SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended September 30, 2005
Commission file number 000-26591
RGC RESOURCES, INC.
(successor to Roanoke Gas Company)
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
Registrant’s telephone number, including area code (540) 777-4427
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Title of Each Class
Name of Each Exchange on
Which Registered
OTC (Nasdaq
National Market)
Indicate by check mark if the registrant is a well-known seasoned issuer as defined in Rule 405 of the Securities Act.
Yes ¨ No x
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
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 (Section 229.405 of this chapter) 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. ¨
Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2).
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.): Yes ¨ No x
State the aggregate market value of the voting stock held by nonaffiliates of the registrant as of November 30, 2005. $53,796,521
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the last practicable date.
Class
Outstanding at November 30, 2005
DOCUMENTS INCORPORATED BY REFERENCE:
Portions of the RGC Resources, Inc. 2005 Annual Report to Shareholders are incorporated by reference into Parts II and IV hereof.
Portions of the RGC Resources, Inc. Proxy Statement for the 2006 Annual Meeting of Shareholders are incorporated by reference into Part III hereof.
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PART I
Forward-Looking Statements
From time to time, RGC Resources, Inc. (the “Company” or “Resources”) may publish forward-looking statements relating to such matters as anticipated financial performance, business prospects, technological developments, new products, research and development activities and similar matters. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements. In order to comply with the terms of the safe harbor, the Company notes that a variety of factors could cause the Company’s actual results and experience to differ materially from the anticipated results or other expectations expressed in the Company’s forward-looking statements. These factors are described in Item 1.A below. All of these factors are difficult to predict and many are beyond the Company’s control. Accordingly, while the Company believes its forward-looking statements to be reasonable, there can be no assurance that they will approximate actual experience or that the expectations derived from them will be realized. When used in the Company’s documents or news releases, the words, “anticipate,” “believe,” “intend,” “plan,” “estimate,” “expect,” “objective,” “projection,” “forecast” or similar words or future or conditional verbs such as “will,” “would,” “should,” “could” or “may” are intended to identify forward-looking statements.
Historical Development
The Company was initially incorporated in Virginia on July 31, 1998 for the primary purpose of becoming the holding company for Roanoke Gas Company (“Roanoke Gas”) and its former subsidiaries, Bluefield Gas Company (“Bluefield Gas”) and Diversified Energy Company (“Diversified”). Effective July 1, 1999, Roanoke Gas and its subsidiaries were reorganized into a holding company structure (the “Reorganization”). As a result of the Reorganization: (i) Resources became a holding company owned by the former shareholders of Roanoke Gas; (ii) Resources became the sole owner of the stock of Roanoke Gas, Bluefield Gas and Diversified; (iii) Commonwealth Public Service Corporation, a former subsidiary of Bluefield, merged its natural gas distribution business into Roanoke Gas; (iv) Roanoke Gas and Bluefield Gas continued to operate in the natural gas distribution business as subsidiaries of Resources; and (v) Diversified continued to carry on its nonutility propane business as a subsidiary of Resources.
Roanoke Gas was organized as a public service corporation under the laws of the Commonwealth of Virginia in 1912. The principal service of Roanoke Gas was, and continues to be, the distribution and sale of natural gas. Commencing in 1972, the distribution and sale of propane gas was added to Roanoke Gas’ line of business. The propane business was transferred to Diversified in January 1979. Diversified, which was not a public utility, distributed and sold propane in Southwestern Virginia and Southern West Virginia.
On May 15, 1987, Roanoke Gas, through a series of merger transactions, acquired 100 percent of the outstanding stock of Bluefield Gas, a public service corporation, organized in 1944 under the laws of the State of West Virginia and principally engaged in the distribution of natural gas in Bluefield, West Virginia and surrounding areas, and Gas Service, Inc. (“Gas Service”), a nonpublic utility affiliate (through common directors and shareholders) of Bluefield Gas, which was engaged in the sale of propane in southwestern Virginia and southern West Virginia. After obtaining requisite shareholder approval and the approvals of the Virginia State Corporation Commission (“Virginia Commission”) and the West Virginia Public Service Commission (“West Virginia Commission”), Gas Service was merged into Diversified, and Bluefield Gas became a wholly-owned subsidiary of Roanoke Gas. Prior to the Reorganization, Bluefield Gas owned all
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of the issued and outstanding stock of Commonwealth, a small Virginia public service corporation organized in 1930 as the subsidiary of a predecessor corporation to Bluefield Gas.
In March 1994, the Highland Gas Marketing (currently Highland Energy) division of Diversified was established to broker natural gas to several industrial transportation customers of Roanoke Gas and Bluefield Gas.
On January 6, 2000, RGC Ventures, Inc. (“RGC Ventures”), a newly created subsidiary of Resources, was merged with Cox Heating and Cooling, Inc., headquartered in Beckley, West Virginia. Cox Heating and Cooling, Inc. provided sales, installation and service for heating, ventilation, and air conditioning equipment in West Virginia with offices in Beckley and Lewisburg, West Virginia. The new organization operated as a division of RGC Ventures and conducted business as Highland Heating and Cooling (“Highland Heating”).
In September 2001, the Company decided to restructure Highland Heating and Cooling due to poor performance. During fiscal 2002, the Company decided to discontinue the sales of heating and air conditioning equipment and continue the service operations with the intent of merging Highland Heating and Cooling into Diversified to improve efficiencies and reduce costs.
In September 2003, the Company completed the merger of RGC Ventures, Inc. into Diversified.
On November 19, 1999, Resources acquired the assets of GIS/GPS Solutions, Inc. in order to offer geographic mapping technology, combined with database management tools, to develop user friendly, broad based management information systems. In July 2002, the operations function of GIS Resources, Inc. was transferred into Roanoke Gas, and the GIS corporate entity was dissolved.
On October 11, 2000, the information technology department of Resources formed Application Resources, Inc. to provide information technology consulting services to Orcom Solutions, Inc.
On July 12, 2004, Resources sold the propane assets of its subsidiary, Diversified, d/b/a Highland Propane Company, for approximately $28,500,000 in cash to Inergy Propane, LLC. The sale of assets encompassed nearly all of the propane plant assets, including the name “Highland Propane,” customer accounts receivable, propane gas inventory and inventory of propane related materials. Resources realized an after tax gain of approximately $9,500,000 on the sale of assets.
On June 26, 2005, Resources sold the remaining 10 parcels of property owned by Diversified to Inergy Propane, LLC for approximately $750,000. Resources realized a pre-tax gain of approximately $153,000 on the sale of property.
Services
Resources maintains an integrated natural gas distribution system. Natural gas is purchased from suppliers and distributed to residential, commercial and large industrial users through underground mains and services. Approximately 90.3 percent of the Company’s customers are residential, approximately 9.6 percent are commercial users, and the remaining percentage is made up of large industrial and transportation customers, who received approximately 32 percent of the Company’s total annual delivered volume in 2005 under the Company’s interruptible tariff and transportation gas services.
Resources’ natural gas distribution business accounted for approximately 82 percent, 81 percent, and 85 percent of the total revenues, excluding discontinued operations, generated by the Company in fiscal years 2005, 2004 and 2003, respectively. Increases or decreases in the cost of natural gas are passed on to
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customers through the purchased gas adjustment mechanism. Therefore, the Company’s revenues are impacted by changes in gas costs as well as by changes in volume due to weather and economic conditions. Furthermore, higher gas costs, which the Company is able to pass through to customers, may cause customers to conserve or, in the case of industrial customers, to use alternative energy sources.
The Company’s retail sales are seasonal and temperature-sensitive as the majority of the gas sold by Resources is used for heating. For the fiscal year ended September 30, 2005, approximately 55 percent of the Company’s total decatherms (“DTH”) of natural gas sales were made in the four-month period of December through March. Total natural gas deliveries were 11,452,388 DTH, 11,903,920 DTH and 12,041,193 DTH in fiscal years 2005, 2004 and 2003, respectively. The Company’s actual heating degree days in fiscal 2005 were approximately 90 percent of normal, as compared with approximately 93 percent and 103 percent of normal in fiscal years 2004 and 2003, respectively.
Suppliers
Roanoke Gas Company and Bluefield Gas Company are each served by multiple interstate and intrastate pipelines. Roanoke Gas is served by Columbia Gas Transmission Corporation and Columbia Gulf Transmission Corporation (together “Columbia”), and East Tennessee Natural Gas Company, Tennessee Gas Pipeline, Midwestern Gas Transmission and Virginia Gas Pipeline Company. Bluefield Gas is served by Columbia and Abbs Valley Pipeline. Columbia historically has delivered approximately 60 percent of Roanoke Gas’ gas supply and 80 percent of Bluefield Gas’ gas supply, while the other pipelines deliver the balance of each companies’ requirements. The rates paid for natural gas transportation and storage services purchased from the interstate pipeline companies are established by tariffs approved by FERC. These tariffs contain flexible pricing provisions, which, in some instances, authorize these transporters to reduce rates and charges to meet price competition.
The Company currently uses long-term (multi-year) contracts to meet its system requirements. The Company’s current suppliers include Sequent Energy and Phoenix Energy Sales Company. The Company expects its firm supply agreements will be sufficient to supply the total system requirements during the period October 1, 2005 through September 30, 2006.
The Company uses summer storage programs to supplement gas supply requirements during the winter months. The Company injects summer gas into its liquefied natural gas storage facility, which is capable of storing up to 220,000 DTH for use during peak demand winter periods. In addition, the Company has contracted for storage reserves from Columbia, Tennessee Gas Pipeline and Virginia Gas Pipeline Company with a combined total of more than three million decatherms of storage capacity. Prior to November 1, 2004, the Company prepaid a portion of its winter requirements under the asset management agreement with a third party under the classification of prepaid gas service. Prepaid gas service represented the Company’s right to receive gas in the future from the asset manager. Effective November 1, 2004, Roanoke Gas and Bluefield Gas each entered into a new asset management contract with a different third party. Each new contract is a three-year agreement with similar terms to the expired contract with a key difference being that the Company maintains title to gas in storage. Under the new contract, the balance in prepaid gas service was converted to storage gas inventory with title and ownership maintained by Roanoke Gas and Bluefield Gas.
Having multiple pipelines at each location, a liquified natural gas facility for peak shaving purposes and a number of underground storage options, the Company believes that it is well positioned to provide adequate gas supply for future customer growth.
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Competition
Resources competes with suppliers of other energy sources such as fuel oil, electricity, propane and coal. Competition can be intense among the other energy sources and can be based primarily on price. This is particularly true for industrial applications where sales are at risk to price competition in markets, which may swing to other fuels, depending upon environmental regulation restriction on fuel usage.
The regulated natural gas utilities operate in a monopolistic environment. Roanoke Gas currently holds the only franchises and/or certificates of public convenience and necessity to distribute natural gas in its Virginia service areas. The franchises generally extend for multi-year periods and are renewable by the municipalities. Certificates of public convenience and necessity, which are issued by the Virginia Commission, are of perpetual duration, subject to compliance with regulatory standards.
Roanoke Gas holds the only franchise to distribute natural gas in the cities of Roanoke and Salem and the Town of Vinton. These franchises expire December 31, 2015.
Bluefield Gas holds the only franchise to distribute natural gas in its West Virginia service area. This franchise expires August 23, 2009.
Management anticipates that the Company will be able to renew all of its franchises when they expire. There can be no assurance, however, that a given jurisdiction will not refuse to renew a franchise or will not, in connection with the renewal of a franchise, impose certain restrictions or conditions that could adversely affect the Company’s business operations or financial condition.
Regulation
Roanoke Gas and Bluefield Gas are subject to regulation at federal and state levels. Federally, the interstate gas transmission between Bluefield Gas and Roanoke Gas in Bluefield, Virginia is regulated by FERC. At the state level, the Virginia and West Virginia Commissions regulate Roanoke Gas and Bluefield Gas, respectively. Such regulation includes the prescription of rates and charges at which natural gas is sold to customers, the approval of agreements between or among affiliated companies involving the provision of goods and services, pipeline safety, and certain corporate activities of the Company, including mergers and acquisitions. Both state Commissions also grant certificates of public convenience and necessity to distribute natural gas in their respective states.
Roanoke Gas and Bluefield Gas are further regulated by the municipalities and localities that grant franchises for the placement of gas distribution pipelines and the operation of a gas distribution network within the streets and alleys of the municipalities.
Both Roanoke Gas and Bluefield Gas operated manufactured gas plants (MGPs) as a source of fuel for lighting and heating until the early 1950’s. A by-product of operating MGPs was coal tar, and the potential exists for on-site tar waste contaminants at former plant sites. The extent of contaminants at these sites, if any, is unknown at this time. An analysis at the Bluefield site indicates some soil contamination. The Company, with concurrence of legal counsel, does not believe any events have occurred requiring regulatory reporting. Further, the Company has not received any notices of violation or liabilities associated with environmental regulations related to the MGP sites and is not aware of any off-site contamination or pollution as a result of prior operations. Therefore, the Company has no plans for subsurface remediation at the MGP sites. Should the Company eventually be required to remediate either site, the Company will pursue all prudent and reasonable means to recover any related costs, including insurance claims and regulatory approval for rate case recognition of expenses associated with any work required. A stipulated rate case agreement between the Company and the West Virginia Public Service
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Commission recognized the Company’s right to defer MGP clean-up costs at the Bluefield site, should any be incurred, and to seek rate relief for such costs. If the Company eventually incurs costs associated with a required clean-up of either MGP site, the Company anticipates recording a regulatory asset for such clean-up costs to be recovered in future rates. Based on anticipated regulatory actions and current practices, management believes that any costs incurred related to this matter will not have a material effect on the Company’s consolidated financial condition or results of operations.
Employees
At September 30, 2005, Resources had 137 full-time employees. As of that date, 41 employees, or 30 percent of the Company’s full-time employees, belonged to the Paper, Allied-Industrial, Chemical and Energy Workers International Union, AFL-CIO Local No. 2-515. Roanoke Gas Company currently has 34 of the unionized employees who are currently covered under a collective bargaining agreement with Resources. The union has been in place at the Company since 1952. The Roanoke Gas collective bargaining agreement will expire on July 31, 2010. Bluefield Gas Company currently has 7 unionized employees who are currently covered under a separate bargaining agreement. The Bluefield Gas collective bargaining agreement will expire on July 4, 2007. Management maintains an amicable relationship with the union.
The Company is exposed to various risks and uncertainties that may affect the operations, performance, development and results of the Company’s business including the following: (i) failure to earn on a consistent basis an adequate return on invested capital; (ii) increasing expenses and labor costs and labor availability; (iii) price competition from alternative fuels; (iv) volatility in the price and availability of natural gas; (v) uncertainty in the projected rate of growth of natural gas requirements in the Company’s service area; (vi) general economic conditions both locally and nationally; (vii) increases in interest rates; (viii) increased customer delinquencies and conservation efforts resulting from high fuel costs and/or colder weather; (ix) developments in electricity and natural gas deregulation and associated industry restructuring; (x) variations in winter heating degree-days from normal; (xi) changes in environmental requirements, pipeline operating requirements and cost of compliance; (xii) impact of potential increased governmental oversight and compliance costs due the Sarbanes-Oxley law; (xiii) failure to obtain timely rate relief for increasing operation or gas costs from regulatory authorities; (xiv) ability to raise debt or equity capital; (xv) impact of uncertainties in the Middle East and related terrorism issues, and (xvi) new accounting standards issued by the Financial Accounting Standards Board, which could change the accounting treatment for certain transactions.
The most significant risk factors include the following:
High natural gas prices:
The combination of the damage to natural gas production and transportation facilities attributable to recent hurricanes and increasing demands for natural gas for electric generation have resulted in a significant rise in natural gas prices. If natural gas prices remain at these unprecedented levels, the Company may encounter a more than proportionate increase in bad debts and sales volume reductions attributable to conservation or customers converting to other energy or heating fuels.
Warm winter weather:
The Company’s business is seasonal in nature and relies upon the sale of natural gas primarily as a heating fuel. In addition, the Company’s non-gas margin rates are established based upon projected sales assuming
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weather utilizing a trailing 30-year period. In years where winter weather is warmer than the trailing 30 year period, the demand for natural gas as a heating fuel declines resulting in reduced sales and lower margins. The risk of warm winter weather has been partially mitigated due to the inclusion of a weather normalization adjustment (“WNA”) factor as part of Roanoke Gas Company’s rate structure. The WNA operates based on a weather occurrence band around the most recent 30-year temperature average. The weather band provides approximately a 6 percent range around normal weather, whereby if the number of heating-degree days fall within approximately 6 percent above or below the 30-year average, no adjustments are made. However, if the number of heating degree-days were more than 6 percent below the 30-year average, the Company would add a surcharge to firm customer bills (those customers not subject to service interruption) equal to the equivalent margin lost below the approximate 6 percent deficiency. Likewise, if the number of heating-degree days were more than 6 percent above the 30-year average, the Company would credit firm customer bills equal to the excess margin realized above the 6 percent heating degree-days. The measurement period in determining the weather band extends from April through March with any adjustment to be made to customer bills in late spring.
The property contained within the “Utility Plant” designation on the Company’s consolidated balance sheet consists of intangible plant, storage plant, transmission plant, distribution plant and general plant as categorized by natural gas utilities. Transmission and distribution plant represent almost 87% of the total investment in plant. The Company has approximately 1,140 miles of transmission and distribution pipeline to serve the Company’s 59,000 customers in the Company’s service territories. All “Utility Plant” is owned by either Roanoke Gas or Bluefield Gas.
Roanoke Gas owns and operates six metering stations through which it measures and regulates the gas being delivered by its suppliers. Roanoke Gas also owns two metering stations located on property owned by East Tennessee Natural Gas Company. These stations are located and various points throughout the Company’s distribution system.
Located in Botetourt County is a liquefied natural gas storage facility that has the capacity to hold 220,000 DTH of natural.
Roanoke Gas’ general and business offices and the maintenance and service departments are located in Roanoke, Virginia on land along Kimball Avenue.
Bluefield Gas’ operations center and warehouse is located at 4699 East Cumberland Road. Bluefield owns a lot at 800 Pulaski Street, Bluefield, West Virginia. In addition, Bluefield owns two lots in the City of Bluefield, West Virginia, upon which its high pressure regulator stations are located.
The Company considers its present properties adequate. The Company intends to construct additional distribution lines as customer growth and pipeline replacement needs warrant.
Not applicable.
There were no matters submitted to a vote of security holders during the fourth quarter of the year ended September 30, 2005.
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Pursuant to General Instruction G(3) of Form 10-K, the following list is included as an unnumbered Item in Part I of this report in lieu of being included in the Proxy Statement for the Annual Meeting of Stockholders to be held on January 30, 2006.
The names, ages and positions of all of the executive officers of RGC Resources, Inc. as of September 30, 2005, are listed below with their business experience for the past five years. Officers are appointed annually by the Board of Directors at the meeting of directors immediately following the Annual Meeting of Stockholders. There are no family relationships among these officers, nor any agreement or understanding between any officer and any other person pursuant to which the officer was selected.
Previous and present duties and responsibilities:
Name and Age
Position and Business
Experience for Past Five Years
John B. Williamson, III, 51
John S. D’Orazio, 45
Vice President – Marketing and
Customer Service – Roanoke Gas
Dale P. Moore, 50
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PART II
The information set forth under the caption “Market Price and Dividend Information” in the 2005 Annual Report to Shareholders is incorporated herein by reference. As of November 30, 2005, there were approximately 1,631 holders of record of the Company’s common stock. This number does not include all beneficial owners of common stock who hold their shares in “street name.”
A summary of the Company’s equity compensation plans follows:
(a)
(b)
(c)
The information set forth under the caption “Selected Financial Data” in the 2005 Annual Report to Shareholders is incorporated herein by reference.
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The information set forth under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the 2005 Annual Report to Shareholders is incorporated herein by reference.
The information set forth under the caption “Market Risk” in the 2005 Annual Report to Shareholders is incorporated herein by reference.
The following consolidated financial statements of the registrant and the Independent Auditors’ Report included in the 2005 Annual Report to Shareholders are incorporated herein by reference:
A financial statement schedule regarding valuation and qualifying accounts is included under Item 15 of Part IV below.
Based on their evaluation of the Company’s disclosure controls and procedures (as defined by Rule 13a-15 (e) under the Securities Exchange Act of 1934) as of September 30, 2005, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that these disclosure controls and procedures are effective. There have been no significant changes during the quarter ended September 30, 2005 in the Company’s internal control over financial reporting or in other factors that could materially affect, or is reasonably likely to materially affect, this internal control over financial reporting.
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PART III
For information with respect to the executive officers of the registrant, see “Executive Officers of the Registrant” at the end of Part I of this report. For information with respect to the directors and nominees and the audit committee financial expert of the registrant, see “Election of Directors of Resources” and “Audit Committee”, respectively, in the Proxy Statement for the 2005 Annual Meeting of Shareholders of Resources, which information is incorporated herein by reference. The information with respect to compliance with Section 16(a) of the Exchange Act, which is set forth under the caption “Section 16(a) Beneficial Ownership Reporting Compliance” in the Proxy Statement for the 2006 Annual Meeting of Shareholders of Resources, is incorporated herein by reference.
The Company has adopted a Code of Ethics applicable to all of its officers, directors and employees. The Company has posted the text of its Code of Ethics on its Internet website at www.rgcresources.com.
The information set forth under the captions “Executive Compensation,” “Report of the Compensation Committee of the Board of Directors,” “Compensation Committee Interlocks and Insider Participation” and “Performance Graph” in the Proxy Statement for the 2006 Annual Meeting of Shareholders of Resources is incorporated herein by reference.
The information pertaining to shareholders beneficially owning more than five percent of the registrant’s common stock and the security ownership of management, which is set forth under the captions “Annual Meeting of Shareholders” and “Security Ownership of Management” in the Proxy Statement for the 2006 Annual Meeting of Shareholders of Resources, is incorporated herein by reference.
The information set forth under the caption “Securities Authorized for Issuance Under Equity Compensation Plans” in the Proxy Statement for the 2006 Annual Meeting of Shareholders of Resources is incorporated herein by reference.
The information with respect to certain transactions with management of the registrant, which is set forth under the caption “Transactions with Management” in the Proxy Statement for the 2006 Annual Meeting of Shareholders of Resources, is incorporated herein by reference.
The information set forth under the caption “Principal Accountant Fees and Services” in the Proxy Statement for the 2006 Annual Meeting of Shareholders of Resources is incorporated herein by reference.
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PART IV
All financial statements of the registrant as set forth under Item 8 of this Report on Form 10-K.
All schedules are omitted with the exception of the valuation and qualifying accounts, as the required information is inapplicable or the information is presented in the consolidated financial statements or related notes thereto.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Board of Directors and Stockholders
RGC Resources, Inc.
We have audited the consolidated financial statements of RGC Resources, Inc. and subsidiaries (the “Company”) as of September 30, 2005 and 2004, and for each of the three years in the period ended September 30, 2005, and have issued our report thereon dated December 15, 2005 (which report expresses an unqualified opinion and includes an explanatory paragraph relating to the sale of the assets of its subsidiary, Diversified Energy Company, d/b/a Highland Propane Company, described in Note 2); such financial statements and report are included in your 2005 Annual Report to Stockholders and are incorporated herein by reference. Our audits also included the financial statement schedule of the Company listed in Item 15. This financial statement schedule is the responsibility of the Company’s management. Our responsibility is to express an opinion based on our audits. In our opinion, such financial statement schedule, when considered in relation to the basic financial statements taken as a whole, present fairly, in all material respects, the information set forth therein.
/s/ Deloitte & Touche LLP
Charlotte, North Carolina
December 15, 2005
12
Valuation and Qualifying Accounts
For the Years Ended September 30, 2005, 2004 and 2003
Description
Allowance for Doubtful Accounts
Accrued Medical Self-Insurance
Other
Exhibit No.
13
14
15
16
17
18
19
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Annual Report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized.
Vice President, Treasurer and
Controller (Principal Financial Officer)
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Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report on Form 10-K has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
/s/ JOHN B. WILLIAMSON, III
John B. Williamson, III
December 20, 2005
Date
Chairman of the Board, President and
Chief Executive Officer
/s/ HOWARD T. LYON
Howard T. Lyon
Vice President, Treasurer and Controller
(Principal Financial Officer)
/s/ NANCY H. AGEE
Nancy H. Agee
Director
/s/ ABNEY S. BOXLEY, III
Abney S. Boxley, III
/s/ FRANK T. ELLETT
Frank T. Ellett
/s/ MARYELLEN F. GOODLATTE
Maryellen F. Goodlatte
/s/ J. ALLEN LAYMAN
J. Allen Layman
/s/ GEORGE W. LOGAN
George W. Logan
/s/ S. FRANK SMITH
S. Frank Smith
/s/ RAYMOND D. SMOOT, JR.
Raymond D. Smoot, Jr.
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EXHIBIT INDEX