-----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, Q89fsPRUVJTRfwxYUediKjjzXjzPE8Ou6TNqEGnPV9T3ys3CqjkVhn/T4fjNYXVN xDMbYDRoIbkEZF1r+dH44Q== 0000063073-96-000006.txt : 19961111 0000063073-96-000006.hdr.sgml : 19961111 ACCESSION NUMBER: 0000063073-96-000006 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19960930 FILED AS OF DATE: 19961108 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MASSACHUSETTS ELECTRIC CO CENTRAL INDEX KEY: 0000063073 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 041988940 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-05464 FILM NUMBER: 96657516 BUSINESS ADDRESS: STREET 1: 25 RESEARCH DR CITY: WESTBOROUGH STATE: MA ZIP: 01582 BUSINESS PHONE: 5083892000 10-Q 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1996 OR ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 0-5464 (LOGO) MASSACHUSETTS ELECTRIC COMPANY (Exact name of registrant as specified in charter) MASSACHUSETTS 04-1988940 (State or other (I.R.S. Employer jurisdiction of Identification No.) incorporation or organization) 25 Research Drive, Westborough, Massachusetts 01582 (Address of principal executive offices) Registrant's telephone number, including area code (508-389-2000) 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 ( ) Common stock, par value $25 per share, authorized and outstanding: 2,398,111 shares at September 30, 1996. PART I FINANCIAL STATEMENTS Item 1. Financial Statements - ---------------------------- MASSACHUSETTS ELECTRIC COMPANY Statements of Income Periods Ended September 30 (Unaudited)
Quarter Nine Months ------- ----------- 1996 1995 1996 1995 ---- ---- ---- ---- (In Thousands) Operating revenue $398,542 $392,575 $1,147,840 $1,121,098 -------- -------- ---------- ---------- Operating expenses: Purchased electric energy, principally from New England Power Company, an affiliate 301,664 296,745 851,057 851,343 Other operation 53,253 56,092 152,855 147,530 Maintenance 7,790 7,373 23,087 22,313 Depreciation 12,037 11,464 36,112 34,394 Taxes, other than income taxes 7,372 7,043 23,855 22,533 Income taxes 2,888 2,059 12,866 6,664 -------- -------- ---------- ---------- Total operating expenses 385,004 380,776 1,099,832 1,084,777 -------- -------- ---------- ---------- Operating income 13,538 11,799 48,008 36,321 Other income (expense), net (439) 58 (2,516) (759) -------- -------- ---------- ---------- Operating and other income 13,099 11,857 45,492 35,562 -------- -------- ---------- ---------- Interest: Interest on long-term debt 6,735 6,651 20,196 19,232 Other interest 1,783 1,774 4,989 5,396 Allowance for borrowed funds used during construction - credit (193) (221) (657) (412) -------- -------- ---------- ---------- Total interest 8,325 8,204 24,528 24,216 -------- -------- ---------- ---------- Net income $ 4,774 $ 3,653 $ 20,964 $ 11,346 ======== ======== ========== ========== Statements of Retained Earnings Retained earnings at beginning of period $154,150 $134,654 $ 150,308$ 136,911 Net income 4,774 3,653 20,964 11,346 Dividends declared on cumulative preferred stock (778) (778) (2,335) (2,335) Dividends declared on common stock (1,199) (2,998) (11,990) (11,391) -------- -------- ---------- ---------- Retained earnings at end of period $156,947 $134,531 $ 156,947 $ 134,531 ======== ======== ========== ========== The accompanying notes are an integral part of these financial statements. Per share data is not relevant because the Company's common stock is wholly owned by New England Electric System.
MASSACHUSETTS ELECTRIC COMPANY Statements of Income Twelve Months Ended September 30 (Unaudited)
1996 1995 ---- ---- (In Thousands) Operating revenue $1,532,418 $1,504,988 ---------- ---------- Operating expenses: Purchased electric energy, principally from New England Power Company, an affiliate 1,113,387 1,106,982 Other operation 211,985 217,551 Maintenance 30,299 33,695 Depreciation 46,547 44,694 Taxes, other than income taxes 31,344 28,200 Income taxes 25,499 17,175 ---------- ---------- Total operating expenses 1,459,061 1,448,297 ---------- ---------- Operating income 73,357 56,691 Other income (expense), net (2,298) 31 ---------- ---------- Operating and other income 71,059 56,722 ---------- ---------- Interest: Interest on long-term debt 26,865 24,699 Other interest 6,377 5,709 Allowance for borrowed funds used during construction - credit (902) (540) ---------- ---------- Total interest 32,340 29,868 ---------- ---------- Net income $ 38,719 $ 26,854 ========== ========== Statements of Retained Earnings Retained earnings at beginning of period $ 134,531 $ 135,372 Net income 38,719 26,854 Dividends declared on cumulative preferred stock (3,114) (3,114) Dividends declared on common stock (13,189) (24,581) ---------- ---------- Retained earnings at end of period $ 156,947 $ 134,531 ========== ========== The accompanying notes are an integral part of these financial statements. Per share data is not relevant because the Company's common stock is wholly owned by New England Electric System.
MASSACHUSETTS ELECTRIC COMPANY Balance Sheets (Unaudited)
September 30, December 31, ASSETS 1996 1995 ------ ---- ---- (In Thousands) Utility plant, at original cost $1,486,299 $1,420,069 Less accumulated provisions for depreciation 424,115 399,711 ---------- ---------- 1,062,184 1,020,358 Construction work in progress 17,897 21,118 ---------- ---------- Net utility plant 1,080,081 1,041,476 ---------- ---------- Current assets: Cash 1,525 1,840 Accounts receivable: From sales of electric energy 152,363 160,795 Other (including $1,693,000 and $1,776,000 from affiliates) 2,804 3,527 Less reserves for doubtful accounts 13,722 12,544 ---------- ---------- 141,445 151,778 Unbilled revenues 42,500 49,800 Materials and supplies, at average cost 8,929 10,602 Prepaid and other current assets 22,968 22,514 ---------- ---------- Total current assets 217,367 236,534 ---------- ---------- Deferred charges and other assets 60,519 65,090 ---------- ---------- $1,357,967 $1,343,100 ========== ========== CAPITALIZATION AND LIABILITIES ------------------------------ Capitalization: Common stock, par value $25 per share, authorized and outstanding 2,398,111 shares $ 59,953 $ 59,953 Premiums on capital stocks 45,862 45,862 Other paid-in capital 155,309 155,310 Retained earnings 156,947 150,308 ---------- ---------- Total common equity 418,071 411,433 Cumulative preferred stock 50,000 50,000 Long-term debt 323,401 353,267 ---------- ---------- Total capitalization 791,472 814,700 ---------- ---------- Current liabilities: Long-term debt due within one year 30,000 Short-term debt (including $7,300,000 and $1,000,000 to affiliates) 24,100 55,450 Accounts payable (including $192,946,000 and $165,515,000 to affiliates) 197,646 181,943 Accrued liabilities: Taxes 9,592 7,371 Interest 6,983 9,502 Other accrued expenses 53,320 17,136 Customer deposits 4,378 4,633 Dividends payable 1,978 1,977 ---------- ---------- Total current liabilities 327,997 278,012 ---------- ---------- Deferred federal and state income taxes 173,936 184,575 Unamortized investment tax credits 16,846 17,684 Other reserves and deferred credits 47,716 48,129 ---------- ---------- $1,357,967 $1,343,100 ========== ========== The accompanying notes are an integral part of these financial statements.
MASSACHUSETTS ELECTRIC COMPANY Statements of Cash Flows Nine Months Ended September 30 (Unaudited)
1996 1995 ---- ---- (In Thousands) Operating Activities: Net income $ 20,964 $ 11,346 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 36,112 34,394 Deferred income taxes and investment tax credit, net (11,458) 910 Allowance for borrowed funds used during construction (657) (412) Decrease (increase) in accounts receivable, net and unbilled revenues 17,633 20,439 Decrease (increase) in materials and supplies 1,673 586 Decrease (increase) in prepaid and other current assets (454) 648 Increase (decrease) in accounts payable 15,703 (3,233) Increase (decrease) in other current liabilities 35,631 4,040 Other, net 4,516 2,323 -------- -------- Net cash provided by operating activities $119,663 $ 71,041 -------- -------- Investing Activities: Plant expenditures, excluding allowance for funds used during construction $(74,091) $(66,562) Other investing activities (211) (1,415) -------- -------- Net cash used in investing activities $(74,302) $(67,977) -------- -------- Financing Activities: Capital contributions from parent $ 10,000 Dividends paid on common stock $(11,991) (21,583) Dividends paid on preferred stock (2,335) (2,335) Long-term debt-issues 88,000 Long-term debt-retirements (35,000) Changes in short-term debt (31,350) (40,170) -------- -------- Net cash used in financing activities $(45,676) $ (1,088) -------- -------- Net increase (decrease) in cash and cash equivalents $ (315) $ 1,976 Cash and cash equivalents at beginning of period 1,840 1,225 -------- -------- Cash and cash equivalents at end of period $ 1,525 $ 3,201 ======== ======== The accompanying notes are an integral part of these financial statements.
Note A - Hazardous Waste - ------------------------ The Federal Comprehensive Environmental Response, Compensation and Liability Act, more commonly known as the "Superfund" law, imposes strict, joint and several liability, regardless of fault, for remediation of property contaminated with hazardous substances. A number of states, including Massachusetts, have enacted similar laws. The electric utility industry typically utilizes and/or generates in its operations a range of potentially hazardous products and by-products. New England Electric System subsidiaries currently have in place an internal environmental audit program and an external waste disposal vendor audit and qualification program intended to enhance compliance with existing federal, state, and local requirements regarding the handling of potentially hazardous products and by-products. The Company has been named as a potentially responsible party (PRP) by either the U.S. Environmental Protection Agency or the Massachusetts Department of Environmental Protection for 19 sites at which hazardous waste is alleged to have been disposed. Private parties have also contacted or initiated legal proceedings against the Company regarding hazardous waste cleanup. The most prevalent types of hazardous waste sites with which the Company has been associated are manufactured gas locations. The Company is aware of approximately 35 such locations in Massachusetts (including eight of the 19 locations for which the Company is a PRP). The Company is currently aware of other sites, and may in the future become aware of additional sites, that it may be held responsible for remediating. In 1993, the Massachusetts Department of Public Utilities approved a rate agreement filed by the Company that allows for remediation costs of former manufactured gas sites and certain other hazardous waste sites located in Massachusetts to be met from a non-rate-recoverable, interest-bearing fund of $30 million established on the Company's books in 1993. Rate-recoverable contributions of $3 million, adjusted for inflation, are added to the fund annually in accordance with the agreement. Any shortfalls in the fund would be paid by the Company and be recovered through rates over seven years. Predicting the potential costs to investigate and remediate hazardous waste sites continues to be difficult. There are also significant uncertainties as to the portion, if any, of the investigation and remediation costs of any particular hazardous waste site that may ultimately be borne by the Company. Where appropriate, the Company intends to seek recovery from its insurers Note A - Hazardous Waste - Continued - ------------------------ and from other PRPs, but it is uncertain whether, and to what extent, such efforts will be successful. At September 30, 1996, the Company had total reserves for environmental response costs of $39 million and a related regulatory asset of $16 million. The Company believes that hazardous waste liabilities for all sites of which it is aware, and which are not covered by a rate agreement, are not material to its financial position. Note B - ------ In the opinion of the Company, these statements reflect all adjustments (which include normal recurring adjustments) necessary for a fair statement of the results of its operations for the periods presented and should be considered in conjunction with the notes to the financial statements in the Company's 1995 Annual Report. Item 2. Management's Discussion and Analysis of Financial --------------------------------------------------------- Condition and Results of Operations ----------------------------------- This section contains management's assessment of Massachusetts Electric Company's financial condition and the principal factors having an impact on the results of operations. This discussion should be read in conjunction with the Company's financial statements and footnotes and the 1995 Annual Report on Form 10-K. This section contains forward-looking statements as defined under the securities laws. Actual results could differ materially from those projected. This section, particularly under "Competitive Conditions - Risk Factors", lists some of the reasons why results could differ materially from those projected. Earnings -------- Net income for the third quarter and first nine months of 1996 increased $1.1 million and $9.6 million, respectively, compared with the corresponding periods in 1995. The increases are primarily due to an October 1995 rate increase. Kilowatt-hour (kWh) sales to ultimate customers also increased 1.8 percent in the nine-month period which reflects an improving economy, despite a decrease in third quarter kWh sales of 2.0 percent due to a cooler summer in 1996. These increases in income were partially offset by increased other operation and maintenance costs. Competitive Conditions ---------------------- The electric utility business is being subjected to rapidly increasing competitive pressures, stemming from a combination of trends, including the presence of surplus generating capacity, a disparity in electric rates among regions of the country, improvements in generation efficiency, increasing demand for customer choice, and new regulations and legislation intended to foster competition. See the Company's Annual Report on Form 10-K for the year ended December 31, 1995. In states across the country, including Massachusetts, there have been an increasing number of proposals to allow retail customers to choose their electricity supplier, with incumbent utilities required to deliver that electricity over their transmission and distribution systems (also known as "retail wheeling"). In these competitive circumstances, utilities across the country that operate generation plants, such as New England Power Company (NEP), the Company's affiliated wholesale power supplier, face the risk that market prices may not be sufficient to recover the costs of the commitments incurred to supply customers under a regulated industry structure. The amount by which costs exceed market prices is commonly referred to as "stranded costs". Massachusetts Settlement Agreement In May 1996, the Massachusetts Department of Public Utilities (MDPU) issued a set of proposed rules and regulations governing the implementation of retail choice in Massachusetts. The proposed rules would allow all customers of Massachusetts investor-owned utilities to choose their electricity supplier beginning in 1998 and would establish a price cap system for regulating the rates for distribution service that would continue to be provided by local utilities. The MDPU proposed rules affirm the principle of stranded cost recovery for utilities over ten years, but create uncertainties concerning the extent of actual stranded cost recovery. While the MDPU did not order mandatory divestiture of generating assets, it stated that it might provide utilities financial incentives to divest. The MDPU has stated that it will issue final regulations by year-end 1996 and issue orders on individual utility plans in 1997. On October 1, 1996, the Company and NEP, together with the Massachusetts Attorney General, the Massachusetts Division of Energy Resources and other parties, filed a comprehensive settlement agreement with the MDPU. The settlement agreement provides for the commencement of retail choice on January 1, 1998 (contingent on choice being available to the customers of all Massachusetts investor-owned utilities), full compensation for potential stranded costs, and the full divestiture of the NEES companies' fossil and hydroelectric generating business. Under the settlement agreement, customers who do not choose an alternative supplier would receive "Standard Offer" service, which would be priced to guarantee customers at least a 10 percent savings in 1998 from current electricity prices, therefore resulting in revenue losses for the Company. Under the settlement agreement, NEP's wholesale contract with the Company would be terminated. In return, the cost of NEP's past generation commitments to serve the Company's customers (estimated at approximately $3 billion) would be recovered through a transition access charge on retail distribution rates. Those commitments consist of (i) generating plant commitments, (ii) regulatory assets, (iii) the above-market component of purchased power contracts, and (iv) the operating cost of nuclear plants which cannot be mitigated by shutting down the plants, including nuclear decommissioning. Sunk costs associated with generating plants and regulatory assets would be recovered over a period of 12 years. The above- market component of purchased power contracts and nuclear decommissioning costs would be recovered as incurred over the life of those obligations, a period expected to extend beyond 12 years. The transaction access charge would be reduced to reflect the net proceeds from the sale of the NEES companies' generating assets. The initial transition access charge, before the application of those proceeds, would be set at 2.8 cents per kWh through December 31, 2000, and is expected to decline thereafter. The settlement agreement also establishes performance-based rates for the Company. Under the plan, the Company's non-fuel rates would be frozen at current levels until the commencement of retail choice. Upon commencement of retail choice, the Company would receive an approximately $45 million increase in its distribution rates, with such rates then frozen through the year 2000. The Company's return on equity would be subject to a floor of 6 percent and a ceiling of 11 percent, effective upon commencement of retail choice. Earnings over the ceiling would be shared equally between customers and shareholders up to an absolute cap of 12.5 percent. To the extent that earnings fall below the floor, the Company would be authorized to surcharge customers for the shortfall. In addition, the settlement agreement provides for changes to the distribution cost of service that become effective on the retail access date. These changes include: an $11 million increase in annual depreciation expense, a $3 million annual contribution to a storm fund, and increased amortization of unfunded deferred income taxes of $1 million over six years. The settlement agreement, when approved, would also eliminate the Company's purchased power cost adjustment mechanism (PPCA) as of July 31, 1996. This mechanism allows the Company to recover purchased power rate changes from NEP and the effects of NEP's seasonal rates. The agreement also stipulates that the Company's $18 million PPCA refund liability balance at July 31, 1996 will be used to create a $3 million storm contingency fund with the remainder being used to offset regulatory assets for hazardous waste costs. The MDPU, with the agreement of the parties, has set a procedural schedule under which it will issue a decision on the settlement agreement by January 10, 1997. The settlement agreement is also subject to approval by the Federal Energy Regulatory Commission (FERC). Additional governmental approvals would be required for the divestiture of the generating business. In addition, the implementation of retail choice in Massachusetts may be the subject of legislation from the Massachusetts legislature. FERC Order In April 1996, the FERC issued Order No. 888 addressing open access transmission and required those utilities that own transmission facilities to file open access tariffs to make available transmission service to affiliates and nonaffiliates at fair non-discriminatory rates. Order No. 888 also stated that public utilities will be allowed to seek recovery of legitimate and verifiable stranded costs from departing customers as a result of wholesale competition. The FERC indicated that it will provide for the recovery of retail stranded costs only if state regulators lack the legal authority to address those costs at the time retail wheeling is required. The FERC also stated that it would permit stranded cost recovery under wholesale requirements contracts, such as the contracts between NEP and its retail affiliates. Accounting Implications Historically, electric utility rates have been based on a utility's costs. As a result, electric utilities are subject to certain accounting standards that are not applicable to other business enterprises in general. Financial Accounting Standards No. 71, Accounting for the Effects of Certain Types of Regulation (FAS 71), requires regulated entities, in appropriate circumstances, to establish regulatory assets and liabilities, and thereby defer the income statement impact of certain costs that are expected to be recovered in future rates. The Company believes that, if approved by regulators, the Massachusetts settlement agreement would meet the criteria for continued application of FAS 71. As a result, no write-off of existing regulatory assets is expected. Risk Factors For a discussion of risk factors in the event that the Massachusetts settlement agreement is not approved, see "Risk Factors" in the Company's Form 10-Q for the quarter ended June 30, 1996. Operating Revenue ----------------- The following table summarizes the changes in operating revenue: Increase (Decrease) in Operating Revenue
Third Quarter Nine Months ------------- ------------ 1996 vs 1995 1996 vs 1995 ------------- ------------ (In Millions) Sales to ultimate customers $(6) $ 9 Rate changes 8 23 Fuel recovery 7 3 Rate adjustment mechanisms 1 (5) Demand side management (DSM) program recovery (6) (6) Other 2 3 --- --- $ 6 $27 === ===
For a discussion of sales to ultimate customers, see the "Earnings" section. The increase in revenues due to rate changes is the result of a $31 million base rate increase effective in October 1995. Rate adjustment mechanisms are designed to allow the Company to pass on to its customers changes in purchased energy costs resulting from rate increases or decreases by NEP. The mechanisms are also designed to pass on to customers the effects of NEP's seasonal rates which lowered purchased power expense during the nine-month period. The passback to customers of the impact is reflected as a reduction in revenues for the first nine months of 1996 under rate adjustment mechanisms. For a discussion of the effects of the settlement agreement on the Company's rate adjustment mechanisms, see the "Competitive Conditions" section. Operating Expenses ------------------ The following table summarizes the changes in operating expenses which are discussed below:
Increase (Decrease) in Operating Expenses Third Quarter Nine Months ------------- ------------ 1996 vs 1995 1996 vs 1995 ------------- ------------ (In Millions) Purchased electric energy: Fuel costs $ 7 $ 3 Other (2) (3) Other operation and maintenance: DSM (6) (6) Other 4 12 Depreciation and amortization - 2 Taxes 1 7 --- --- $ 4 $15 === ===
The increase in other operation and maintenance expense in the third quarter and first nine months of 1996 reflects increased customer service expenses, increased distribution system-related expenses, increased uncollectible accounts expense, and increased postretirement benefit costs due to the inclusion of additional amounts in rates that were previously deferred. The change in taxes is primarily due to increased income. Utility Plant Expenditures and Financings ----------------------------------------- Cash expenditures for utility plant totaled $74 million in the first nine months of 1996. The funds necessary for utility plant expenditures during the period were provided by net cash from operating activities, after the payment of dividends. The Company did not issue any long-term debt during the first nine months of 1996. The Company plans to issue $20 million of long-term debt later in 1996. In July 1996, Nantucket Electric Company (Nantucket), a retail affiliate of the Company, issued $28 million of tax-exempt long-term debt at rates ranging from 4.10 percent to 6.75 percent to fund construction of an undersea cable. The Company guaranteed the debt on behalf of Nantucket. At September 30, 1996, the Company had $24 million of short- term debt outstanding including $17 million of commercial paper borrowings. The Company currently has lines of credit with banks totaling $90 million. These lines of credit are available to provide liquidity support for commercial paper borrowings and other corporate purposes. There were no borrowings under these lines of credit at September 30, 1996. For the twelve-month period ending September 30, 1996, the ratio of earnings to fixed charges was 2.90. PART II. OTHER INFORMATION Item 1. Legal Proceedings -------------------------- Information concerning the restructuring dockets before the Massachusetts Department of Public Utilities, discussed in Part I of this report in Management's Discussion and Analysis of Financial Condition and Results of Operations, is incorporated herein by reference and made a part hereof. Item 6. Exhibits and Reports on Form 8-K ----------------------------------------- The Company is filing the following revised exhibit for incorporation by reference into its registration statement on Form S-3, Commission File No. 33-59145. 12 Statement re computation of ratios The Company is filing Financial Data Schedules. The Company filed reports on Form 8-K dated September 12, 1996 and October 1, 1996, each containing Item 5, Other Events. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report on Form 10-Q for the quarter ended September 30, 1996 to be signed on its behalf by the undersigned thereunto duly authorized. MASSACHUSETTS ELECTRIC COMPANY s/Michael E. Jesanis Michael E. Jesanis, Treasurer, Authorized Officer, and Principal Financial Officer Date: November 8, 1996 EX-99 2 Exhibit Index Exhibit Index ------------- Exhibit Description Page ------- ----------- ---- 12 Statement re computation of Filed herewith ratios 27 Financial Data Schedule Filed herewith EX-12 3 Exhibit 12 MASSACHUSETTS ELECTRIC COMPANY Computation of Ratio of Earnings to Fixed Charges (SEC Coverage) (Unaudited)
12 Months Ended September 30, 1996 Years Ended December 31, Actual ------------------------------------------------------------- (Unaudited) 1995 1994 1993 1992 1991 -------------- ---- ---- ---- ---- ---- (In Thousands) Net Income $38,719 $29,101 $34,726 $23,779 $34,905 $25,243 - ---------- Add income taxes and fixed charges - ---------------------------------- Current federal income taxes 24,928 9,437 (6,762) 5,606 3,977 8,568 Deferred federal income taxes (4,186) 6,156 24,932 3,430 13,451 3,889 Investment tax credits - net (1,121) (1,132) (1,228) (1,228) (1,228) (1,194) Massachusetts franchise tax 4,982 3,935 4,681 3,348 3,858 2,920 Interest on long-term debt 26,865 25,901 20,967 23,403 21,910 20,157 Interest on short-term debt and other 6,377 6,784 6,366 3,638 3,657 3,643 ------- ------- ------- ------- ------- ------- Net earnings available for fixed charges $96,564 $80,182 $83,682 $61,976 $80,530 $63,226 ------- ------- ------- ------- ------- ------- Fixed charges: Interest on long-term debt $26,865 $25,901 20,967 $23,403 $21,910 $20,157 Interest on short-term debt and other 6,377 6,784 6,366 3,638 3,657 3,643 ------- ------- ------- ------- ------- ------- Total fixed charges $33,242 $32,685 $27,333 $27,041 $25,567 $23,800 ======= ======= ======= ======= ======= ======= Ratio of earnings to fixed charges $2.90 2.45 3.06 2.29 3.15 2.66 - ----------------------------------
EX-27 4
UT THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE SHEET AND RELATED STATEMENTS OF INCOME, RETAINED EARNINGS AND CASH FLOWS OF MASSACHUSETTS ELECTRIC COMPANY, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 DEC-31-1996 SEP-30-1996 9-MOS PER-BOOK 1,080,081 0 217,367 60,519 0 1,357,967 59,953 201,171 156,947 418,071 0 50,000 323,401 24,100 0 0 30,000 0 0 0 512,395 1,357,967 1,147,840 12,866 1,086,966 1,099,832 48,008 (2,516) 45,492 24,528 20,964 2,335 18,629 11,990 20,196 119,663 0 0 Total deferred charges includes other assets. Short-term notes includes commercial paper obligations and short-term debt to affiliates. Per share data is not relevant because the Company's common stock is wholly-owned by New England Electric System. -----END PRIVACY-ENHANCED MESSAGE-----