-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Ul6/W20zq41Q4rScbQPFmZ4/99Dq9OFyh84/x0G4ttEFtjsovphoKhz24AP7V/NW WHYxpv0wdCHhAFEerFZNXg== 0001035675-02-000016.txt : 20020628 0001035675-02-000016.hdr.sgml : 20020628 20020628151158 ACCESSION NUMBER: 0001035675-02-000016 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20011231 FILED AS OF DATE: 20020628 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NSTAR/MA CENTRAL INDEX KEY: 0001035675 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 046830187 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 11-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-14768 FILM NUMBER: 02691309 BUSINESS ADDRESS: STREET 1: 800 BOYLSTON ST CITY: BOSTON STATE: MA ZIP: 02199 BUSINESS PHONE: 6174242000 MAIL ADDRESS: STREET 1: 800 BOYLSTON STREET CITY: BOSTON STATE: MA ZIP: 02199 FORMER COMPANY: FORMER CONFORMED NAME: B E C ENERGY DATE OF NAME CHANGE: 19980421 FORMER COMPANY: FORMER CONFORMED NAME: BOSTON EDISON HOLDINGS DATE OF NAME CHANGE: 19970313 11-K 1 nstarsavings11k2001c.txt NSTAR 11K FOR YEAR ENDED 2001 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 11-K FOR ANNUAL REPORTS OF EMPLOYEE STOCK PURCHASE, SAVINGS AND SIMILAR PLANS PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
[X] For annual reports of employee stock purchase, savings and similar plans pursuant to Section 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended December 31, 2001 or [ ] Transition report pursuant to Section 15(d) of the Securities Exchange Act of 1934 For the transition period from to
Commission File Number 1-14768 NSTAR SAVINGS PLAN (Full title of the plan) NSTAR (Name of issuer of the securities held pursuant to the plan) 800 Boylston Street, Boston, Massachusetts 02199 (Address of principal executive offices) REPORT OF INDEPENDENT ACCOUNTANTS To the Retirement Plans Committee: In our opinion, the accompanying statements of net assets available for benefits and the related statement of changes in net assets available for benefits present fairly, in all material respects, the net assets available for benefits of the NSTAR Savings Plan (the "Plan") at December 31, 2001 and 2000, and the changes in net assets available for benefits for the year ended December 31, 2001, in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Plan's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules of assets (held at end of year) at December 31, 2001 and reportable transactions for the year ended December 31, 2001 are presented for the purpose of additional analysis and are not a required part of the basic financial statements but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. These supplemental schedules are the responsibility of the Plan's management. The supplemental schedules have been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. As further described in Note A, on March 30, 2001, the NSTAR Negotiated Savings Plan for Office, Technical and Professional Employees, the NSTAR Negotiated Savings Plan for Production and Maintenance Employees and the NSTAR 401(k) Plan merged into the Plan. /s/ PricewaterhouseCoopers LLP Boston, Massachusetts June 28, 2002
NSTAR SAVINGS PLAN Statements of Net Assets Available for Benefits (in thousands) December 31, 2001 2000 Assets Investments, at fair value: Registered investment company shares $ 334,124 $ 70,206 NSTAR Common Share Fund 171,120 44,863 Fidelity Brokerage Link 14,922 4,652 Loans to participants 12,964 1,680 Total investments 533,130 121,401 Other assets: Receivables - Employee contributions 262 44 Employer contributions 165 24 Total other assets 427 68 Net assets available for benefits $ 533,557 $ 121,469 ========== ========== The accompanying notes are an integral part of these financial statements.
NSTAR SAVINGS PLAN Statement of Changes in Net Assets Available for Benefits Plan year ended December 31, 2001 (in thousands) Additions to net assets attributed to: Investment income Interest and dividends - Registered investment company shares $ 6,815 NSTAR Common Share Fund 6,715 Fidelity Brokerage Link 166 Interest on participant loans 871 14,567 Net appreciation (depreciation) in fair value of investments: NSTAR Common Share Fund 21,482 Registered investment companies (9,867) Fidelity Brokerage Link (2,160) 9,455 Contributions: Employee 17,411 Employer 7,105 24,516 Total additions, net 48,538 Deductions from net assets attributed to: Benefits paid to participants or beneficiaries 39,098 Deemed distributions from participant loans 325 Total deductions 39,423 Net increase in net assets available for benefits prior to merger 9,115 Merger of net assets from other NSTAR savings plans 402,973 (Note A) Net increase in net assets available for benefits 412,088 Net assets available for benefits: Beginning of year 121,469 End of year $533,557 ======== The accompanying notes are in integral part of these financial statements.
NSTAR SAVINGS PLAN Notes to Financial Statements A. Summary The following description of the NSTAR Savings Plan (the "Plan") provides only general information. Eligible employees' ("Participants") benefits under this Plan are determined in accordance with the Plan document. Effective January 1, 2000, the current Plan name was adopted following a corporate merger in August 1999 and replaced the former Boston Edison Savings Plan. Features of the Plan are described below. The Plan is administered by the Retirement Plans Committee ("Committee"), which is empowered to decide questions of eligibility and make other interpretations under the Plan in its discretion, and in general to administer the operation of the Plan. In addition, the Executive Personnel Committee of the Trustees of NSTAR, the Plan sponsor, has the responsibility to appoint and remove the Plan Trustee. Members of the Committee and the Pension Management Committee select investment funds, employ Plan advisors, appoint investment managers and generally establish policies, including funding and investment policies, for the Plan. The Pension Management Committee also has the responsibility to implement these policies and generally to monitor the operations of the Plan and the Plan Trustee. The Plan investments are held in trust by Fidelity Management Trust Company ("Fidelity"), the Plan's trustee and record keeper. The Trustee retains the Plan assets, provides records of Plan activity and makes distributions as instructed by the Committee or its designee. On March 30, 2001, the NSTAR Negotiated Savings Plan for Office, Technical and Professional Employees, the NSTAR Negotiated Savings Plan for Production and Maintenance Employees and the NSTAR 401(k) Plan were merged into the Plan. Effective April 2, 2001, all participants in those plans became Participants in the NSTAR Savings Plan. Net plan assets of $50,910,000, $88,647,000 and $263,416,000 were transferred from the NSTAR Negotiated Savings Plan for Office, Technical and Professional Employees, the NSTAR Negotiated Savings Plan for Production and Maintenance Employees and the NSTAR 401(k) Plan, respectively, into the Plan. General NSTAR (the "Company") is an energy delivery company serving approximately 1.3 million customers in Massachusetts including more than one million electric customers in 81 communities and 246,000 gas customers in 51 communities. Common Shares of NSTAR are listed on the New York and Boston stock exchanges under the trading symbol of NST. The Plan was originally established in 1986 and provides retirement benefits for participating eligible employees through a program of salary-reduction contributions and limited matching employer contributions. The Plan has been amended from time to time thereafter. The Plan is a defined contribution plan subject to the rules and regulations of the Employee Retirement Income Security Act of 1974 ("ERISA"). The Plan is qualified under section 401(a) of the Internal Revenue Code (the "Code") and utilizes the special federal income tax deferral features of section 401(k) of the Code. Participation Active NSTAR employees who are full-time or part-time who are regularly scheduled to work at least twenty hours per week, are eligible to participate in the Plan. Contribution Policy Employees who participated in the Plan prior to April 2, 2001 elected to make contributions of at least 2% but not more than 15% of their pretax annual compensation as defined in the Plan. Effective April 2, 2001, Participants in the merged Plan can elect to make contributions of at least 1% but not more than 17% of their pretax annual compensation as defined in the Plan up to the annual Internal Revenue Service dollar limit ($10,500 in 2001). Participants can change contributions at any time. Participants are immediately fully vested in and have a non- forfeitable right to the value of their contributions and company matching contributions. On January 1, 2000, a Plan amendment changed the company matching contribution feature of the Plan to equal 50% up to the first 8% of a Participant's eligible compensation invested through payroll deductions directed into the Plan. Effective with this amendment, the matching funds were restricted and invested only in the NSTAR Stock Fund and any contributions and earnings thereon were restricted from being transferred to other available Plan funds. These restrictions on transferring funds out of the renamed NSTAR Common Share Fund were removed from the Plan effective April 2, 2001. Investments Prior to April 2, 2001, investments in the Plan were directed by the Plan Participants to nine investment choices offered under the Plan: seven mutual funds (Asset Manager, Magellan, Retirement Government Money Market, Spartan U.S. Equity Index, Intermediate Bond, International Growth and Income and Disciplined Equity) managed by Fidelity, the NSTAR Stock Fund and Fidelity Brokerage Link. Fidelity Brokerage Link is a self-directed brokerage account through which Participants are able to invest in a variety of securities, including stock, bonds, mutual funds and certificates of deposit. Effective April 2, 2001, the NSTAR Savings Plan began offering twelve investment choices: eight Fidelity-managed investment options described above, excluding the Disciplined Equity Fund and including the Growth Company and Mid-Cap Stock Funds, a Vanguard growth and income mutual fund, a Morgan Stanley growth- oriented mutual fund, Fidelity Brokerage Link and the renamed NSTAR Common Share Fund. Participant contributions and investment earnings remain available for Participant direction.
Investments at fair value are summarized below. Investments representing more than 5% of Plan assets are listed separately (in thousands): December 31, 2001 2000 Registered Investment Companies: Fidelity Asset Manager $ 58,190 $ 11,819 Fidelity Magellan 78,401 33,809 Fidelity Retirement Government Money Market 43,710 5,518 Fidelity Spartan U.S. Equity Index 22,397 11,558 Vanguard Windsor II 77,144 - Other registered investments 54,282 7,502 Total registered investment companies 334,124 70,206 Fidelity Brokerage Link 14,922 4,652 NSTAR Common Share Fund # 171,120 44,863 Participant loans receivable 12,964 1,680 Total investments * $533,130 $121,401 ======== ======== * All investments listed above represent parties-in-interest to the Plan, except Vanguard Windsor II and other registered investments # Partially non-participant directed (see Note C)
Participants' Accounts Each Participant account is credited with their contribution and an allocation of Plan earnings (based on the Participant's account balance). The Company matching contribution is invested in the NSTAR Common Share Fund and a Participant may transfer balances in this Fund to any of the Plan's other investment options effective April 2, 2001. Vesting Participants are fully vested at all times in the entire balance of their own contributions to the Plan and are immediately vested in the Company match. Receiving Payments from the Plan Participants may be eligible to take a withdrawal from the Plan depending on the assets in their Member Account, Rollover Account, Company Account and Pay Deferral Account and their particular circumstances. While actively employed at NSTAR, withdrawals from accounts are restricted by the Internal Revenue Service due to the Plan's tax advantages. Effective April 2, 2001, upon termination of employment, Participant account balances may be paid in a lump-sum or payment may be deferred until age seventy and one-half. Plan Termination The Plan was established with the intent of continuing it indefinitely. The Executive Personnel Committee reserves the right to terminate, suspend, withdraw, amend or modify the Plan in whole or in part for any reason at any time subject to applicable laws. If the Plan, that now continues, is terminated or there is a complete discontinuance of contributions, Participants will continue to be fully vested in their account balances. Distributions will be made upon Plan termination to the extent consistent with continued qualification of the Plan under the Code of 1986, as amended. The Code places restrictions on plan termination distributions in the case of a plan such as the Plan, if the employer continues to maintain another similar plan. Because Participant benefits depend solely on the amount in individual accounts, the Plan was not insured by the Pension Benefit Guaranty Corporation under Title IV of ERISA. Participant Loans Participants in the Plan may obtain a loan from the balance in their account. The loan may not be less than $1,000 nor exceed the lesser of $50,000 or 50% of the market value of the Participant's account. Loans must be repaid to the Participant's account over a period not to exceed five years (unless the loan is for the purchase of a principal residence) via payroll deductions. Both the principal and interest on the loan are repaid to the borrower's account. The annual interest rate on a loan will be the Prime Rate as of the prior January 1 and is fixed for the term of the loan. B. Summary of Significant Accounting Policies Basis of Accounting and Use of Estimates The Plan's financial statements have been prepared under the accrual method of accounting and in accordance with the rules and regulations of ERISA. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Risks and Uncertainties The Plan provides for various investment options in any combination of stocks, mutual funds and other investment securities. Investment securities are exposed to various risks, such as interest rate, market and credit. Due to the level of risk associated with certain investment securities and the level of uncertainty related to changes in the value of investment securities, it is at least reasonably possible that changes in risks in the near term would materially affect Participants' account balances and the amounts reported in the statement of net assets available for benefits and the statement of changes in net assets available for benefits. Investments Valuation Plan investments held by Fidelity, Vanguard and Morgan Stanley Dean Witter are stated at fair value. Fair value of shares of registered investment companies represent the net asset value of such shares as of the close of business at the end of the period. Fair value of NSTAR common shares are based on the last quoted market price as of the close of business at period end. Fair value of the Fidelity Brokerage Link Account assets, which consist primarily of registered investment companies, are determined using the methods stated above. Participant loans are valued at cost plus interest which approximates fair value. Income Recognition Income of the NSTAR Common Share Fund consists primarily of dividends on its common shares. The allocation of each Plan investment fund's earnings to a Participant's account is based on the percentage of the Participant's units in the fund's Plan investment and is allocated daily. Capital gain distributions are included in dividend income. Dividend income is recorded on the ex-dividend date. Interest income is recorded on the accrual basis. Purchases and sales of securities are recorded on a trade- date basis. Net Appreciation/(Depreciation) in the Fair Value of Investments Gains and losses are realized upon distributions (including withdrawals) to Participants and the transfer of all or a portion of a Participant's account between investment choices. The Plan presents in the statement of changes in net assets the net appreciation (depreciation) in the fair value of its investments which consists of the realized gains or losses and the unrealized appreciation (depreciation) on those investments. Contributions Salary reduction contributions made on behalf of Participants and matching Company contributions are recorded in the period payroll deductions are made from Participants. Contributions receivable at December 31, 2001 and 2000 represent amounts withheld from Participants and the corresponding matching Company contributions subsequently deposited to the Plan in the following month. Distributions and withdrawals Distributions and withdrawal payments are recorded when paid. Transfers Between Investment Choices Plan Participants may, with certain limitations, elect to transfer their elective contribution account balances from any investment option or options to any of the other options offered by the Plan on a daily basis. Refer to Note A for a change to the Plan's Contribution Policy effective in 2001. C. NSTAR Common Share Fund
Information about the significant components of the changes in net assets relating to the NSTAR Common Share Fund is as follows (in thousands): Year Ended December 31, 2001 NSTAR Common Share Fund Beginning of year $ 44,863 Changes in Net Assets - Interest and dividends $ 6,885 Contributions 8,735 Net appreciation 21,482 Benefits paid to Participants (11,674) Merger of Plans 118,948 Loans to Participants (3,396) Interfund transfers (14,723) 126,257 End of year $ 171,120* ======= * Includes participant and nonparticipant-directed investments
D. Expenses Brokerage fees, commissions, stock transfer taxes and other expenses in connection with the purchase, sale or distribution of securities for each fund may be charged to such fund. Any expense of litigation may be paid by the Plan Trustee and charged to the Trust Fund or to the investment fund or funds to which the litigation relates. Expenses and charges incurred in the administration of the Plan are generally paid by the Company. An administrative fee relating to the issuance of Plan loans is paid by Plan Participants. E. Related Party Transactions Certain Plan investments are shares of mutual funds managed by an affiliate of Fidelity. Fidelity is the trustee as defined by the Plan and, therefore, these transactions qualify as party-in- interest. Common Shares of NSTAR and the Fidelity Funds are parties-in-interest as that term is defined in section 3(14) of ERISA. F. Reconciliation of Financial Statements to Form 5500
The following is a reconciliation of net assets available for benefits per these financial statements to the Form 5500 at December 31, 2001 and 2000 (in thousands): 2001 2000 Net assets available for benefits per these financial statements $533,557 $121,469 Less: Contributions receivable 427 68 Net assets available for benefits per the Form 5500 $533,130 $121,401 ======== ========
The following is a reconciliation of contributions received per these financial statements to the Form 5500 for the year ended December 31, 2001 (in thousands): 2001 Contributions per these financial statements $ 24,516 Add: Contributions receivable at the beginning of the year 68 Less: Contributions receivable at the end of the year 427 Contributions per the Form 5500 $ 24,157 ======== Contributions are recorded on the Form 5500 when received.
G. Tax Status The Internal Revenue Service has determined and informed management by a letter dated May 15, 2002, that the Plan is designed in accordance with applicable sections of the Internal Revenue Code. The Plan administrator and tax counsel for the Plan believe the Plan is designed and is currently being operated in compliance with the applicable requirements of the Internal Revenue Code. Therefore, no provision for income taxes has been included in the Plan's financial statements. H. Subsequent Event Effective January 1, 2002, Participants may contribute from 1% to 50% of their compensation on a pre-tax basis, up to the annual IRS limit of $11,000 in 2002 (for the 2001 Plan year, the maximum amount was 17%, up to the IRS limit of $10,500). This limit will increase by $1,000 each year thereafter until it reaches $15,000 in 2006. After 2006, the maximum amount will be adjusted for inflation in $500 increments. In addition, starting in January 2002, Participants have the option of reinvesting dividends paid on the NSTAR Common Share Fund or receiving such dividends in cash. Effective April 1, 2002, Participants will be able to elect pre- tax "catch-up" contributions to the Plan if they are at least age 50 by December 31, 2002. Catch-up contributions are additional pre-tax contributions for Participants who are at least age 50 or older during the plan year and are contributing the maximum IRS limit ($11,000 for deferral in 2002) or the Plan's pre-tax contribution limit (50% of eligible compensation in 2002). Starting in 2002, the maximum annual pre-tax catch-up contribution is $1,000. The catch-up contribution will increase to $2,000 in 2003, $3,000 in 2004, $4,000 in 2005, and $5,000 in 2006. After 2006, the catch-up contribution will be adjusted for inflation in $500 increments.
Supplemental Schedule I Employer Identification Number: 04-3466300 Plan Number: 52709 NSTAR SAVINGS PLAN Schedule of Assets (held at end of Year) (in thousands) Schedule H, Line 4i - Form 5500 December 31, 2001 Current Name of Issuer and Title of Issue Cost Value Fidelity Mutual Funds*: Asset Manager $ 58,961 $ 58,190 Magellan 75,644 78,401 Retirement Government Money Market 43,710 43,710 Spartan U.S. Equity Index 21,233 22,397 Intermediate Bond 11,184 11,218 International Growth & Income 12,039 11,321 Growth Company 11,816 12,083 Mid-Cap Stock 11,484 11,146 Total Fidelity Mutual Funds 246,071 248,466 Vanguard Windsor II 69,750 77,144 MSI Small Corporate Growth 7,584 8,514 Fidelity Brokerage Link* 14,922 14,922 NSTAR Common Share Fund* 88,772 171,120 $ 427,099 $ 520,166 ========= ========= Participant Loans* (Rates of 6.0% to 10.5%) $ 12,964 $ 12,964 Total $ 440,063 $ 533,130 ========= ========= * Represent parties in interest to the Plan
Supplemental Schedule II Employer Identification Number: 04-3466300 Plan Number: 52709 NSTAR SAVINGS PLAN Schedule of Reportable Transactions* Year ended December 31, 2001 Schedule H, Part IV, Line 4j - Form 5500 Current Value On Purchase Selling Cost of Expenses Lease Transaction Net Description Prices Prices Asset Incurred Rental Date Gain/Loss Series of transactions: NSTAR Common Shares $12,461,142 $33,350,097 $28,555,788 $45,811,239 $4,794,309 * Transactions or a series of transactions in excess of 5% of the Plan's assets at December 31, 2000, as defined in Section 2520.103-6 of the Department of Labor's Rules and Regulations and Disclosure under ERISA.
SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Retirement Plans Committee of the NSTAR Savings Plan has duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.
NSTAR Savings Plan Date: June 28, 2002 /s/ Timothy R. Manning Senior Vice President - Human Resources and on behalf of the NSTAR Retirement Plans Committee
EX-23 3 nstar11kexh23.txt NSTAR EXHIBIT 23 CONSENT OF INDEPENDENT ACCOUNTANTS Exhibit 23 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (File Nos. 333-85559 and 333- 87272) of NSTAR of our report dated June 28, 2002 relating to the financial statements and supplemental schedules of NSTAR Savings Plan as of and for the year ended December 31, 2001 included with this Form 11-K. /s/ PRICEWATERHOUSECOOPERS LLP Boston, Massachusetts June 28, 2002 -----END PRIVACY-ENHANCED MESSAGE-----