<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31, 1997
Commission File Number 1-11441
ENERGYNORTH, INC.
(Exact name of registrant as specified in its charter)
New Hampshire 02-0363755
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1260 Elm Street, P.O. Box 329, Manchester, NH 03105
(Address and zip code of principal executive offices)
(603)625-4000
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]
EnergyNorth, Inc. had 3,243,543 shares of $1.00 par value common
stock outstanding on April 24, 1997, the filing date of this
Report.
<PAGE> 2
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
ENERGYNORTH, INC.
Condensed Consolidated Balance Sheets
Assets
(Unaudited, except for September 30, 1996 data)
(Thousands of dollars)
<TABLE>
<CAPTION>
March 31, September 30,
1997 1996 1996
-------------------- --------
<S> <C> <C> <C>
Property:
Utility plant, at cost $139,994 $131,913 $136,229
Accumulated depreciation and amortization 46,704 43,120 44,683
-------------------- --------
Net utility plant 93,290 88,793 91,546
Net nonutility property, at cost 7,743 7,897 7,748
-------------------- --------
Net property 101,033 96,690 99,294
-------------------- --------
Current assets:
Cash and temporary cash investments 1,121 1,382 770
Note receivable 79 - 39
Accounts receivable (net of allowances of
$1,336, $1,235 and $1,211, respectively) 16,370 13,369 2,029
Unbilled revenues 1,638 1,490 582
Deferred gas costs 1,228 2,899 3,783
Inventories, at average cost:
Materials and supplies 1,674 1,650 1,590
Supplemental gas supplies 3,802 1,542 9,039
Prepaid and deferred taxes 668 956 1,603
Recoverable FERC 636 transition costs 1,305 1,733 1,733
Prepaid expenses and other 703 734 1,304
--------------------- --------
Total current assets 28,588 25,755 22,472
--------------------- --------
Deferred charges:
Regulatory asset - income taxes 2,401 2,401 2,401
Recoverable environmental costs 6,140 7,062 6,840
Other deferred charges 548 542 996
--------------------- --------
Total deferred charges 9,089 10,005 10,237
--------------------- --------
Total Assets $138,710 $132,450 $132,003
===================== ========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
2
<PAGE> 3
ENERGYNORTH, INC.
Condensed Consolidated Balance Sheets
Stockholders' Equity and Liabilities
(Unaudited, except for September 30, 1996 data)
(Thousands of dollars)
<TABLE>
<CAPTION>
March 31, September 30,
1997 1996 1996
------------------- --------
<S> <C> <C> <C>
Capitalization:
Common stockholders' equity:
Common stock - par value of $1 per
share, 10,000,000 shares authorized;
3,243,543, 3,219,176 and 3,239,148
shares issued and outstanding, respectively $ 3,244 $ 3,219 $ 3,239
Amount in excess of par 30,428 29,967 30,342
Retained earnings 19,807 17,901 11,586
------------------- --------
Total common stockholders' equity 53,479 51,087 45,167
Long-term debt 29,283 29,415 29,525
Capital lease obligations - 137 46
------------------- --------
Total capitalization 82,762 80,639 74,738
------------------- --------
Current liabilities:
Notes payable to banks 9,500 3,400 9,535
Current portion of long-term debt 2,140 3,409 2,090
Current portion of capital lease obligations 153 256 229
Inventory purchase obligation 4,930 2,604 7,867
Accounts payable 7,601 8,729 6,189
Accrued interest 394 888 838
Accrued and deferred taxes 4,270 4,221 1,642
Accrued FERC 636 transition costs 1,305 1,733 1,733
Customer deposits, environmental and other 3,290 5,363 5,062
------------------- --------
Total current liabilities 33,583 30,603 35,185
------------------- --------
Commitments and contingencies
Deferred credits:
Deferred income taxes 16,910 15,556 16,525
Unamortized investment tax credits 1,802 1,940 1,870
Regulatory liability - income taxes 1,314 1,436 1,374
Contributions in aid of construction and other 2,339 2,276 2,311
------------------- --------
Total deferred credits 22,365 21,208 22,080
------------------- --------
Total Stockholders' Equity and Liabilities $138,710 $132,450 $132,003
=================== ========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
3
<PAGE> 4
ENERGYNORTH, INC.
Condensed Consolidated Statements of Income
For the periods ended March 31
(Unaudited)
(Thousands of dollars except for per share amounts and shares outstanding)
<TABLE>
<CAPTION>
Three Months Six Months Twelve Months
1997 1996 1997 1996 1997 1996
--------- --------- --------- --------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
Total operating revenues $48,898 $39,661 $78,352 $65,637 $101,669 $86,763
--------- --------- --------- --------- --------- ---------
Operating expenses:
Cost of gas sold 29,663 20,023 44,535 31,174 58,302 43,150
Operations and maintenance 5,488 5,817 11,032 11,373 21,319 21,643
Depreciation and amortization 1,608 1,575 3,124 3,031 5,918 5,601
Taxes other than income taxes 981 1,023 1,958 2,030 3,873 3,900
Federal and state income taxes 3,863 3,844 5,974 5,996 3,614 3,331
--------- --------- --------- --------- --------- ---------
Total operating expenses 41,603 32,282 66,623 53,604 93,026 77,625
--------- --------- --------- --------- --------- ---------
Operating income 7,295 7,379 11,729 12,033 8,643 9,138
--------- --------- --------- --------- --------- ---------
Other income:
Net rentals, service and appliance sales 231 225 531 467 1,012 869
Other, net 8 23 (43) 30 (114) 560
--------- --------- --------- --------- --------- ---------
Total other income 239 248 488 497 898 1,429
--------- --------- --------- --------- --------- ---------
Income before interest expense 7,534 7,627 12,217 12,530 9,541 10,567
--------- --------- --------- --------- --------- ---------
Interest expense:
Interest on long-term debt 726 756 1,457 1,520 2,941 3,084
Other interest 243 204 582 592 790 1,211
Interest charged to construction (16) (4) (21) (7) (42) (28)
--------- --------- --------- --------- --------- ---------
Total interest expense 953 956 2,018 2,105 3,689 4,267
--------- --------- --------- --------- --------- ---------
Net income $ 6,581 $ 6,671 $10,199 $10,425 $ 5,852 $ 6,300
========= ========= ========= ========= ========= =========
Weighted average shares outstanding 3,243,543 3,221,118 3,242,433 3,205,304 3,234,519 3,192,468
========= ========= ========= ========= ========= =========
Earnings per share $ 2.03 $ 2.07 $ 3.15 $ 3.25 $ 1.81 $ 1.97
========= ========= ========= ========= ========= =========
Dividends declared per share $ 0.305 $ 0.29 $ 0.61 $ 0.58 $ 1.22 $ 1.14
========= ========= ========= ========= ========= =========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
4
<PAGE> 5
ENERGYNORTH, INC.
Condensed Consolidated Statements of Cash Flows
For the six months ended March 31
(Unaudited)
(Thousands of dollars)
<TABLE>
<S> <C> <C>
1997 1996
-------- --------
Cash flows from operating activities:
Net income $ 10,199 $ 10,425
Noncash items:
Depreciation and amortization 3,490 3,431
Deferred taxes and investment tax credits, net 257 860
Changes in:
Accounts receivable, net (14,341) (11,198)
Unbilled revenues (1,056) (904)
Inventories 5,153 6,506
Prepaid expenses and other 601 607
Deferred gas costs 2,555 (8,544)
Accounts payable 1,412 3,961
Accrued liabilities (601) (416)
Accrued/prepaid taxes 3,563 4,104
Payments for environmental costs and other (571) 113
-------- --------
Net cash provided by operating activities 10,661 8,945
-------- --------
Cash flows from investing activities:
Additions to property (4,824) (3,268)
Change in note receivable, net (40) -
-------- --------
Net cash used by investing activities (4,864) (3,268)
-------- --------
Cash flows from financing activities:
Issues of common stock 91 407
Issues of long-term debt 460 135
Change in notes payable to banks (35) 1,650
Increase in inventory purchase obligation 2,604 2,254
Change in customer deposits and other (272) 94
Cash dividends on common stock (1,979) (1,859)
Refunding requirements:
Repayment of long-term debt (652) (633)
Repayment of capital lease obligations (122) (138)
Repayment of inventory purchase obligation (5,541) (6,780)
-------- --------
Net cash used for financing activities (5,446) (4,870)
-------- --------
Net increase in cash and temporary cash investments 351 807
Cash and temporary cash investments, beginning of period 770 575
-------- --------
Cash and temporary cash investments, end of period $ 1,121 $ 1,382
======== ========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
5
<PAGE> 6
ENERGYNORTH, INC.
Notes to Condensed Consolidated Financial Statements
March 31, 1997
(Unaudited)
EnergyNorth, Inc. is an exempt public utility holding company operating in
southern and central New Hampshire. Its principal operating subsidiaries
include EnergyNorth Natural Gas, Inc. ("ENGI"), a natural gas distribution
utility, and EnergyNorth Propane, Inc. ("ENPI"), a retail propane company.
Note 1. Basis of Presentation
The accompanying condensed consolidated financial statements of EnergyNorth,
Inc. (the "Company") include the accounts of all subsidiaries. All
significant intercompany accounts and transactions have been eliminated in the
accompanying financial statements.
The condensed consolidated financial statements included herein have been
prepared by the Company, without audit, pursuant to the rules and regulations
of the U. S. Securities and Exchange Commission. Certain footnote disclosures
and other information, normally included in financial statements prepared in
accordance with generally accepted accounting principles, have been condensed
or omitted from these interim financial statements, pursuant to such rules
and regulations, although the Company believes that the disclosures are
adequate to make the information not misleading. In the opinion of the
Company, the accompanying unaudited condensed consolidated financial
statements contain all adjustments, which include only normal recurring
adjustments, necessary to present fairly the financial position as of March
31, 1997 and 1996 and the results of operations for the three, six and twelve
months then ended and statements of cash flows for the six months ended March
31, 1997 and 1996. All accounting policies and practices have been applied
in a manner consistent with prior periods. These interim financial
statements should be read in conjunction with the consolidated financial
statements and notes thereto contained in the Company's Annual Report to
Shareholders for the year ended September 30, 1996.
The business of ENGI and ENPI is influenced by seasonal weather conditions.
The amount of gas sold and transported for central and space heating purposes
and, to a lesser extent, water heating, is directly related to the ambient
air temperature. Consequently, more gas is sold and transported during the
winter months than is sold and transported during the summer months.
Therefore, the results of operations for the interim periods presented are
not indicative of the results to be expected for all or any part of the
balance of the current fiscal year.
Reclassifications are made periodically to previously issued financial
statements to conform to the current year's presentation.
6
<PAGE> 7
ENERGYNORTH, INC.
Notes to Condensed Consolidated Financial Statements (continued)
March 31, 1997
(Unaudited)
Note 2. Cash Flows
Supplemental disclosures of cash flow information for the six months ended
March 31, are as follows (in thousands):
<TABLE>
<S> <C> <C>
1997 1996
------ ------
Cash paid during the period for:
Interest (net of amount capitalized) $2,150 $1,643
Income taxes 2,417 818
</TABLE>
In preparing the accompanying condensed consolidated statements of cash
flows, all highly liquid investments having maturities of three months or
less when acquired were considered to be cash equivalents.
Note 3. Commitments and Contingencies
For a discussion of commitments and contingencies, please refer to Footnote 9
in the Company's 1996 Annual Report to Shareholders.
7
<PAGE> 8
ENERGYNORTH, INC.
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
March 31, 1997
Results of Operations
Net income was $6,581,000, or $2.03 per share, for the three months ended
March 31, 1997, compared to $6,671,000, or $2.07 per share, in 1996. Net
income decreased to $10,199,000, or $3.15 per share, for the six months ended
March 31, 1997, from $10,425,000, or $3.25 per share, in 1996. For the
twelve months ended March 31, 1997, net income was $5,852,000, or $1.81 per
share, compared to $6,300,000, or $1.97 per share, in the prior period.
Temperatures for all periods ended March 31, 1997 were significantly warmer
than normal and the prior comparable periods. The table below discloses
degree day data as recorded at the U.S. weather station in Concord, New
Hampshire, comparing actual degree days to the previous period and to normal.
Due to the size and topographical variations of the Company's service
territory, weather conditions vary. Concord, New Hampshire weather data is
considered to be representative of the territory.
Change Change
Actual Actual vs. vs.
03-31-97 03-31-96 Normal Previous Period Normal
-------- -------- ------ --------------- ------
3 months 3,440 3,634 3,617 (5.3)% (4.9)%
6 months 5,993 6,247 6,211 (4.1)% (3.5)%
12 months 7,228 7,579 7,510 (4.6)% (3.8)%
Quarterly Comparison
Total operating revenues increased $9.2 million, or 23.3%, for the quarter
ended March 31, 1997. Utility gas service revenues were $43.4 million
compared to $34.6 million in the prior period, a 25.4% increase. Revenue
from firm customers, including transportation customers, increased $11
million as a result of the pass through of higher purchased gas costs through
the cost of gas adjustment ("CGA" ). Although changes in CGA rates affect
operating revenues, they do not affect total margin because the CGA is a
tariff mechanism designed to provide dollar-for-dollar recovery of gas costs.
The weather was 5.3% warmer than the same quarter last year and,
consequently, firm sendout, including transportation, decreased 2.6%. Growth
in the average number of firm customers was nearly 2% and helped diminish the
impact of warmer weather on sendout. Margin earned from utility natural gas
operations decreased $444,000, or 2.6%.
Although the average number of retail propane customers increased over 8%
from the prior period, warmer temperatures resulted in a decrease in the
volume of gallons sold of approximately 4%. Despite competitive pressures on
price, retail propane operating revenues increased $412,000.
8
<PAGE> 9
ENERGYNORTH, INC.
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations (continued)
March 31, 1997
Decreases in wages, resulting mostly from a reduction in overtime
requirements, and related operating expense reductions were the primary
reasons for the net decrease in operations and maintenance expenses for the
quarter.
Six-Month Comparison
Total operating revenues increased over $12.7 million, or 19.4%, for the six
months ended March 31, 1997. Utility gas service revenues were $68.8 million
compared to $57.2 million in the prior period, a 20.3% increase. Higher
purchased gas cost of $13.3 million passed through the CGA was the principal
reason for the significant increase. The weather was 4.1% warmer than the
same six months last year, contributing to a decrease in firm sendout,
including firm transportation, of 1.8%. Margin earned from utility natural
gas operations decreased $670,000, or 2.3%.
Despite significant customer growth of almost 9%, the warmer weather
accounted for a net decrease in propane gallons sold of 4.2%. Retail propane
operating revenue increased almost $1.2 million as sales prices rose to meet
the increase in the cost of propane from suppliers.
While wage rates have increased, reductions in the work force and overtime
requirements were the primary reasons for the decrease in operations and
maintenance expenses during the period.
Twelve-Month Comparison
Total operating revenues increased $14.9 million, or 17.2%, for the twelve
months ended March 31, 1997. Utility gas service revenues were $89 million
compared to $75.9 million in the prior period, a 17.4% increase. Firm
sendout was virtually the same as the corresponding prior period as a 2%
increase in firm customers offset the impact of weather that was 4.6% warmer
than last year. The pass through of $14.2 million in higher gas costs
through the CGA was the principal reason for the increase in operating
revenues. Margin earned from utility natural gas operations decreased
$411,000, or 1%.
The average number of retail propane customers increased over 9% during the
twelve month period ended March 31, 1997. The warmer temperatures held
propane gallons sold to approximately the same level as the prior period.
Operating revenues increased $1.7 million as sales prices increased to offset
the rise in the cost of propane sold.
9
<PAGE> 10
ENERGYNORTH, INC.
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations (continued)
March 31, 1997
Reductions in the work force, other cost saving initiatives and workers'
compensation and health insurance refunds were the main reasons for the 1.5%
decrease in operations and maintenance expenses for the period. Higher
depreciation and amortization charges were a direct result of plant additions
and amortization of remediation costs. Federal and state income taxes
increased as a result of a favorable resolution of certain tax issues in
the prior period.
Total other income decreased as a result of startup losses of $122,000
incurred in two joint venture projects during the twelve month period ended
March 31, 1997. In addition, the prior period includes a gain of $350,000
from the sale of railcars formerly used to transport liquid propane.
Total interest expense decreased 13.5% mostly as a result of interest due
from customers on the average deferred gas cost undercollected balance during
the period.
Capital Resources and Liquidity
Cash flow patterns reflect the seasonality of the Company's business. The
greatest demand for cash is in the fall and early winter as construction
projects are brought to completion and during the winter as accounts
receivable balances grow. The net accounts receivable balance at March 31,
1997 is $16.4 million and includes higher purchased gas costs being passed
through the CGA. During the spring and early summer months, a positive cash
flow stream is created as accounts receivable balances are collected. At
this time, inventories have been utilized and prepaid amounts, mostly
insurance, are being amortized. At March 31, 1997, deferred gas cost is in
an undercollected position resulting from current winter and prior summer
activity. The undercollected amounts will be recovered from firm gas
customers during the next winter period through the cost of gas adjustment
mechanism.
The Company's major capital requirements result from normal replacements and
efforts to improve the efficiency of the existing plant and to serve
additional customers. For the six months ended March 31, 1997, capital
expenditures totaled approximately $4.8 million.
Capital expenditures, undercollected deferred gas costs and working capital
requirements were financed by internally generated funds and supplemented by
short-term bank borrowings. At March 31, 1997, the Company had unsecured
bank lines of credit of $15.2 million, $9.5 million of which was outstanding.
10
<PAGE> 11
ENERGYNORTH, INC.
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations (continued)
March 31, 1997
Construction expenditures for fiscal 1997 are expected to total approximately
$13.2 million. Included in the 1997 construction expenditures is a major
main extension project to serve Milford, New Hampshire. Construction
expenditures, payment of dividends, long-term debt repayments, environmental
remediation and working capital requirements will continue to be funded
through cash generated by operations supplemented by available lines of
credit. Additional permanent financing is being considered and will be
necessary in 1998.
Future financing requirements are subject to the amount and timing of
internally generated funds, rate relief, sales volumes, construction
requirements, regulatory actions and market conditions.
FERC Order 636
FERC Order 636 allows interstate pipeline companies to recover transition
costs created as they buy out of long-term, fixed-price gas contracts.
Since the Company's supplier began direct billing these costs on September
1, 1993 as a component of demand charges, $7.2 million has been billed
through March 31, 1997. The Company is recovering transition costs through
the cost of gas adjustment. Based on current information, additional
transition costs are expected to total approximately $1.3 million and will
be billed over a period of approximately 21 months or less.
Environmental Matters
The Company and certain of its predecessors owned or operated facilities for
the manufacture of gas from coal, a process used through the mid-1900's that
produced by-products that may be considered contaminated or hazardous under
current law, and some of which may still be present at such facilities. The
Company accrues environmental investigation and clean-up costs with respect
to former manufacturing sites and other environmental matters when it is
probable that a liability exists and the amount or range of amounts is
reasonably certain.
A former manufactured gas facility in Concord, New Hampshire has been
investigated and partially remediated. Disposal of the contents of the
gasholder situated at this former gas manufacturing facility has been
completed. Total remediation costs amounted to approximately $3.5 million
and were recorded in deferred charges. Recovery of costs from customers
began on July 1, 1995 and will extend over a seven-year period. The
unamortized balance of $2.6 million at March 31, 1997 is excluded from rate
base.
The Company has begun remedial action for a portion of the Concord site at
which wastes were disposed of between the late 1800's and mid-1900's. The
estimated cost of the remedial action ranges from $2.1 million to $3.2
million, and the Company has recorded $2.1 million at March 31, 1997 in
deferred charges.
11
<PAGE> 12
ENERGYNORTH, INC.
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations (continued)
March 31, 1997
The Company is pursuing recovery from its insurance carriers as well as from
insurance carriers of its predecessors with respect to the Concord site. In
addition, the Company is pursuing recovery against an entity that the Company
alleges owned or operated the manufactured gas plant during the late 1800's
and early 1900's.
The Company and another utility company have conducted an environmental site
characterization of a former manufactured gas plant in Laconia, New
Hampshire. The Laconia manufactured gas plant operated between approximately
1887 and 1952, and the Company owned and operated the facility for
approximately the last seven years of its active life. Without admitting
liability, the Company and the other utility have entered into an agreement
under which costs of the site characterization are shared. The Company's
share of the costs of the site characterization and a report to the New
Hampshire Department of Environmental Services ("NHDES"), totaled $216,000
and has been recorded in deferred charges as of March 31, 1997. The Company
is currently unable to predict the magnitude of any liability that may be
imposed on it for the cost of additional studies or the performance of a
remedial action in connection with the Laconia site. The Company is pursuing
recovery from its insurance carriers for costs incurred with respect to the
Laconia site.
The Company will pursue recovery from insurance carriers and claims against
any other responsible parties seeking to ensure that they contribute
appropriately to reimburse the Company for any costs incurred with respect to
environmental matters. The Company intends to seek and expects to receive
approval of rate recovery methods with respect to environmental matters after
it has determined the extent of contamination, received recommendations with
regard to remediation and commenced remediation efforts.
Factors that May Affect Future Results
The Private Securities Litigation Reform Act of 1995 encourages the use of
cautionary statements accompanying forward-looking statements. The preceding
Management's Discussion and Analysis of Financial Condition and Results of
Operations includes forward-looking statements concerning the impact of
changes in the cost of gas and of the CGA mechanism on total margin; projected
capital expenditures and sources of cash to fund expenditures; and estimated
costs of environmental remediation and anticipated regulatory approval of
recovery mechanisms. The Company's future results, generally and with
respect to such forward-looking statements, may be affected by many factors,
among which are, but not limited to, uncertainty as to the regulatory
allowance of recovery of changes in the cost of gas; uncertain demands for
capital expenditures and the availability of cash from various sources; and
uncertainty as to regulatory approval of the full recovery of environmental
costs, transition costs, and other regulatory assets.
12
<PAGE> 13
ENERGYNORTH, INC.
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations (continued)
March 31, 1997
PART II. OTHER INFORMATION
Item 1. Legal Proceeding
The Company commenced proceedings in New Hampshire Superior Court and Federal
District Court on February 2, 1997 against eighteen of its present and
former insurers seeking recovery of expenses that have been and will be
incurred in connection with the investigation and remediation of contamination
from a former manufactured gas plant in Laconia, New Hampshire that was owned
and operated by the Company for approximately seven of sixty-five years of
operation. Costs incurred by the Company as of March 31, 1997 totaled
$216,000, and the magnitude of future liability is uncertain.
Items 2, 3 and 5 are not applicable.
Item 4. Submission of Matters to a Vote of Security Holders
The shareholders of the Company elected certain directors and ratified the
appointment of auditors at the annual meeting held on February 5, 1997.
Numbers of votes for each nominee and for the ratification of auditors are
shown in the following table.
<TABLE>
<CAPTION>
Against
or Broker
For Withheld Abstain Nonvotes
Director Nominees
- ------------------
<S> <C> <C> <C> <C>
Roger C. Avery 2,814,558 23,507 - -
Robert R. Giordano 2,807,189 30,876 - -
N. George Mattaini 2,811,461 26,604 - -
John E. Tulley, II 2,793,451 44,614 - -
Auditor Ratification 2,802,137 9,624 26,304 -
</TABLE>
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
10 - Directors Incentive Compensation Plan
27 - Financial Data Schedule
(Submitted only in electronic format to the
Securities and Exchange Commission)
(b) Reports on Form 8-K:
The Company did not file any reports on Form 8-K
during the quarter ended March 31, 1997.
13
<PAGE> 14
ENERGYNORTH, INC.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
EnergyNorth, Inc.
-----------------
(Registrant)
Date: April 24, 1997 /s/ DAVID A. SKRZYSOWSKI
-------------- ----------------------------
David A. Skrzysowski, duly authorized
Vice President & Controller
(Principal Accounting Officer)
14
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
The schedule contains summary financial information extracted from the
EnergyNorth, Inc. condensed consolidated balance sheet as of March 31, 1997 and
condensed consolidated statement of income and statement of cash flows for the
six months ended March 31, 1997 and is qualified in its entirety by reference to
such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-END> MAR-31-1997
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 93,290<F1>
<OTHER-PROPERTY-AND-INVEST> 7,743<F2>
<TOTAL-CURRENT-ASSETS> 28,588
<TOTAL-DEFERRED-CHARGES> 9,089
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 138,710
<COMMON> 3,244
<CAPITAL-SURPLUS-PAID-IN> 30,428
<RETAINED-EARNINGS> 19,807
<TOTAL-COMMON-STOCKHOLDERS-EQ> 53,479
0
0
<LONG-TERM-DEBT-NET> 29,283
<SHORT-TERM-NOTES> 9,500
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 2,140
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 153
<OTHER-ITEMS-CAPITAL-AND-LIAB> 44,155
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<GROSS-OPERATING-REVENUE> 78,352
<INCOME-TAX-EXPENSE> 5,974
<OTHER-OPERATING-EXPENSES> 60,649
<TOTAL-OPERATING-EXPENSES> 66,623
<OPERATING-INCOME-LOSS> 11,729
<OTHER-INCOME-NET> 488
<INCOME-BEFORE-INTEREST-EXPEN> 12,217
<TOTAL-INTEREST-EXPENSE> 2,018
<NET-INCOME> 10,199
0
<EARNINGS-AVAILABLE-FOR-COMM> 10,199
<COMMON-STOCK-DIVIDENDS> 1,979
<TOTAL-INTEREST-ON-BONDS> 2,590<F3>
<CASH-FLOW-OPERATIONS> 10,661
<EPS-PRIMARY> $3.15
<EPS-DILUTED> 0
<FN>
<F1>Net of accumulated depreciation of $46,704
<F2>Net of accumulated depreciation of $ 8,921
<F3>$2,590 represents the forecasted annual interest on bonds for the fiscal year
ending September 30, 1997. Actual interest on bonds for the six months ended
March 31, 1997 was $1,311.
</FN>
</TABLE>
<PAGE> 1
ENERGYNORTH, INC.
DIRECTOR INCENTIVE COMPENSATION PLAN
This Director Incentive Compensation Plan has been adopted
on February 5, 1997 by the Board of Directors of EnergyNorth,
Inc. for the benefit of its Non-Employee Directors.
1. DEFINITIONS.
The following terms shall have the following meanings:
1.1 "Committee" shall mean the Compensation
Committee of the Board of Directors of the Company.
1.2 "Company" shall mean EnergyNorth, Inc.
1.3 "Common Stock" shall mean the $1.00 common stock of the
Company.
1.4 "Earnings" shall mean net income of the Company,
as shown on the Company's audited financial statement.
1.5 "Effective Date" shall mean February 5, 1997.
1.6 "Incentive Award" shall mean awards of Shares
granted to Participants pursuant to the terms of the
Plan.
1.7 "Non-Employee Director" shall mean a director of
the Company who (i) is not an officer of the Company,
its parent or any of its subsidiaries, or otherwise
employed by the Company, its parent or any of its
subsidiaries, and (ii) does not receive compensation
directly from the Company, its parent or any of is
subsidiaries, for services rendered in any capacity
other than as a director, except for an amount not in
excess of $60,000 per year.
1.8 "Participant" shall have the meaning set forth
in Section 6 of the Plan.
1.9 "Peer Group" shall mean a group of natural gas
distribution companies selected by the Committee for
their reasonable comparability to the Company, as shown
on Exhibit A, as it may be amended from time to time.
1.10 "Plan" shall mean the EnergyNorth, Inc. Director
Incentive Compensation Plan.
1.11 "Plan Year" shall mean the Company's fiscal year
during each year of the term of the Plan, beginning with
the fiscal year ending September 30, 1997.
<PAGE> 2
1.12 "Shares" shall mean shares of the Company's
Common Stock, granted as Incentive Awards.
1.13 "Total Return" shall mean the sum of (i) all
cash dividends paid per share for the three (3) year
period ending on the last day of the most recently
concluded fiscal year plus (ii) the aggregate increase
(or decrease) in the per share price for the three (3)
year period ending on the last day of the most recently
concluded fiscal year, expressed as a percentage of the
per share price on the first day of such three-year
period. Per share prices shall be determined by
averaging the closing prices for the ten trading days
ending on the first or last day of the three-year
period, as the case may be.
2. PURPOSE.
The Plan is intended to compensate Non-Employee Directors
based upon the performance of the Company with share ownership in
the Company.
3. TERM.
The Plan was approved by the Company's Board of Directors on
February 5, 1997 (the "Effective Date"). The Plan shall expire
on September 30, 2006.
4. SHARES SUBJECT TO PLAN.
The number of shares of the Common Stock that may be awarded
under the Plan is 20,000.
5. PLAN ADMINISTRATION.
The Plan shall be administered by the Compensation Committee
of the Company's Board of Directors. The Committee shall have
full power to construe and interpret the Plan and to establish
rules and regulations for its administration. The Committee's
determination on the foregoing matters shall be by a majority of
the Committee, and its determinations and decisions shall be
final and binding upon all persons. Notwithstanding the
foregoing or any other provision of the Plan, no Incentive Award
shall be made by the Committee without the prior approval of a
majority of the members of the Board of Directors of the Company.
6. ELIGIBLE DIRECTORS.
Subject to Article 7, Incentive Awards shall be granted to
all Non-Employee Directors who served as Non-Employee Directors
of the Company for the entire Plan Year upon which the Incentive
Award is based (a "Participant"). Further, Incentive Awards may
be granted to such Non-Employee Directors who served as Non-
Employee Directors of the Company for less than the entire Plan
Year
<PAGE> 3
upon which an Incentive Award is based, as may be determined by
the Committee (also a "Participant").
7. INCENTIVE AWARDS.
All Participants (as determined in accordance with Article 6)
shall receive One Hundred (100) Shares as compensation for
services as a director each Plan Year, provided that:
7.1 The Company's Total Return for the Plan Year
exceeds the median Total Return of the Peer Group for
the same period; and
7.2 The Company's Earnings for the Plan Year
(adjusting for events determined by the Committee to be
nonrecurring, extraordinary events) exceed the total
dividends on Company Common Stock paid during the Plan
Year.
8. PAYMENT OF INCENTIVE AWARDS.
Within a reasonable time after all necessary information is
available to the Committee following each Plan Year, but no later
than December 31 immediately following the end of the previous
Plan Year, the Committee shall determine the Incentive Award
grants for the previous Plan Year in accordance with the
provisions of the Plan, which awards shall be subject to the
prior approval of a majority of the members of the Board of
Directors of the Company. Shares granted as an Incentive Award
for a Plan Year shall be issued as compensation, without payment
by Participants of additional consideration, no later than
December 31 immediately following the end of the previous Plan
Year.
9. CORPORATE CHANGES.
The Company's Board of Directors shall adjust the number of
Shares subject to the Plan to give effect to any stock dividends,
stock splits, stock combinations, recapitalizations, or other
such changes in the Company's capital structure.
10. TERMINATION OR AMENDMENT.
The Board of Directors may at any time suspend, reinstate, or
terminate the Plan or make such changes in or additions to the
Plan as it deems advisable without further action on the part of
the shareholders of the Company, except that no such termination
or amendment shall adversely affect or impair any right to
receive Shares with respect to Plan Years then ended or affect or
impair then issued and outstanding Shares.
11. DIRECTORSHIP.
Nothing in the Plan shall confer upon any director the right
to his or her directorship.
<PAGE> 4
12. OTHER PLANS.
The adoption of the Plan shall not affect any other
compensation plan in effect for the Company, nor shall the Plan
preclude the Company from establishing any other forms of
incentive or other compensation for employees of the Company.
13. INDEMNIFICATION.
In addition to other rights of indemnification as directors
or otherwise, the members of the Committee shall at all times be
indemnified by the Company against the reasonable expenses,
including attorneys' fees, actually and necessarily incurred in
connection with the assertion of any claim, action, suit or
proceeding, or in connection with any appeal thereof, to which
they, or any of them, may be a party by reason of any action
taken or failure to act in connection with the Plan and against
all amounts paid by them in settlement thereof approved by
independent legal counsel selected by the Company, or paid by
them in satisfaction of a judgment in any such action, suit or
proceeding, provided that within sixty (60) days after
institution of such action, suit or proceeding, the member shall
make written offer to the Company to handle and defend the same
at its own expense.
14. SECTION 16 COMPLIANCE
With respect to persons subject to Section 16 of the
Securities Exchange Act of 1934, transactions under the Plan are
intended to comply with all applicable conditions of Rule 16b-3
or its successors under the Securities Exchange Act of 1934. To
the extent any provisions of the Plan or action by the Committee
fails to so comply, such provision shall be deemed null and void,
to the extent permitted by law and deemed advisable by the
Committee.
<PAGE> 5
EnergyNorth, Inc.
Director Incentive Compensation Plan
EXHIBIT A
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Bay State Gas Company
Colonial Gas Company
Essex County Gas Company
Berkshire Gas Company
Valley Resources, Inc.
Providence Energy Corporation
Connecticut Energy Corporation
Connecticut Natural Gas Company Corp.
Southeastern Michigan Gas Ent.
