þ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) |
New Jersey
(State or other jurisdiction of incorporation or organization) |
13-1086010
(I.R.S. Employer Identification No.) |
|
6363 Main Street
Williamsville, New York (Address of principal executive offices) |
14221
(Zip Code) |
Name of
|
||
Each Exchange
|
||
on Which
|
||
Title of Each Class
|
Registered
|
|
Common Stock, $1 Par Value, and
Common Stock Purchase Rights |
New York Stock Exchange |
1
2
Item 1 | Business |
3
| Horizon Energy Development, Inc. (Horizon), a New York corporation formed to engage in foreign and domestic energy projects through investments as a sole or substantial owner in various business entities. These entities include Horizons wholly owned subsidiary, Horizon Energy Holdings, Inc., a New York corporation, which owns 100% of Horizon Energy Development B.V. (Horizon B.V.). Horizon B.V. is a Dutch company that is in the process of winding up or selling certain power development projects in Europe; | |
| Horizon LFG, Inc. (Horizon LFG), a New York corporation engaged through subsidiaries in the purchase, sale and transportation of landfill gas in Ohio, Michigan, Kentucky, Missouri, Maryland and Indiana. Horizon LFG and one of its wholly owned subsidiaries own all of the partnership interests in Toro Partners, LP (Toro), a limited partnership which owns and operates short-distance landfill gas pipeline companies. The Company acquired Toro in June 2003; | |
| Leidy Hub, Inc. (Leidy Hub), a New York corporation formed to provide various natural gas hub services to customers in the eastern United States; | |
| Data-Track Account Services, Inc. (Data-Track), a New York corporation formed to provide collection services principally for the Companys subsidiaries; | |
| Horizon Power, Inc. (Horizon Power), a New York corporation which is an exempt wholesale generator under PUHCA 2005 and is developing or operating mid-range independent power production facilities and landfill gas electric generation facilities; and | |
| Empire Pipeline, Inc., a New York corporation formed in 2005 to be the surviving corporation of a planned future merger with Empire, which is expected to occur after construction of the Empire Connector project (described below under the heading Rates and Regulation and under Item 7, MD&A under the headings Investing Cash Flow and Rate and Regulatory Matters). |
4
5
6
7
8
9
10
Current Company
|
||
Positions and
|
||
Other Material
|
||
Business Experience
|
||
Name and Age (as of
|
During Past
|
|
November 15, 2007)
|
Five Years | |
Philip C. Ackerman
(63) |
Chairman of the Board of Directors since January 2002; Chief Executive Officer since October 2001; and President of Horizon since September 1995. Mr. Ackerman has served as a Director of the Company since March 1994, and previously served as President of the Company from July 1999 through January 2006. | |
David F. Smith
(54) |
President of the Company since February 2006; Chief Operating Officer of the Company since February 2006; President of Supply Corporation since April 2005; President of Empire since April 2005. Mr. Smith previously served as Vice President of the Company from April 2005 through January 2006; President of Distribution Corporation from July 1999 to April 2005; and Senior Vice President of Supply Corporation from July 2000 to April 2005. | |
Ronald J. Tanski
(55) |
Treasurer and Principal Financial Officer of the Company since April 2004; President of Distribution Corporation since February 2006; Treasurer of Distribution Corporation since April 2004; Treasurer of Horizon since February 1997. Mr. Tanski previously served as Controller of the Company from February 2003 through March 2004; Senior Vice President of Distribution Corporation from July 2001 through January 2006; and Controller of Distribution Corporation from February 1997 through March 2004. | |
Matthew D. Cabell
(49) |
President of Seneca since December 2006. Prior to joining Seneca, Mr. Cabell served as Executive Vice President and General Manager of Marubeni Oil & Gas (USA) Inc., an exploration and production company, from June 2003 to December 2006. From January 2002 to June 2003, Mr. Cabell served as a consultant assisting oil companies in upstream acquisition and divestment transactions as well as Gulf of Mexico entry strategy, first as an independent consultant and then as Vice President of Randall & Dewey, Inc., a major oil and gas transaction advisory firm. Mr. Cabells prior employers are not subsidiaries or affiliates of the Company. | |
Karen M. Camiolo
(48) |
Controller and Principal Accounting Officer of the Company since April 2004; Controller of Distribution Corporation and Supply Corporation since April 2004; and Chief Auditor of the Company from July 1994 through March 2004. | |
Anna Marie Cellino
(54) |
Secretary of the Company since October 1995; Secretary of Distribution Corporation since September 1999; Senior Vice President of Distribution Corporation since July 2001. | |
Paula M. Ciprich
(47) |
General Counsel of the Company since January 2005; Assistant Secretary of Distribution Corporation since February 1997. | |
Donna L. DeCarolis
(48) |
Vice President Business Development of the Company since October 2007. Ms. DeCarolis previously served as President of NFR from January 2005 to October 2007; Secretary of NFR from March 2002 to October 2007; and Vice President of NFR from May 2001 to January 2005. | |
John R. Pustulka
(55) |
Senior Vice President of Supply Corporation since July 2001. | |
James D. Ramsdell
(52) |
Senior Vice President of Distribution Corporation since July 2001. |
(1) | The executive officers serve at the pleasure of the Board of Directors. The information provided relates to the Company and its principal subsidiaries. Many of the executive officers also have served or currently serve as officers or directors of other subsidiaries of the Company. |
11
Item 1A | Risk Factors |
12
13
14
15
16
Item 1B | Unresolved Staff Comments |
17
20
25
93
95
105
108
112
114
115
117
121
122
123
124
125
Item 2
Properties
18
Table of Contents
For The Year Ended September 30
2007
2006
2005
$
6.58
$
8.01
$
7.05
$
63.04
$
64.10
$
49.78
$
6.87
$
5.89
$
6.01
$
64.09
$
47.46
$
35.03
$
1.08
$
0.86
$
0.71
40
36
50
$
6.54
$
7.93
$
6.85
$
56.86
$
56.80
$
42.91
$
6.82
$
7.19
$
6.15
$
47.43
$
37.69
$
23.01
$
1.54
$
1.35
$
1.15
19
Table of Contents
For The Year Ended September 30
2007
2006
2005
50
53
53
$
7.48
$
9.53
$
7.60
$
62.26
$
65.28
$
48.28
$
8.25
$
8.90
$
7.01
$
62.26
$
65.28
$
48.28
$
0.69
$
0.69
$
0.63
17
15
13
$
6.82
$
8.42
$
7.13
$
58.43
$
58.47
$
44.87
$
7.25
$
7.02
$
6.26
$
51.68
$
40.26
$
26.59
$
1.23
$
1.09
$
0.90
108
104
117
$
6.09
$
7.14
$
6.15
$
50.06
$
51.40
$
42.97
$
6.17
$
7.47
$
6.14
$
50.06
$
51.40
$
42.97
$
1.94
$
1.57
$
1.29
21
26
27
$
6.64
$
8.04
$
6.86
$
57.93
$
57.94
$
44.72
$
6.98
$
7.15
$
6.23
$
51.58
$
41.10
$
27.86
$
1.35
$
1.18
$
0.98
129
130
144
Gulf Coast
West Coast
Appalachian
Region
Region
Region
Total Company
Gas
Oil
Gas
Oil
Gas
Oil
Gas
Oil
33
37
1,313
2,347
7
2,380
1,357
19
16
1,305
2,274
6
2,293
1,327
Table of Contents
Golf
West
Coast
Coast
Appalachian
Total
Region
Region
Region
Company
141,425
11,058
515,400
667,883
97,756
10,688
488,907
597,351
148,960
472,407
621,367
89,921
447,802
537,723
Productive
Dry
2007
2006
2005
2007
2006
2005
1.31
2.94
1.30
1.42
0.85
0.47
1.00
0.78
0.23
0.67
0.50
58.99
92.98
116.97
2.00
1.00
8.10
3.88
3.00
4.00
184.00
140.58
45.00
2.00
1.75
1.00
9.91
6.82
4.30
1.42
0.85
4.47
243.99
234.34
162.20
4.67
2.75
1.00
6.38
12.60
21.14
1.35
2.00
1.80
2.50
3.50
1.00
16.29
19.42
25.44
1.42
2.20
6.47
245.79
236.84
165.70
4.67
3.75
1.00
21
Table of Contents
Gulf
West
Coast
Coast
Appalachian
Total
Region
Region
Region
Company
2.00
4.00
90.00
96.00
1.30
4.00
88.00
93.30
(1)
Includes wells awaiting completion.
Item 3
Legal
Proceedings
22
Table of Contents
Item 4
Submission
of Matters to a Vote of Security Holders
Item 5
Market
for the Registrants Common Equity, Related Stockholder
Matters and Issuer Purchases of Equity Securities
Total Number
Maximum Number
of Shares
of Shares
Purchased as
that May
Part of
Yet Be
Publicly Announced
Purchased Under
Total Number
Average Price
Share Repurchase
Share Repurchase
of Shares
Paid per
Plans or
Plans or
Purchased(a)
Share
Programs
Programs(b)
7,317
$
44.75
4,278,122
124,254
$
41.93
113,000
4,165,122
22,622
$
44.97
4,165,122
154,193
$
42.51
113,000
4,165,122
(a)
Represents (i) shares of common stock of the Company
purchased on the open market with Company matching
contributions for the accounts of participants in the
Companys 401(k) plans, (ii) shares of common stock of
the Company tendered to the Company by holders of stock options
or shares of restricted stock for the payment of option exercise
prices or applicable withholding taxes, and (iii) shares of
common
23
Table of Contents
stock of the Company purchased on the open market pursuant to
the Companys publicly announced share repurchase program.
Shares purchased other than through a publicly announced share
repurchase program totaled 7,317 in July 2007, 11,254 in August
2007 and 22,622 in September 2007 (a three-month total of
41,193). Of those shares, 23,498 were purchased for the
Companys 401(k) plans and 17,695 were purchased as a
result of shares tendered to the Company by holders of stock
options or shares of restricted stock.
(b)
On December 8, 2005, the Companys Board of Directors
authorized the repurchase of up to eight million shares of the
Companys common stock. Repurchases may be made from time
to time in the open market or through private transactions.
Item 6
Selected
Financial Data(1)
Year Ended September 30
2007
2006
2005
2004
2003
(Thousands)
$
2,039,566
$
2,239,675
$
1,860,774
$
1,867,875
$
1,821,899
1,018,081
1,267,562
959,827
949,452
963,567
396,408
395,289
388,094
374,010
330,316
70,660
69,202
68,164
68,378
72,073
157,919
151,999
156,502
159,184
154,634
1,643,068
1,884,052
1,572,587
1,551,024
1,520,590
(1,252
)
168,787
396,498
355,623
288,187
315,599
470,096
4,979
3,583
3,362
805
535
(4,158
)
1,550
9,409
6,236
1,771
2,427
4,936
2,825
12,744
2,908
2,204
(68,446
)
(72,629
)
(73,244
)
(82,989
)
(91,381
)
(6,029
)
(5,952
)
(9,069
)
(6,354
)
(11,010
)
333,488
292,859
224,058
231,740
372,871
131,813
108,245
85,621
89,820
116,795
201,675
184,614
138,437
141,920
256,076
15,479
(46,523
)
25,277
24,666
(68,240
)
120,301
25,774
135,780
(46,523
)
51,051
24,666
(68,240
)
24
Table of Contents
Year Ended September 30
2007
2006
2005
2004
2003
(Thousands)
337,455
138,091
189,488
166,586
187,836
(8,892
)
$
337,455
$
138,091
$
189,488
$
166,586
$
178,944
$
2.43
$
2.20
$
1.66
$
1.73
$
3.17
$
2.37
$
2.15
$
1.63
$
1.71
$
3.15
$
4.06
$
1.64
$
2.27
$
2.03
$
2.21
$
3.96
$
1.61
$
2.23
$
2.01
$
2.20
$
1.22
$
1.18
$
1.14
$
1.10
$
1.06
$
1.21
$
1.17
$
1.13
$
1.09
$
1.05
$
1.24
$
1.20
$
1.16
$
1.12
$
1.08
16,989
17,767
18,369
19,063
19,217
$
1,099,280
$
1,084,080
$
1,064,588
$
1,048,428
$
1,028,393
681,940
674,175
680,574
696,487
705,927
982,698
1,002,265
974,806
923,730
925,833
102
59
97
80
171
89,902
90,939
94,826
82,838
87,600
16,735
17,394
18,098
21,172
22,042
7,748
8,814
6,311
234,029
221,082
$
2,878,405
$
2,877,726
$
2,839,300
$
3,006,764
$
2,991,048
$
3,888,412
$
3,763,748
$
3,749,753
$
3,738,103
$
3,740,944
$
1,630,119
$
1,443,562
$
1,229,583
$
1,253,701
$
1,137,390
799,000
1,095,675
1,119,012
1,133,317
1,147,779
$
2,429,119
$
2,539,237
$
2,348,595
$
2,387,018
$
2,285,169
(1)
Certain prior year amounts have been reclassified to conform
with current year presentation.
(2)
Includes discontinued operations and cumulative effect of
changes in accounting.
(3)
Includes net plant of SECI discontinued operations as follows:
$0 for 2007, $88,023 for 2006, $170,929 for 2005, $142,860 for
2004, and $116,487 for 2003.
(4)
Includes net plant of the former international segment as
follows: $38 for 2007, $27 for 2006, $20 for 2005, $227,905 for
2004, and $219,199 for 2003.
Table of Contents
Item 7
Managements
Discussion and Analysis of Financial Condition and Results of
Operations
6.
Other Matters, including: (a) 2007 and 2008 funding to the
Companys defined benefit retirement plan and
post-retirement benefit plan, (b) realizability of deferred
tax assets, (c) disclosures and tables concerning market
risk sensitive instruments, (d) rate and regulatory matters
in the Companys New York, Pennsylvania and FERC regulated
jurisdictions, (e) environmental matters, and (f) new
accounting pronouncements.
26
Table of Contents
27
Table of Contents
28
Table of Contents
29
Table of Contents
30
Table of Contents
A $120.3 million gain on the sale of SECI, which was
completed in August 2007. This amount is included in earnings
from discontinued operations;
A $4.8 million benefit to earnings in the Pipeline and
Storage segment due to the reversal of a reserve established for
all costs incurred related to the Empire Connector project
recognized during June 2007;
A $1.9 million benefit to earnings in the Pipeline and
Storage segment associated with the discontinuance of hedge
accounting for Empires interest rate collar; and
A $2.3 million benefit to earnings in the Energy Marketing
segment related to the resolution of a purchased gas contingency.
$68.6 million of impairment charges related to the
Exploration and Production segments Canadian oil and gas
assets under the full cost method of accounting using natural
gas pricing at June 30, 2006 and September 30, 2006;
An $11.2 million benefit to earnings in the Exploration and
Production segment ($6.1 million in continuing operations
and $5.1 million in discontinued operations) related to
income tax adjustments recognized during 2006; and
A $2.6 million benefit to earnings in the Utility segment
related to the correction of Distribution Corporations
calculation of the symmetrical sharing component of New
Yorks gas adjustment rate.
31
Table of Contents
A $25.8 million gain on the sale of U.E., which was
completed in July 2005. This amount is included in earnings from
discontinued operations;
A $2.6 million gain in the Pipeline and Storage segment
associated with a FERC approved sale of base gas;
A $3.9 million gain in the Pipeline and Storage segment
associated with insurance proceeds received in prior years for
which a contingency was resolved during 2005;
A $3.3 million loss related to certain derivative financial
instruments that no longer qualified as effective hedges;
A $2.7 million impairment in the value of the
Companys 50% investment in ESNE (recorded in the All Other
category), a limited liability company that owns an 80-megawatt,
combined cycle, natural gas-fired power plant in the town of
North East, Pennsylvania; and
A $1.8 million impairment of a gas-powered turbine in the
All Other category that the Company had planned to use in the
development of a co-generation plant.
Year Ended September 30
2007
2006
2005
(Thousands)
$
50,886
$
49,815
$
39,197
56,386
55,633
60,454
74,889
67,494
35,581
7,663
5,798
5,077
3,728
5,704
5,032
193,552
184,444
145,341
2,564
359
(2,616
)
5,559
(189
)
(4,288
)
201,675
184,614
138,437
135,780
(46,523
)
51,051
$
337,455
$
138,091
$
189,488
(1)
Includes earnings from the former International segments
activity other than the activity from the Czech Republic
operations included in Earnings from Discontinued Operations.
32
Table of Contents
Year Ended September 30
2007
2006
2005
(Thousands)
$
848,693
$
993,928
$
868,292
136,863
166,779
145,393
8,271
13,484
13,998
993,827
1,174,191
1,027,683
9,751
102,534
92,569
83,669
14,612
14,003
5,715
$
1,120,724
$
1,280,763
$
1,117,067
Year Ended September 30
2007
2006
2005
60,236
59,443
66,903
10,713
10,681
11,984
727
985
1,387
71,676
71,109
80,274
1,355
62,240
57,950
59,770
135,271
129,059
140,044
Percent (Warmer)
Colder Than
Normal
Actual
Normal
Prior Year
Buffalo
6,692
6,271
(6.3
)%
5.1
%
Erie
6,243
6,007
(3.8
)%
5.6
%
Buffalo
6,692
5,968
(10.8
)%
(9.4
)%
Erie
6,243
5,688
(8.9
)%
(8.9
)%
Buffalo
6,692
6,587
(1.6
)%
0.2
%
Erie
6,243
6,247
0.1
%
2.6
%
33
Table of Contents
34
Table of Contents
35
Table of Contents
36
Table of Contents
Year Ended September 30
2007
2006
2005
(Thousands)
$
118,771
$
118,551
$
117,146
4,161
4,858
4,413
122,932
123,409
121,559
66,966
66,718
65,320
169
39
267
67,135
66,757
65,587
21,899
24,186
28,713
$
211,966
$
214,352
$
215,859
Year Ended September 30
2007
2006
2005
351,113
363,379
357,585
4,975
11,609
14,794
356,088
374,988
372,379
37
Table of Contents
Year Ended September 30
2007
2006
2005
(Thousands)
$
143,785
$
126,969
$
132,528
167,627
134,307
94,925
37,528
42,252
36,350
1,147
3,072
(3,447
)
(26,050
)
(31,704
)
(29,706
)
$
324,037
$
274,896
$
230,650
$
50,495
$
71,984
$
62,775
38
Table of Contents
(1)
Represents the elimination of certain West Coast gas production
revenue included in Gas (after Hedging) from Continuing
Operations in the table above that is sold to the gas
processing plant shown in the table above. An elimination for
the same dollar amount was made to reduce the gas processing
plants Purchased Gas expense.
Year Ended September 30
2007
2006
2005
10,356
9,110
12,468
3,929
3,880
4,052
5,555
5,108
4,650
19,840
18,098
21,170
6,426
7,673
8,009
26,266
25,771
29,179
717
685
989
2,403
2,582
2,544
124
69
36
3,244
3,336
3,569
206
272
300
3,450
3,608
3,869
Year Ended September 30
2007
2006
2005
$
6.58
$
8.01
$
7.05
$
6.54
$
7.93
$
6.85
$
7.48
$
9.53
$
7.60
$
6.82
$
8.42
$
7.13
$
7.25
$
7.02
$
6.26
$
6.09
$
7.14
$
6.15
$
63.04
$
64.10
$
49.78
$
56.86
$
56.80
$
42.91
$
62.26
$
65.28
$
48.28
$
58.43
$
58.47
$
44.87
$
51.68
$
40.26
$
26.59
$
50.06
$
51.40
$
42.97
(1)
Refer to further discussion of hedging activities below under
Market Risk Sensitive Instruments and in
Note F Financial Instruments in Item 8 of
this report.
(2)
Includes low gravity oil which generally sells for a lower price.
39
Table of Contents
40
Table of Contents
Year Ended September 30
2007
2006
2005
(Thousands)
$
413,405
$
496,769
$
329,560
207
300
154
$
413,612
$
497,069
$
329,714
Year Ended September 30
2007
2006
2005
50,775
45,270
40,683
41
Table of Contents
Year Ended September 30
2007
2006
2005
(Thousands)
$
21,927
$
23,077
$
22,478
5,097
7,123
7,296
27,908
32,809
29,651
3,965
2,020
1,861
$
58,897
$
65,029
$
61,286
Year Ended September 30
2007
2006
2005
(Thousands)
8,660
9,527
7,601
9,358
10,454
10,489
14,778
16,862
15,491
32,796
36,843
33,581
42
Table of Contents
43
Table of Contents
44
Table of Contents
Year Ended September 30
2007
2006
2005
(Millions)
$
394.2
$
471.4
$
317.3
(276.7
)
(294.2
)
(219.5
)
(3.3
)
232.1
111.6
(58.2
)
5.1
1.4
(0.8
)
(3.2
)
3.2
(115.4
)
(119.6
)
(9.8
)
(13.3
)
17.5
23.3
20.3
(100.6
)
(98.2
)
(94.1
)
(12.7
)
13.7
6.5
(48.1
)
(85.2
)
(0.1
)
1.4
1.3
$
55.2
$
12.0
$
0.1
45
Table of Contents
Year Ended September 30, 2007
Total Expenditures
Capital
Investment
For Long-Lived
Expenditures
in Partnership
Assets
(Millions)
$
54.2
$
$
54.2
43.2
43.2
146.7
146.7
3.7
3.7
(0.2
)
3.3
3.1
$
247.6
$
3.3
$
250.9
(1)
Excludes expenditures for long-lived assets associated with
discontinued operations of $29.1 million.
46
Table of Contents
Year Ended September 30
2008
2009
2010
(Millions)
$
59.0
$
57.0
$
56.0
152.0
96.0
40.0
154.0
146.0
143.0
1.0
$
366.0
$
299.0
$
239.0
(1)
Includes estimated expenditures for the years ended
September 30, 2008, 2009 and 2010 of approximately
$33 million, $36 million and $27 million,
respectively, to develop proved undeveloped reserves.
47
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48
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49
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Payments by Expected Maturity Dates
2008
2009
2010
2011
2012
Thereafter
Total
(Millions)
$
259.8
$
148.4
$
45.5
$
232.7
$
171.8
$
439.3
$
1,297.5
$
6.7
$
5.8
$
4.4
$
2.9
$
2.6
$
13.1
$
35.5
$
0.9
$
0.5
$
0.4
$
0.4
$
0.2
$
$
2.4
$
718.1
$
67.2
$
7.1
$
2.8
$
2.8
$
16.2
$
814.2
$
48.4
$
47.3
$
43.7
$
19.3
$
6.0
$
7.1
$
171.8
$
118.3
$
0.6
$
$
$
$
$
118.9
$
20.5
$
9.6
$
6.0
$
4.2
$
3.7
$
14.2
$
58.2
(1)
Refer to Note E Capitalization and Short-Term
Borrowings, as well as the table under Interest Rate Risk in the
Market Risk Sensitive Instruments section below, for the amounts
excluding interest expense.
(2)
Gas prices are variable based on the NYMEX prices adjusted for
basis.
(3)
The Empire Connector is scheduled to be placed in service by
November 2008, at an estimated cost of $177 million. The
Company has only committed itself to $118.9 million for the
project at September 30, 2007.
50
Table of Contents
Expected Maturity Dates
2008
2009
Total
12.2
1.0
13.2
$
8.15
$
8.82
$
8.20
$
7.77
$
9.08
$
7.86
51
Table of Contents
Expected Maturity Dates
2008
2009
Total
1,305,000
180,000
1,485,000
$
57.72
$
54.70
$
57.35
$
78.69
$
74.31
$
78.16
Expected
Maturity
Date
2008
1.4
$
16.45
$
8.83
52
Table of Contents
Expected Maturity Dates
2008
2009
2010
2011
2012
Total
2.9
(0.1
)
(1)
(1)
2.8
$
9.08
$
9.50
NA
$
6.99
$
8.68
$
9.11
$
8.94
$
9.13
NA
$
6.31
$
9.00
$
8.96
(1)
The Energy Marketing segment has purchased 4 and 6 futures
contracts (1 contract = 2,500 Dth) for 2011 and 2012,
respectively.
53
Table of Contents
Principal Amounts by Expected Maturity Dates
2008
2009
2010
2011
2012
Thereafter
Total
(Dollars in millions)
$
200.0
(1)
$
100.0
$
$
200.0
$
150.0
$
349.0
$
999.0
6.3
%
6.0
%
7.5
%
6.7
%
5.9
%
6.4
%
(1)
These notes have been classified as Current Portion of Long-Term
Debt on the Companys Consolidated Balance Sheet.
54
Table of Contents
55
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56
Table of Contents
57
Table of Contents
1.
Changes in economic conditions, including economic disruptions
caused by terrorist activities, acts of war or major accidents;
2.
Changes in demographic patterns and weather conditions,
including the occurrence of severe weather such as hurricanes;
3.
Changes in the availability
and/or
price
of natural gas or oil and the effect of such changes on the
accounting treatment of derivative financial instruments or the
valuation of the Companys natural gas and oil reserves;
4.
Uncertainty of oil and gas reserve estimates;
5.
Ability to successfully identify, drill for and produce
economically viable natural gas and oil reserves;
6.
Significant changes from expectations in the Companys
actual production levels for natural gas or oil;
7.
Changes in the availability
and/or
price
of derivative financial instruments;
8.
Changes in the price differentials between various types of oil;
9.
Inability to obtain new customers or retain existing ones;
10.
Significant changes in competitive factors affecting the Company;
11.
Changes in laws and regulations to which the Company is subject,
including changes in tax, environmental, safety and employment
laws and regulations;
12.
Governmental/regulatory actions, initiatives and proceedings,
including those involving acquisitions, financings, rate cases
(which address, among other things, allowed rates of return,
rate design and retained gas), affiliate relationships, industry
structure, franchise renewal, and environmental/safety
requirements;
13.
Unanticipated impacts of restructuring initiatives in the
natural gas and electric industries;
14.
Significant changes from expectations in actual capital
expenditures and operating expenses and unanticipated project
delays or changes in project costs or plans;
15.
The nature and projected profitability of pending and potential
projects and other investments, and the ability to obtain
necessary governmental approvals and permits;
16.
Occurrences affecting the Companys ability to obtain funds
from operations, from borrowings under our credit lines or other
credit facilities or from issuances of other short-term notes or
debt or equity securities to finance needed capital expenditures
and other investments, including any downgrades in the
Companys credit ratings;
17.
Ability to successfully identify and finance acquisitions or
other investments and ability to operate and integrate existing
and any subsequently acquired business or properties;
58
Table of Contents
18.
Impairments under the SECs full cost ceiling test for
natural gas and oil reserves;
19.
Significant changes in tax rates or policies or in rates of
inflation or interest;
20.
Significant changes in the Companys relationship with its
employees or contractors and the potential adverse effects if
labor disputes, grievances or shortages were to occur;
21.
Changes in accounting principles or the application of such
principles to the Company;
22.
The cost and effects of legal and administrative claims against
the Company;
23.
Changes in actuarial assumptions and the return on assets with
respect to the Companys retirement plan and
post-retirement benefit plans;
24.
Increasing health care costs and the resulting effect on health
insurance premiums and on the obligation to provide
post-retirement benefits; or
25.
Increasing costs of insurance, changes in coverage and the
ability to obtain insurance.
Item 7A
Quantitative
and Qualitative Disclosures About Market Risk
59
Table of Contents
Item 8
Financial
Statements and Supplementary Data
Page
61
62
63
64
65
66
117
60
Table of Contents
61
Table of Contents
62
Table of Contents
At September 30
2007
2006
(Thousands of dollars)
$
4,461,586
$
4,703,040
1,583,181
1,825,314
2,878,405
2,877,726
124,806
69,611
61,964
4,066
19,676
172,380
173,671
20,682
25,538
66,195
59,461
35,669
36,693
14,769
12,970
45,057
63,723
8,550
23,402
554,138
484,745
83,954
79,511
12,070
15,492
137,577
76,917
5,545
3,558
85,902
88,414
18,256
11,590
5,476
5,476
28,836
31,498
61,006
64,125
9,188
11,305
9,003
8,059
4,388
455,869
401,277
$
3,888,412
$
3,763,748
$
83,461
$
83,403
569,085
543,730
983,776
786,013
1,636,322
1,413,146
(6,203
)
30,416
1,630,119
1,443,562
799,000
1,095,675
2,429,119
2,539,237
200,024
22,925
109,757
133,034
10,409
23,935
25,873
25,008
18,158
18,420
22,863
29,417
36,062
27,040
16,200
39,983
439,346
319,762
575,356
544,502
14,026
10,426
5,392
6,094
91,226
85,076
76,659
75,456
70,555
32,918
75,939
77,392
110,794
72,885
1,019,947
904,749
$
3,888,412
$
3,763,748
63
Table of Contents
Year Ended September 30
2007
2006
2005
(Thousands of dollars)
$
337,455
$
138,091
$
189,488
(159,873
)
(27,386
)
104,739
170,803
179,615
193,144
52,847
(5,230
)
40,388
(3,366
)
1,067
(1,372
)
4,158
2,645
(13,689
)
(6,515
)
16,399
4,829
7,390
15,610
58,108
(69,172
)
5,669
(12,343
)
(25,828
)
(5,714
)
1,679
1,934
(1,799
)
1,847
(7,285
)
18,800
(39,572
)
(42,409
)
(26,002
)
(23,144
)
48,089
(13,526
)
22,777
(1,996
)
(6,554
)
4,946
3,971
8,950
(17,754
)
18,715
4,109
(22,700
)
(13,461
)
(5,922
)
80,960
(3,667
)
394,197
471,400
317,346
(276,728
)
(294,159
)
(219,530
)
(3,300
)
232,092
111,619
(58,248
)
5,137
13
1,349
(725
)
(3,230
)
3,238
(101,772
)
(297,376
)
(103,324
)
(115,359
)
13,689
6,515
(48,070
)
(85,168
)
(119,576
)
(9,805
)
(13,317
)
17,498
23,339
20,279
(100,632
)
(98,266
)
(94,159
)
(12,676
)
(237,091
)
(163,385
)
(215,232
)
(139
)
1,365
1,276
55,195
12,004
66
69,611
57,607
57,541
$
124,806
$
69,611
$
57,607
$
75,987
$
78,003
$
84,455
$
97,961
$
54,359
$
83,542
64
Table of Contents
Year Ended September 30
2007
2006
2005
(Thousands of dollars)
$
337,455
$
138,091
$
189,488
165,914
(83,379
)
7,874
7,408
14,286
(42,658
)
(716
)
(37,793
)
4,747
2,573
2,891
(651
)
8,495
90,196
(206,847
)
5,106
91,743
97,689
(16,436
)
357,118
(213,804
)
58,070
(29,183
)
112
(112
)
1,724
894
1,012
(228
)
3,153
34,772
(79,059
)
2,824
35,338
36,507
7,701
129,074
(70,951
)
(24,137
)
228,044
(142,853
)
$
313,318
$
366,135
$
46,635
65
Table of Contents
Note A
Summary
of Significant Accounting Policies
66
Table of Contents
67
Table of Contents
As of September 30
2007
2006
(Thousands)
$
1,539,808
$
1,493,991
976,316
962,831
1,577,745
1,899,777
1,199
1,123
119,237
116,281
32,806
33,338
$
4,247,111
$
4,507,341
(1)
Fiscal 2006 includes the depreciable plant of SECI discontinued
operations of $469,810.
68
Table of Contents
Year Ended September 30
2007
2006
2005
2.8
%
2.8
%
2.8
%
3.5
%
4.0
%
4.1
%
$
1.94
$
2.00
$
1.74
2.8
%
4.8
%
7.6
%
4.0
%
5.6
%
6.2
%
4.6
%
4.1
%
4.3
%
(1)
Amounts include depletion of oil and gas producing properties as
well as depreciation of fixed assets. As disclosed in
Note O Supplementary Information for Oil and
Gas Producing Properties, depletion of oil and gas producing
properties amounted to $1.92, $1.98 and $1.72 per Mcfe of
production in 2007, 2006 and 2005, respectively. Depletion of
oil and gas producing properties in the United States amounted
to $1.97, $1.74 and $1.58 per Mcfe of production in 2007, 2006
and 2005, respectively. Depletion of oil and gas producing
properties in Canada amounted to $1.67, $2.95 and $2.36 per Mcfe
of production in 2007, 2006 and 2005, respectively.
69
Table of Contents
Year Ended September 30
2007
2006
(Thousands)
$
(12,482
)(1)
$
(83
)
34,701
(3,886
)
(11,510
)
10,248
7,225
$
(6,203
)
$
30,416
(1)
In accordance with the transition recognition provisions of
SFAS 158, the adjustment to recognize the funded positions
of the Pension and Other Post-retirement Benefit Plans are shown
as an adjustment to the ending balance of accumulated other
comprehensive income (loss). The adjustment is not shown as
other comprehensive income (loss) in the Consolidated Statements
of Comprehensive Income.
70
Table of Contents
Year Ended September 30
2007
2006
(Thousands)
$
8,925
$
13,174
5,641
3,218
$
14,566
$
16,392
71
Table of Contents
72
Table of Contents
73
Table of Contents
Year Ended
September 30,
2005
(Thousands, except
per share amounts)
$
189,488
336
(2,782
)
$
187,042
$
2.27
$
2.24
$
2.23
$
2.20
(1)
Stock-based compensation expense in 2005 represented
compensation expense related to restricted stock awards. The
pre-tax expense was $517,000 for the year ended
September 30, 2005.
74
Table of Contents
Year Ended September 30
2007
2006
2005
4.46
%
5.08
%
4.46
%
7.0
7.0
7.0
17.73
%
17.71
%
17.76
%
0.76
%
0.83
%
1.00
%
Year Ended
September 30,
2007
4.53
%
7.0
17.55
%
0.73
%
75
Table of Contents
76
Table of Contents
Note B
Asset
Retirement Obligations
77
Table of Contents
Year Ended September 30
2007
2006
2005
(Thousands)
$
77,392
$
41,411
$
32,292
23,234
(932
)
11,244
8,343
(6,108
)
(1,303
)
(1,938
)
5,394
2,671
2,448
193
135
266
$
75,939
$
77,392
$
41,411
78
Table of Contents
Note C
Regulatory
Matters
At September 30
2007
2006
(Thousands)
$
98,787
$
47,368
83,954
79,511
20,738
12,937
14,769
12,970
8,470
8,399
8,315
9,018
4,445
3,691
5,292
3,903
244,770
177,797
91,226
85,076
27,964
40,881
21,676
13,063
19,147
13,791
14,026
10,426
10,409
23,935
7,422
7,516
450
205
192,320
194,893
$
52,450
$
(17,096
)
(1)
The Company recovers the cost of its regulatory assets but, with
the exception of Unrecovered Purchased Gas Costs, does not earn
a return on them.
(2)
Included in Other Regulatory Assets on the Consolidated Balance
Sheets.
(3)
Included in Other Regulatory Liabilities on the Consolidated
Balance Sheets.
79
Table of Contents
80
Table of Contents
Note D
Income
Taxes
Year Ended September 30
2007
2006
2005
(Thousands)
$
99,608
$
65,593
$
45,571
21,700
13,511
14,413
22
2,212
4,104
39,340
19,111
27,412
10,751
9,024
2,280
2,756
(33,365
)
10,120
174,177
76,086
103,900
(697
)
(697
)
(697
)
$
173,480
$
75,389
$
103,203
$
(697
)
$
(697
)
$
(697
)
131,813
108,245
85,621
2,792
(32,159
)
16,667
39,572
1,612
$
173,480
$
75,389
$
103,203
Year Ended September 30
2007
2006
2005
(Thousands)
$
496,074
$
293,887
$
223,113
14,861
(80,407
)
69,578
$
510,935
$
213,480
$
292,691
81
Table of Contents
Year Ended September 30
2007
2006
2005
(Thousands)
$
178,827
$
74,718
$
102,442
21,093
14,648
10,850
(20,980
)
(3,718
)
(4,845
)
(2,877
)
(5,460
)
(7,382
)
(5,244
)
$
173,480
$
75,389
$
103,203
At September 30
2007
2006
(Thousands)
$
612,648
$
569,677
61,616
37,865
674,264
607,542
(107,458
)
(95,445
)
(107,458
)
(95,445
)
$
566,806
$
512,097
$
(8,550
)
$
(23,402
)
(9,003
)
575,356
544,502
$
566,806
$
512,097
82
Table of Contents
Note E
Capitalization
and Short-Term Borrowings
Earnings
Accumulated
Reinvested
Other
Paid
in
Comprehensive
Common Stock
In
the
Income
Shares
Amount
Capital
Business
(Loss)
(Thousands, except per share amounts)
82,990
$
82,990
$
506,560
$
718,926
$
(54,775
)
189,488
(95,394
)
(142,853
)
(2
)
(2
)
(52
)
1,369
1,369
23,326
84,357
84,357
529,834
813,020
(197,628
)
138,091
(98,829
)
228,044
1,705
1,572
1,572
28,564
(2,526
)
(2,526
)
(16,373
)
(66,269
)
83,403
83,403
543,730
786,013
30,416
337,455
(101,496
)
(24,137
)
(12,482
)
3,727
1,367
1,367
30,193
(1,309
)
(1,309
)
(8,565
)
(38,196
)
83,461
$
83,461
$
569,085
$
983,776
(3)
$
(6,203
)
(1)
Paid in Capital includes tax benefits of $13.7 million,
$6.5 million and $3.7 million for September 30,
2007, 2006 and 2005, respectively, associated with the exercise
of stock options.
(2)
As of October 1, 2005, Paid in Capital includes
compensation costs associated with stock option, stock-settled
SARs and/or restricted stock awards, in accordance with
SFAS 123R. The expense is included within Net Income
Available For Common Stock, net of tax benefits.
(3)
The availability of consolidated earnings reinvested in the
business for dividends payable in cash is limited under terms of
the indentures covering long-term debt. At September 30,
2007, $880.6 million of accumulated earnings was free of
such limitations.
83
Table of Contents
84
Table of Contents
85
Table of Contents
Weighted
Average
Number of
Remaining
Aggregate
Shares Subject
Weighted Average
Contractual
Intrinsic
to Option
Exercise Price
Life (Years)
Value
(In thousands)
9,016,254
$
24.69
448,000
$
39.48
(2,070,613
)
$
23.65
(33,600
)
$
25.39
7,360,041
$
25.89
3.96
$
154,007
6,875,041
$
24.99
3.62
$
150,038
1,075,397
(1)
Including shares available for stock-settled SARs and restricted
stock grants.
Options Outstanding
Weighted
Options Exercisable
Number
Average
Weighted
Number
Weighted
Outstanding
Remaining
Average
Exercisable
Average
at
Contractual
Exercise
at
Exercise
9/30/07
Life
Price
9/30/07
Price
4,233,174
2.8
$
22.72
4,213,174
$
22.73
2,361,867
4.4
$
27.72
2,361,867
$
27.72
300,000
8.6
$
35.11
300,000
$
35.11
465,000
9.2
$
39.39
86
Table of Contents
Weighted
Average
Number of
Remaining
Aggregate
Shares Subject
Weighted Average
Contractual
Intrinsic
to Option
Exercise Price
Life (Years)
Value
(In thousands)
$
50,000
$
41.20
$
$
50,000
$
41.20
9.45
$
281
$
Stock-Settled SARs Outstanding
Stock-Settled SARs
Weighted
Exercisable
Number
Average
Weighted
Number
Weighted
Outstanding
Remaining
Average
Exercisable
Average
at
Contractual
Exercise
at
Exercise
9/30/07
Life
Price
9/30/07
Price
50,000
9.5
$
41.20
Number of
Weighted Average
Restricted
Fair Value per
Share Awards
Award
42,328
$
28.44
25,000
$
40.18
(25,000
)
$
24.50
(6,000
)
$
34.94
36,328
$
38.16
87
Table of Contents
At September 30
2007
2006
(Thousands)
$
749,000
$
749,000
250,000
346,665
999,000
1,095,665
22,766
24
169
999,024
1,118,600
200,024
22,925
$
799,000
$
1,095,675
(1)
These medium-term notes and notes are unsecured.
(2)
At September 30, 2006, $96,665,000 of the 6.5% unsecured
notes were redeemable at par at any time after
September 15, 2006. On April 30, 2007, the Company
redeemed these notes for $96.3 million, plus accrued
interest.
(3)
On December 8, 2006, the Company repaid these notes for
$22.8 million. As such, the notes were classified as
Current Portion of Long-Term Debt on the Companys
Consolidated Balance Sheet at September 30, 2006. These
notes constituted project financing that was secured
by the various project documentation and natural gas
transportation contracts related to the Empire State Pipeline.
The interest rate on these notes was a variable rate based on
LIBOR.
88
Table of Contents
Note F
Financial
Instruments
At September 30
2007 Carrying
2007 Fair
2006 Carrying
2006 Fair
Amount
Value
Amount
Value
(Thousands)
$
999,024
$
1,024,417
$
1,118,600
$
1,148,089
89
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90
Table of Contents
Note G
Retirement
Plan and Other Post-Retirement Benefits
91
Table of Contents
Retirement Plan
Other Post-Retirement Benefits
Year Ended September 30
Year Ended September 30
2007
2006
2005
2007
2006
2005
(Thousands)
$
732,207
$
825,204
$
693,532
$
445,931
$
546,273
$
422,003
12,898
16,416
13,714
5,614
8,029
6,153
44,350
40,196
42,079
27,198
26,804
25,783
1,566
1,559
1,017
1,325
(2,986
)
(108,112
)
115,128
(14,450
)
(115,052
)
110,663
(43,950
)
(41,497
)
(39,249
)
(22,639
)
(21,682
)
(19,346
)
$
742,519
$
732,207
$
825,204
$
444,545
$
445,931
$
546,273
$
664,521
$
616,462
$
573,366
$
325,624
$
271,636
$
229,485
119,662
68,649
56,201
65,552
34,785
20,577
16,488
20,907
26,144
42,268
39,326
39,903
8,423
1,566
1,559
1,017
(43,950
)
(41,497
)
(39,249
)
(22,639
)
(21,682
)
(19,346
)
$
765,144
$
664,521
$
616,462
$
412,371
$
325,624
$
271,636
$
22,625
$
(67,686
)
$
(208,742
)
$
(32,174
)
$
(120,307
)
$
(274,637
)
107,626
257,553
54,487
205,423
49,890
57,017
7,185
8,142
12
17
$
22,625
$
47,125
$
56,953
$
(32,174
)
$
(15,918
)
$
(12,180
)
92
Table of Contents
Retirement Plan
Other Post-Retirement Benefits
Year Ended September 30
Year Ended September 30
2007
2006
2005
2007
2006
2005
(Thousands)
$
$
$
(117,103
)
$
(70,555
)
$
(32,918
)
$
(26,584
)
22,625
47,125
38,381
17,000
14,404
8,142
165,914
$
22,625
$
47,125
$
56,953
$
(32,174
)
$
(15,918
)
$
(12,180
)
6.25
%
6.25
%
5.00
%
6.25
%
6.25
%
5.00
%
8.25
%
8.25
%
8.25
%
8.25
%
8.25
%
8.25
%
5.00
%
5.00
%
5.00
%
5.00
%
5.00
%
5.00
%
$
12,898
$
16,416
$
13,714
$
5,614
$
8,029
$
6,153
44,350
40,196
42,079
27,198
26,804
25,783
(51,235
)
(49,943
)
(49,545
)
(26,960
)
(22,302
)
(18,862
)
882
957
1,029
4
4
4
7,127
7,127
7,127
13,528
23,108
10,473
8,214
23,402
12,467
1,211
(6,409
)
1,988
16,220
(11,084
)
(410
)
$
21,634
$
24,325
$
19,738
$
37,417
$
31,980
$
32,262
$
$
(165,914
)
$
83,379
$
$
$
$
11,256
NA
NA
$
778
NA
NA
6.25
%
5.00
%
6.25
%
6.25
%
5.00
%
6.25
%
8.25
%
8.25
%
8.25
%
8.25
%
8.25
%
8.25
%
5.00
%
5.00
%
5.00
%
5.00
%
5.00
%
5.00
%
(1)
Distribution Corporations New York jurisdiction calculates
the amortization of the actuarial loss on a vintage year basis
over 10 years, as mandated by the NYPSC. All the other
subsidiaries of the Company utilize the corridor approach.
Table of Contents
Before
Consolidated
After
Application of
SFAS 158
Application of
SFAS 158(1)
Impact
SFAS 158
(Thousands)
$
51,612
$
(28,987
)
$
22,625
$
$
17,731
$
17,731
$
$
7,008
$
7,008
$
$
4,248
$
4,248
94
Table of Contents
Before
Consolidated
After
Application of
SFAS 158
Application of
SFAS 158(1)
Impact
SFAS 158
(Thousands)
$
26,067
$
12,314
$
38,381
$
$
38,472
$
38,472
$
$
(3,247
)
$
(3,247
)
$
$
484
$
484
$
$
294
$
294
$
(22,238
)
$
(48,317
)
$
(70,555
)
$
$
5,704
$
5,704
$
$
4,990
$
4,990
$
$
3,027
$
3,027
$
(30,115
)
$
(13,721
)
$
(43,836
)
$
77,679
$
(16,673
)
$
61,006
$
$
61,907
$
61,907
$
$
(3,247
)
$
(3,247
)
$
$
12,482
$
12,482
$
$
7,569
$
7,569
$
(22,238
)
$
(48,317
)
$
(70,555
)
$
(30,115
)
$
(13,721
)
$
(43,836
)
(1)
Amounts represent balances before applying the effects of the
adoption of SFAS 158, but after giving effect to any
necessary adjustments as a result of recognizing an additional
minimum pension liability. At September 30, 2007, there was
no additional minimum pension liability adjustment since the
fair value of the plan assets exceeded the accumulated benefit
obligation.
Table of Contents
Other
Retirement
Post-Retirement
Non-Qualified
Plan
Benefits
Benefit Plan
(Thousands)
$
(22,684
)
$
6,768
$
(13,605
)
(42,763
)
(6,303
)
(8
)
(116
)
$
(28,987
)
$
(36,003
)
$
(13,721
)
$
(11,064
)
$
(2,927
)
$
(1,218
)
(7,127
)
(808
)
(4
)
(106
)
$
(11,872
)
$
(10,058
)
$
(1,324
)
(1)
Amounts presented are shown before recognizing deferred taxes.
2007
2006
2005
$
742,519
$
732,207
$
825,204
$
672,340
$
660,026
$
733,565
$
765,144
$
664,520
$
616,462
96
Table of Contents
97
Table of Contents
Benefit Payments
Subsidy Receipts
$
23,990,000
$
(1,522,000
)
$
25,973,000
$
(1,745,000
)
$
28,007,000
$
(1,954,000
)
$
29,917,000
$
(2,154,000
)
$
31,406,000
$
(2,401,000
)
$
176,333,000
$
(15,391,000
)
98
Table of Contents
Percentage of Plan
Target Allocation
Assets at September 30
2008
2007
2006
2005
60-75
%
70
%
67
%
63
%
20-35
%
24
%
26
%
28
%
0-15
%
6
%
7
%
9
%
100
%
100
%
100
%
Percentage of Plan
Target Allocation
Assets at September 30
2008
2007
2006
2005
85-100
%
95
%
95
%
92
%
0-15
%
1
%
1
%
2
%
0-15
%
4
%
4
%
6
%
100
%
100
%
100
%
99
Table of Contents
Note H
Commitments
and Contingencies
(i)
Former
Manufactured Gas Plant Sites
(ii)
Third
Party Waste Disposal Sites
100
Table of Contents
(iii)
Other
Note I
Discontinued
Operations
101
Table of Contents
Year Ended September 30
2007
2006
2005
(Thousands)
$
50,495
$
71,984
$
62,775
33,306
151,532
40,600
17,189
(79,548
)
22,175
1,082
866
260
18,271
(78,682
)
22,435
2,792
(32,159
)
7,357
15,479
(46,523
)
15,078
120,301
$
135,780
$
(46,523
)
$
15,078
102
Table of Contents
Year Ended
September 30
2005
(Thousands)
$
124,840
103,155
21,685
2,048
(558
)
23,175
10,331
2,645
10,199
25,774
$
35,973
Note J
Business
Segment Information
103
Table of Contents
104
Table of Contents
Year Ended September 30, 2006
Corporate
Pipeline
Exploration
Total
and
and
and
Energy
Reportable
All
Intersegment
Total
Utility
Storage
Production
Marketing
Timber
Segments
Other
Eliminations
Consolidated
(Thousands)
$
1,265,695
$
132,921
$
274,896
$
497,069
$
65,024
$
2,235,605
$
3,304
$
766
$
2,239,675
$
15,068
$
81,431
$
$
$
5
$
96,504
$
9,444
$
(105,948
)
$
$
4,889
$
454
$
7,816
$
445
$
747
$
14,351
$
22
$
(4,964
)
$
9,409
$
26,174
$
6,620
$
50,457
$
227
$
3,095
$
86,573
$
2,555
$
(10,547
)
$
78,581
$
40,172
$
36,876
$
67,122
$
53
$
6,495
$
150,718
$
789
$
492
$
151,999
$
35,699
$
33,896
$
29,351
$
3,748
$
3,277
$
105,971
$
969
$
1,305
$
108,245
$
$
$
$
$
$
$
3,583
$
$
3,583
$
49,815
$
55,633
$
67,494
$
5,798
$
5,704
$
184,444
$
359
$
(189
)
$
184,614
$
54,414
$
26,023
$
166,535
$
16
$
2,323
$
249,311
$
85
$
2,995
$
252,391
At September 30, 2006
(Thousands)
$
1,498,442
$
767,889
$
1,209,969
(1)
$
81,374
$
159,421
$
3,717,095
$
64,287
$
(17,634
)
$
3,763,748
(1)
Amount includes $134,930 of assets of SECI, which has been
classified as discontinued operations as of September 30,
2007. (See Note I Discontinued Operations).
(1)
Amount represents the impairment in the value of the
Companys 50% investment in ESNE, a partnership that owns
an 80-megawatt, combined cycle, natural gas-fired power plant in
the town of North East, Pennsylvania.
Table of Contents
(2)
Amount includes $204,892 of assets of SECI, which has been
classified as discontinued operations as of September 30,
2007. (See Note I Discontinued Operations).
For The Year Ended September 30
2007
2006
2005
(Thousands)
$
2,039,566
$
2,239,675
$
1,860,774
At September 30
2007
2006
2005
(Thousands)
$
3,334,274
$
3,181,769
$
2,978,680
97,234
171,196
$
3,334,274
$
3,279,003
$
3,149,876
(1)
Revenue is based upon the country in which the sale originates.
This table excludes revenues from Canadian discontinued
operations of $50,495, $71,984 and $62,775 for
September 30, 2007, 2006 and 2005, respectively.
Note K
Investments
in Unconsolidated Subsidiaries
At September 30
2007
2006
(Thousands)
$
4,652
$
4,486
12,033
5,366
1,571
1,738
$
18,256
$
11,590
Note L
Intangible
Assets
106
Table of Contents
At September 30,
At September 30, 2007
2006
Gross Carrying
Accumulated
Net Carrying
Net Carrying
Amount
Amortization
Amount
Amount
$
8,580
$
(4,989
)
$
3,591
$
4,660
31,864
(6,619
)
25,245
26,838
$
40,444
$
(11,608
)
$
28,836
$
31,498
$
2,662
$
2,662
$
2,662
Note M
Quarterly
Financial Data (unaudited)
107
Table of Contents
Net
Income
Income
Income
(Loss)
Available
from
from
for
Earnings from
Quarter
Operating
Operating
Continuing
Discontinued
Common
Continuing Operations per Common Share
Earnings per Common Share
Revenues
Income
Operations
Operations
Stock
Basic
Diluted
Basic
Diluted
(Thousands, except per common share amounts)
$
302,030
$
73,504
$
34,295
$
123,395
(1)
$
157,690
(1)
$
0.41
$
0.40
$
1.89
$
1.84
$
448,779
$
83,933
$
41,212
(2)
$
5,586
$
46,798
(2)
$
0.49
$
0.48
$
0.56
$
0.55
$
798,100
$
142,404
$
75,480
(3)
$
2,967
$
78,447
(3)
$
0.91
$
0.89
$
0.95
$
0.92
$
490,657
$
96,657
$
50,688
(4)
$
3,832
$
54,520
(4)
$
0.61
$
0.60
$
0.66
$
0.64
$
280,506
$
56,865
$
28,585
$
(26,617
)(5)
$
1,968
(5)
$
0.34
$
0.33
$
0.02
$
0.02
$
397,206
$
67,122
$
37,618
(7)
$
(37,507
)(6)
$
111
(6)(7)
$
0.45
$
0.44
$
$
$
874,700
$
133,745
$
69,650
$
8,944
(8)
$
78,594
(8)
$
0.83
$
0.81
$
0.93
$
0.91
$
687,263
$
97,891
$
48,761
(9)
$
8,657
$
57,418
(9)
$
0.58
$
0.57
$
0.68
$
0.67
(1)
Includes a $120.3 million gain on the sale of SECI.
(2)
Includes $4.8 million of income associated with the
reversal of reserve for preliminary project costs associated
with the Empire Connector project.
(3)
Includes a $2.3 million of income associated with the
reversal of a purchased gas expense accrual related to the
resolution of a contingency.
(4)
Includes a $1.9 million positive earnings impact associated
with the discontinuance of hedge accounting on an interest rate
collar.
(5)
Includes expense of $29.1 million related to the impairment
of oil and gas producing properties.
(6)
Includes expense of $39.5 million related to the impairment
of oil and gas producing properties.
(7)
Includes income of $6.1 million related to income tax
adjustments.
(8)
Includes income of $5.1 million related to income tax
adjustments.
(9)
Includes income of $2.6 million related to a regulatory
adjustment.
Note N
Market
for Common Stock and Related Shareholder Matters
(unaudited)
Table of Contents
Price Range
High
Low
Dividends Declared
$
47.00
$
40.95
$
.31
$
47.87
$
42.75
$
.31
$
43.79
$
36.94
$
.30
$
40.21
$
35.02
$
.30
$
39.16
$
34.95
$
.30
$
36.75
$
31.33
$
.30
$
35.43
$
30.60
$
.29
$
35.27
$
29.25
$
.29
At September 30
2007
2006
(Thousands)
$
1,583,956
$
1,884,049
20,005
41,930
1,603,961
1,925,979
627,073
929,921
$
976,888
$
996,058
(1)
Includes asset retirement costs of $40.9 million and
$42.2 million at September 30, 2007 and 2006,
respectively.
Total
as of
September 30,
Year Costs Incurred
2007
2007
2006
2005
Prior
(Thousands)
$
20,005
$
5,957
$
12,485
$
1,099
$
464
109
Table of Contents
Year Ended September 30
2007
2006
2005
(Thousands)
$
2,621
$
5,339
$
287
3,210
8,844
1,215
26,891
64,087
32,456
113,206
87,738
49,016
2,139
10,965
8,051
148,067
176,973
91,025
(1,404
)
(427
)
(1,551
)
(1,142
)
6,492
4,668
20,134
20,778
22,943
11,414
14,385
12,198
167
279
292
29,169
41,507
38,550
1,217
4,912
(1,264
)
2,068
15,336
5,883
47,025
84,865
55,399
124,620
102,123
61,214
2,306
11,244
8,343
$
177,236
$
218,480
$
129,575
110
Table of Contents
Year Ended September 30
2007
2006
2005
(Thousands, except per Mcfe amounts)
$
135,399
$
152,451
$
151,004
189,539
195,050
160,145
324,938
347,501
311,149
48,410
41,354
38,442
3,704
2,412
2,220
77,452
66,488
67,097
78,928
88,104
74,110
116,444
149,143
129,280
39,114
54,819
49,275
10,313
13,985
12,875
49,427
68,804
62,150
14,846
14,628
12,683
249
258
228
12,787
27,439
23,108
104,739
3,703
(31,987
)
8,577
17,842
(46,273
)
17,554
111
Table of Contents
Year Ended September 30
2007
2006
2005
(Thousands, except per Mcfe amounts)
174,513
207,270
200,279
199,852
209,035
173,020
374,365
416,305
373,299
63,256
55,982
51,125
3,953
2,670
2,448
90,239
93,927
90,205
104,739
82,631
56,117
82,687
$
134,286
$
102,870
$
146,834
(1)
Exclusive of hedging gains and losses. See further discussion in
Note F Financial Instruments.
(2)
See discussion of impairment in Note A Summary
of Significant Accounting Policies.
Table of Contents
113
Table of Contents
Oil Mbbl
U.S.
West
Canada
Gulf Coast
Coast
Appalachian
Total
(Discontinued
Total
Region
Region
Region
U.S.
Operations)
Company
2,080
60,882
147
63,109
2,104
65,213
99
63
162
204
366
105
(1,253
)
3
(1,145
)
(186
)
(1,331
)
(989
)
(2,544
)
(36
)
(3,569
)
(300
)
(3,869
)
(122
)
(122
)
1,295
57,085
177
58,557
1,700
60,257
39
172
108
319
128
447
595
(80
)
57
572
101
673
(685
)
(2,582
)
(69
)
(3,336
)
(272
)
(3,608
)
274
274
274
(25
)
(25
)
1,244
54,869
273
56,386
1,632
58,018
63
281
344
108
452
851
(6,822
)
84
(5,887
)
(76
)
(5,963
)
(717
)
(2,403
)
(124
)
(3,244
)
(206
)
(3,450
)
(6
)
(7
)
(13
)
(1,458
)
(1,471
)
1,435
45,644
507
47,586
47,586
2,061
38,631
148
40,840
2,104
42,944
1,229
41,701
177
43,107
1,700
44,807
1,217
42,522
273
44,012
1,632
45,644
1,435
36,509
483
38,427
38,427
Table of Contents
Year Ended September 30
2007
2006
2005
(Thousands)
$
4,879,496
$
3,911,059
$
6,138,522
872,536
758,258
777,417
229,987
205,497
188,795
1,423,707
1,019,307
1,868,548
2,353,266
1,927,997
3,303,762
1,292,804
1,066,338
1,812,230
1,060,462
861,659
1,491,532
197,227
601,210
92,234
136,338
11,520
12,197
(151
)
137,524
93,624
315,151
19,375
108,508
74,249
206,643
4,879,496
4,108,286
6,739,732
872,536
850,492
913,755
229,987
217,017
200,992
1,423,707
1,019,156
2,006,072
2,353,266
2,021,621
3,618,913
1,292,804
1,085,713
1,920,738
$
1,060,462
$
935,908
$
1,698,175
Table of Contents
Year Ended September 30
2007
2006
2005
(Thousands)
$
861,659
$
1,491,532
$
935,369
(276,529
)
(306,147
)
(272,707
)
539,895
(941,545
)
1,093,353
7,607
484
(762
)
98,751
66,975
100,102
(83,199
)
(83,750
)
(89,805
)
58,710
67,048
25,038
(174,920
)
404,176
(362,956
)
(140,203
)
4,850
25,055
175,814
150,913
38,845
1,060,462
861,659
1,491,532
74,249
206,643
110,730
(34,581
)
(54,176
)
(49,467
)
35,628
(180,216
)
174,985
(151,236
)
(238
)
(3,751
)
6,908
10,369
31,028
5,722
(3,282
)
(11,007
)
5,798
4,450
12,032
(10,075
)
82,966
(51,541
)
34,998
(15,478
)
(5,990
)
32,589
23,211
(376
)
74,249
206,643
116
Table of Contents
Year Ended September 30
2007
2006
2005
(Thousands)
935,908
1,698,175
1,046,099
(311,110
)
(360,323
)
(322,174
)
575,523
(1,121,761
)
1,268,338
7,607
(150,752
)
(238
)
(4,513
)
105,659
77,344
131,130
(77,477
)
(87,032
)
(100,812
)
64,508
71,498
37,070
(184,995
)
487,142
(414,497
)
(105,205
)
(10,628
)
19,065
208,403
174,124
38,469
$
1,060,462
$
935,908
$
1,698,175
Additions
Balance
Charged
Additions
Balance
at
to
Charged
at
Beginning
Costs
to
End
of
and
Other
of
Period
Expenses
Accounts
Deductions(3)
Period
(Thousands)
$
31,427
$
27,652
$
1,414
(1)
$
31,839
$
28,654
$
26,940
$
29,088
$
907
(1)
$
25,508
$
31,427
$
2,877
$
(2,877
)
$
$
$
$
17,440
$
31,113
$
2,480
(2)
$
24,093
$
26,940
$
2,877
$
$
$
$
2,877
(1)
Represents the discount on accounts receivable purchased in
accordance with the Utility segments 2005 New York rate
agreement.
(2)
Represents amounts reclassified from regulatory asset and
regulatory liability accounts under various rate settlements
($4.5 million). Also includes amounts removed with the sale
of U.E. (-$2.02 million).
(3)
Amounts represent net accounts receivable written-off.
Table of Contents
Item 9
Changes
in and Disagreements with Accountants on Accounting and
Financial Disclosure
Item 9A
Controls
and Procedures
Item 9B
Other
Information
Item 10
Directors,
Executive Officers and Corporate Governance
118
Table of Contents
Item 11
Executive
Compensation
Item 12
Security
Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters
(a)
Security
Ownership of Certain Beneficial Owners
(b)
Security
Ownership of Management
119
Table of Contents
(c)
Changes
in Control
Item 13
Certain
Relationships and Related Transactions, and Director
Independence
Item 14
Principal
Accountant Fees and Services
Item 15
Exhibits
and Financial Statement Schedules
Exhibit
Description of
3(i)
Articles of Incorporation:
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)
Certificate of Amendment of Restated Certificate of
Incorporation (Exhibit 3(ii),
Form 8-K
dated March 14, 2005 in File
No. 1-3880)
3(ii)
By-Laws:
National Fuel Gas Company By-Laws as amended June 7, 2007
(Exhibit 3.1,
Form 8-K
dated June 8, 2007 in File
No. 1-3880)
4
Instruments Defining the Rights of Security Holders, Including
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)
120
Table of Contents
Exhibit
Description of
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 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 fiscal year ended September 30, 1999 in File
No. 1-3880)
Officers Certificate establishing 5.25% Notes due 2013,
dated February 18, 2003 (Exhibit 4,
Form 10-Q
for the quarterly period ended March 31, 2003 in File
No. 1-3880)
4
.1
Amended and Restated Rights Agreement, dated as of
September 1, 2007, between the Company and The Bank of New
York
10
Material Contracts:
Contracts other than compensatory plans, contracts or
arrangements:
Form of Indemnification Agreement, dated September 2006, between
the Company and each Director (Exhibit 10.1,
Form 8-K
dated September 18, 2006 in File
No. 1-3880)
Credit Agreement, dated as of August 19, 2005, among the
Company, the Lenders Party Thereto and JPMorgan Chase Bank,
N.A., as Administrative Agent (Exhibit 10.1,
Form 10-K
for fiscal year ended September 30, 2005 in File
No. 1-3880)
Compensatory plans, contracts or arrangements:
10
.1
Form of Employment Continuation and Noncompetition Agreement
among the Company, a subsidiary of the Company and each of
Philip C. Ackerman, Anna Marie Cellino, Paula M. Ciprich, Donna
L. DeCarolis, John R. Pustulka, James D. Ramsdell, David F.
Smith and Ronald J. Tanski
10
.2
Employment Continuation and Noncompetition Agreement, dated as
of September 20, 2007, among the Company, Seneca Resources
Corporation and Matthew D. Cabell
Letter Agreement between the Company and Matthew D. Cabell,
dated November 17, 2006 (Exhibit 10.1,
Form 10-Q
for the quarterly period ended December 31, 2006 in File
No. 1-3880)
National Fuel Gas Company 1993 Award and Option Plan, dated
February 18, 1993 (Exhibit 10.1,
Form 10-Q
for the quarterly period ended March 31, 1993 in File
No. 1-3880)
Amendment to National Fuel Gas Company 1993 Award and Option
Plan, dated October 27, 1995 (Exhibit 10.8,
Form 10-K
for fiscal year ended September 30, 1995 in File
No. 1-3880)
Amendment to National Fuel Gas Company 1993 Award and Option
Plan, dated December 11, 1996 (Exhibit 10.8,
Form 10-K
for fiscal year ended September 30, 1996 in File
No. 1-3880)
Amendment to National Fuel Gas Company 1993 Award and Option
Plan, dated December 18, 1996 (Exhibit 10,
Form 10-Q
for the quarterly period ended December 31, 1996 in File
No. 1-3880)
National Fuel Gas Company 1993 Award and Option Plan, amended
through June 14, 2001 (Exhibit 10.1,
Form 10-K
for fiscal year ended September 30, 2001 in File
No. 1-3880)
Table of Contents
Exhibit
Description of
National Fuel Gas Company 1993 Award and Option Plan, amended
through September 8, 2005 (Exhibit 10.2,
Form 10-K
for fiscal year ended September 30, 2005 in File
No. 1-3880)
Administrative Rules with Respect to At Risk Awards under the
1993 Award and Option Plan (Exhibit 10.14,
Form 10-K
for fiscal year ended September 30, 1996 in File
No. 1-3880)
National Fuel Gas Company 1997 Award and Option Plan, as amended
and restated as of February 15, 2007 (Exhibit 10.2,
Form 10-Q
for the quarterly period ended March 31, 2007 in File
No. 1-3880)
Form of Award Notice under National Fuel Gas Company 1997 Award
and Option Plan (Exhibit 10.1,
Form 8-K
dated March 28, 2005 in File
No. 1-3880)
Form of Award Notice under National Fuel Gas Company 1997 Award
and Option Plan (Exhibit 10.1,
Form 8-K
dated May 16, 2006 in File
No. 1-3880)
Form of Restricted Stock Award Notice under National Fuel Gas
Company 1997 Award and Option Plan (Exhibit 10.2,
Form 10-Q
for the quarterly period ended December 31, 2006 in File
No. 1-3880)
Form of Stock Option Award Notice under National Fuel Gas
Company 1997 Award and Option Plan (Exhibit 10.3,
Form 10-Q
for the quarterly period ended December 31, 2006 in File
No. 1-3880)
Administrative Rules with Respect to At Risk Awards under the
1997 Award and Option Plan amended and restated as of
September 8, 2005 (Exhibit 10.4,
Form 10-K
for fiscal year ended September 30, 2005 in File
No. 1-3880)
National Fuel Gas Company 2007 Annual At Risk Compensation
Incentive Program (Exhibit 10.1,
Form 10-Q
for the quarterly period ended March 31, 2007 in File
No. 1-3880)
Description of performance goals for Chief Executive Officer
under the Companys Annual At Risk Compensation Incentive
Program (Exhibit 10,
Form 10-Q
for the quarterly period ended December 31, 2004 in File
No. 1-3880)
Description of performance goals for Chief Executive Officer
under the Companys Annual At Risk Compensation Incentive
Program (Exhibit 10.2,
Form 10-Q
for the quarterly period ended December 31, 2005 in File
No. 1-3880)
Description of performance goals for certain executive officers
under the Companys Annual At Risk Compensation Incentive
Program (Exhibit 10.8,
Form 10-Q
for the quarterly period ended December 31, 2006 in File
No. 1-3880)
Administrative Rules of the Compensation Committee of the Board
of Directors of National Fuel Gas Company, as amended and
restated effective December 6, 2006 (Exhibit 10.6,
Form 10-Q
for the quarterly period ended December 31, 2006 in File
No. 1-3880)
National Fuel Gas Company Deferred Compensation Plan, as amended
and restated through May 1, 1994 (Exhibit 10.7,
Form 10-K
for fiscal year ended September 30, 1994 in File
No. 1-3880)
Amendment to National Fuel Gas Company Deferred Compensation
Plan, dated September 27, 1995 (Exhibit 10.9,
Form 10-K
for fiscal year ended September 30, 1995 in File
No. 1-3880)
Amendment to National Fuel Gas Company Deferred Compensation
Plan, dated September 19, 1996 (Exhibit 10.10,
Form 10-K
for fiscal year ended September 30, 1996 in File
No. 1-3880)
National Fuel Gas Company Deferred Compensation Plan, as amended
and restated through March 20, 1997
(Exhibit 10.3,Form 10-K
for fiscal year ended September 30, 1997 in File
No. 1-3880)
Amendment to National Fuel Gas Company Deferred Compensation
Plan, dated June 16, 1997 (Exhibit 10.4,
Form 10-K
for fiscal year ended September 30, 1997 in File
No. 1-3880)
Amendment No. 2 to the National Fuel Gas Company Deferred
Compensation Plan, dated March 13, 1998 (Exhibit 10.1,
Form 10-K
for fiscal year ended September 30, 1998 in File
No. 1-3880)
Amendment to the National Fuel Gas Company Deferred Compensation
Plan, dated February 18, 1999
(Exhibit 10.1,Form 10-Q
for the quarterly period ended March 31, 1999 in File
No. 1-3880)
Amendment to National Fuel Gas Company Deferred Compensation
Plan, dated June 15, 2001 (Exhibit 10.3,
Form 10-K
for fiscal year ended September 30, 2001 in File
No. 1-3880)
Amendment to the National Fuel Gas Company Deferred Compensation
Plan, dated October 21, 2005 (Exhibit 10.5,
Form 10-K
for fiscal year ended September 30, 2005 in File
No. 1-3880)
Table of Contents
Exhibit
Description of
Form of Letter Regarding Deferred Compensation Plan and Internal
Revenue Code Section 409A, dated July 12, 2005
(Exhibit 10.6,
Form 10-K
for fiscal year ended September 30, 2005 in File
No. 1-3880)
National Fuel Gas Company Tophat Plan, effective March 20,
1997 (Exhibit 10,
Form 10-Q
for the quarterly period ended June 30, 1997 in File
No. 1-3880)
Amendment No. 1 to National Fuel Gas Company Tophat Plan,
dated April 6, 1998 (Exhibit 10.2,
Form 10-K
for fiscal year ended September 30, 1998 in File
No. 1-3880)
Amendment No. 2 to National Fuel Gas Company Tophat Plan,
dated December 10, 1998 (Exhibit 10.1,
Form 10-Q
for the quarterly period ended December 31, 1998 in File
No. 1-3880)
Form of Letter Regarding Tophat Plan and Internal Revenue Code
Section 409A, dated July 12, 2005 (Exhibit 10.7,
Form 10-K
for fiscal year ended September 30, 2005 in File
No. 1-3880)
National Fuel Gas Company Tophat Plan, Amended and Restated
December 7, 2005 (Exhibit 10.1,
Form 10-Q
for the quarterly period ended December 31, 2005 in File
No. 1-3880)
10
.3
National Fuel Gas Company Tophat Plan, as amended
September 20, 2007
Amended and Restated Split Dollar Insurance and Death Benefit
Agreement, dated September 17, 1997 between the Company and
Philip C. Ackerman (Exhibit 10.5,
Form 10-K
for fiscal year ended September 30, 1997 in File
No. 1-3880)
Amendment Number 1 to Amended and Restated Split Dollar
Insurance and Death Benefit Agreement by and between the Company
and Philip C. Ackerman, dated March 23, 1999
(Exhibit 10.3,
Form 10-K
for fiscal year ended September 30, 1999 in File
No. 1-3880)
Amended and Restated Split Dollar Insurance and Death Benefit
Agreement, dated September 15, 1997, between the Company
and Dennis J. Seeley (Exhibit 10.9,
Form 10-K
for fiscal year ended September 30, 1999 in File
No. 1-3880)
Amendment Number 1 to Amended and Restated Split Dollar
Insurance and Death Benefit Agreement by and between the Company
and Dennis J. Seeley, dated March 29, 1999
(Exhibit 10.10,
Form 10-K
for fiscal year ended September 30, 1999 in File
No. 1-3880)
Split Dollar Insurance and Death Benefit Agreement, dated
September 15, 1997, between the Company and David F. Smith
(Exhibit 10.13,
Form 10-K
for fiscal year ended September 30, 1999 in File
No. 1-3880)
Amendment Number 1 to Split Dollar Insurance and Death Benefit
Agreement by and between the Company and David F. Smith, dated
March 29, 1999 (Exhibit 10.14,
Form 10-K
for fiscal year ended September 30, 1999 in File
No. 1-3880)
National Fuel Gas Company Parameters for Executive Life
Insurance Plan (Exhibit 10.1,
Form 10-K
for fiscal year ended September 30, 2004 in File
No. 1-3880)
National Fuel Gas Company and Participating Subsidiaries
Executive Retirement Plan as amended and restated through
November 1, 1995 (Exhibit 10.10,
Form 10-K
for fiscal year ended September 30, 1995 in File
No. 1-3880)
Amendments to National Fuel Gas Company and Participating
Subsidiaries Executive Retirement Plan, dated September 18,
1997 (Exhibit 10.9,
Form 10-K
for fiscal year ended September 30, 1997 in File
No. 1-3880)
Amendments to National Fuel Gas Company and Participating
Subsidiaries Executive Retirement Plan, dated December 10,
1998 (Exhibit 10.2,
Form 10-Q
for the quarterly period ended December 31, 1998 in File
No. 1-3880)
Amendments to National Fuel Gas Company and Participating
Subsidiaries Executive Retirement Plan, effective
September 16, 1999 (Exhibit 10.15,
Form 10-K
for fiscal year ended September 30, 1999 in File
No. 1-3880)
Amendment to National Fuel Gas Company and Participating
Subsidiaries Executive Retirement Plan, effective
September 5, 2001 (Exhibit 10.4,
Form 10-K/A
for fiscal year ended September 30, 2001, in File
No. 1-3880)
Table of Contents
Table of Contents
Exhibit
Description of
23
.1
Consent of Netherland, Sewell & Associates, Inc.
regarding Seneca Resources Corporation
23
.2
Consent of Independent Registered Public Accounting Firm
31
Rule 13a-14(a)/15d-14(a)
Certifications:
31
.1
Written statements of Chief Executive Officer pursuant to
Rule 13a-14(a)/15d-14(a)
of the Exchange Act
31
.2
Written statements of Principal Financial Officer pursuant to
Rule 13a-14(a)/15d-14(a)
of the Exchange Act
32
Certifications pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
99
Additional Exhibits:
99
.1
Report of Netherland, Sewell & Associates, Inc.
regarding Seneca Resources Corporation
99
.2
Company Maps
Incorporated herein by reference as indicated.
All other exhibits are omitted because they are not applicable
or the required information is shown elsewhere in this Annual
Report on
Form 10-K
In accordance with Item 601(b)(32)(ii) of
Regulation S-K
and SEC Release Nos.
33-8238
and
34-47986,
Final Rule: Managements Reports on Internal Control Over
Financial Reporting and Certification of Disclosure in Exchange
Act Periodic Reports, the material contained in Exhibit 32
is furnished and not deemed filed with
the SEC and is not to be incorporated by reference into any
filing of the Registrant under the Securities Act of 1933 or the
Exchange Act, whether made before or after the date hereof and
irrespective of any general incorporation language contained in
such filing, except to the extent that the Registrant
specifically incorporates it by reference
Table of Contents
(Registrant)
By
Chairman of the Board, Chief Executive Officer and Director
Date: November 29, 2007
Director
Date: November 29, 2007
Director
Date: November 29, 2007
Director
Date: November 29, 2007
Director
Date: November 29, 2007
Director
Date: November 29, 2007
Director
Date: November 29, 2007
Director
Date: November 29, 2007
Director
Date: November 29, 2007
President, Chief Operating Officer and Director
Date: November 29, 2007
126
Table of Contents
Treasurer and Principal Financial Officer
Date: November 29, 2007
Controller and Principal Accounting Officer
Date: November 29, 2007
127
Section 1. Certain Definitions
|
2 | |||
Section 2. Appointment of Rights Agent
|
6 | |||
Section 3. Issue of Right Certificates
|
6 | |||
Section 4. Form of Right Certificates
|
8 | |||
Section 5. Countersignature and Registration
|
8 | |||
Section 6. Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated,
Destroyed, Lost or Stolen Right Certificates
|
9 | |||
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights
|
10 | |||
Section 8. Cancellation and Destruction of Right Certificates
|
11 | |||
Section 9. Reservation and Availability of Shares of Common Stock
|
12 | |||
Section 10. Common Stock Record Date
|
13 | |||
Section 11. Adjustment of Purchase Price, Number of Shares or Number of Rights
|
13 | |||
Section 12. Certificate of Adjusted Purchase Price or Number of Shares
|
20 | |||
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power
|
20 | |||
Section 14. Fractional Rights and Fractional Shares
|
22 | |||
Section 15. Rights of Action
|
23 | |||
Section 16. Agreement of Right Holders
|
23 | |||
Section 17. Right Certificate Holder Not Deemed a Stockholder
|
24 | |||
Section 18. Concerning the Rights Agent
|
24 | |||
Section 19. Merger or Consolidation or Change of Name of Rights Agent
|
25 | |||
Section 20. Duties of Rights Agent
|
26 | |||
Section 21. Change of Rights Agent
|
28 | |||
Section 22. Issuance of New Right Certificates
|
28 | |||
Section 23. Redemption and Termination
|
29 |
i
Section 24. Exchange
|
30 | |||
Section 25. Notice of Certain Events
|
31 | |||
Section 26. Notices
|
31 | |||
Section 27. Supplements and Amendments
|
32 | |||
Section 28. Successors; Assignment
|
33 | |||
Section 29. Determinations and Actions by the Board of Directors
|
33 | |||
Section 30. Benefits of This Agreement
|
33 | |||
Section 31. Severability
|
33 | |||
Section 32. Governing Law
|
34 | |||
Section 33. Counterparts
|
34 | |||
Section 34. Descriptive Headings
|
34 | |||
|
||||
Exhibit A - Form of Right Certificate
|
A-1 | |||
Form of Assignment
|
A-4 | |||
Certificate
|
A-5 | |||
Notice
|
A-6 | |||
Form of Election to Purchase
|
A-7 | |||
Exhibit B - Summary of Rights to Purchase Common Stock
|
B-1 |
ii
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
NATIONAL FUEL GAS COMPANY
|
||||
By: | /s/ Philip C. Ackerman | |||
Name: | Philip C. Ackerman | |||
Title: Chief Executive Officer | ||||
By:
|
/s/ James R. Peterson | |||
|
|
|||
|
Title: Assistant Secretary |
THE BANK OF NEW YORK
|
||||
By: | /s/ Phil Triolo | |||
Name: | Phil Triolo | |||
Title: Assistant Vice President | ||||
By:
|
/s/ Eli Guardiola
|
|||
|
Title: Assistant Treasurer |
34
Certificate No. R- | _________ Rights |
A-1
A-2
NATIONAL FUEL GAS COMPANY
|
||||
By: | ||||
Name: | ||||
Title: | ||||
By:
|
||||
|
|
|||
|
Name: | |||
|
Title: |
Countersigned: | ||||||||
|
||||||||
|
, | |||||||
as Rights Agent | ||||||||
|
||||||||
|
By: | |||||||
|
||||||||
|
Authorized Signature | |||||||
|
||||||||
|
Date: |
A-3
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print name and address)
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(Please insert social security or other taxpayer identifying number) |
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(Please print name and address) | ||
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(Please insert social security or other taxpayer identifying number) |
A-7
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B-2
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[SUBSIDIARY CORPORATION] | |||||
|
||||||
Attest: /s/
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By: | |||||
|
||||||
Secretary
|
Title: | |||||
|
||||||
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NATIONAL FUEL GAS COMPANY | |||||
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||||||
Attest: /s/
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By: | |||||
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Secretary
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Title: | |||||
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||||||
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EXECUTIVE: | |||||
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19
Page | ||||
1. Operation of Agreement
|
2 | |||
a. Effective Date
|
2 | |||
b. Termination of Employment Following a Potential
Change in Control
|
2 | |||
|
||||
2. Definitions
|
2 | |||
a. Change in Control
|
2 | |||
b. Potential Change in Control
|
3 | |||
|
||||
3. Employment Period
|
3 | |||
|
||||
4. Position and Duties
|
3 | |||
|
||||
5. Compensation
|
4 | |||
a. Base Salary
|
4 | |||
b. Annual Bonus
|
4 | |||
c. Long-term Incentive Compensation Programs
|
4 | |||
d. Benefit Plans
|
4 | |||
e. Expenses
|
5 | |||
f. Vacation and Fringe Benefits
|
5 | |||
g. Indemnification
|
5 | |||
|
||||
6. Termination
|
5 | |||
a. Death, Disability or Retirement
|
5 | |||
b. Voluntary Termination
|
5 | |||
c. Cause
|
6 | |||
d. Good Reason
|
6 | |||
e. Notice of Termination
|
7 | |||
f. Date of Termination
|
7 | |||
|
||||
7. Obligations of the Company upon Termination
|
7 | |||
a. Death or Disability
|
7 | |||
b. Cause and Voluntary Termination
|
7 | |||
c. Termination by the Company other than for Cause
and Termination by the Executive for Good Reason
|
8 | |||
i. Severance Benefits
|
8 | |||
ii. Continuation of Welfare Benefits
|
8 | |||
iii. Qualification for Early Retirement
|
9 |
20
Page | ||||
d. Discharge of the Companys Obligations
|
10 | |||
e. Limit on Payments by the Company
|
10 | |||
i. Application of Section 7(e)
|
10 | |||
ii. Calculation of Benefits
|
11 | |||
iii. Imposition of Payment Cap
|
11 | |||
iv. Application of Section 280G
|
11 | |||
v. Applicable Tax Rates
|
12 | |||
vi. Adjustments in Respect of the Payment Cap
|
12 | |||
f. If Termination of Employment Occurs After the Executive Has Reached Age
62
|
13 | |||
|
||||
8. Non-exclusivity of Rights
|
13 | |||
|
||||
9. No Offset
|
13 | |||
|
||||
10. Non-Competition and Non-Solicitation
|
14 | |||
a. Noncompete
|
14 | |||
b. Non-Solicitation of Employees
|
14 | |||
c. Confidential Information
|
14 | |||
d. Non-disparagement
|
14 | |||
e. Company Property
|
15 | |||
f. Additional Payment
|
15 | |||
|
||||
11. Injunctive Relief and Other Remedies with Respect to
Covenants
|
15 | |||
|
||||
12. Successors
|
15 | |||
|
||||
13. Miscellaneous
|
16 | |||
a. Applicable Law
|
16 | |||
b. Arbitration
|
16 | |||
c. Amendments
|
16 | |||
d. Entire Agreement
|
16 | |||
e. Notices
|
17 | |||
f. Source of Payments
|
17 | |||
g. Tax Withholding
|
17 | |||
h. Severability; Reformation
|
18 | |||
i. Waiver
|
18 | |||
j. Counterparts
|
18 | |||
k. Captions
|
18 | |||
|
||||
Signature Page
|
18 |
21
2
3
4
5
6
7
8
9
10
11
12
benefit in excess of the Payment Cap shall be deemed for all purposes a loan to the Executive made on the date of receipt of such excess payments, which the Executive shall have an obligation to repay to the Company on demand, together with interest on such amount at the applicable Federal rate (as defined in Section 1274(d) of the Code) from the date of the payment hereunder to the date of repayment by the Executive. If the Executive receives reduced payments and benefits by reason of this Section 7(e) and it is established pursuant to a Final Determination that the Executive could have received a greater amount without exceeding the Payment Cap, then the Company shall promptly thereafter pay the Executive the aggregate additional amount which could have been paid without exceeding the Payment Cap, together with interest on such amount at the applicable Federal rate (as defined in Section 1274(d) of the Code) from the original payment due date to the date of actual payment by the Company. |
13
14
15
16
17
18
SENECA RESOURCES CORPORATION | ||||||||
|
||||||||
Attest:
|
By: |
/s/ B. McMahan
|
||||||
|
||||||||
/s/ Linda Harris
|
Name: Barry McMahan | |||||||
|
||||||||
|
||||||||
|
Title: Senior Vice President | |||||||
|
||||||||
NATIONAL FUEL GAS COMPANY | ||||||||
|
||||||||
Attest:
|
By: | /s/ David F. Smith | ||||||
|
||||||||
|
||||||||
/s/ Sarah J. Mugel
|
Name: D. F. Smith | |||||||
|
||||||||
|
||||||||
|
Title: President | |||||||
|
||||||||
EXECUTIVE: | ||||||||
|
||||||||
/s/ M. D. Cabell | ||||||||
19
Page | ||||||||
|
||||||||
1. | Operation of Agreement | 2 | ||||||
|
a. | Effective Date | 2 | |||||
|
b. | Termination of Employment Following a Potential Change in Control | 2 | |||||
|
||||||||
2. | Definitions | 2 | ||||||
|
a. | Change in Control | 2 | |||||
|
b. | Potential Change in Control | 3 | |||||
|
||||||||
3. | Employment Period | 4 | ||||||
|
||||||||
4. | Position and Duties | 4 | ||||||
|
||||||||
5. | Compensation | 4 | ||||||
|
a. | Base Salary | 4 | |||||
|
b. | Annual Bonus | 4 | |||||
|
c. | Long-term Incentive Compensation Programs | 5 | |||||
|
d. | Benefit Plans | 5 | |||||
|
e. | Expenses | 5 | |||||
|
f. | Vacation and Fringe Benefits | 5 | |||||
|
g. | Indemnification | 5 | |||||
|
||||||||
6. | Termination | 6 | ||||||
|
a. | Death, Disability or Retirement | 6 | |||||
|
b. | Voluntary Termination | 6 | |||||
|
c. | Cause | 6 | |||||
|
d. | Good Reason | 6 | |||||
|
e. | Notice of Termination | 7 | |||||
|
f. | Date of Termination | 7 | |||||
|
||||||||
7. | Obligations of the Company upon Termination | 7 | ||||||
|
a. | Death or Disability | 7 | |||||
|
b. | Cause and Voluntary Termination | 8 | |||||
|
c. | Termination by the Company other than for Cause and Termination by the Executive for Good Reason | 8 | |||||
|
i. Severance Benefits | 8 | ||||||
|
ii. Continuation of Medical Benefits | 9 | ||||||
|
iii. Continuation of Other Welfare Benefits | 9 | ||||||
|
iv. Vesting of Retirement Benefit Account | 9 | ||||||
|
d. | Discharge of the Companys Obligations | 10 |
20
Page | ||||||
|
e. | Limit on Payments by the Company | 10 | |||
|
i. Application of Section 7(e) | 10 | ||||
|
ii. Calculation of Benefits | 10 | ||||
|
iii. Imposition of Payment Cap | 11 | ||||
|
iv. Application of Section 280G | 11 | ||||
|
v. Applicable Tax Rates | 12 | ||||
|
vi. Adjustments in Respect of the Payment Cap | 12 | ||||
|
f. | If Termination of Employment Occurs After the | ||||
|
Executive Has Reached Age 62 | 13 | ||||
|
||||||
8. | Non-exclusivity of Rights | 13 | ||||
|
||||||
9. | No Offset | 13 | ||||
|
||||||
10. | Non-Competition and Non-Solicitation | 14 | ||||
|
a. | Noncompete | 14 | |||
|
b. | Non-Solicitation of Employees | 14 | |||
|
c. | Confidential Information | 14 | |||
|
d. | Non-disparagement | 14 | |||
|
e. | Company Property | 15 | |||
|
f. | Additional Payment | 15 | |||
|
||||||
11. | Injunctive Relief and Other Remedies with Respect to Covenants | 15 | ||||
|
||||||
12. | Successors | 15 | ||||
|
||||||
13. | Miscellaneous | 16 | ||||
|
a. | Applicable Law | 16 | |||
|
b. | Arbitration | 16 | |||
|
c. | Amendments | 17 | |||
|
d. | Entire Agreement | 17 | |||
|
e. | Notices | 17 | |||
|
f. | Source of Payments | 18 | |||
|
g. | Tax Withholding; Section 409A | 18 | |||
|
h. | Severability; Reformation | 18 | |||
|
i. | Waiver | 18 | |||
|
j. | Counterparts | 19 | |||
|
k. | Captions | 19 | |||
|
||||||
Signature Page | 19 |
21
Page | ||||
Preamble
|
1 | |||
|
||||
ARTICLE 1 Definitions
|
1 | |||
|
||||
1.1 AARCIP
|
1 | |||
1.2 Base Salary
|
1 | |||
1.3 Beneficiary
|
2 | |||
1.4 Code
|
2 | |||
1.5 Committee
|
2 | |||
1.6 Company
|
2 | |||
1.7 Continuing Service Participant
|
2 | |||
1.8 DCP
|
2 | |||
1.9 Employer
|
2 | |||
1.10 ERP
|
2 | |||
1.11 409A Election Date
|
2 | |||
1.12 409A Service Recipients
|
3 | |||
1.13 Legal Limits
|
3 | |||
1.14 Maximum Matching Contribution Percentage
|
3 | |||
1.15 Participant
|
3 | |||
1.16 Plan
|
3 | |||
1.17 Plan Year
|
4 | |||
1.18 Policies
|
4 | |||
1.19 Retirement
|
4 | |||
1.20 Retirement Plan
|
4 | |||
1.21 Retirement Plan-Related Tophat Benefit
|
4 | |||
1.22 TDSP
|
4 | |||
1.23 TDSP-Related Matching Benefit
|
4 | |||
1.24 TDSP-Related Retirement Savings Account Benefit
|
4 | |||
1.25 TDSP-Related Tophat Benefit
|
4 | |||
1.26 Termination of Employment
|
4 | |||
1.27 409A Transition Rules
|
5 | |||
|
||||
ARTICLE 2 Benefits Provided
|
5 | |||
|
||||
2.1 Coordination With Other Benefits
|
5 | |||
2.2 TDSP-Related Tophat Benefit
|
5 | |||
2.3 Retirement Plan-Related Tophat Benefit
|
6 | |||
2.4 Distribution of TDSP-Related Tophat Benefit
|
8 | |||
|
||||
ARTICLE 3 Participants Termination of Employment
|
8 | |||
|
||||
3.1 TDSP-Related Tophat Benefits
|
8 |
i
Page | ||||
3.2 Retirement Plan-Related Tophat Benefits
|
9 | |||
3.3 Lump Sum Cash-Out of De Minimis Tophat Benefits
|
13 | |||
|
||||
ARTICLE 4 Beneficiary Designation
|
13 | |||
|
||||
4.1 Beneficiary Designation
|
13 | |||
4.2 Change of Beneficiary Designation
|
13 | |||
4.3 No Beneficiary Designation
|
14 | |||
4.4 Effect of Payment
|
14 | |||
|
||||
ARTICLE 5 Termination and Modification
|
14 | |||
|
||||
5.1 Termination and Amendment
|
14 | |||
5.2 Limited Power of President to Amend Plan
|
14 | |||
|
||||
ARTICLE 6 Administration
|
14 | |||
|
||||
6.1 Committee Duties
|
14 | |||
6.2 Agents
|
15 | |||
6.3 Binding Effect of Decisions
|
15 | |||
6.4 Indemnity of Committee
|
15 | |||
6.5 Section 409A of the Code
|
15 | |||
|
||||
ARTICLE 7 Miscellaneous
|
15 | |||
|
||||
7.1 Unsecured General Creditor
|
15 | |||
7.2 Nonassignability
|
15 | |||
7.3 Not a Contract of Employment
|
16 | |||
7.4 Health Information
|
16 | |||
7.5 Governing Law
|
16 | |||
7.6 Withholding
|
16 | |||
7.7 Binding Effect
|
16 | |||
7.8 Borrowing
|
16 | |||
7.9 Validity
|
16 | |||
7.10 Incapacity of Person Entitled To Payment
|
16 | |||
7.11 Captions
|
17 | |||
7.12 Construction
|
17 |
ii
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5
6
7
8
9
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11
12
13
14
15
16
17
ARTICLE | PAGE NO. | |||
|
||||
ARTICLE 1 Purpose
|
1 | |||
|
||||
ARTICLE 2 Definitions
|
1 | |||
|
||||
ARTICLE 3 Determination of Retirement Benefits
|
7 | |||
|
||||
ARTICLE 4 Vesting; Forfeiture
|
11 | |||
|
||||
ARTICLE 5 Form of Payment of Benefits
|
12 | |||
|
||||
ARTICLE 6 Source of Payment
|
17 | |||
|
||||
ARTICLE 7 Administration of the Plan
|
17 | |||
|
||||
ARTICLE 8 Amendment and Termination
|
19 | |||
|
||||
ARTICLE 9 General Provisions
|
20 |
2
3
AARCIP Award (relating to | ||||||||
fiscal year ending September | ||||||||
Salary | 30 but paid in December) | |||||||
2001
|
$ | 480,000 | $ | 120,000 | ||||
2002
|
$ | 540,000 | $ | 150,000 | ||||
2003
|
$ | 600,000 | $ | 180,000 | ||||
2004
|
$ | 660,000 | $ | 210,000 | ||||
2005
|
$ | 780,000 | $ | 240,000 | ||||
2006
|
$ | 840,000 | $ | 270,000 |
4
(1) | the Members Total Benefit Base; | ||
(2) | the sum of |
(i) | the Members Social Security Offset and | ||
(ii) | the Members Basic Pension Plan Benefit. |
5
(1) | the Members Benefit Base as determined under the Basic Pension Plan, but without reduction on account of Benefit Limitations and adjusted as if deferrals under the National Fuel Gas Company Deferred Compensation Plan were not excluded from the definition of Final Average Pay under the Basic Pension Plan and | ||
(2) | the Members Basic Pension Plan Benefit. |
(1) | .0197 times the Members Years of Service not in excess of 30; | ||
(2) | .0132 times the Members Years of Service, if any, in excess of 30 (but not to exceed 10); | ||
(3) | the Members Final Average Pay. |
6
7
(1) | the product of (i) and (ii), where (i) and (ii) are |
( i ) | the Members Top-Hat Benefit, | ||
( ii ) | the early retirement percentage that would be applicable to the Member were the Top-Hat Benefit actually payable from the Basic Pension Plan commencing on the date on which payment of the Top-Hat Benefit is to commence hereunder (regardless of when payment of the Basic Pension Plan Benefit actually commences); |
(2) | the product of (i) and (ii ), where (i) and (ii) are |
( i ) | the remainder of (x) minus [the sum of (y) and (z)], where (x), (y) and (z) are: |
( x ) | the Members Total Benefit Base; | ||
( y ) | the amount determined under Section 3.3(a)(1); | ||
( z ) | (A) the Members Basic Pension Plan Benefit times (B) the early retirement percentage that would be applicable to the Member were the Basic Pension Plan to commence on the date on which payment of the Top-Hat Benefit is to commence hereunder (regardless of when payment of the Basic Pension Plan Benefit actually commences); |
( ii ) | the Members Early Retirement Percentage as determined in Section 3.3(b) below; and |
(3) | the Members Social Security Offset. |
8
Retirement Age | Early Retirement Percentage | |||
65
|
100 | |||
64
|
94 | |||
63
|
88 | |||
62
|
82 | |||
61
|
70 | |||
60
|
58 | |||
59
|
46 | |||
58
|
34 | |||
57
|
22 | |||
56
|
10 | |||
55 years and 2 months
|
0 |
9
Step 1.
Calculate the Top-Hat Benefit
|
||||
|
||||
[(.015 x $300,000) x 29] the Members Basic Pension Plan Benefit
|
||||
|
||||
The Members Base Pension Plan Benefit is
|
||||
[(.015 x $220,000) x 29]
|
||||
($3,300) x 29 = $95,700
|
||||
so the Top-Hat Benefit is
|
||||
[(.015 x $300,000) x 29] -$95,700
|
||||
[$4,500 x 29] $95,700
|
||||
$130,500 - 95,700=
|
$ | 34,800 | ||
|
||||
Step 2.
Adjust the Top-Hat Benefit for Early Retirement
|
||||
|
||||
$34,800 x .9 =
|
$ | 31,320 | ||
|
||||
Step 3.
Determine the Total Benefit Base
|
||||
|
||||
[(.0197 x $300,000) x 30]
$5,910 x 30 = |
$ | 177,300 | ||
|
||||
Step 4. Reduce the Total Benefit Base by the Top-Hat Benefit and the
|
||||
Basic Pension Plan Benefit, each as Adjusted for Early Retirement
|
||||
|
||||
$177,300 - [Adjusted Top-Hat Benefit + Adjusted Basic Pension
|
||||
Plan Benefit]
|
||||
|
||||
$177,300 - [$31,320 + (95,700 x .9)]
|
||||
$177,300 - [$31,320 + 86,130]
|
||||
$177,300 - $117,450 =
|
$ | 59,850 | ||
|
||||
Step 5. Adjust Reduced Total Benefit Base for the Early
|
||||
Retirement Percentage
|
||||
|
||||
$59,850 x .34 =
|
$ | 20,349 | ||
|
||||
Step 6.
Calculate the Social Security Offset
|
||||
|
||||
[(.0125 x 30) x $15,000]
|
||||
(0.3750) x $15,000 =
|
$ | 5,625 |
10
($31,320 + 20,349) $5,625
$51,669- $5,625 = |
$ | 46,044 |
11
12
13
14
15
16
17
18
19
20
21
A. | The Executive currently is employed as the President of Supply, a wholly owned subsidiary of National. | ||
B. | Supply, National and the Executive desire to set forth the Executives additional retirement benefits if the Executives employment with the Company is terminated by the Company without Cause or if the Executive terminates employment with the Company with Good Reason prior to March 1, 2011. |
2
3
4
5
6
7
8
9
10
11
NATIONAL FUEL GAS SUPPLY CORPORATION | ||||||
|
||||||
|
By: | /s/ James R. Peterson | ||||
|
||||||
|
Name: | James R. Peterson | ||||
|
Title: | Secretary | ||||
|
||||||
NATIONAL FUEL GAS COMPANY | ||||||
|
||||||
|
By: | /s/ Philip C. Ackerman | ||||
|
||||||
|
Name: | Philip C. Ackerman | ||||
|
Title: | Chairman/CEO | ||||
|
||||||
EXECUTIVE: | ||||||
|
||||||
/s/ David F. Smith | ||||||
DAVID F. SMITH |
12
STATE OF NEW YORK
|
) | |
|
): ss. | |
COUNTY OF ERIE
|
) |
/s/ Sarah J. Mugel
|
[Notary Stamp Omitted] | |
Notary Public
|
13
(1) | Investment Tax Credit is included in Other Income | |
(2) | Rentals shown above represent the portion of all rentals (other than delay rentals) deemed representative of the interest factor. | |
(3) | Fiscal 2005 includes the Impairment of Investment in Partnership of $4,158. |
As of September 30, 2007
Legal Name
Domicile
USA, New Jersey
USA, New York
USA, New York
USA, Pennsylvania
USA, Pennsylvania
USA, New York
USA, New York
USA, New York
USA, New York
USA, New York
USA, New York
USA, New York
The Netherlands
USA, New York
USA, Texas
USA, New York
USA, New York
USA, New York
USA, New York
USA, Delaware
USA, New York
NETHERLAND, SEWELL & ASSOCIATES, INC.
|
||||
By: | /s/ Danny D. Simmons, P. E. | |||
Danny D. Simmons, P. E. | ||||
Executive Vice President | ||||
1. | The Companys Annual Report on Form 10-K for the year ended September 30, 2007 (the Annual Report) fully complies with the requirements of section 13(a) of the Securities Exchange Act of 1934, as amended; and | ||
2. | Information contained in the Annual Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
|
/s/ P. C. Ackerman | |
|
||
|
Chairman of the Board and
Chief Executive Officer |
|
|
||
|
/s/ R. J. Tanski | |
|
||
|
Treasurer and Principal Financial Officer |
All Properties | ||||||||||||||||
Net Reserves | Future Net Revenue (M$) | |||||||||||||||
Oil | Gas | Present Worth | ||||||||||||||
Category | (MBBL) | (MMCF) | Total | at 10% | ||||||||||||
|
||||||||||||||||
Proved Developed
|
38,426.7 | 187,826.8 | 3,173,748 | 1,381,687 | ||||||||||||
Proved Undeveloped
|
9,159.6 | 17,561.8 | 603,224 | 209,375 | ||||||||||||
|
||||||||||||||||
|
||||||||||||||||
Total Proved
|
47,586.3 | 205,388.6 | 3,776,972 | 1,591,062 |
East Coast Division | ||||||||||||||||
Net Reserves | Future Net Revenue (M$) | |||||||||||||||
Oil | Gas | Present Worth | ||||||||||||||
Category | (MBBL) | (MMCF) | Total | at 10% | ||||||||||||
|
||||||||||||||||
Proved Developed
|
483.3 | 96,673.5 | 551,327 | 246,600 | ||||||||||||
Proved Undeveloped
|
24.2 | 10,404.1 | 49,476 | 12,385 | ||||||||||||
|
||||||||||||||||
|
||||||||||||||||
Total Proved
|
507.5 | 107,077.6 | 600,803 | 258,985 |
Gulf Coast Division | ||||||||||||||||
Net Reserves | Future Net Revenue (M$) | |||||||||||||||
Oil | Gas | Present Worth | ||||||||||||||
Category | (MBBL) | (MMCF) | Total | at 10% | ||||||||||||
|
||||||||||||||||
Proved Developed
|
1,434.8 | 25,136.1 | 177,811 | 156,879 |
West Coast Division | ||||||||||||||||
Net Reserves | Future Net Revenue (M$) | |||||||||||||||
Oil | Gas | Present Worth | ||||||||||||||
Category | (MBBL) | (MMCF) | Total | at 10% | ||||||||||||
|
||||||||||||||||
Proved Developed
|
36,508.6 | 66,017.2 | 2,444,610 | 978,208 | ||||||||||||
Proved Undeveloped
|
9,135.4 | 7,157.7 | 553,748 | 196,990 | ||||||||||||
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|
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Total Proved
|
45,644.0 | 73,174.9 | 2,998,358 | 1,175,198 |
Sincerely, | ||||||
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NETHERLAND, SEWELL & ASSOCIATES, INC. | ||||||
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By: | /s/ Frederic D. Sewell, P.E. | ||||
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Frederic D. Sewell, P.E.
Chairman and Chief Executive Officer |
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By:
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/s/ Danny D. Simmons, P.E. | By: | /s/ Mike K. Norton, P.G. | |||
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Danny D. Simmons, P.E.
Executive Vice President |
Mike K. Norton, P.G.
Senior Vice President |
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Date Signed: October 17, 2007 | Date Signed: October 17, 2007 |