Annual Report — [x] Reg. S-K Item 405 — Form 10-K
Filing Table of Contents
Document/Exhibit Description Pages Size
1: 10-K405 Annual Report -- [x] Reg. S-K Item 405 19 132K
2: EX-10.17 Deferred Compensation Plan 11± 44K
3: EX-12 Ratio of Earnings to Fixed Charges 1 9K
4: EX-13 Semco Energy, Inc. 1999 Annual Report to 43 284K
Shareholders
5: EX-18 Letter Re Change in Accounting Principle 1 8K
6: EX-21 Subsidiary List as of 12/31/1999 2± 9K
7: EX-23 Consent 1 6K
8: EX-24 Power of Attorney 2± 11K
9: EX-27 Financial Data Schedule 1 8K
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
--- ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
--- EXCHANGE ACT OF 1934
For the transition period from ___________ to ___________
Commission file number 001-15565
SEMCO Energy, Inc.
(Exact name of registrant as specified in its charter)
MICHIGAN 38-2144267
(State of incorporation) (I.R.S. Employer
Identification No.)
405 WATER STREET, PORT HURON, MICHIGAN 48060
(Address of principal executive offices) (Zip Code)
810-987-2200
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
---------------------- -----------------
COMMON STOCK, $1 PAR VALUE NEW YORK STOCK EXCHANGE
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. X
---
The aggregate market value of the Registrant's Common Stock held by
non-affiliates as of February 29, 2000 was $188,902,548 based on 15,741,879
shares held by non-affiliates and the closing price on that day (New York Stock
Exchange).
Number of outstanding shares of the Registrant's Common Stock as of February 29,
2000: 17,918,619
DOCUMENTS INCORPORATED BY REFERENCE:
Portions of Registrant's definitive Proxy Statement (filed pursuant to
Regulation 14A) with respect to Registrant's April 18, 2000 Annual Meeting of
Shareholders are incorporated by reference in Part III. Portions of the
Registrant's 1999 Annual Report to Shareholders (filed as exhibit 13 to this
Form 10-K) are incorporated by reference in Part I, Item 1 and Part II, Items
5,6, 7, 7A and 8, from such exhibits as noted herein.
T A B L E O F C O N T E N T S
PAGE
CONTENTS NUMBER
PART I
ITEM 1. BUSINESS 1
ITEM 2. PROPERTIES 7
ITEM 3. LEGAL PROCEEDINGS 8
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 9
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS 9
ITEM 6. SELECTED FINANCIAL DATA 9
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 10
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISKS 10
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 10
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE 10
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT 10
ITEM 11. EXECUTIVE COMPENSATION 11
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT 12
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 12
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS
ON FORM 8-K 12
SIGNATURES 17
KEY TO ABBREVIATED TERMS
AMR (Automated Meter Reading) a meter reading system that employs
radio waves to collect natural gas consumption data
ATS (Aggregated Transportation Service) program that allows commercial
and industrial gas distribution customers in Michigan to purchase
their gas from third-party gas suppliers with the Company
transporting the gas
Bcf A measure of natural gas volumes equivalent to one billion cubic
feet
Degree Day A measure of coldness computed by the number of degrees the
average daily temperature falls below 65 degrees Fahrenheit
DRIP Direct Stock Purchase and Dividend Reinvestment Plan
FASB Financial Accounting Standards Board
FERC Federal Energy Regulatory Commission
FOS (Field Order System) a computerized dispatching system for field
service calls
GCR (Gas Cost Recovery) a process by which the Gas Distribution
Business, through annual gas cost proceedings before the MPSC, can
recover the prudent and reasonable cost of gas sold
Mcf A measure of natural gas volumes equivalent to one thousand cubic
feet
MMcf A measure of natural gas volumes equivalent to one million cubic
feet
MPSC Michigan Public Service Commission
PGA (Purchased Gas Adjustment) a process by which the Gas Distribution
business, through annual gas cost proceedings before the RCA, can
recover the prudent and reasonable cost of gas sold
RCA Regulatory Commission of Alaska
SFAS Statement of Financial Accounting Standards
Tcf A measure of natural gas volumes equivalent to one trillion cubic
feet
-i-
FORWARD-LOOKING STATEMENTS
This document contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995 that are based on current
expectations, estimates and projections of SEMCO Energy Inc. and its
subsidiaries (the "Company"). Statements that are not historical facts,
including statements about the Company's outlook, beliefs, plans, goals, and
expectations, are forward-looking statements. These statements are subject to
potential risks and uncertainties and, therefore, actual results may differ
materially. The Company undertakes no obligation to update publicly any
forward-looking statements whether as a result of new information, future events
or otherwise. Factors that may impact forward-looking statements include, but
are not limited to, the following: (i) the effects of weather and other natural
phenomena; (ii) the economic climate and growth in the geographical areas where
the Company does business; (iii) the capital intensive nature of the Company's
business; (iv) increased competition within the energy industry as well as from
alternative forms of energy; (v) the timing and extent of changes in commodity
prices for natural gas and propane; (vi) the effects of changes in governmental
and regulatory policies, including income taxes, environmental compliance and
authorized rates; (vii) the Company's ability to bid on and win construction,
engineering and quality assurance contracts; (viii) the impact of energy prices
on the amount of projects and business available to the Company's engineering
services segment; (ix) the nature, availability and projected profitability of
potential investments available to the Company; (x) the Company's ability to
accomplish its financing objectives in a timely and cost-effective manner in
light of changing conditions in the capital markets, and in particular, the
Company's ability to refinance, in a timely and cost-effective manner, the
$290,000,000 short-term bridge loan obtained to finance the acquisition of
ENSTAR Natural Gas Company and Alaska Pipeline Company, and (xi) the Company's
ability to operate and integrate acquired businesses in accordance with its
plans.
PART I
ITEM 1. BUSINESS
SEMCO ENERGY, INC.
SEMCO Energy, Inc. is a diversified energy services and infrastructure holding
company headquartered in southeastern Michigan. It was founded in 1950 as
Southeastern Michigan Gas Company. SEMCO Energy, Inc. and its subsidiaries (the
"Company") operate four business segments: (1) gas distribution; (2) pipeline
construction services; (3) engineering services; and (4) propane, pipelines and
storage. The latter three segments are sometimes referred to together as the
"diversified businesses". The Company sold the subsidiary comprising its energy
marketing business effective March 31, 1999. In addition, several business
acquisitions were made during 1999. These acquisitions are discussed in the
following business segment sections. The Company had approximately 1,632
employees at December 31, 1999.
GAS DISTRIBUTION
The Company's gas distribution business segment operates in Michigan and Alaska.
The Alaska-based operation, which consists of ENSTAR Natural Gas Company and
Alaska Pipeline Company (together known as "ENSTAR"), was acquired on November
1, 1999 for approximately $290,000,000. The acquisition of ENSTAR was accounted
for as a purchase and therefore, the consolidated financial statements and the
table below include the results of ENSTAR's operations since November 1, 1999.
The success of the ENSTAR acquisition is, in part, dependent on the synergies
obtained in combining ENSTAR with the Company's other gas distribution
operations, the Company's ability to operate ENSTAR in accordance with its plans
and the Company's ability to accomplish its permanent financing related to the
ENSTAR acquisition in a timely and cost-effective manner in light of changing
conditions in the capital markets.
- 1 -
The Michigan gas distribution operation and ENSTAR are referred to together
as the "Gas Distribution Business". The Michigan gas distribution operation and
ENSTAR Natural Gas Company operate as divisions of SEMCO Energy, Inc.
SEMCO Energy Gas Company, which had conducted the Michigan gas distribution
operation, was merged into SEMCO Energy, Inc. on December 31, 1999. Alaska
Pipeline Company operates as a subsidiary of SEMCO Energy, Inc.
The Gas Distribution Business distributes and transports natural gas to
residential, commercial and industrial customers and is the Company's largest
business segment. Set forth in the table below is gas sales and transportation
information for the past three years:
[Download Table]
Years ended December 31, 1999(b) 1998 1997
----------------------------------------- --------- -------- --------
GAS SALES REVENUE (IN THOUSANDS):
Residential . . . . . . . . . . . . . . $ 137,407 $118,220 $139,538
Commercial. . . . . . . . . . . . . . . 38,451 42,041 66,577
Industrial. . . . . . . . . . . . . . . 6,763 6,439 12,065
--------- -------- --------
Total gas sales revenue (a) . . . . . $ 182,621 $166,700 $218,180
========= ======== ========
GAS TRANSPORTATION REVENUE (IN THOUSANDS) $ 22,369 $ 14,832 $ 13,243
========= ======== ========
VOLUMES OF GAS SOLD (MMCF):
Residential . . . . . . . . . . . . . . 28,583 21,946 25,968
Commercial. . . . . . . . . . . . . . . 8,882 8,840 13,483
Industrial. . . . . . . . . . . . . . . 1,780 1,461 2,534
--------- -------- --------
Total volumes of gas sold (a) . . . . 39,245 32,247 41,985
VOLUMES OF GAS TRANSPORTED (MMCF) . . . . 32,417 23,791 21,373
--------- -------- --------
TOTAL VOLUMES DELIVERED (a) . . . . . . . 71,662 56,038 63,358
========= ======== ========
<FN>
(a) Does not include the sale of excess inventory gas to a third party in
1999.
(b) 1999 results include two months of activity from ENSTAR.
Refer to Note 12 of the Notes to the Consolidated Financial Statements on
pages 60 and 61 of the Company's 1999 Annual Report to Shareholders, which
information is incorporated herein by reference from exhibit 13 to this Form
10-K, for the Gas Distribution Business' operating revenues, operating income,
assets and other financial information for the past three years.
GAS SALES - Gas sales revenue is generated primarily through the sale and
delivery of natural gas to residential and commercial customers. These
customers use natural gas mainly for space heating purposes. Consequently,
weather has a significant impact on sales. Given the impact of weather on this
business segment, most of its gas sales revenue is earned in the first and
fourth quarters of the calendar year. Revenues from gas sales accounted for
50%, 26% and 28% of consolidated operating revenues in 1999, 1998 and 1997,
respectively. If operating revenues from the Company's energy marketing
business, which was sold effective March 31, 1999, are excluded, gas sales by
the Gas Distribution Business would have accounted for 66%, 68% and 88% of
consolidated operating revenues for those three years.
Competition in the gas sales market arises from alternative energy sources
such as electricity, propane and oil. However, this competition is inhibited
because of the time, inconvenience and investment for residential and commercial
customers to convert to an alternate energy source when the price of natural gas
fluctuates. For more information on competition for the Gas Distribution
Business, refer to the section titled "Outlook" on pages 29 and 30 of the
Company's 1999 Annual Report to Shareholders, which information is incorporated
herein by reference from exhibit 13 to this Form 10-K.
An aggregation tariff, which was effective April 1, 1998, provides all
Michigan commercial and industrial customers the opportunity to purchase their
gas from a third-party supplier, while allowing the Gas Distribution Business to
continue charging the existing distribution fees and customer fees plus a gas
load balancing fee. Refer to the sections titled "Gas Sales Margin" and "Gas
Transportation Revenue" on pages 26 and 27 of the Company's 1999 Annual Report
to Shareholders, which information is incorporated herein by reference from
exhibit 13 to this Form 10-K, for further information regarding the impact of
the aggregation tariff on gas sales and transportation revenue.
- 2 -
TRANSPORTATION - The Gas Distribution Business provides transportation services
to its large-volume commercial and industrial customers. This service offers
those customers the option of purchasing natural gas directly from producers or
marketing companies while utilizing the Gas Distribution Business' distribution
network to transport the gas to their facilities.
Alaska Pipeline Company ("APC") owns and operates the only natural gas
transmission lines in its service area that are operated for utility purposes.
APC's transmission system delivers natural gas from producing fields in
southcentral Alaska to ENSTAR's Anchorage-based gas distribution system. APC's
only customer is ENSTAR Natural Gas Company.
The market price of alternate energy sources such as coal, electricity, oil
and steam is the primary competitive factor affecting the demand for
transportation. Certain large industrial customers have some ability to convert
to another form of energy if the price of natural gas increases significantly.
Partially offsetting the impact of price sensitivity has been the use of natural
gas as an industrial fuel because of clean air legislation and the resultant
pressures on industry and electric utilities to reduce emissions from their
plants.
As is the case with many gas distribution utilities, there has been
downward pressure on transportation rates due to the potential risk for
industrial customers and electric generating plants located in close proximity
to interstate natural gas pipelines to bypass the Company and connect directly
to such pipelines. However, management is currently unaware of any significant
bypass efforts by the Company's customers. The Company has and would continue
to address any such efforts by offering special services and contractual
arrangements designed to retain these customers on the Company's system.
Customers in ENSTAR's service territory are currently precluded from bypassing
ENSTAR's transportation and distribution system due to the limited availability
of gas transmission systems and the large distances between producing fields and
the locations of current customers.
CUSTOMER BASE - At December 31, 1999, the Michigan gas distribution operation
had approximately 255,000 customers. The largest concentration of customers,
approximately 100,000, is located in southeastern Michigan. The remaining
Michigan customers are located in and around the following communities: Battle
Creek, Albion, Holland, Three Rivers, Niles, Marquette and Houghton. The
Michigan customer base is diverse and includes residential, commercial and
industrial customers. The largest customers include power plants, food
production facilities, paper processing plants, furniture manufacturers and
others in a variety of other industries. The average number of customers in
Michigan has increased by an average of approximately 3% annually during the
past three years. By contrast, the customer growth rate for the U.S. gas
distribution industry has averaged approximately 1% annually during the past
three years.
At December 31, 1999, ENSTAR had approximately 102,000 customers in and
around the Anchorage, Alaska area including the communities of Big Lake, Bird
Creek, Butte, Chugiak, Eagle River, Eklutna, Girdwood, Houston, Indian, Kenai,
Knik, Nikiski, Palmer, Peters Creek, Portage, Sterling, Soldotna, Wasilla and
Whittier. ENSTAR is the sole distributor of natural gas to the greater
Anchorage metropolitan area, and its service area encompasses approximately 50%
of the population of Alaska. ENSTAR has two types of customers: gas sales and
transportation. Gas sales customers are primarily residential and commercial.
ENSTAR provides transportation service to power plant sites, a liquified natural
gas plant, an ammonia plant, and hundreds of commercial locations on behalf of
gas producers and gas marketers. The average number of customers at ENSTAR has
increased by an average of approximately 3% annually during the past three
years.
GAS SUPPLY - The Gas Distribution Business has agreements with TransCanada Gas
Services, Inc. ("TransCanada"), under which TransCanada provides the Company's
natural gas requirements and manages the Company's natural gas supply and the
supply aspects of transportation and storage operations in Michigan for the
three year period that began April 1, 1999. For additional information about
this agreement, refer to Note 2 of the Notes to the Consolidated Financial
Statements on pages 47 and 48 of the Company's 1999 Annual Report to
Shareholders, which information is incorporated herein by reference from exhibit
13 to this Form 10-K. The Gas Distribution Business owns underground storage
facilities in Michigan with a working capacity of 5.0 billion cubic feet
("Bcf"). In addition, it leases 6.5 Bcf of storage from Eaton Rapids Gas
Storage System and 4.5 Bcf from non-affiliates in Michigan. The owned and
leased storage capacity equals 35% to 40% of the Company's average annual gas
sales volumes in Michigan. SEMCO Gas Storage Company (an affiliated company) is
a 50% owner of Eaton Rapids Gas Storage System.
- 3 -
ENSTAR has a gas purchase contract (the "Marathon Contract") with Marathon
Oil Company ("Marathon") that has been approved by the Regulatory Commission of
Alaska ("RCA") and is a "requirements" contract with no specified daily
deliverability or annual take-or-pay quantities. Marathon has agreed to deliver
all of ENSTAR's gas requirements in excess of those provided for in other
presently existing gas supply contracts, subject to certain exceptions, until
the commitment has been exhausted. However, ENSTAR's purchase obligations and
Marathon's delivery obligations are set at specified annual amounts after 2001.
The contract has a base price and is subject to an annual adjustment based on
changes in the price of certain traded oil futures contracts plus reimbursement
for any severance taxes and other charges.
ENSTAR also has an RCA-approved gas purchase contract with the Municipality
of Anchorage, Chevron U.S.A., Inc. and ARCO Alaska, Inc. (the "Beluga Contract")
which provides for the delivery of up to approximately 220 Bcf of gas through
the year 2009. The pricing mechanism in the Beluga Contract is similar to that
contained in the Marathon Contract.
Based on gas purchases during the twelve months ended December 31, 1999,
which are not necessarily indicative of the volume of future purchases, gas
reserves committed to ENSTAR under the Marathon and Beluga Contracts are
sufficient to supply all of ENSTAR's expected gas supply requirements through
the year 2001. After that time supplies will still be available under the
Marathon and Beluga contracts in accordance with their terms, but at least a
portion of ENSTAR's requirements are expected to be satisfied outside the terms
of these contracts, as currently in effect.
The Michigan-based gas distribution operation is served by four major
interstate pipelines: (1) Panhandle Eastern Pipe Line Company; (2) Northern
Natural Gas Company; (3) Great Lakes Gas Transmission Company and (4) ANR
Pipeline Company. Currently, ENSTAR's supply source, primarily though the
Marathon and Beluga Contracts, is confined to the Cook Inlet area with no direct
access to other natural gas pipelines. However, the Cook Inlet area is home to
major gas producing fields, with proven and producing reserves of approximately
2.6 trillion cubic feet ("Tcf"). An additional 2.3 Tcf of undiscovered gas in
the Cook Inlet area has been estimated by the United States Geological Survey
and Minerals Management Service.
RATES AND REGULATION - The rates of gas distribution customers located in the
City of Battle Creek, Michigan and surrounding communities are subject to the
jurisdiction of the City Commission of Battle Creek. The Michigan Public
Service Commission ("MPSC") authorizes the rates charged to all of the remaining
Michigan customers. ENSTAR is subject to regulation by the RCA which has
jurisdiction over, among other things, rates, accounting procedures, and
standards of service. The RCA order approving the Company's acquisition of
ENSTAR provides that ENSTAR's existing rates remain in effect on an interim
basis and requires the Company to file revenue requirement and cost of service
information by July 1, 2000.
Management periodically reviews the adequacy of the Gas Distribution
Business' rates and files requests for rate increases whenever it is deemed
necessary and appropriate. However, a recent rate case includes provisions
limiting the Company's ability to request a rate increase in Michigan during the
three year period that began April 1, 1999. Refer to Note 2 of the Notes to the
Consolidated Financial Statements on pages 47 through 49 of the Company's 1999
Annual Report to Shareholders, which information is incorporated herein by
reference from exhibit 13 to this Form 10-K, for further information on
regulatory matters including recent regulatory orders and rate cases.
ENVIRONMENTAL MATTERS - The Gas Distribution Business currently owns seven
Michigan sites which formerly housed manufactured gas plants. In the earlier
part of the 20th century, gas was manufactured from processes using coal, coke
or oil. By-products of this process have left some contamination at these
sites. The Gas Distribution Business has submitted plans to the appropriate
regulatory authority in the State of Michigan to close one site and begin work
at another site. For further information, refer to Note 14 of the Notes to the
Consolidated Financial Statements on pages 62 and 63 of the Company's 1999
Annual Report to Shareholders, which information is incorporated herein by
reference from exhibit 13 to this Form 10-K.
- 4 -
DIVERSIFIED BUSINESSES
The Company's diversified businesses have grown during the past three years
primarily through acquisitions. The following table shows operating revenues
for each of the diversified businesses, including intercompany revenues, for
1997 through 1999:
[Download Table]
Years Ended December 31, 1999 1998 1997
--------------------------------- ------- ------- -------
(in thousands)
Operating Revenues
Pipeline Construction Services. $58,272 $25,904 $13,207
Engineering Services. . . . . . 17,486 41,366 5,660
Propane, Pipelines and Storage. 6,284 4,852 3,027
<FN>
The amounts in the above table include intercompany transactions.
Refer to Note 12 of the Notes to the Consolidated Financial Statements on
pages 60 and 61 of the Company's 1999 Annual Report to Shareholders, which
information is incorporated herein by reference from exhibit 13 to this Form
10-K, for each of the diversified business' operating revenues, operating
income, assets and other financial information for the past three years.
PIPELINE CONSTRUCTION SERVICES
The Company's pipeline construction services segment ("Construction Services")
operates in the mid-western and southeastern areas of the United States and has
offices in Michigan, Tennessee, Kansas, Iowa, Georgia, and Texas as of December
31, 1999. Its primary service is underground pipeline installation and
replacement for the natural gas distribution industry. During 1999, the Company
made four business acquisitions that not only expanded the geographic reach of
Construction Services but also expanded underground construction service
offerings in new industries such as telecommunications and water supply. As of
December 31, 1999, Construction Services was comprised of six companies that
were all acquired during the past three years: (1) Sub-Surface Construction Co.;
(2) King Energy & Construction Co.; (3) K&B Construction, Inc.; (4) Iowa
Pipeline Associates, Inc.; (5) Flint Construction Co.; and (6) Long's
Underground Technologies, Inc. On December 31, 1999, King Energy & Construction
Co. was merged into Flint Construction Co. There is additional information
regarding these acquisitions in Note 3 of the Notes to the Consolidated
Financial Statements on pages 49 through 51 of the Company's 1999 Annual Report
to Shareholders, which information is incorporated herein by reference from
exhibit 13 to this Form 10-K.
Construction Services had operating revenues, excluding intercompany
transactions, of $49,965,000, $16,621,000, and $7,484,000 in 1999, 1998 and
1997, respectively. These operating revenues accounted for 17%, 7% and 3% of
consolidated operating revenues, excluding energy marketing operating revenues,
during those years.
The natural gas construction services industry is comprised of a highly
fragmented group of companies focused primarily on regional or local markets.
The top six construction companies in the United States have less than 10% of
the market. Approximately 30% of the market represents work done by utility
companies' in-house construction operations with the remainder of the market
being served by a large number of small and medium-size companies. For more
information on competition for Construction Services, refer to the section
titled "Outlook" on page 31 of the Company's 1999 Annual Report to Shareholders,
which information is incorporated herein by reference from exhibit 13 to this
Form 10-K.
Construction Services' business is seasonal in nature. Most of this
segment's annual profits are made during the summer and fall months.
Construction Services generally incurs losses during the winter months when
underground construction is inhibited.
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ENGINEERING SERVICES
The Company's engineering services business segment ("Engineering Services") is
comprised of two companies, Maverick Pipeline Services, Inc. ("Maverick") and
Oilfield Materials Consultants, Inc. ("OMC"). Maverick was acquired in December
1997 and OMC was acquired in November 1998. Maverick purchased the assets and
certain liabilities of Drafting Services, Inc. in September 1999 and Pinpoint
Locators, Inc. in October 1999. These two businesses are being operated as
divisions of Maverick. See Note 3 of the Notes to the Consolidated Financial
Statements on pages 49 through 51 of the Company's 1999 Annual Report to
Shareholders, which information is incorporated herein by reference from exhibit
13 to this Form 10-K, for information regarding acquisitions. Engineering
Services has offices in New Jersey, Michigan, Louisiana and Texas and provides a
variety of energy related engineering and quality assurance services in several
states.
Engineering Services had operating revenues, excluding intercompany
transactions, of $14,841,000, $40,937,000, and $5,660,000 in 1999, 1998 and
1997, respectively. These operating revenues accounted for 5%, 17% and 2% of
consolidated operating revenues, excluding energy marketing operating revenues,
during those years.
Engineering Services serves the natural gas distribution and transmission,
oil products, exploration/production and telecommunication industries. The
primary services provided include engineering design, distribution system
design, construction project management, field surveys, global positioning
surveys, inspection, testing, pipeline-mill quality assurance and full turn-key
service. Engineering Services competes with regional, national and
international firms as well as in-house engineering and field service
departments. Refer to the section titled "Outlook" on page 32 of the Company's
1999 Annual Report to Shareholders, which information is incorporated herein by
reference from exhibit 13 to this Form 10-K, for further discussion concerning
competition in the engineering services industry.
There has been a reduction in oil and gas production and related activities
due to the downturn in oil prices in late 1998 and early 1999. There has also
been a reduction or deferral of new engineering projects for the gas
distribution industry due to the cash flow impact on the industry of the warm
weather during the past two years. As a result, Engineering Services has
experienced a reduction in the level of available projects. Management believes
that the level of available projects will increase as gas distribution companies
start releasing new engineering projects and as pipeline construction and
inspection projects become available as a result of the recovery in oil prices
in late 1999.
PROPANE, PIPELINES AND STORAGE
The Company's pipelines and storage operations consist of several pipelines and
a gas storage facility. The Company has partial ownership interests or equity
interests in certain of these operations. The pipelines and storage operations
are all located in Michigan. Refer to Item 2 of this Form 10-K, which is
incorporated herein by reference, for additional information on each pipeline
and storage facility such as its location and customers. In March 1998, the
Company entered the propane distribution business with the acquisition of
Hotflame Gas, Inc. and Hotflame Transport Co., Inc. (together known as
"Hotflame"). Hotflame supplies approximately 5 million gallons of propane
annually to retail customers in Michigan's upper peninsula and northeast
Wisconsin. Because propane is used principally for heating, most of the
operating income for the propane business is generated in the first and fourth
quarters of the calendar year.
The retail propane industry is highly fragmented with the largest firm in
the industry serving less than 10% of the national market and the vast majority
of propane companies individually having less than one percent market share.
Propane is transported easily in pressurized containers and is generally the
fuel used in rural areas where natural gas pipelines and distribution systems do
not exist or are uneconomical to build. The Company purchases the majority of
its propane from BP Amoco PLC. The propane operation competes with other energy
sources such as natural gas, fuel oil, electricity and other regional propane
providers. The basis of the competition is generally price and service. The
propane business has become increasingly competitive and less profitable, which
necessitates large-scale operations to be successful in the long term. The
Company will continue to assess regional growth opportunities and the strategic
fit of the propane business over the coming year.
- 6 -
ITEM 2. PROPERTIES
SEMCO ENERGY, INC.
The properties of SEMCO Energy, Inc. consist of the net assets of the Michigan
gas distribution operation and ENSTAR Natural Gas Company (both of which are
divisions of SEMCO Energy, Inc.), equity investments in its subsidiaries,
leasehold improvements and office equipment.
GAS DISTRIBUTION
The gas delivery system of the Michigan gas distribution operation included
approximately 153 miles of gas transmission pipelines and 5,222 miles of gas
distribution pipelines at December 31, 1999. The pipelines are located
throughout the southern half of Michigan's lower peninsula (centered around the
cities of Port Huron, Albion, Battle Creek and Holland) and also in the central
and western areas of Michigan's upper peninsula. At December 31, 1999, ENSTAR's
gas delivery system included approximately 394 miles of gas transmission
pipelines and 2,244 miles of gas distribution pipelines. ENSTAR's pipelines are
located in Anchorage and other communities around the Cook Inlet area of Alaska.
The Gas Distribution Business' distribution system and service lines are,
for the most part, located on or under public streets, alleys, highways and
other public places, or on private property not owned by the Company with
permission or consent, except to an inconsequential extent, of the individual
owners. The distribution systems and service lines located on or under public
streets, alleys, highways and other public places were all installed under valid
rights and consents granted by appropriate local authorities.
The Gas Distribution Business owns underground gas storage facilities in
eight depleted salt caverns and two depleted gas fields together with measuring,
compressor and transmission facilities. The storage facilities are all located
in Michigan. The aggregate working capacity of the storage system is
approximately 5.0 Bcf.
The Gas Distribution Business also owns meters and service lines, gas
regulating and metering stations, garages, warehouses and other buildings
necessary and useful in conducting its business. It also leases a significant
portion of its computer and transportation equipment.
PIPELINE CONSTRUCTION SERVICES
The tangible properties of Construction Services include equipment required for
the installation, repair or replacement of underground pipelines or similar
items. This includes primarily equipment necessary for excavation such as
backhoes, trenchers, directional drills and dumptrucks. This equipment can be
driven or carried on trailers from one worksite to another. Substantially all
of Construction Services' equipment at December 31, 1999 was located in Georgia,
Iowa, Kansas, Michigan, Tennessee and Texas.
ENGINEERING SERVICES
Engineering Services' properties include primarily computers, trucks, testing
equipment and related devices required to perform engineering and related
services. Much of the equipment is portable and is used by the Company's
employees at customer worksites throughout several states.
PROPANE, PIPELINES AND STORAGE
The principal properties of this business segment include interests and
operations in propane distribution, natural gas transmission and gathering and
an underground gas storage system.
- 7 -
Set forth in the following table are the equity investments of the propane,
pipelines and storage business segment and its ownership percentage and equity
investment at December 31, 1999:
[Download Table]
Percent Equity
Ownership Investment
----------- -----------
(in thousands of dollars)
Eaton Rapids Gas Storage System. . . 50% $ 4,165
Michigan Intrastate Pipeline System. 50% 0
Michigan Intrastate Lateral System . 50% 42
-----------
$ 4,207
===========
The Company owns a 50% equity interest in the Eaton Rapids Gas Storage
System. This system, located near Eaton Rapids, Michigan, became operational in
March 1990 and consists of approximately 12.8 Bcf of underground storage
capacity. The Gas Distribution Business leases 6.5 Bcf of the capacity.
The Company also owns 50% of the Michigan Intrastate Pipeline System
(MIPS") and the Michigan Intrastate Lateral System partnerships. The sole
purpose of these partnerships is to hold a 10% ownership of the Saginaw Bay
Pipeline Project, a 126-mile pipeline from Michigan's Saginaw Bay area to
processing plants in Kalkaska, Michigan. The Company sold its MIPS investment
effective January 1, 2000.
The property of the propane distribution operation consists primarily of
pressurized propane storage tanks used by customers to store propane purchased
from the Company and trucks for transporting propane. The Company also owns
large propane storage tanks that allow the Company to store up to 258,000
gallons of propane inventory. The propane distribution property is all located
in Michigan's upper peninsula and northeast Wisconsin.
The following table sets forth the pipeline operations wholly or partially
owned by the Company, the total net property of the project, the Company's
ownership percentage and net property at December 31, 1999:
[Download Table]
Total The Company's The Company's
Net Property Percent Ownership Net Property
------------- ------------------- --------------
(in thousands of dollars)
Litchfield Lateral. . . . $ 10,118 33% $ 3,339
Greenwood Pipeline. . . . 6,800 100% 6,800
Eaton Rapids Pipeline . . 853 100% 853
------------- --------------
$ 17,771 $ 10,992
============= ==============
The Litchfield Lateral is a 31-mile pipeline located in southwest Michigan.
The line, which is leased entirely to ANR Pipeline Company, links the Eaton
Rapids Gas Storage System with interstate pipeline supplies. The Litchfield
Lateral began operations in February 1993.
The Greenwood Pipeline, an 18-mile pipeline, was constructed in 1991, to
serve Detroit Edison's Greenwood power plant located in Michigan's thumb area.
The Company and Detroit Edison have entered into an agreement whereby Detroit
Edison has contracted for the entire capacity of the line which amounts to 240
million cubic feet ("MMcf") per day.
The Eaton Rapids Pipeline is a 7.1 mile pipeline constructed in 1990. It
provides direct delivery of gas from the Eaton Rapids Gas Storage System to the
Gas Distribution Business' systems in Battle Creek and Albion, Michigan.
The Company previously owned a 40% interest in the Iosco-Reno System, which
consisted of the Iosco County Pipeline and Reno Gas Processing Plant. The
Company sold its interest during 1999.
ITEM 3. LEGAL PROCEEDINGS
None.
- 8 -
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
MARKET INFORMATION AND NYSE LISTING
SEMCO Energy, Inc. Common Stock began trading on the New York Stock Exchange on
January 6, 2000 under the trading symbol "SEN". Prior to this date the Company
was traded on The Nasdaq Stock Market under the symbol "SMGS." The table below
shows high and low quotations of the Company's common stock in the
over-the-counter market (as reported in the Wall Street Journal) adjusted to
reflect a 5% stock dividend in May 1998.
[Download Table]
1999 Price Range 1998 Price Range
-------------------------------------- -------------------------------------
1999 High Low 1998 High Low
-------------------------------------- -------------------------------------
First Quarter $17-1/2 $14-1/4 First Quarter $17-7/8 $15-1/4
Second Quarter $16-7/8 $13-1/4 Second Quarter $18-3/8 $15-1/4
Third Quarter $16 $13 Third Quarter $18 $13-1/8
Fourth Quarter $15-3/8 $11-5/16 Fourth Quarter $17-1/2 $14-1/2
See the cover page for a recent stock price and the number of shares
outstanding. The Company issued unregistered shares of its common stock in
connection with certain acquisition transactions during the past three years
(for additional information, refer to Notes 3 and 5 of the Notes to the
Consolidated Financial Statements on page 49, 50, 52 and 53 of the Company's
1999 Annual Report to Shareholders, which information is incorporated herein by
reference from exhibit 13 to this Form 10-K). See Selected Financial Data in
Item 6 of this Form 10-K for the number of registered common shareholders at
year end for the past five years. The Company had 9,214 registered common
shareholders at February 29, 2000.
DIVIDENDS
For information regarding dividends, see Notes 5 and 16 of the Notes to the
Consolidated Financial Statements on pages 52, 53 and 64 of the Company's 1999
Annual Report to Shareholders, which information is incorporated herein by
reference from exhibit 13 to this Form 10-K, and Selected Financial Data in item
6 of this Form 10-K.
ITEM 6. SELECTED FINANCIAL DATA
For the information required pursuant to this item, refer to the section titled
"Selected Financial Data" in the Company's 1999 Annual Report to Shareholders,
pages 66 and 67, which information is incorporated herein by reference from
exhibit 13 to this Form 10-K.
- 9 -
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
For the information required pursuant to this item, refer to the section titled
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" in the Company's 1999 Annual Report to Shareholders, pages 24
through 39, which information is incorporated herein by reference from exhibit
13 to this Form 10-K.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
For the information required pursuant to this item, refer to the section titled
"Market Risk Information" on pages 37 and 38 of the Company's 1999 Annual Report
to Shareholders, which information is incorporated herein by reference from
exhibit 13 to this Form 10-K.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
For the information required pursuant to this item, refer to the following
sections of the Company's 1999 Annual Report to Shareholders, which information
is incorporated herein by reference from exhibit 13 to this Form 10-K:
Consolidated Statements of Income, page 40
Consolidated Statements of Cash Flows, page 41
Consolidated Statements of Financial Position, page 42
Consolidated Statements of Capitalization, page 43
Consolidated Statements of Changes in Shareholders' Investment, page 44
Notes to the Consolidated Financial Statements, pages 45 through 64
Report of Independent Public Accountants, page 65
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information appearing under the caption "Information About Directors" in the
Company's definitive Proxy Statement (filed pursuant to Regulation 14A) with
respect to the Company's April 18, 2000 Annual Meeting of Shareholders is
incorporated by reference herein. Information about the executive officers of
SEMCO Energy, Inc. follows:
William L. Johnson (age 57) has been Chairman of the Board of Directors
since December 1997 and Chief Executive Officer since May 1996. He was also
President from May 1996 to September 1999. From 1994 to May 1996 he was Chief
Executive Officer of Northern Pipeline Construction Company of Kansas City,
Missouri, and from 1990 to 1994 he was President, Gas Service Division of
Western Resources, Inc. of Topeka, Kansas.
- 10 -
Carl W. Porter (age 50) has been President since September 1999 and Chief
Operating Officer since July 1996. He was also a Senior Vice President from
July 1996 to September 1999. Prior to joining SEMCO Energy, Inc., he was Vice
President-Gas Utilities of Itron, Inc., Spokane, Washington, from August 1995 to
July 1996. From 1992 to 1995 he was Senior Vice President of Operations of New
Jersey Natural Gas, Wall, New Jersey, and from 1990 to 1992 he was Vice
President of Operations of Western Resources, Inc., Topeka, Kansas.
Sebastian Coppola (age 48) has been Senior Vice President and Chief
Financial Officer since January 1999. Prior to joining SEMCO Energy, Inc., he
was Senior Vice President of Finance, Treasurer and Investor Relations Officer
of MCN Energy Group, Inc., Detroit, Michigan, from September 1994 to December
1998. While at MCN Energy Group, Inc., he was also Director of Accounting
Services and Investor Relations from October 1988 to August 1994.
Rudolfo D. Cifolelli (age 59) has been Senior Vice President and Chief
Information Officer of SEMCO Energy, Inc. since November 1998. He was President
and Owner of OACIS, Inc., Bloomfield, Michigan from June 1996 to October 1998.
He was also employed by the GENIX Group, a subsidiary of MCN Energy Group, Inc.,
Detroit, Michigan, as President and Chief Executive Officer from 1994 to 1996
and President and Chief Operating Officer from 1990 to 1994.
Barrett Hatches (age 44) became President of ENSTAR Natural Gas Co. (a
division of SEMCO Energy, Inc.) in January 2000. He had been Senior Vice
President of Human Resources and Public Affairs for SEMCO Energy, Inc. from
February 1999 to December 1999, and Vice President of Human Resources and Public
Affairs from February 1997 to February 1999. He was Vice President of V.
Robinson & Company, Inc., Kansas City, Missouri, from 1996 to February 1997. He
was Director of Logistics and Chief Operating Officer - H & N Railroad of North
American Salt Company, Overland Park, Kansas, from 1995 to 1996. He worked at
Missouri Gas Energy, Kansas City, Missouri, as Director of Field Services from
May 1994 to January 1995 and Director of Customer Information from July 1992 to
May 1994.
John E. Schneider (age 51) has been Senior Vice President of Corporate
Development for SEMCO Energy, Inc. since September 1999. He was Senior Vice
President of SEMCO Energy Ventures, Inc. (a subsidiary of SEMCO Energy, Inc.)
from May 1998 to September 1999. Prior to joining the Company, he was
self-employed as a management and business consultant from 1994 to May 1998.
From 1984 to 1994, Mr. Schneider was President and Chief Executive Officer of
Westmark Mortgage Corporation and Westmark Insurance Company, Costa Mesa,
California.
Lila R. Bradley (age 55) has been Vice President of Human Resources and
Public Affairs for SEMCO Energy, Inc. since January 2000. She was Director of
Human Resources for SEMCO Energy Gas Company from March 1998 to January 2000.
Prior to joining SEMCO Energy, Inc., she was Manager of Labor Relations for
Burlington Northern Santa Fe Railway from 1988 to March 1998.
Samuel B. Dallas (age 49) has been Vice President of Finance for SEMCO
Energy, Inc. since May 1999. He was Director, Trust Investments at MCN Energy
Group, Inc. from 1990 to 1999. Prior to 1990, he held other management
positions at MCN Energy Group, Inc. and its affiliate companies including
Director of Investor Relations and Director of Corporate Finance.
Edric R. Mason, Jr. (age 54) has been Treasurer of SEMCO Energy, Inc. since
September 1999 and Director of Investor Relations since October 1997. He was
also Treasurer of SEMCO Energy Gas Company (a subsidiary of SEMCO Energy, Inc.)
from October 1997 to September 1999. From 1987 to October 1997, he was
Assistant Treasurer and Manager of Treasury Operations at Delmarva Power & Light
Company in Wilmington, Delaware.
Steven W. Warsinske (age 44) will become Vice President and Controller of
SEMCO Energy, Inc. effective April 2000. He has been Vice President and Chief
Accounting Officer of SEMCO Energy Gas Company since February 1998. Mr.
Warsinske was Vice President of Accounting and Controller of SEMCO Energy Gas
Company from 1996 to February 1998 and Secretary and Treasurer from 1988 to
1996. Prior to 1988, he held various positions with the Company.
ITEM 11. EXECUTIVE COMPENSATION
The information appearing under the captions "Compensation of Directors and
Executive Officers" and "Compensation Committee Interlocks and Insider
Participation" in the Company's definitive Proxy Statement (filed pursuant to
Regulation 14A) with respect to Registrant's April 18, 2000 Annual Meeting of
Shareholders is incorporated by reference herein.
- 11 -
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information appearing under the caption "Stock Outstanding and Voting
Rights" in the Company's definitive Proxy Statement (filed pursuant to
Regulation 14A) with respect to the Company's April 18, 2000 Annual Meeting of
Shareholders is incorporated by reference herein.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information appearing under the captions "Certain Business Relationships of
Directors" and "Employment and Related Agreements" in the Company's definitive
Proxy Statement (filed pursuant to Regulation 14A) with respect to the Company's
April 18, 2000 Annual Meeting of Shareholders is incorporated by reference
herein.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) 1 All Financial Statements. For a list of financial statements
incorporated by reference, see the Part II, Item 8 of this 10-K.
(a) 2 Financial Statement Schedules. The following additional data and
schedule should be read in conjunction with the Consolidated
Financial Statements in Part II, item 8 of this 10-K. Schedules
not included herein have been omitted because they are not
applicable or the required information is shown in such financial
statements or notes thereto.
Pages in 10-K
-------------
Report of Independent Public Accountants. . . . . . 13
Schedule II - Consolidated Valuation and Qualifying
Accounts for the years ended December 31, 1999,
1998 and 1997 . . . . . . . . . . . . . . . . . . . 14
(a) 3 Exhibits, including those incorporated by reference are on pages
15 and 16 of this 10-K.
(b) On November 12, 1999, the Company filed Form 8-K to disclose
certain information regarding the acquisition of ENSTAR and to
file the Regulatory Commission of Alaska order entitled "Order
Approving Applications, Subject to Conditions; and Requiring
Filings."
The Company filed Form 8-K on November 24, 1999, to file (1) the
ENSTAR Financial Statements and Notes Thereto for the Years Ended
December 31, 1998, 1997 and 1996 and (2) the Company's Pro Forma
Financial Statements reflecting the acquisition of ENSTAR.
(c) The Exhibits, if any, filed herewith are identified in Item
14(a) 3 above.
(d) The financial statement schedules filed are identified under Item
14(a) 2 above.
- 12 -
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To SEMCO Energy, Inc.:
We have audited, in accordance with generally accepted auditing standards, the
consolidated financial statements of SEMCO Energy, Inc. included in this Form
10-K, and have issued our report thereon dated January 24, 2000. Our audit was
made for the purpose of forming an opinion on the basic financial statements
taken as a whole. The schedule listed in item 14 (a) 2 is presented for
purposes of complying with the Securities and Exchange Commission's rules and is
not part of the basic financial statements. The schedule has been subjected to
the auditing procedures applied in the audit of the basic financial statements
and, in our opinion, fairly states in all material respects the financial data
required to be set forth therein in relation to the basic financial statements
taken as a whole.
Arthur Andersen LLP
Detroit, Michigan,
January 24, 2000
- 13 -
SCHEDULE II
SEMCO ENERGY, INC.
SCHEDULE II - CONSOLIDATED VALUATION AND QUALIFYING ACCOUNTS
(THOUSANDS OF DOLLARS)
[Enlarge/Download Table]
DEDUCTIONS
ADDITIONS FOR FROM RESERVE
BALANCE PROVISIONS FOR PURPOSE FOR BALANCE
BEGINNING CHARGED WHICH THE RESERVE END
DESCRIPTION OF PERIOD TO INCOME WAS PROVIDED OF PERIOD
------------------------------------ -------------- ------------- ------------------ -------------
YEAR ENDED DECEMBER 31, 1999
----------------------------
Reserves deducted from receivables
in the Statement of
Financial Position:
Allowances for doubtful accounts $ 632 $ 1,115 $ 667 $ 1,080
============== ============= ================== =============
Reserves deducted from net property,
Plant and equipment in the
Statement of Financial Position $ 1,401 $ 241 $ 0 $ 1,642
============== ============= ================== =============
YEAR ENDED DECEMBER 31, 1998
----------------------------
Reserves deducted from receivables
in the Statement of
Financial Position:
Allowances for doubtful accounts $ 1,498 $ 742 $ 1,608 $ 632
============== ============= ================== =============
Reserves deducted from net property,
Plant and equipment in the
Statement of Financial Position $ 2,401 $ 100 $ 1,100 $ 1,401
============== ============= ================== =============
Reserves deducted from deferred
credits and other liabilities in
the Statement of
Financial Position:
Reserve for NOARK investment $ 25,212 $ 0 $ 25,212 $ 0
============== ============= ================== =============
YEAR ENDED DECEMBER 31, 1997
----------------------------
Reserves deducted from receivables
in the Statement of
Financial Position:
Allowances for doubtful accounts $ 1,247 $ 2,199 $ 1,948 $ 1,489
============== ============= ================== =============
Reserves deducted from net property,
Plant and equipment in the
Statement of Financial Position $ 2,401 $ 0 $ 0 $ 2,401
============== ============= ================== =============
Reserves deducted from deferred
credits and other liabilities in
the Statement of
Financial Position:
Reserve for NOARK investment $ 32,942 $ 0 $ 7,730 $ 25,212
============== ============= ================== =============
- 14 -
EXHIBITS, INCLUDING THOSE INCORPORATED BY REFERENCE
[Enlarge/Download Table]
Filed
----------------------
Exhibit By
No. Description Herewith Reference
------ ----------- -------- ---------
2 Plan of Acquisition, etc. NA NA
3.(i) Articles of Incorporation of SEMCO Energy, Inc., as
restated June 25, 1999.(q) x
3.(ii) Bylaws--last revised October 14, 1999.(r) x
4.1 Note Agreement dated as of June 1, 1994, relating to
issuance of $80,000,000 of long-term debt.(a) x
4.2 Rights Agreement dated as of April 15, 1997 with
Continental Stock Transfer & Trust Company, as Rights
Agent.(c) x
4.3 Note Agreement dated as of October 1, 1997, relating to
issuance of $60,000,000 of long-term debt.(f) x
4.4 Form of Indenture relating to Senior Debt Securities
dated as of October 23, 1998, with NBD Bank as
Trustee.(h) x
4.5 Credit Agreement dated as of October 7, 1999 Among
SEMCO Energy, Inc. as Borrower, the Banks named in the
Credit Agreement as Banks, Banc of America
Securities LLC as Arranger, and Bank of America, N.A.
as Administrative Agent. x
9 Voting Trust Agreement. NA NA
10 Material Contracts.
10.1 Short-Term Incentive Plan as amended June 10, 1999.(q) x
10.2 1997 Long-Term Incentive Plan.(b) x
10.3 Stock Option Certificate and Agreement dated October 10,
1996 with William L. Johnson.(c) x
10.4 Stock Option Certificate and Agreement dated
February 26, 1997 with William L. Johnson.(c) x
10.5 Employment Agreement dated October 10, 1996, with
William L. Johnson.(d) x
10.6 Change of Control Employment Agreement dated October 10,
1996, with William L. Johnson.(d) x
10.7 Form of Change in Control Agreement effective March 20,
1998, for all officers except Mr. Johnson.(g) x
10.8 Asset Purchase Agreement dated August 9, 1997 between
Sub-Surface Construction Co., Stewart Kniff and SEMCO
Energy Construction Co., First Amendment to Asset
Purchase Agreement, Amendment to Leased Equipment
Purchase Agreements and Asset Purchase Agreement, List
of Schedules and Exhibits and Agreement to Furnish
Schedules and Exhibits.(e) x
10.9 Purchase Agreement between the Company and Merrill
Lynch & Co., etc., pertaining to an offering of
1,600,000 Shares of Common Stock.(i) x
10.10 Distribution Agreement between the Company and Merrill
Lynch & Co., etc., pertaining to an offering of
$150,000,000 Medium-Term Notes and Form of Medium Term
Note.(j) x
10.11 Agreement and Plan of Merger dated as of October 30,
1998, between the Company, SEMCO Consultants, Inc. and
Jimmy C. Foster and the Press Release announcing the
merger.(k) x
10.12 Executive Security Agreement.(m) x
10.13 Split-Dollar Agreement.(m) x
10.14 Deferred Compensation and Stock Purchase Agreement
for Outside Directors for 1999.(m) x
10.15 Stock Purchase Agreement dated March 15, 1999
concerning the sale of the stock in SEMCO Energy
Services, Inc.(o) x
10.16 Purchase and Sale Agreement dated as of July 15,
1999, with Ocean Energy, Inc. for the acquisition of
ENSTAR Natural Gas Company and Alaska Pipeline
Company.(p) x
10.17 SEMCO Energy, Inc. Deferred Compensation Plan (for
certain executive and management employees). x
11 Statement re computation of per share earnings. NA NA
12 Ratio of Earnings to Fixed Charges. x
13 SEMCO Energy, Inc. 1999 Annual Report to Shareholders,
pages 24-67. x
16 Letter re change in certifying accountant. NA NA
18 Letter re change in accounting principle. x
21 Subsidiaries of the Registrant. x
22 Published report regarding matters submitted to a vote
of security holders. NA NA
23 Consent of Independent Public Accountants. x
24 Power of Attorney. x
27 Financial Data Schedule. x
99.1 Announcement of agreement to sell SEMCO Energy
Services, Inc.(l) x
99.2 Announcement of dividend policy change.(n) x
99.3 Proxy Statement dated March 3, 2000.(s) x
<FN>
Key to Exhibits Incorporated by Reference
(a) Filed with SEMCO Energy, Inc.'s Form 10-Q for the quarter ended June 30,
1994, File No. 0-8503.
(b) Filed March 6, 1997 as part of SEMCO Energy, Inc.'s 1997 Proxy
Statement, dated March 7, 1997, File No. 0-8503.
(c) Filed with SEMCO Energy, Inc.'s Form 10-K for 1996, dated March 27,
1997, File No. 0-8503.
(d) Filed with SEMCO Energy, Inc.'s Form 10-Q for the quarter ended March
31, 1997, File No. 0-8503.
(e) Filed with SEMCO Energy, Inc.'s Form 8-K dated August 13, 1997, File No.
0-8503.
(f) Filed with SEMCO Energy, Inc.'s Form 10-Q for the quarter ended
September 30, 1997, File No. 0-8503.
(g) Filed with SEMCO Energy, Inc.'s Form 10-Q/A for the quarter ended March
31, 1998, File No. 0-8503.
(h) Filed with SEMCO Energy, Inc.'s Registration Statement, Form S-3, Nos.
333-58715 and 333-58715-01, filed July 8, 1998.
(i) Filed with SEMCO Energy, Inc.'s Form 8-K dated August 13, 1998, File No.
0-8503.
(j) Filed with SEMCO Energy, Inc.'s Form 8-K dated October 21, 1998, File
No. 0-8503.
(k) Filed with SEMCO Energy, Inc.'s Form 8-K dated November 5, 1998, File
No. 0-8503.
(l) Filed with SEMCO Energy, Inc.'s Form 8-K dated March 23, 1999, File No.
0-8503.
(m) Filed with SEMCO Energy, Inc.'s Form 10-K for 1998, dated March 26,
1999, File No. 0-8503.
(n) Filed with SEMCO Energy, Inc.'s Form 8-K dated April 22, 1999, File No.
0-8503.
(o) Filed with SEMCO Energy, Inc.'s Form 10-Q for the quarter ended March
31, 1999, File No. 0-8503.
(p) Filed with SEMCO Energy, Inc.'s Form 8-K dated July 16, 1999, File No.
0-8503.
(q) Filed with SEMCO Energy, Inc.'s Form 10-Q for the quarter ended June 30,
1999, File No. 0-8503.
(r) Filed with SEMCO Energy, Inc.'s Form 10-Q for the quarter ended
September 30, 1999, File No. 0-8503.
(s) Filed March 1, 2000, pursuant to Rule 14a-6 of the Exchange Act, File
No. 0001-15565.
- 15-16 -
SIGNATURES
Pursuant to the requirements of Section 13 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.
SEMCO ENERGY, INC.
Date: March 20, 2000 By /s/William L. Johnson
------------------------------------
William L. Johnson
Chairman and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/William L. Johnson Chairman and March 20, 2000
---------------------
William L. Johnson Chief Executive Officer (Director)
/s/Sebastian Coppola Senior Vice President and March 20, 2000
--------------------
Sebastian Coppola Chief Financial Officer
(Principal Financial and
Accounting Officer)
/s/John M. Albertine* Director March 20, 2000
--------------------
John M. Albertine
/s/Daniel A. Burkhardt* Director March 20, 2000
----------------------
Daniel A. Burkhardt
/s/Edward J. Curtis* Director March 20, 2000
--------------------
Edward J. Curtis
/s/John T. Ferris* Director March 20, 2000
------------------
John T. Ferris
/s/Michael O. Frazer Director March 20, 2000
--------------------
Michael O. Frazer
/s/Marcus Jackson* Director March 20, 2000
------------------
Marcus Jackson
/s/Harvey I. Klein* Director March 20, 2000
-------------------
Harvey I. Klein
/s/Frederick S. Moore* Director March 20, 2000
----------------------
Frederick S. Moore
/s/Edith A. Stotler* Director March 20, 2000
--------------------
Edith A. Stotler
/s/Donald W. Thomason* Director March 20, 2000
----------------------
Donald W. Thomason
*By /s/William L. Johnson March 20, 2000
-----------------------
William L. Johnson
Attorney-in-fact
- 17 -
Dates Referenced Herein and Documents Incorporated by Reference
| Referenced-On Page |
|---|
| This ‘10-K405’ Filing | | Date | | First | | Last | | | Other Filings |
|---|
| |  |
| | 7/1/00 | | 7 |
| | 4/18/00 | | 1 | | 15 | | | DEF 14A, PRE 14A |
| Filed on: | | 3/20/00 | | 19 | | | | | 8-K |
| | 3/3/00 | | 18 |
| | 3/1/00 | | 18 | | | | | DEF 14A |
| | 2/29/00 | | 1 | | 12 | | | 4 |
| | 1/24/00 | | 16 | | | | | 5 |
| | 1/6/00 | | 12 |
| | 1/1/00 | | 11 | | | | | 3 |
| For Period End: | | 12/31/99 | | 1 | | 17 | | | 4, 5 |
| | 11/24/99 | | 15 | | | | | 8-K |
| | 11/12/99 | | 15 | | | | | 8-K |
| | 11/1/99 | | 4 |
| | 10/14/99 | | 18 |
| | 10/7/99 | | 18 |
| | 9/30/99 | | 18 | | | | | 10-Q, 4 |
| | 7/16/99 | | 18 | | | | | 8-K |
| | 7/15/99 | | 18 |
| | 6/30/99 | | 18 | | | | | 10-Q, 4 |
| | 6/25/99 | | 18 |
| | 6/10/99 | | 18 |
| | 4/22/99 | | 18 | | | | | 8-K |
| | 4/1/99 | | 6 | | 7 |
| | 3/31/99 | | 4 | | 18 | | | 10-Q, 4, 4/A |
| | 3/26/99 | | 18 | | | | | 10-K405 |
| | 3/23/99 | | 18 | | | | | 8-K |
| | 3/15/99 | | 18 |
| | 12/31/98 | | 15 | | 17 | | | 10-K405, 4, 5, U-3A-2 |
| | 11/5/98 | | 18 | | | | | 8-K |
| | 10/30/98 | | 18 |
| | 10/23/98 | | 18 | | | | | 424B5, 8-K |
| | 10/21/98 | | 18 | | | | | 8-K |
| | 8/13/98 | | 18 | | | | | 10-Q, 424B5, 8-K |
| | 7/8/98 | | 18 | | | | | 10-Q/A, 4, S-3 |
| | 4/1/98 | | 5 |
| | 3/31/98 | | 18 | | | | | 10-K405, 10-Q, 10-Q/A, 4 |
| | 3/20/98 | | 18 |
| | 12/31/97 | | 15 | | 17 | | | 10-K405, 4, 5, U-3A-2 |
| | 10/1/97 | | 18 |
| | 9/30/97 | | 18 | | | | | 10-Q, 4 |
| | 8/13/97 | | 18 | | | | | 10-Q, 8-K |
| | 8/9/97 | | 18 |
| | 4/15/97 | | 18 | | | | | DEF 14A |
| | 3/31/97 | | 18 | | | | | 10-K405, 10-Q, 4 |
| | 3/27/97 | | 18 |
| | 3/7/97 | | 18 |
| | 3/6/97 | | 18 | | | | | DEF 14A |
| | 2/26/97 | | 18 |
| | 12/31/96 | | 15 | | | | | 10-K405, 10-K405/A, U-3A-2 |
| | 10/10/96 | | 18 |
| | 6/30/94 | | 18 | | | | | 10-Q |
| | 6/1/94 | | 18 |
| List all Filings |
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Filing Submission 0000277158-00-000007 – Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)
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