorporation, dated December 23, 1986,
and certificate of amendment dated December 31, 1986
(Exhibit (12)i, Form U5S for fiscal year ended
September 30, 1987).
*ii By-Laws (Exhibit (12)ii, Form U5S for fiscal year
ended September 30, 1987).
Note: Merged into Highland Land & Minerals, Inc. See 9(iii)
above.
* Incorporated herein by reference as indicated.
<PAGE>
EXHIBITS (Continued)
(11) Data-Track Account Services, Inc.
*i Restated Articles of Incorporation, dated March 2,
1984 (Exhibit A-1, File No. 70-7512).
*ii By-Laws (Exhibit A-2, File No. 70-7512).
(12) National Fuel Resources, Inc.
*i Articles of Incorporation, dated January 9, 1991
(Exhibit (14)i, designated as Exhibit EX-3(a) for
EDGAR purposes, Form U5S for fiscal year ended
September 30, 1992).
*ii By-Laws (Exhibit (14)ii, designated as Exhibit EX-3(b)
for EDGAR purposes, Form U5S for fiscal year ended
September 30, 1992).
(13) NFR Power, Inc.
i Certificate of Incorporation, dated December 13, 1995.
Designated as Exhibit EX-3-1 for EDGAR purposes.
ii By-Laws. Designated as Exhibit EX-3-2 for EDGAR
purposes.
(14) Horizon Energy Development, Inc.
*i Certificate of Incorporation (Exhibit (13)i,
designated as Exhibit EX-3(a) for EDGAR purposes, Form
U5S for fiscal year ended September 30, 1995).
*ii By-Laws (Exhibit (13)ii, designated as Exhibit EX-3(b)
for EDGAR purposes, Form U5S for fiscal year ended
September 30, 1995).
(15) Horizon Energy Holdings, Inc.
*i Certificate of Incorporation dated April 1, 1998.
(Exhibit (14)i designated as Exhibit EX99-1 for EDGAR
purposes, Form U5S for fiscal year ended September 30,
1998).
*ii By-Laws. (Exhibit (14)ii, designated as Exhibit EX99-2
for EDGAR purposes, Form U5S for fiscal year ended
September 30, 1998).
(16) Horizon Energy Development B.V. (formerly Beheeren-
Beleggingmaatschappij Bruwabel B.V.
*i Articles of Incorporation (Exhibit (14), designated as
exhibit EX-99-2 for EDGAR purposes, Form U5S for
fiscal year ended September 30, 1996).
(17) Horizon Energy Development, s.r.o. (formerly Power
International, s.r.o.)
*i Founding Notarial Deed, dated May 8, 1991 (Exhibit
(15)i, designated as Exhibit EX-99-9 for EDGAR
purposes, Form U5S/A for fiscal year ended September
30, 1996).
* Incorporated herein by reference as indicated
<PAGE>
EXHIBITS (Continued)
*ii Notarial Deed, dated December 2, 1993 (Exhibit (15)ii,
designated as Exhibit EX-99-10 for EDGAR purposes,
Form U5S/A for fiscal year ended September 30, 1996).
*iii Notarial Deed, dated June 28, 1996 (Exhibit (15)iii,
designated as Exhibit EX-99-11 for EDGAR purposes,
Form U5S/A for fiscal year ended September 30, 1996).
*iv Notarial Deed, dated November 27, 1996 (Exhibit
(15)iv, designated as Exhibit EX-99-12 for EDGAR
purposes, Form U5S/A for fiscal year ended September
30, 1996).
(18) Power Development, s.r.o.
*i Founding Notarial Deed, dated May 4, 1994 (Exhibit
(16)i, designated as Exhibit EX-99-13 for EDGAR
purposes, Form U5S/A for fiscal year ended September
30, 1996).
*ii Notarial Deed, dated June 28, 1996 (Exhibit (16)ii,
designated as Exhibit EX-99-14 for EDGAR purposes,
Form U5S/A for fiscal year ended September 30, 1996).
*iii Notarial Deed, dated November 27, 1996 (Exhibit
(16)iii, designated as Exhibit EX-99-15 for EDGAR
purposes, Form U5S/A for fiscal year ended September
30, 1996).
(19) Teplarna Kromeriz a.s.
*i Statutes, dated June 1996 (Exhibit (17), designated as
Exhibit EX-99-16 for EDGAR purposes, Form U5S/A for
fiscal year ended September 30, 1996).
(20) Severoceske Teplarny, a.s.
*i Articles of Association, dated April 24, 1997 (Exhibit
(20)i, designated as Exhibit EX99-11 for EDGAR
purposes, Form U5S/A for fiscal year ended September
30, 1997).
(21) Teplarna Liberec, a.s.
*i Founding Contract, dated November 11, 1994 (Exhibit
(21)i, designated as Exhibit EX99-12 for EDGAR
purposes, Form U5S/A for fiscal year ended September
30, 1997).
*ii Notarial Record, dated November 11, 1994 (Exhibit
(21)ii, designated as Exhibit EX99-13 for EDGAR
purposes, Form U5S/A for fiscal year ended September
30, 1997).
*iii Articles of the Association, dated June 12, 1997
(Exhibit (21)iii, designated as Exhibit EX99-14 for
EDGAR purposes, Form U5S/A for fiscal year ended
September 30, 1997).
* Incorporated herein by reference as indicated.
<PAGE>
EXHIBITS (Continued)
(22) Energoservis Liberec, s.r.o.
*i Articles of Incorporation of Limited Liability Company
Foundation, dated August 14, 1995 (Exhibit (22)i,
designated as Exhibit EX99-15 for EDGAR purposes, Form
U5S/A for fiscal year ended September 30, 1997).
*ii Notarial Record, dated January 22, 1996 (Exhibit
(22)ii, designated as Exhibit EX99-16 for EDGAR
purposes, Form U5S/A for fiscal year ended September
30, 1997).
Note: Energoservis Liberec, s.r.o. was sold by Severoceske
Teplarny, a.s. during the fiscal year ended September
30, 1999.
(23) Zateca teplarenska, a.s.
*i Foundation Charter, dated December 4, 1995 (Exhibit
(23)i, designated as Exhibit EX99-17 for EDGAR
purposes, Form U5S/A for fiscal year ended September
30, 1997).
*ii Articles of Association, dated December 4, 1995
(Exhibit (23)ii, designated as Exhibit EX99-18 for
EDGAR purposes, Form U5S/A for fiscal year ended
September 30, 1997).
(24) SCT Softmaker, s.r.o.
*i Notarial Record, dated September 24, 1996 (Exhibit
(24)i, designated as Exhibit EX99-19 for EDGAR
purposes, Form U5S/A for fiscal year ended September
30, 1997).
(25) Zkusebna mericu tepla a vodomeru Litomerice, s.r.o.
*i Founders Deed, dated January 22, 1996 (Exhibit (25)i,
designated as Exhibit EX99-20 for EDGAR purposes, Form
U5S/A for fiscal year ended September 30, 1997).
Note: Zkusebna mericu tepla a vodomeru Litomerice, s.r.o.
was sold by Severoceske Teplarny, a.s. during the
fiscal year ended September 30, 1999.
(26) AMES MOST, s.r.o.
*i Founders Deed, dated October 10, 1997. (Exhibit (27)i,
designated as Exhibit 99-3 for EDGAR purposes, Form
U5S for fiscal year ended September 30, 1998).
Note: AMES MOST, s.r.o. was sold by Severoceske Teplarny,
a.s. during the fiscal year ended September 30, 1999.
* Incorporated herein by reference as indicated.
<PAGE>
EXHIBITS (Continued)
(27) Teplo Branany, s.r.o.
*i Partnership Agreement, dated November 18, 1997.
(Exhibit (28)i, designated as Exhibit 99-4 for EDGAR
purposes, Form U5S for fiscal year ended September 30,
1998).
(28) Jablonecka teplarenska a realitni, a.s.
*i Articles of Association. (Exhibit (29)i, designated as
Exhibit EX99-5 for EDGAR purposes, Form U5S for fiscal
year ended September 30, 1998).
(29) Lounske tepelne hospodarstvi, s.r.o.
i Notarial Records, dated November 12, 1998, January 6,
1999 and December 2, 1999. Designated as Exhibit
EX-99-6 for EDGAR purposes.
(30) Prvni severozapadni teplarenska, a.s.
*i Notarial Record, dated April 28, 1992. (Exhibit (30)i,
designated as Exhibit EX99-6 for EDGAR purposes, Form
U5S for fiscal year ended September 30, 1998).
*ii Articles of Association, dated April 28, 1992.
(Exhibit (30)ii, designated as Exhibit EX99-7 for
EDGAR purposes, Form U5S for fiscal year ended
September 30, 1998).
(31) ENOP, s.r.o.
*i Founders Deed, dated December 19, 1995. (Exhibit
(31)i, designated as Exhibit EX99-8 for EDGAR
purposes, Form U5S for fiscal year ended September 30,
1998).
(32) Upstate Energy Inc. (formerly known as Niagara Energy Trading
Inc.)
*i Restated Certificate of Incorporation of Niagara
Energy Trading Inc., dated May 19, 1998. (Exhibit
(32)i, designated as Exhibit EX99-9 for EDGAR
purposes, Form U5S for fiscal year ended September 30,
1998).
ii By-Laws as amended August 24, 1999. Designated as
Exhibit EX-99-7 for EDGAR purposes.
(33) Roystone Gas Processing Plant Partnership
i Facility Construction, Ownership and Operating
Agreement, dated November 1, 1994. Designated as
Exhibit EX-99-8 for EDGAR purposes.
ii Ratification and Joinder of Roystone Gas Processing
Plant Facility Construction, Ownership and Operating
Agreement and Related Agreements, dated September 30,
1999. Designated as Exhibit EX-99-9 for EDGAR
purposes.
* Incorporated herein by reference as indicated.
<PAGE>
EXHIBITS (Continued)
(34) Niagara Independence Marketing Company
*i Certificate of Incorporation dated September 17, 1997
(Exhibit (27)i, designated as exhibit EX99-3 for EDGAR
purposes, Form U5S for fiscal year ended September 30,
1997).
*ii By-Laws amended March 11, 1998. (Exhibit (33)ii,
designated at Exhibit EX99-11 for EDGAR purposes, Form
U5S for fiscal year ended September 30, 1998).
*iii Marketing Partnership Agreement among Coastal Gas
Marketing DirectLink Corp., MGS Marketing Corp.,
Niagara Independence Marketing Company and Williams
Independence Marketing Company (Exhibit (27)iii,
designated as Exhibit EX-99-5 for EDGAR purposes, Form
U5S for fiscal year ended September 30, 1997).
(35) Seneca Independence Pipeline Company
*i Certificate of Incorporation of Empire Oklahoma, Inc.
dated April 16, 1996 (Exhibit (28)i, designated as
Exhibit EX-99-6 for EDGAR purposes, Form U5S for
fiscal year ended September 30, 1997).
*ii Certificate of Amendment of Certificate of
Incorporation of Empire Oklahoma, Inc. dated July 24,
1997 (Exhibit (28)ii, designated as exhibit EX-99-7
for EDGAR purposes, Form U5S for fiscal year ended
September 30, 1997).
iii By-Laws amended September 20, 1999. Designated as
Exhibit EX-99-10 for EDGAR purposes.
(36) HarCor Energy, Inc.
*i Amended and Restated Certificate of Incorporation,
dated September 1, 1998. (Exhibit (35)i, designated as
Exhibit EX99-13 for EDGAR purposes, Form U5S for
fiscal year ended September 30, 1998).
*ii By-Laws, as amended. (Exhibit (35)ii, designated as
Exhibit EX99-14 for EDGAR purposes, Form U5S for
fiscal year ended September 30, 1998).
Note: Merged into Seneca Resources Corporation. See 5(vii)
and 5(viii) above.
* Incorporated herein by reference as indicated.
<PAGE>
EXHIBITS (Continued)
C. Indentures
* Indenture dated as of October 15, 1974, between the Company and The
Bank of New York (formerly Irving Trust Company) (Exhibit 2(b) in
File No. 2-51796).
* Third Supplemental Indenture dated as of December 1, 1982, to
Indenture dated as of October 15, 1974, between the Company and The
Bank of New York (formerly Irving Trust Company) (Exhibit 4(a)(4)
in File No. 33-49401).
* Tenth Supplemental Indenture dated as of February 1, 1992, to
Indenture dated as of October 15, 1974, between the Company and The
Bank of New York (formerly Irving Trust Company) (Exhibit 4(a),
Form 8-K dated February 14, 1992 in File No.
1-3880).
* Eleventh Supplemental Indenture dated as of May 1, 1992, to
Indenture dated as of October 15, 1974, between the Company and The
Bank of New York (formerly Irving Trust Company) (Exhibit 4(b),
Form 8-K dated February 14, 1992 in File No.
1-3880).
* Twelfth Supplemental Indenture dated as of June 1, 1992, to
Indenture dated as of October 15, 1974, between the Company and The
Bank of New York (formerly Irving Trust Company) (Exhibit 4(c),
Form 8-K dated June 18, 1992 in File No. 1-3880).
* Thirteenth Supplemental Indenture dated as of March 1, 1993, to
Indenture dated as of October 15, 1974, between the Company and The
Bank of New York (formerly Irving Trust Company) (Exhibit 4(a)(14)
in File No. 33-49401).
* Fourteenth Supplemental Indenture dated as of July 1, 1993, to
Indenture dated as of October 15, 1974, between the Company and The
Bank of New York (formerly Irving Trust Company) (Exhibit 4.1, Form
10-K for fiscal year ended September 30, 1993 in File No. 1-3880).
* Fifteenth Supplemental Indenture dated as of September 1, 1996 to
Indenture dated as of October 15, 1974, between the Company and The
Bank of New York (formerly Irving Trust Company) (Exhibit 4.1, Form
10-K for fiscal year ended September 30, 1996 in File No. 1-3880).
* Indenture dated as of October 1, 1999 between the Company and the
Bank of New York (Exhibit 4.1, Form 10-K for the fiscal year ended
September 30, 1999 in File No. 1-3880).
* Officers certificate establishing Medium-Term Notes dated October
14, 1999 (Exhibit 4.2, Form 10-K for the fiscal year ended
September 30, 1999 in File No. 1-3880).
* Amended and Restated Rights Agreement dated as of April 30, 1999
between National Fuel Gas Company and HSBC Bank USA (Exhibit 10.2,
Form 10-Q for the quarterly period ended March 31, 1999 in File No.
1-3880).
D. Tax Allocation Agreement pursuant to Rule 45(c). Designated as Exhibit
EX-99-11 for EDGAR purposes.
<PAGE>
EXHIBITS (Concluded)
E. *(1) Employee Relocation Manual filed pursuant to Rule 48(b)
(Exhibit E(1), designated as Exhibit EX-99-9 for EDGAR
purposes, Form U5S for fiscal year ended September 30, 1997).
*(2) National Fuel Employee Computer Purchase Program filed
pursuant to Rule 48(b). (Exhibit E(2), designated as Exhibit
EX99-15 for EDGAR purposes, Form U5S for fiscal year ended
September 30, 1998).
(3) Independence Pipeline Company Unaudited Financial Statements
for the quarter and year-to-date period ended December 31,
1998 and the quarter and year-to-date period ended September
30, 1999 filed pursuant to Rule 16. This document is subject
to a request for confidential treatment under Rule 104(b) of
the Public Utility Holding Company Act of 1935.
F. Schedules of Supporting Items of this Report - None.
G. Financial Data Schedules. (Designated as Exhibit EX-27 for EDGAR
purposes.)
H. *(1) Organization chart showing relationship to Teplarna
Kromeriz, a.s., a foreign utility company (Exhibit H(1),
designated as Exhibit EX99-16 for EDGAR purposes, Form U5S for
fiscal year ended September 30, 1998).
(2) Organization chart showing relationship to Severoceske
teplarny, a.s. and Teplarna Liberec, a.s., both of which are
foreign utility companies. Designated as Exhibit EX-99-12 for
EDGAR purposes.
*(3) Organization chart showing relationship to Prvni severozapadni
teplarenska, a.s., a foreign utility company (Exhibit H(3),
designated as Exhibit EX99-18 for EDGAR purposes, Form U5S for
fiscal year ended September 30, 1998).
(4) Organization chart showing relationship to NFR Power, Inc., an
exempt wholesale generator. Designated as Exhibit EX-99-13 for
EDGAR purposes.
I. (1) SCT Audited Financial Statements for the Calendar Year Ended
December 31, 1998. Designated as Exhibit EX-99-14 for EDGAR
purposes.
(2) TL Audited Financial Statements for the Calendar Year Ended
December 31, 1998. Designated as Exhibit EX-99-15 for EDGAR
purposes.
(3) PSZT Audited Financial Statements for the Calendar Year Ended
December 31, 1998. Designated as Exhibit EX-99-16 for EDGAR
purposes.
(4) Kromeriz Audited Financial Statements for the Calendar Year
Ended December 31, 1998. Designated as Exhibit EX-99-17 for
EDGAR purposes.
(5) NFR Power, Inc. Audited Financial Statements for the Fiscal
Year Ended September 30, 1999. These financial statements will
be filed by amendment when available.
* Incorporated herein by reference as indicated.
<PAGE>
S I G N A T U R E
The undersigned System company has duly caused this annual report to be
signed on its behalf by the undersigned thereunto duly authorized pursuant to
the requirements of the Public Utility Holding Company Act of 1935.
NATIONAL FUEL GAS COMPANY
By: /s/Joseph P. Pawlowski
--------------------------------
Joseph P. Pawlowski, Treasurer
and Principal Accounting Officer
Date: January 28, 2000
----------------
<PAGE>
EXHIBIT INDEX
EX3-1 Certificate of Incorporation, dated December 13, 1995 for NFR
Power, Inc.
EX3-2 By-Laws of NFR Power, Inc.
EX27-1 Financial Data Schedule of National Fuel Gas Company for period
ending September 30, 1999
EX27-2 Financial Data Schedule of National Fuel Gas Distribution
Corporation for period ending September 30, 1999
EX99-1 By-Laws, as amended March 11, 1998, of National Fuel Gas
Distribution Corporation
EX99-2 Restated Certificate of Incorporation of Enerop Corporation
dated October 15, 1993
EX99-3 Articles of Merger and Plan of Merger of HarCor Energy, Inc.
with and into Seneca Resources Corporation, filed August 31,
1999
EX99-4 Certificate of Ownership and Merger merging HarCor Energy, Inc.
into Seneca Resources Corporation filed August 31, 1999
EX99-5 Articles of Merger and Plan of Merger of Utility Constructors,
Inc. into Highland Land & Minerals, Inc. filed October 1, 1999
EX99-6 Notarial Records of Lounske tepelne hospodarstvi, s.r.o., dated
November 12, 1998, January 6, 1999 and December 2, 1999
EX99-7 By-Laws of Upstate Energy Inc. as amended August 24, 1999
EX99-8 Facility Construction, Ownership and Operating Agreement for
Roystone Gas Processing Plant, dated November 1, 1994
EX99-9 Ratification and Joinder of Roystone Gas Processing Plant
Facility Construction, Ownership and Operating Agreement and
Related Agreements, dated September 30, 1999
EX99-10 By-Laws of Seneca Independence Pipeline Company, amended
September 20, 1999
EX99-11 Tax Allocation Agreement pursuant to Rule 45(c)
EX99-12 Organization Chart Showing Relationship to Severoceske teplarny,
a.s. and Teplarna Liberec, a.s.
EX99-13 Organization Chart Showing Relationship to NFR Power, Inc.
EX99-14 SCT Audited Financial Statements for the Calendar Year Ended
December 31, 1998
EX99-15 TL Audited Financial Statements for the Calendar Year Ended
December 31, 1998
EX99-16 PSZT Audited Financial Statements for the Calendar Year Ended
December 31, 1998
EX99-17 Kromeriz Audited Financial Statements for the Calendar Year
Ended December 31, 1998
CERTIFICATE
OF
INCORPORATION
OF
NFR POWER, INC.
Under Section 402 of the
Business Corporation Law
Filer: Kyle G. Storie
10 Lafayette Square
Buffalo, New York 14203
<PAGE>
CERTIFICATE OF INCORPORATION
OF
NFR POWER, INC.
------------------------
Under Section 402 of the
Business Corporation Law
------------------------
The undersigned, being over the age of eighteen, for the purpose of
forming a corporation pursuant to Section 402 of the Business Corporation Law,
hereby certifies:
FIRST: The name of the Corporation is NFR Power, Inc.
-----
SECOND: The purpose for which it is formed is to engage in any lawful
------
act or activity for which corporations may be organized under the Business
Corporation Law of New York, provided that the Corporation shall not engage in
any act or activity requiring the consent or approval of any state official,
department, board, agency or other body without such consent or approval first
being obtained.
THIRD: The office of the Corporation is to be located in the County
-----
of Erie, State of New York.
FOURTH: The aggregate number of shares which the Corporation shall
------
have authority to issue is 20,000 shares of common stock, $1.00 par value.
FIFTH: The Secretary of State is designated the agent of the
-----
Corporation upon whom process against the Corporation may be served. The post
office address to which the Secretary of State shall mail a copy of any process
against the Corporation served upon him is 478 Main Street, Buffalo, New York
14202, Attn: Robert J.
Kreppel.
SIXTH: To the fullest extent permitted by the New York Business
-----
Corporation Law, as the same exists on the date of the incorporation of the
Corporation or to such greater extent permitted by any amendment thereof, a
director of the Corporation shall not be liable to the Corporation or its
shareholders for damages for any breach of duty as a director. No amendment or
repeal of this paragraph or adoption of any provision inconsistent herewith
shall have any effect on the liability of any director of the Corporation with
respect to any act or omission as a director occurring prior to the amendment,
repeal or adoption.
IN WITNESS WHEREOF, I have executed this Certificate this 13th day of
December, 1995 and affirmed the statements contained herein as true under
penalties of perjury.
/s/ Kyle G. Storie
------------------------------
Kyle G. Storie, Incorporator
10 Lafayette Square
Buffalo, New York 14203
BY - L A W S
OF
NFR POWER, INC.
ARTICLE I
---------
Meetings of Shareholders
------------------------
Section 1. Annual Meeting. The annual meeting of the shareholders shall
--------- --------------
be held each year at a time and place to be designated by the President of the
Corporation.
Section 2. Special Meetings. Special Meetings of shareholders may be
--------- -----------------
called at any time by a majority of the Directors, the President of the
Corporation or the holders of not less than 25 percent of all of the shares
entitled to vote at a
Section 3. Notice. The Secretary shall give written notice, personally
--------- ------
or by mail, to all shareholders of record of the holding of any regular or
special meeting of shareholders. Notice shall be given personally or by first
class mail not fewer than ten nor more than fifty days prior to the date of the
meeting or by third-class mail not fewer than twenty-four nor more than fifty
days prior to the date of the meeting. No notice shall be required in the case
of any shareholder who waives the same in writing or attends the meeting without
protesting prior to its conclusion the lack of notice. Notice of a special
meeting shall state the purpose for which the meeting is called.
Section 4. Quorum and Vote. The presence in person or by proxy of
---------- ----------------
holders of the majority of outstanding stock entitled to vote shall be necessary
to constitute a quorum. The affirmative vote of a majority of the votes cast at
a meeting shall be the act of the shareholders, provided that a quorum is
present at such meeting and that the vote of a greater or lesser number of
shares is not required by law or by the certificate of incorporation.
Section 5. Adjourned Meetings. In case a quorum shall not be present
--------- -------------------
at any duly called meeting, the majority of those present may adjourn the
meeting from time to time not exceeding thirty days at any one time until a
quorum shall be present and the business of the meeting accomplished; and of
such adjourned meeting, no notice need be given except as required by law.
Section 6. Written Consent of Shareholders. Whenever shareholders are
--------- -------------------------------
required or permitted to take any action by vote, such action may be taken
without a meeting on written consent, setting forth the action so taken, signed
by the holders of all outstanding shares entitled to vote thereon.
ARTICLE II
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Directors
---------
Section 1. Number. The number of Directors of the Corporation shall be
--------- ------
such number, but not less than three, as is fixed from time to time by the Board
of Directors by vote of a majority of the entire Board, except that when there
are fewer than three shareholders the number of Directors may be less than three
but not less than the number of shareholders. The "entire Board" means the total
number of Directors the Corporation would have if there were no vacancies. Until
further action by the Board of Directors, the number of Directors shall be
three.
Section 2. Election. The Directors shall be chosen at the annual
---------- --------
shareholders, meeting by a plurality of the votes cast, and each of such
Directors shall serve until the next annual meeting of shareholders and until
such Director's successor has been elected and qualified. Any vacancy occurring
in the Board of Directors by reason of death, resignation, removal (with or
without cause) or disqualification of a Director or increase in the number of
Directors, or for any other reason, shall be filled by a majority of the
Directors remaining; and such Director shall serve until the next annual meeting
of shareholders and until such Director's successor is elected. A Director need
not be a shareholder. The Directors may elect from their number a Chairman.
Section 3. Quorum. A majority of the entire Board of Directors shall be
--------- ------
necessary to constitute a quorum unless the number of Directors in office is
less than a quorum, in which event any newly created directorship and any
vacancy may be filled by the affirmative vote of one of the Directors then in
office.
Section 4. Meeting. Meetings of the Board of Directors will be held
--------- -------
upon the call of and at such times and places as are designated by the President
or the Secretary; and such call shall be issued whenever requested in writing by
any two Directors. Meetings may be held outside the State of New York. Notice of
each meeting shall be by telegram or by any written communication, but no notice
shall be required in the case of any Director who waives the same or attends the
meeting. If such notice is served personally or by telegram, it must be so
served not less than two days prior to the meeting; and, if mailed, it must be
mailed not less than five days prior to the meeting.
Any one or more members of the Board or any committee thereof may
participate in a meeting of such Board or committee by means of a conference
telephone or similar communications equipment allowing all persons participating
in the meeting to hear each other at the same time. Participation by such means
shall constitute presence in person at a meeting.
Section 5. Written Consent of Directors. Any action required or
---------- ------------------------------
permitted to be taken by the Board of Directors or any committee thereof may be
taken without a meeting if all members of the Board or of the committee consent
in writing to the adoption of the resolution authorizing the action. The
resolution and the written consent thereto by the members of the Board or
committee shall be filed with the minutes of the proceeding of the Board or
committee.
Section 6. Removal of Directors. Any Director may be removed with or
--------- ---------------------
without cause at any time by the vote of shareholders holding a majority of
shares entitled to vote thereon at a meeting of shareholders.
Section 7. Committees of the Board. The Board of Directors, by
---------- -------------------------
resolution adopted by a majority of the entire Board, may designate from among
its members an executive committee and other committees, each consisting of
three or more Directors and each of which, to the extent provided in such
resolution and not prohibited by law, shall have the authority of the Board.
Each such committee shall serve at the pleasure of the Board. The necessary
notice of meetings of each such committee, and procedure thereat, shall be in
accordance with the resolution appointing the same or, if not so provided, as
determined by each such committee itself.
ARTICLE III
-----------
Procedure at Meetings
---------------------
The order of business and all other matters of -Procedure at any
meeting of shareholders or Directors, unless determined at the meeting itself by
majority vote, shall be determined by the person presiding, who shall be the
President or, in his absence, such other officer of Director as shall be chosen
by a majority vote at such meeting.
ARTICLE IV
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Officers
--------
Section 1. Election. The Corporation shall have such officers as the
--------- --------
Board of Directors may elect, which may include a President, Vice President,
Secretary, Treasurer, and such other officers as the Board of Directors shall
deem appropriate. Such officers shall serve at the pleasure of the Directors and
shall receive compensation to be determined by the
Section 2. President. The President shall be the chief executive
---------- ---------
officer of the Corporation. The President shall have supervision and control of
the management of the business of the Corporation, shall have authority to fix
compensation of all employees of the Corporation other than the officers, shall
be generally in charge of all the affairs of the Corporation, and shall see that
all orders and resolutions of the Board are
Section 3. Vice President. The Vice President or, if more than one, the
--------- --------------
Vice Presidents in the order determined by the Board, in the absence or
incapacity of the President, shall perform the duties of that officer; and shall
perform such duties as the Board and the President may from time to time
prescribe.
Section 4. Secretary. The Secretary shall have custody of the minutes
--------- ---------
of the Corporation, have charge of the certificate book and shall perform the
other duties customarily performed by the Secretary of a corporation.
Section 5. Treasurer. The Treasurer shall maintain the financial
--------- ---------
records of the Corporation and perform the other duties customarily performed by
the Treasurer of a corporation.
ARTICLE V
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Indemnification of Directors and Officers
-----------------------------------------
Section 1. Indemnification. The Corporation shall indemnify to the
--------- ---------------
broadest and maximum extent permitted by the New York Business Corporation Law,
as the same exists on the date of the adoption of this Article or to the greater
extent permitted by any amendment of that Law (the intent being to provide the
greatest of those indemnification rights permitted by that Law at any time from
the time of the act or omission through the final disposition of the action) any
person ("Indemnitee") made or threatened to be made a party to any action or
proceeding, whether civil, criminal, administrative or investigative, including
an action by or in the right of any other corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise which any Director or
officer of the Corporation served in any capacity at the request of the
Corporation, by reason of the fact that such person is or was a Director or
officer of the Corporation or is or was serving such other enterprise at the
request of the Corporation; provided, however, that the Corporation shall
provide indemnification in connection with any such action or proceeding
initiated by an Indemnitee only if such action or proceeding was authorized by
the Board of Directors.
Section 2. Advances. Expenses incurred by any Indemnitee in defending
--------- --------
an action or proceeding shall be paid by the Corporation in advance of the final
disposition of such action or proceeding upon receipt of an undertaking by or on
behalf of an Indemnitee to repay the expenses so advanced by the Corporation to
the extent they exceed the indemnification to which the Indemnitee is entitled.
Unless otherwise required by law, such Indemnitee shall not be required as a
condition of obtaining advancement of expenses hereunder to show that the
Indemnitee has met the applicable standard of conduct provided by law for
indemnification in connect-Ion with such action or proceeding.
Section 3. Inurement. The rights of indemnification and advancement of
--------- ---------
expenses provided for in this Article shall inure to the benefit of the
Indemnitee's legal representatives, heirs and distributees.
Section 4. Insurance. The Board of Directors of the Corporation may, in
--------- ---------
its discretion, authorize the Corporation to purchase and maintain insurance to
indemnify itself for any obligation which it incurs as a result of the
indemnification of any Indemnitee or to indemnify any Indemnitee to the fullest
extent permitted by law.
Section 5. Interpretation. To the extent permitted under applicable
--------- --------------
law, the rights of indemnification and advancement of expenses provided in this
Article (a) shall be available with respect to events occurring prior to the
adoption of this Article, (b) shall continue to exist after any rescission
or restrictive amendment of this Article with respect to events occurring prior
to such rescission or amendment, (c) shall be interpreted on the basis of
applicable law in effect at the time of the occurrence of the event or events
giving rise to the action or proceeding or, at the sole discretion of the
Indemnitee (or, if applicable, at the sole discretion of the heirs, distributees
or legal representatives of such Indemnitee seeking such rights), on the basis
of applicable law in effect at the time such rights are claimed and (d) shall be
in the nature of contract rights that may be enforced in any court of competent
jurisdiction as if the Corporation and the Indemnitee were parties to a separate
written agreement.
Section 6. Other Rights. The rights of indemnification and advancement
--------- ------------
of expenses provided in this Article shall not be deemed exclusive of any other
rights to which any Indemnitee or other person may now or hereafter be otherwise
entitled, whether contained in the Certificate of Incorporation, these By-Laws,
a resolution of the Board of Directors or an agreement providing for such
indemnification, the creation of such other rights being hereby expressly
authorized. Without limiting the generality of the foregoing, the rights of
indemnification and advancement of expenses provided in this Article shall not
deemed exclusive of any rights, pursuant to statute or otherwise, of any
Indemnitee or other person in any action or proceeding to have assessed or
allowed in his or her favor, against the Corporation or otherwise, his or her
costs and expenses incurred therein or in connection therewith or any part
thereof.
Section 7. Notice to Shareholders. If any action with respect to
---------- -----------------------
indemnification of Directors and officers is taken by way of payment of
indemnification, amendment of these By-Laws, resolution of Directors or by
agreement, then the Corporation shall, not later than the next annual meeting of
shareholders, unless such meeting is held within three months form the date of
such action, and, in any event, within fifteen months from the date of such
action, mail to its shareholders of record at the time entitled to vote for the
election of Directors a statement specifying the action taken.
Section 8. Severability. If this Article or any part hereof shall be
--------- ------------
held unenforceable in any respect by a court of competent jurisdiction, it shall
be deemed modified to the minimum extent necessary to make it enforceable, and
the remainder of this Article shall remain fully enforceable.
ARTICLE VI
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Certificates for Shares
-----------------------
Section 1. General Requirements. Certificates representing shares or
--------- ---------------------
fractions of a share of the Corporation shall be bound in a book, shall be
numbered and issued in consecutive order, shall be signed by the Chairman of the
Board of Directors, President or Vice President and the Secretary or Treasurer,
under the Corporation's seal; and in the stub of each certificate shall be
entered the name of the person owning the shares represented thereby, the number
of such shares and the date of issue. All certificates exchanged or returned to
the Corporation shall be marked cancelled, with the date of cancellation, by the
Secretary, and shall be immediately attached to the stubs in the certificate
books from which they were detached when issued.
Section 2. Lost Certificates. The Board of Directors may direct a new
--------- ------------------
share certificate to be issued in place of any certificate previously issued by
the Corporation alleged to have been lost, destroyed or wrongfully taken, upon
the making of an affidavit of that fact by the person claiming the certificate
to be lost, destroyed or wrongfully taken. As a condition of authorizing such
issue of a new certificate, the Board of Directors may, in its discretion,
require the owner of such lost, destroyed or wrongfully taken certificate, or
the owner's legal representative, to give the Corporation a bond in such sum as
it may direct as indemnity against any claim that may be made against the
Corporation with respect to the certificate alleged to have been lost, destroyed
or wrongfully taken.
ARTICLE VII
-----------
Amendments
----------
These By-Laws and any hereafter adopted may be added to, amended,
altered or repealed by a majority of the votes cast at a duly held meeting of
shareholders by the holders of shares entitled to vote thereto. Subject to any
restrictions imposed by shareholders, these By-Laws and any hereafter adopted
may be added to, amended, altered or repealed by a vote of the majority of the
Directors present at any duly held meeting.
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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<ARTICLE> UT
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM NATIONAL FUEL
GAS COMPANY'S CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULES AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> SEP-30-1999
<PERIOD-START> OCT-01-1998
<PERIOD-END> SEP-30-1999
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 2,353,894
<OTHER-PROPERTY-AND-INVEST> 0
<TOTAL-CURRENT-ASSETS> 257,289
<TOTAL-DEFERRED-CHARGES> 14,266
<OTHER-ASSETS> 217,137
<TOTAL-ASSETS> 2,842,586
<COMMON> 38,837
<CAPITAL-SURPLUS-PAID-IN> 431,952
<RETAINED-EARNINGS> 472,517
<TOTAL-COMMON-STOCKHOLDERS-EQ> 939,293
0
0
<LONG-TERM-DEBT-NET> 822,743
<SHORT-TERM-NOTES> 245,995
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 147,500
<LONG-TERM-DEBT-CURRENT-PORT> 69,608
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 617,447
<TOT-CAPITALIZATION-AND-LIAB> 2,842,586
<GROSS-OPERATING-REVENUE> 1,263,274
<INCOME-TAX-EXPENSE> 64,829
<OTHER-OPERATING-EXPENSES> 1,006,437
<TOTAL-OPERATING-EXPENSES> 1,071,266
<OPERATING-INCOME-LOSS> 192,008
<OTHER-INCOME-NET> 12,343
<INCOME-BEFORE-INTEREST-EXPEN> 204,351
<TOTAL-INTEREST-EXPENSE> 87,698
<NET-INCOME> 115,037
0
<EARNINGS-AVAILABLE-FOR-COMM> 115,037
<COMMON-STOCK-DIVIDENDS> 70,632
<TOTAL-INTEREST-ON-BONDS> 54,501
<CASH-FLOW-OPERATIONS> 271,890
<EPS-BASIC> 2.98
<EPS-DILUTED> 2.95
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<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM NATIONAL FUEL
GAS DISTRIBUTION CORPORATION'S FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
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<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> SEP-30-1999
<PERIOD-START> OCT-01-1998
<PERIOD-END> SEP-30-1999
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 919,642
<OTHER-PROPERTY-AND-INVEST> 0
<TOTAL-CURRENT-ASSETS> 131,897
<TOTAL-DEFERRED-CHARGES> 1,958
<OTHER-ASSETS> 124,689
<TOTAL-ASSETS> 1,178,186
<COMMON> 59,170
<CAPITAL-SURPLUS-PAID-IN> 121,668
<RETAINED-EARNINGS> 282,793
<TOTAL-COMMON-STOCKHOLDERS-EQ> 463,631
0
0
<LONG-TERM-DEBT-NET> 249,983
<SHORT-TERM-NOTES> 114,300
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 352
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 349,920
<TOT-CAPITALIZATION-AND-LIAB> 1,178,186
<GROSS-OPERATING-REVENUE> 807,355
<INCOME-TAX-EXPENSE> 34,741
<OTHER-OPERATING-EXPENSES> 687,073
<TOTAL-OPERATING-EXPENSES> 721,814
<OPERATING-INCOME-LOSS> 85,541
<OTHER-INCOME-NET> 993
<INCOME-BEFORE-INTEREST-EXPEN> 86,534
<TOTAL-INTEREST-EXPENSE> 29,659
<NET-INCOME> 56,875
0
<EARNINGS-AVAILABLE-FOR-COMM> 56,875
<COMMON-STOCK-DIVIDENDS> 34,800
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> 119,906
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
By-Laws with Amendments ADDENDUM A
to April 1. 1976
- -----------------------
As Amended 5/28/76,
9/15/78, 12/21/78,
12/15/80,9/28/81,
2/15/85, 12/16/94,
3/11/98
BY-LAWS
OF
NATIONAL FUEL GAS DISTRIBUTION CORPORATION
------------------------------------------
ARTICLE I.
OFFICES
Section 1. Principal Office. The principal office of the Corporation
-----------------
shall be located in the County of Erie and State of New York.
Section 2. Additional Offices. The Corporation may also have offices
-------------------
and places of business at such other places, within or without the State of New
York, as the Board of Directors may from time to time determine or the business
of the Corporation may require.
ARTICLE II.
MEETINGS OF SHAREHOLDERS
Section 1. Annual Meeting . The annual meeting of shareholders for the
--------------
election of the directors and for the transaction of such other business as may
properly be brought before the meeting shall be held on the third Thursday of
February in each year (if not a legal holiday, and if a legal holiday then on
the next succeeding business day), or on such other business day as the Board of
Directors may fix, at such time and at such place within or without the State of
New York as shall be determined by the Board of Directors prior to the date for
serving notice of such meeting, or, if no such place is fixed, at the office of
the Corporation.
Section 2. Notice of Annual Meeting. Written notice of the place, date
------------------------
and hour of the annual meeting, shall be given by first class mail to each
shareholder of record entitled to vote thereat, not less than ten (10) nor more
than sixty (60) days prior to the meeting. If, at any meeting, action is
proposed to be taken which would, if taken, entitle shareholders fulfilling the
requirements of Section 623 of the New York Business Corporation Law to receive
payment for their shares, the notice of such meeting shall also include a
statement of such purpose and to that effect, and shall be accompanied by a copy
of Section 623 or an outline of its material terms.
Section 3. Special Meetings. Special meetings of the shareholders, for
----------------
any purpose or purposes, unless otherwise prescribed by statute or by the
Certificate of Incorporation, may be called by the Chairman of the Board, the
President, or the Board of Directors. Such request shall state the purpose or
purposes of the proposed meeting. Such
<PAGE>
meeting shall be held at such time and at such place within or without the State
of New York as shall be determined by the chief executive officer of the
Corporation.
Section 4. Notice of Special Meeting. Written notice of a special
---------------------------
meeting of shareholders, stating the place, date and hour of the meeting, the
purpose or purposes for which the meeting is called, by or at whose direction it
is being called, and such other matters as may be required by law, shall be
given by first class mail to each shareholder entitled to vote thereat, not less
than ten (10) nor more than sixty (60) days prior to the meeting. If, at any
meeting, action is proposed to be taken which would, if taken, entitle
shareholders fulfilling the requirements of Section 623 of the New York Business
Corporation Law to receive payment for their shares, the notice of such meeting
shall also include a statement to that effect, and shall be accompanied by a
copy of Section 623 or an outline of its material terms.
Section 5. Quorum. Except as otherwise provided by statute or the
------
Certificate of Incorporation, the holders of record of a majority of the shares
of the Corporation issued and outstanding and entitled to vote thereat upon a
specified item of business, present in person or represented by proxy, shall be
necessary to and shall constitute a quorum for the transaction of such specified
item of business at any meeting of the shareholders. If, however, as to any item
or items of business noticed to come before any meeting of shareholders such
quorum shall not be present or represented at such meeting, the shareholders
entitled to vote thereon present in person or represented by proxy shall have
power to adjourn the meeting as to such item or items of business for which a
quorum is not present from time to time, until a quorum for the transaction of
such item or items of business
<PAGE>
shall be present or represented. At such adjourned meeting at which a quorum
shall be present or represented any business may be transacted which might have
been transacted at the meeting as originally noticed. The chairman of any
meeting of shareholders shall, at the beginning of such meeting, determine
whether a quorum is present for the transaction of each item of business noticed
to come before such meeting. A quorum for the transaction of any item of
business, once present, shall not be broken by the subsequent withdrawal of any
shareholders or their representatives.
Section 6. Voting. At any meeting of the shareholders every shareholder
------
having the right to vote shall be entitled to vote in person, or by proxy.
Except as otherwise provided by law or the Certificate of Incorporation, each
such shareholder of record shall be entitled to one vote for each share of stock
standing in his name on the books of the Corporation. All elections shall be
determined by a plurality vote, and, except as otherwise provided by law or the
Certificate of Incorporation, all other matters shall be determined by vote of a
majority of the shares present or represented at such meeting and voting on such
questions.
Section 7. Proxies. No proxy shall be valid after the expiration of
-------
eleven (I 1) months from the date thereof, unless otherwise provided in the
proxy. Every proxy shall be revocable at the pleasure of the shareholder
executing it, except in those cases where an irrevocable proxy is permitted by
law.
<PAGE>
ARTICLE III.
DIRECTORS
Section 1. Number; Tenure. Subject to statutes, Certificate of
---------------
Incorporation and By-Laws, the business of the Corporation shall be managed by a
Board of Directors. Each director shall be at least eighteen years of age. The
number of directors shall be eight, and may be altered from time to time by
resolution adopted by a vote of a majority of the entire Board of Directors as
then constituted. No decrease in the number of directors shall affect the
current term of any director then in office.
Directors shall be elected at the annual meeting of the shareholders,
except as provided in Section 3 of this Article III, and each director shall be
elected to serve until his successor has been elected and qualified.
Section 2. Resignation; Removal. Any director may resign at any time by
--------------------
giving written notice to the President or the Secretary. Such resignation shall
take effect at the time stated therein. The Board of Directors may, by majority
vote of all directors then in office, remove a director for cause. The
shareholders entitled to vote for the election of directors may remove a
director, with or without cause.
Section 3. Vacancies. If any vacancy should occur in the Board of
---------
Directors by reason of the death, resignation, retirement, or disqualification
of any director, or the removal from office of any director with or without
cause, or if any new directorship is created, all of the directors then in
office, although less than a quorum, may, by majority vote, choose a successor
or successors to fill the vacated or newly created directorship, and any
director so
<PAGE>
chosen shall hold office through the next annual meeting of the shareholders and
until his successor shall be duly elected and qualified. However, if the
directors remaining in office shall be unable, by majority vote, to fill such
vacancy within thirty (30) days of the occurrence thereof, the President or the
Secretary may call a special meeting of the shareholders at which such vacancy
shall be filled.
<PAGE>
ARTICLE IV.
MEETINGS OF THE BOARD
Section 1. Place. The Board of Directors of the Corporation may hold
-----
meetings, both regular and special, either within or without the State of New
York.
Section 2. Regular Meetings. Regular meetings of the Board of Directors
----------------
shall be held at such time and at such place as shall from time to time be
determined by the Board.
Section 3. Special Meetings. Special meetings of the Board of Directors
----------------
may be called by the Chairman of the Board, if any, or by the President on one
day's notice to each director, personally or five days' notice by mail or by
telegrams. On the written request of three directors special meetings shall be
called by the Chairman, President or Secretary in like manner and on like
notice.
Section 4. Action by Unanimous Written Consent. Any action required or
-----------------------------------
permitted to be taken by the Board of Directors may be taken without a meeting
upon the consent in writing of all the members of the Board to the adoption of a
resolution authorizing the action, such resolution, together with such consents,
to be filed with the minutes of the proceedings of the Board of Directors.
Section 5. Quorum. At all meetings of the Board of Directors a majority
------
of the entire Board shall be necessary to and constitute a quorum for the
transaction of business, and the vote of a majority of the directors present at
the time of the vote if a quorum is present shall be the act of the Board of
Directors, except as may be otherwise specifically provided by law or by the
Certificate of Incorporation. If a quorum shall not be present at any meeting of
<PAGE>
the Board of Directors, the directors present thereat may adjourn the meeting
from time to time, until a quorum shall be present. Notice of any such
adjournment shall be given to any directors who were not present and, unless
announced at the meeting, to the other directors.
Section 6. Compensation. Each director who is not a regular full time
------------
employee of the Corporation or one or more of its affiliated corporations shall
be paid such annual fee as the Board of Directors may set by resolution . Each
director of the Corporation who is not a regular full time employee of the
Corporation or one or more of its affiliated corporations shall receive a fee
for attendance at any meeting of the Board of Directors or of any committee of
the Board of Directors as set by resolution of the Board of Directors. Each
director shall be reimbursed for the travel expenses incurred by him in
attending any meeting of the Board of Directors or any committee of the Board of
Directors.
Section 7. Meetings by Conference Telephone. Any one or more members of
--------------------------------
the Board of Directors or any committee thereof may participate in a meeting of
such Board or committee by means of a conference telephone or similar
communications equipment allowing all persons participating in the meeting to
hear each other at the same time. Participation by such means shall constitute
presence in person at a meeting.
<PAGE>
ARTICLE V.
COMMITTEES OF THE BOARD
Section 1. Designation. The Board of Directors by resolution adopted by
-----------
a majority of the entire Board, may designate from among its members an
Executive Committee and other committees, each consisting of one or more
directors, and each of which, to the extent provided in such resolution, shall
have all the authority of the Board. However, no such committee shall have
authority as to any of the following matters:
(a) the submission to shareholders of any action as to which
shareholders' authorization is required by law;
(b) the filling of vacancies in the Board of Directors or on any
committee;
(c) the fixing of compensation of any director for serving on the
Board or on any committee;
(d) the amendment or repeal of these By-Laws or the adoption of new
ByLaws; and
(e) the amendment or repeal of any resolution of the Board which by
its terms shall not be so amendable or repealable.
The Board may designate one or more directors as alternate members of
any such committee who may replace any absent member or members at any meeting
of such committee.
<PAGE>
Section 2. Tenure; Reports. Each committee shall serve at the pleasure
----------------
of the Board of Directors. It shall keep minutes of its meetings and report the
same to the Board of Directors.
<PAGE>
ARTICLE VI.
NOTICES
Section 1. Form: Delivery. Notices to directors and shareholders shall
--------------
be in writing and may be delivered personally or by mail or telegram. Notice by
mail shall be deemed to be given at the time when deposited in the post office
or letter box, in a post-paid sealed wrapper, and addressed to directors or
shareholders at their addresses appearing on the records of the Corporation.
Section 2. Waiver. Whenever a notice is required to be given by any
------
statute, the Certificate of Incorporation or these By-Laws, a waiver thereof in
writing, signed by the person or persons entitled to such notice, whether before
or after the time stated therein shall be deemed equivalent to such notice. In
addition, any shareholder attending a meeting of shareholders in person or by
proxy without protesting prior to the conclusion of the meeting the lack of
notice thereof to him, and any director attending a meeting of the Board of
Directors without protesting prior to the meeting or at its commencement such
lack of notice shall be conclusively deemed to have waived notice of such
meeting.
<PAGE>
ARTICLE VII.
OFFICERS
Section 1. Officers. The executive officers of the Corporation shall be
--------
a Chairman of the Board, a President, one or more Vice Presidents, a Secretary,
a Treasurer and a Controller. Any two or more of the foregoing offices may be
held by the same person. In its discretion, the Board of Directors may leave
unfilled for such period as it may determine any of the foregoing offices,
except the offices of President, Treasurer and Secretary.
The Board of Directors may also from time to time appoint such other
officers and agents as they may deem necessary or advisable for the transaction
of the business of the Corporation to perform such duties as may from time to
time be designated or assigned to them by said Board of Directors.
Section 2. Authority and Duties. All officers, as between themselves
--------------------
and the Corporation, shall have such authority and perform such duties in the
management of the Corporation as may be provided in these By-Laws, or, to the
extent not so provided, by the Board of Directors.
Section 3. Election and Appointment; Term of Office; Removal. All
-----------------------------------------------------
executive officers shall be elected and all other officers shall be appointed by
the Board of Directors or a Committee thereof and shall hold office at the
pleasure of the Board or for such term as may be prescribed by the Board. Any
officer elected or appointed by the Board may be removed with or without cause
at any item by the Board.
<PAGE>
Section 4. Vacancies. If an office becomes vacant for any reason, the
---------
Board of Directors may fill such vacancy. Any officer so appointed or elected by
the Board shall serve only until such time as the unexpired term of his
predecessor shall have expired unless reelected or appointed by the Board.
Section 5. The Chairman of the Board. The Chairman of the Board shall
--------------------------
preside at all meetings of the Board of Directors. In the absence of the
President, or in the event that there is a vacancy in the office of President,
the Chairman of the Board shall be the chief Executive Officer of the
Corporation and shall exercise the powers and perform the duties of the
President, as well as those of Chairman of the Board.
Section 6. The President. In addition to the duties and
---------------
responsibilities specified in the laws of the State of New York and these
By-Laws, the President shall be Chief Executive Officer of the Corporation,
shall preside at all shareholders' meetings, shall, in general, supervise,
manage, and control all of the business and affairs of the Corporation, subject
to direction by the Board of Directors, and shall perform such other duties as
from time to time may be assigned to him by the Board of Directors.
Section 7. Vice Presidents. The Vice President, or if there be more
----------------
than one, the Vice Presidents (who may have such designations, if any, as the
Board of Directors may determine), in such order determined by the Board shall,
in the absence or disability of the President and the Chairman of the Board,
exercise the powers and perform the duties of the President and each Vice
President shall exercise such other powers and perform such other duties as may
be prescribed by the President or the Board of Directors.
<PAGE>
Section 8. The Secretary. The Secretary shall attend all meetings of
--------------
the Board of Directors and all meetings of the shareholders and record all votes
and the minutes of the shareholders and record all votes and the minutes of all
proceedings in a book to be kept for that purpose and shall perform like duties
for the standing committees when required. He shall give, or cause to be given,
notice of all meetings of the shareholders and special meetings of the Board of
Directors, and shall perform such other duties as may be prescribed by the Board
of Directors or President, under whose supervision he shall act. He shall keep
in safe custody the seal of the Corporation and, when authorized by the Board,
affix the same to any instrument requiring it and, when so affixed, it shall be
attested by his signature or by the signature of the Treasurer or an Assistant
Secretary or Assistant Treasurer. He shall keep in safe custody the certificate
books and shareholder records and shall perform all other duties incident to the
office of Secretary as the Board of Directors shall prescribe.
Section 9. Assistant Secretaries. The Assistant Secretaries, if any, in
---------------------
such order determined by the Board of Directors shall, in the absence or
disability of the Secretary, perform the duties and exercise the powers of the
Secretary and shall perform such other duties as the Board of Directors or the
Secretary shall prescribe.
Section 10. The Treasurer. The Treasurer shall have the care and
--------------
custody of the corporate funds, and other valuable effects, including
securities, and shall keep full and accurate accounts of receipts and
disbursements in books belonging to the Corporation and shall deposit all moneys
and other valuable effects in the name and to the credit of the Corporation in
such depositories as may be designated by the Board of Directors. The Treasurer
shall disburse the funds of the Corporation as may be ordered by the Board,
taking
<PAGE>
proper vouchers for such disbursements, and shall render to the President and
directors, at the regular meetings of the Board, or whenever they may require
it, an account of all his transactions as Treasurer and of the financial
condition of the Corporation. If required by the Board of Directors, the
Treasurer shall give the Corporation a bond for such term, in such sum and with
such surety or sureties as shall be satisfactory to the Board for the faithful
performance of the duties of his office and for the restoration to the
corporation, in case of his death, resignation, retirement or removal from
office, of all books, papers, vouchers, money and other property of whatever
kind in his possession or under his control belonging to the Corporation.
Section 11. Assistant Treasurers. The Assistant Treasurers, if any, in
--------------------
such order determined by the Board, shall in the absence or disability of the
Treasurer, perform the duties and exercise the powers of the Treasurer and shall
perform such other duties as the Board of Directors or the Treasurer shall
prescribe.
Section 12. Controller. The Controller shall see that adequate records
----------
of all assets, liabilities, and transactions of the Corporation are maintained;
that adequate audits thereof are currently and regularly made, and in
conjunction with other officers initiate and enforce measures and procedures
whereby the business of the Corporation shall be conducted with maximum
efficiency, safety and economy. He shall also perform all such other duties as
usually pertain to the office of Controller. He shall be in all matters subject
to the control of and responsible to the Board of Directors alone.
<PAGE>
ARTICLE VIII.
SHARE CERTIFICATES
Section 1. Form; Signature. The certificates for shares of the
----------------
Corporation shall be in such form as shall be determined by the Board of
Directors and shall be numbered consecutively and entered in the books of the
Corporation as they are issued. Each certificate shall exhibit the registered
holder's name and the number and class of shares, and shall be signed by the
President or a Vice President and the Treasurer or an Assistant Treasurer or the
Secretary or any Assistant Secretary, and shall bear the seal of the Corporation
or a facsimile thereof. Where any such certificate is countersigned by a
transfer agent, or registered by a registrar, the signature of any such officer
may be a facsimile signature. In case any officer who signed, or whose facsimile
signature or signatures were placed on any such certificate shall have ceased to
be such officer before such certificate is issued, it may nevertheless be issued
by the Corporation with the same effect as if he were such officer at the date
of issue.
Section 2. Lost, Destroyed or Stolen Certificates. The Board of
------------------------------------------
Directors or an officer or officers duly authorized thereunto by the Board may
direct a new share certificate or certificates to be issued in place of any
certificate or certificates theretofore issued by the Corporation alleged to
have been lost, destroyed or wrongfully taken upon the making of a sworn
affidavit of that fact by the person claiming the certificate to have been lost,
destroyed or wrongfully taken. When authorizing such issue of a new certificate
or certificates, the Board of Directors or any authorized officer or officers
may, in its, his or their discretion and as a condition precedent to the
issuance thereof, require the owner of such lost, destroyed or
<PAGE>
wrongfully taken certificate or certificates, or his legal representative, to
give the Corporation a bond in such sum as may be directed as indemnity against
any claim that may be made against the Corporation with respect to the
certificate alleged to have been lost, destroyed or wrongfully taken.
Section 3. Registration of Transfer. Subject to the provisions of the
------------------------
Federal Securities Laws and to any contractual restriction which may be
evidenced by a legend upon the face of such certificate, upon surrender to the
Corporation or any transfer agent of the Corporation of a certificate for shares
duly endorsed or accompanied by proper evidence of succession, assignment or
authority to transfer, it shall be the duty of the Corporation or such transfer
agent to issue a new certificate to the person entitled thereto, cancel the old
certificate and record the transaction upon its books.
Section 4. Registered Shareholders. Except as otherwise provided by
------------------------
law, the Corporation shall be entitled to recognize the exclusive right of a
person registered on its books as the owner of shares to receive dividends or
other distributions, and to vote as such owner, and shall not be bound to
recognize any equitable or legal claim to or interest in such share or shares on
the part of any other person.
Section 5. Record Date. For the purpose of determining the shareholders
-----------
entitled to notice of or to vote at any meeting of shareholders or any
adjournment thereof, or to express consent to or dissent from any proposal
without a meeting, or for the purpose of determining shareholders entitled to
receive payment of any dividend or the allotment of any rights, or for the
purpose of any other action affecting the interests of shareholders, the Board
of Directors may fix, in advance, a record date. Such date shall not be more
than sixty (60)
<PAGE>
nor less than ten (10) days before the date of any such meeting, nor more than
sixty (60) days prior to any other action.
In each such case, except as otherwise provided by law, only such
persons as shall be shareholders of record on the date so fixed shall be
entitled to notice of, and to vote at, such meeting and any adjournment thereof,
or to express such consent or dissent, or to receive payment of such dividend,
or such allotment or rights, or otherwise to be recognized as shareholders for
the related purpose, notwithstanding any registration of transfer of shares on
the books of the Corporation after any such record date so fixed.
<PAGE>
ARTICLE IX.
GENERAL PROVISIONS
Section 1. Dividends. Subject to the applicable provisions of the
---------
certificate of incorporation, if any, dividends upon the outstanding shares of
the Corporation, may be declared by the Board of Directors at any regular or
special meeting, pursuant to law and may be paid in cash, in property or in
shares of the Corporation.
Section 2. Reserves. Before payment of any dividend, there may be set
--------
aside out of any funds of the Corporation available for dividends such sum or
sums as the Board of Directors from time to time, in their absolute discretion,
think proper as a reserve or reserves to meet contingencies, or for equalizing
dividends, or for repairing or maintaining any property of the Corporation, or
for such other purpose as the Board shall think conducive to the interest of the
Corporation, and the Board may modify or abolish any such reserve in the manner
in which it was created.
Section 3. Instruments Under Seal. All deeds, bonds, mortgages,
------------------------
contracts and other instruments requiring a seal may be signed in the name of
the Corporation by the President or by any other officer authorized to sign such
instrument by the President or the Board of Directors.
Section 4. Checks, etc. All checks or demands for money and notes or
------------
other instruments evidencing indebtedness or obligations of the Corporation
shall be signed by such officer or officers or such other person or persons as
the President or Vice President and Treasurer or Secretary, or the Board of
Directors, may from time to time designate.
<PAGE>
Section 5. Fiscal Year. The fiscal year of the Corporation shall,
------------
unless otherwise fixed by the Board of Directors, begin on the lst day of
October in each calendar year and end on the 30th day of September of the next
succeeding calendar year.
Section 6. Seal. The corporate seal shall have inscribed thereon the
----
words "National Fuel Gas Distribution Corporation, Corporate Seal, New York,
1973".
<PAGE>
ARTICLE X.
INDEMNIFICATION AND INSURANCE
Section 1. Indemnification. Any person made, or threatened to be made,
---------------
a party to an action or proceeding, by reason of the fact that he, his testator
or intestate is or was a director or officer of the Corporation, or by reason of
the fact that he, his testator or intestate, while serving as a director or
officer of the Corporation served in any capacity any other domestic or foreign
corporation, partnership, joint venture trust, employee benefit plan or other
enterprise at the request of the Corporation, shall be indemnified by the
Corporation against the expenses (including attorney's fees, judgments, fines
and amounts paid in settlement) actually incurred by him as a result of such
action or proceeding, or any appeal therein, to the full extent permissible
under Sections 721 through 726 of the New York Business Corporation Law or any
amendments thereto.
Section 2. Insurance. The Corporation may purchase and maintain
---------
insurance to indemnify the Corporation and the directors and officers to the
extent permitted under Section 726 of the New York Business Corporation Law or
any successor provisions.
<PAGE>
ARTICLE XI.
AMENDMENTS
Section 1. Power to Amend. The Board of Directors shall have power to
--------------
amend, repeal or adopt By-Laws at any regular or special meeting of the Board.
However, any By-Law adopted by the Board may be amended or repealed by vote of
the holders of shares entitled at the time to vote for the election of
directors.
Section 2. Amendment Affecting Election of Directors; Notice. If any
----------------------------------------------------
By-Law regulating an impending election of directors is adopted, amended or
repealed by the Board, there shall be set forth in the notice of the next
meeting of shareholders for the election of directors the By-Law so adopted,
amended or repealed, together with a concise statement of the changes effected
by such adoption, amendment or repeal.
ATTACHMENT A
RESTATED CERTIFICATE OF INCORPORATION
OF
ENEROP CORPORATION
Under Section 807 of the Business Corporation Law
The undersigned, W. E. DeForest and G. T. Wehrlin, the President and
Secretary respectively of Enerop Corporation, hereby certify:
1. The name of the Corporation is Enerop Corporation.
2. The Certificate of Incorporation of the Corporation was filed
by the Department of State on November 4, 1981.
3. The Certificate of Incorporation of the Corporation is amended
as follows: To amend the provisions stating the name of the
corporation.
4. The text of the Certificate of Incorporation of Enerop
Corporation is hereby restated, as amended hereby, to read as
herein set forth in full:
FIRST: The name of the Corporation is Leidy Hub, Inc.
SECOND: The purpose of the corporation is to engage in any lawful
act or activity for which corporations may be organized
under the New York Business Corporation Law, provided that
it shall not engage in any act or activity requiring the
consent or approval of any state official, department,
board, agency or other body without such consent or
approval first being obtained.
THIRD: The office of the corporation is to be located in the
County of Erie, New York.
FOURTH:The aggregate number of shares which this corporation shall
have authority to issue is 4,000 shares of common stock
with a par value of one dollar ($1.00). No holder of any
share of the Corporation shall, because of his ownership
of shares, have a pre-emptive or other right to purchase,
subscribe for, or take any part of any shares or any part
of the notes, debentures, bonds, or other securities
convertible into or carrying options or warrants to
purchase shares of the Corporation issued, optioned, or
sold by it after its incorporation, whether the shares be
authorized by this certificate of incorporation or be
authorized by an amended certificate duly filed and in
effect at the time of the issuance or sale of such shares
or of such notes, debentures, bonds, or other securities.
Any part of the shares authorized by this certificate of
incorporation, or by an amended certificate duly filed,
and any part of the notes, debentures, bonds, or other
securities convertible into or carrying options or
warrants to purchase shares of the Corporation may at any
time be issued, optioned for sale and sold, or disposed of
by the Corporation pursuant to resolution of its Board of
Directors to such persons and upon such terms and
conditions as may, to such Board, seem proper and
advisable without first offering to existing shareholders
the said shares or the said notes, debentures, bonds, or
other securities convertible into or carrying options or
warrants to purchase shares of the Corporation, or any
part of any thereof.
FIFTH: The Corporation, by a majority vote of the Board of
Directors, may make, alter, amend or rescind its By-Laws.
The Corporation may sell all or substantially all of the
assets of the Corporation, but no such sale of all or
substantially all of the assets of the Corporation shall
be made except pursuant to the authorization of at least
two-thirds (2/3) of the Board of Directors.
SIXTH: The Secretary of State of the State of New York is
designated as the agent of the corporation upon whom
process against it may be served, and the post office
address to which the Secretary of State shall mail a copy
of any such process served upon him is 10 Lafayette
Square, Buffalo, State of New York.
SEVENTH: Subject to any limitation provided in any statute of the
State of New York, the corporation in furtherance of its
corporate purposes shall have all the powers now or
hereafter conferred by statute upon, or otherwise legally
attributable to, corporations formed under said Business
Corporation Law.
EIGHTH: To the fullest extent that the Business Corporation Law of
the State of New York, as the same exists or may hereafter
be amended, permits elimination or limitation of the
liability of directors, no director of the corporation
shall be liable to the corporation or its shareholders for
damages for any breach of duty in such capacity. Any
repeal or modification of this provision by the
shareholders of the corporation shall be prospective only
and shall not adversely affect any elimination or
limitation of the personal liability of a director of the
corporation for acts or omissions occurring prior to the
effective date of such repeal or modification.
5. The Restatement of the Certificate of Incorporation of Enerop
Corporation was authorized by the Unanimous Written Consent of
the Board of Directors followed by the Written Consent of the
sole shareholder of Enerop Corporation.
IN WITNESS WHEREOF, the undersigned have made and signed this
Certificate this 15th day of October, 1993 and they affirm the statements
contained herein as true under penalties of perjury.
/s/ W.E. DeForest
------------------------
W.E. DeForest, President
/s/ G.T. Wehrlin
------------------------
G. T. Wehrlin, Secretary
486
PENNSYLVANIA DEPARTMENT OF STATE
CORPORATION BUREAU
ROOM 308 NORTH OFFICE BUILDING
P.O. BOX 8722
HARRISBURG, PA 17105-8722
SENECA RESOURCES CORPORATION
THE CORPORATION BUREAU IS HAPPY TO SEND YOU YOUR FILED DOCUMENT. PLEASE
NOTE THE FILE DATE AND THE SIGNATURE OF THE SECRETARY OF THE COMMONWEALTH. THE
CORPORATION BUREAU IS HERE TO SERVE YOU AND WANTS TO THANK YOU FOR DOING
BUSINESS IN PENNSYLVANIA. IF YOU HAVE ANY QUESTIONS PERTAINING TO THE
CORPORATION BUREAU, CALL (717) 787-1057.
ENTITY NUMBER: 0220438
MICROFILM NUMBER: 09963
1083 - 1086
CT CORP SYSTEM
COUNTER
<PAGE>
Microfilm Number 9963-1083 Filed with the Department of State AUG 31 1999
Entity Number 220438 /s/ Kim (illegible)
Secretary of the Commonwealth
ARTICLES OF MERGER-DOMESTIC BUSINESS CORPORATION
DSCB:15-1926 (Rev 90)
In compliance with the requirements of 15 Pa.C.S. ss. 1926 (relating to
articles of merger or consolidation), the undersigned business corportation,
desiring to effect a merger, hereby state that:
1. The name of the corporation surviving the merger is: Seneca Resources
Corporation
2. (Check and complete one of the following):
x The surviving corporation is a domestic business corporation and the
---
(a) address of its current registered office in this Commonwealth or
(b) name of its commercial registered office provider and the county
of venue is (the Department is hereby authorized to correct the
following information to conform to the records of the Department):
(a) ________________________________________________________________
Name and Street City State Zip County
(b) c/o: CT Corporation Systems Pennsylvania Philadelphia
Name of Commercial Registered Office-Provider County
For a corporation represented by a commercial registered office provider,
the county in (b) shall be deemed the county in which the corporation is located
for venue and official publication purposes.
__The surviving corporation is a qualified foreign business corporation
incorporated under the laws of _____ and the (a) address of its current
registered office in this Commonwealth or (b) name of its commercial registered
office provider and the county of venue is (the Department is hereby authorized
to correct the following information to conform to the records of the
Department):
(a)____________________________________________________________________
Name and Street City State Zip County
(b)c/o:________________________________________________________________
Name of Commercial Registered Office-Provider County
For a corporation represented by a commercial registered office provider, the
county in (b) shall be deemed the county in which the corporation is located for
venue and official publication purposes.
___The surviving corporation is a nonqualified foreign business corporation
incorporated under the laws of
- -----------------------------------------------------------------------------
Number and Street City State Zip County
<PAGE>
9963-1084
3. The name and the address of the registered office in this Commonwealth or
name of its commercial registered office provider and the county of venue of
each other domestic business corporation and qualified foreign business
corporation which is a party to the plan of merger are as follows:
Name of Corporations Address of Registered Office or County
Name of Commercial Registered
Office Provider
N/A
4. (Check, and if appropriate complete, one of the following):
____The Plan of merger shall be effective upon filing these Articles of Merger
in the Department of State.
X The plan of merger shall be effective on August 31, 1999 at N/A
- ---- --------------- -----
Date Hour
5. The manner in which the plan of merger was adopted by each domestic
corporation is as follows:
Name of corporation Manner of adoption
Seneca Resources Corporation Adopted by the Board
of Directors and Shareholders
pursuant to 15 PACS. ss.1924.
6. The plan was authorized, adopted or approved, as the case may be, by the
foreign business corporation (or each of the foreign corporations) party
to the plan in accordance with the laws of the jurisdiction in which it is
incorporated.
7. (Check, and complete, one of the following):
X The plan of merger is set forth in full in Exhibit A attached hereto and
- -----
made a part hereof.
___Pursuant to 15 Pa.C.S. ss.1901 (relating to omission of certain provisions
from filed plans) the provisions, if any, of the plan of merger that amended or
constitutes the operative Articles of Incorporation of the surviving corporation
as in effect subsequent to the effective date of the plan are set forth in full
in Exhibit A attached hereto and made a part thereof. The full text of the plan
of merger is on file at the principal place of business of the surviving
corporation, the address of which is:
- ------------------------------------------------------------------------
Number and Street City State Zip County
<PAGE>
9963-1085
IN TESTIMONY WHEREOF, the undersigned corporation or each undersigned
corporation has caused these Articles of Merger to be signed by a duly
authorized officer thereof this 31st day of August, 1999.
Seneca Resources Corporation
(Name of Corporation)
By: /s/ John F. McKnight
(Signature)
Title: Vice President
Harcor Energy, Inc.
(Name of Corporation)
By: /s/ Phillip C. Ackerman
(Signature)
Title: President and Director
<PAGE>
EXHIBIT A
MERGER OF HARCOR ENERGY, INC. WITH AND INTO
SENECA RESOURCES CORPORATION
PLAN OF MERGER
In accordance with Section 1922 of the Pennsylvania Business Corporation
Law, the following is a summary of the proposed merger of Harcor Energy, Inc., a
Delaware corporation, with and into Seneca Resources Corporation, a Pennsylvania
corporation:
Surviving Corporation: Seneca Resources Corporation, a Pennsylvania
corporation ("Seneca" or the "Surviving
Corporation")
Merged Corporation: Harcor Energy, Inc., a Delaware corporation
and a wholly-owned subsidiary of Seneca
("Harcor" or the "Merged Corporation")
The terms and conditions of the merger:
(a) The Boards of Directors of Seneca and Harcor have determined
by unanimous written consent that Seneca will merge into
itself its wholly-owned subsidiary, Harcor (the "Merger") and
will assume all of Harcor's liabilities and obligations.
(b) The Merger will be effective on August 31, 1999.
(c) The articles of incorporation and bylaws of the Surviving
Corporation as they shall exist on the effective date of the
Merger will be and remain the articles of incorporation and
the bylaws of the Surviving Corporation until the same shall
be altered, amended and repealed as therein provided.
(d) The directors and officers of the Surviving Corporation shall
continue in office until the next annual meeting of
stockholders and until their successors shall have been
elected and qualified.
The manner and basis of converting the shares of each corporation into shares,
obligations, or other securities of the surviving corporation or into money or
other property in whole or part:
(a) Each share of common stock of the Surviving Corporation which
shall be issued and outstanding on the effective date of the
Merger, shall remain issued and outstanding.
(b) Each share of common stock of the Merged Corporation,
including treasury shares, shall be, by virtue of the Merger
and without any action on the part of the holder thereof, at
the effective time of the Merger no longer be outstanding and
shall at such time be canceled and retired and shall cease to
exist.
State of Delaware
Page 1
Office of the Secretary of State
--------------------------------
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO
HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
OWNERSHIP, WHICH MERGES:
"HARCOR ENERGY, INC.", A DELAWARE CORPORATION,
WITH AND INTO "SENECA RESOURCES CORPORATION" UNDER THE NAME OF "SENECA
RESOURCES CORPORATION", A CORPORATION ORGANIZED AND EXISTING UNDER THE LAWS OF
THE STATE OF PENNSYLVANIA, AS RECEIVED AND FILED IN THIS OFFICE THE THIRTY-FIRST
DAY OF AUGUST, A.D. 1999, AT 10:30 O'CLOCK A.M.
A FILED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE NEW CASTLE
COUNTY RECORDER OF DEEDS.
/s/ Edward J. Freel,
Edward J. Freel, Secretary of State
3090507 8100M
AUTHENTICATION: 9948206
991363817 DATE: 08-31-99
<PAGE>
CERTIFICATE OF OWNERSHIP AND MERGER
MERGING
HARCOR ENERGY, INC.
INTO
SENECA RESOURCES CORPORATION
SENECA RESOURCES CORPORATION, a corporation organized and existing
under the laws of Pennsylvania, DOES HEREBY CERTIFY:
FIRST: That this corporation was incorporated on June 9, 1913, pursuant
to the Business Corporation Law of the Commonwealth of Pennsylvania, the
provisions of which permit the merger of a subsidiary corporation of another
state and parent corporation organized and existing under the laws of said
state.
SECOND: That this corporation owns one-hundred percent (100%) of the
outstanding shares of each class of the stock of Harcor Energy, Inc., a
corporation incorporated on May 20, 1987, pursuant to the General Corporation
Law of the State of Delaware.
THIRD: That the directors of Seneca Resources Corporation by the
following resolutions of its Board of Directors duly adopted by the unanimous
written consent of its members, filed with the minutes of the Board, on the 27th
day of August, 1999, determined to and did merge into itself said Harcor Energy,
Inc.
<PAGE>
FURTHER RESOLVED, that the merger shall be effective on August 31,
1999; and
FURTHER RESOLVED, that the proper officer of this corporation be and
hereby is directed to make and execute a Certificated of Ownership and
Merger setting forth a copy of the resolutions to merge said Harcor Energy,
Inc. and assume its liabilities and obligations, and the date of adoption
thereof, and to cause the same to be filed with the Secretary of State and
to do all acts and things whatsoever, whether within or without the State
of Delaware, which may be in anywise necessary or proper to effect said
merger; and
FURTHER RESOLVED, that the articles of incorporation and bylaws of
Seneca Resources Corporation, the surviving corporation, as they shall
exist on the effective date of the Merger will be and remain the articles
of incorporation and bylaws of the surviving corporation until the same
shall be altered, amended and repealed as therein provided; and that the
directors and officers of the surviving corporation shall continue in
office until the next annual meeting of stockholders and until their
successors have been elected and qualified.
FOURTH: That this corporation survives the merger and may be served
with process in the State of Delaware in any proceeding for enforcement of any
obligation of Harcor Energy, Inc. as well as for the enforcement of any
obligation of the surviving corporation arising from the merger, and it does
irrevocably appoint the Secretary of State of Delaware as its agent to accept
service of process in any such suit or other proceeding. The address to which a
copy of such process shall be mailed by the Secretary of State of Delaware is
1201 Louisiana, Suite 400, Houston, Texas 77002.
<PAGE>
IN WITNESS WHEREOF, said Seneca Resources Corporation has caused this
Certificate to be signed by Bernard J, Kennedy, the Chairman of the Board of
Directors of Seneca Resources Corporation, this 31st day of August, 1999,
SENECA RESOURCES CORPORATION
By: /s/ Bernard J. Kennedy
----------------------------------
Bernard J. Kennedy
Chairman of the Board of Directors
11
PENNSYLVANIA DEPARTMENT OF STATE
CORPORATION BUREAU
ROOM 308 NORTH OFFICE BUILDING
P.O. BOX 8722
HARRISBURG, PA 17105-8722
HIGHLAND LAND & MINERALS, INC.
THE CORPORATION BUREAU IS HAPPY TO SEND YOU YOUR FILED DOCUMENT. PLEASE
NOTE THE FILE DATE AND THE SIGNATURE OF THE SECRETARY OF THE COMMONWEALTH. THE
CORPORATION BUREAU IS HERE TO SERVE YOU AND WANTS TO THANK YOU FOR DOING
BUSINESS IN PENNSYLVANIA. IF YOU HAVE ANY QUESTIONS PERTAINING TO THE
CORPORATION BUREAU, CALL (717) 787-1057.
ENTITY NUMBER: 0758903
MICROFILM NUMBER: 09973
1125 - 1128
CSC NETWORKS
COUNTER
<PAGE>
Microfilm Number 9973-1125 Filed with the Department of State OCT 1 1999
Entity Number 758903 /s/ Kim (illegible)
Secretary of the Commonwealth
ARTICLES OF MERGER-DOMESTIC BUSINESS CORPORATION
DSCB:15-1926 (Rev 90)
In compliance with the requirements of 15 Pa.C.S. ss. 1926 (relating to
articles of merger or consolidation), the undersigned business corporation,
desiring to effect a merger, hereby state that:
1. The name of the corporation surviving the merger is: Highland Land &
Minerals, Inc.
2. (Check and complete one of the following):
_x_ The surviving corporation is a domestic business corporation and the
(a) address of its current registered office in this Commonwealth or
(b) name of its commercial registered office provider and the county
of venue is (the Department is hereby authorized to correct the
following information to conform to the records of the Department):
(a) ________________________________________________________________
Name and Street City State Zip County
(b) c/o: Corporation Service Company Dauphin
Name of Commercial Registered Office Provider County
For a corporation represented by a commercial registered office provider,
the county in (b) shall be deemed the county in which the corporation is located
for venue and official publication purposes.
__The surviving corporation is a qualified foreign business corporation
incorporated under the laws of _____ and the (a) address of its current
registered office in this Commonwealth or (b) name of its commercial registered
office provider and the county of venue is (the Department is hereby authorized
to correct the following information to conform to the records of the
Department):
(a)____________________________________________________________________
Name and Street City State Zip County
(b)c/o:________________________________________________________________
Name of Commercial Registered Office-Provider County
For a corporation represented by a commercial registered office provider, the
county in (b) shall be deemed the county in which the corporation is located for
venue and official publication purposes.
___The surviving corporation is a nonqualified foreign business corporation
incorporated under the laws of___________ and the address of its principal
office under the laws of such jurisdiction is:
- -----------------------------------------------------------------------------
Number and Street City State Zip County
3. The name and the address of the registered office in this Commonwealth or
name of its commercial registered office provider and the county of venue of
each other domestic business corporation and qualified foreign business
corporation which is a party to the plan of merger are as follows:
Name of Corporations Address of Registered Office County
or Name of Commercial Registered
Office Provider
Utility Constructors, Inc. Corporation Service Company Dauphin
<PAGE>
9973-1126
4. (Check, and if appropriate complete, one of the following):
__x__The Plan of merger shall be effective upon filing these Articles of Merger
in the Department of State.
____The plan of merger shall be effective on
--------------- -----
Date Hour
5. The manner in which the plan of merger was adopted by each domestic
corporation is as follows:
Name of corporation Manner of adoption
Highland Land & Minerals, Inc. --Adopted by the directors and shareholders
pursuant to 15 Pa.C.S. ss.1924 (a).
Utility Constructors, Inc. . --Adopted by the directors and shareholders
pursuant to 15 Pa.C.S. ss.1924 (a).
6. xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx.
xxxxxxxxxxxxxxxxxxxxxxxxx
7. (Check, and if appropriate complete, one of the following):
__X__The plan of merger is set forth in full in Exhibit A attached hereto and
made a part hereof.
___Pursuant to 15 Pa.C.S. ss.1901 (relating to omission of certain provisions
from filed plans) the provisions, if any, of the plan of merger that amended or
constitutes the operative Articles of Incorporation of the surviving corporation
as in effect subsequent to the effective date of the plan are set forth in full
in Exhibit A attached hereto and made a part thereof. The full text of the plan
of merger is on file at the principal place of business of the surviving
corporation, the address of which is:
- -----------------------------------------------------------------------------
Number and Street City State Zip County
IN TESTIMONY WHEREOF, the undersigned corporation or each undersigned
corporation has caused these Articles of Merger to be signed by a duly
authorized officer thereof this 30th day of September, 1999.
Highland Land & Minerals, Inc.
(Name of Corporation)
By: /s/ J.A. Beck
(Signature)
Title: President
Utility Constructors, Inc.
(Name of Corporation)
By: /s/ W.M. Petmecky
(Signature)
Title: Secretary
<PAGE>
9973-1127
EXHIBIT A
PLAN OF MERGER OF
UTILITY CONSTRUCTORS, INC.
INTO
HIGHLAND LAND & MINERALS, INC.
1. The names of the corporations to be merged are Highland Land & Minerals,
Inc. ("Highland") and Utility Constructors, Inc. ("UCI"). The name under
which UCI was formed is Line Constructors, Inc.
2. UCI shall, pursuant to the provisions of the Pennsylvania Business
Corporation Law of 1988, be merged into Highland which shall be the
surviving corporation ("Surviving Corporation") upon the effective date of
the merger and which shall continue to exist as the Surviving Corporation
pursuant to the provisions of the Pennsylvania Business Law of 1988
("Merger"). The separate existence of UCI shall cease upon the effective
date of the Merger in accordance with the provisions of the New York
Business Corporation Law.
3. The Articles of Incorporation of Highland, as amended, as in effect upon
the effective date of the Merger shall be the Articles of Incorporation of
the Surviving Corporation.
4. The By-Laws of Highland as in effect upon the effective date of the Merger
shall be the By-Laws of the Surviving Corporation and shall continue in
full forces and effect until altered, amended or repealed.
5. The issued shares of UCI shall not be converted or exchanged in any manner,
but shall be surrendered and cancelled upon the effective date of the
Merger. The issued shares of Highland shall not be converted or exchanged
in any manner, but each share of Highland which is issued as of the
effective date of the Merger shall continue to represent one issued share
of the Surviving Corporation.
6. All persons who are directors and officers of highland on the effective
date of the Merger shall be the directors and officers of the Surviving
Corporation, until their successors are elected and shall have qualified.
7. In the event that this Plan of Merger shall have been duly adopted and
approved on behalf of Highland and UCI in accordance with the provisions of
the Pennsylvania Business Corporation Law of 1988, Highland and UCI hereby
stipulate that (a) they will cause to be executed and filed and/or recorded
any document or documents prescribed by the laws of the Commonwealth of
Pennsylvania and (b) they will cause to be performed all necessary acts
therein and elsewhere to effectuate the Merger.
8. The proper officers of Highland and the proper officers of UCI are hereby
authorized to execute the Article of Merger on behalf of their respective
corporation in accordance with the provisions of the Pennsylvania Business
Corporation Law of 1988: and the Board of Directors and the proper officers
of Highland and of UCI, respectively, are hereby authorized, empowered, and
directed to any and all acts and things, and to make execute,
<PAGE>
9973-1128
deliver, file and/or record any and all instruments, papers and documents
which shall be or become necessary, proper, or convenient to carry out or
put into effect any of the provisions of this Plan of Merger or the Merger.
9. Notwithstanding the full adoption and approval of the Plan of Merger on
behalf of Highland and UCI in accordance with the provisions of the
Pennsylvania Business Corporation Law of 1988 and the full authorization of
the Merger, this Plan of Merger may be amended or terminated at any time
prior to the filing of the Articles of Merger with the Department of State
of the Commonwealth of Pennsylvania by the Board of Directs of either
Highland or UCI.
IN WITNESS WHEREOF, this Plan of Merger has been duly executed by Highland
and UCI on September 30, 1999, the Plan already having been adopted by the Board
of Directors and sole shareholder of Highland and by the Board of Directors and
the sole shareholder of UCI.
HIGHLAND LAND & MINERALS, INC.
By: /s/ J.A. Beck
J.A. Beck
President
UTILITY CONSTRUCTORS, INC.
By: /s/ William M. Petmecky
W. M. Petmecky
Secretary
Registration number: N 375/98 Page One
- ------------------- --------
NZ 371/98
COPY
NOTARIAL RECORD
written in a notary's office before me, JUDr. Ivana Demutova, a notary public in
atec, at Obrancu miru 315, 438 01 atec on 12 November 1998, i.e. the twelfth day
of November nineteen ninety-eight. A person who I do not know personally, who
has declared to have capacity to legal acts and who has proved his identity
through his valid identity card is present: Ing. Emil Volkmann, personal
identification number: 360822/056, residing at Louny, SNP 1863, the Mayor of
Louny. He is an authorized representative of the single owner of Lounske tepelne
hospodarstvi, spol. s r.o., with its registered office at Louny, Benese z Loun
185, Company Identification Number: 62243179, recorded in the Commercial
Register of the Regional Court in Usti nad Labem, Section C Insert 8193. The
aforesaid authorized representative of the single owner had the following
information recorded in this notarial record according to the resolutions of the
Louny City Council Nos. 492/98, 493/98 and 494/98 as of 11 November 1998:
DECISION OF THE SINGLE OWNER ACTING AS THE GENERAL MEETING
Firstly: I am changing the Founder's Deed as of 15 November 1994, reg. No. NZ
- -------
165/94, written by JUDr. Jaroslava Susicka, a notary public, with her office in
Louny, Na Valich 502, with an amendment as of 3 June 1996, reg. No. NZ 65/96,
written by the same notary public, as follows:
1. the third sentence in the Article IX of the Founder's Deed shall be
deleted;
2. the following text shall be inserted as the fourth sentence in Article XI
of the Founder's Deed: "A share in the Company may be transferred by a
company member to a third party pursuant to the Commercial Code s. 115."
Page Two:
- ---------
Secondly: I am changing the Articles of Association of the Company as follows:
- --------
1. The second sentence "The Louny City Council acts in this function." shall
be deleted from Article III para. 1.
2. The sentence in Article III para. 4 of the Articles of Association shall be
as follows: "The General Meeting is convened by executives by means of a
written invitation", and the remaining text in the para. 4 shall be
deleted.
3. The third, i.e. the last sentence "If none of the executives is present,
the General Meeting is headed by the Louny Mayor or his deputy (hereinafter
only the Chairman of the General Meeting)." in Article III para. 6 shall be
deleted.
4. The words: "...and with the head of the local management department as a
representative of the lessor..." shall be deleted from the first sentence
in Article V para. 4 (b).
5. The words: "...and with the head of the local management department as a
representative of the lessor..." shall be deleted from the first sentence
in Article V para. 4 (c).
6. The words: "...and with the head of the local management department as a
representative of the lessor..." shall be deleted from the first sentence
in Article V para. 4 (d).
7. Article VII is to be replaced with the following text: "These Articles of
Association were approved by the General Meeting of Lounske tepelne
hospodarstvi, spol. s r.o., on 18 January 1995 and amended by the General
Meeting of the Company on 20 December 1995, 29 January 1997 and 11 November
1998."
The full version of the Articles of Association is attached hereto.
Thirdly: I am approving a transfer of a one hundred per cent share in Lounske
tepelne hospodarstvi, spol. s r.o., with its registered office at Louny, Benese
z Loun 185, to Severoceske teplarny, a.s., with its registered office at Most,
J. Seiferta 2179, 434 01 Most under terms and conditions approved in the City
Council resolution No. 494/98 as of 11 November 1998.
This notarial record has been written about the above mentioned facts.
The person present has read it, approved it and signed it.
Ing. Volkmann, in his own hand
City of Louny
JUDr. Ivana Demutova, in her own hand
Notary public in atec
<PAGE>
Mgr. Alena Zahradnikova, notary public in Most, Moskevska 1/14
- --------------------------------------------------------------------------------
Page One
--------
N 1/99
NZ 1/99
COPY
NOTARIAL RECORD
written in a notary's office by me, Mgr. Alena Zahradnikova, a notary public in
Most, on the sixth day of January nineteen ninety-nine.
Participants who have declared to have capacity to legal acts and who have
proved their identities through their valid identity cards are present:
Mr. Josef Vanura, personal identification number: 430608/102, residing at
Vysoka Pec, Pysna 4, the Deputy Chairman of the Board of Directors of
Severoceske teplarny, a.s., with its registered office at Most, J. Seiferta
2179, Company Identification Number: 46708065, and
Ing. Emil Volkmann, personal identification number: 360822/056, residing at
Louny, SNP 1863, a member of the Board of Directors of Severoceske teplarny,
a.s., with its registered office at Most, J. Seiferta 2179, Company
Identification Number: 46708065.
Both of them, representing Severoceske teplarny, a.s., pursuant to a record in
the Commercial Register, made
this decision of the single owner having the capacity of a General
Meeting pursuant to the Commercial Code s. 132 (1)
before me, a notary public in Most.
Firstly: Both of the participants present have declared that Severoceske
teplarny, a.s., with its registered office at Most, J. Seiferta 2179, Company
Identification Number: 46708065, is the single company member of Lounske tepelne
hospodarstvi, spol. s r.o., with its registered office at Louny, Benese z Loun
185, Company Identification Number: 62243179, registered at the Regional Court
in Usti nad Labem, Section C, Insert 8193.
Today, Severoceske teplarny, a.s., as the single company member of Lounske
tepelne hospodarstvi, spol. s r.o., with its registered office at Louny, Benese
z Loun 185, Company Identification Number: 62243179, made the following decision
pursuant to the Act No. 513/91 Coll. s. 132, the valid version. They decided to
change the Founder's Deed of the Company, as follows:
The second sentence "The organization of the Company's activities shall be
governed by the Articles of Association." shall be deleted from Article XI of
the Founder's Deed.
Page Two
Secondly: Severoceske teplarny, a.s., as the single owner of the aforesaid
company and as the General Meeting of the company, cancels hereby the Articles
of Association of Lounske tepelne hospodarstvi, spol. s r.o., as of 18 January
1995, as amended.
This notarial record has been written about the above mentioned facts. The
participants present have read it, approved it and signed it.
Van ura, in his own hand Ing. Volkmann, in his own hand
A. Zahradnikova, in her own hand
Notary public
I verify that this copy of a notarial record complies word-by-word with the
notarial record No. NZ 1/99 as of 6 January 1999 and it is intended for Mr.
Josef Van ura, residing at Vysoka Pec, Pysna 4.
Most, the sixth day of January nineteen ninety-nine
Round seal: Mgr. ALENA ZAHRADNIKOVA Signature: A. Zahradnikova
NOTARY PUBLIC IN MOST Notary public
<PAGE>
Page One
N 200/99
NZ 188/99
COPY
NOTARIAL RECORD
---------------
written in a notary's office at Moskevska 1/14 by me, Mgr. Alena Zahradnikova, a
notary public in Most, on the second day of December nineteen ninety-nine.
Participants who have declared to have capacity to legal acts and who have
proved their identities through their valid identity cards are present:
1. Mr. Josef Van ura, personal identification number: 430608/102, residing at
Vysoka Pec, Pysna 4, the Deputy Chairman of the Board of Directors of
Severoceske teplarny, a.s., with its registered office at Most, J. Seiferta
2179, Company Identification Number: 46708065, and
2. Ing. Emil Volkmann, personal identification number: 360822/056, residing at
Louny, SNP 1863, a member of the Board of Directors of Severoceske teplarny,
a.s., with its registered office at Most, J. Seiferta 2179, Company
Identification Number: 46708065.
Both of them, representing Severoceske teplarny, a.s., with its registered
office at Most, J. Seiferta 2179, Company Identification Number: 46708065, that
is the single owner of Lounske tepelne hospodarstvi, spol. s r.o., with its
registered office at Louny, Benese z Loun 185, Company Identification Number:
62243179, made
this decision of the single owner having the capacity of a
General Meeting pursuant to the Commercial Code s. 132 (1)
before me, a notary public in Most.
Firstly: Both of the participants present declare that Severoceske teplarny,
a.s., with its registered office at Most, J. Seiferta 2179, Company
Identification Number: 46708065, is the single company member of Lounske tepelne
hospodarstvi, spol. s r.o., with its registered office at Louny, Benese z Loun
185, Company Identification Number: 62243179. They have proved this fact by
means of a Certificate of Incorporation issued by the Regional Court in Usti nad
Labem where the Company is registered at Section C, Insert 8193.
Secondly: Severoceske teplarny, a.s., as the single owner of Lounske tepelne
hospodarstvi, spol. s r.o., with its registered office at Louny, Benese z Loun
185, Company Identification Number: 62243179, decided, as the General Meeting of
the aforesaid company, to change the registered office of the company. The new
registered office shall be at 17. listopadu, Louny, zip code 440 01. The
Founder's Deed, as amended, shall be changed hereby, i.e. the text of Article
III thereof saying "The registered office of the company is at Louny, Benese z
Loun 185." shall be replaced by " The registered office of the company is at 17.
listopadu, Louny, zip code 440 01.
Page Two
This notarial record has been written about the above mentioned facts. The
participants present have read it, approved it and signed it.
J. Van ura, in his own hand Ing. Volkmann, in his own hand
A. Zahradnikova, in her own hand
Notary public
I verify that this copy of a notarial record made on 2 December 1999 complies
word-by-word with the notarial record No. NZ 188/99 as of 2 December 1999 and it
is intended for Severoceske teplarny, a.s., with its registered office at Most,
J. Seiferta 2179.
Round seal: Mgr. ALENA ZAHRADNIKOVA Signature: A. Zahradnikova
NOTARY PUBLIC IN MOST Notary public
Amended 10/8/97
Amended 3/13/98
Amended 5/19/98
Amended 6/19/98
Amended 8/24/99
BY-LAWS
OF
UPSTATE ENERGY INC.
ARTICLE I
OFFICES
-------
Section 1. Principal Office. The principal office of this corporation
-----------------
shall be in the City of Buffalo, State of New York.
Section 2. Other Offices. The corporation may have such other offices
-------------
and places of business, within or without the State of New York, as may be
determined by the Directors.
<PAGE>
ARTICLE II
SHAREHOLDERS
------------
Section 1. Place of Meetings. Meetings of the shareholders may be held
-----------------
at such place or places, within or without the State of New York, as shall be
fixed by the President and stated in the notice of the meeting.
Section 2. Annual Meeting. The annual meeting of shareholders for the
--------------
election of Directors and the transaction of such other business as may properly
come before the meeting shall be held on such business day and time as the
President shall designate.
Section 3. Notice of Annual Meeting. Written notice of the annual
-------------------------
meeting shall be given to each shareholder entitled to vote, at least ten (10)
days but no more than fifty (50) days prior to the meeting.
Section 4. Special Meetings. Special meetings of the shareholders for
-----------------
any purpose or purposes may be called by the President or Board of Directors and
must be called by the President or Secretary upon receipt by either of them of
the written request of the holders of twenty-five (25) percent of the stock then
outstanding and entitled to vote.
Section 5. Notice of Special Meeting. Written notice of a special
---------------------------
meeting, stating the time, place and purpose or purposes thereof, shall be given
to each shareholder entitled to vote, at least ten (10) days but no more than
fifty (50) days prior to the meeting. The notice shall also be set forth at
whose direction it is being issued.
Section 6. Quorum. At any meeting of the shareholders, the holders of
------
record of a majority of the shares of stock then entitled to vote shall
constitute a quorum for all purposes, except as otherwise provided by law or the
Certificate of Incorporation.
Section 7. Voting. Except as may be otherwise provided by the
------
Certificate of Incorporation, at each meeting of the shareholders, every holder
of stock then entitled to vote may vote in person or by proxy and shall have one
vote for each share registered in his name.
Section 8. Adjourned Meetings. Any meeting of shareholders may be
-------------------
adjourned to a designated time and place by a vote of a majority in interest of
the shareholders present in person or by proxy and entitled to vote, even though
less than a quorum is so present. No notice of such an adjourned meeting need be
given, other than by announcement at the meeting, and any business may be
transacted which might have been transacted at the meeting as originally called.
Section 9. Action by Written Consent of Shareholders. Whenever by any
------------------------------------------
provision of statute or of the Certificate of Incorporation or of these By-Laws,
shareholders are required or permitted to take any action by vote, such action
may be taken without a meeting on written consent setting forth the action so
taken, signed by the holders of all outstanding shares entitled to vote thereon.
Section 10. Appraisal Rights. If, at any meeting, action is proposed to
----------------
be taken which would, if taken, entitle shareholders to receive payment for
shares, the notice of such meeting shall include a statement of that purpose and
to that effect.
ARTICLE III
DIRECTORS
---------
Section 1. Number. The number of Directors of the corporation shall be
------
two (2), who shall hold office for one year and/or until their successors are
elected and qualify. Directors shall be elected at the annual meetings of
shareholders. The number of Directors may be increased or decreased from time to
time by amendment to these By-Laws made by a majority of the Board of Directors
or by the shareholders. Directors need not be shareholders.
Section 2. Powers. The Board of Directors may adopt such rules and
------
regulations for the conduct of business of its meetings, the exercise of its
powers and the management of the affairs of the corporation as it may deem
proper, not inconsistent with the laws of the State of New York, the Certificate
of Incorporation or these By-Laws.
In addition to the powers and authorities by these By-Laws expressly
conferred upon it, the Board of Directors may exercise all such powers of the
corporation and do such lawful acts and things as are not by statute or by the
Certificate of Incorporation or by these By-Laws directed or required to be
exercised or done by the shareholders.
Neither the Board of Directors nor any Director who is not an officer
shall have (i) any day-to-day duties or responsibilities for planning,
directing, organizing or carrying out gas-related operations, including gas
transportation, gas sales or gas marketing activities, or (ii) any duties
involving day-to-day gas purchasing, marketing, sales, transportation,
operations, dispatching, storage or related activities. No Director who is an
officer, operating employee or non-operating employee of a "natural gas company"
(as defined in the federal Natural Gas Act of 1938, as amended) shall disclose
to any Director, officer, operating employee, non-operating employee,
contractor, agent or representative of the corporation either:
any information received by such natural gas company
from a nonaffiliated shipper or potential nonaffiliated shipper; or
any information related to transportation (including storage, exchange,
backhaul, displacement or other methods of transportation) of natural
gas, unless such natural gas company provides that information
contemporaneously to all shippers, affiliated and nonaffiliated, on its
system.
Section 3. Meeting, Quorum, Meeting by Telephone, Action Without
-----------------------------------------------------------
Meeting. Meetings of the Board of Directors may be held at any place, either
- -------
within or without the State of New York, provided a quorum be in attendance.
Except as may be otherwise provided by the Certificate of Incorporation or by
the corporate laws of the State of New York, a majority of the Directors in
office shall constitute a quorum at any meeting of the Board and the vote of a
majority of a quorum of Directors shall constitute the act of the Board.
The Board of Directors may hold an annual meeting, without notice,
immediately after the annual meeting of the shareholders. Regular meetings of
the Board of Directors may be held without notice at such time and at such place
as shall from time to time be determined by the Board of Directors. The Chairman
of the Board (if any) or the President or Secretary may call, and at the request
of any two Directors must call, a special meeting of the Board of Directors by
appropriate notice. Five days' notice is required when given personally or by
telegraph, cable or facsimile transmission to each Director.
Any one or more members of the Board of Directors or any Committee
thereof may participate in a meeting of such Board or any Committee by means of
a conference telephone or similar communication equipment allowing all persons
participating in the meeting to hear each other at the same time. Participation
by such means shall constitute presence in person at a meeting.
Any action required or permitted to be taken by the Board of Directors
or any Committee thereof may be taken without a meeting if all members of the
Board or the Committee consent in writing to the adoption of a resolution
authorizing the action. The resolution and the written consents thereto by the
members of the Board or Committee shall be filed with the minutes of the
proceedings of the Board or Committee.
Section 4. Resignation, Vacancies, Removal. Any Director may resign at
--------------------------------
any time by giving written notice to the President or the Secretary. Such
resignation shall take effect at the time stated therein. Except as otherwise
provided in the Certificate of Incorporation or in the following paragraph,
vacancies occurring in the membership of the Board of Directors, from whatever
cause arising, may be filled by a majority vote of the remaining Directors,
though less than a quorum.
Any one or more of the Directors may be removed for cause by action of
the Board of Directors taken by a vote of a majority of all Directors then in
office at any regular or special meeting of the Board.
Section 5. Committees. The Board of Directors, by resolution adopted by
----------
a majority of the entire Board, may designate from its members an Executive
Committee or other committee or committees, each consisting of three or more
members, and each of which shall have such powers and authority (to the extent
permitted by law) as may be provided in said resolution.
Section 6. Compensation. Directors, as such, shall not receive any
------------
stated salary for their services, but by resolution of the Board of Directors a
fixed fee and expenses of attendance, if any, may be allowed for attendance at
each regular or special meeting of the Board or of any committee of the Board,
provided that nothing herein contained shall be construed to preclude any
Director from serving the corporation in any other capacity and receiving
compensation therefor.
ARTICLE IV
OFFICERS
--------
Section 1. Executive Officers. The executive officers of the
--------------------
corporation shall be a President, one or more Vice-Presidents, a Treasurer and a
Secretary, each of whom shall be elected annually by the Directors and shall
hold office for such term as may be prescribed by the Board. All vacancies
occurring among any of the offices may be filled by the Board of Directors or,
in its discretion, the Board may leave unfilled at its pleasure any of the
foregoing offices except the offices of President, Treasurer and Secretary. Any
officer may be removed at any time with or without cause by the Board of
Directors.
Section 2. Other Officers. The Board of Directors may appoint such
---------------
other officers and agents with such powers and duties as it shall deem
necessary.
Section 3. The President. The President shall, in the absence or
--------------
non-election of a Chairman of the Board, preside at all meetings of the
shareholders and Directors and perform such other duties as from time to time
may be assigned to him by the Board of Directors. The President shall be the
Chief Executive Officer of the corporation and shall perform all of the duties
of the Chairman of the Board as well as those of President.
Section 4. The Vice-President. The Vice-President, or if there be more
------------------
than one, the Vice-Presidents (who may have such designations, if any, as the
Board of Directors may determine), in the order of their seniority or in any
other order determined by the Board shall, in the absence or disability of the
President, exercise the powers and perform the duties of the President, and each
Vice-President shall exercise such other duties as may be prescribed by the
President or the Board.
Section 5. The Treasurer. The Treasurer shall have custody of all
--------------
funds, securities and other valuable effects of the corporation; he shall
receive and give receipts and acquittances for moneys paid in on account of the
corporation; he shall deposit all moneys and other valuable effects in the name
and to the credit of the corporation in such depositories as may be designated
by the Board of Directors; he shall pay out of the funds on hand all bills,
payrolls and other just debts of the corporation, of whatever nature, upon
maturity; he shall enter regularly, in books to be kept by him for that purpose,
full and accurate accounts of all moneys received and paid out by him on account
of the corporation; and he shall perform all other duties incident to the office
of Treasurer and as may be prescribed by the Board.
Section 6. The Secretary. The Secretary shall keep the minutes of all
-------------
proceedings of the Board of Directors and of the shareholders; he shall attend
to the giving and serving of all notices to the shareholders and Directors or
other notice required by law or by these By-Laws; he shall affix the seal of the
corporation to deeds, contracts and other instruments in writing requiring a
seal, when duly signed on behalf of the corporation; he shall have charge of the
certificate books and stock books and such other books and papers as the Board
may direct; and he shall perform all other duties incident to the office of
Secretary as the Board may prescribe.
ARTICLE V
CAPITAL STOCK
-------------
Section 1. Form and Execution of Certificates. Certificates of stock
-----------------------------------
shall be in such form as required by the laws of the State of New York and as
shall be adopted by the Board of Directors. They shall be numbered and
registered in the order issued, shall be signed by the President or a
Vice-President and by the Secretary or the Treasurer and shall be sealed with
the corporate seal or a facsimile thereof. If such a certificate is
countersigned by a transfer agent or registered by a registrar, the signatures
of any such officers may be facsimile.
Section 2. Transfer. Transfer of shares shall be made only upon the
--------
books of the corporation by the registered holder in person or by attorney, duly
authorized, and upon surrender of the certificate or certificates for such
shares duly endorsed or accompanied by proper evidence of succession, assignment
or authority to transfer. A record shall be made of each transfer, and whenever
a transfer shall be made for collateral security, and not absolutely, it shall
be so expressed in the entry of the transfer on the record of shareholders of
the corporation.
Section 3. Lost or Destroyed Certificates. The holder of any
----------------------------------
certificate representing shares of stock of the corporation may notify the
corporation of any loss, theft or destruction thereof, and the Board of
Directors may thereupon, in its discretion, cause a new certificate for the same
number of shares, to be issued to such holder upon satisfactory proof of such
loss, theft or destruction, and the deposit of indemnity by way of bond or
otherwise, in such form and amount and with such surety or sureties as the Board
of Directors may require, to indemnify the corporation against loss or liability
by reason of the issuance of such new certificates.
Section 4. Record Date. In lieu of closing the books of the
------------
corporation, the Board of Directors may fix in advance a date, not exceeding
fifty days nor less than ten days, as the record date for the determination of
shareholders entitled to receive notice of, or to vote at, any meeting of
shareholders, or to consent to any proposal without a meeting, or for the
purpose of determining shareholders entitled to receive payment of any
dividends, or allotment of any rights, or for the purpose of any other action.
ARTICLE VI
MISCELLANEOUS
-------------
Section 1. Dividends. Subject to the applicable provisions of the
---------
Certificate of Incorporation, the Board of Directors may declare dividends from
time to time upon the capital stock of the corporation from the surplus or net
profits available therefor.
Section 2. Fiscal Year. The fiscal year of the corporation shall begin
-----------
on the 1st day of October in each calendar year and end on the 30th day of
September of the next succeeding calendar year.
Section 3. Checks, Notes, etc. Checks, notes, drafts, bills of exchange
------------------
and orders for payment of money shall be signed or endorsed in such manner as
shall be determined by the Board of Directors.
The funds of the corporation shall be deposited in such bank or trust
company, and checks drawn against such funds shall be signed in such manner as
may be determined from time to time by the Board of Directors.
Section 4. Notice and Waiver of Notice. Any notice required to be given
---------------------------
under these By-Laws may be waived by the person entitled thereto, in writing, by
telegram, cable, facsimile transmission or radiogram, and the presence of any
person at a meeting shall constitute waiver of notice thereof as to such person.
Whenever any notice is required by these By-Laws to be given, personal
notice is not meant unless expressly so stated; and any notice so required shall
be deemed to be sufficient if given by depositing it in a post office or post
box in a sealed postpaid wrapper, addressed to such shareholder, officer or
director, at such address as appears on the books of the corporation, and such
notice shall be deemed to have been given on the day of such deposit.
ARTICLE VII
INDEMNIFICATION AND INSURANCE
-----------------------------
Section 1. Indemnification. Any person made a party to an action or
---------------
proceeding, by reason of the fact that he, his testator or his intestate is or
was a director or officer of the corporation, or of any other corporation,
domestic or foreign, that he, his testator or intestate served in any capacity
at the request of the corporation, shall be indemnified by the corporation
against the expenses (including attorney's fees, judgments, fines and amounts
paid in settlement) actually incurred by him as a result of such action or
proceeding, or any appeal therein, to the full extent permissible.
Section 2. Insurance. The corporation may purchase and maintain
---------
insurance to indemnify the corporation and the directors and officers to the
extent permitted.
ARTICLE VIII
AMENDMENTS
----------
Section 1. The authority to make, alter, amend or repeal these By-Laws
is expressly vested in the Board of Directors, subject to the power of the
shareholders to change or repeal such By-Laws.
CONTRACT NO. K# 14008
ROYSTONE GAS PROCESSING PLANT
FACILITY CONSTRUCTION, OWNERSHIP AND OPERATING AGREEMENT
Between
ELKHORN OPERATING COMPANY
and
FIVE OAKS, INC.
and
TENNECO GAS PROCESSING COMPANY
Warren County, Pennsylvania
<PAGE>
ROYSTONE GAS PROCESSING PLANT
FACILITY CONSTRUCTION, OWNERSHIP AND OPERATION AGREEMENT
This AGREEMENT, made and entered into effective the 1st day of
November, 1994 by and between ELKHORN OPERATING COMPANY, an Oklahoma
corporation, hereinafter referred to as "PLANT OPERATOR" and the other
undersigned parties, TENNECO GAS PROCESSING COMPANY ("TENNECO"), a Delaware
Corporation, and FIVE OAKS, INC., ("FIVE OAKS") an Oklahoma Corporation,
hereinafter collectively referred to as "PLANT OWNERS".
WITNESSETH:
WHEREAS, the PLANT OWNERS hereto desire to join in the construction,
and operation of a gas processing plant and appurtenant facilities co extract
and fractionate Plant Products from gas moved through pipelines owned by
National Fuel Gas Supply Corporation at a location in or near Roystone,
Pennsylvania; and
WHEREAS, PLANT OWNERS desire the PLANT OPERATOR oversee the design and
construction of the Plant and whereas, PLANT OWNERS desire the PLANT OPERATOR to
start up and operate such gas processing plant.
NOW, THEREFORE IN CONSIDERATION of the terms and the mutual covenants
hereinafter contained, the parties hereto agree as follows:
ARTICLE I
---------
DEFINITIONS
-----------
1.01 Definitions
-----------
As used in this Agreement, and the Exhibits attached hereto, the
following words and terms shall have the meanings hereafter ascribed to them:
(a) Accounting Procedure means the provisions set forth in Exhibit B.
---------------------
(b) Adjustment Date means 1st of each year beginning Jan., 1995.
---------------
<PAGE>
(c) AFE (Authority for Expenditure) means a document prepared by PLANT
---
OPERATOR which describes work to be performed and that indicates
the cost and economic evaluation thereof.
(d) Agreement means this agreement including the Exhibits hereto, as
---------
Amended from time to time.
(e) Annual Budget by Month means PLANT OPERATOR'S estimate of monthly
-------------
Expenditures necessary to operate the PLANT during a calendar Year.
(f) Approved Budget by Month means an Annual Budget by Month Which has
-------------------------
been approved in writing by PLANT OWNERS.
(g) Approved AFE means a AFE approved in writing by PLANT OWNERS.
------------
(h) Authorized Expenses means costs and expenses set forth in Article
--------------------
7.02 hereof.
(i) Construction Costs means expenditures incurred in connection with
------------------
The initial construction of the PLANT.
(j) Contract year means January 1 to December 31st for the first
--------------
Contract year and thereafter each succeeding twelve month period.
(k) Day means a period of twenty-four (24) consecutive hours begining
---
and ending at 7:00 a.m. Eastern Standard Time.
(l) Expansion means an addition to the PLANT which results in an
---------
increase in capacity to process Gas.
(m) Expansion Capacity means an increase in Plant Capacity attributable
------------------
to an Expansion.
(n) Expansion Costs means such capital Costs as may be incurred in
----------------
connection with any Expansion.
(o) Gas shall mean all gaseous hydrocarbons produced, whether pro-
---
duced from oil or from gas or gas condensate formations.
(p) Inlet Delivery Point means the point or points designated for the
---------------------
acceptance of Gas into the PLANT.
(q) MCF means 1,000 cubic feet of Gas at an absolute pressure of 14.73
---
pounds per square inch at a temperature of 60 degrees Fahrenheit.
(r) MMCFD means 1,000 MCF per day.
-----
(s) Month means the period commencing at 7:00 a.m. EST on the first day
-----
of a calendar month and ending at 7:00 a.m. EST on the first day of
the next succeeding calendar month.
(t) PLANT means the ROYSTONE Gas Processing PLANT located in Warren
-----
County near Roystone, Pennsylvania, which also includes all real
and personal property of every kind, nature and description that
constitutes the plant facilities, the storage and loading
facilities acquired by the PLANT OWNERS and held by PLANT OPERATOR
as provided in this agreement.
<PAGE>
(u) Plant Account means the account set up by the PLANT OPERATOR
--------------
pursuant to Article 8.01.
(v) Plant Bypass means the total volume which is bypassed around the
------------
PLANT because the PLANT is unable to process all or a portion of
the Gas delivered to it. Facilities for such Plant Bypass shall be
installed and operated as a part of the PLANT.
(w) Plant Capacity means the volume of inlet gas measured in MCF per
---------------
day that the PLANT is capable of processing. The initial Plant
Capacity shall be six million cubic feet of gas per day (6000
MCFD).
(x) Plant Outlet for Plant Products means the point of delivery for
---------------------------------
Plant Products at or near the PLANT at which such products are
loaded into trucks or railcars.
(y) Plant Owners means the parties who own the PLANT as set forth on
-------------
Exhibit A hereto.
(z) Plant Participation Percentage means each PLANT OWNER'S percentage
-------------------------------
ownership in the PLANT as set forth opposite each PLANT OWNER'S
name on Exhibit A.
(aa) Plant Products means all substances that are recovered from Gas
--------------
and are available for delivery from the PLANT including, but not
limited to ethane, propane, butanes, pentanes and heavier
hydrocarbons, or any mixtures thereof, but excluding Residue Gas
and such substances as are lost or consumed as fuel in the
operation of the PLANT.
(bb) Plant Redelivery Point means the point downstream of the PLANT
------------------------
where Residue Gas is delivered into National Fuel Gas Supply
Corporation's pipeline facilities.
(cc) Plant Supplies means all chemicals and other substances used or
--------------
consumed in operations under this Agreement (such as, but not
limited to amine, glycol, methanol, water treatment chemicals and
all lubricants) and spare parts and equipment used to replace or
repair items of equipment and materials.
(dd) Gas Processing Contract means the certain Processing Agreement
------------------------
dated________________ between Tenneco Gas Processing Company;
Five Oaks, Inc., and National Fuel Gas Supply Corporation
attached hereto as Exhibit C.
(ee) Residue Gas means that Gas remaining after the extraction of
------------
Plant Products, but shall not include any such portion Lost, used
or consumed as fuel in the operation of the plant.
<PAGE>
ARTICLE II
----------
EXHIBITS
--------
2.01 Exhibits Attached
-----------------
The following Exhibits are attached to and incorporated in this
Agreement:
(a) Exhibit A: Plant Participation Percentages
(b) Exhibit B: Accounting Procedure
(c) Exhibit C: Processing Agreement
(d) Exhibit D: Initial Annual Budget By Month
(e) Exhibit E: Tax Partnership
2.02 Revision of Exhibits
--------------------
(a) Exhibit A shall be revised from time to time as provided in
Article 12.01 hereof;
(b) Exhibits B, C, D & E may be revised from time to time at the
direction of PLANT OWNERS; per Article V of this Agreement.
(c) PLANT OPERATOR shall, forthwith upon revision of any
Exhibit, supply each PLANT OWNER with a copy of the revised
Exhibit.
2.03 Form of Revised or Corrected Exhibits
-------------------------------------
Exhibits that are revised or corrected shall not become effective until
approved by the PLANT OWNERS and shall show the effective time of such
revision or corrections and shall be numbered consecutively.
2.04 Conflicts
---------
If there are any conflicts between the terms of this Agreement and
anything contained in an Exhibit hereto, the provisions of this
Agreement shall prevail and if there are any conflicts between the
terms of two or more Exhibits, the Exhibit with the most recent
revision date shall prevail. However, in case a conflict between the
terms of Exhibit E and the terms of this Agreement or any other Exhibit
hereto, the provisions of Exhibit E shall prevail.
ARTICLE III
-----------
PURPOSE AND OWNERSHIP
---------------------
3.01 Purpose
-------
The purpose of this Agreement is to set forth the terms and conditions
by which the PLANT shall be owned by the PLANT OWNERS, and the terms
under which the PLANT OPERATOR shall construct, operate and maintain
the PLANT.
<PAGE>
3.02 Ownership of Plant
------------------
Each PLANT OWNER shall own an undivided interest in the PLANT equal to
its Plant Ownership Percentage as set forth on Exhibit A hereto. PLANT
OPERATOR shall operate the PLANT on behalf of the PLANT OWNERS, in
accordance with their instructions and the provisions of this
Agreement. The PLANT site and all other property obtained in connection
therewith shall be owned by and paid for by PLANT OWNERS in proportion
to their respective Plant Ownership Percentages.
ARTICLE IV
----------
PLANT OPERATOR'S SERVICES
-------------------------
4.01 Plant Operator
--------------
PLANT OWNERS hereby appoint Elkhorn Operating Company as PLANT OPERATOR
to supervise the design, construction and operation of the PLANT.
Subject to the other provisions of this Agreement and the Gas
Processing Contract, PLANT OPERATOR shall have the right to supervise
the construction and operation of the PLANT; provided, that when
management decisions are made by a vote of the PLANT OWNERS, as herein
provided, PLANT OPERATOR shall be bound to follow such decisions,
determinations, and authorizations.
4.02 General Obligations of Plant Operator
-------------------------------------
PLANT OPERATOR will enter into contracts as instructed or budgeted with
competent, responsible, independent contractors for the construction of
the PLANT. PLANT OPERATOR shall acquire such rights-of-way, easements,
and grants on behalf of the PLANT OWNERS as may be necessary to
accomplish the purpose of this Agreement, title to all of which shall
be acquired and held by the PLANT OWNERS in proportion to each PLANT
OWNER'S respective Plant participation Percentage. PLANT OWNERS shall
have the right to audit the financial records and documentation as it
relates to the construction and operation of the PLANT.
PLANT OPERATOR shall supervise the construction, operation,
maintenance, alteration, and/or enlargement of the PLANT, and conduct
all operations hereunder in a good and workmanlike manner consistent
with industry standards, and in accordance with an approved budget
described in paragraph 7.01 of this Agreement. In the absence of
specific instructions from PLANT OWNERS, PLANT OPERATOR shall have the
right and duty to act in accordance with its best judgment as a prudent
operator. OPERATOR shall consult freely with PLANT OWNERS and shall
keep the PLANT OWNERS informed of all matters arising during the
design, construction,
<PAGE>
operation, maintenance, alteration, and enlargement of the PLANT, which
PLANT OPERATOR. in the exercise of its best judgment, consider
important. PLANT OWNERS shall have the right, at their own risk and
expense, to observe the construction and operation of the PLANT.
4.03 Specific Duties
---------------
PLANT OPERATOR shall perform the duties of operator of the PLANT on
---------------
behalf of the PLANT OWNERS. These duties shall specifically include,
but are not limited to, the following acts, to-wit:
(a) Prepare bid packages for acquisition/construction of the
PLANT; Recommend to PLANT OWNERS which equipment and bids
should be selected for acquisition/construction of the PLANT.
(b) Prepare and implement Annual Budgets by Month and AFE's for
the PLANT.
(c) Supervise the construction of the PLANT and training of the
PLANT personnel.
(d) Supervise the PLANT startup and all operations for the
extraction, separation, and delivery of Plant Products and
Residue Gas.
(e) Supervise and monitor all daily operations of the PLANT and
provide engineering and technical expertise required for
normal operation of the PLANT.
(f) Exercise all rights, powers and privileges and perform for and
on behalf of PLANT OWNERS the rights, powers, privileges and
obligations of Processor, as defined in the Processing
Agreement between NATIONAL FUEL and PLANT OWNERS, in the Gas
Processing Agreement.
(g) Approve all plant expenses. Pay and discharge promptly for and
on behalf of the PLANT OWNERS, all costs and expenses incurred
in connection with the construction and operation of the PLANT
pursuant to this Agreement, and take advantage of trade
discounts where available.
(h) Pay wages and salaries of PLANT personnel at rates being paid
from time to Time by PLANT OPERATOR for similar work at other
similar operations. The number of PLANT employees, the
selection of such employees, their hours of labor, and the
compensation to be paid such employees shall be determined by
PLANT OPERATOR
<PAGE>
consistent with the approved budget and all such employees
shall be employees of PLANT OPERATOR.
(i) Invoice purchasers of Plant Products for PLANT OWNER(S) not
taking product in kind.
(j) Keep an accurate and itemized record of the account of the
PLANT OWNERS and of all operations of the PLANT, and report
all expenditures made or incurred during the preceding Month,
together with any reasonable information relating to said
account or operations of the PLANT.
(k) Furnish monthly reports concerning operating highlights of the
PLANT.
(l) Prepare proposals and supervise work on capital projects
including PLANT modifications and improvements as approved by
PLANT OWNERS.
(m) Keep the PLANT free from all liens and encumbrances occasioned
by operations hereunder, except the lien granted under Article
9.04 of this Agreement to enforce the collection of overdue
costs and expenses from delinquent PLANT OWNERS and except
liens being contracted in good faith.
(n) Abide by and conform to all valid applicable laws, orders,
rules and regulations made by duly constituted governmental
authorities; Make all necessary reports to governmental
authorities, obtain all necessary licenses and permits, and
pay all valid applicable excise taxes, property taxes and fees
levied upon the PLANT or its Plant Products.
(o) Render for ad valorem taxation, all property subject to this
Agreement which by law should be rendered for such taxes, and
timely pay all local, state and federal taxes (other than
income and franchise taxes) applicable to the operation and
maintenance of the plant.
If any tax assessment is considered unreasonable by PLANT
OPERATOR, PLANT OPERATOR shall notify PLANT OWNERS in writing.
If the PLANT OWNERS do not respond back within ten (10) days
of such notice of their election to be involved, then PLANT
OPERATOR, at its discretion may protest such valuation within
the time and manner prescribed by law, and it may at its
discretion, prosecute or not prosecute, the protest to a final
determination, subject to the right of the PLANT OWNERS to
take over or dismiss such
<PAGE>
action at any time. When any such protested valuation shall
have been finally determined, PLANT OPERATOR shall pay the
assessment for the Plant Account, together with interest and
penalty accrued.
(p) Settle claims, demands or lawsuits resulting from or arising
from operations hereunder in accordance with the guidelines
set forth in Article 15.03.
(q) The PLANT OWNERS shall have semi-annual meetings and also
shall allow the PLANT OPERATOR to call meetings whenever it
deems necessary. The PLANT OWNERS likewise have the right to
call a meeting anytime they deem it necessary.
(r) Generally carry out technical and supervisory services and
handle all other matters necessary to the full accomplishment
of the purposes of this Agreement.
(s) PLANT OPERATOR shall fax to PLANT OWNERS a daily operating
report. This report shall include: gas volume processed,
products produced, fuel used, and loadout of products, if any.
(t) PLANT OPERATOR shall prepare other reports as required.
These reports to include:
U.S. Dept. of Energy Report EIA-816 - Monthly Natural Gas
Liquids
U.S. Dept. of Energy Report EIA-64A - Annual Report of the
Origin of Natural Gas Liquids Production (by Plant)
American Petroleum Institute APSI-Sl84 - Monthly LPG and LGR
Stocks Report
Monthly Plant Allocation Statement, showing: BTU Factor
Allocation/Calculation of NGLs Theoretical Gallons by
Each NGL Product Actual Gallons by Each NGL Product
Fuel & Shrinkage in MCF & MMBTU Plant Fuel Misc. Loss
TGPr's Entitlement in NGL Products and Condensate
Monthly Over/Under & Liquid Volume Make-up Report
4.04 Employees of Plant Operator
---------------------------
The number of employees used by PLANT OPERATOR in conducting operations
hereunder, their selection, their hours of labor, and their
compensation for services performed shall be determined by PLANT
OPERATOR in accordance with accepted industry practices and within the
guidelines established in an approved Annual Budget by Month. All such
employees shall be employees of PLANT OPERATOR.
<PAGE>
4.05 Standard of Care
----------------
PLANT OPERATOR shall perform the services as operator of the PLANT in a
safe, proper and workmanlike manner with that degree of diligence and
prudence which would be reasonably and ordinarily exercised by
experienced operators engaged in a similar activity under similar
circumstances and conditions. PLANT OPERATOR shall do or cause all such
acts and deeds within its control as may be reasonable necessary to
operate and maintain the PLANT in compliance with the requirements of
all applicable Federal, State, regional and local laws, rules and
regulations.
4.06 Liability of PLANT OPERATOR
---------------------------
PLANT OPERATOR shall be liable for any loss or damage suffered by the
PLANT OWNERS resulting or arising from operations hereunder, when and
to the extent that such loss or damage results from the gross
negligence or willful or wanton conduct of PLANT OPERATOR, its
employees, agents or subcontractors.
4.07 Indemnification
---------------
PLANT OPERATOR covenants and agrees to fully defend, protect,
indemnify, hold harmless and render whole PLANT OWNERS, their
respective officers, directors, employees, and agents from and against
each and every claim, demand or cause of action and liability, cost
and/or expense (including but not limited to reasonable attorneys' fees
and expenses incurred in defense of PLANT OWNERS their officers,
directors, employees, and agents), for damage or loss in connection
therewith, arising from PLANT OPERATOR, its officers, directors
employees and/or agents or arising from any subcontractor.
subcontractor's officers, directors, employees and/or agents, or which
may be made or asserted by any third party, including but not limited
to PLANT OWNERS, their officers, directors, employees, and agents on
account of personal injury or death or property damage caused by,
arising out of, or in any way incidental to, or in connection with the
performance of the work hereunder, including but not limited to, those
situations where personal injury or death or property damage (or
liability therefor) was caused by the willful or wanton conduct, or the
gross negligence of the PLANT OPERATOR, any subcontractor or any third
party (and/or any of their respective officers, directors, employees,
agents and limited partners), or where liability for such personal
injury or death or property damage, with or without faults, is imposed
on any theory of strict liability by operation of law.
4.08 Resignation of PLANT OPERATOR
-----------------------------
In the event PLANT OPERATOR desires to resign, PLANT OPERATOR shall
give written notice of its election to resign to PLANT OWNERS not less
than ninety (90) days prior to the effective date of such resignation.
<PAGE>
Within thirty (30) days from receipt Of such notice, the PLANT OWNERS
shall elect, by majority votes a new PLANT OPERATOR, who shall succeed
thereafter to all the rights, powers, privileges and obligations of the
PLANT OPERATOR hereunder; provided however, resignation of PLANT
OPERATOR shall not relieve PLANT OPERATOR of any liabilities or
obligations accrued prior to the effective date of such resignation.
4.09 Removal of PLANT OPERATOR
-------------------------
If, at any time throughout the term of this Agreement, in the judgment
of any PLANT OWNER, the PLANT OPERATOR fails to operate the PLANT as
stated within the guidelines of this Agreement and efficiently and
properly within industry standards, any PLANT OWNER may notify PLANT
OPERATOR in writing of such facts, specifying the acts or omissions
complained of. If the PLANT OPERATOR, by the end of a period of
forty-five (45) days after receipt of said notice, does not correct
such conditions to the satisfaction of the PLANT OWNER, then such PLANT
OWNER may request that the PLANT OPERATOR be removed. Thereupon the
PLANT OWNERS shall determine if the PLANT OPERATOR should be removed.
If PLANT OWNERS owning a majority of the plant Participation
Percentages determine that the PLANT OPERATOR should be removed, then
said PLANT OPERATOR shall be removed upon at least 30 days prior
written notice from PLANT OWNERS, and a new PLANT OPERATOR selected.
Removal of PLANT OPERATOR shall not relieve PLANT OPERATOR of any
liabilities or obligations accrued prior to the effective date of such
removal.
4.10 Transition upon Termination
---------------------------
In the event the PLANT OPERATOR resigns or is removed, the PLANT
OPERATOR shall cooperate with its successor to make the transition as
smoothly as possible. At a reasonable time prior to PLANT OPERATOR'S
termination, PLANT OPERATOR shall provide its successor with such
operating manuals, procedures and all records necessary for succeeding
PLANT OPERATOR to discharge its duties and obligations. PLANT OPERATOR
shall turn over all permits and any correspondences with any government
entity having jurisdiction over the facility.
ARTICLE V
---------
MANAGEMENT BY PLANT OWNERS
--------------------------
5.01 Matters to be Acted Upon
------------------------
Unless otherwise specifically directed, PLANT OPERATOR shall use its
own best judgement to operate the PLANT. Provided however, all powers
and duties not specifically conferred upon PLANT OPERATOR are reserved
to
<PAGE>
PLANT OWNERS and PLANT OWNERS shall at all times retain managerial
control of the PLANT. All matters concerning the PLANT which would be
considered outside the scope of ordinary daily operations shall be
directed to PLANT OWNERS for consent and approval. Proposed Annual
Budget by Month, AFE's and other requests for expenditures not covered
by an Approved Annual Budget by Month shall be submitted to the PLANT
OWNERS for approval.
5.02 Vote Required
-------------
Each PLANT OWNER shall have a voting interest equal to its Plant
Participation Percentage at the time of voting. An affirmative vote by
PLANT OWNERS whose voting interest totals more than fifty percent (50%)
shall be binding upon all PLANT OWNERS.
5.03 Failure to Vote
---------------
If any PLANT OWNER fails to vote, within thirty (30) days from receipt
of a ballot on any matter hereunder which requires the approval or
decision of the PLANT OWNERS, then such PLANT OWNERS failure to vote
shall be counted as an affirmative vote and shall constitute approval
of such matter.
5.04 Designated Representative
-------------------------
All PLANT OWNERS shall, by furnishing satisfactory written evidence of
such authority to PLANT OPERATOR, authorize and designate a
representative to receive all notices hereunder and to act on behalf of
such PLANT OWNER as to any matter arising hereunder or any matter
connected with the PLANT or its operation. Any representative so
designated may be changed from time to time and the act of any such
representative shall be equally binding as the act of its principal.
ARTICLE VI
----------
PLANT OPERATOR'S COMPENSATION
-----------------------------
6.01 Operating Fee
-------------
As consideration for the services rendered by PLANT OPERATOR hereunder,
PLANT OWNERS shall pay to PLANT OPERATOR the sum of Four Thousand
Dollars ($4,000) per month ("Operating Fee").
<PAGE>
6.02 Operating Fee Adjustment
------------------------
Commencing January 1st, 1995 and annually thereafter on the
Adjustment Date during the term hereof, the Operating Fee shall be
adjusted. The adjustment shall be computed by multiplying the Operating
Fee then in use by the percentage increase or decrease in the average
weekly earnings of Crude Petroleum and Gas Production Workers for the
last calendar year compared to the calendar year preceding as shown by
the Index of Average Weekly Earnings of Crude Petroleum and Gas
Production Workers ("Index") as published by the United States
Department of Labor, Bureau of Labor Statistics. Provided however, in
no event shall the operating fee be reduced below the Operating Fee
hereinabove set forth in Article 6.01. The adjusted Operating Fee shall
be the operating Fee then in use, plus or minus the computed
adjustment. If the Index is discontinued or revised during the term of
this Agreement, PLANT OWNERS and PLANT OPERATOR shall use such other
governmental index or computation with which the Index is replaced in
order to obtain substantially the same result as would have been
obtained if the Index had not been discontinued or revised.
6.03 Initial Construction Overhead Fee
---------------------------------
To compensate PLANT OPERATOR for overhead costs associated with the
initial construction and installation of the PLANT, PLANT OWNERS shall
pay PLANT OPERATOR an Initial Construction Overhead Fee of $35,000 plus
out of pocket expenses.
6.04 Supplemental Construction Overhead Fee
--------------------------------------
To compensate PLANT OPERATOR for overhead costs incurred after initial
construction and installation of the PLANT associated with the
construction and installation of fixed assets, the expansion of fixed
assets, and any other project clearly discernible as a fixed asset
required for the operation or expansion of the PLANT, as specifically
approved in advance by PLANT OWNERS, PLANT OPERATOR shall receive a
Supplemental Construction Overhead Fee based on the following:
(a) 5% of those capital costs up to $100,000; plus
(b) 3% of those capital costs between $100,000 and
$1,000,000; plus
(c) 2% of those capital Costs over $1,000,000; plus
(d) out of pocket expenses.
<PAGE>
ARTICLE VII
-----------
7.01 Annual Budget by Month
----------------------
PLANT OPERATOR shall prepare and submit an Annual Budget by Month to
PLANT OWNERS for each calendar year no later than September lst prior
to the relevant calendar year. In addition, PLANT OPERATOR shall
prepare and provide PLANT OWNERS within 60 days after award of this
Contract a list of estimated PLANT costs for the remainder of the
calendar year.
7.02 Authority for Expenditure (AFE) and Authorized Expenditures
-----------------------------------------------------------
Before entering into any commitment or incurring any expenditure for
any single item which exceeds the current estimated cost for the item
contained in the relevant Approved Annual Budget by Month or Approved
AFE by the lesser of: (a) Ten percent (10%); or (b) $10,000, PLANT
OPERATOR shall prepare and submit an AFE to the PLANT OWNERS for
approval of such expenditure. Upon approval of the AFE by PLANT OWNERS,
PLANT OPERATOR shall be authorized to incur the expenditure on behalf
of the PLANT OWNERS.
ARTICLE VIII
------------
ACCOUNTING PROCEDURES
---------------------
8.01 Plant Account
-------------
PLANT OPERATOR shall set up and maintain a separate Plant Account on
behalf of the PLANT OWNERS. PLANT OPERATOR shall credit the Plant
Account with any income, gain, or profit derived from PLANT operations.
All costs, expenses or other losses incurred by PLANT OPERATOR in the
construction, operation, maintenance. alteration, and enlargement of
the PLANT shall be charged to the Plant Account upon the cost and
expense basis set out in the Accounting Procedure attached hereto as
Exhibit B. The Plant Account shall also be debited by the amount of all
distributions made to the PLANT OWNERS. PLANT OPERATOR shall pay and
discharge all expenses incurred for the Plant Account as authorized by
the PLANT OWNERS as described under Article VII. The Plant Account and
all statements thereof furnished to PLANT OWNERS shall be divided into
Capital Costs and Operating Costs.
<PAGE>
8.02 Operating Fund
--------------
PLANT OPERATOR shall, to the extent possible, pay operating expenses
out of available operating revenues. PLANT OPERATOR may keep on hand an
operating fund in an amount equal to two (2) month's anticipated
operating costs as set forth in an Approved Annual Budget By Month.
When required in the reasonable judgement of PLANT OPERATOR, PLANT
OWNERS will advance, for an operating fund, their respective shares of
an amount not to exceed two (2) month's anticipated operating costs as
set forth in an Approved Annual Budget By Month. After the
establishment of the operating fund, PLANT OWNERS shall remit their
share of actual costs and expenses in accordance with each Month's
billing, thus maintaining the operating fund intact. Should it be
determined by the PLANT OPERATOR that the Plant Account contains excess
funds, a distribution will be made to PLANT OWNERS proportionate to
their PLANT ownership percentage.
8.03 Funds
-----
Funds received by PLANT OPERATOR under this Agreement shall be
segregated by PLANT OPERATOR and not commingled with its own funds.
PLANT OWNERS will be notified of the institution, location and account
number.
8.04 Allocation of Income, Revenues, Expenses & Losses
-------------------------------------------------
All revenues, expenses, gains and losses shall be allocated as to each
PLANT OWNER in accordance with its respective Plant Participation
percentage during the month in which they accrue.
8.05 Conflicting Provisions
----------------------
In the event of any conflict between the terms and provisions of the
body of this Agreement and those of said Accounting Procedure, the
terms and provisions contained in the body of this Agreement shall
prevail.
ARTICLE IX
----------
BILLINGS & PAYMENT
------------------
9.01 Billing
-------
On or before the last day of each Month, PLANT OPERATOR shall invoice
PLANT OWNERS for: (i) the Operating Overhead Fee, Authorized Expenses
(including PLANT OPERATOR'S Employee Expense and reimbursable Insurance
<PAGE>
Expense) for such Month; and (ii) the Supplemental Construction
Overhead Fee Authorized, Emergency Expenses and Legal Claims and
Settlement Expenses, if any, incurred the prior Month. Within fifteen
days following receipt of PLANT OPERATOR'S monthly invoice, PLANT
OWNERS shall remit payment therefor to PLANT OPERATOR. PLANT OWNERS
shall have the ability to dispute a cost item on their monthly invoice.
If a cost item is disputed then PLANT OPERATOR shall send sufficient
support for such item. If this is accepted by PLANT OWNER, then PLANT
OWNER shall remit payment for such item. If the support is not
acceptable to PLANT OWNER, they shall remit payment in "protest" and
await audit rights. If the cost item was made in error by PLANT
OPERATOR, then PLANT OPERATOR shall make correction to the monthly
invoice statement. Any statement, bill or payment shall be considered
final after two (2) years from the date of issuance, provided there is
no previous request by either party for correction or adjustment of
said document.
9.02 Advance Billings For Capital Items
----------------------------------
PLANT OPERATOR may require the PLANT OWNERS to advance their respective
share of capital expenses authorized by PLANT OWNERS by submitting to
PLANT OWNERS a reasonably detailed estimate of such capital expenses
for the succeeding sixty (60) day period with a request for payment in
advance. After receiving such a request, each PLANT OWNER shall, within
fifteen days, make payment of its share of such capital costs. PLANT
OPERATOR'S monthly billings to PLANT OWNERS shall reflect credit for
any amounts advanced.
9.03 Payment
-------
PLANT OWNERS shall pay all such bills within fifteen (15) days after
receipt thereof. If a PLANT OWNER fails to pay a bill within the said
fifteen (15) day period, the unpaid amount shall, upon notice, bear
interest at the rate of twelve percent (12%) per annum from the end of
said period until paid. PLANT OPERATOR shall have the right at any time
after such default, to enforce the lien hereinafter provided upon the
interests of any such defaulting PLANT OWNER.
9.04 Lien and Enforcement
--------------------
If a PLANT OWNER fails to pay when due its share of the costs and
expenses as provided in this Agreement, then upon notice in writing, a
lien shall exist in favor of PLANT OPERATOR for the benefit of the
other PLANT OWNER(S), upon the defaulting PLANT OWNER'S interest in the
PLANT and in any unsold Plant Products and in the proceeds of the sale
of such Plant Products. PLANT OPERATOR may, while such Lien exists,
sell and
<PAGE>
deliver the defaulting PLANT OWNER'S share of Plant Products and may
collect and receive the proceeds of any sale thereof made by or for the
defaulting PLANT OWNER. PLANT OPERATOR shall apply all sums so
collected against the defaulting PLANT OWNER'S unpaid share of costs
and expenses of operations hereunder. The rights granted to PLANT
OPERATOR in this section shall not be construed as exclusive remedies,
but shall be in addition to all rights, privileges and remedies
afforded PLANT OPERATOR by provisions of this Agreement and by law.
Service of a counterpart of this Agreement which has been executed by
or on behalf of the defaulting PLANT OWNER or a true copy thereof, upon
any purchaser of any part of a defaulting PLANT OWNER'S share of Plant
Products, shall constitute written authorization by the defaulting
PLANT OWNER for the purchase to pay the proceeds from such sale to
PLANT OPERATOR during the period of default. Books and records kept by
PLANT OPERATOR with respect to operations hereunder shall constitute
conclusive proof of the existence or nonexistence of any default,
subject however, to all rights of inspection, verification and audit
provided in this Agreement.
ARTICLE X
---------
PLANT PRODUCTS
--------------
10.01 PLANT OWNER'S Share of Plant Products
-------------------------------------
PLANT OWNERS may take in kind and/or market individually Plant Products
that are attributable to each PLANT OWNER. PLANT OPERATOR shall
construct and operate for the Plant Account loading and shipping
facilities and storage facilities adequate to handle five (5) days
production. Each PLANT OWNER shall have the use of such storage,
shipping and loading facilities in proportion to its Plant
Participation Percentage; provided however, that any additional
expenses incidental to taking Plant Products in kind shall be borne by
the PLANT OWNER(S) taking in kind. As defined for this purpose
"Additional Expenses" are overtime compensation for employees, any
special lab work required, any equipment costs that are required by the
trucking firm which PLANT OWNERS do not have installed, and any state
or federal taxes associated with the sale of the product.
PLANT OPERATOR SHALL IN NO WAY ALTER OR IMPAIR THE QUALITY OR
SPECIFICATIONS OF Plant Products produced from PLANT in order to
accommodate a PLANT OWNER taking plant Products in kind. Any PLANT
OWNER electing to take products in kind shall notify PLANT OPERATOR
ninety (90) days prior to commencement of taking products in kind.
<PAGE>
10.02 Losses in Handling
------------------
Each PLANT OWNER shall bear a proportionate share of any losses
actually suffered due to evaporation, flaring resulting from
emergencies, or handling of Plant Products prior to the delivery of
said Plant Products from the PLANT.
10.03 Failure to Take in Kind
-----------------------
In the event any PLANT OWNER does not desire to take in kind or
otherwise adequately provide for the disposition of its Plant Products,
the PLANT OPERATOR shall arrange for sale of such Plant Products during
such time or times in any manner PLANT OPERATOR sees fit, So long as
all of such OWNERS' Plant Products are proportionately marketed. All
contracts for sale by PLANT OPERATOR of the PLANT OWNERS' production
shall be only for such reasonable periods of time as are consistent
with the needs of the industry under the circumstances. The proceeds,
if any, received by PLANT OPERATOR from such sale of such Plant
Products shall be credited to such PLANT OWNERS.
10.04 Report of Price for Products Taken in Kind
------------------------------------------
In the event any PLANT OWNER takes its share of Plant Products in kind,
said PLANT OWNER shall report to PLANT OPERATOR the price received from
the sale of Owner's Plant products on or before the tenth (10th)
working day of the Month following the Month of production. This
paragraph 10.04 shall be applicable only when and to the extent that
PLANT OPERATOR needs this information in order to calculate the price
payable to producers supplying gas processed in the Plant. If such
report is not required, then the amount of revenues reported from such
transactions shall be determined under Exhibit E.
ARTICLE XI
----------
RIGHT TO INSPECT AND AUDIT
--------------------------
11.01 Access to Inspect Facilities & Records
--------------------------------------
PLANT OWNERS shall at all times, and from time to time, retain the
right to access and inspect the PLANT and any records which may be kept
at the PLANT. Employees of PLANT OWNERS shall observe all applicable
safety policies and regulations while at the PLANT. PLANT OWNERS shall
also have access to PLANT OPERATOR'S records, pertaining to the PLANT,
during regular business hours at PLANT OPERATOR'S Tulsa offices.
<PAGE>
11.02 Audit
-----
PLANT OWNERS shall retain the right to audit all books of account,
shipping papers and records, gauge tickets, and all other records of
whatsoever nature, pertaining to the PLANT and PLANT OPERATOR'S
operation thereof in accordance with section 2.04 of the Accounting
Procedure. The PLANT OWNER desiring to conduct the audit shall notify
PLANT OPERATOR in writing at least thirty (30) days prior to the time
of the audit.
11.03 Cost of Audit
-------------
The cost of an audit of PLANT OPERATOR'S records shall be borne by the
PLANT OWNERS who elect to participate in the audit.
ARTICLE XII
-----------
TRANSFER OF INTEREST
--------------------
12.01 Transfer of Ownership in the Plant
----------------------------------
All sales, transfers, assignments, mortgages or other conveyances of
the interest of any PLANT OWNER in the PLANT shall be made expressly
subject to this Agreement and shall not be binding on any of the PLANT
OWNERS other than the PLANT OWNER selling, transferring, assigning,
mortgaging, or conveying the same, unless and until a copy of the
instrument evidencing such change in ownership has been delivered to
PLANT OPERATOR, together with a copy of a ratification agreement, in
the form acceptable to PLANT OPERATOR, properly executed and
acknowledged by the acquiring party. Upon receipt of said copy and said
ratification agreement, PLANT OPERATOR shall notify PLANT OWNERS of the
change in ownership.
All such sales, transfers, assignments or conveyances of an interest in
the PLANT, whether expressly so stated or not, shall operate to impose
upon the party or parties acquiring such interest, its or their
proportionate part of all costs and liabilities and Other obligations
chargeable hereunder to such interest and shall likewise operate to
give and grant to the party or parties acquiring such interest, its or
their proportionate part of all benefits accruing hereunder.
<PAGE>
12.02 Assignment by PLANT OPERATOR
----------------------------
The rights under this Agreement may not be assigned by PLANT OPERATOR
without the prior written consent of PLANT OWNERS owning a majority of
the Plant Participation Percentage.
ARTICLE XIII
------------
LAWS, REGULATIONS, FORCE MAJEURE, AND EMERGENCY
-----------------------------------------------
13.01 Laws and Regulations
--------------------
This Agreement and all operations hereunder shall be subject to the
valid and applicable federal and state laws and the valid and
applicable orders, laws, rules and regulations of any state or federal
authority having jurisdiction, but nothing contained herein shall be
construed as a waiver of any right to question or contest any such
order, law, rule or regulation in any forum having jurisdiction in the
premises.
13.02 Force Majeure
-------------
In the event either party hereto is rendered unable, wholly or in part,
by force majeure to carry out its obligations under this Agreement,
other than the payment of monies due, it is agreed that on such party
giving notice and full particulars of such force majeure, in writing,
or by telephone (promptly confirmed in writing) to the other party as
soon as possible after the occurrence of the cause relied on, then the
obligation of the party giving such notice, so far as they are affected
by such force majeure, shall be suspended during the continuance of any
inability so caused, but for no longer period, and such cause shall as
far as possible be remedied with all reasonable dispatch.
Notwithstanding an event of force majeure, PLANT OPERATOR shall take
all necessary action to reduce loss or damage to persons or property
which may occur from such event to the extent that it is reasonable to
do so.
The term "force majeure" as employed herein shall mean acts of God,
strikes, lockouts or other industrial disturbances, acts of the public
enemy, wars, blockades, insurrections, riots, epidemics, landslides,
lightning, earthquakes, fires, storms, floods, washouts, arrests and
restraints of government and people, civil disturbances, explosions, or
any other causes, whether of the kinds herein enumerated or otherwise,
not within the control of the party claiming suspension and which, by
the exercise of due diligence, such party is unable to prevent or
<PAGE>
overcome. It is understood and agreed that the settlement of strikes
and lockouts shall be entirely within the discretion of the party
having the difficulty, and the above requirement that any force majeure
shall be remedied with all reasonable dispatch shall not require the
settlement of strikes or lockouts by acceding to the demands of any
opposing party when such course in inadvisable in the discretion of the
party having the difficulty.
13.03 Emergency
---------
In case of blowout, explosion, fire, flood or other sudden emergency,
PLANT OPERATOR shall take such steps and incur such expenses as, in its
opinion, are required to deal with the emergency and to safeguard life
and property or prevent pollution or other environmental damage;
provided that PLANT OPERATOR shall, as promptly as possible, report the
emergency to the PLANT OWNERS or their representatives and shall
endeavor to obtain from said PLANT OWNERS or their representatives any
sanction which might otherwise have been required.
ARTICLE XIV
-----------
INSURANCE & BOND TO BE CARRIED BY PLANT OPERATOR
------------------------------------------------
14.01 Insurance to be Carried by PLANT OPERATOR
-----------------------------------------
At all times during the term of this Agreement, PLANT OPERATOR shall
comply with the Workers, Compensation laws of the States of
Pennsylvania and Oklahoma and any other state wherein PLANT OPERATOR'S
employees may work. PLANT OPERATOR shall require all subcontractors,
engaged in work at or for the benefit of the PLANT, to comply with the
Workers' Compensation Laws of the State of Pennsylvania, the state in
which the subcontractors are domiciled and any other state wherein
subcontractor's employees may work. PLANT OPERATOR shall purchase,
provide and maintain at all times during the term of this agreement,
for the benefit of the PLANT OWNERS, the insurance coverage set forth
below.
<PAGE>
(a) Workers, Compensation Insurance and Occupational Disease Insurance in
full compliance with all applicable state and federal laws and
regulations. Workers' Compensation Insurance shall contain a Borrowed
Servants Endorsement and a waiver of subrogation;
(b) Employer's Liability Insurance with the limit of $500,000 per accident
covering injury or death to any employee who may be outside the scope
of the Workers' Compensation statute of the state in which the work is
performed;
(c) Comprehensive General Liability Insurance, including contractor's
contingent and contractual liability coverage as respects any contract
into which Plant Operator may enter under the terms of this Agreement,
with limits of $1,000,000 per occurrence for Bodily Injury and Property
Damage, combined single limit coverage including the following coverage
and extensions: (1) Contractual Bodily Injury and Property Damage
Liability covering liability assumed under this Agreement; (2)
Independent Contractor's Contingent Coverage; (3) Premises and
Operations Coverage; (4) Products and Completed Operations Coverage;
and (5) Explosion, Collapse and Underground Property Damage Liability.
(d) Automobile Liability Insurance covering owned, non-owned, and hired
automotive equipment with limits for Bodily Injury and Property Damage
of $500,000 per occurrence, combined single limit coverage.
(e) Umbrella Liability Insurance with combined single limit of $5,000,000
per occurrence in excess of (b), (c), and (d) above of $5,000,000 per
occurrence with a $25,000 per occurrence deductible.
(f) Commercial Product Damage and Business Interruption Insurance with
$10,000 deductible.
(g) Boiler and Machinery and Business Interruption Insurance with $5,000
deductible.
All such insurance (i) shall be carried by an acceptable company or
companies; (ii) shall be maintained in full force and effect during the term of
this Agreement (iii) shall name PLANT OWNERS as additional insureds; and (iv)
shall not be cancelled, altered or amended without thirty (30) days prior
written notice to PLANT OWNERS as a additional insureds with respect to
operation of the PLANT. Upon request of any PLANT OWNER, PLANT OPERATOR shall
provide PLANT OWNERS a Certificate of Insurance evidencing the coverage set
forth in this Agreement, naming the above described parties as insured parties.
<PAGE>
ARTICLE XV
----------
IN GENERAL
----------
15.01 Term
----
This Agreement shall continue in force from the effective date
specified above, for so long as the operation of the PLANT is desirable
in the opinion of the PLANT OWNERS. When the operation of the PLANT -is
determined to be undesirable by PLANT OWNERS. PLANT OPERATOR shall shut
down the operation of the PLANT and shall either sell the PLANT intact
to the highest and best bidder or shall sell it in parts under a
salvage, operation, whichever appears to the PLANT OWNERS to be the
most profitable. PLANT OPERATOR shall distribute the proceeds of such
sale to PLANT OWNERS in the proportions of their respective interests
in the PLANT at that time; provided, that if any PLANT OWNER or PLANT
OWNERS do not desire to shut down the Plant and desire to purchase the
PLANT intact and take over the operation of it, they shall so notify
all PLANT OWNERS in writing, and shall submit a cash bid for the value
of the PLANT. If said bid is acceptable to the other PLANT OWNERS
desiring to abandon the PLANT, then the PLANT shall be sold intact to
said purchasing PLANT OWNER, and said PLANT OWNER shall have the right
thereafter to own and operate the Plant. However, if said bid is not
acceptable to the other PLANT OWNERS, then PLANT OPERATOR shall proceed
to sell the PLANT in the manner provided above. However, each PLANT
OWNER shall be given the Right of First Refusal independently on all
bids received on the sale of the assets. "Right of First Refusal" as
stated is intended to mean the right to match the highest offer
received for the PLANT or equipment sold separately.
15.02 Relationship of the Parties
---------------------------
It is the intent of the parties that PLANT OPERATOR shall be an
independent contractor in its activities as operator.
(a) The duties, obligations, and liabilities of the PLANT OWNERS
are intended to be several and not joint or collective, and
nothing herein contained or contained in any agreement made
pursuant hereto shall ever by construed to create an
association, or any kind of partnership, or partnership duty,
obligation, or liability with regard to any one or more of the
PLANT OWNERS. Each PLANT OWNER hereto shall be individually
responsible for only its proportionate share of the cost and
liabilities as herein stipulated.
<PAGE>
(b) Whenever in this Agreement reference is made to Operations for
the Plant Account, or whenever similar language is used, PLANT
OWNERS use such language merely as a convenient method of
referring to the accounting necessary between them and no such
phraseology shall be construed as creating any joint liability
upon the part of the PLANT OWNERS for any obligation incurred
under this Agreement; or as setting apart of creating any fund
or jointly-owned property for the satisfaction of any
obligation; or as creating a common fund for any other
purpose.
15.03 Settlement of Claims
--------------------
PLANT OPERATOR shall have the authority to settle and discharge any
claim, demand or lawsuit resulting from or arising from operations
hereunder, provided the full settlement for such claim, demand or
lawsuit does not exceed $5,000.00. PLANT OPERATOR shall notify PLANT
OWNERS immediately of any claim, demand or lawsuit which (i) PLANT
OPERATOR is unwilling or deems inadvisable co settle; or (ii) the
amount required for full settlement exceeds the above-specified amount.
PLANT OPERATOR shall notify PLANT OWNERS of such fact and the PLANT
OWNERS shall determine how to further handle the claim, demand or suit
with the costs and expense thereof being charged to the Plant Account
as provided in Exhibit B hereof. If a claim, demand or suit is made
against a PLANT OWNER or if a PLANT OWNER is sued on account of any
matter arising from PLANT operations, the PLANT OWNERS shall
immediately notify the PLANT OPERATOR and the claim, demand or suit
shall be treated as any other subject matter of this Agreement.
15.04 Reports
-------
On or before the 20th day of each Month, PLANT OPERATOR shall provide
to the PLANT OWNERS a report of operations during the preceding Month
and a monthly statement showing the volume of Gas delivered into the
PLANT, the volume of each kind of Plant Product extracted at the PLANT,
the volume of each kind of Plant Product shipped, delivered and sold
from the PLANT, and other operating highlights.
<PAGE>
15.05 Taxes
-----
The PLANT OWNERS agree that this Agreement shall constitute a
partnership under the Internal Revenue Code. The PLANT OWNERS agree to
make such modifications and amendments to this Agreement as are
necessary to maintain such tax status.
15.06 Notices
-------
Notices and statements to be given hereunder shall be deemed
sufficiently given and served if deposited in the United States mail,
postage prepaid and addressed to the respective parties or their
designee at the address set forth on Exhibit A hereto or to such other
address as they hereafter designate in writing.
<PAGE>
15.07 Governing Law
-------------
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE LAWS OF THE STATE OF OKLAHOMA AND ALL OBLIGATIONS OF THE PARTIES
CREATED HEREUNDER ARE PERFORMED IN TULSA, COUNTY, OKLAHOMA.
15.08 Waiver
------
Failure or delay by either party in exercising any right or power under
this Agreement shall not operate as a waiver of that right or power.
Despite the invalidity or enforceability of any provision of this
Agreement, each other provision of this Agreement shall be severable
and enforceable to the extent permitted by law.
15.09 Inuring
-------
This Agreement is the entire Agreement between the parties as to its
subject matter, and there are no other contracts, oral or written, as
to that subject matter, express or implied. This Agreement may be
modified only in writing signed by all parties. This Agreement shall
inure to the benefit of and be binding upon the PLANT OPERATOR, PLANT
OWNERS and their respective successors and assigns.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year hereinabove first written.
PLANT OPERATOR
ATTEST ELKHORN OPERATING COMPANY
By [illegible] By [illegible]
TENNECO GAS PROCESSING COMPANY
By [illegible] By /s/ Douglas N. Schantz
FIVE OAKS, INC.
By [illegible] By /s/ Thomas H. Rinehart
<PAGE>
STATE OF OKLAHOMA )
)
COUNTY OF TULSA )
BEFORE ME, the undersigned, a notary Public in and for said County and
State, on this 1st day of November, 1994, personally appeared
[illegible]________________________________ to me known to be the identical
person who subscribed the name of ELKHORN OPERATING COMPANY to the within and
foregoing instrument and duly acknowledged to me that he executed the same as
his free and voluntary act and deed of such corporation for the uses, purposes
and consideration therein expressed and set forth.
GIVEN UNDER MY HAND AND SEAL OF OFFICE the day and year last above
written.
My Commission Expires:
Jan 27, 1998 /s/ Christy Brooks
- ------------ ------------------
Notary Public
STATE OF TEXAS )
)
COUNTY OF HARRIS )
BEFORE ME, the undersigned a Notary Public in and for said County and
State, on this 1st day of November, 1994, personally appeared
/s/ Douglas N. Schantz, to me known to be the identical person who subscribed
the name of TENNECO GAS PROCESSING COMPANY to the within and foregoing
instrument and duly acknowledged to me that he executed the same as his free and
voluntary act and deed of such corporation for the uses, purposes and
consideration therein expressed and set forth.
GIVEN UNDER MY HAND AND SEAL OF OFFICE. the day and year last above
written.
My Commission Expires:
_/s/Yolanda S. Salinas /s/Yolanda S. Salinas
- ---------------------- ---------------------
Notary Public
<PAGE>
STATE OF OKLAHOMA )
)
COUNTY OF TULSA )
BEFORE ME, the undersigned, a Notary Public in and for said County And
State, on this 1st day of November, 1994, personally appeared
/s/ Thomas H Rinehart, to me known to be the identical person who subscribed the
name of FIVE OAKS, INC. to the within and foregoing instrument and duly
acknowledged to me that he executed the same as his free and voluntary act and
deed of such corporation for the uses,, purposes and consideration therein
expressed and set forth.
GIVEN UNDER MY HAND AND SEAL OF OFFICE the day and year last above
written.
My Commission Expires:
1/27/98 /s/ Christy Brooks
- ------- ------------------
Notary Public
<PAGE>
EXHIBIT A
---------
Attached to and made a part of that certain Facility Construction, Ownership and
Operating Agreement dated November 1, 1994 by Elkhorn Operating Company and Five
Oaks, Inc., and Tenneco Gas Processing Company.
PLANT OWNERS PLANT PARTICIPATION PERCENTAGE
- ------------ ------------------------------
Five Oaks, Inc. .500
8801 South Yale, Suite 420
Tulsa, Oklahoma 74137
Tenneco Gas Processing Company .500
The Phoenix Tower
3200 SW Freeway, #1020
Houston, Texas 77027
<PAGE>
EXHIBIT B
---------
Attached to and made a part of that certain Facility Construction, Ownership and
Operating Agreement dated November 1, 1994 by and between Elkhorn Operating
Company and Five Oaks, Inc. and Tenneco Gas Processing Company.
ACCOUNTING PROCEDURE
--------------------
PART I
------
DEFINITIONS
-----------
1.01 Definitions
-----------
The definitions of the Agreement for Facility Construction, Ownership
and Operating Agreement dated November 1, 1994 for the Roystone Gas Processing
Plant (hereinafter called "the Agreement") are adopted for the purposes of this
Accounting Procedure. In addition, in this Accounting Procedure, unless the
context otherwise requires:
(a) "Plant Account" means for the benefit and risk and at the
expense of the PLANT OWNERS.
(b) "Plant Operation" means all operations for the Plant Account.
(c) "Joint Property" means the Plant covered by the Agreement to
which this Accounting Procedure is attached.
(d) "Material" means the equipment, machinery and supplies
acquired for the Plant Account, and classified as follows:
(i) Condition "A" means that which is new;
(ii) Condition "B" means that which has been used but is
sound and is suitable for its original function
without reconditioning;
(iii) Condition "C" means that which has been used and
would be suitable for its original function after
reconditioning or that which cannot be reconditioned
for, but has a limited service in its original
function;
<PAGE>
(iv) Condition "D" means that which is not suitable for
its original function but is usable for another
function;
(v) Condition "E" means that which is junk.
(e) "New Price" means the cost of Condition "A" material at the
nearest reputable supply store where such material is
available or at the carrier receiving point to which such
material could be delivered, whichever is the closer to the
Joint Property. Tubular goods, 2 inches in diameter and over,
shall be priced on a price per unit paid basis. Any cash
discounts that may be allowed by a dealer shall not be
deducted in determining the New Price.
(f) "First Level Supervisors" shall mean those employees whose
primary function in the construction, maintenance, and
operation of the PLANT is the direct supervision of other
employees and/or contract labor directly employed at the PLANT
in a field operating capacity.
(g) "Technical Employees" shall mean those employees having
special and specific engineering, geological or other
professional skills, and whose primary function in the
construction, maintenance. and operation of the PLANT is
handling of specific operating conditions and problems for the
benefit of the PLANT.
PART II
-------
RECORDS, BILLINGS AND RELATED MATTERS
-------------------------------------
2.01 Monthly Billing
---------------
On or before the last day of each Month, PLANT OPERATOR shall provide
each PLANT OWNER with a statement of each PLANT OWNER'S proportionate
share of costs and expenditures incurred during the preceding calendar
Month, less proper credits for each PLANT OWNER'S share of revenues
received from operation of the PLANT for that period. Such statement
shall summarize gross revenues earned and costs and expenses incurred,
and shall be accompanied by appropriate supporting documents. Amounts
distributable under the statement shall accompany such statements or
will be paid upon receipt of proceeds from the sale of PLANT Product if
received subsequent to last day of Month, if in excess of amounts owing
thereunder, or shall be applied against amounts owing thereunder if
less than such amounts.
<PAGE>
2.02 Payments
--------
Bills shall be paid in accordance with Article 9.03 of the Agreement.
2.03 Advances
--------
The PLANT OWNERS shall make advances in accordance with Article 8.02 of
the Agreement.
2.04 Right to Protest and Audits
---------------------------
PLANT OWNERS may protest or question the correctness of a bill,
(notwithstanding the payment thereof) at any time prior to the end of
the audit period herein below set forth. All PLANT OPERATOR'S books,
accounts and records relating to PLANT operations for a Contract Year
may be audited during the twenty-four (24) Months following the end of
each Contract Year by any PLANT OWNERS, who shall give reasonable
written notice to PLANT OPERATOR that they intend to audit. PLANT
OWNERS who participate in the audit shall bear the cost thereof in a
proportionate amount based on their respective ownership percentage.
The audit report shall be presented to PLANT OPERATOR not later than
two (2) Months following said twenty-four (24) Month period. Each audit
shall be conducted so as to cause a minimum of inconvenience to PLANT
OPERATOR. Any claims of discrepancy by PLANT OWNERS shall be made
within the twenty-six (26) Month period next following the end of such
Contract Year. Failure on the part of PLANT OWNERS to make claim on
PLANT OPERATOR for adjustment within such period shall establish the
correctness of PLANT OPERATOR'S books, accounts and records relating to
PLANT operations and preclude the filing of exceptions thereto or
making claims for adjustments thereof. The audit shall be binding only
on the parties that participate in the audit.
PART III
--------
CHARGES
-------
General: The following is a list of items which PLANT OPERATOR
-------
may charge the PLANT OWNERS for as long as it is part of the
current approved budget:
3.01 Rentals
-------
PLANT OPERATOR may charge the cost of any rentals required to keep the
Joint Property in good standing.
<PAGE>
3.02 Labor Costs
-----------
PLANT OPERATOR may charge:
(a) (1) Salaries and wages of PLANT OPERATOR'S field employees
directly employed at the PLANT in the construction, operation
and maintenance of the PLANT.
(2) Salaries and wages of employees of PLANT OPERATOR'S Affiliates
directly employed at the PLANT and engaged by Operator for the
benefit of the Plant Account in the constructions operation
and maintenance of the PLANT.
(3) Salaries of first level Supervisors employed by PLANT OPERATOR
or by PLANT OPERATOR'S Affiliates at the PLANT for the benefit
of Plant Account in the construction, operation and
maintenance of the PLANT.
(4) Salaries and wages of Technical Employees of PLANT OPERATOR or
PLANT OPERATOR'S Affiliates directly employed at the PLANT in
the construction, operation and maintenance of the PLANT.
(5) Salaries and wages of employees of PLANT OPERATOR or PLANT
OPERATOR'S Affiliates for process engineering related to the
construction, operation and maintenance of the PLANT and
performed solely for the benefit of the PLANT.
(6) Salaries and wages of other Technical Employees of PLANT
OPERATOR or PLANT OPERATOR'S Affiliates either temporarily or
permanently assigned to and directly employed in the
construction, operation, and maintenance of the PLANT as
approved by PLANT OWNERS.
(7) A pro rata portion of the salaries, wages, and expenses of
representatives of the PLANT OPERATOR inspecting the design
and and construction of PLANT. Such charges shall be included
in and shown on all AFE's for such PLANT.
(b) Cost of holiday, vacation, sickness and disability insurance
benefits, and other customer allowances paid to employees
whose salaries and wages are chargeable to the Plant Account
under subclause 3.02(a). Such costs under this subclause
3.02(b) may be charged on a "when and as paid basis" or by
"percentage assessment" on the amount of salaries and wages
chargeable to the Plant Account under subclause 3.02(a). If
percentage assessment is used, the rate shall be based on the
PLANT OPERATOR'S actual cost experience.
(c) Expenditures or contributions made pursuant to assessments
imposed by governmental authority which are applicable to
PLANT OPERATOR'S costs and chargeable to the Plant Account
under subclauses 3.02(a) & (b).
<PAGE>
3.03 Employee Benefits
-----------------
PLANT OPERATOR may charge to the Plant Account PLANT OPERATOR'S current
actual costs of established plans for employee's group life insurance,
hospitalization, pension, retirement, stock purchase, thrift, bonus,
and other benefit plans of a like nature applicable to PLANT OPERATOR'S
labor costs chargeable to the Plant Account under subclause 3.02(a) and
3.02(b), not to exceed the percentage most recently recommended by the
Council of Petroleum Accountants Societies for the billing period.
3.04 Employee Expenses and Transportation
------------------------------------
PLANT OPERATOR may charge all reasonable and prudent expenses of
employees chargeable to the Plant Account under Article 3.02 including
the cost of transporting employees while engaged in the operation and
maintenance of the PLANT.
3.05 Material
--------
PLANT OPERATOR may charge cost, as provided in Part IV, of Material
purchased or furnished by PLANT OPERATOR and of transporting such
material.
3.06 Outside Services
----------------
PLANT OPERATOR may charge the cost of contract services and utilities
obtained from other persons and necessary for the operation and
maintenance of the PLANT, except that the cost of services obtained
from professional consultants shall not be charged without the approval
of PLANT OWNERS. Any charges for any services under this Article 3.06
shall be subject to the limitations of Article 7.02 of the Agreement.
<PAGE>
3.07 Repairs or Replacements
-----------------------
Subject to the limitations as provided in the Agreement, PLANT OPERATOR
may charge to the Plant Account the cost of replacement or repairs of
damages or losses incurred by fire, explosion, flood, storm or from any
other causes not occurring by reason of PLANT OPERATOR'S gross
negligence. PLANT OPERATOR shall, as soon as possible, but no later
than ten (10) working days, furnish the PLANT OWNERS with written
notice of any such damages or losses.
3.08 Litigation, Judgments and Claims
--------------------------------
Subject to the limitations as provided in Article 15.03 of the
Agreement, PLANT OPERATOR may charge all reasonable costs and expenses
of litigation or legal services otherwise necessary or expedient for
the protection of the interests of each party to the Agreement,
including attorney's fees and expenses approved by the PLANT OWNERS,
together with all judgments obtained against the PLANT OWNERS or the
subject matter of the Agreement and actual expenses incurred by a party
in securing evidence for the purpose of defending any action or claim
prosecuted or made against PLANT OWNERS or the subject matter of the
Agreement.
3.09 Taxes
-----
PLANT OPERATOR may charge the amount of taxes which it has properly
paid for the Plant Account.
3.10 Insurance
---------
PLANT OPERATOR may charge the cost of insurance premiums for
insurance required to be carried by PLANT OPERATOR for the plant. Any
claim settled by the insurance carriers arising from insurance so
carried, shall be credited to the Plant Account.
3.11 Plant Office Expense
--------------------
PLANT OPERATOR may charge the cost incurred in maintaining and
operating the Plant Office in accordance with any Approved Annual
Budget by Month.
3.12 PLANT OPERATOR'S Compensation
-----------------------------
PLANT OPERATOR shall be compensated in accordance with Article VI of
the Agreement.
<PAGE>
3.13 Warranty of Material Furnished by PLANT OPERATOR
------------------------------------------------
There shall be no obligation on the part of PLANT OPERATOR to give
warranty for the material installed or connected, other than as
otherwise provided herein. PLANT OPERATOR shall inspect all
equipment/material for workmanship and make every reasonable effort to
install equipment/material which is covered by a warranty, other than
as otherwise provided herein. In the case of defective material, the
dealer's or manufacturer's guarantee shall be for the benefit of PLANT
OWNERS. No credit entry shall be made in the accounts until adjustment
has been received from the manufacturer or its agent.
3.14 Other Expenditures
------------------
Subject to the limitations as provided in the Agreement, PLANT OPERATOR
may charge to the Plant Account any cost that is incurred by PLANT
OPERATOR and which are of direct benefit to the PLANT for the
reasonable and necessary operations and for which provision is not made
elsewhere in this Accounting Procedure.
PART IV
-------
ACQUISITION OF AND CHARGES FOR MATERIAL
---------------------------------------
4.01 General
-------
PLANT OPERATOR is responsible for Joint Material and shall make proper
and timely charges and credits for all Material movements affecting the
PLANT. PLANT OPERATOR shall provide all Material for use in the
Operating Area; however, at PLANT OPERATOR'S option, such Material may
be supplied by the PLANT OWNER'S. PLANT OPERATOR shall make timely
disposition of idle and/or surplus Material, such disposal being made
either through sale to PLANT OPERATOR or PLANT OWNERS, division in
kind, or sale to outsiders provided, however, no such disposition shall
be affected without notice in advance to all PLANT OWNERS. PLANT
OPERATOR may purchase, but shall be under no obligation to purchase the
interest of PLANT OWNERS in surplus condition A or B Material.
4.02 Acquisition
-----------
PLANT OPERATOR shall, whenever practicable:
<PAGE>
(a) purchase material for delivery directly co the PLANT; and
(b) purchase for or transfer to the PLANT only such material as is
required for immediate use or necessary spare parts.
4.03 Charges for Purchases
---------------------
Material purchased shall be charged at the price paid by PLANT
OPERATOR. Discount's actually received in respect thereof shall be for
the Joint Account. In case of Material found to be defective or
returned to, vendor for any other reasons, credit shall be passed the
Joint Account when adjustment has been received by the PLANT OPERATOR.
4.04 Charges for Material Furnished by PLANT OPERATOR
------------------------------------------------
When it is not practicable to purchase material for delivery directly
to the PLANT, material may be furnished by PLANT OPERATOR from its
stocks, in which event it shall be charged as follows:
(a) New Material Condition "A" at a New Price;
(b) Used Material Condition "B" at 75 percent of New Price;
(c) Used material Condition "C" at 50 percent of New Price;
(d) Used Material Condition "D" at a reasonable price based on the use
to which it is to be put.
Notwithstanding the material condition, PLANT OWNERS may approve a
price not in accordance with the foregoing for any item. PLANT OWNERS
shall have the right to Inspect all material prior to installation.
4.05 PLANT OPERATOR'S Exclusively Owned Facilities
---------------------------------------------
(a) PLANT OPERATOR shall charge the Plant Account for use of land,
equipment, and facilities owned or leased by the PLANT
OPERATOR or PLANT OPERATOR'S Affiliates at rates commensurate
with costs of ownership and operations. Such rates shall
include costs of maintenance, repairs, other operating
expenses, insurance, taxes, depreciation, and interest on
gross investment less accumulated depreciation not to exceed
twelve percent (12%) per annum. Such rates shall not exceed
average commercial rates prevailing in the immediate area of
the PLANT.
<PAGE>
(b) In lieu of races approved in Subclause 4.05(a), PLANT OPERATOR
may charge for use of its own facilities and equipment, except
automotive equipment, at the commercial rates prevailing in
the immediate area. For automotive equipment, PLANT OPERATOR
may elect to use rates published by the Petroleum Motor
Transport Association or other source recommended by COPAS.
(c) When requested to do so, PLANT OPERATOR shall inform PLANT
OWNERS in advance of the rates to be charged.
(d) PLANT OPERATOR shall furnish PLANT OWNERS supporting
documentation for rates charged.
4.06 Transportation of Material
--------------------------
PLANT OPERATOR may, for transporting material, charge the actual cost
of transportation to or from the PLANT or the estimated cost of
transporting such material from the closer of the nearest reputable
supply store or railway receiving point, whichever is lower; but no
charge shall be made for transporting material from the PLANT to other
properties belonging to PLANT OPERATOR without the approval of PLANT
OWNERS.
<PAGE>
EXHIBIT C
---------
Attached to and made a part of that certain Facility Construction,
Ownership and Operating Agreement dated November 1, 1994 by and between
Elkhorn Operating Company and Five Oaks, Inc. and Tenneco Gas
Processing Company.
PROCESSING AGREEMENT
--------------------
<PAGE>
EXHIBIT D
---------
Attached to and made a part of chat certain Facility Construction,
Ownership and Operating Agreement dated November 1, 1994 by and between
Elkhorn Operating Company and Five Oaks, Inc. and Tenneco Gas
Processing Company.
ANNUAL BUDGET FOR INITIAL CONTRACT YEAR
---------------------------------------
<PAGE>
EXHIBIT E
To that certain Construction, Ownership and Operating Agreement, hereinafter
referred to as the "Agreement", for the Roystone Gas Processing Plant, dated
November 1, 1994, between Elkhorn operating Company, Tenneco Gas Processing
Company, and Five Oaks, Inc.
TAX PARTNERSHIP
ARTICLE I: GENERAL PROVISIONS
1.1 Terms. The terms used herein which are defined in the Agreement
-----
shall have the meanings specified in the Agreement unless specifically otherwise
defined herein. As used herein,(a) the term "Code" means the Internal Revenue
Code of 1986, as amended, and any successor statute, (b) the term "Law" means
the law of any political subdivision other than the code, (c) the term "Taxes"
means any tax or other governmental fee or charge of any nature, however
denominated, imposed by any country or political subdivision thereof, together
with any interest, additions or penalties with respect thereto and any interest
in respect of such additions or penalties, and (d) the term "Tax Partnership"
refers to the partnership for income tax purposes created by the Agreement.
1.2 Intent. The Plant Owners intend and agree to create a partnership
------
for federal, state and local income tax purposes, and, if applicable, for the
purposes of other Taxes computed with respect to income. No Plant Owner shall
make an election to be, or have the arrangement evidenced hereby, excluded from
the application of any provisions of Subchapter K of the Code, or any equivalent
state or other income tax provision.
1.3 Operations. This Exhibit applies only to operations undertaken
----------
pursuant to the Agreement to which this Exhibit is attached and to operations
undertaken in accordance with any amendments thereof. It shall not apply to any
other property or interest of the Plant Owners outside the Agreement.
1.4 Superseding Provision. This Exhibit shall supersede any and all
----------------------
inconsistent terms or provisions of the Agreement and any exhibits thereto.
ARTICLE II: Capital Accounts
2.1 Capital Accounts. Capital accounts shall be established and
-----------------
maintained for each Plant Owner. The capital account of each Plant Owner shall
be (a) credited with the amount of cash and the fair market value of property
contributed by him to the Tax Partnership, as determined by the Plant Owners in
writing, (net of liabilities to which such contributed property is subject), and
with any income and gain allocated to such Plant Owner pursuant to this Exhibit,
(b) charged with the amount of cash and the fair market value of property
distributed to him by the
<PAGE>
Tax Partnership, as determined herein, (net of liabilities assumed by such Plant
Owner and liabilities to which such distributed property is subject), and with
any losses and deductions (or items thereof) allocated to such Plant Owner
pursuant to this Exhibit, and (c) otherwise kept in accordance with Treasury
Regulation Section 1.704-1(b).
2.2 Deemed Sale on Property Distributions. Property distributed by the
-------------------------------------
Tax Partnership (whether in liquidation or otherwise) shall be deemed to have
been sold upon distribution at its fair market value, determined by daily market
prices for Plant Products and independent appraisal for other assets, and the
unrealized gain or loss from such deemed sale shall be allocated pursuant to
Article III and charged or credited to the Plant Owners capital accounts.
2.3 Current Cash Distributions. The Tax Partnership shall keep records
--------------------------
recording the source of cash generated by the Plant Ownership, allocable to each
Plant Owner, and shall distribute such cash in accordance with the Plant Owners'
Plant Participation Percentage.
ARTICLE III: Tax Allocations
3.1 General. Except as otherwise provided by Sections 3.2 and 3.3, all
-------
items of income, gain, deduction, loss and credit shall be allocated to the
Plant Owners in proportion to their Plant Participation Percentage.
3.2 Take-in-Kind. Where any Plant Owner has retained the right to take
------------
his share of Plant Products in-kind and during the taxable year such Plant Owner
actually exercises such right any revenue associated with such Plant Products
from the sale of such products by such Plant Owner shall be accounted for
separately by that Plant Owner.
3.3 Contributed Property. The provisions of Section 704 (c) of the Code
--------------------
shall apply to contributed property for the purpose of allocating gain or loss
and deductions to the extent required by tax regulations and to the extent of
the methodologies adopted by the Plant Owners for complying with such rules.
ARTICLE IV: Partnership Tax Accounting
4.1 Method. The Tax Partnership shall keep its accounts using the
------
accrual method of accounting.
4.2 Fiscal Year. The fiscal year of the Tax Partnership shall be the
-----------
calendar year.
4.3 Tax Returns. The Plant Operator shall prepare the federal, state
-----------
and local partnership income tax returns and other returns and reports necessary
for the operations reportable under the Tax Partnership. The Plant Operator
agrees to use his best efforts in the preparation of such returns, but in doing
so shall incur no liability to any Plant Owner with regard to such returns, The
Plant Operator in addition to its own tax or accounting staff may employ outside
consultants
<PAGE>
to complete such returns, all costs of which shall be chargeable to the Plant
Owners in Proportion to their Plant Participation Percentage. The Plant Operator
shall submit copies of such returns to the Plant Owners sufficiently in advance
of their due date, as extended, to permit review, approval and timely filing.
4.4 Tax Elections. Unless the Plant Owners otherwise unanimously agree
-------------
in writing, the Operator shall make the following elections in preparing the Tax
Partnership's returns:
(a) Compute depreciation using the method which allows the
maximum accelerated deduction within the shortest permissible period,
to the extent such method does not reduce percentage depletion of the
Tax Partnership, if any, under any limitation rule.
(b) Deduct currently all research and experimental
expenditures as permitted by Section 174 of the Code.
(c) Amortize start-up expenditures under Section 195 of the
Code and organization costs under Section 709 of the Code over the
shortest period allowable.
(d) Make any other election which accelerates the Tax
Partnership's deductions and, credits and decelerates the recognition
of Tax Partnership income. Where an election has contrary income or
credit and deduction effects, the Plant Operator shall choose the
election which maximizes cash flow from the Tax Partnership (using the
then existing prime rate as the discount factor).
4.5 Tax Liability. Each Plant Owner shall (a) be responsible for the
-------------
discharge of its own income taxes and taxes imposed upon Plant Products taken
in-kind or separately disposed of by such Plant Owner, and (b) shall indemnify
each other Plant Owner against and hold them harmless from any and all loss,
cost, or liability arising therefrom.
4.6 Correspondence. All correspondence relating to the preparation and
--------------
filing of the Tax Partnership's income tax returns or other tax matters shall be
sent to the Plant Owners in the manner prescribed in the agreement.
4.7 Cooperation. Each Plant Owner agrees to furnish the Plant Operator
-----------
with any information it has relating to the operations and business of the Plant
necessary to prepare such returns. Such information shall include price and sale
information for Plant Products taken in kind where product pricing information
is required to settle with producers.
ARTICLE V: Termination
5.1 Termination. The Tax Partnership shall terminate upon; (a) the
-----------
withdrawal, dissolution, bankruptcy or insolvency of any Plant Owner; (b) the
shut down, sale or abandonment of the Plant; (c) the termination of the
Agreement; (d) the unanimous consent of the Plant Owners; or (e) as provided by
Law.
<PAGE>
5.2 Procedure Upon Termination. Upon termination of the Tax
------------------------------
Partnership, the capital accounts shall be updated and the properties of the Tax
Partnership shall be deemed to have been sold at their fair market value
pursuant to Section 2.2, determined by using daily market prices for Plant
Products and in accordance with an independent appraisal for other assets, and
the unrealized gain or loss from such deemed sale shall be credited or charged
to the Plant Owners, capital accounts.
5.3 Dissolution. Upon dissolution, capital contributions shall be made
-----------
and the assets of the Tax Partnership shall be distributed in the following
order:
(a) First, liabilities of the Plant and the Tax Partnership,
other than to the Plant Owners, shall be paid.
(b) Second, liabilities of the Plant and the Tax Partnership
to the Plant Owners, shall be paid.
(c) Third, any Plant Owner with a deficit in its capital
account following such initial distribution of assets shall contribute
cash equal to such deficit to the Tax Partnership, which shall be
contributed to such Plant Owner's capital account and distributed to
Plant Owners with unpaid positive capital account balances or paid to
creditors in accordance with this Section.
(d) Finally, following the contribution under subsection (c),
property of the Tax Partnership shall be distributed pro rata to the
Plant Owners with a positive capita account balance (such pro rata
allocation being based on the ratio of each Plant Owner's positive
capital account balance to the sum of such account balances) until each
Plant Owner's capital account is repaid.
5.4 Agreement Not to Terminate. The Plant Owners agree to structure any
--------------------------
permissible sale or assignment of their interest under the Agreement so as to
avoid a termination of the Tax Partnership under Section 708 (b) (1) (B) of the
Code. If a termination is caused, the terminating Plant Owner will indemnify the
non-terminating Plant Owners and hold them harmless from any increase in taxes,
interest and penalties, recapture of deductions, decrease in credits, or any
other economic detriment caused by the termination of the Partnership. The
indemnification if any, shall be computed on a cash flow basis, using as
discount rate of 10 percent, taking into consideration the liability for tax on
any indemnification proceeds received by the non-terminating Plant Owners.
ARTICLE VI: Partnership Items and Audits
6.1 Tax Matters Partner. The Plant Owners hereto agree that Five. Oaks,
-------------------
Inc. shall act in the capacity of Tax Matters Partner. Five Oaks, Inc., as Tax
Matters Partner, agrees to use its best efforts to comply with its duties and
responsibilities as set forth in the Code and this Exhibit, but in doing so,
shall incur no liability to any other Plant Owner for its actions as Tax Matters
Partner, including, but not limited to liability for any additional taxes,
interest, or penalties owed
<PAGE>
by any Plant Owner due to adjustment of partnership items at the Tax Partnership
level.
6.2 Consistency. No Plant Owner shall knowingly treat a partnership
-----------
item on its federal income tax return in a manner inconsistent with the
treatment of such item on the Tax Partnership's federal income tax return filed
by Five Oaks, Inc. without first giving reasonable advance notice of such
intended action (including the proposed treatment of such partnership items) to
the other Plant Owners.
6.3 Communication. The Plant Owners shall furnish the Tax Matters
-------------
Partner with such information including, without limitation, information
specified in Section 6230(e) of the Code, as it may reasonably request to permit
it to provide the Internal Revenue Service with sufficient information to allow
proper notice to the Plant Owners in accordance with Section 6223 of the Code.
The Plant Owners shall also furnish to each other copies of all correspondence
with the Internal Revenue Service or the Department of the Treasury regarding
any aspect of any partnership items or the Tax Partnership's tax returns. The
Tax Matters Partner shall keep, each Plant Owner informed of all administrative
and judicial proceedings for the adjustment at the Tax Partnership level of
partnership items in accordance with Section 6223 (g) of the Code.
6.4 Extensions of Limitation Periods. The Tax Matters Partner shall not
--------------------------------
enter into any extension of the period of limitations for making assessments
with respect to partnership items, as provided under Section 6229 of the Code,
without first giving reasonable advance notice to all other Plant Owners of such
intended action and obtaining their unanimous written consent.
6.5 Settlement Negotiations
-----------------------
(a) No Plant Owner shall enter into settlement negotiations
with the Internal Revenue Service or the Department of the Treasury with respect
to the federal income tax treatment of partnership items without first giving
reasonable advance notice of such intended action (including any proposal for
settlement) to the other Plant Owners. No Plant Owners other than the Tax
Matters Partner, as provided herein, shall enter into any settlement agreement
which binds or purports to bind the Tax Partnership, or any other Plant Owner
without their written concurrence. Any Plant Owner who enters into a settlement
agreement with the Internal Revenue Service or the Department of the Treasury
with respect to any partnership items shall immediately notify the other Plant
Owners of such settlement agreement and its terms.
(b) The Tax Matters Partner shall not enter into settlement
negotiations with respect to tax treatment of partnership items without first
giving reasonable advance notice of such intended action (including any proposal
for settlement) to the other Plant Owners. The Tax Matters Partner shall not
bind any other Plant Owner to a settlement agreement without obtaining the
written concurrence of such Plant Owner who would be bound by such agreement.
6.6 Requests for Adjustments Administrative and Judicial Proceedings.
------------------------------------------------------------------
The Tax Matters Partner shall not file on behalf of the Tax Partnership and (a)
request for an administrative adjustment of any partnership item under Section
6227(b) of the Internal Revenue Code, (b) petition for readjustment of
partnership items under Section 6226(a) of the Code, or (c) petition
<PAGE>
for an adjustment with respect to partnership items under Section 6228(a) of the
Code without first giving reasonable advance notice to all other Plant Owners
and securing their written consent.
If the requisite approval for filing a petition for readjustment of
partnership items under Section 6226(a) of the Code is secured, the Tax Matters
Partner shall file the petition within 9o days after the day on which a notice
of final partnership administrative adjustment is mailed to the Tax Matters
Partner in a court of competent Jurisdiction approved in writing by the Plant
Owners.
If the requisite approval for filing a petition for an adjustment with
respect to partnership items under Section 6228(a) of the Code is secured, the
Tax Matters Partner shall file a petition within the time period specified in
Section 6228(a)(2)(A) of the Code in a court of competent jurisdiction approved
in writing by the Plant Owners.
No Partner (including the Tax Matters Partner) shall individually file
(a) a request for an administrative adjustment of partnership items under
Section 6227(a) of the Code, (b) a petition for readjustment of partnership
items under Section 6626(b) of the Code or (c) petition for an adjustment under
Section 6228 of the Code (or other sections of the Code) with respect to any
partnership item or other tax matters involving the Tax Partnership without
first giving reasonable advance notice of such intended action and the nature of
the contemplated proceeding (including the proposed treatment of the partnership
items and the proposed court, it applicable) to the other Plant Owners.
6.7 Fees and Expenses. The Tax Matters Partner shall have the right to
-----------------
engage legal counsel, certified public accountants, or others with respect to
Tax Partnership level tax audits or contests without the prior written consent
of the other Plant Owners. Any Plant Owner may engage legal counsel, certified
public accountants, or others on its own behalf and at its sole cost and
expense. Any reasonable item of expense with respect to such matters, including
but not limited to fees and expenses for legal counsel, certified public
accountants, and others which the Tax Matters Partner incurs in connection with
any Partnership level audit, assessment, litigation, or other proceeding
regarding any partnership item, shall constitute proper charges under the
Agreement and shall be borne by the Plant Owners as any other operating expense
under the Agreement.
6.8 Other Income Based Taxes. The provisions of this Article shall
-------------------------
apply for state and local income tax purposes (and for other taxes computed with
respect to income) to the extent rules similar to Code Sections 6221 through
6233 are applicable to such taxes.
6.9 Survival. The provisions of this Exhibit regarding partnership
--------
items and audits, including but not limited to the obligation to pay fees and
expense contained in Section 6.7, shall survive the termination of the
Agreement, the Tax Partnership and the termination of any Plant Owner's interest
under the Agreement or the Tax Partnership and shall remain binding on the Plant
Owners hereto for a period of time necessary to resolve with the Internal
Revenue Service or the Department of the Treasury any and all matters regarding
the federal income taxation of the Tax Partnership for the applicable tax year.
<PAGE>
6.10 Definitions. The terms used in Section 6.1 through 6.9 shall have
-----------
the meaning accorded them in Sections 6221 through 6223 of the Code.
kk2529
RATIFICATION AND JOINDER
OF
ROYSTONE GAS PROCESSING PLANT
FACILITY CONSTRUCTION, OWNERSHIP AND OPERATING AGREEMENT
AND RELATED AGREEMENTS
THIS RATIFICATION AND JOINDER OF ROYSTONE GAS PROCESSING PLANT FACILITY
CONSTRUCTION, OWNERSHIP AND OPERATING AGREEMENT (this "Ratification Agreement")
is entered into effective as of September 30, 1999 by and among Upstate Energy
Inc., a New York corporation ("Buyer"), Elkhorn Operating Company, an Oklahoma
corporation ("Operator"), and Five Oaks, Inc., an Oklahoma corporation ("Five
Oaks"); and
WHEREAS, Operator, Five Oaks and Tenneco Gas Processing Company entered
into that certain Roystone Gas Processing Plant Facility Construction, Ownership
and Operating Agreement dated effective as of November 1, 1994 (the "Operating
Agreement"); and
WHEREAS, El Paso Field Services Company, a Delaware corporation
("Seller") is the successor in interest to Tenneco Gas Processing Company; and
WHEREAS, Buyer has acquired an undivided fifty (50%) percent interest
in the Roystone Plant, as more fully described in that certain Purchase and Sale
Agreement between Seller and Buyer dated as of September 30, 1999; and
WHEREAS, Seller, Five Oaks and National Fuel Gas Supply Corporation
("National Fuel") entered into a Gas Processing Contract dated as of October 17,
1994, as amended by two letter agreements dated as of October 17, 1994, an
additional letter agreement dated July 10, 1998 and by an amendment dated August
1, 1998 (collectively, the "Gas Processing Agreement"); and
WHEREAS, Seller, Five Oaks and National Fuel entered into a Facility
Land Lease and Easement Agreement dated as of October 17, 1994, as amended on
August 1, 1998 (collectively the "Lease");
NOW, THEREFORE, for good and valuable consideration of the mutual
promises exchanged herein, Buyer hereby agrees with Operator and Five Oaks as
follows:
1. Buyer hereby ratifies, adopts and approves the terms of the
Operating Agreement, the Gas Processing Agreement as amended, and the Lease as
amended, and consents to the release of the Guarantee which was Attachment 6 to
the Gas Processing Agreement.
<PAGE>
2. Operator and Five Oaks hereby consent, for all purposes, to the
substitution of Buyer for Seller with respect to the Operating agreement, the
Gas Processing Agreement as amended, and the Lease as amended, and consent to
the release of the Guarantee which was Attachment 6 to the Gas Processing
Agreement.
IN WITNESS WHEREOF, the undersigned have executed this Ratification and
Joinder Agreement as of the date first written above.
UPSTATE ENERGY INC.
By: /s/ James A. Beck
-----------------
Name: James A. Beck
-------------
President
Title:_______________________
ELKHORN OPERATING COMPANY
By: /s/ Thomas H. Rinehart
----------------------
Name: Thomas H. Rinehart
------------------
Title: OWNER
-------------------
FIVE OAKS, INC.
By: /s/ Thomas H. Rinehart
----------------------
Name: Thomas H. Rinehart
------------------
Title: PRESIDENT
------------------
a\daj\roystone\ratification
Amended 10/8/97
Amended 3/11/98
Amended 9/20/99
BY-LAWS
OF
SENECA INDEPENDENCE PIPELINE COMPANY
ARTICLE I
OFFICES
-------
Section 1. Principal Office. The principal office of this corporation
-----------------
shall be in the City of Buffalo, State of New York.
Section 2. Other Offices. The corporation may have such other offices
-------------
and places of business, within or without the State of Delaware, as may be
determined by the Directors.
ARTICLE II
SHAREHOLDERS
------------
Section 1. Place of Meetings. Meetings of the shareholders may be held
-----------------
at such place or places, within or without the State of Delaware, as shall be
fixed by the President and stated in the notice of the meeting.
Section 2. Annual Meeting. The annual meeting of shareholders for the
--------------
election of Directors and the transaction of such other business as may properly
come before the meeting shall be held on such business day and time as the
President shall designate.
Section 3. Notice of Annual Meeting. Written notice of the annual
-------------------------
meeting shall be given to each shareholder entitled to vote, at least ten (10)
days but no more than fifty (50) days prior to the meeting.
Section 4. Special Meetings. Special meetings of the shareholders for
-----------------
any purpose or purposes may be called by the President or Board of Directors and
must be called by the President or Secretary upon receipt by either of them of
the written request of the holders of twenty-five (25) percent of the stock then
outstanding and entitled to vote.
Section 5. Notice of Special Meeting. Written notice of a special
---------------------------
meeting, stating the time, place and purpose or purposes thereof, shall be given
to each shareholder entitled to vote, at least ten (10) days but no more than
fifty (50) days prior to the meeting. The notice shall also be set forth at
whose direction it is being issued.
Section 6. Quorum. At any meeting of the shareholders, the holders of
------
record of a majority of the shares of stock then entitled to vote shall
constitute a quorum for all purposes, except as otherwise provided by law or the
Certificate of Incorporation.
Section 7. Voting. Except as may be otherwise provided by the
------
Certificate of Incorporation, at each meeting of the shareholders, every holder
of stock then entitled to vote may vote in person or by proxy and shall have one
vote for each share registered in his name.
Section 8. Adjourned Meetings. Any meeting of shareholders may be
-------------------
adjourned to a designated time and place by a vote of a majority in interest of
the shareholders present in person or by proxy and entitled to vote, even though
less than a quorum is so present. No notice of such an adjourned meeting need be
given, other than by announcement at the meeting, and any business may be
transacted which might have been transacted at the meeting as originally called.
Section 9. Action by Written Consent of Shareholders. Whenever by any
------------------------------------------
provision of statute or of the Certificate of Incorporation or of these By-Laws,
shareholders are required or permitted to take any action by vote, such action
may be taken without a meeting on written consent setting forth the action so
taken, signed by the holders of all outstanding shares entitled to vote thereon.
Section 10. Appraisal Rights. If, at any meeting, action is proposed to
----------------
be taken which would, if taken, entitle shareholders to receive payment for
shares, the notice of such meeting shall include a statement of that purpose and
to that effect.
ARTICLE III
DIRECTORS
---------
Section 1. Number. The number of Directors of the corporation shall be
------
one (1), who shall hold office for one year and/or until their successors are
elected and qualify. Directors shall be elected at the annual meetings of
shareholders. The number of Directors may be increased or decreased from time to
time by amendment to these By-Laws made by a majority of the Board of Directors
or by the shareholders. Directors need not be shareholders.
Section 2. Powers. The Board of Directors may adopt such rules and
------
regulations for the conduct of business of its meetings, the exercise of its
powers and the management of the affairs of the corporation as it may deem
proper, not inconsistent with the laws of the State of Delaware, the Certificate
of Incorporation or these By-Laws.
In addition to the powers and authorities by these By-Laws expressly
conferred upon it, the Board of Directors may exercise all such powers of the
corporation and do such lawful acts and things as are not by statute or by the
Certificate of Incorporation or by these By-Laws directed or required to be
exercised or done by the shareholders.
Section 3. Meeting, Quorum, Meeting by Telephone, Action Without
-----------------------------------------------------------
Meeting. Meetings of the Board of Directors may be held at any place, either
- -------
within or without the State of Delaware, provided a quorum be in attendance.
Except as may be otherwise provided by the Certificate of Incorporation or by
the corporate laws of the State of Delaware, a majority of the Directors in
office shall constitute a quorum at any meeting of the Board and the vote of a
majority of a quorum of Directors shall constitute the act of the Board.
The Board of Directors may hold an annual meeting, without notice,
immediately after the annual meeting of the shareholders. Regular meetings of
the Board of Directors may be held without notice at such time and at such place
as shall from time to time be determined by the Board of Directors. The Chairman
of the Board (if any) or the President or Secretary may call, and at the request
of any two Directors must call, a special meeting of the Board of Directors by
appropriate notice. Five days' notice is required when given personally or by
telegraph, cable or facsimile transmission to each Director.
Any one or more members of the Board of Directors or any Committee
thereof may participate in a meeting of such Board or any Committee by means of
a conference telephone or similar communication equipment allowing all persons
participating in the meeting to hear each other at the same time. Participation
by such means shall constitute presence in person at a meeting.
Any action required or permitted to be taken by the Board of Directors
or any Committee thereof may be taken without a meeting if all members of the
Board or the Committee consent in writing to the adoption of a resolution
authorizing the action. The resolution and the written consents thereto by the
members of the Board or Committee shall be filed with the minutes of the
proceedings of the Board or Committee.
Section 4. Resignation, Vacancies, Removal. Any Director may resign at
--------------------------------
any time by giving written notice to the President or the Secretary. Such
resignation shall take effect at the time stated therein. Except as otherwise
provided in the Certificate of Incorporation or in the following paragraph,
vacancies occurring in the membership of the Board of Directors, from whatever
cause arising, may be filled by a majority vote of the remaining Directors,
though less than a quorum.
Any one or more of the Directors may be removed for cause by action of
the Board of Directors taken by a vote of a majority of all Directors then in
office at any regular or special meeting of the Board.
Section 5. Committees. The Board of Directors, by resolution adopted by
----------
a majority of the entire Board, may designate from its members an Executive
Committee or other committee or committees, each consisting of three or more
members, and each of which shall have such powers and authority (to the extent
permitted by law) as may be provided in said resolution.
Section 6. Compensation. Directors, as such, shall not receive any
------------
stated salary for their services, but by resolution of the Board of Directors a
fixed fee and expenses of attendance, if any, may be allowed for attendance at
each regular or special meeting of the Board or of any committee of the Board,
provided that nothing herein contained shall be construed to preclude any
Director from serving the corporation in any other capacity and receiving
compensation therefor.
ARTICLE IV
OFFICERS
--------
Section 1. Executive Officers. The executive officers of the
--------------------
corporation shall be a President, one or more Vice-Presidents, a Treasurer and a
Secretary, each of whom shall be elected annually by the Directors and shall
hold office for such term as may be prescribed by the Board. All vacancies
occurring among any of the offices may be filled by the Board of Directors or,
in its discretion, the Board may leave unfilled at its pleasure any of the
foregoing offices except the offices of President, Treasurer and Secretary. Any
officer may be removed at any time with or without cause by the Board of
Directors.
Section 2. Other Officers. The Board of Directors may appoint such
---------------
other officers and agents with such powers and duties as it shall deem
necessary.
Section 3. The President. The President shall, in the absence or
--------------
non-election of a Chairman of the Board, preside at all meetings of the
shareholders and Directors and perform such other duties as from time to time
may be assigned to him by the Board of Directors. The President shall be the
Chief Executive Officer of the corporation and shall perform all of the duties
of the Chairman of the Board as well as those of President.
Section 4. The Vice-President. The Vice-President, or if there be more
------------------
than one, the Vice-Presidents (who may have such designations, if any, as the
Board of Directors may determine), in the order of their seniority or in any
other order determined by the Board shall, in the absence or disability of the
President, exercise the powers and perform the duties of the President, and each
Vice-President shall exercise such other duties as may be prescribed by the
President or the Board.
Section 5. The Treasurer. The Treasurer shall have custody of all
--------------
funds, securities and other valuable effects of the corporation; he shall
receive and give receipts and acquittances for moneys paid in on account of the
corporation; he shall deposit all moneys and other valuable effects in the name
and to the credit of the corporation in such depositories as may be designated
by the Board of Directors; he shall pay out of the funds on hand all bills,
payrolls and other just debts of the corporation, of whatever nature, upon
maturity; he shall enter regularly, in books to be kept by him for that purpose,
full and accurate accounts of all moneys received and paid out by him on account
of the corporation; and he shall perform all other duties incident to the office
of Treasurer and as may be prescribed by the Board.
Section 6. The Secretary. The Secretary shall keep the minutes of all
-------------
proceedings of the Board of Directors and of the shareholders; he shall attend
to the giving and serving of all notices to the shareholders and Directors or
other notice required by law or by these By-Laws; he shall affix the seal of the
corporation to deeds, contracts and other instruments in writing requiring a
seal, when duly signed on behalf of the corporation; he shall have charge of the
certificate books and stock books and such other books and papers as the Board
may direct; and he shall perform all other duties incident to the office of
Secretary as the Board may prescribe.
ARTICLE V
CAPITAL STOCK
-------------
Section 1. Form and Execution of Certificates. Certificates of stock
-----------------------------------
shall be in such form as required by the laws of the State of Delaware and as
shall be adopted by the Board of Directors. They shall be numbered and
registered in the order issued, shall be signed by the President or a
Vice-President and by the Secretary or the Treasurer and shall be sealed with
the corporate seal or a facsimile thereof. If such a certificate is
countersigned by a transfer agent or registered by a registrar, the signatures
of any such officers may be facsimile.
Section 2. Transfer. Transfer of shares shall be made only upon the
--------
books of the corporation by the registered holder in person or by attorney, duly
authorized, and upon surrender of the certificate or certificates for such
shares duly endorsed or accompanied by proper evidence of succession, assignment
or authority to transfer. A record shall be made of each transfer, and whenever
a transfer shall be made for collateral security, and not absolutely, it shall
be so expressed in the entry of the transfer on the record of shareholders of
the corporation.
Section 3. Lost or Destroyed Certificates. The holder of any
----------------------------------
certificate representing shares of stock of the corporation may notify the
corporation of any loss, theft or destruction thereof, and the Board of
Directors may thereupon, in its discretion, cause a new certificate for the same
number of shares, to be issued to such holder upon satisfactory proof of such
loss, theft or destruction, and the deposit of indemnity by way of bond or
otherwise, in such form and amount and with such surety or sureties as the Board
of Directors may require, to indemnify the corporation against loss or liability
by reason of the issuance of such new certificates.
Section 4. Record Date. In lieu of closing the books of the
------------
corporation, the Board of Directors may fix in advance a date, not exceeding
fifty days nor less than ten days, as the record date for the determination of
shareholders entitled to receive notice of, or to vote at, any meeting of
shareholders, or to consent to any proposal without a meeting, or for the
purpose of determining shareholders entitled to receive payment of any
dividends, or allotment of any rights, or for the purpose of any other action.
ARTICLE VI
MISCELLANEOUS
-------------
Section 1. Dividends. Subject to the applicable provisions of the
---------
Certificate of Incorporation, the Board of Directors may declare dividends from
time to time upon the capital stock of the corporation from the surplus or net
profits available therefor.
Section 2. Fiscal Year. The fiscal year of the corporation shall begin
-----------
on the 1st day of October in each calendar year and end on the 30th day of
September of the next succeeding calendar year.
Section 3. Checks, Notes, etc. Checks, notes, drafts, bills of exchange
------------------
and orders for payment of money shall be signed or endorsed in such manner as
shall be determined by the Board of Directors.
The funds of the corporation shall be deposited in such bank or trust
company, and checks drawn against such funds shall be signed in such manner as
may be determined from time to time by the Board of Directors.
Section 4. Notice and Waiver of Notice. Any notice required to be given
---------------------------
under these By-Laws may be waived by the person entitled thereto, in writing, by
telegram, cable, facsimile transmission or radiogram, and the presence of any
person at a meeting shall constitute waiver of notice thereof as to such person.
Whenever any notice is required by these By-Laws to be given, personal
notice is not meant unless expressly so stated; and any notice so required shall
be deemed to be sufficient if given by depositing it in a post office or post
box in a sealed postpaid wrapper, addressed to such shareholder, officer or
director, at such address as appears on the books of the corporation, and such
notice shall be deemed to have been given on the day of such deposit.
ARTICLE VII
INDEMNIFICATION AND INSURANCE
-----------------------------
Section 1. Indemnification. Any person made a party to an action or
---------------
proceeding, by reason of the fact that he, his testator or his intestate is or
was a director or officer of the corporation, or of any other corporation,
domestic or foreign, that he, his testator or intestate served in any capacity
at the request of the corporation, shall be indemnified by the corporation
against the expenses (including attorney's fees, judgments, fines and amounts
paid in settlement) actually incurred by him as a result of such action or
proceeding, or any appeal therein, to the full extent permissible.
Section 2. Insurance. The corporation may purchase and maintain
---------
insurance to indemnify the corporation and the directors and officers to the
extent permitted.
ARTICLE VIII
AMENDMENTS
----------
Section 1. The authority to make, alter, amend or repeal these By-Laws
is expressly vested in the Board of Directors, subject to the power of the
shareholders to change or repeal such By-Laws.
AGREEMENT PURSUANT TO RULE 45 (c)
UNDER THE PUBLIC UTILITY HOLDING ACT OF 1935
WHEREAS, National Fuel Gas Company ("National"), a corporation
organized under the laws of the State of New Jersey and a registered holding
company under the Public Utility Holding Company Act of 1935 ("Act"), together
with its wholly-owned subsidiaries, listed below:
National Fuel Gas Distribution Corporation
National Fuel Gas Supply Corporation
Seneca Resources Corporation
Leidy Hub, Inc.
Highland Land & Minerals, Inc.
Utility Constructors, Inc.
Data-Track Account Services, Inc.
National Fuel Resources, Inc.
Horizon Energy Development, Inc.
Seneca Independence Pipeline Company
Upstate Energy Inc.
Niagara Independence Marketing Company
Horizon Energy Holdings, Inc., a wholly-owned subsidiary of Horizon
Energy Development, Inc.
NFR Power, Inc.
join annually in the filing of a consolidated federal income tax return; and
WHEREAS, it is the intention of National and its subsidiaries
(hereinafter collectively referred to as the "System"), to enter into a Tax
Agreement for the allocation of current federal income taxes; and
WHEREAS, Rule 45 (c) of the Act has been adopted by the Securities and
Exchange Commission with the specific intention of providing a method of
allocation of consolidated federal income taxes by a registered holding company
and its subsidiaries;
NOW, THEREFORE, the System does hereby covenant and agree with one
another that the consolidated current federal income tax liability of the System
shall be allocated pursuant to Rule 45 (c) of the Act, so that each company of
the System will benefit mutually from the application of said Rule, as follows:
FIRST: There shall be allocated and preserved to each company the tax
effects of its own capital gains or losses which shall be subject to the capital
gains rate, if applicable, its tax credits, investment tax credit recapture and
the effects of any other material items taxed at different rates or involving
special benefits or limitations as may result from an unexpected event,
including changes to the Internal Revenue Code which may be applicable to a
particular company, including its carry-over amounts to the extent those amounts
are absorbed in the taxable year.
SECOND: After giving effect to the special allocations described in
paragraph First above, the balance of the current tax liability of the System
shall be allocated to each System company on the basis of each of their
respective contributions of corporate taxable income to the total consolidated
taxable income of the System, excluding income subject to taxation at the
capital gains rate, if applicable. The tax attributable to such income will have
been separately allocated pursuant to paragraph First above. However, so long as
National has negative corporate taxable income, no portion of the current tax
liability shall be allocated to National as a corporate tax credit. Instead, the
negative corporate taxable income of National shall be allocated to those System
companies which have positive corporate taxable income, on the basis of each of
these companies' contribution of positive corporate taxable income to the total
positive corporate taxable income of the System. The tax allocated to a company
under this paragraph, which may be either positive or negative (except for
National) shall be equal to the consolidated tax liability multiplied by a
fraction, the numerator of which is the positive corporate taxable income of the
Company (as adjusted by National's negative corporate taxable income described
in this paragraph Second above and in paragraph Third); or the negative
corporate taxable income of the Company (as adjusted in paragraph Third),
including any carry-over loss attributable to the Company to the extent absorbed
in the taxable year, and the denominator of which is the consolidated taxable
income of the System (as adjusted in paragraphs First and Third). Companies with
taxable income will be allocated a tax liability under this method while
companies with net operating losses (except National) will be allocated a tax
benefit or credit.
THIRD: The tax effect of intercompany transactions eliminated in the
calculation of consolidated taxable income shall be eliminated from the
corporate taxable income of the companies involved in such transactions in the
calculations provided in paragraph Second.
FOURTH: Any consolidated alternative minimum income tax and
environmental tax arising from consolidated alternative minimum taxable income
(AMTI) will be allocated among the companies on the basis of each of their
respective contributions of positive AMTI to the total positive AMTI of the
System.
FIFTH: Under the method of allocation described in paragraphs First
through Fourth above, the companies agree that the tax allocated to each company
(except National) shall not exceed the amount of tax of such company based upon
a separate return computed as if such company had always filed its tax returns
on a separate return basis. However, in computing the separate return tax
liability of a company, items of carry-forward, carry-back and intercompany
transactions, to the extent that any or all of these items have been utilized by
the System in a prior taxable year's allocation, will be disregarded in order to
comply with the separate return limitation provisions set forth in Rule 45 (c)
of the Act and regulations promulgated under Section 1552 of the Internal
Revenue Code. Thus, to the extent that a company receives a tax benefit or
credit pursuant to paragraph Second above, such benefit or credit would be
applied to reduce any tax credits in future years to which such company might
otherwise become entitled under the separate return limitation provisions of
Rule 45 (c) of the Act and regulations promulgated under Section 1552 of the
Internal Revenue Code.
IT IS FURTHER AGREED by and among the System as follows:
I. PAYMENTS: It is agreed that those companies allocated a current
federal income tax liability under this agreement will pay the Internal Revenue
Service a portion of that liability in the amounts and on the dates directed by
National, as determined and pursuant to the applicable sections of the Internal
Revenue Code. Another portion of the current federal income tax liability of
those companies shall be paid by them to the other companies which were
allocated a tax benefit. Such payments will also be made in the amounts and on
the dates directed by National.
II. SEPARATE RETURN LIABILITY: The System intends that the result of
the proposed method of allocation and payment will be: (a) No company
will pay more than its separate return liability as if it had always
filed separate returns. However, the qualifications set out in
paragraph Fifth above concerning the calculation of a separate return
tax shall apply; (b) Each company having a net operating loss or other
net tax benefit will receive in current cash payments the benefit of
its own net operating loss (except as described in paragraph Second) or
other net tax benefits to the extent that the other companies can
utilize such items to offset the tax liability they would otherwise
have on a separate return basis. III. EFFECTIVE DATE: This Tax
Agreement will be effective for allocation of the current income tax
liability of the system for
the fiscal year 1999 and all subsequent years until this Tax Agreement shall be
amended in writing by each of the companies which is a party thereto.
IV. APPROVAL AND AMENDMENTS: Any amendments to this Tax Agreement may
be made only with the unanimous written consent of all the parties hereto. A
copy of this Tax Agreement is being filed as an exhibit to National's Form U5S
Annual Report to the Securities and Exchange Commission for the year ended
September 30, 1999. Any amendments to this Tax Agreement will be filed as an
exhibit to National's Form U5S for the year when the amendment becomes
effective. It is contemplated that any additional companies which hereafter
become associated with the System shall have the option of joining in and
becoming a party to this Tax Agreement by amendment thereto.
V. PRIOR AGREEMENTS SUPERSEDED: Any prior agreements relating to the
allocation of income tax liability among the System are superseded.
IN WITNESS WHEREOF, each of the parties hereto have caused this Tax
Agreement to be executed in its name and on its behalf by one of its officers
duly authorized, and its corporate seal to be affixed hereto by its Secretary on
this 28th day of January 2000.
NATIONAL FUEL GAS COMPANY
By: /s/Joseph P. Pawlowski
--------------------------
Joseph P. Pawlowski
Treasurer
NATIONAL FUEL GAS DISTRIBUTION
CORPORATION
By: /s/Joseph P. Pawlowski
--------------------------
Joseph P. Pawlowski
Treasurer
NATIONAL FUEL GAS SUPPLY
CORPORATION
By: /s/Joseph P. Pawlowski
--------------------------
Joseph P. Pawlowski
Treasurer
SENECA RESOURCES CORPORATION
By: /s/Calvin H. Friedrich
--------------------------
Calvin H. Friedrich
Treasurer
LEIDY HUB, INC.
By: /s/Gerald T. Wehrlin
------------------------
Gerald T. Wehrlin
Treasurer
HIGHLAND LAND & MINERALS, INC.
By: /s/Calvin H. Friedrich
--------------------------
Calvin H. Friedrich
Treasurer
UTILITY CONSTRUCTORS, INC.
By: HIGHLAND LAND & MINERALS, INC.,
successor by merger of
UTILITY CONSTRUCTORS, INC.
By: /s/Calvin H. Friedrich
--------------------------
Calvin H. Friedrich
Treasurer
DATA-TRACK ACCOUNT SERVICES,
INC.
By: /s/William M. Petmecky
--------------------------
William M. Petmecky
Treasurer
NATIONAL FUEL RESOURCES, INC.
By: /s/William M. Petmecky
--------------------------
William M. Petmecky
Treasurer
HORIZON ENERGY DEVELOPMENT,
INC.
By: /s/Ronald J. Tanski
-----------------------
Ronald J. Tanski
Treasurer
SENECA INDEPENDENCE PIPELINE
COMPANY
By: /s/Dennis J. Seeley
-----------------------
Dennis J. Seeley
Treasurer
UPSTATE ENERGY INC.
By: /s/Calvin H. Friedrich
--------------------------
Calvin H. Friedrich
Treasurer
NIAGARA INDEPENDENCE
MARKETING COMPANY
By: /s/Calvin H. Friedrich
--------------------------
Calvin H. Friedrich
Treasurer
HORIZON ENERGY HOLDINGS, INC.
By: /s/Ronald J. Tanski
-----------------------
Ronald J. Tanski
Treasurer
NFR POWER, INC.
By: /s/William M. Petmecky
--------------------------
William M. Petmecky
Treasurer
Exhibit H-2
National Fuel Gas Company
Organization Chart of Foreign Utility Company Ownership (FUCO)
As of September 30, 1999
---------------------------
National Fuel Gas Company
---------------------------
100%
----------------------------------
Horizon Energy Development, Inc.
----------------------------------
100%
-------------------------------
Horizon Energy Holdings, Inc.
-------------------------------
100%
---------------------------------
Horizon Energy Development B.V.
---------------------------------
82.87%
----------------------------
Severoceske teplarny, a.s.
(FUCO)
----------------------------
70%
------------------------
Teplarna Liberec, a.s.
(FUCO)
------------------------
Note: Percents reported represent percent of voting power as of September 30,
1999
Exhibit H-4
National Fuel Gas Company
Organization Chart of Exempt Wholesale Generator (EWG)
As of September 30, 1999
---------------------------
National Fuel Gas Company
---------------------------
100%
----------------------------------
NFR Power, Inc.
----------------------------------
Exhibit I-1
Auditor's statement
Auditors report for shareholders of stock corporation
Severoceske teplarny, a.s.
We have audited the financial statements of Severoceske teplarny, a.s. for the
year ended 31 December 1998. The Board of Directors is responsible for the
preparation of the financial statements and for maintaining accounting which is
complete, supportable and correct. Our responsibility is to express an opinion
on the financial statements taken as a whole, based on our audit performed in
accordance with the CNR Act no. 524/1992 Coll., on Auditors and the Chamber of
Auditors of the Czech Republic and the auditing guidelines issued by the Chamber
of Auditors.
The auditing guidelines require that we plan and perform the audit to obtain
reasonable assurance that the financial statements are free of material
misstatements. Our audit includes an examination of the evidence supporting the
financial statements. Our audit also includes assessing whether the accounting
policies used and significant estimates made by management are fair and
suitable, as well as evaluating the overall presentation of the financial
statements. Our audit procedures were carried out on a test basis and with
regard to the principle of materiality. We believe that our audit provides a
reasonable basis for expressing our opinion.
In our opinion, the financial statements present fairly, in all material
aspects, the assets, liabilities, equity and financial position of Severoceske
teplarny, a.s., as at 31 December 1998 and the financial results for the year
then ended in accordance with valid acts and relevant accounting legislation.
In conclusion we note that the extraordinary General Meeting held on 28
September 1998 decided to wind-up the stock corportion Severoceske teplarny
without liquidation and merge it with the stock corporation Prvni severozapadni
teplarenska. this change has not been recorded in the Registrar of Companies
yet.
Prague March 22, 1999
Auditing company: Statutory auditor:
Consultas - Audit, s.r.o. Jaroslav Suva
License number 87 License number 234
<PAGE>
SEVEROCESKE TEPLARNY, a.s.
FINANCIAL STATEMENTS - BALANCE SHEET
ASSETS 12/31/98 12/31/97
------ --------- ---------
(CZK 000's)
---------------------------
Total Assets 1,967,372 1,929,188
========= =========
Intang. & Tang. Assets & Invest. 1,609,480 1,620,930
--------- ---------
Intangible Assets 3,216 1,877
--------- ---------
Software 718 770
Intangibles in Progress 2,498 -
Advances for Intangibles - 1,107
--------- ---------
Tangible Assets 1,337,659 1,347,758
--------- ---------
Land 33,773 34,516
Building, Halls & Constructions 927,602 949,650
Sep. Movab. Items & Groups of
Mov. Items 322,639 315,301
Other Tangible Assets 20 20
Tangibles in Progress 52,341 46,488
Advances for Tangibles 1,334 1,838
Adjustment to Acquired Property (50) (55)
--------- ---------
Financial Investment 268,605 271,295
--------- ---------
Major. Sharehol. & Particip.
Inter. (50%) 211,823 210,051
Subst. Sharhol. & Partic.
Inter. (20-50%) 44,249 44,133
Intergroup Loans 5,155 7,733
Other Loans & Financial Investment 7,378 9,378
--------- ---------
Current Assets 355,981 304,511
--------- ---------
Inventory 55,203 48,764
--------- ---------
Materials 42,182 42,343
Work in Progress & Semi-Finished
Product. 13,021 6,421
--------- ---------
Long-Term Receivables 11,373 4,179
--------- ---------
Trade and Other Receivables 10,345 4,030
Other Receivables 1,028 149
--------- ---------
Short-Term Receivables 120,704 152,886
--------- ---------
Trade Receivables 109,159 79,326
Receivables From Taxes & Subsidies 8,590 9,369
Receiv. From Related Comp.
(Sharehol. 20-50%) - 61,000
Other Receivables 2,955 3,191
--------- ---------
Financial Accounts 168,701 98,682
--------- ---------
Cash 377 260
Bank Accounts 28,324 98,422
Short-Term Financial Assets 140,000 -
--------- ---------
Other Assets 1,911 3,747
--------- ---------
Temporary Accounts of Assets 1,798 3,741
--------- ---------
Prepaid Expenses 1,752 3,701
Unbilled Revenue 46 40
--------- ---------
Contingencies-Gain 113 6
<PAGE>
SEVEROCESKE TEPLARNY, a.s.
FINANCIAL STATEMENTS - BALANCE SHEET
12/31/98 12/31/97
--------- ---------
(CZK 000's)
----------------------------
Total Capital & Liabilities 1,967,372 1,929,188
========= =========
Capital 1,719,379 1,662,408
--------- ---------
Basic Capital 1,133,279 1,133,279
Capital Funds 25,030 25,109
--------- ---------
Funds Created From Profit 124,105 117,310
--------- ---------
Legal Reserve Fund 121,278 114,915
Statutory and Other Funds 2,827 2,395
--------- ---------
Retained Earnings 320,491 259,450
Profit and Loss of Current Accounting
Period 116,474 127,260
--------- ---------
Liabilities 244,223 262,767
--------- ---------
Reserves 9,863 24,108
--------- ---------
Legal Reserves (i.e. Tax Deductible) 9,863 21,108
Other Reserves - 3,000
--------- ---------
Long-Term Liabilities 1,414 2,219
--------- ---------
Short-Term Liabilities 95,845 77,814
--------- ---------
Trade Payables 60,894 38,445
Payables to Partners and Associations 2,389 506
Payables to Employees 1,071 1,267
Social Security Payable 2,757 3,115
Taxes Payable 852 1,247
Deferred Taxes 20,881 18,423
Other Payables 7,001 14,811
--------- ---------
Bank Loans and Short Term Notes 137,101 158,626
--------- ---------
Long-Term Bank Loans 137,101 158,626
Other Liabilities-Temporary Accounts of
Liabilities 3,770 4,013
--------- ---------
Accruals 232 70
--------- ---------
Accruals 75 45
Deferred Income 157 25
--------- ---------
Contingencies-Loss 3,538 3,943
<PAGE>
SEVEROCESKE TEPLARNY, a.s.
FINANCIAL STATEMENTS - PROFIT AND LOSS STATEMENT
12/31/98 12/31/97
-------- --------
(CZK 000's)
---------------------------
Operation Revenues (A) 810,329 850,171
------- -------
Revenues From Finished Products and
Services 785,555 816,607
Changes in Inventory 6,599 (87)
Capitalization (Of Own Work) 18,175 33,651
------- -------
Consumption From Operation (B) 461,934 349,282
------- -------
Consumption of Material and Energy 373,580 246,325
Services 88,354 102,957
------- -------
Value Added (A)-(B)=(C) 348,395 500,889
------- -------
Personnel Expenses 103,750 98,798
------- -------
Wages & Salaries & Earn. Of Part &
Coop. Members 75,098 70,595
Bonus. To Mem. Of Exec. Bodies of
Companies & Coop. 585 1,815
Social Insurance & Other Expenses 26,219 24,559
Statutory Social Expenses 1,848 1,829
------- -------
Taxes and Fees 1,886 2,204
Amortization of Intangibles and
Depreciation of Tangibles 77,727 72,867
Rev. From Intangibles & Tangible
Assets & Material Sold (+) 29,903 28,186
Net Book Value of Intangible,
Tangibles and Material Sold (-) 23,309 20,552
Reversal of Reserves & Prepaid Expenses (+) 24,550 19,219
Creation of Reserves & Prepaid Expenses (-) 10,304 22,913
Reversal of Provisions (+) 3,746 4,456
Creation of Provisions (-) 4,925 3,188
Other Operational Revenues (+) 1,318 796
Other Operational Expenses (-) 13,343 152,544
------- -------
Net Operating Results (D) 172,668 180,480
------- -------
Revenues From Sales of Securities and
Deposits (+) 1,461 -
Sold Securities and Deposits (-) 1,233 -
Revenues from Financial Investments (+) 1,333 1,018
Revenues from Short-Term Financial Assets (+) 102 -
Interest Revenues (+) 21,476 24,442
Interest Expenses (-) 24,485 18,182
Other Financial Revenues (+) 65 151
Other Financial Expenses (-) 4,615 4,404
------- -------
Transfer of Financial Revenues
Transfer of Financial Expenses
Net Result From Financial
Activities (E) (5,896) 3,025
------- -------
Income Taxes on Normal Activity (F) 55,735 53,745
------- -------
Due 53,277 50,329
Deferred 2,458 3,416
------- -------
Net Results After Taxes From Normal
Activities (D)+(E)-(F)=(G) 111,037 129,760
------- -------
Extraordinary Revenues (+) 9,541 2,468
Extraordinary Expenses (-) 1,177 4,968
------- -------
Income Tax on Extraordinary Activity 2,927 -
------- -------
Due 2,927 -
Deferred - -
------- -------
Net Result From Extraordinary
Activities (H) 5,437 (2,500)
------- -------
Income Distribution to Partners
Net Income (Net Loss) for the Account
Period (G)-(H) 116,474 127,260
======= =======
Result of Operations Before Tax 175,136 181,005
======= =======
<PAGE>
<TABLE>
<CAPTION>
SEVEROCESKE TEPLARNY, a.s.
CASH FLOW STATEMENT
For the year ended 31 December 1998
12/31/98 12/31/97
-------- --------
<S> <C> <C>
Cash and Cash Equivalents at the Beginning of the Accounting Period (A) 98,682 103,605
------- -------
Profit/Loss From Normal Activity Before Taxes (B) 166,772 183,505
------- -------
Adjustment by Non-Cash Transactions (C) 63,904 127,896
------- -------
Depreciation of Fixed Assets 79,302 73,928
Change in Provisions, Reserves and Change in Prepayments and Accruals (11,467) 67,695
(Profit) Loss From Sale of Fixed Assets (5,607) (6,449)
Dividends and Profit Revenues (1,333) (1,018)
Interest Expense 3,009 (6,260)
------- -------
Net Cash Flow From Operational Activity (B)+(C)=(D) 230,676 311,401
------- -------
Change in Working Capital (E) 42,328 (78,318)
------- -------
Change in Receivables From Operational Activities 30,148 (9,388)
Change in Short-Term Payables From Operational Activities 19,819 (59,667)
Change in Inventories Balance (7,639) (9,263)
------- -------
Net Cash Flow From Oper. Activity Before Taxes (D)+(E)=(F) 273,004 233,083
------- -------
Interest Paid (G) (24,485) (18,182)
Interest Received (H) 21,408 24,334
Tax on Normal Activity and Additional Tax of Prior Years (I) (57,598) (45,055)
Revenues and Expenses Related to Extraordinary Items (J) 8,364 (2,500)
------- -------
Net Cash Flow From Operational Activity (F)+(G)+(H)+(I)+(J)=(K) 220,693 191,680
------- -------
Fixed Asset Acquisition (109,119) (145,834)
Sale of Fixed Assets 14,652 14,966
Loans to Related Parties 2,578 2,578
------- -------
Net Cash Flow From Investment Activity (L) (91,889) (128,290)
------- -------
Change in Long-Term and Short-Term Liabilities (M) (805) (10,805)
------- -------
Impact of Changes in Equity (N) (59,313) (58,526)
------- -------
Direct Payments Debited to Funds (1,694) (1,803)
Paid-out Dividends and Profit Shares (57,619) (56,723)
------- -------
Dividends and Profit Shares Received (O) 1,333 1,018
------- -------
Net Cash Flow From Financial Activity (M)+(N)+(O)=(P) (58,785) (68,313)
------- -------
Net Increase/Decrease in Cash (K)+(L)+(P)=(Q) 70,019 (4,923)
------- -------
Cash and Cash Equivalents as the End of the Accounting Period (A)+(Q) 168,701 98,682
======= =======
</TABLE>
Exhibit I-2
Auditors report for shareholders of
Teplarna Liberec, a.s., stock corporation
We have audited the financial statements of Teplarna Liberec, a.s. and its
annual report for the year ended 31 December 1998. The Board of Directors is
responsible for the preparation of the financial statements and for maintaining
accounting which is complete, supportable and correct. Our responsibility is to
express an opinion on the financial statements taken as a whole, based on our
audit performed in accordance with the CNR Act no. 524/1992 Coll., on Auditors
and the Chamber of Auditors of the Czech Republic, and the auditing guidelines
issued by the Chamber of Auditors.
The auditing guidelines require that we plan and perform the audit to obtain
reasonable assurance that the financial statements are free of material
misstatements. Our audit includes an examination of the evidence supporting the
financial statements. Our audit also includes assessing whether the accounting
policies used and significant estimates made by management are fair and
suitable, as well as evaluating the overall presentation of the financial
statements. Our audit procedures were carried out on a test basis and with
regard to the principle of materiality. We believe that our audit provides a
reasonable basis for expressing our opinion.
In our opinion, the financial statements present fairly, in all material
aspects, the assets, liabilities, equity and financial position of Teplarna
Liberec, a.s. as of 31 December 1998 and the financial results for the year then
ended in accordance with valid acts and relevant accounting legislation.
We have examined whether the historical financial information included in the
annual report of the Company for the year ended 31 December 1998, is consistent
with the audited financial statements of the Company. In our opinion, this
information is in all material respects consistent with the audited financial
statements.
Prague, March 8, 1999
Auditing company: Statutory auditor:
Consultas-Audit, s.r.o. Jaroslav Suva
License number 87 License number 234
<PAGE>
TEPLARNA LIBEREC, a.s.
FINANCIAL STATEMENTS - BALANCE SHEET
ASSETS
12/31/98 12/31/97
-------- --------
(CZK 000's)
Total Assets 578,606 589,925
======= =======
Fixed Assets 381,946 381,388
------- -------
Intangible Assets 421 396
------- -------
Software 347 311
Patents, Copyrights, Trademarks,
Tradenames 74 85
------- -------
Fixed (Tangible) Assets 381,375 380,542
------- -------
Land 7,070 7,052
Plant (Buildings, Halls and Construction) 117,831 121,149
Capital Equipment 238,131 251,005
Acquisition of Fixed Asset in Progress 13,476 1,278
Deposits Towards Fixed Acquisitions 4,867 58
------- -------
Investments (Financial Assets) 150 450
------- -------
Other Investments 150 450
------- -------
Current Assets 196,244 202,743
------- -------
Inventory 66,198 71,088
------- -------
Raw Materials 66,198 68,058
Merchandise - 3,030
------- -------
Accounts Receivable 63,324 76,769
------- -------
Long-Term Receivables 481 -
------- -------
Trade and Other Receivables 481 -
------- -------
Short-Term Receivables 62,843 76,769
------- -------
Accounts Receivable 60,797 58,679
Receivable - Taxes 1,959 18,024
Other Accounts Receivable 87 66
------- -------
Current Liquid Assets 66,722 54,886
------- -------
Petty Cash and Deposits in Transit 97 95
Cash in Bank 14,625 54,791
Short-Term Assets 52,000 -
------- -------
Other Assets - Temporary Debit Accounts 416 5,794
------- -------
Accruals 315 5,719
------- -------
Pre-Paid Expenses 152 273
Unbilled Revenue 163 5,446
------- -------
Contingencies and Estimate Pre-Paid Items
(Debit Balance) 101 75
<PAGE>
TEPLARNA LIBEREC, a.s.
FINANCIAL STATEMENTS - BALANCE SHEET
LIABILITIES AND OWNER'S EQUITY
12/31/98 12/31/97
-------- --------
(CZK 000's)
Total Liabilities and Owner's Equity 578,606 589,925
======= =======
Owner's Equity 529,542 522,044
------- -------
Capital Stock at Par 500,000 500,000
Restricted Retained Earnings 2,068 1,486
------- -------
Statutory Reserve Account 2,068 1,486
------- -------
Retained Earnings 19,626 8,928
Net Income or Net Loss 7,848 11,630
------- -------
External Sources (Of Money) 40,156 58,931
------- -------
Reserves 12,779 3,854
------- -------
Tax Deductible Reserves - -
Other Reserves 12,779 3,854
------- -------
Liabilities to Subsidiaries 5,155 7,733
------- -------
Current Liabilities 22,222 47,344
------- -------
Accounts Payable 17,138 43,188
Payroll Payable 1,173 1,015
Social Security Payable 1,508 1,270
Taxes Payable 407 322
Deferred Taxes Payable 686 416
Payable to Subsidiaries - -
Other Payables 1,310 1,133
------- -------
Bank Loans - -
------- -------
Other Liabilities and Equity - Closing
Accounts 8,908 8,950
------- -------
Accrual Accounts 3,290 3,097
------- -------
Accrued Expenses 3,185 3,097
Unearned Revenue 105 -
------- -------
Contingencies and Estimated Accrued Items
(Credit Balance) 5,618 5,853
<PAGE>
TEPLARNA LIBEREC, a.s.
FINANCIAL STATEMENTS - INCOME STATEMENT
12/31/98 12/31/97
-------- --------
(CZK 000's)
Revenue (From Sale of Merchandise) 3,052 1,200
Cost of Goods Sold (Merchandise) 2,897 1,154
------- -------
Gross Profit on Merchandise Sold (A) 155 46
------- -------
Revenue (From Sale of Manufactured
Goods) (B) 589,927 608,105
------- -------
Revenue (From Sale of Manufactured
Goods and/or Services) 589,848 608,037
Self-Constructed Asset Revenue 79 68
------- -------
Cost of Materials Used in Manufacturing (C) 495,743 521,106
------- -------
Raw Materials and Utilities Used 305,053 313,749
Services Used 190,690 207,357
------- -------
Gross Profit on Sales (A)+(B)-(C) 94,339 87,045
------- -------
Payroll 46,800 39,875
------- -------
Wages and Salaries 32,987 27,730
Board Member Fees and Bonuses 568 910
Social Security Expenses 11,445 9,674
Fringe Benefits 1,800 1,561
------- -------
Taxes and Fees 33 43
Amortization of Intangible and
Depreciation of Tangible Fixed Assets 27,992 23,806
Moneys Received From Sale of Fixed
Assets and Raw Materials (+) 503 633
Net Book Value of Disposed Fixed
Assets or Raw Materials (-) 331 495
Clearing of Reserves & Accrued Revenue (+) 3,854 8,150
Creation of Reserves & Accrued Expenses (-) 12,779 7,929
Clearing of Gains on Assets to Operating
Revenue (+) 2,699 3,140
Clearing of Losses on Assets to Operating
Expense (-) 2,215 10,806
Other Operating Gains (Revenues)(+) 2,870 2,971
Other Operating Expenses (-) 3,860 11,746
------- -------
Operating Income (D) 10,255 7,239
------- -------
Moneys Received From Sale of Securities
Or Direct Investments (+) - 9,768
Cost (Purchase Price) of Securities and
Direct Investments Sold (-) - 13,088
Gains on Investments (+) 38 99
Revenues from Short-Term Financial Assets (+) 32 -
Interest Income (+) 11,342 12,064
Interest Expense (-) 1,015 3,754
Other Gains on Investments (+) - -
Other Expenses on Investments (-) 2,306 2,029
------- -------
Profit/loss From Financial Operations (E) 8,091 3,060
------- -------
Income Tax (F) 9,794 (751)
------- -------
Payable 9,524 12
Deferred 270 (763)
------- -------
Income From Operations (D)+(E)-(F)=(G) 8,552 11,050
------- -------
Unusual and/or Extraordinary Gain/Income (+) 1,089 643
Unusual and/or Extraordinary
Loss/Expenses (-) 1,793 63
------- -------
Unusual Profit/Loss (H) (704) 580
------- -------
Net Income/Loss for Fiscal Period (G)+(H) 7,848 11,630
======= =======
Income Before Tax 17,642 10,879
======= =======
<PAGE>
CASH FLOW
12/31/98 12/31/97
-------- --------
Cash and Cash Equivalents at the Beginning
of the Accounting Period (A) 54,886 38,755
------- -------
Profit/Loss From Normal Activity Before Taxes (B) 18,346 10,299
------- -------
Adjustments by Non-Cash Transactions (C) 32,551 21,427
------- -------
Depreciation of Fixed Assets 29,142 23,641
Change in Provisions, Reserves and Change in
Prepayments and Accruals 13,777 2,795
(Profit) Loss From Sale of Fixed Assets (41) 3,302
Interest Expense (10,327) (8,311)
Net Cash Flow From Operational Activity Before
Taxes and Before Changes in Working Capital and
------- -------
Extraordinary Items (B)+(C)=(D) 50,897 31,726
------- -------
Change in Working Capital (E) (15,533) (51,571)
------- -------
Change in Receivables From Operational Activities 12,183 39,321
Change in Short-Term Payables From Operational
Activities (33,202) (73,518)
Change in Inventories Balance 5,486 (17,374)
------- -------
Net Cash Flow From Operational Activity Before
Taxes and Extraordinary Items (D)+(E)=(F) 35,364 (19,845)
------- -------
Interest Paid (G) (947) (4,511)
Interest Received (H) 11,342 12,046
Tax on Normal Activity and Additional Tax of
Prior Years (I) (1,782) (2,134)
Revenues and Expenses Related to Extraordinary
Items (J) (704) 580
------- -------
Net Cash Flow From Operational
Activity (F)+(G)+(H)+(I)+(J)=(K) 43,273 (13,864)
------- -------
Fixed Asset Acquisition (28,840) (46,454)
Sale of Fixed Assets 331 80,026
------- -------
Net Cash Flow From Investment Activity (L) (28,509) 33,572
------- -------
Change in Long-Term and Short-Term Liabilities (2,578) (2,577)
Paid-Out Dividends and Profit Shares (350) (1,000)
------- -------
Net Cash Flow From Financial Activity (M) (2,928) (3,577)
------- -------
Net Increase/Decrease in Cash (K)+(L)+(M)=(N) 11,836 16,131
------- -------
Cash and Cash Equivalents at the End of the
Accounting Period (A)+(N) 66,722 54,886
======= =======
Auditor's Report
1. AUDITED COMPANY
---------------
Prvni severozapadni teplarenska
stock corporation
Komorany u Mostu
Company Identification Number: 46708197
2. PERIOD OF THE FINANCIAL STATEMENT
---------------------------------
The period of 1 January 1998 to 31 December 1998 was audited.
3. SUBJECT AND PURPOSE OF THE AUDIT
--------------------------------
We audited 1998 financial statements and the 1998 Annual Report.
The purpose of our audit is to find out:
- whether the data in the financial statements and the Annual Report
give a true and fair view of the assets and liabilities,
difference between the assets and liabilities, financial position
and results of the financial results;
- whether the accounting records are maintained in a complete,
supportable and correct way;
- whether the annex to the financial statements includes information
demonstrating important events that occurred in the period of the
financial statement date to the compilation of this report and
information on an assumption of an indefinite duration of the
accounting unit if it is jeopardized in any manner.
The stocktaking systems of tangible and intangible fixed assets were
examined as far as documentation of their results is concerned. At the
same time, the stocktaking process itself and the system of the
stocktaking organization were reviewed through a direct check of
selected items.
4. RESPONSIBILITY DEFINITION
-------------------------
The statutory body of the audited company is responsible for keeping
complete, supportable and correct accounting records. The auditor is
obliged to draw up a report based on the conducted audit and to express
his opinion as to the company financial statements. The auditor shall
verify information proving data in the financial statements.
We conducted our audit in accordance with the Act on Auditors and the
Chamber of Auditors of the Czech Republic and the auditing guidelines
issued by the Chamber of Auditors.
With regard to the nature of the financial statements, we planned and
executed our audit to obtain reasonable assurance about whether the
financial statements are free of material misstatements whether caused
by mistake, deliberately or on different grounds.
The audit is conducted on a test basis and in accordance with a
principle of the accounting data significance and is focused on a
verification of completeness and conclusive evidence of the data and
information in the financial statements, the correctness of the
financial statement operations and the adequateness of the applied
accounting methods. The auditor also reviews important estimates and
decisions of the accounting unit management that have an impact on the
financial statements and its whole presentation.
Our audit provides a reasonable basis for our opinion regarding the
financial statements.
5. AUDITOR'S STATEMENT
-------------------
We have undertaken an audit of the 1998 financial statements and the
1998 Annual Report, and the found-out data allow us to make the
following conclusion:
In our opinion, the financial statements of the audited company were
drawn up in the prescribed extent and on the basis of data in the
accounting that is kept in accordance with valid laws and regulations.
The audited financial statements, in all their essential aspects,
present fairly the assets, liabilities, equity as to 31 December 1998,
the financial position and economic results of the company in the said
period in accordance with the relevant legislation. That is why we
issue this statement
w i t h o u t r e s e r v a t i o n.
Most, 26 March, 1999
Audited by: MK Audit, v.o.s.
auditor - license No. 113
Statutory auditor
Ing. Rudolf Mrnka
<PAGE>
<TABLE>
<CAPTION>
PSZT
BALANCE SHEET
12/31/1998 12/31/1997 12/31/1996
---------- ---------- ----------
(CZK 000's)
---------------------------------------------------
<S> <C> <C> <C>
Total Assets 5,033,764 4,633,148 3,519,485
Stock Subscriptions
Receivable - - -
Intangible and Tangible
Assets and Investments 4,641,214 4,029,663 3,116,955
Intangible Assets 887 519 1,135
Tangible Assets 4,640,207 4,029,024 3,115,700
Financial Investment 120 120 120
Current Assets 390,574 265,809 384,259
Inventory 56,244 47,449 45,408
Long-term Receivables 175 175 154
Short-term Receivables 296,402 180,178 252,767
Financial Accounts 37,753 38,007 85,930
Other Assets 1,976 337,676 18,271
Temporary Accounts of Assets 1,930 337,676 18,271
Contingencies - Gain 46 - -
Total Shareholders' Equity and
Liabilities 5,033,764 4,633,148 3,519,485
Shareholders' equity 2,237,283 1,885,497 1,822,450
Registered Capital 1,006,309 1,006,309 1,006,309
Capital Funds 169 169 169
Funds Created From Profit 142,667 138,688 134,458
Retained Earnings 733,146 673,822 576,482
Profit and Loss of
Current Accounting Period 354,992 66,509 105,032
Liabilities 2,766,333 2,745,595 1,693,426
Reserves 82,635 338,962 192,461
Long-term Liabilities 300,000 300,000 300,000
Short-term Liabilities 787,774 254,178 284,541
Bank Loans and Short-term
Notes 1,595,924 1,852,455 916,424
Other Liabilities -
Temporary Accounts of
Liabilities 30,148 2,056 3,609
Accruals 22,544 - 66
Contingencies-Loss 7,604 2,056 3,543
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PSZT
PROFIT AND LOSS STATEMENT
12/31/1998 12/31/1997
---------- ----------
(CZK 000's)
--------------------------------------
<S> <C> <C>
Operation 2,204,769 1,874,611
Revenues from Finished Products
and Services 2,204,300 1,874,364
Capitalization 469 247
Consumption from Operation 1,050,771 837,663
Value Added 1,153,998 1,036,948
Personnel Expenses (-) 151,416 143,359
Taxes and Fees (-) 1,076 1,126
Amortization of Intangibles and
Depreciation of Tangibles (-) 206,700 150,153
Revenues from Intang. and Tang.
Assets and Materials Sold (+) 58,519 70,592
Net Book Value of Intangibles,
Tangibles and Material Sold (-) 48,019 61,173
Reversal of Reserves and Prepaid
Expenses (+) 86,916 42,155
Creation of Reserves and Prepaid
Expenses (-) 17,584 65,036
Reversal of Provisions (+) 15,237 8,707
Creation of Provisions (-) 10,577 8,182
Other Operational Revenues (+) 2,021 330
Other Operational Expenses (-) 411,321 357,354
Net Operating Results (A) 469,998 372,349
Reversal of Financial Reserves (+) 71,879 557
Creation of Financial Reserves (-) (115,115) 124,176
Interest Revenues (+) 4,227 6,574
Interest Expenses (-) 163,068 98,396
Other Financial Revenues (+) 130,811 49,023
Other Financial Expenses (-) 228,384 46,366
Net Result from Financial
Activities (B) (69,420) (212,784)
Income Taxes on Normal Activity (C) 45,988 89,585
Net Result After Taxes from
Normal Activities (A+B-C=D) 354,590 69,980
Extraordinary Revenues (+) 1,652 117
Extraordinary Expenses (-) 1,250 3,543
Income Tax on Extraordinary
Activity (-) - 45
Net Result from Extraordinary
Activities (E) 402 (3,471)
Net Income (Net Loss) for the
Accounting Period (D+E) 354,992 66,509
</TABLE>
<PAGE>
PSZT
CASH FLOW
December 31, 1998
-----------------
Cash and Cash Equivalents at the Beginning
of the Accounting Period (A) 38,007,110.24
Profit/Loss from Normal Activity Before Taxes (B) 400,578,344.12
Adjustments by Non-cash Transactions (C) 471,204,498.46
Depreciation of Fixed Assets (+) 209,681,044.95
Change in Provisions, Reserves and Change in
Prepayments and Accruals 102,804,376.79
(Profit) Loss from Sale of Fixed Assets (+/-) (121,855.00)
Interest Expense (+) 158,840,931.72
Net Cash Flow from Operational Activity Before
Taxes and Before Changes in Working Capital
and Extraordinary Items (B+C=D) 871,782,842.58
Change in Working Capital (E) 80,722,680.62
Change in Receivables from Operational Activities (+/-) (115,366,973.43)
Change in Short-term Payables from Operational
Activities (+/-) 203,984,705.79
Change in Inventories Balance (+/-) (7,895,051.74)
Net Cash Flow from Operational Activity Before
Taxes and Extraordinary Items (D+E=F) 952,505,523.20
Interest Paid (-) (163,067,921.01)
Interest Received (+) 4,226,989.29
Revenues and Expenses Related to Extraordinary Items 401,712.09
Net Cash Flow from Operational Activity (G) 794,066,303.57
Fixed Asset Acquisition (818,157,788.45)
Sale of Fixed Assets (48,215.00)
Net Cash Flow from Investment Activity (H) (818,206,003.45)
Change in Long-term and Short-term Liabilities 27,091,307.20
Impact of Changes in Equity (3,205,636.35)
Direct Payments Debited to Funds (-) (1,610,636.35)
Paid-out Dividends and Profit Shares (-) (1,595,000.00)
Dividends and Profit Shares Received (+) -
Net Cash Flow from Financial Activity (I) 23,885,670.85
Net Increase/Decrease in Cash (G+H+I=J) (254,029.03)
Cash and Cash Equivalents at the End of the
Accounting Period (A+J) 37,753,081.21
Auditor's report on audit of financial statements of Teplarna Kromeriz, a.s.
The 1998 financial statements of Teplarna Kromeriz, a.s., with its
registered office at Kromeriz, Na Sadkach 3572, were audited due to a legal
obligation to provide financial statements audited by an auditor.
The ordinary financial statements prepared as to 31 December 1998 were
subject to the audit pursuant to Section 14 Subsections 1 and 2 of the Czech
National Council's Act No. 524/1992 Coll.
In our audit, we paid attention to:
- - a checkout of the balance sheet continuity;
- - a checkout of linking of balances on synthetic accounts to the balance
sheet and the profit and loss statement. This checkout was carried out in
Microsoft Excel. After balances of synthetic accounts had been taken over
and control statements had been made, no differences were found out.
- - the system of accounting procedures and internal audit in 1998 with regard
to methodological and technical approaches and the compliance with valid
regulations, particularly with the Act 563/1991 Coll., on Accounting
Procedures, and with the ruling of the Federal Ministry of Finance, reg.
No. V/20-100/1992, on Account Classification and Accounting methods for
Entrepreneurs, as amended;
- - a survey of balances discovered in the Company's accounting as of 31
December 1998 on accounts of the Company's assets and on accounts of its
liabilities and shareholders' capital;
- - an evaluation of events that occurred after the financial statements date
and that could have an impact on our auditor's report.
We conducted our audit in accordance with the guidelines issued by the
Chamber of Auditors of the Czech Republic, and/or with requirements of
international auditing standards ensuring from the responsibility of the
Company's statutory bodies for keeping complete, supportable and correct
accounting records, and from the obligation to have data in the financial
statements audited on a test basis and using the principles of significance.
Accounting documents related to accounting records were audited on a test basis.
No extraordinary survey of any assets was necessary.
Based on the results of the applied auditing methods, we did not find out
any significant errors or discrepancies with valid laws and regulations. The
carried-out audit entitles us reasonably to issue this statement:
In our opinion, the financial statements, in all their essential aspects,
present fairly the assets, liabilities, equity and the financial position of
Teplarna Kromeriz, a.s., as to 31 December 1998, and its economic results in the
accounting period 1998 in accordance with the Act No. 563/1991 Coll., on
Accounting, and with respective regulations.
Signature
Bystrice pod Hostynem, 31 March 1999
On behalf of Muller - audit, spol. s.r.o., license No. KACT 140
Ing. Jiri Muller, auditor, decree No. 527, the executive of the company
<PAGE>
<TABLE>
<CAPTION>
Profit and Loss Statement
In its full extent
As to December 31, 1998
(in whole thousands of Czech crowns)
1998 1997
---- ----
<S> <C> <C>
Income from sale of goods - 2
Costs expended on goods sold - -
------ ------
Trade margin - 2
Performances 53,879 55,002
------ ------
Income from sale of own products and
services 53,879 55,002
Output Consumption 45,975 48,824
------ ------
Consumption of material and power 42,960 43,946
Services 3,015 4,878
------ ------
Value added 7,904 6,180
Personal expenses 4,997 4,873
------ ------
Wages expenses 3,692 3,608
Expenditure on social security 1,305 1,265
Taxes and payments (-) 47 40
Deductions on intangible and tangible
fixed assets (-) 1,209 1,277
Income from sale of fixed assets and
Materials (+) 130 11
Accounting of corrective items in
operative yields (+) 129 129
Accounting of corrective items in
operative costs (-) - -
Other operative yields (+) 47 55
Other operative costs (-) 516 139
Operative economic result (A) 1,441 46
Interest revenues (+) 139 207
Interest expenses (-) 1,290 2,553
Other financial revenues (+) 29 -
Other financial expenses (-) 145 108
Net result from financial activities (B) (1,267) (2,454)
Income taxes on normal activity - -
- due - -
- deferred - -
Net result after taxes from normal activity
(A+B =C) 174 (2,408)
Extraordinary revenues 310 735
Extraordinary expenses - -
Income tax on extraordinary activity - -
- due - -
- deferred - -
Net result from extraordinary activities (D) 310 735
Net income (net loss) for the accounting
Period (C + D) 484 (1,673)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BALANCE SHEET
In its full extent
As of December 31, 1998
(in whole thousands of Czech crowns)
1998 1997
---- ----
<S> <C> <C>
ASSETS
Total Assets 43,782 40,783
====== ======
Intangible and Tangible Assets and
Investments 30,288 31,022
------ ------
Intangible inv. Assets 9 12
Tangible assets 30,279 31,010
------ ------
Land 1,321 1,321
Buildings, halls and constructions 15,932 16,412
Separate movable items and sets of
mov. It. 5,704 6,085
Incomplete tangible investments 8,742 8,742
Corrective item for acquired property (1,420) (1,550)
Current Assets 13,464 8,976
------ ------
Trade Receivables 10,824 8,666
Receivables from Taxes and Subsidiaries 1,763 -
Other Receivables 17 33
Cash 74 140
Bank Accounts 786 128
Short-Term Financial Assets - 9
Other Assets 30 785
------ ------
Temporary Accounts of Assets 27 51
Contingencies - Gain 3 734
TOTAL LIABILITIES AND CAPITAL 43,782 40,783
====== ======
Own capital 4,573 1,890
------ -------
Basic capital 17,487 1,000
Capital funds - 14,291
Economic result of past years (13,398) (11,728)
Economic result of current acc. period 484 (1,673)
Liabilities 39,169 38,705
------ ------
Short-term liabilities 35,544 27,830
------ ------
Trade payables 7,357 5,585
Payables to employees 241 202
Social security payable 171 126
Taxes payable 44 884
Payables to related companies
(shareholdings less than 50%) 27,729 21,018
Other payables 2 15
Bank loans and short-term notes 3,625 10,875
------ ------
Long-term bank loans 3,625 3,625
Short-term bank loans - 7,250
Other liabilities - temporary accounts of
liabilities 40 188
------ ------
Contingencies - loss 40 188
</TABLE>
<PAGE>
Teplarna Kromeriz, a.s.
CASH FLOW STATEMENT
For the year ended 31 December 1998
1998
----
Cash and cash equivalents at the beginning of the accounting period 277
---
Cash flow from main (operational) activity
Profit/loss from normal activity before taxes 174
---
Adjustments by non-cash transactions 2,708
Depreciation of fixed assets 1,209
Change in provisions, reserves and change in
prepayments and accruals 479
(Profit) loss from sale of fixed assets (130)
Dividends and profit revenues -
Interest Expense 1,150
Net cash flow from operational activity before taxes and
before changes in working capital and extraordinary items 2,882
-----
Change in working capital 3,842
Change in receivables from operational activities (2,158)
Change in short-term payables from operational activities 6,000
Change in inventories balance -
Net cash flow from operational activity before taxes
and extraordinary items 6,724
-----
Interest paid (1,290)
Interest received 140
Tax on normal activity and additional tax of prior years (32)
Revenues and expenses related to extraordinary items 310
Net cash flow from operational activity 5,852
-----
Cash flow from investment activity
Fixed asset acquisition (345)
Sale of fixed assets 130
Loans to related parties -
Net cash flow from investment activity (215)
----
Cash flow from financial activity
Change in long-term and short-term liabilities (7,250)
Impact of changes in equity 2,196
Capital and reserve fund increase 12,196
Refund of equity to shareholders -
Monetary donations and subsidies to equity and other cash
contributions of partners and shareholders -
Settling of loss by shareholders -
Direct payments debited to funds -
Paid-out dividends and profit shares -
Dividends and profit shares received -
Net cash flow from financial activity (5,054)
------
Net increase/decrease in cash 583
---
Cash and cash equivalents at the end of the accounting period 860
---
