U-9C-3 1 december2001u9c3.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549-1004 FORM U-9C-3 QUARTERLY REPORT PURSUANT TO RULE 58 For the quarterly period ended December 31, 2001 Northeast Utilities ------------------- (Name of registered holding company) 107 Selden Street, Berlin, CT 06037 ----------------------------------- (Address of Principal Executive Officers) Name and telephone number of officer to whom inquiries concerning this report should be directed: John P. Stack, Vice President-Accounting and Controller Telephone Number: 860-665-2333 GENERAL INSTRUCTIONS A. Use of Form 1. A reporting company, as defined herein, shall file a report on this form within 60 days after the end of each of the first three quarters, and within 90 days after the end of the fourth quarter, of the fiscal year of the registered holding company. The period beginning on the date of effectiveness of rule 58 and ending at the end of the quarter following the quarter in which the rule becomes effective shall constitute the initial period for which any report shall be filed, if applicable. 2. The requirement to provide specific information by means of this form supersedes any requirement by order of the Commission to provide identical information by means of periodic certificates under rule 24; but does not so supersede and replace any requirement by order to provide information by means of an annual report on Form U-13-60. 3. Information with respect to reporting companies that is required by Form U-13-60 shall be provided exclusively on that form. 4. Notwithstanding the specific requirements of this form, this Commission may informally request such further information as, in its opinion, may be necessary or appropriate. B. Statements of Monetary Amounts and Deficits 1. Amounts included in this form and in related financial statements may be expressed in whole dollars, thousands of dollars or hundred thousands of dollars. 2. Deficits and other similar entries shall be indicated by either brackets or parentheses. An explanation should be provided by footnote. C. Formal Requirements This form, including exhibits, shall be filed with Commission electronically pursuant to Regulation S-T (17 CFR 232.10 et seq.). A conformed copy of each such report shall be filed with each state commission having jurisdiction over the retail rates of a public utility company that is an associate company of a reporting company. Each report shall provide the name and telephone number of the person to whom inquiries concerning this report should be directed. D. Definitions As used in this form, the word "reporting company" means an energy-related company or gas-related company, as defined in rule 58(b). All other words and terms have the same meaning as in the Public Utility Holding Company Act of 1935, as amended, and the rules and regulations thereunder. ITEM 1 - ORGANIZATIONAL CHART ------------------------------------------------------------------------------- Instructions ------------------------------------------------------------------------------- 1. Complete Item 1 only for the first three calendar quarters of the fiscal year of the registered holding company. 2. Under the caption "Name of Reporting Company," list each energy- related and gas-related company and each system company that directly or indirectly holds securities thereof. Add the designation "(new)" for each reporting company of which securities were acquired during the period, and the designation "(*)" for each inactive company. 3. Under the caption "Percentage of Voting Securities Held," state the aggregate percentage of the outstanding voting securities of the reporting company held directly or indirectly by the registered holding company at the end of the quarter. 4. Provide a narrative description of each reporting company's activities during the reporting period. ------------------------------------------------------------------------------- 4th quarter not required. ITEM 2 - ISSUANCES AND RENEWALS OF SECURITIES AND CAPITAL CONTRIBUTIONS ------------------------------------------------------------------------------- Instruction ----------- With respect to a transaction with an associate company, report only the type and principal amount of securities involved. -------------------------------------------------------------------------------
Person Company Type of Principal to Whom Collateral Consideration Company Amount of Issuing Security Amount of Issue or Cost of Security Given With Received for Contributing Capital Security Issued Security Renewal Capital Was Issued Security Each Security Capital Contribution -------------- -------- ------------ -------- ------- ----------- ---------- ------------- ------------ ------------ NU Select Enterprises, Energy, Inc. N/A N/A N/A N/A N/A N/A N/A Inc. $10,000,000 Northeast Generation NU Services Enterprises, Company N/A N/A N/A N/A N/A N/A N/A Inc. $ 925,000 Select Energy Contracting, Inc. No transactions this quarter. Reeds Ferry Supply Co., Inc. No transactions this quarter. HEC/Tobyhanna Energy Project, Inc. No transactions this quarter. Yankee Energy Services Company No transactions this quarter. R. M. Services, Inc. No transactions this quarter. Acumentrics Corporation No transactions this quarter. ERI/HEC EFA-Med, LLC No transactions this quarter. E.S. Boulos Company No transactions this quarter. NGS Mechanical Company No transactions this quarter. HEC/CJTS Energy Select Energy Center LLC N/A N/A N/A N/A N/A N/A N/A Services, Inc. $ 10,000 Northeast Select Energy Utilities Advance $33,502,000 N/A N/A New York, Inc. N/A N/A N/A Select Energy Select Energy, New York, Inc. N/A N/A N/A N/A N/A N/A N/A Inc. $ 5,000,000
ITEM 3 - ASSOCIATE TRANSACTIONS ------------------------------------------------------------------------------- Instructions ------------ 1. This item is used to report the performance during the quarter of contracts among reporting companies and their associate companies, including other reporting companies, for service, sales and construction. A copy of any such contract not filed previously should be provided as an exhibit pursuant to Item 6.B. 2. Parts I and II concern transactions performed by reporting companies on behalf of associate companies, and transactions performed by associate companies on behalf of reporting companies, respectively. ------------------------------------------------------------------------------- Part I - Transactions performed by reporting companies on behalf of associate companies.
Total Amount Billed* Reporting Associate Company Company Types of Three Months Rendering Receiving Services Ended Services Services Rendered December 31, 2001 ----------------------- ------------------- -------------- ------------------ (Thousands of Dollars) Northeast Select Generation Energy, Inc. Electrical and Services Mechanical services $ 12 Company ================== Northeast The Generation Connecticut Services Light & Power Electrical and Company Company Mechanical services $ 2 ================== Northeast Western Generation Massachusetts Electrical and Services Electric Company Mechanical services $ 13 Company ================== Northeast Public Service Generation Company of Electrical and Services New Hampshire Mechanical services $ 253 Company ================== Northeast Holyoke Water Generation Power Company Electrical and Services Mechanical services $ 2,930 Company ================== Northeast Northeast Generation Generation Electrical and Services Company Mechanical services $ 6,087 Company ================== Wholesale Reeds Ferry Select Energy Purchasing Supply Co., Inc. Contracting, Inc. Services $ 295 ================== Northeast North Atlantic Generation Energy Service Electrical and Services Corporation Mechanical services $ 24 Company ================== Northeast Generation Yankee Energy Electrical and Services Services Company Mechanical services $ 69 Company ================== Northeast Northeast Generation Utilities Services Service Electrical and Company Company Mechanical services $ 38 ==================
Part II - Transactions performed by associate companies on behalf of reporting companies.
Total Amount Billed* Associate Reporting Company Company Types of Three Months Rendering Receiving Services Ended Services Services Rendered December 31, 2001 ----------------------- ------------------- -------------- ------------------ (Thousands of Dollars) Public Service Company Select of New Hampshire Energy, Inc. Miscellaneous $ 12 ==================
* 'Total Amount Billed' is direct costs only. ITEM 4 - SUMMARY OF AGGREGATE INVESTMENT Investments in energy-related companies: --------------------------------------- (Thousands of Dollars) Total consolidated capitalization as of12/31/01 $6,885,709 line 1 Total capitalization multiplied by 15% (line 1 multiplied by .15) 1,032,856 line 2 Greater of $50 million or line 2 $1,032,856 line 3 Total current aggregate investment: (categorized by major line of energy-related business): Select Energy, Inc. $616,950 Northeast Generation Services Company 25,336 Select Energy Contracting, Inc. 36,656 Select Energy New York, Inc. 36,699 Reeds Ferry Supply Co., Inc. 7 HEC/Tobyhanna Energy Project, Inc. - Yankee Energy Services Company 10,582 E.S. Boulos Company 7,539 R.M. Services, Inc. 13,799 NGS Mechanical Company 10 Acumentrics Corporation 10,000 ERI/HEC EFA-Med, LLC 6 HEC/CJTS Energy Center LLC 10 ----------- Total current aggregate investment 757,594 line 4 ----------- Difference between the greater of $50 million or 15% of capitalization and the total aggregate investment of the registered holding company system $275,262 line 5 =========== ITEM 5 - OTHER INVESTMENTS ------------------------------------------------------------------------------- Instruction ----------- This item concerns investments in energy-related and gas-related companies that are excluded from the calculation of aggregate investment under rule 58. ------------------------------------------------------------------------------- Major Line Other Other of Energy- Investment Investment Related in Last in This Reason for Difference Business U-9C-3 Report U-9C-3 Report in Other Investment ------------- ------------- ------------- ------------------------ NONE ITEM 6 - FINANCIAL STATEMENTS AND EXHIBITS ------------------------------------------------------------------------------- Instructions ------------------------------------------------------------------------------- A. Financial Statements 1. Financial statements are required for reporting companies in which the registered holding company system has at least 50% equity or other ownership interest. For all other rule 58 companies, the registered holding company shall make available to the Commission such financial statements as are available to it. 2. For each reporting company, provide a balance sheet as of the end of the quarter and income statements for the three- month and year-to-date periods ending as of the end of the quarter, together with any notes thereto. Financial statements shall be for the first three quarters of the fiscal year of the registered holding company. 3. If a reporting company and each of its subsidiaries engage exclusively in single category of energy-related or gas- related activity, consolidated financial statements may be filed. 4. Separate financial statements need not be filed for inactive companies or for companies engaged solely in the ownership of interests in energy-related or gas-related companies. B. Exhibits 1. Copies of contracts required to be provided by Item 3 shall be filed as exhibits. 2. A certificate stating that a copy of the report for the previous quarter has been filed with interested state commissions shall be filed as an exhibit. The certificate shall provide the names and addresses of the state commissions. A. Financial Statements Select Energy, Inc. (Unconsolidated): Balance Sheet - As of December 31, 2001 Income Statement - Three months and twelve months ended December 31, 2001 Select Energy New York, Inc.: Balance Sheet - As of December 31, 2001 Income Statement - Three months and twelve months ended December 31, 2001 Northeast Generation Services Company: Balance Sheet - As of December 31, 2001 Income Statement - Three months and twelve months ended December 31, 2001 Select Energy Contracting, Inc.: Balance Sheet - As of December 31, 2001 Income Statement - Three months and twelve months ended December 31, 2001 Reeds Ferry Supply Co., Inc.: Balance Sheet - As of December 31, 2001 Income Statement - Three months and twelve months ended December 31, 2001 HEC/Tobyhanna Energy Project, Inc.: Balance Sheet - As of December 31, 2001 Income Statement - Three months and twelve months ended December 31, 2001 Yankee Energy Services Company: Balance Sheet - As of December 31, 2001 Income Statement - Three months and twelve months ended December 31, 2001 ERI/HEC EFA-Med, LLC: Not available as of December 31, 2001 E. S. Boulos Company: Balance Sheet - As of December 31, 2001 Income Statement - Three months and twelve months ended December 31, 2001 NGS Mechanical Company: Balance Sheet - As of December 31, 2001 Income Statement - Three months and twelve months ended December 31, 2001 HEC/CJTS Energy Center LLC: Balance Sheet - As of December 31, 2001 Income Statement - Three months and twelve months ended December 31, 2001 Northeast Utilities (Parent): 4th quarter not required B. Exhibits Exhibit No. Description ----------- ----------- 6.B.1.1a Copy of contract required by Item 3 - filed under confidential treatment pursuant to Rule 104(b). 6.B.1.1b Copy of contract required by Item 3 - filed under confidential treatment pursuant to Rule 104(b). 6.B.1.1c Copy of contract required by Item 3 - filed under confidential treatment pursuant to Rule 104(b). 6.B.1.1d Copy of contract required by Item 3 - filed under confidential treatment pursuant to Rule 104(b). 6.B.1.1e Copy of contract required by Item 3 - filed under confidential treatment pursuant to Rule 104(b). 6.B.1.1f Copy of contract required by Item 3 - filed under confidential treatment pursuant to Rule 104(b). 6.B.1.1g Copy of contract required by Item 3 - filed under confidential treatment pursuant to Rule 104(b). 6.B.1.1h Copy of contract required by Item 3 - filed under confidential treatment pursuant to Rule 104(b). 6.B.1.1i Copy of contract required by Item 3 - filed under confidential treatment pursuant to Rule 104(b). 6.B.1.1j Copy of contract required by Item 3 - filed under confidential treatment pursuant to Rule 104(b). 6.B.1.2a Copy of contract required by Item 3 - filed under confidential treatment pursuant to Rule 104(b). 6.B.1.2b Copy of contract required by Item 3 - filed under confidential treatment pursuant to Rule 104(b). 6.B.1.3 Copy of contract required by Item 3 - filed under confidential treatment pursuant to Rule 104(b). 6.B.1.4 Copy of contract required by Item 3 - filed under confidential treatment pursuant to Rule 104(b). 6.B.2.1 The company certifies that a conformed copy of Form U-9C-3 for the previous quarter was filed with the following state commissions: Ms. Louise E. Rickard Acting Executive Secretary Department of Public Utility Control 10 Franklin Square New Britain, CT 06051 Ms. Mary L. Cottrell, Secretary Massachusetts Department of Telecommunications and Energy 100 Cambridge Street Boston, MA 02202 Mr. Thomas B. Getz Executive Director and Secretary State of New Hampshire Public Utilities Commission 8 Old Suncook Road, Building One Concord, NH 03301-7319 SELECT ENERGY, INC. BALANCE SHEET (Unaudited) December 31, 2001 -------------- (Thousands of Dollars) ASSETS ------ Current Assets: Accounts receivable, including unbilled revenues, net $ 277,132 Accounts receivable from affiliated companies 107,567 Taxes receivable 2,282 Special deposits 13,036 Unrealized gains on mark-to-market transactions 60,836 Prepaid wholesale power purchases 8,286 Prepayments and other 2,847 ------------- Total current assets 471,986 ------------- Deferred Charges: Intangibles, net 20,151 Accumulated deferred income taxes 32,585 Prepaid pensions 2,716 Other 23,697 ------------- Total deferred charges 79,149 ------------- Property Plant and Equipment: Other 12,051 ------------- 12,051 Less: Accumulated provision for depreciation 3,736 ------------- 8,315 Capital additions in progress 289 ------------- Total long-lived assets 8,604 ------------- Total Assets $ 559,739 ============= Note: In the opinion of the Company, all adjustments necessary for a fair presentation of financial position for the period shown have been made. See accompanying notes to financial statements. SELECT ENERGY, INC. BALANCE SHEET (Unaudited) December 31, 2001 -------------- (Thousands of Dollars) LIABILITIES AND STOCKHOLDER'S EQUITY ------------------------------------ Current Liabilities: Notes payable to affiliated companies $ 162,000 Accounts payable 273,166 Accounts payable to affiliated companies 15,018 Other 87,488 ------------- Total current liabilities 537,672 ------------- Stockholder's Equity: Common stock, $1 par value - 20,000 shares authorized and 100 shares outstanding - Capital surplus, paid in 199,551 Other comprehensive loss (33,459) Retained deficit (144,025) ------------- Total stockholder's equity 22,067 ------------- Total Liabilities and Stockholder's Equity $ 559,739 ============= Note: In the opinion of the Company, all adjustments necessary for a fair presentation of financial position for the period shown have been made. See accompanying notes to financial statements. SELECT ENERGY, INC. INCOME STATEMENT (Unaudited) Three Months Twelve Months Ended Ended December 31, December 31, 2001 2001 -------------- --------------- (Thousands (Thousands of Dollars) of Dollars) Operating Revenues $ 783,921 $ 2,749,628 ------------- ------------- Operating Expenses: Purchased power, net interchange power and capacity 791,243 2,774,370 Depreciation 1,234 4,787 Other 5,798 40,027 Taxes other than income taxes (161) 4,346 ------------- ------------- Total operating expenses 798,114 2,823,530 ------------- ------------- Operating Loss (14,193) (73,902) ------------- ------------- Other Income 2,745 3,011 ------------- ------------- Interest and financing costs 1,291 8,578 ------------- ------------- Loss before income taxes (12,739) (79,469) ------------- ------------- Income Tax Benefit: Federal and state income taxes, net 5,867 32,160 ------------- ------------- Loss before cumulative effect of accounting change (6,872) (47,309) Cumulative effect of accounting change, net of tax benefit of $14,611 - (21,985) ------------- ------------- Net Loss $ (6,872) $ (69,294) ============= ============= Note: In the opinion of the Company, all adjustments necessary for a fair presentation of financial position for the Period shown have been made. See accompanying notes to financial statements. NORTHEAST GENERATION SERVICES COMPANY BALANCE SHEET (Unaudited) December 31, 2001 -------------- (Thousands of Dollars) ASSETS ------ Current Assets: Cash $ 184 Accounts receivable 11,766 Accounts receivable from affiliated companies 1,274 Fuel, materials and supplies, at average cost 455 Prepayments and other 1,572 ------------- Total current assets 15,251 ------------- Other Investments: Investment in subsidiary company 13,902 ------------- Total other investments 13,902 ------------- Deferred Charges: Other 1,130 ------------- Total deferred charges 1,130 ------------- Long-Lived Assets: Other 1,514 ------------- 1,514 Less: Accumulated provision for depreciation 711 ------------- 803 Capital additions in progress 1,116 ------------- Total long-lived assets 1,919 ------------- Total Assets $ 32,202 ============= Note: In the opinion of the Company, all adjustments necessary for a fair presentation of financial position for the period shown have been made. See accompanying notes to financial statements. NORTHEAST GENERATION SERVICES COMPANY BALANCE SHEET (Unaudited) December 31, 2001 -------------- (Thousands of Dollars) LIABILITIES AND STOCKHOLDER'S EQUITY ------------------------------------ Current Liabilities: Notes payable to affiliated companies $ 12,500 Accounts payable 498 Accounts payable to affiliated companies 3,833 Accrued taxes 1,589 Other 139 ------------- Total current liabilities 18,559 ------------- Deferred Credits: Other 37 ------------- Total deferred credits 37 ------------- Stockholder's Equity: Common stock, $1 par value - 20,000 shares authorized and 100 shares outstanding - Capital surplus, paid in 10,436 Retained earnings 3,170 ------------- Total stockholder's equity 13,606 ------------- Total Liabilities and Stockholder's Equity $ 32,202 ============= Note: In the opinion of the Company, all adjustments necessary for a fair presentation of financial position for the period shown have been made. See accompanying notes to financial statements. NORTHEAST GENERATION SERVICES COMPANY INCOME STATEMENT (Unaudited) Three Months Twelve Months Ended Ended December 31, December 31, 2001 2001 ------------ ------------- (Thousands (Thousands of Dollars) of Dollars) Operating Revenues $ 19,030 $ 67,588 ------------- ------------- Operating Expenses: Operation 13,556 50,398 Maintenance 3,990 14,760 Depreciation (23) 36 Federal and state income taxes 88 95 Taxes other than income taxes 4 256 ------------- ------------- Total operating expenses 17,615 65,545 ------------- ------------- Operating Income 1,415 2,043 ------------- ------------- Other Income 661 3,147 ------------- ------------- Interest and financing costs 123 611 ------------- ------------- Net Income $ 1,953 $ 4,579 ============= ============= Note: In the opinion of the Company, all adjustments necessary for a fair presentation of financial position for the period shown have been made. See accompanying notes to financial statements. SELECT ENERGY CONTRACTING, INC. BALANCE SHEET (Unaudited) December 31, 2001 ------------ (Thousands of Dollars) ASSETS ------ Current Assets: Cash $ 215 Accounts receivable 15,307 Accounts receivable from affiliated company 830 Other material and supplies 267 Prepayments and other 421 ------------ Total current assets $ 17,040 ------------ Deferred Charges: Goodwill 5,943 ------------ Total deferred charges 5,943 ------------ Long-Lived Assets: Other 18,575 ------------ 18,575 Less: Accumulated provision for depreciation 4,570 ------------ Total long-lived assets 14,005 ------------ Total Assets $ 36,988 ============ Note: In the opinion of the Company, all adjustments necessary for a fair presentation of financial position for the period shown have been made. See accompanying notes to financial statements. SELECT ENERGY CONTRACTING, INC. BALANCE SHEET (Unaudited) December 31, 2001 ------------ (Thousands of Dollars) LIABILITIES AND STOCKHOLDERS' EQUITY ------------------------------------ Current Liabilities: Notes payable to affiliated companies $ 3,790 Accounts payable 4,576 Accounts payable to affiliated companies 7,454 Accrued taxes 926 Other current liabilities 1,780 ------------ Total current liabilities 18,526 ------------ Long-term Liabilities: Deferred taxes 260 Other 2,538 ------------ Total long-term liabilities 2,798 ------------ Stockholders' Equity: Common stock, $1 par value - 100,000 shares authorized and 100 shares outstanding - Capital surplus, paid in 14,910 Retained earnings 754 ------------ Total stockholders' equity 15,664 ------------ Total Liabilities and Stockholders' Equity $ 36,988 ============ Note: In the opinion of the Company, all adjustments necessary for a fair presentation of financial position for the period shown have been made. See accompanying notes to financial statements. SELECT ENERGY CONTRACTING, INC. INCOME STATEMENT (Unaudited) Three Months Twelve Months Ended Ended December 31, December 31, 2001 2001 ------------ -------------- (Thousands (Thousands of Dollars) of Dollars) Operating Revenues $ 14,246 $ 56,511 ------------ ------------ Operating Expenses: Operation 13,391 51,568 Maintenance 128 437 Depreciation 316 1,647 Taxes other than income taxes 55 450 ------------ ------------ Total operating expenses 13,890 54,102 ------------ ------------ Operating Income 356 2,409 ------------ ------------ Other (Loss)/Income (18) 22 ------------ ------------ Interest and financing costs 107 680 ------------ ------------ Income before income taxes 231 1,751 ------------ ------------ Income Tax Expense: Federal and state income taxes, net 178 833 ------------ ------------ Net Income $ 53 $ 918 ============ ============ Note: In the opinion of the Company, all adjustments necessary for a fair presentation of financial position for the period shown have been made. See accompanying notes to financial statements. REEDS FERRY SUPPLY CO., INC. BALANCE SHEET (Unaudited) December 31, 2001 ------------ (Thousands of Dollars) ASSETS ------ Current Assets: Cash $ 5 Accounts receivable 127 ------------ Total current assets 132 ------------ Long-Lived Assets: Organization costs, net 247 ------------ Total long-lived assets 247 ------------ Total Assets $ 379 ============ LIABILITIES AND STOCKHOLDERS' EQUITY ------------------------------------ Current Liabilities: Accounts payable $ 126 Accounts payable to affiliated companies 295 ------------ Total current liabilities 421 ------------ Stockholders' Equity: Common stock, $0 par value - 100 shares authorized and outstanding 4 Capital surplus, paid in 3 Retained deficit (49) ------------ Total stockholders' equity (42) ------------ Total Liabilities and Stockholders' Equity $ 379 ============ Note: In the opinion of the Company, all adjustments necessary for a fair presentation of financial position for the period shown have been made. See accompanying notes to financial statements. REEDS FERRY SUPPLY CO., INC. INCOME STATEMENT (Unaudited) Three Months Twelve Months Ended Ended December 31, December 31, 2001 2001 ------------ ------------- (Thousands (Thousands of Dollars) of Dollars) Operating Revenues $ 258 $ 961 ------------- ------------- Operating Expenses: Other 259 962 Amortization 5 20 ------------- ------------- Total operating expenses 264 982 ------------- ------------- Net Loss $ (6) $ (21) ============= ============= Note: In the opinion of the Company, all adjustments necessary for a fair presentation of financial position for the period shown have been made. See accompanying notes to financial statements. HEC/TOBYHANNA ENERGY PROJECT, INC. BALANCE SHEET (Unaudited) December 31, 2001 ------------ (Thousands of Dollars) ASSETS ------ Current Assets: Cash $ 2,525 Accounts receivable from affiliated companies 1,272 ------------ Total current assets 3,797 ------------ Long-Lived Assets: Other 714 ------------ 714 Less: Accumulated provision for depreciation 73 ------------ 641 Contracts receivable 26,265 ------------ Total long-lived assets 26,906 ------------ Total Assets $ 30,703 ============ CAPITALIZATION AND LIABILITIES ------------------------------ Capitalization: Common stock, $1 par value - 100 shares authorized and outstanding $ - Retained earnings 226 ------------ Total common stockholder's equity 226 Long-term debt 25,979 ------------ Total capitalization 26,205 ------------ Current Liabilities: Accounts payable to affiliated companies 3,403 Accrued interest 744 ------------ Total current liabilities 4,147 ------------ Long-term Liabilities: Other 351 ------------ Total long-term liabilities 351 ------------ Total Capitalization and Liabilities $ 30,703 ============ Note: In the opinion of the Company, all adjustments necessary for a fair presentation of financial position for the period shown have been made. See accompanying notes to financial statements. HEC/TOBYHANNA ENERGY PROJECT, INC. INCOME STATEMENT (Unaudited) Three Months Twelve Months Ended Ended December 31, December 31, 2001 2001 ------------ ------------- (Thousands (Thousands of Dollars) of Dollars) Other Income $ 531 $ 2,259 ------------- ------------- Interest and Financing Costs 504 2,038 ------------- ------------- Income Tax Expense 151 178 ------------- ------------- Net (Loss)/Income $ (124) $ 43 ============= ============= Note: In the opinion of the Company, all adjustments necessary for a fair presentation of financial position for the period shown have been made. See accompanying notes to financial statements. YANKEE ENERGY SERVICES COMPANY BALANCE SHEET (Unaudited) December 31, 2001 ------------ (Thousands of Dollars) ASSETS ------ Other Property and Investments: Nonutility property, at cost $ 443 ------------- Total other property and investments 443 ------------- Current Assets: Cash 151 Accounts receivable 4,700 Accounts receivable from affiliated companies 2,280 Taxes receivable 402 ------------- Total current assets 7,533 ------------- Deferred Charges: Accumulated deferred income taxes 1,399 Goodwill 405 ------------- Total deferred charges 1,804 ------------- Total Assets $ 9,780 ============= Note: In the opinion of the Company, all adjustments necessary for a fair presentation of financial position for the period shown have been made. See accompanying notes to financial statements. YANKEE ENERGY SERVICES COMPANY BALANCE SHEET (Unaudited) December 31, 2001 ------------ (Thousands of Dollars) LIABILITIES AND STOCKHOLDERS' EQUITY ------------------------------------ Current Liabilities: Notes payable to affiliated companies $ 3,515 Other 34 ------------ Total current liablilities 3,549 ------------ Stockholders' Equity: Common stock, $0 par value - 10,000 shares authorized and 200 shares outstanding 1 Capital surplus, paid in 7,881 Retained deficit (1,651) ----------- Total stockholders' equity 6,231 ----------- Total Liabilities and Stockholders' Equity $ 9,780 =========== Note: In the opinion of the Company, all adjustments necessary for a fair presentation of financial position for the period shown have been made. See accompanying notes to financial statements. YANKEE ENERGY SERVICES COMPANY INCOME STATEMENT (Unaudited) Three Months Twelve Months Ended Ended December 31, December 31, 2001 2001 ------------ ------------ (Thousands (Thousands of Dollars) of Dollars) Operating Revenues $ 51 $ 200 ------------ ----------- Operating Expenses: Other 129 1,279 Depreciation (1) 151 Amortization 5 22 ------------ ----------- Total operating expenses 133 1,452 ------------ ----------- Operating Loss (82) (1,252) ------------ ----------- Other Loss (229) (1) ------------ ----------- Interest and financing costs 31 399 ------------ ----------- Income Tax Expense: Income taxes, net (740) (1,188) ------------ ----------- Net Income/(Loss) $ 398 $ (464) ============ =========== Note: In the opinion of the Company, all adjustments necessary for a fair presentation of financial position for the period shown have been made. See accompanying notes to financial statements. E.S. BOULOS COMPANY BALANCE SHEET (Unaudited) December 31, 2001 ------------ (Thousands of Dollars) ASSETS ------ Current Assets: Cash $ 286 Accounts receivable 9,713 Accounts receivable from affiliated companies 872 Materials and supplies, at average cost 103 Prepayments and other 1,683 ----------- Total current assets 12,657 ----------- Other Investments: Other investments, at cost 26 ----------- Total other investments 26 ----------- Deferred Charges: Other 6,964 ----------- Total deferred charges 6,964 ----------- Long-Lived Assets: Other 547 ---------- 547 Less: Accumulated provision for depreciation 81 ---------- Total long-lived assets 466 ---------- Total Assets $ 20,113 ========== Note: In the opinion of the Company, all adjustments necessary for a fair presentation of financial position for the period shown have been made. See accompanying notes to financial statements. E.S. BOULOS COMPANY BALANCE SHEET (Unaudited) December 31, 2001 ------------ (Thousands of Dollars) LIABILITIES AND STOCKHOLDER'S EQUITY ------------------------------------ Current Liabilities: Advance from parent, non-interest bearing $ 2,948 Accounts payable 3,237 Accounts payable to affiliated companies 256 Accrued taxes 1,048 Other 540 ---------- Total current liabilities 8,029 ---------- Deferred Credits: Other 1,139 ---------- Total deferred credits 1,139 ---------- Stockholder's Equity: Common stock, $1 par value - 20,000 shares authorized and 100 shares outstanding - Capital surplus, paid in 7,539 Retained earnings 3,406 ---------- Total stockholder's equity 10,945 ---------- Total Liabilities and Stockholder's Equity $ 20,113 ========== Note: In the opinion of the Company, all adjustments necessary for a fair presentation of financial position for the period shown have been made. See accompanying notes to financial statements. E.S. BOULOS COMPANY INCOME STATEMENT (Unaudited) Three Months Twelve Months Ended Ended December 31, December 31, 2001 2001 ------------ ------------- (Thousands (Thousands of Dollars) of Dollars) Operating Revenues $ 13,171 $ 45,946 ------------- ------------- Operating Expenses: Operation 11,582 41,703 Depreciation 101 356 Federal and state income taxes 894 2,249 ------------- ------------- Total operating expenses 12,577 44,308 ------------- ------------- Operating Income 594 1,638 ------------- ------------- Other Income 296 1,768 ------------- ------------- Net Income $ 890 $ 3,406 ============= ============= Note: In the opinion of the Company, all adjustments necessary for a fair presentation of financial position for the period shown have been made. See accompanying notes to financial statements. NGS MECHANICAL COMPANY BALANCE SHEET (Unaudited) December 31, 2001 ------------ (Thousands of Dollars) ASSETS ------ Current Assets: Cash $ 10 ------------ Total current assets 10 ------------ Total Assets $ 10 ============ LIABILITIES AND STOCKHOLDER'S EQUITY ------------------------------------ Current Liabilities: Accounts payable to affiliated companies $ 1 ------------- Total current liabilities 1 ------------- Stockholder's Equity: Common stock, $0 par value - 20,000 shares authorized and 100 shares outstanding - Capital surplus, paid in 10 Retained deficit (1) ------------- Total stockholder's equity 9 ------------- Total Liabilities and Stockholder's Equity $ 10 ============= Note: In the opinion of the Company, all adjustments necessary for a fair presentation of financial position for the period shown have been made. See accompanying notes to financial statements. NGS MECHANICAL COMPANY INCOME STATEMENT (Unaudited) Three Months Twelve Months Ended Ended December 31, December 31, 2001 2001 ------------ ------------- (Thousands (Thousands of Dollars) of Dollars) Operating Revenues $ - $ - --------- --------- Operating Expenses: Other - 1 --------- --------- Total operating expenses - 1 --------- --------- Net Loss $ - $ (1) ========= ========= Note: In the opinion of the Company, all adjustments necessary for a fair presentation of financial position for the period shown have been made. See accompanying notes to financial statements. SELECT ENERGY NEW YORK, INC. BALANCE SHEET (Unaudited) December 31, 2001 ------------ (Thousands of Dollars) ASSETS ------ Current Assets: Cash $ 5,876 Accounts receivable 44,873 Unrealized gains on mark-to-market transactions 12,030 Fuel, materials and supplies, at average cost 2,754 Prepayments and other 2,908 ------------- Total current assets 68,441 ------------- Deferred Charges: Accumulated deferred income taxes 96 ------------- Total deferred charges 96 ------------- Property Plant and Equipment: Other 2,193 ------------- 2,193 Less: Accumulated provision for depreciation 1,955 ------------- Total long-lived assets 238 ------------- Total Assets $ 68,775 ============= Note: In the opinion of the Company, all adjustments necessary for a fair presentation of financial position for the period shown have been made. See accompanying notes to financial statements. SELECT ENERGY NEW YORK, INC. BALANCE SHEET (Unaudited) December 31, 2001 ------------ (Thousands of Dollars) LIABILITIES AND STOCKHOLDER'S EQUITY ------------------------------------ Current Liabilities: Accounts payable $ 24,913 Accounts payable to affiliated companies 37 Accrued taxes 1,356 Other 3,075 ------------- Total current liabilities 29,381 ------------- Advance from Northeast Utilities Parent Company 33,502 ------------- Stockholder's Equity: Common stock, $1 par value - 10,000 shares authorized and outstanding 10 Capital surplus, paid in 3,187 Retained earnings 2,695 ------------- Total stockholder's equity 5,892 ------------- Total Liabilities and Stockholder's Equity $ 68,775 ============= Note: In the opinion of the Company, all adjustments necessary for a fair presentation of financial position for the period shown have been made. See accompanying notes to financial statements. SELECT ENERGY NEW YORK, INC. INCOME STATEMENT (Unaudited) Three Months Twelve Months Ended Ended December 31, December 31, 2001 2001 ------------ ------------- (Thousands (Thousands of Dollars) of Dollars) Operating Revenues $ 30,651 $ 30,651 ------------- ------------- Operating Expenses: Purchased power, net interchange power and capacity 26,592 26,592 Maintenance 1 1 Taxes other than income taxes (88) (88) ------------- ------------- Total operating expenses 26,505 26,505 ------------- ------------- Operating Income 4,146 4,146 ------------- ------------- Other Income 11 11 ------------- ------------- Interest and financing costs 11 11 ------------- ------------- Income before income taxes 4,146 4,146 ------------- ------------- Income Tax Expense: Federal and state income taxes, net (1,451) (1,451) ------------- ------------- Net Income $ 2,695 $ 2,695 ============= ============= Note: In the opinion of the Company, all adjustments necessary for a fair presentation of financial position for the period shown have been made. See accompanying notes to financial statements. HEC/CJTS ENERGY CENTER LLC BALANCE SHEET (Unaudited) December 31, 2001 ------------ (Thousands of Dollars) ASSETS ------ Current Assets: Cash $ 1 ----------- Total current assets 1 ----------- Total Assets $ 1 ============ LIABILITIES AND STOCKHOLDER'S EQUITY ------------------------------------ Stockholder's Equity: Capital surplus, paid in 10 Retained deficit (9) ------------ Total stockholder's equity 1 ------------ Total Liabilities and Stockholder's Equity $ 1 ============ Note: In the opinion of the Company, all adjustments necessary for a fair presentation of financial position for the period shown have been made. See accompanying notes to financial statements. HEC/CJTS ENERGY CENTER LLC INCOME STATEMENT (Unaudited) Three Months Twelve Months Ended Ended December 31, December 31, 2001 2001 ------------- ------------- (Thousands (Thousands of Dollars) of Dollars) Operating Revenues $ - $ - ---------- ---------- Operating Expenses: Other 9 9 ---------- ---------- Total operating expenses 9 9 ---------- ---------- Net Loss $ (9) $ (9) ========== ========== Note: In the opinion of the Company, all adjustments necessary for a fair presentation of financial position for the period shown have been made. See accompanying notes to financial statements. Northeast Utilities Select Energy, Inc. Northeast Generation Services Company and Subsidiaries E.S. Boulos Company NGS Mechanical, Inc. Select Energy Contracting, Inc. Reeds Ferry Supply Co., Inc. HEC/Tobyhanna Energy Project, Inc. HEC/CJTS Energy Center, LLC ERI/HEC EFA-Med, LLC Yankee Energy Services Company R.M. Services, Inc. Acumentrics Corporation Select Energy New York, Inc. Notes to Financial Statements (Unaudited) 1. About Northeast Utilities Northeast Utilities (NU) is the parent company of the Northeast Utilities system (NU system). The NU system's regulated utilities furnish franchised retail electric service in Connecticut, New Hampshire and western Massachusetts through three wholly owned subsidiaries: The Connecticut Light and Power Company (CL&P), Public Service Company of New Hampshire (PSNH) and Western Massachusetts Electric Company (WMECO). Another wholly owned subsidiary, North Atlantic Energy Corporation, sells all of its entitlement to the capacity and output of the Seabrook Station nuclear unit (Seabrook) to PSNH under the terms of two life-of-unit, full cost recovery contracts (Seabrook Power Contracts). A fifth wholly owned subsidiary, Holyoke Water Power Company (HWP), also is engaged in the production of electric power. A sixth wholly owned subsidiary, Yankee Energy System, Inc. (Yankee), the parent company of Yankee Gas Services Company, is Connecticut's largest natural gas distribution system. Several wholly owned subsidiaries of NU provide support services for the NU system companies and, in some cases, for other New England utilities. Northeast Utilities Service Company provides centralized accounting, administrative, engineering, financial, information resources, legal, operational, planning, purchasing, and other services to the NU system companies. North Atlantic Energy Service Corporation has operational responsibility for Seabrook. Three other subsidiaries construct, acquire or lease some of the property and facilities used by the NU system companies. NU Enterprises, Inc. (NUEI) is a wholly owned subsidiary of NU and acts as the holding company for certain of NU's competitive energy subsidiaries. Northeast Generation Company (NGC) was formed to acquire and manage generation facilities. Select Energy, Inc. (Select Energy), Northeast Generation Services Company and its subsidiaries (NGS), Select Energy Services, Inc., and its subsidiaries (SESI), and Mode 1 Communications, Inc., engage in a variety of energy-related and telecommunications activities, as applicable, primarily in the competitive energy retail and wholesale commodity, marketing and services fields. E.S. Boulos Company (Boulos) and NGS Mechanical, Inc. (NGS Mechanical) are wholly owned subsidiaries of NGS. Select Energy Contracting, Inc. (Select Energy Contracting), Reeds Ferry Supply Co., Inc. (Reeds Ferry), HEC/Tobyhanna Energy Project, Inc., (HEC/Tobyhanna), and HEC/CJTS Energy Center, LLC (HEC/CJTS) are wholly owned subsidiaries of SESI. Another company, ERI/HEC EFA-Med, LLC (ERI/HEC), is 50 percent owned by SESI. Yankee maintains certain wholly owned subsidiaries including Yankee Energy Services Company (YESCO) and owns 10 percent of the voting securities of R. M. Services, Inc. (R.M. Services). On September 26, 2000, NUEI invested $10 million in Acumentrics Corporation (Acumentrics) in return for a 5 percent ownership share of that company. On November 30, 2001, Select Energy acquired Niagara Mohawk Energy Marketing, Inc. (NMEM) for $31.7 million. This business was subsequently renamed Select Energy New York, Inc. (SENY). Select Energy, NGS, Boulos, NGS Mechanical, Select Energy Contracting, Reeds Ferry, HEC/Tobyhanna, HEC/CJTS, ERI/HEC, YESCO, R.M. Services, Acumentrics, and SENY are "energy-related companies" under Rule 58. 2. About Select Energy Select Energy is an integrated energy business that buys, markets and sells electricity, gas, oil and energy-related products and services to both wholesale and retail customers in the Northeastern United States. Select Energy procures and delivers energy and capacity required to serve its electric, gas and oil customers. Select Energy, collectively with its affiliated competitive energy businesses, provides a wide range of energy products and energy services. Select Energy is a licensed retail electricity supplier and is registered with local electric distribution companies in the states of Connecticut, Delaware, Maine, Maryland, Massachusetts, New Jersey, New York, Pennsylvania, Rhode Island, and Virginia. Select Energy is a registered gas marketer with local gas distribution companies in the states of Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, and Virginia. 3. About NGS NGS was formed to provide management, operation and maintenance services to the electric generation market, as well as to large industrial customers, in the Northeast. NGS also provides consulting services which include engineering services, construction management, permitting, and compliance management. 4. About Boulos On January 19, 2001, NGS completed the acquisition of Boulos, an electrical construction company which specializes in high voltage electrical construction and maintenance in Maine, Massachusetts, New Hampshire, and Vermont. Boulos is wholly owned by NGS. 5. About NGS Mechanical In January 2001, NGS formed a new subsidiary, NGS Mechanical, to provide mechanical services initially in certain New England states and New York. NGS Mechanical is wholly owned by NGS. 6. About Select Energy Contracting Select Energy Contracting, formerly known as HEC International Corporation, designs, manages, and directs the construction of, and/or installation of mechanical, water and electrical systems, energy and other resource consuming equipment. 7. About Reeds Ferry Reeds Ferry was acquired by SESI in August 1999 as an equipment wholesaler to purchase equipment on behalf of Select Energy Contracting. 8. About HEC/Tobyhanna Effective September 30, 1999, HEC/Tobyhanna was established as a special purpose entity to manage the assets of an Energy Savings Performance Contract at the Tobyhanna Army Depot. 9. About HEC/CJTS HEC/CJTS was formed on March 2, 2001, as a special purpose entity to facilitate the financing of SESI's construction of the Connecticut Juvenile Training School in Middletown, Connecticut. HEC/CJTS is wholly owned by SESI. 10. About ERI/HEC ERI/HEC was established on September 30, 2000, by SESI and ERI Services, Inc. to enter into an indefinite delivery/indefinite quantity contract with the United States Navy. ERI/HEC is 50 percent owned by SESI. 11. About YESCO YESCO is winding down its energy-related services for its customers. YESCO has disposed of most of its assets and is in the process of liquidating the remainder of its assets. 12. About R.M. Services R. M. Services provides consumer collection services for companies throughout the United States. 13. About Acumentrics On September 26, 2000, NUEI invested $10 million in Acumentrics in return for a 5 percent ownership share of that company. Acumentrics is a privately owned producer of advanced power generation and power protection technologies applicable to homes, telecommunications, commercial businesses, industrial facilities, and the auto industry. 14. About SENY On November 30, 2001, Select Energy acquired NMEM for $31.7 million. This business was subsequently renamed SENY. SENY is a wholly owned subsidiary of Select Energy and engages in the brokering, marketing, transportation, storage, and sale of energy commodities in the state of New York. 15. Public Utility Regulation NU is registered with the Securities and Exchange Commission (SEC) as a holding company under the Public Utility Holding Company Act of 1935 (1935 Act), and the NU system is subject to the provisions of the 1935 Act. Arrangements among the NU system companies, outside agencies and other utilities covering interconnections, interchange of electric power and sales of utility property are subject to regulation by the Federal Energy Regulatory Commission (FERC) and/or the SEC. The operating subsidiaries are subject to further regulation for rates, accounting and other matters by the FERC and/or applicable state regulatory commissions. 16. Presentation The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. 17. Market Risk and Risk Management Instruments Select Energy provides both firm requirement energy services to its customers and engages in energy trading and marketing activities. Select Energy manages its exposure to risk from existing contractual commitments and provides risk management services to its customers through forward contracts, futures, over-the-counter swap agreements, and options (commodity derivatives). Select Energy has utilized the sensitivity analysis methodology to disclose the quantitative information for its commodity price risks. Sensitivity analysis provides a presentation of the potential loss of future earnings, fair values or cash flows from market risk-sensitive instruments over a selected time period due to one or more hypothetical changes in commodity prices, or other similar price changes. Commodity Price Risk - Trading Activities: As a market participant in the Northeast United States, Select Energy conducts commodity-trading activities in electricity and its related products, natural gas and oil and, therefore, experiences net open positions. Select Energy manages these open positions with strict policies which limit its exposure to market risk and require daily reporting to management of potential financial exposure. Commodity derivatives utilized for trading purposes are accounted for using the mark-to- market method, under Emerging Issues Task Force Issue No. 98-10, "Accounting for Energy Trading and Risk Management Activities." Under this methodology, these instruments are adjusted to market value, and the unrealized gains and losses are recognized in income in the current period in the statements of income as fuel, purchased and net interchange power and in the balance sheets as prepayments and other. The mark-to-market position at December 31, 2001, was a positive $44.4 million. Under sensitivity analysis, the fair value of the portfolio is a function of the underlying commodity, contract prices and market prices represented by each derivative commodity contract. For swaps, forward contracts and options, market value reflects management's best estimates considering over- the-counter quotations, time value and volatility factors of the underlying commitments. Exchange-traded futures and options are recorded at market, based on closing exchange prices. As of December 31, 2001, Select Energy has calculated the market price resulting from a 10 percent unfavorable change in forward market prices. That 10 percent change would result in approximately a $0.6 million decline in the fair value of the Select Energy trading portfolio. In the normal course of business, Select Energy also faces risks that are either nonfinancial or nonquantifiable. Such risks principally include credit risk, which is not reflected in the sensitivity analysis above. Commodity Price Risk - Nontrading Activities: Select Energy utilizes derivative financial and commodity instruments (derivatives), including futures and forward contracts, to reduce market risk associated with fluctuations in the price of electricity and natural gas sold under firm commitments with certain customers. Select Energy also utilizes derivatives, including price swap agreements, call and put option contracts, and futures and forward contracts, to manage the market risk associated with a portion of its anticipated supply requirements. These derivative instruments have been designated as cash flow hedging instruments. When conducting sensitivity analysis of the change in the fair value of Select Energy's electricity, natural gas and oil nontrading portfolio, which would result from a hypothetical change in the future market price of electricity, natural gas and oil, the fair value of the contracts are determined from models which take into account estimated future market prices of electricity, natural gas and oil, the volatility of the market prices in each period, as well as the time value factors of the underlying commitments. In most instances, market prices and volatility are determined from quoted prices on the futures exchange. Select Energy has determined a hypothetical change in the fair value for its nontrading electricity, natural gas and oil contracts, assuming a 10 percent unfavorable change in forward market prices. As of December 31, 2001, an unfavorable 10 percent change in forward market price would have resulted in a decrease in fair value of approximately $29 million. The impact of a change in electricity, natural gas and oil prices on Select Energy's nontrading contracts on December 31, 2001, is not necessarily representative of the results that will be realized when these contracts are physically delivered. Select Energy also maintains natural gas service agreements with certain customers to supply gas at fixed prices for terms extending through 2004. Select Energy has hedged its gas supply risk under these agreements through NYMEX contracts. Under these contracts, the purchase price of a specified quantity of gas is effectively fixed over the term of the gas service agreements, which extend through 2004. As of December 31, 2001, the NYMEX contracts had a notional value of $91.3 million and a negative after-tax mark- to-market position of $14.7 million. Derivative Cash Flow Hedge Accounting: Derivative instruments recorded which were effective cash flow hedges resulted in an increase in other comprehensive income of $12.3 million, net of tax, upon the adoption of Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging Activities," as amended. During 2001, a positive $4.5 million, net of tax, was reclassified from other comprehensive income upon the conclusion of these hedged transactions and recognized in earnings. An additional $1.3 million, net of tax, was recognized in earnings for those derivatives that were determined to be ineffective. Also, during 2001, new cash flow hedge transactions were entered into which hedge cash flows through 2027. As a result of these new transactions and market value changes since January 1, 2001, other comprehensive income decreased by $53.7 million, net of tax. Accumulated other comprehensive income at December 31, 2001, was a negative $36.9 million, net of tax (decrease to equity), relating to hedged transactions and it is estimated that $29.4 million, net of tax, will be reclassified as a charge to earnings within the next twelve months. Cash flows from the hedge contracts are reported in the same category1 as cash flows from the hedged assets. 18. Special Deposits Special deposits include cash collateral posted in connection with various power purchase and sales agreements. QUARTERLY REPORT OF SELECT ENERGY, INC. SIGNATURE CLAUSE Pursuant to the requirements of the Public Utility Holding Company Act of 1935 and the rules and regulations of the Securities and Exchange Commission issued thereunder, the undersigned company has duly caused this report to be signed on its behalf by the undersigned officer thereunto duly authorized. NORTHEAST UTILITIES ------------------- (Registered Holding Company) By: /s/ John P. Stack ------------------------------ (Signature of Signing Officer) John P. Stack Vice President-Accounting and Controller Date: March 27, 2002