-----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, TLjhr2/ymcY5Eqv1S2Y4tZeUEpX3meZYA8bBgTl0ouNRoU8V9IJXS39EaY0xQJix qCjbFUk2FYSwqB9GJrwiOA== 0000072741-01-000059.txt : 20010321 0000072741-01-000059.hdr.sgml : 20010321 ACCESSION NUMBER: 0000072741-01-000059 CONFORMED SUBMISSION TYPE: U-1/A PUBLIC DOCUMENT COUNT: 6 FILED AS OF DATE: 20010320 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NORTHEAST UTILITIES SYSTEM CENTRAL INDEX KEY: 0000072741 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 042147929 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: U-1/A SEC ACT: SEC FILE NUMBER: 070-09839 FILM NUMBER: 1572848 BUSINESS ADDRESS: STREET 1: 174 BRUSH HILL AVE CITY: WEST SPRINGFIELD STATE: MA ZIP: 01090-0010 BUSINESS PHONE: 4137855871 MAIL ADDRESS: STREET 1: 107 SELDON ST CITY: BERLIN STATE: CT ZIP: 06037-1616 U-1/A 1 0001.txt AMENDMENT NO.2 TO FORM U-1 NO. 70-9839 SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 AMENDMENT NO. 2 TO APPLICATION/DECLARATION ON FORM U-1 UNDER THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935 Northeast Utilities Western Massachusetts Electric Company 174 Brush Hill Road West Springfield, MA 01089 The Connecticut Light and Power Company 107 Selden Street Berlin, CT 06037 (Names of companies filing this statement and addresses of principal executive offices) NORTHEAST UTILITIES (Name of top registered holding company) Cheryl W. Grise Senior Vice President, Secretary and General Counsel Northeast Utilities Service Company 107 Selden Street Berlin, CT 06037 (Name and address of agent for service) The Commission is requested to mail signed copies of all orders, notices and communications to: Jeffrey C. Miller, Esq. David R. McHale Assistant General Counsel Vice President and Treasurer Northeast Utilities Service Company Northeast Utilities Service Company 107 Selden Street 107 Selden Street Berlin, CT 06037 Berlin, CT 06037 The Application/Declaration in this File is hereby amended as follows: (a) The last sentence of paragraph 1 is deleted and replaced with the following: "The senior debt ratings of CL&P and WMECO issued by Standard & Poor's were upgraded to "BBB+" on January 31, 2001 while the senior debt ratings of CL&P and WMECO issued by Moody's Investor Service, Inc. were upgraded to "Baa1" on January 23, 2001." (b) Paragraph 16 is hereby deleted and replaced with the following: "Inability to meet the Commission's 30% Common Equity Ratio Test In the Use of Proceeds Filing, the Utilities noted that the addition of the then anticipated securitization debt to the balance sheets of CL&P and WMECO on a pro forma basis with the reduced capitalization of the Utilities as a result of the authorization granted in such file, would cause the Utilities (and NU on a consolidated basis) to fail the Commission's benchmark of 30% common equity-to-capitalization test, with their respective pro forma common equity ratios at 19.1% and 16.6% and NU at 29.1%. As indicated in the Use of Proceeds Filing, however, the ratings of the respective senior debt securities of CL&P and WMECO will be unaffected or will be improved by the issuance of the rate reduction bonds, as such bonds are not considered obligations of the Utilities by the ratings agencies. As indicated earlier herein, both CL&P and WMECO have used proceeds from the sale of non-nuclear generating assets to reduce their respective capitalization but no RRBs have yet been issued. After giving effect to the sale of Millstone, the issuance of the RRBs and the paydown of debt and equity with the proceeds, the pro forma common equity ratios of CL&P and WMECO (and NU on a consolidated basis), as of September 30, 2000, (without including the issuance of the RRBs as debt of the companies) would remain above 30%, with CL&P at 41%, WMECO at 40% and NU consolidated at 40%. Giving effect to the Millstone transactions, the issuance of the RRBs and including the issuance of the RRBs as debt of the respective companies, the respective pro forma common equity ratios as of September 30, 2000 of CL&P, and WMECO would fall below the 30% benchmark with CL&P at 20% and WMECO at 28%. However, the companies will adhere to any state commission order requiring a higher equity ratio (see Item 4 hereof). The transactions described herein and the issuance of the RRBs would not cause NU on a consolidated basis to fall below 30%. However, NU expects that other events in the NU consolidated system, including the issuance of RRBs by Public Service Company of New Hampshire ("PSNH") and a $225 million after-tax write-off taken by PSNH in the fourth quarter of 2000 as a result of restructuring in New Hampshire, would cause NU on a consolidated basis to fall below 30%. (See Exhibit K.1 hereto). CL&P and WMECO presently anticipate that the debt associated with the RRBs will have been amortized by no later than twelve years after the respective date when such company has issued the maximum principal amount of RRBs which it intends to issue ("Full Securitization"). Thus CL&P's and WMECO's common equity ratios will exceed 30% by no later than the end of such period. In all likelihood, a sufficient amount of securitization debt will be amortized prior to the end of such twelve year period to restore both CL&P's and WMECO's common equity ratio to over 30% prior to that date. Based on the expected terms and amortizations of the RRBs to be issued by CL&P (and assuming the RRBs issued by WMECO are issued on similar terms) the Applicants believe that the common equity ratio of CL&P will be above 30% by December 31, 2008 and that of WMECO will be above 30% by December 31, 2003 (See Exhibit L hereto) It is also expected that NU's common equity ratio on a consolidated basis will be above 30% by December 31, 2002. If by December 31, 2002, in the case of NU, or by the end of the Authorization Period in the case of the Utilities, the respective company is not above 30% common equity, further authorization from the Commission will be required." (c) Item 4 is hereby deleted and replaced with the following: "ITEM 4 REGULATORY APPROVALS 28. The Connecticut Department of Public Utility Control (the "DPUC") has jurisdiction over CL&P's plan of divestiture of Millstone, and in its order approving the divestiture plan, the DPUC required that within 180 days following the closing, CL&P file information regarding the disposition of the proceeds, including an itemization of costs that will be netted against the proceeds and detailed tax calculations. On March 16, 2001, the DPUC issued a temporary order requiring CL&P to use the proceeds in a way to result in a common equity ratio (not including the RRBs as debt) for CL&P between 45% and 50%. (See Exhibit D attached hereto). The Massachusetts Department of Telecommunications and Energy (DTE) has jurisdiction over WMECO's use of proceeds from the Millstone sale. In approving the sale of WMECO's share of Millstone, the DTE stated that it was not ruling on the use of proceeds and would examine that issue in an annual transition charge reconciliation proceeding after the sale is completed.. No other state or Federal regulatory approval, other than the approval of the Commission pursuant to this Application, is required to consummate the transactions described herein. The transactions described herein will be effected in compliance with all applicable state and federal laws and regulations." (d) Item 6 is hereby deleted and replaced with the following: "ITEM 6 EXHIBITS AND FINANCIAL STATEMENTS (asterisked (*) items have already been filed in this Application) ** - to be filed by amendment 30. (a) Exhibits D. Temporary Order of the Connecticut Department of Public Utility Control dated March 16, 2001** F. Opinion of Counsel* H. Proposed Form of Notice* J. CL&P Mortgage Indenture Dividend Covenant* K. Common Equity Ratios* K.1 Revised Common Equity Ratios L. Amortization Schedule for RRBs (b) Financial Statements 1 Northeast Utilities and Subsidiaries (consolidated) 1.1 Balance Sheet, per books and pro forma, as of September 30, 2000. 1.2 Statement of Income, per books and pro forma, for 12 months September 30, 2000 and capital structure, per books and pro forma, as of September 30, 2000. 2 The Connecticut Light and Power Company 2.1 Balance Sheet, per books and pro forma, as of September 30, 2000 2.2 Statement of Income and Surplus, per books and pro forma, for 12 months ended September 30, 2000 and capital structure, per books and pro forma, as of September 30, 2000. 3 Western Massachusetts Electric Company 3.1 Balance Sheet, per books and pro forma, as of September 30, 2000. 3.2 Statement of Income and Surplus, per books and pro forma, for 12 months ended September 30, 2000 and capital structure, per books and pro forma, as of September 30, 2000. SIGNATURES Pursuant to the requirements of the Public Utility Holding Company Act of 1935, as amended, the undersigned companies have duly caused this statement to be signed on their behalf by the undersigned thereunto duly authorized. NORTHEAST UTILITIES WESTERN MASSACHUSETTS ELECTRIC COMPANY THE CONNECTICUT LIGHT AND POWER COMPANY By: /s/ Cheryl W. Grise ------------------- Name: Cheryl W. Grise Title: Senior Vice President, Secretary and General Counsel Northeast Utilities Service Company as Agent for the above named companies. Date: March 18, 2001 EX-99.1 2 0002.txt CAPITALIZATION RATES EXHIBIT K.1 REVISED COMMON EQUITY RATIOS SEC 30% Test Capitalization Rates - NU Consolidated As of September 30, 2000 Per Book Pro Forma Capitalization: Common stock: 743,480 596,421 Capital surplus, paid in 1,094,996 741,275 Deferred contribution plan - employee stock ownership plan (118,554) (118,554) Retained earnings 691,164 639,348 Accumulated other comprehensive income 2,699 2,699 Total Common Stockholder's Equity 2,413,785 1,861,189 Preferred stock not subject to mandatory redemption 136,200 116,200 Preferred stock subject to mandatory redemption 41,500 - Debt MIPS 100,000 - Short-Term Debt 1,127,338 883,819 Long-Term Debt 2,556,329 1,735,061 Rate Reduction Bond Obligation - 2,230,242 Total Capitalization 6,375,152 6,776,511 Capital Structure With Rate Reduction Bond Obligation:
Per Book Pro Forma Difference Total Common Stockholder's Equity 37.86% 27.47% -10.40% Total Preferred Stock 2.79% 1.71% - 1.07% Total Debt (includes Rate Reduction Obligation) 59.35% 70.82% 11.47% Totals 100.00% 100.00% 0.00% Capital Structure Without Rate Reduction Bond Obligation: Per Book Pro Forma Difference Total Common Stockholder's Equity 37.86% 40.94% 3.08% Total Preferred Stock 2.79% 2.56% -0.23% Total Debt (excludes Rate Reduction Bond Obligation) 59.35% 56.51% -2.84% Totals 100.00% 100.00% 0.00%
SEC 30% Test Capitalization Ratios - CL&P As of September 30, 2000 Per Book Pro Forma Capitalization: Common stock 75,849 75,849 Capital surplus, paid in 412,993 312,993 Retained earnings 208,816 247,510 Accumulated other comprehensive income 802 802 Total Common Stockholder's Equity 698,460 637,154 Preferred stock not subject to mandatory redemption 116,200 116,200 Debt MIPS 100,000 - Short-Term Debt 110,000 - Long-term debt 1,229,615 813,615 Rate Reduction Bond Obligation 1,550,242 Total Capitalization 2,254,275 3,117,211 Capital Structure With Rate Reduction Bond Obligation:
Per Book Pro Forma Difference Total Common Stockholder's Equity 31% 20% -11% Total Preferred Stock 5% 4% -1% Total Debt (includes Rate Reduction Bond Obligation) 64% 76% 12% Totals 100% 100% 0% Capital Structure Without Rate Reduction Bond Obligation: Per Book Pro Forma Difference Total Common Stockholder's Equity 31% 41% 10% Total Preferred Stock 5% 7% 2% Total Debt (excludes Rate Reduction Bond Obligation) 64% 52% -12% Totals 100% 100% 0%
SEC 30% Test Capitalization Ratios - WMECO As of September 30, 2000 Per Book Pro Forma Capitalization: Common stock 14,752 14,752 Capital surplus, paid in 93,945 72,165 Retained earnings 52,223 61,386 Accumulated other comprehensive income 267 267 Total Common Stockholder's Equity 161,187 148,570 Preferred stock not subject to mandatory redemption 20,000 - Preferred stock subject to mandatory redemption 16,500 1,500 Debt Short-Term Debt 126,600 122,348 Long-term debt 198,699 98,699 Rate Reduction Bond Obligation 155,000 Total Capitalization 522,986 526,117 Capital Structure With Rate Reduction Bond Obligation:
Per Book Pro Forma Difference Total Common Stockholder's Equity 31% 28% -3% Total Preferred Stock 7% 0% -7% Total Debt (includes Rate Reduction Bond Obligation) 62% 71% 9% Totals 100% 100% 0% Capital Structure Without Rate Reduction Bond Obligation: Per Book Pro Forma Difference Total Common Stockholder's Equity 31% 40% 9% Total Preferred Stock 7% 0% -7% Total Debt (excludes Rate Reduction Bond Obligation) 62% 60% -3% Totals 100% 100% 0%
EX-99.2 3 0003.txt NU CONSOLIDATED EXHIBIT L NU CONSOLIDATED 30% TEST ANALYSIS
Pro Forma Pro Forma Pro Forma Pro Forma Pro Forma Pro Forma 09/30/00 12/31/01 12/31/02 12/31/03 12/31/04 12/31/05 --------- --------- --------- --------- --------- --------- Capitalization: Common stock 596,421 596,421 596,421 596,421 596,421 596,421 Capital surplus, paid in 741,275 741,275 741,275 741,275 741,275 741,275 Deferred contribution plan - employee stock ownership plan (118,554) Retained earnings 639,348 639,348 639,348 639,348 639,348 639,348 Accumulated other comprehensive income 2,699 2,699 2,699 2,699 2,699 2,699 --------- --------- --------- --------- --------- --------- Total Common Stockholder's Equity 1,861,189 1,979,743 1,979,743 1,979,743 1,979,743 1,979,743 Preferred stock not subject to mandatory redemption 116,200 116,200 116,200 116,200 116,200 116,200 Debt MIPS - - - - - - Short-Term Debt 833,819 833,819 833,819 833,819 833,819 833,819 Long-Term Debt 1,735,061 1,735,061 1,735,061 1,735,061 1,736,061 1,736,061 Rate Reduction Bond Obligation 2,230,242 2,148,563 1,975,957 1,795,646 1,601,465 1,390,332 --------- --------- --------- --------- --------- --------- Total Capitalization 6,776,511 6,813,385 6,640,780 6,460,469 6,266,288 6,055,155 ========= ========= ========= ========= ========= ========= Capital Structure With Rate Reduction Bond Obligation: Total Common Stockholder's Equity 27.5% 29.1% 29.8% 30.6% 31.6% 32.7% Total Preferred Stock 1.7% 1.7% 1.7% 1.8% 1.9% 1.9% Total Debt (includes Rate Reduction Bond Obligation) 70.8% 69.2% 68.4% 67.6% 66.6% 65.4% --------- --------- --------- --------- --------- --------- Totals 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% ========= ========= ========= ========= ========= ========= Annual Rate Reduction Bond Amortization $ 81,679 $ 172,605 $ 180,311 $ 194,181 $ 211,133 ========= ========= ========= ========= =========
Pro Forma Pro Forma Pro Forma Pro Forma Pro Forma 12/31/06 12/31/07 12/31/08 12/31/09 12/31/10 --------- --------- --------- --------- --------- Capitalization: Common stock 596,421 596,421 596,421 596,421 596,421 Capital surplus, paid in 741,275 741,275 741,275 741,275 741,275 Deferred contribution plan - employee stock ownership plan Retained earnings 639,348 639,348 639,348 639,348 639,348 Accumulated other comprehensive income 2,699 2,699 2,699 2,699 2,699 --------- --------- --------- --------- --------- Total Common Stockholder's Equity 1,979,743 1,979,743 1,979,743 1,979,743 1,979,743 Preferred stock not subject to mandatory redemption 116,200 116,200 116,200 116,200 116,200 Debt MIPS - - - - - Short-Term Debt 833,819 833,819 833,819 833,819 833,819 Long-Term Debt 1,735,061 1,735,061 1,735,061 1,735,061 1,735,061 Rate Reduction Bond Obligation 1,165,328 923,373 662,923 380,899 78,839 --------- --------- --------- --------- --------- Total Capitalization 5,830,151 5,588,195 5,327,746 5,045,721 4,743,662 ========= ========= ========= ========= ========= Capital Structure With Rate Reduction Bond Obligation: Total Common Stockholder's Equity 34.0% 35.4% 37.2% 39.2% 41.7% Total Preferred Stock 2.0% 2.1% 2.2% 2.3% 2.4% Total Debt (includes Rate Reduction Bond Obligation) 64.0% 62.5% 60.7% 58.5% 55.8% --------- --------- --------- --------- --------- Totals 100.0% 100.0% 100.0% 100.0% 100.0% ========= ========= ========= ========= ========= Annual Rate Reduction Bond Amortization $ 225,003 $ 241,956 $ 260,449 $ 282,025 $ 302,059 ========= ========= ========= ========= =========
Exhibit L CL&P CONSOLIDATED 30% TEST ANALYSIS
Pro Forma Pro Forma Pro Forma Pro Forma Pro Forma Pro Forma 09/30/00 12/31/01 12/31/02 12/31/03 12/31/04 12/31/05 --------- --------- --------- --------- --------- --------- Capitalization: Common stock 75,849 75,849 75,849 75,849 75,849 75,849 Capital surplus, paid in 312,993 312,993 312,993 312,993 312,993 312,993 Retained earnings 247,510 247,510 247,510 247,510 247,510 247,510 Accumulated other comprehensive income 802 802 802 802 802 802 --------- --------- --------- --------- --------- --------- Total Common Stockholder's Equity 637,154 637,154 637,154 637,154 637,154 637,154 Preferred stock not subject to mandatory redemption 116,200 116,200 116,200 116,200 116,200 116,200 Debt MIPS - - - - - - Short-Term Debt - - - - - - Long-Term Debt 813,615 813,615 813,615 813,615 813,615 813,615 Rate Reduction Bond Obligation 1,550,242 1,493,469 1,373,497 1,248,169 1,113,200 966,448 --------- --------- --------- --------- --------- --------- Total Capitalization 3,117,211 3,060,438 2,940,466 2,815,138 2,680,169 2,533,417 ========= ========= ========= ========= ========= ========= Capital Structure With Rate Reduction Bond Obligation: Total Common Stockholder's Equity 20.4% 20.8% 21.7% 22.6% 23.8% 25.1% Total Preferred Stock 3.7% 3.8% 4.0% 4.1% 4.3% 4.6% Total Debt (includes Rate Reduction Bond Obligation) 75.8% 75.4% 74.4% 73.2% 71.9% 70.3% --------- --------- --------- --------- --------- --------- Totals 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% ========= ========= ========= ========= ========= ========= Annual Rate Reduction Bond Amortization $ 56,773 $ 119,972 $ 125,328 $ 134,969 $ 146,752 ========= ========= ========= ========= =========
Pro Forma Pro Forma Pro Forma Pro Forma Pro Forma 12/31/06 12/31/07 12/31/08 12/31/09 12/31/10 --------- --------- --------- --------- --------- Capitalization: Common stock 75,849 75,849 75,849 75,849 75,849 Capital surplus, paid in 312,993 312,993 312,993 312,993 312,993 Retained earnings 247,510 247,510 247,510 247,510 247,510 Accumulated other comprehensive income 802 802 802 802 802 --------- --------- --------- --------- --------- Total Common Stockholder's Equity 637,154 637,154 637,154 637,154 637,154 Preferred stock not subject to mandatory redemption 116,200 116,200 116,200 116,200 116,200 Debt MIPS - - - - - Short-Term Debt - - - - - Long-Term Debt 813,615 813,615 813,615 813,615 813,615 Rate Reduction Bond Obligation 810,055 641,880 460,850 264,824 54,872 --------- --------- --------- --------- --------- Total Capitalization 2,377,024 2,208,849 2,027,819 1,831,793 1,621,841 ========= ========= ========= ========= ========= Capital Structure With Rate Reduction Bond Obligation: Total Common Stockholder's Equity 26.8% 28.8% 31.4% 34.8% 39.3% Total Preferred Stock 4.9% 5.3% 5.7% 6.3% 7.2% Total Debt (includes Rate Reduction Bond Obligation) 68.3% 65.9% 62.8% 58.9% 53.5% --------- --------- --------- --------- --------- Totals 100.0% 100.0% 100.0% 100.0% 100.0% ========= ========= ========= ========= ========= Annual Rate Reduction Bond Amortization $ 156,393 $ 168,176 $ 181,030 $ 196,026 $ 209,952 ========= ========= ========= ========= =========
WMECO 30% TEST ANALYSIS Exhibit L
Pro Forma Pro Forma Pro Forma Pro Forma Pro Forma Pro Forma 09/30/00 12/31/01 12/31/02 12/31/03 12/31/04 12/31/05 --------- --------- --------- --------- --------- --------- Capitalization: Common stock 14,752 14,752 14,752 14,752 14,752 14,752 Capital surplus, paid in 72,165 72,165 72,165 72,165 72,165 72,165 Retained earnings 61,386 61,386 61,386 61,386 61,386 61,386 Accumulated other comprehensive income 267 267 267 267 267 267 --------- --------- --------- --------- --------- --------- Total Common Stockholder's Equity 148,570 148,570 148,570 148,570 148,570 148,570 Preferred stock not subject to mandatory redemption - - - - - - Preferred stock subject to mandatory redemption 1,500 1,500 1,500 1,500 1,500 1,500 Debt Short-Term Debt 122,348 122,348 122,348 122,348 122,348 122,348 Long-Term Debt 98,699 98,699 98,699 98,699 98,699 98,699 Rate Reduction Bond Obligation 155,000 149,323 137,326 124,793 111,296 96,621 --------- --------- --------- --------- --------- --------- Total Capitalization 526,117 520,439 508,442 495,909 482,412 467,737 ========= ========= ========= ========= ========= ========= Capital Structure With Rate Reduction Bond Obligation: Total Common Stockholder's Equity 28.2% 28.5% 29.2% 30.0% 30.8% 31.8% Total Preferred Stock 0.3% 0.3% 0.3% 0.3% 0.3% 0.3% Total Debt (includes Rate Reduction Bond Obligation) 71.5% 71.2% 70.5% 69.7% 68.9% 67.9% --------- --------- --------- --------- --------- --------- Totals 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% ========= ========= ========= ========= ========= ========= Annual Rate Reduction Bond Amortization $ 5,677 $ 11,997 $ 12,533 $ 13,497 $ 14,675 ========= ========= ========= ========= =========
WMECO 30% Test Analysis Pro Forma Pro Forma Pro Forma Pro Forma Pro Forma 12/31/06 12/31/07 12/31/08 12/31/09 12/30/10 --------- --------- --------- --------- --------- Capitalization: Common stock 14,752 14,752 14,752 14,752 14,752 Capital surplus, paid in 72,165 72,165 72,165 72,165 72,165 Retained earnings 61,386 61,386 61,386 61,386 61,386 Accumulated other comprehensive income 267 267 267 267 267 --------- --------- --------- --------- --------- Total Common Stockholder's Equity 148,570 148,570 148,570 148,570 148,570 Preferred stock not subject to mandatory redemption - - - - - Preferred stock subject to mandatory redemption 1,500 1,500 1,500 1,500 1,500 Debt Short-Term Debt 122,348 122,348 122,348 122,348 122,348 Long-Term debt 98,699 98,699 98,699 98,699 98,699 Rate Reduction Bond Obligation 80,981 64,164 46,061 26,458 5,463 --------- --------- --------- --------- --------- Total Capitalization 452,098 435,280 417,177 397,575 376,580 ========= ========= ========= ========= ========= Capital Structure With Rate Reduction Bond Obligation: Total Common Stockholder's Equity 32.9% 34.1% 35.6% 37.4% 39.5% Total Preferred Stock 0.3% 0.3% 0.4% 0.4% 0.4% Total Debt (includes Rate Reduction Bond Obligation) 66.8% 65.5% 64.0% 62.3% 60.1% --------- --------- --------- --------- --------- Totals 100.0% 100.0% 100.0% 100.0% 100.0% ========= ========= ========= ========= ========= Annual Rate Reduction Bond Amortization $ 15,639 $ 16,818 $ 18,103 $ 19,603 $ 20,995 ========= ========= ========= ========= =========
EX-99.3 4 0004.txt NORTHEAST UTILITIES BALANCE SHEETS Exhibit 1.1 NORTHEAST UTILITIES AND SUBSIDIARIES PRO FORMA BALANCE SHEET - ASSETS AS OF SEPTEMBER 30, 2000 Unaudited (Thousands of Dollars)
Pro Forma Giving Millstone Effect to Per Book Securitization Sale Adjustments -------- -------------- --------- ----------- Utility Plant, at cost: Electric $ 9,314,090 $ $ (156,200) (9) $ 9,157,890 Gas and other 847,856 847,856 ----------- ---------- ----------- ---------- 10,161,946 0 (156,200) 10,005,746 Less: Accumulated provision for depreciation 6,493,571 (367,985) (10) 6,125,586 ----------- ---------- ----------- ----------- 3,668,375 0 211,785 3,880,160 Unamortized PSNH acquisition costs 303,123 303,123 Construction work in progress 206,513 206,513 Nuclear fuel, net 118,550 (85,691) (9) 32,859 ----------- ---------- ----------- ----------- Total net utility plant 4,296,561 0 126,094 4,422,655 ----------- ---------- ----------- ----------- Other Property and Investments: Nuclear decommissioning trusts, at market 762,686 (693,083) (11) 69,603 Investments in regional nuclear generating companies, at equity 83,284 83,284 Other, at cost 139,694 139,694 ----------- ---------- ----------- ----------- 985,664 0 (693,083) 292,581 ----------- ---------- ----------- ----------- Current Assets: Cash and cash equivalents 237,972 37,495 (1) (250,529) (12) 24,939 Special Deposits 100,000 (2) 100,000 Investment in securitization assets 62,635 62,635 Receivables, net 479,957 479,957 Unbilled revenues 72,003 72,003 Fuel, materials and supplies, at average cost 171,253 171,253 Recoverable energy costs, net - current portion 109,882 109,882 Prepayments and other 226,863 226,863 ----------- ---------- ----------- ----------- 1,360,565 137,495 (250,529) 1,247,532 ----------- ---------- ----------- ----------- Deferred Charges: Regulatory assets: Recoverable nuclear costs 2,096,234 (1,035,455) (13) 1,060,779 Income taxes, net 598,942 598,942 Deferred costs - nuclear plants 50,287 50,287 Unrecovered contractual obligations 265,375 265,375 Recoverable energy costs, net 197,349 197,349 Other 152,814 922,073 (3) 1,074,887 Unamortized debt expense 33,524 17,873 (14) 51,397 Goodwill and other purchased intangible assets 336,221 336,221 Other 191,844 48,317 (11) 240,161 ----------- ---------- ----------- ----------- 3,922,590 922,073 (969,265) 3,875,398 ----------- ---------- ----------- ----------- Total Assets $10,565,380 $1,059,568 $(1,786,783) $ 9,838,166 =========== ========== =========== ===========
NORTHEAST UTILITIES AND SUBSIDIARIES PRO FORMA BALANCE SHEET - CAPITALIZATION AND LIABILITIES AS OF SEPTEMBER 30, 2000 Unaudited Exhibit 1.1 (Thousands of Dollars)
Pro Forma Giving Millstone Effect to Per Book Securitization Sale Adjustments -------- -------------- --------- ----------- Capitalization: Common stock $ 743,480 $ $ (147,059) (14) $ 596,421 Capital surplus, paid in 1,094,996 (780) (4) (352,941) (14) 741,275 Deferred contribution plan - employee stock ownership plan (118,554) (118,554) Retained earnings 691,164 (188,722) 136,906 (14) 639,348 Accumulated other comprehensive income 2,699 2,699 ----------- ------------ ----------- ---------- Total common stockholder's equity 2,413,785 (189,502) (363,904) 1,861,189 Preferred stock not subject to mandatory redemption 136,200 (20,000) (5) 116,200 Preferred stock subject to mandatory redemption 15,000 (39,268) (5) (24,268) Long-term debt 2,042,929 (86,284) (5) (209,716) (14) 1,746,929 ----------- ------------ ----------- ---------- Total capitalization 4,607,914 (335,054) (572,810) 3,700,050 ----------- ----------- ----------- ---------- Minority Interest in Consolidated Subsidiary 100,000 (100,000) (5) 0 Obligations Under Capital Leases 50,619 (49,009) (14) 1,610 ----------- ----------- ----------- ---------- Rate Reduction Bond Obligation 0 2,230,242 (6) 2,230,242 ----------- ----------- ----------- ---------- Current Liabilities: Notes payable to banks* 1,127,338 (237,098) (5) (56,421) (14) 833,819 Long-term debt and preferred stock - current portion 539,900 (467,500) (5) (60,000) (14) 12,400 Obligations under capital leases - current portion 113,101 (111,026) (14) 2,075 Accounts payable 481,411 481,411 Accrued taxes 144,282 (438,148) (7) 15,931 (15) (277,935) Accrued interest 46,760 (51,703) (8) (24,365) (15) (29,308) Other 121,259 121,259 ----------- ----------- ----------- ---------- 2,574,051 (1,194,449) (235,881) 1,143,721 ----------- ----------- ----------- ---------- Deferred Credits and Other Long-Term Liabilities: Accumulated deferred income taxes 1,674,587 458,829 (3) (245,848) (16) 1,887,568 Accumulated deferred investment tax credits 156,002 156,002 Decommissioning obligation - Millstone 1 683,234 (683,234) (11) 0 Deferred contractual obligations 255,816 255,816 Other 463,157 463,157 ----------- ---------- ----------- ---------- 3,232,796 458,829 (929,082) 2,762,543 ----------- ---------- ----------- ---------- Total Capitalization and Liabilities $10,565,380 $1,059,568 $(1,786,783) $9,838,166 =========== ========== =========== ==========
*Includes $430 million of short-term debt for Northeast Generation Company which is not jurisdictional to the SEC because it has EWG status. Exhibit 1.2 NORTHEAST UTILITIES AND SUBSIDIARIES PRO FORMA INCOME STATEMENT FOR THE 12 MONTHS ENDED SEPTEMBER 30, 2000 Unaudited (Thousands of Dollars)
Pro Forma Giving Millstone Effect to Per Book Securitization Sale Adjustments -------- -------------- --------- ----------- ---------- ---------- --------- ---------- Operating Revenues $5,718,392 $ $ $5,718,392 ---------- ---------- --------- ---------- Operating Expenses: Operation - Fuel, purchased and net interchange power 3,046,583 (15,462) (15) 3,031,121 Other 934,438 934,438 Maintenance 251,570 251,570 Depreciation 245,055 245,055 Amortization of regulatory assets, net 566,975 566,975 Federal and state income taxes 251,112 20,681 (8) (15,931) (15) 287,724 Taxes other than income taxes 254,032 254,032 Gain on sale of utility plant (287,672) (287,672) ---------- ---------- ---------- ---------- Total operating expenses 5,262,093 20,681 469 5,283,243 ---------- ---------- ---------- ---------- Operating Income 456,299 (20,681) (469) 435,149 ---------- ---------- ---------- ---------- Other Income (Loss): Equity in earnings of regional nuclear generating companies 6,887 6,887 Nuclear related costs (69,354) (69,354) Other, net (11,921) 181,149 (17) 169,228 Minority interest in loss of subsidiary (9,300) (9,300) Income taxes 88,261 (68,140) (16) (20,121) ---------- ---------- ---------- ---------- Other(loss)income, net (4,573) 0 113,009 117,582 ---------- ---------- --------- ---------- Income before interest charges 460,872 (20,681) 112,541 552,731 ---------- ---------- --------- ---------- Interest charges: Interest on long-term debt 218,661 (45,250) (8) (20,678) (15) 152,733 Other interest 77,686 (6,453) (8) (3,687) (15) 67,546 ---------- ---------- --------- ---------- Interest charges, net 296,347 (51,703) (24,365) 220,279 Income after interest charges $ 164,525 $ 31,022 $ 136,906 $ 332,452 ---------- ---------- --------- ---------- Preferred Dividends of subsidiaries 16,633 (5,256) (8) 11,377 ---------- ---------- --------- ---------- Income before extraordinary loss, net of taxes 147,892 36,278 136,906 321,076 ========== ========== ========== =========== Extraordinary loss, net of tax benefits 225,000 225,000 ---------- ---------- --------- ---------- Net Income $ 147,892 $ (188,722) $ 136,906 $ 96,076 ========== ========== ========== ===========
NORTHEAST UTILITIES AND SUBSIDIARIES PRO FORMA STATEMENT OF RETAINED EARNINGS AS OF SEPTEMBER 30, 2000 Unaudited (Thousands of Dollars)
Exhibit 1.2 Pro Forma Giving Millstone Effect to Per Book Securitization Sale Adjustments Balance at beginning of period $ 597,505 $ 597,505 Net income 164,525 (193,978) 136,906 107,452 Yankee purchase adjustment (11,229) (11,229) Cash dividends on preferred stock (16,633) 5,256 (11,377) Cash dividends on Common stock (43,003) (43,003) ---------- ---------- ---------- ----------- Balance at end of period $ 691,164 $ (188,722) $ 136,906 $ 639,348 ========== ========== ========== ===========
NORTHEAST UTILITIES AND SUBSIDIARIES PRO FORMA CAPITAL STRUCTURE AS OF SEPTEMBER 30, 2000 Unaudited (Thousands of Dollars)
Exhibit 1.2 Pro Forma Giving Millstone Effect to Per Book Securitization Sale Adjustments Long term debt $ 2,556,329 $ (553,784) $(269,716) $ 1,732,829 Preferred stock not subject to mandatory redemption (136,200) (20,000) 116,200 Preferred stock subject to mandatory redemption 41,500 (39,268) 2,232 Common stock equity 2,413,785 (189,502) (363,094) 1,861,189 Total Capitalization 5,147,814 $ (802,554) $(632,810) $3,712,450 ========== ========== ========== ===========
[1] see adjustments a, b,c, d and f [2] see adjustment e [3] see adjustments b and e [4] see adjustment d [5] see adjustment c [6] see adjustments a [7] see adjustment b, e and f [8] see adjustment f [9] see adjustments h [10] see adjustments i and j [11] see adjustment i [12] see adjustment h, i, j, k, l and m [13] see adjustments h and i [14} see adjustments l [15] see adjustment m [16] see adjustment k [17] see adjustment j [17] see adjustment g NORTHEAST UTILITIES AND SUBSIDIARIES PRO FORMA ADJUSTMENTS TO FINANCIAL STATEMENTS (Thousands of Dollars) Debit Credit SECURITIZATION ADJUSTMENTS: a) Cash $2,230,242 Rate reduction bond obligation $2,230,242 To record the issuance of CL&P, WMECO and PSNH rate reduction bonds. b) Regulatory assets - other 31,182 Accrued taxes 12,473 Cash 31,182 Accumulated deferred income taxes 12,473 To record issuance expenses associated with securitization and related tax effect c) Notes payable to banks 237,098 Minority interest in consolidated subsidiary 100,000 Preferred stock subject to mandatory redemption 39,268 Preferred stock not subject to mandatory redemption 20,000 Long-term debt and preferred stock - current portion 467,500 Long-term debt 86,284 Cash 950,150 To record the use of securitization proceeds to retire short-term and long-term debt. d) Capital Surplus, paid in 780 Cash 780 To record the associated costs and premiums of retiring Preferred Stock e) Regulatory assets - other 1,115,891 Accrued taxes 446,356 Special deposits 100,000 Cash 1,215,891 Accumulated deferred income taxes 446,356 To record the buyout of IPP contracts, establishment of escrow and related tax effect. f) Accrued interest 51,703 Cash 5,256 Federal and State Income Taxes 20,681 Interest on long-term debt 42,250 Other Interest 6,453 Preferred Stock Dividends 5,256 Accrued taxes 20,681 To record decrease in interest costs associated with debt repurchase and the related tax effect. g) PSNH Write off 225,000 - Regulatory Assets - other 225,000 To record extraordinary loss associated with the restructuring settlement agreement in New Hampshire. h. Cash 943,089 Electric Utility Plant 156,200 Recoverable Nuclear Costs 701,198 Nuclear Fuel 85,691 To record the sale of CL&P and WMECO's ownership interest in Millstone, expenses associated with sale and reduction in stranded costs i. Decommissioning obligation - Millstone 1 683,234 Accumulated Provision for Depreciation 357,185 Deferred Charges, Other 48,317 Nuclear Decommissioning Trusts 693,083 Cash 61,396 Recoverable Nuclear Costs 334,257 To record the funding and transfer of decommissioning trust funds and decommissioning liability j. Cash 170,349 Accumulated Provision for Depreciation 10,800 Other income 181,149 To record Proceeds from Joint Owner Settlement and CMEEC impacts k. Accumulated Deferred Income tax 245,848 Income taxes 68,140 Cash 313,988 To reflect taxes associated with the gain on the sale of CL&P's ownership interest in Millstone and income from Joint Owner Settlement and CMEEC impacts. l. Common Shares 147,059 Capital Surplus, paid in 352,941 Long-term debt 209,716 Long-term debt, current portion 60,000 Obligations Under Capital leases 49,009 Obligations Under Capital leases Current portion 111,026 Notes payable to banks 56,421 Unamortized debt expense 17,873 Cash 1,004,045 To reflect retirement of common shares, long- term debt, retirement of Niantic Bay Fuel Trust Notes and retirement of short-term debt with proceeds of sale m. Federal and State Income Tax 15,931 Accrued interest 24,365 Cash 15,462 Fuel, purchased and net interchange power 15,462 Interest on Long-Term Debt 20,678 Other Interest 3,687 Accrued Taxes 15,931 To reflect reduced Niantic Bay Fuel Trust payments, reduced interest on debt and increase of cash and associated tax impacts. EX-99.4 5 0005.txt CL&P BALANCE SHEETS Exhibit 2.1 THE CONNECTICUT LIGHT AND POWER COMPANY AND SUBSIDIARIES PRO FORMA BALANCE SHEET - ASSETS* AS OF SEPTEMBER 30, 2000 Unaudited (Thousands of Dollars)
Pro Forma Giving Millstone Effect to Per Book Securitization Sale Adjustments -------- -------------- --------- ----------- Utility Plant, at cost: Electric $5,722,708 $ $(120,700) (8) $5,602,608 Less: Accumulated provision for depreciation 4,202,763 (290,530) (9) 3,912,233 ---------- ---------- --------- ---------- 1,519,945 0 169,830 1,689,775 Construction work in progress 112,624 112,624 Nuclear fuel, net 73,520 (69,503) (8) 4,017 ---------- ---------- --------- ---------- Total net utility plant 1,706,089 0 100,327 1,806,416 ---------- ---------- ---------- ---------- Other Property and Investments: Nuclear decommissioning trusts, at market 549,373 (540,123) (10) 9,250 Investments in regional nuclear generating companies, at equity 55,907 55,907 Other, at cost 30,882 30,882 ---------- ---------- ---------- ---------- 636,162 0 (540,123) 96,039 ---------- ---------- ---------- ---------- Current Assets: Cash 5,242 0 (1) 12,524 (11) 17,766 Special Deposits 100,000 (2) 100,000 Investment in securitizable assets 62,635 62,635 Notes receivable from affiliated companies 80,400 80,400 Receivables, net 36,232 36,232 Accounts receivable from affiliated companies 135,821 135,821 Fuel, materials and supplies, at average cost 40,206 40,206 Prepayments and other 197,864 197,864 ---------- ---------- ---------- --------- 558,400 100,000 12,524 670,924 Deferred Charges: Regulatory assets: Recoverable nuclear costs 1,128,135 (856,533) (12) 271,602 Income taxes, net 377,209 377,209 Unrecovered contractual obligations 177,257 177,257 Recoverable energy costs, net 85,445 85,445 Other 66,213 1,051,602 (3) 1,117,815 Unamortized debt expense 14,977 15,209 (13) 30,186 Other 34,486 34,486 ---------- ---------- ---------- ---------- 1,883,722 1,051,602 (841,324) 2,094,000 ---------- ---------- ---------- ---------- Total Assets $4,784,373 $1,151,602 $(1,268,596) $4,667,379 ========== ========== ========== ===========
**The pro forma balance sheet reflects only the use of proceeds from the described transactions and the direct related impacts on the company's capital structure. THE CONNECTICUT LIGHT AND POWER COMPANY AND SUBSIDIARIES PRO FORMA BALANCE SHEET - CAPITALIZATION AND LIABILITIES* AS OF SEPTEMBER 30, 2000 Unaudited (Thousands of Dollars)
Pro Forma Giving Millstone Effect to Per Book Securitization Sale Adjustments -------- -------------- --------- ----------- Capitalization: Common stock $ 75,849 $ $ $ 78,849 Capital surplus, paid in 412,993 (100,000) (13) 312,993 Retained earnings 208,816 19,659 19,035 (13) 247,510 Accumulated other comprehensive income 802 802 ---------- ---------- ---------- ----------- Total common stockholder's equity 698,460 19,659 (80,965) 637,154 Preferred stock not subject to mandatory redemption 116,200 116,200 Long-term debt 1,069,615 (86,284) (4) (169,716) (13) 813,615 ---------- ---------- ---------- ----------- Total capitalization 1,884,275 (66,625) (250,681) 1,566,969 ---------- ---------- ---------- ----------- Minority Interest in Consolidated Subsidiary 100,000 (100,000) (4) 0 ---------- ---------- ---------- ----------- Obligations Under Capital Leases 42,459 (42,459) (13) 0 ---------- ---------- ---------- ----------- Rate Reduction Bond Obligation 0 1,550,242 (5) 1,550,242 ---------- ---------- ---------- ----------- Current Liabilities: Notes payable to banks 110,000 (52,356) (4) 86,389 (13) ( 28,745) Long-term debt and preferred stock-current portion 160,000 (160,000) (4) 0 Obligations under capital leases current portion 90,023 (90,023) (13) 0 Accounts payable 155,217 155,217 Accounts payable to affiliated companies 123,167 123,167 Accrued taxes 70,166 (407,535) (6) 12,690 (14) (324,679) Accrued interest 16,652 (32,765) (7) (19,200) (14) (35,313) Other 29,065 29,065 ---------- ---------- ---------- ----------- 754,290 (652,656) (182,922) (81,288) ---------- ---------- ---------- ----------- Deferred Credits and Other Long-Term Liabilities: Accumulated deferred income taxes 980,728 420,641 (3) (199,981) (15) 1,201,388 Accumulated deferred investment tax credits 101,594 101,594 Decommissioning obligation - Millstone 1 592,552 (592,552) (10) 0 Deferred contractual obligations 167,698 167,698 Other 160,777 160,777 ---------- ---------- ---------- ----------- 2,003,349 420,641 (792,533) 1,631,457 ---------- ---------- ---------- ----------- Total Capitalization and Liabilities $4,784,373 $1,151,602 $(1,268,596) $4,667,379 ========== ========== ========== ===========
*The pro forma balance sheet reflects only the use of proceeds from the described transactions and the direct related impacts on the company's capital structure. Exhibit 2.2 THE CONNECTICUT LIGHT AND POWER COMPANY AND SUBSIDIARIES PRO FORMA INCOME STATEMENT* FOR THE 12 MONTHS ENDED SEPTEMBER 30, 2000 Unaudited (Thousands of Dollars)
Pro Forma Giving Millstone Effect to Per Book Securitization Sale Adjustments -------- -------------- --------- ----------- ---------- ---------- --------- ---------- Operating Revenues $2,793,144 $ $ $2,793,144 ---------- ---------- --------- ---------- Operating Expenses: Operation - Fuel, purchased and net interchange power 1,427,996 (12,524) (14) 1,415,472 Other 429,412 429,412 Maintenance 149,207 149,207 Depreciation 121,507 121,507 Amortization of regulatory assets, net 390,410 390,410 Federal and state income taxes 168,046 13,106 (7) (12,690) (14) 193,842 Taxes other than income taxes 144,357 144,357 Gain on sale of utility plant (286,477) (286,477) ---------- ---------- ---------- ---------- Total operating expenses 2,544,458 13,106 166 2,557,730 ---------- ---------- ---------- ---------- Operating Income 248,686 (13,106) (166) 235,414 ---------- ---------- ---------- ---------- Other Income (Loss): Equity in earnings of regional nuclear generating companies 2,857 2,857 Nuclear related costs (53,858) (53,858) Other, net (20,783) 151,237 (16) 130,454 Minority interest in loss of subsidiary (9,300) (9,300) Income taxes, net 34,726 (56,175) (15) (21,449) ---------- ---------- ---------- ---------- Other(loss)income, net (46,358) 0 95,062 48,704 ---------- ---------- --------- ---------- Income before interest charges 202,328 (13,106) 94,897 284,119 ---------- ---------- --------- ---------- Interest charges: Interest on long-term debt 99,167 (29,007) (7) (13,153) (14) 57,007 Other interest 9,344 (3,758) (7) (6,047) (14) (461) ---------- ---------- --------- ---------- Interest charges, net 108,511 (32,765) (19,200) 56,546 Net income $ 93,817 $ 19,659 $ 114,097 $ 227,573 ---------- ---------- --------- ---------- Preferred Stock Dividends 9,169 9,169 ---------- ---------- --------- ---------- Earnings for Common Shares $ 84,648 $ 19,659 $ 114,097 $ 218,404 ========== ========== ========== ===========
*The pro forma income statement only reflects the changes in interest expense (net of tax) and preferred dividends that directly result from the described transactions. Adjustments for interest and Principal Amortization on the Rate Reduction Bond Obligation are not included due to the corresponding offset in amortizations. THE CONNECTICUT LIGHT AND POWER COMPANY AND SUBSIDIARIES PRO FORMA STAETEMENT OF RETAINED EARNINGS AS OF SEPTEMBER 30, 2000 Unaudited (Thousands of Dollars)
Exhibit 2.1 Pro Forma Giving Millstone Effect to Per Book Securitization Sale Adjustments -------- -------------- --------- ----------- Balance at beginning of period $ 159,435 $ 159,435 ---------- ---------- ---------- ----------- Net Income 93,817 19,659 114,097 (13) 227,573 Cash dividends on preferred stock (9,169) (9,169) Cash dividends on common stock (35,000) (95,062) (130,062) ESOP contribution (267) (267) ---------- ---------- ---------- ----------- Balance at end of period 208,816 19,659 19,035 247,510
THE CONNECTICUT LIGHT AND POWER COMPANY AND SUBSIDIARIES PRO FORMA CAPITAL STRUCTURE AS OF SEPTEMBER 30, 2000 Unaudited (Thousands of Dollars)
Pro Forma Giving Millstone Effect to Per Book Securitization Sale Adjustments Long-term debt $1,229,615 $ (246,284) (169,716) 813,615 Preferred stock not subject to mandatory redemption 116,200 116,200 Common stock equity 698,460 19,659 (80,965) 637,154 ---------- ---------- ---------- ----------- Total Capitalization $2,044,275 $ (226,625) $(250,681) $1,566,969 ========== ========== ========== ===========
[1] see adjustments a, b,c and d [2] see adjustment d [3] see adjustments b and d [4] see adjustment c [5] see adjustment a [6] see adjustments b, d and e [7] see adjustment e [8] see adjustment f [9] see adjustments g and h [10] see adjustment g [11] see adjustments f, g, h, i, j and k [12] see adjustment f and g [13] see adjustment j [14} see adjustments k [15] see adjustment i [16] see adjustment h THE CONNECTICUT LIGHT AND POWER COMPANY AND SUBSIDIARIES PRO FORMA ADJUSTMENTS TO FINANCIAL STATEMENTS (Thousands of Dollars)
Debit Credit SECURITIZATION ADJUSTMENTS: a) Cash $1,550,242 Rate reduction bond obligation $1,550,242 To record the issuance of rate reduction bonds. b) Regulatory assets - other 15,133 Accrued taxes 6,053 Cash 15,133 Accumulated deferred income taxes 6,053 To record issuance expenses associated with securitization and related tax effect c) Notes payable to banks 52,356 Minority interest in consolidated subsidiary 100,000 Long-term debt and preferred stock current portion 160,000 Long-term debt 86,284 Cash 398,640 To record the use of securitization proceeds to retire short-term and long-term debt. d) Regulatory assets - other 1,036,469 Accrued taxes 414,588 Special deposits 100,000 Cash 1,136,469 Accumulated deferred income taxes 414,588 To record the buyout of IPP contracts, establishment of escrow and related tax effect. e) Accrued interest 32,765 Federal and State Income Taxes 13,106 Interest on Long-term debt 29,007 Other interest 3,758 Accrued taxes 13,106 To record decrease ininterest costs associated with debt repurchase and the related tax effect. MILLSTONE SALE f) Cash 764,308 Electric Utility Plant 120,700 Recoverable Nuclear Costs 574,105 Nuclear Fuel 69,503 To record the sale of CL&P's ownership interest in Millstone, expenses associated with sale and reduction in stranded costs. g) Decommissioning obligation - Millstone 1 592,552 Accumulated Provision for Depreciation 279,730 Recoverable Nuclear Costs Nuclear Decommissioning Trusts 540,123 Cash 49,731 Recoverable Nuclear Costs 282,428 To record the funding and transfer of decommissioning trust funds and decommissioning liability. h. Cash 140,437 Electric Utility Plant 10,800 Other Income 151,237 To record Proceeds from Joint Owner Settlement and CMEEC impacts i. Accumulated Deferred Income tax 199,981 Income taxes 56,175 Cash 256,156 To reflect taxes associated with the gain on the sale of CL&P's ownership interest in Millstone and income from Joint Owner Settlement and CMEEC impacts. j. Capital surplus, paid in 100,000 retained earnings 95,062 Long term debt 169,716 Obligations Under Capital Leases 42,459 Obligations under capital leases- Current Portion 90,023 Notes payable to banks 86,389 Unamortized debt expense 15,209 Cash 598,858 To reflect dividends from capital surplus, dividends from retained earnings, retirement of long-term debt, retirement of Niantic Bay Fuel Trust Notes and retirement of short-term debt with proceeds of sale. k. Federal and State Income taxes 12,690 Accrued interest 19,200 Cash 12,524 Fuel, purchased and net interchange power 12,524 Interest on Long-Term Debt 13,524 Other interest 6,047 Accrued taxes 12,690 To reflect reduced Niantic Bay Fuel Trust payments, reduced interest on debt and increase of cash and associated tax impacts.
EX-99.5 6 0006.txt WMECO BALANCE SHEETS Exhibit 3.1 WESTERN MASSACHUSETTS ELECTRIC COMPANY AND SUBSIDIARY PRO FORMA BALANCE SHEET - ASSETS* AS OF SEPTEMBER 30, 2000 Unaudited (Thousands of Dollars)
Pro Forma Giving Millstone Effect to Per Book Securitization Sale Adjustments -------- -------------- --------- ----------- Utility Plant, at cost: Electric $1,107,511 $ $ (35,500) (8) $1,072,011 Less: Accumulated provision for depreciation 792,208 (77,455) (9) 714,753 ---------- ---------- --------- ---------- 315,303 0 41,955 357,258 Construction work in progress 20,240 20,240 Nuclear fuel, net 17,013 (16,188) (8) 825 ---------- ---------- --------- ---------- Total net utility plant 352,556 0 25,767 378,323 ---------- ---------- ---------- ---------- Other Property and Investments: Nuclear decommissioning trusts, at market 152,960 (152,960) (9) 0 Investments in regional nuclear generating companies, at equity 15,121 15,121 Other, at cost 6,356 6,356 ---------- ---------- ---------- ---------- 174,437 0 (152,960) 21,477 ---------- ---------- ---------- ---------- Current Assets: Cash 112 2,684 (1) 2,937 (10) 5,733 Receivables, net 34,076 34,076 Accounts receivable from affiliated companies 16,249 16,249 Taxes receivable 2,212 2,212 Accrued utility revenues 14,784 14,784 Fuel, materials and supplies, at average cost 1,640 1,640 Prepayments and other 47,104 47,104 ---------- ---------- ---------- ---------- Deferred Charges: Regulatory assets: Recoverable nuclear costs 258,937 (178,922) (11) 80,015 Income taxes, net 50,359 50,359 Unrecovered contractual obligations 44,352 44,352 Recoverable energy costs, net 7,168 7,168 Other 43,932 85,000 (2) 128,932 Unamortized debt expense 1,689 2,664 (12) 4,353 Other 4,500 4,500 ---------- ---------- ---------- ---------- 410,937 85,000 (176,258) 319,679 ---------- ---------- ---------- ---------- Total Assets $1,054,107 $ 87,684 $(300,513) $ 841,278 ========== ========== ========= ==========
*The pro forma balance sheet reflects only the use of proceeds from the described transactions and the direct related impacts on the company's capital structure. WESTERN MASSACHUSETTS ELECTRIC COMPANY AND SUBSIDIARY PRO FORMA BALANCE SHEET - CAPITALIZATION AND LIABILITIES* AS OF SEPTEMBER 30, 2000 Unaudited (Thousands of Dollars)
Pro Forma Giving Millstone Effect to Per Book Securitization Sale Adjustments -------- -------------- --------- ----------- Capitalization: Common stock $ 14,752 $ $ $ 14,752 Capital surplus, paid in 93,945 (780) (3) (21,000) (12) 72,165 Retained earnings 52,223 4,301 4,862 (12) 61,386 Accumulated other comprehensive income 267 267 ---------- ---------- ---------- ----------- Total common stockholder's equity 161,187 3,521 (16,138) 148,570 Preferred stock not subject to mandatory redemption 20,000 (20,000) (4) 0 Preferred stock subject to mandatory redemption 15,000 (15,000) (4) 0 Long-term debt 138,699 (40,000) (12) 98,699 ---------- ---------- ---------- ----------- Total capitalization 334,886 (31,479) (56,138) 247,269 ---------- ---------- ---------- ----------- Obligations Under Capital Leases 0 155,000 (5) 155,000 ---------- ---------- ---------- ----------- Rate Reduction Bond Obligation Current Liabilities: Notes payable to banks 110,000 (34,220) (4) 29,968 (12) 105,748 Notes payable to affiliated company 16,600 16,600 Long-term debt and preferred stock - current portion 61,500 (60,000) (12) 1,500 Obligations under capital leases - current portion 21,003 (21,003) (12) 0 Accounts payable 28,689 28,689 Accounts payable to affiliated companies 5,099 5,099 Accrued taxes 1,705 (32,922) (6) 3,241 (13) (27,976) Accrued interest 2,998 (2,695) (7) (5,165) (13) (4,862) Other 11,030 11,030 ---------- ---------- ---------- ----------- 258,624 (69,837) (52,959) 135,828 ---------- ---------- ---------- ----------- Deferred Credits and Other Long-Term Liabilities: Accumulated deferred income taxes 225,322 34,000 (2) (45,867) (14) 213,455 Accumulated deferred investment tax credits 17,918 17,918 Decommissioning obligation - Millstone 1 138,999 (138,999) (9) 0 Deferred contractual obligations 44,352 44,352 Other 27,456 27,456 ---------- ---------- ---------- ----------- 454,047 34,000 (184,866) 303,181 ---------- ---------- ---------- ----------- Total Capitalization and Liabilities $1,054,107 $ 87,684 $(300,513) $ 841,278 ========== ========== ========== ===========
*The pro forma balance sheet reflects only the use of proceeds from the described transactions and the direct related impacts on the company's capital structure. Exhibit 3.2 WESTERN MASSACHUSETTS ELECTRIC COMPANY AND SUBSIDIARY PRO FORMA INCOME STATEMENT* FOR THE 12 MONTHS ENDED SEPTEMBER 30, 2000 Unaudited (Thousands of Dollars)
Pro Forma Giving Millstone Effect to Per Book Securitization Sale Adjustments -------- -------------- --------- ----------- Operating Revenues $ 479,840 $ $ $ 479,840 ========= ========== ========= ========== Operating Expenses: Operation - Fuel, purchased and net interchange power 216,724 (2,938) (13) 213,786 Other 106,035 106,035 Maintenance 31,137 31,137 Depreciation 18,138 18,138 Amortization of regulatory assets, net 43,631 43,631 Federal and state income taxes 10,606 1,078 (7) 3,241 (13) 14,925 Taxes other than income taxes 18,166 18,166 Gain on sale of utility plant (1,196) (1,196) --------- ------- --------- ---------- Total operating expenses 443,241 1,078 303 444,622 --------- ------- --------- ---------- Operating Income 36,599 (1,078) (303) 35,218 --------- ------- --------- ---------- Operating Income/(Loss): Equity in earnings of regional nuclear generating companies 770 770 Nuclear related costs (14,496) (14,496) Other, net 780 29,912 (15) 30,692 Income taxes 9,681 (11,965) (14) (2,284) Other (loss)/income, net (3,265) 0 17,947 14,682 --------- ------- --------- ---------- Income before interest charges 33,334 (1,078) 17,644 49,900 --------- ------- --------- ---------- Interest Charges Interest on long-term debt 16,995 (7,525) (13) 9,470 Other interest 10,208 (2,695) (7) 2,360 (13) 9,873 --------- ------- --------- ---------- Interest charges, net 27,203 (2,695) (5,165) 19,343 --------- ------- --------- ---------- Net Income 6,131 1,617 22,809 30,557 --------- ------- --------- ---------- Preferred Stock Dividends 2,827 (2,684) (7) 143 --------- ------- --------- ---------- Earnings for Common Shares $ 3,304 $ 4,301 $ 22,809 $ 30,414 ========= ======= ========= ==========
*The pro forma income statement only reflects the changes in interest expense (net of tax) and preferred dividends that directly result from the described transactions. Adjustments for Interest and Principal Amortization on the Rate Reduction Bond Obligation are not included due to the corresponding offset in amortizations. WESTERN MASSACHUSETTS ELECTRIC COMPANY AND SUBSIDIARY PRO FORMA STATEMENT OF RETAINED EARNINGS AS OF SEPTEMBER 30, 2000 Unaudited (Thousands of Dollars)
Pro Forma Giving Millstone Effect to Per Book Securitization Sale Adjustments -------- -------------- --------- ----------- Balance at beginning of period $ 56,979 $ $ 56,979 Net income 6,131 1,617 22,809 30,557 Cash dividends on preferred stock (2,827) 2,684 (143) Cash dividends on common stock (8,002) (17,947) (25,949) ESOP contribution (58) (58) --------- -------- -------- --------- Balance at end of period $ 52,223 $ 4,301 $ 4,862 $ 61,386 ========= ======= ======== =========
WESTERN MASSACHUSETTS ELECTRIC COMPANY AND SUBSIDIARY PRO FORMA CAPITAL STRUCTURE AS OF SEPTEMBER 30, 2000 Unaudited (Thousands of Dollars)
Pro Forma Giving Millstone Effect to Per Book Securitization Sale Adjustments -------- -------------- --------- ----------- Long-Term Debt $ 198,699 $ $(100,000) $ 98,699 Preferred stock not subject to mandatory redemption 20,000 (20,000) 0 Preferred stock subject to mandatory redemption 16,500 (15,000) 1,500 Common stock equity 161,187 3,521 (16,138) 148,570 --------- -------- --------- --------- Total Capitalization $ 396,386 (31,479) $(116,138) $ 248,769 ========= ======== ========= =========
[1] - See adjustments a, b, c, d, e and f. [2] - See adjustments b and e. [3] - See adjustment d. [4] - See adjustment c. [5] - See adjustment a. [6] - See adjustments b, e and f. [7] - See adjustment f. [8] - See adjustment g. [9] - See adjustment h. [10] - See adjustments g, h, i, j, k and l. [11] - See adjustments g and h. [12] - See adjustment k. [13] - See adjustment l. [14] - See adjustment j. [15] - See adjustment i. WESTERN MASSACHUSETTS ELECTRIC COMPANY AND SUBSIDIARY PRO FORMA ADJUSTMENTS TO FINANCIAL STATEMENTS (Thousands of Dollars) Debit Credit ----- ------ SECURITIZATION ADJUSTMENTS: a) Cash 155,000 Rate reduction bond obligation 155,000 To record the issuance of rate reduction bonds. b) Regulatory assets - other 5,578 Accrued taxes 2,231 Cash 5,578 Accumulated deferred income taxes 2,231 To record the deferral of issuance expenses associated with securitization and related tax effect. c) Notes payable to banks 34,220 Preferred stock subject to mandatory redemption 15,000 Preferred stock not subject to mandatory redemption 20,000 Cash 69,220 To record the use of securization proceeds to retire short-term debt and preferred stock. d) Capital Surplus, paid in 780 Cash 780 To record the associated costs and premiums of retiring Preferred Stock e) Regulatory assets - other 79,422 Accrued Taxes 31,769 Cash 79,422 Accumulated deferred income taxes 31,769 To record the buyout of IPP contracts and related tax effect. f) Accrued interest 2,695 Cash 2,684 Federal and state income taxes 1,078 Other Interest 2,695 Preferred Stock Dividends 2,684 Accrued taxes 1,078 To record decrease in interest costs associated with debt repurchase, increase in cash from reduction in preferred stock dividends on stock retired and the related increase in taxes from reduction in interest expense. MILLSTONE SALE ADJUSTMENTS g) Cash 178,781 Electric Utility Plant, Net 35,500 Recoverable Nuclear Costs 127,093 Nuclear Fuel 16,188 To record the sale of WMECO's ownership interest in Millstone and reduction in stranded costs. h) Accumulated Provision for Depreciation 77,455 Decommissioning obligation - Millstone 1 138,999 Nuclear Decommissioning Trusts 152,960 Recoverable Nuclear Costs 51,829 Cash 11,665 To record the funding and transfer of decommissioning trust funds and decommissioning liability. i) Cash 29,912 Other income 29,912 To record proceeds from Joint Owner Settlement. j) Accumulated Deferred Income Tax 45,867 Income taxes 11,965 Cash 57,832 To reflect taxes associated with the gain on the sale of WMECO's ownership interest in Millstone and income from Joint Owner Settlement k) Capital surplus, paid in 21,000 Retained earnings 17,947 Long-term debt 40,000 Long-term debt - current portion 60,000 Obligations Under Capital Leases 6,550 Obligations Under Capital Leases - Current Portion 21,003 Unamortized debt expense 2,664 Notes payable to banks 29,968 Cash 139,196 To reflect dividends from capital surplus, dividends from retained earnings, retirement of long-term debt, retirement of Niantic Bay Fuel Trust Notes and retirement of short-term debt with proceeds of sale l) Federal and State Income Tax 3,241 Accrued Interest 5,165 Cash 2,938 Other Interest 2,360 Fuel, purchased and net interchange power 2,938 Interest on Long-Term Debt 7,525 Accrued Taxes 3,241 To reflect reduced Niantic Bay Fuel Trust payments, reduced interest on debt and increase of cash and associated tax impacts. -----END PRIVACY-ENHANCED MESSAGE-----