Date of Report (Date of Earliest Event Reported): April 7, 2022
RGC RESOURCES, INC.
(Exact name of Registrant as specified in its charter)
Virginia
000-26591
54-1909697
(State or other jurisdiction
of incorporation)
(Commission
File Number)
(IRS Employer
Identification No.)
519 Kimball Ave.,N.E. Roanoke, Virginia
24016
(Address of principal executive offices)
(Zip Code)
Registrant’s telephone number, including area code: 540-777-4427
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 240.425)
☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐
Pre-commencement communications pursuant to Rule 13c-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class
Trading
Symbol
Name of Each Exchange on Which Registered
Common Stock, $5 Par Value
RGCO
NASDAQ Global Market
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 if the Securities Exchange Act of 1934.
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
EXPLANATORY NOTE
This Amendment No. 2 to Form 8-K is being filed to provide additional information with respect to the evaluation of a potential material impairment initially disclosed under Item 2.06 in the Form 8-K filed by the registrant on February 22, 2022, and subsequently amended on March 23, 2022.
ITEM 2.06.
MATERIAL IMPAIRMENTS.
RGC Midstream, LLC (“Midstream”), a wholly owned subsidiary of RGC Resources, Inc. (“Resources”) is an equity method investor in Mountain Valley Pipeline, LLC (“LLC”), a joint venture established for the construction and operation of the Mountain Valley Pipeline (“MVP”) and MVP Southgate.
As disclosed in Item 2.06 on the Form 8-K dated February 22, 2022 and amended March 23, 2022, due primarily to recent decisions by the U.S. Court of Appeals for the Fourth Circuit (the “Court”) vacating and remanding certain permits necessary for the completion of MVP construction and commercial operation, and the greater uncertainty that now exists given the Court’s actions, as well as the recent actions by project partners to impair their respective investments and the discontinuance of the previously-publicized summer 2022 in-service target for the MVP project, on April 7, 2022, Midstream assessed the value of its equity investment in the LLC to determine whether the fair value of its investment in the LLC had declined below its carrying value on an other-than-temporary basis as of February 22, 2022, and concluded an impairment charge is required.
Midstream has recorded a pre-tax impairment loss of approximately $39.8 million (or $29.6 million, after tax) that reduced the carrying value of its investment in the LLC from $66 million to $26 million, with $10 million associated as a deferred tax asset. This impairment, based on an updated fair value analysis required for accounting purposes, will be recorded in the second quarter of 2022.
Resources remains committed to completing the MVP project and is supportive of engagement with federal agencies, legal counsel and the other joint venture partners to evaluate the best path forward.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
RGC RESOURCES, INC.
Date: April 7, 2022
By:
/s/ Jason A. Field
Jason A. Field
Vice President, Chief Financial Officer and Treasurer
