-----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, KuF6vJWUVUn/aC8+suGnGv/Kf/WxpkPeAarVZ30zZ8d2JNaouzrsu1/sUIyvsB/S aLYJP2+Xg4g8T3QIkEfAhg== 0000069659-95-000021.txt : 19951119 0000069659-95-000021.hdr.sgml : 19951119 ACCESSION NUMBER: 0000069659-95-000021 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951113 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: NARRAGANSETT ELECTRIC CO CENTRAL INDEX KEY: 0000069659 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 050187805 STATE OF INCORPORATION: RI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-07471 FILM NUMBER: 95589637 BUSINESS ADDRESS: STREET 1: 280 MELROSE ST CITY: PROVIDENCE STATE: RI ZIP: 02901 BUSINESS PHONE: 4019411400 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, 1995 OR ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 1-7471 (LOGO) THE NARRAGANSETT ELECTRIC COMPANY (Exact name of registrant as specified in charter) Rhode Island 05-0187805 (State or other (I.R.S. Employer jurisdiction of Identification No.) incorporation or organization) 280 Melrose Street, Providence, R.I. 02901 (Address of principal executive offices) Registrant's telephone number, including area code (401-784-7000) 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 $50 per share, authorized and outstanding: 1,132,487 shares at September 30, 1995. PART I FINANCIAL INFORMATION Item 1. Financial Statements - ---------------------------- THE NARRAGANSETT ELECTRIC COMPANY Statements of Income Periods Ended September 30 (Unaudited)
Quarter Nine Months ------- ----------- 1995 1994 1995 1994 ---- ---- ---- ---- (In Thousands) Operating revenue $139,217 $137,014 $380,663 $366,275 -------- -------- -------- -------- Operating expenses: Purchased electric energy, principally from New England Power Company, an affiliate 82,973 84,859 227,488 228,436 Other operation 19,695 19,126 53,613 52,454 Maintenance 2,638 3,112 7,690 9,339 Depreciation 8,049 6,650 23,062 19,980 Taxes, other than federal income taxes 9,044 8,975 27,930 27,414 Federal income taxes 4,119 3,355 8,235 4,594 -------- -------- -------- -------- Total operating expenses 126,518 126,077 348,018 342,217 -------- -------- -------- -------- Operating income 12,699 10,937 32,645 24,058 Other income: Allowance for equity funds used during construction (175) 343 253 961 Other income (expense) - net (94) (194) (560) (1,246) -------- -------- -------- -------- Operating and other income 12,430 11,086 32,338 23,773 -------- -------- -------- -------- Interest: Interest on long-term debt 4,242 3,675 12,312 10,489 Other interest 1,023 685 2,685 1,913 Allowance for borrowed funds used during construction - credit (774) (504) (1,422) (1,160) -------- -------- -------- -------- Total interest 4,491 3,856 13,575 11,242 -------- -------- -------- -------- Net income $ 7,939 $ 7,230 $ 18,763 $ 12,531 ======== ======== ======== ======== Statements of Retained Earnings Retained earnings at beginning of period $ 97,345 $ 84,755 $ 91,556 $ 81,659 Net income 7,939 7,230 18,763 12,531 Dividends declared on cumulative preferred stock (535) (535) (1,607) (1,607) Dividends declared on common stock (567) (1,132) (4,530) (2,265) -------- -------- -------- -------- Retained earnings at end of period $104,182 $ 90,318 $104,182 $ 90,318 ======== ======== ======== ======== 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.
THE NARRAGANSETT ELECTRIC COMPANY Statements of Income Twelve Months Ended September 30 (Unaudited)
1995 1994 ---- ---- (In Thousands) Operating revenue $496,057 $481,453 -------- -------- Operating expenses: Purchased electric energy, principally from New England Power Company, an affiliate 299,730 301,952 Other operation 74,241 72,537 Maintenance 10,632 12,088 Depreciation 27,895 23,898 Taxes, other than federal income taxes 36,334 35,808 Federal income taxes 8,524 4,465 -------- -------- Total operating expenses 457,356 450,748 -------- -------- Operating income 38,701 30,705 Other income: Allowance for equity funds used during construction 320 1,210 Other income (expense) - net (170) (863) -------- -------- Operating and other income 38,851 31,052 -------- -------- Interest: Interest on long-term debt 16,157 13,751 Other interest 3,669 2,623 Allowance for borrowed funds used during construction - credit (1,796) (1,399) -------- -------- Total interest 18,030 14,975 -------- -------- Net income $ 20,821 $ 16,077 ======== ======== Statements of Retained Earnings Retained earnings at beginning of period $ 90,318 $ 79,215 Net income 20,821 16,077 Dividends declared on cumulative preferred stock (2,143) (2,143) Dividends declared on common stock (4,814) (2,831) -------- -------- Retained earnings at end of period $104,182 $ 90,318 ======== ======== 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.
THE NARRAGANSETT ELECTRIC COMPANY Balance Sheets (Unaudited)
September 30, December 31, ASSETS 1995 1994 ------ ---- ---- (In Thousands) Utility plant, at original cost $669,096 $617,498 Less accumulated provisions for depreciation 172,883 161,557 -------- -------- 496,213 455,941 Construction work in progress 27,776 35,974 -------- -------- Net utility plant 523,989 491,915 -------- -------- Current assets: Cash 1,417 713 Accounts receivable: From sales of electric energy 59,073 51,278 Other (including $1,196,000 and $9,306,000 from affiliates) 18,635 17,953 Less reserves for doubtful accounts 6,410 4,472 -------- -------- 71,298 64,759 Unbilled revenues 11,900 13,100 Fuel, materials and supplies, at average cost 5,811 5,170 Prepaid and other current assets 15,915 13,993 -------- -------- Total current assets 106,341 97,735 -------- -------- Deferred charges and other assets 56,804 57,727 -------- -------- $687,134 $647,377 ======== ======== CAPITALIZATION AND LIABILITIES ------------------------------ Capitalization: Common stock, par value $50 per share, authorized and outstanding 1,132,487 shares $ 56,624 $ 56,624 Premiums on preferred stocks 170 170 Other paid-in capital 70,000 60,000 Retained earnings 104,182 91,556 -------- -------- Total common equity 230,976 208,350 Cumulative preferred stock 36,500 36,500 Long-term debt 203,857 188,862 -------- -------- Total capitalization 471,333 433,712 -------- -------- Current liabilities: Short-term debt (including $5,650,000 to affiliates in 1995) 31,050 29,800 Accounts payable (including $46,175,000 and $47,900,000 to affiliates) 51,097 56,139 Accrued liabilities: Taxes 357 143 Interest 3,228 5,615 Other accrued expenses 22,612 25,346 Customer deposits 5,464 5,261 Dividends payable 1,102 819 -------- -------- Total current liabilities 114,910 123,123 -------- -------- Deferred federal income taxes 76,754 70,253 Unamortized investment tax credits 8,141 8,518 Other reserves and deferred credits 15,996 11,771 -------- -------- $687,134 $647,377 ======== ======== The accompanying notes are an integral part of these financial statements.
THE NARRAGANSETT ELECTRIC COMPANY Statements of Cash Flows Nine Months Ended September 30 (Unaudited)
1995 1994 ---- ---- (In Thousands) Operating Activities: Net income $ 18,763 $ 12,531 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 23,062 19,980 Deferred federal income taxes and investment tax credit - net 4,635 1,198 Allowance for funds used during construction (1,675) (2,121) Amortization of unbilled revenues (6,156) 4,105 Decrease (increase) in accounts receivable, net, and unbilled revenues (5,339) (18,113) Decrease (increase) in fuel, materials, and supplies (641) (1,759) Decrease (increase) in prepaid and other current assets (1,922) (717) Increase (decrease) in accounts payable (5,042) 4,703 Increase (decrease) in other current liabilities 1,452 11,999 Other, net 6,632 1,715 -------- -------- Net cash provided by operating activities $ 33,769 $ 33,521 -------- -------- Investing Activities: Plant expenditures, excluding allowance for funds used during construction $(53,461) $(66,725) Other investing activities (900) -------- -------- Net cash used in investing activities $(53,461) $(67,625) -------- -------- Financing Activities: Capital contributions from parent $ 10,000 Dividends paid on common stock (4,247) $ (1,699) Dividends paid on preferred stock (1,607) (1,607) Long-term debt - issues 15,000 23,000 Changes in short-term debt 1,250 13,900 -------- -------- Net cash provided by financing activities $ 20,396 $ 33,594 -------- -------- Net increase (decrease) in cash and cash equivalents $ 704 $ (510) Cash and cash equivalents at beginning of period 713 838 -------- -------- Cash and cash equivalents at end of period $ 1,417 $ 328 ======== ======== Supplementary Information: Interest paid less amounts capitalized $ 15,112 $ 12,286 -------- -------- Federal income taxes paid $ 584 $ 703 -------- -------- The accompanying notes are an integral part of these financial statements.
Note A - ------ A 1986 Rhode Island Supreme Court decision held that the Rhode Island Public Utilities Commission's (RIPUC) rate-making powers include the authority to order refunds of amounts earned in excess of an allowed return. As a result, the RIPUC monitors the Company's earnings on a regular basis. Note B - 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. 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 (NEES) 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 two sites (one of which is located in Massachusetts) at which hazardous waste is alleged to have been disposed. 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. Gas was manufactured from coal in Rhode Island in the past. The Company is aware of five sites on which gas was manufactured or manufactured gas was stored that were owned either by the Company or by its predecessor companies. It is not known to what extent the Company would be held liable for hazardous wastes, if any, left at these manufactured gas locations. 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. A preliminary review by a consultant hired by the NEES companies of the potential cost of investigating and, if necessary, remediating Note B - Hazardous Waste - Continued - ------------------------ Rhode Island manufactured gas sites resulted in costs per site ranging from less than $1 million to $8 million. An informal survey of other utilities conducted on behalf of NEES and its subsidiaries indicated costs in a similar range. Where appropriate, the Company intends to seek recovery from its insurers and from other PRPs, but it is uncertain whether and to what extent such efforts would be successful. The Company believes that hazardous waste liabilities for all sites of which it is aware will not be material to its financial position. Note C - New Accounting Standard - -------------------------------- In March 1995, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of (FAS 121), effective for fiscal year 1996. This standard clarifies when and how to recognize an impairment of long-lived assets. In addition, FAS 121 requires that all regulatory assets, which must have a high probability of recovery to be initially established, must continue to meet that high probability standard to avoid being written off. However, if written off, a regulatory asset can be restored if it again has a high probability of recovery. The impact of this standard will be driven by the facts and circumstances that exist when the standard is adopted and thereafter. Note D - Power Surge - -------------------- In July 1995, a power surge occurred in a section of the Company's service territory. Residents have claimed the surge caused damage to their appliances and other equipment. On November 8, 1995, the Rhode Island Division of Public Utilities and Carriers dtermined that, for this surge, the Company is not entitled to protection under the limitation of liability provisions of its Terms and Conditions of Service. The Company will reimburse affected customers for all documented damage. These costs are estimated to range from $0.4 million to $1.2 million. Note E - ------ 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 1994 Annual Report. Item 2. Management's Discussion and Analysis of Financial --------------------------------------------------------- Condition and Results of Operations ----------------------------------- This section contains management's assessment of The Narragansett 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 1994 Annual Report on Form 10-K. Earnings - -------- Net income for the third quarter and first nine months of 1995 increased $1 million and $6 million, respectively, from the corresponding periods in 1994. These increases in income reflect the recovery that commenced in 1995 of the Company's investment in new transmission facilities which went into service in September 1994. The increase in earnings for the first nine months of 1995 also reflects the recognition of unbilled revenues over a 21 month period ending December 31, 1995, in accordance with a 1994 rate agreement. These increases were partially offset by decreased sales to ultimate customers. Regulatory Activity - ------------------- On October 17, 1995, the Rhode Island Public Utilities Commission (RIPUC) approved a settlement between the Company, the Rhode Island Division of Public Utilities and Carriers, and a group of large commercial and industrial customers that provides for a base rate increase of $15 million effective in December 1, 1995. The RIPUC also approved $3 million of new discounts for manufacturing customers, the costs of which are not being recovered from other customers. In June 1995, the RIPUC opened a proceeding to reassess whether fuel adjustment and purchased power cost adjustment (PPCA) mechanisms should be continued after 1995 or whether such costs should be included in base rates. These adjustment mechanisms currently allow the Company to pass through the costs of fuel and purchased power and do not require the Company to take significant risk regarding recovery of such costs. The RIPUC has not yet scheduled hearings in this proceeding. In February 1995, the Federal Energy Regulatory Commission (FERC) approved a rate agreement, effective in January 1995, for the Company's affiliated power supplier, New England Power Company (NEP). This rate agreement, among other things, increased the credits the Company receives from NEP for the costs of owning and operating its generation and transmission facilities by $14 million on an annual basis. The Company supplies all of the output of its generating facilities to NEP. The increase in the credits reflects the Company's 10 percent investment in the Manchester Street generating station, which is expected to enter commercial operation during the fourth quarter of 1995, and the transmission facilities associated with the station, which were placed in service in September 1994. Power Surge - ----------- In July 1995, a power surge occurred in a section of the Company's service territory. Residents have claimed the surge caused damage to their appliances and other equipment. On November 8, 1995, the Rhode Island Division of Public Utilities and Carriers determined that, for this surge, the Company is not entitled to protection under the limitation of liability provisions of its Terms and Conditions of Service. The Company will reimburse affected customers for all documented damage. These costs are estimated to range from $0.4 million to $1.2 million. Operating Revenue - ----------------- The following table summarizes the changes in operating revenue: Increase (Decrease) in Operating Revenue
Third Quarter Nine Months ------------- ------------ 1995 vs 1994 1995 vs 1994 ------------- ------------ (In Millions) Sales to ultimate customers $ 1 $(2) Fuel recovery 1 9 Purchased Power Cost Adjustment (PPCA) Mechanism 1 3 Unbilled revenues recognized under rate agreement (2) 2 Other 1 2 --- --- $ 2 $14 === ===
Sales to ultimate customers decreased by approximately 1 percent for the nine months ending September 30, 1995. The amount shown for unbilled revenues recognized under rate agreement reflects the recognition of $14 million over a 21 month period that will end December 31, 1995 in accordance with the Company's 1994 rate agreement. The amount applicable to the second quarter of 1994 was not recorded until the third quarter of 1994 when the rate agreement was approved. The Company's rates contain a fuel clause and a PPCA provision. These mechanisms are designed to allow the Company to pass on to its customers changes in purchased energy costs. For a discussion of fuel recovery see the fuel costs discussion in the Operating Expenses section. Operating Expenses - ------------------ The following table summarizes the changes in operating expenses discussed below: Increase (Decrease) in Operating Expenses
Third Quarter Nine Months ------------- ------------ 1995 vs 1994 1995 vs 1994 ------------- ------------ (In Millions) Purchased electric energy: Fuel costs $ 1 $ 9 Integrated facilities credits from NEP (4) (11) Other 1 1 Depreciation 1 3 Taxes 1 4 --- ---- $ - $ 6 === ====
The increase in fuel costs from NEP in the nine months reflects increased short-term purchases which flow through NEP's fuel clause. This increase was the result of decreased generation from NEP's nuclear power suppliers, decreased hydro production due to low water levels, and overhauls of NEP's thermal generating facilities. The Company owns a 10 percent share of the Manchester Street Station and also owns the entire seven mile underground transmission line associated with the facility as well as other transmission facilities in Rhode Island. The Company's share of the electricity generated by this plant is made available to NEP which owns the remaining 90 percent of the station. The Company receives a credit on its purchased power bill from NEP reflecting rate recovery of its investment in the station and the transmission line, and for its fuel costs and other generation and transmission costs. The increase in the integrated facilities credits from NEP shown in the table above is primarily due to the recovery of the Company's investment in this new transmission line which was placed in service in September 1994, as well as increased credits for dismantlement costs being incurred on the Company's previously retired South Street generating station. The increase in depreciation expense is primarily due to increased dismantlement costs for the previously retired South Street generating station and depreciation of new plant expenditures. The increase in taxes in the first nine months of the year is primarily due to increased income. Interest Expense - ---------------- The increase in interest expense is due to increased long-term and short-term debt balances and higher interest rates. Competitive Conditions - ---------------------- The electric utility business is being subjected to rapidly increasing competitive pressures, stemming from a combination of trends, including surplus generating capacity, increasing electric rates, improved technologies, 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, 1994. Rhode Island has been considering various proposals for allowing electric customers greater choice over their electricity supplier. The Company proposed to the RIPUC a set of interdependent principles for industry restructuring which was agreed to by groups representing environmental protection advocates, governmental agencies, non-utility generators, investor-owned utilities, and large and small customer interests. These principles included, among others, provisions for increased customer choice while allowing utilities the opportunity to recover the cost of their past commitments (stranded costs). In August 1995, the RIPUC adopted the principles proposed by the Company, except for one regarding temporary support for renewable fuel technologies. The RIPUC ordered the Company to file a report no later than February 1, 1996 on its progress in negotiating a specific plan consistent with the principles. In July 1995, the Governor of Rhode Island vetoed two bills that would have allowed certain industrial customers to buy power from alternative suppliers, rather than through the local electric utility. The Company urged the Governor to exercise his veto, because the Company believed the proposed legislation would result in piecemeal deregulation that would not be fair to customers or shareholders and would circumvent the comprehensive proceedings mentioned above. The Company committed that, if the measures were not enacted into law, it would provide a two year rate discount to manufacturing customers (see Rate Activity section). In addition, the Company committed that if the measures were not enacted, it would submit by July 1, 1996, a specific and detailed proposal to the RIPUC addressing the issues associated with providing open access to the Company's distribution system for its large commercial and industrial customers. Among other issues, that filing would address the proper means for recovering past costs incurred to serve exiting customers through a compensatory access charge. If the charges were approved by the RIPUC, the appropriate access tariffs would then be filed with the FERC. The Rhode Island Legislature may still override the vetoes. In October 1995, the Company began discussions with interested parties regarding the plan to be filed with the RIPUC. That plan, to be called "Choice: New England", will propose that all electric utility customers in Rhode Island, have the ability to choose their power supplier beginning in 1998. Under the plan, NEP's generation assets would become competitive, while the Company's transmission and distribution assets would remain regulated. Among other provisions, the plan would also propose a uniform access charge so that all utilities in the state will have an opportunity to recover the cost of commitments made under the current regulated system. NEES believes that its "Choice: New England" proposal meets the principles for industry restructuring adopted by the MDPU and RIPUC for increased customer choice while providing utilities with an opportunity to recover costs which may be stranded by such customer choice. However, there can be no assurance that a final plan will include an access charge which would recover all stranded costs. In March 1995, the FERC issued a notice of proposed rule-making in which it stated that recovery in rates of legitimate and verifiable stranded costs from departing customers is the appropriate method for recovery of costs stranded as the result of wholesale competition. Under the FERC policy proposal, costs stranded as a result of retail competition would be subject to state commission review if the state commission has the necessary statutory authority, and subject to FERC review if the state commission does not have such authority. A final decision is expected in 1996. Electric utility rates have historically 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 Standard 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 its operations currently meet the criteria established in FAS 71. However, the effects of regulatory and/or legislative initiatives, or its own initiatives, such as "Choice: New England", could, in the near future, cause all or a portion of the Company's operations to cease meeting the criteria of FAS 71. In that event, the application of FAS 71 to such operations would be discontinued and a non-cash write-off of previously established regulatory assets and liabilities related to such operations would be required. At September 30, 1995, the Company had pre-tax regulatory assets (net of regulatory liabilities) of approximately $50 million. In addition, if competitive or regulatory change should cause the Company's revenues to be insufficient to recover its costs, a write-down of plant assets could be required pursuant to Financial Accounting Standard No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of (FAS 121). This standard, effective for fiscal year 1996, clarifies when and how to recognize an impairment of long-lived assets. For further discussion of FAS 121 see Note C. Utility Plant Expenditures and Financings - ----------------------------------------- Cash expenditures for utility plant totaled $53 million in the first nine months of 1995, including $11 million related to the Company's 10 percent share of the Manchester Street Station repowering project in Providence, Rhode Island. In September 1995, the first of three generating units began commercial operation at the power plant. The remaining units are scheduled to commence commercial operation during the fourth quarter of this year. The first of the three units is now in commercial operation. The approximately 500 megawatt repowering project is estimated to cost approximately $455 million, excluding transmission facilities. The Company's share of the costs amounts to approximately $45 million. The funds necessary for utility plant expenditures were primarily provided by net cash from operating activities, after the payment of dividends, and from proceeds of long-term debt issues and a capital contribution from the parent. During the first nine months of 1995 the Company issued $15 million of bonds at interest rates ranging from 7.75 to 7.81 percent. In October 1995, the Company issued $7 million of long-term debt at a rate of 7.50 percent. The Company is planning to issue $16 million of first mortgage bonds during the fourth quarter of 1995, bearing an interest rate of 7.30 percent, to refinance outstanding first mortgage bonds. At September 30, 1995, the Company had $31 million of short-term, debt outstanding of which $25 million represents commercial paper borrowings. The Company currently has lines of credit with banks totaling $41 million. There were no outstanding borrowings under these lines of credit at September 30, 1995. For the twelve-month period ending September 30, 1995, the ratio of earnings to fixed charges was 2.46. PART II. OTHER INFORMATION Item 1. Legal Proceedings - -------------------------- Information concerning the Company's $14.9 million rate order from the Rhode Island Public Utilities Commission, 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. Information concerning the Company's liability for a power surge, discussed in Note D of Notes to Unaudited Financial Statements, 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 statements on Form S-3, Commission file Nos. 33-49455, 33-50015, and 33-61131. 12 Statement re computation of ratios The Company is filing Financial Data Schedules. The Company filed reports on Form 8-K dated July 3, 1995, August 16, 1995, and September 8, 1995, 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, 1995 to be signed on its behalf by the undersigned thereunto duly authorized. THE NARRAGANSETT ELECTRIC COMPANY s/ Howard W. McDowell Howard W. McDowell Controller, Authorized Officer, and Principal Accounting Officer Date: November 13, 1995 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 THE NARRAGANSETT ELECTRIC COMPANY Computation of Ratio of Earnings to Fixed Charges (SEC Coverage) (Unaudited)
12 Months Ended September 30, 1995 Years Ended December 31, Actual ------------------------------------------------------------- (Unaudited) 1994 1993 1992 1991 1990 -------------- ---- ---- ---- ---- ---- (In Thousands) Net Income $20,821 $14,589 $14,274 $21,052 $16,820 $17,599 - ---------- Add income taxes and fixed charges - ---------------------------------- Current federal income taxes 1,241 1,020 2,183 4,608 1,558 7,624 Deferred federal income taxes 7,363 3,930 2,199 4,560 5,528 351 Investment tax credits - net (504) (508) (508) (507) (500) (504) Interest on long-term debt 16,157 14,334 12,715 13,290 12,581 11,016 Interest on short-term debt and other3,669 2,897 2,074 1,277 2,500 2,968 ------- ------- ------- ------- ------- ------- Net earnings available for fixed charges $48,747 $36,262 $32,937 $44,280 $38,487 $39,054 ------- ------- ------- ------- ------- ------- Fixed charges: Interest on long-term debt $16,157 $14,334 $12,715 $13,290 $12,581 $11,016 Interest on short-term debt and other3,669 2,897 2,074 1,277 2,500 2,968 ------- ------- ------- ------- ------- ------- Total fixed charges $19,826 $17,231 $14,789 $14,567 $15,081 $13,984 ======= ======= ======= ======= ======= ======= Ratio of earnings to fixed charges 2.46 2.10 2.23 3.04 2.55 2.79 - ----------------------------------
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 THE NARRAGANSETT ELECTRIC COMPANY, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 DEC-31-1995 DEC-31-1994 DEC-31-1995 DEC-31-1994 SEP-30-1995 SEP-30-1994 SEP-30-1995 SEP-30-1994 9-MOS 9-MOS 3-MOS 3-MOS PER-BOOK PER-BOOK PER-BOOK PER-BOOK 523,989 0 0 0 0 0 0 0 106,341 0 0 0 56,804 0 0 0 0 0 0 0 687,134 0 0 0 56,624 0 0 0 70,170 0 0 0 104,182 0 0 0 230,976 0 0 0 0 0 0 0 36,500 0 0 0 203,857 0 0 0 31,050 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 184,751 0 0 0 687,134 0 0 0 380,663 366,275 139,217 137,014 8,235 4,594 4,119 3,355 339,783 337,623 122,399 122,722 348,018 342,217 126,518 126,077 32,645 24,058 12,699 10,937 (307) (285) (269) 149 32,338 23,773 12,430 11,086 13,575 11,242 4,491 3,856 18,763 12,531 7,939 7,230 1,607 1,607 535 535 17,156 10,924 7,404 6,695 4,530 2,265 567 1,132 12,312 10,489 4,242 3,675 34,065 33,521 5,932 4,375 0 0 0 0 0 0 0 0 Total deferred charges includes other assets. Short-term notes includes notes payable to banks 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-----