-----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, AA3uVEkR4J5yujH1+Nk3/Cjdo8pv8axCqJI4hbdotkMEkfEcyOIovB/4/MgnkBJt cPvKq/dwmSOBkaFj26RF4A== 0000072741-02-000159.txt : 20021125 0000072741-02-000159.hdr.sgml : 20021125 20021125085910 ACCESSION NUMBER: 0000072741-02-000159 CONFORMED SUBMISSION TYPE: U-9C-3 PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20020930 FILED AS OF DATE: 20021125 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-9C-3 SEC ACT: 1935 Act SEC FILE NUMBER: 074-00011 FILM NUMBER: 02838694 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-9C-3 1 u9c3september2002.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 September 30, 2002 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. - -------------------------------------------------------------------------------
Percentage Activities Energy of Voting Reported Name of or Gas Date of State of Securities Nature of During the Reporting Company Related Organization Organization Held Business Period - ----------------- ------- ------------ ------------- ----------------- -------------- ---------- NU Holding 01/04/99 Connecticut 100% by Unregulated (A) Enterprises, Northeast businesses Inc. Utilities holding company Select Energy 09/26/96 Connecticut 100% by NU Invest in (B) Energy, Inc. Enterprises, energy-related Inc. activities Select Energy 03/17/99 Connecticut 100% by NU Invest in (C) Energy Enterprises, energy-related Portland Inc. activities Pipeline, Inc. * Northeast Energy 01/04/99 Connecticut 100% by NU Invest in (D) Generation Enterprises, energy-related Services Inc. activities Company Select Energy 06/19/90 Massachusetts 100% by Invest in (E) Energy Enterprises, energy-related Services, Inc. activities Inc. Reeds Ferry Energy 07/15/64 New Hampshire 100% by Invest in (F) Supply Co., Select Energy energy-related Inc. Services, Inc. activities HEC/Tobyhanna Energy 09/28/99 Massachusetts 100% by Invest in (G) Energy Select Energy energy-related Project, Inc. Services, Inc. activities Select Energy 10/12/94 Massachusetts 100% by Invest in (H) Energy Select Energy energy-related Contracting, Services, Inc. activities Inc. Yankee Holding 02/15/00 Connecticut 100% by Public Utility (I) Energy Northeast Holding Company System, Inc. Utilities Yankee Energy 07/02/93 Connecticut 100% by Invest in (J) Energy Yankee energy-related Services Energy activities Company * System, Inc. R. M. Energy 11/22/94 Connecticut 10% by Invest in (K) Services, Yankee Energy energy-related Inc. System, Inc. activities Acumentrics Energy 09/13/00 Massachusetts 5% by NU Invest in (L) Corporation Enterprises, enery-related Inc. activities ERI/HEC EFA- Energy 09/30/00 Delaware 50% by Invest in (M) Med, LLC Select Energy energy-related Services, Inc. activities E. S. Boulos Energy 01/19/01 Connecticut 100% by Invest in (N) Company Northeast energy-related Generation activities Services Company NGS Energy 01/24/01 Connecticut 100% by Provide (O) Mechanical, Northeast mechanical Inc. Generation construction Services and Company maintenance services HEC/CJTS Energy 03/02/01 Delaware 100% by Facilitate (P) Energy Select Energy construction Center LLC Services, financing Inc. Select Energy 02/13/96 Delaware 100% by Invest in (Q) Energy Select Energy energy-related New York, Inc. activities Inc. Woods Energy 07/31/02 Connecticut 100% by Provide (R) Electrical Northeast electrical Co., Inc. Generation contracting New Services services
(A) NU Enterprises, Inc. is not the "reporting company" but is included in this Item 1 because it holds, directly or indirectly, voting securities issued by reporting companies as indicated above. (B) Select Energy, Inc. (Select Energy) is an integrated energy business that buys, sells, markets and trades electricity, gas and 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. Under the umbrella of the Select Energy brand, 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 Hampshire, 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. (C) Select Energy Portland Pipeline, Inc. (SEPPI) acquired a 5% interest in Portland Natural Gas Transmission System partnership in March 1999 and sold this interest in June 2001. (D) Northeast Generation Services Company (NGS) was established to provide a full range of energy-related operation and maintenance services for larger industrial, institutional and power generation customers throughout the 11-state Northeast area. NGS' current business segments focus on providing turnkey Manage and Operate Services (MOS) and also a variety of Specialty Services (SS) and full-scope mechanical Construction and Maintenance Services (CMS). MOS is a service that is designed for generation asset owners. NGS has the ability to offer station management and operation services with a focus on optimizing the value of that specific asset with the owner. Within the SS platform, its offerings include electrical maintenance and laboratory analysis. Within the CMS platform, the product and service offerings include mechanical construction and maintenance services and engineering and environmental consulting services, with an emphasis on power plant systems. (E) Select Energy Services, Inc. (formerly HEC Inc.) is not the "reporting company" but is included in this Item 1 because it holds, directly or indirectly, voting securities issued by reporting companies as indicated above. (F) Reed's Ferry Supply Corporation is as an equipment wholesaler which purchases equipment on behalf of Select Energy Contracting, Inc. (G) HEC/Tobyhanna Energy Project, Inc. was established as a special purpose entity to manage the assets of an Energy Savings Performance Contract (ESPC) project at the Tobyhanna Army Depot. (H) Select Energy Contracting, Inc. designs, manages and directs the construction of, and/or installing of mechanical, water, and electrical systems, energy and other resource consuming equipment. (I) Yankee Energy System, Inc. is not the "reporting company" but is included in this Item 1 because it holds, directly or indirectly, voting securities issued by reporting companies as indicated above. (J) Yankee Energy Services Company (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. (K) R. M. Services, Inc. provides consumer collection services for companies throughout the United States. (L) Acumentrics Corporation develops, manufactures, and distributes advanced power generation, power quality and power protection devices including a high-speed flywheel and advanced technology fuel cells. (M) ERI/HEC EFA-Med, LLC is a Delaware limited liability company that was formed by Select Energy Services, Inc., and ERI Services, Inc. to enter into an indefinite delivery/indefinite quantity contract with the U.S. Navy. Under the contract, the Navy will issue Delivery Orders for energy services work at U.S. Government facilities located in Bahrain, Greece, Egypt, Italy, Spain, Turkey, and the United Kingdom. The LLC will designate either ERI or Select Energy Services, Inc. to perform each of the Delivery Orders. The LLC will also act as the conduit for any project-related financing. ERI Services, Inc. and Select Energy Services, Inc. each own 50% of the LLC. (N) E. S. Boulos Company (Boulos) is in the electrical contracting business primarily in Maine, New Hampshire and Massachusetts. Boulos is registered to do business in Connecticut, Rhode Island, Maine, Massachusetts, New Hampshire, and Vermont. (O) NGS Mechanical, Inc. (NGSM) performs mechanical construction and maintenance services. NGSM is registered to do business in Massachusetts, New Hampshire, Maine, Vermont, Rhode Island, and New York. (P) HEC/CJTS Energy Center LLC (HEC/CTJS) facilitated the construction of an energy center at the Connecticut Juvenile Training School in Middletown, Connecticut. HEC/CJTS does not have any employees nor does it conduct any other activities other than those related to accepting the assignment of the lease. (Q) Select Energy New York, Inc. (SENY) is engaged in the brokering, marketing, transportation, storage, and sale of energy commodities in the state of New York. (R) Woods Electrical Co., Inc. (Woods) is in the electrical contracting business in Connecticut. Woods is registered to do business in Connecticut, Massachusetts, New Hampshire and Maine. 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 - --------------- -------- ---------- -------- ------- ---------- ---------- ------------- ------------ ------------ Select Energy, Inc. No transactions this quarter. Northeast Generation NU Services Enterprises, Company N/A N/A N/A N/A N/A N/A N/A Inc. $5,250,000 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. 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. $2,000,000 Select Energy New York, Inc. No transactions this quarter. Woods Northeast Northeast Electrical Generation Generation Company, Common Services Services Inc. Stock $10,000 N/A N/A Company N/A N/A Company $4,990,000 Northeast Utilities No transactions this quarter.
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 September 30, 2002 - ----------------------- ------------------- -------------- ------------------ (Thousands of Dollars) Northeast Select Generation Energy, Inc. Electrical and Services Mechanical services $ 15 Company ================= Northeast The Generation Connecticut Services Light & Power Electrical and Company Company Mechanical services $ 21 ================= Northeast Western Generation Massachusetts Electrical and Services Electric Company Mechanical services $ 2 Company ================= Northeast Public Service Generation Company of Electrical and Services New Hampshire Mechanical services $ 564 Company ================= Northeast Holyoke Water Generation Power Company Electrical and Services Mechanical services $ 3,027 Company ================= Northeast Northeast Generation Generation Electrical and Services Company Mechanical services $ 5,637 Company ================= Wholesale Reeds Ferry Select Energy Purchasing Supply Co., Inc. Contracting, Inc. Services $ 179 ================= Northeast North Atlantic Generation Energy Service Electrical and Services Corporation Mechanical services $ (71) Company ================= Northeast Generation Yankee Energy Electrical and Services Services Company Mechanical services $ 24 Company ================= Northeast Northeast Generation Utilities Services Service Electrical and Company Company Mechanical services $ 36 =================
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 September 30, 2002 - ----------------------- ------------------- -------------- ------------------ (Thousands of Dollars) Public Service Company Select of New Hampshire Energy, Inc. Miscellaneous $ 3 ================= * '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 of 09/30/02 $6,881,492 line 1 Total capitalization multiplied by 15% (line 1 multiplied by .15) 1,032,224 line 2 Greater of $50 million or line 2 $1,032,224 line 3 Total current aggregate investment: (categorized by major line of energy-related business): Select Energy, Inc. $637,794 Northeast Generation Services Company 35,879 Select Energy Contracting, Inc. 31,683 Select Energy New York, Inc. 36,692 Woods Electrical Co., Inc. 9,450 Reeds Ferry Supply Co., Inc. 7 HEC/Tobyhanna Energy Project, Inc. - Yankee Energy Services Company 8,282 E.S. Boulos Company 7,539 R.M. Services, Inc. 13,799 NGS Mechanical, Inc. 10 Acumentrics Corporation 7,500 ERI/HEC EFA-Med, LLC 17 HEC/CJTS Energy Center LLC 12 ----------- Current aggregate investment 788,664 ----------- Elimination * 22,532 ----------- Total current aggregate investment 766,132 line 4 ----------- Difference between the greater of $50 million or 15% of capitalization and the total aggregate investment of the registered holding company system $266,092 line 5 =========== *Elimination is for capital contributions made from a parent company who is a reporting company to a subsidiary who is also a reporting company. 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.: Balance Sheet - As of September 30, 2002 Income Statement - Three months and nine months ended September 30, 2002 Northeast Generation Services Company: Balance Sheet - As of September 30, 2002 Income Statement - Three months and nine months ended September 30, 2002 Select Energy Contracting, Inc.: Balance Sheet - As of September 30, 2002 Income Statement - Three months and nine months ended September 30, 2002 Reeds Ferry Supply Co., Inc.: Balance Sheet - As of September 30, 2002 Income Statement - Three months and nine months ended September 30, 2002 HEC/Tobyhanna Energy Project, Inc.: Balance Sheet - As of September 30, 2002 Income Statement - Three months and nine months ended September 30, 2002 Yankee Energy Services Company: Balance Sheet - As of September 30, 2002 Income Statement - Three months and nine months ended September 30, 2002 ERI/HEC EFA-Med, LLC: Not available as of September 30, 2002 E. S. Boulos Company: Balance Sheet - As of September 30, 2002 Income Statement - Three months and nine months ended September 30, 2002 NGS Mechanical, Inc.: Balance Sheet - As of September 30, 2002 Income Statement - Three months and nine months ended September 30, 2002 Northeast Utilities (Parent): Balance Sheet - As of September 30, 2002 Income Statement - Three months and nine months ended September 30, 2002 Select Energy New York, Inc.: Balance Sheet - As of September 30, 2002 Income Statement - Three months and nine months ended September 30, 2002 HEC/CJTS Energy Center LLC: Balance Sheet - As of September 30, 2002 Income Statement - Three months and nine months ended September 30, 2002 Woods Electrical Co., Inc.: Balance Sheet - As of September 30, 2002 Income Statement - Three months and nine months ended September 30, 2002 B. Exhibits Exhibit No. Description - ----------- ----------- 6.B.1.1 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.1.2c Copy of contract required by Item 3 - filed under confidential treatment pursuant to Rule 104(b). 6.B.1.3a Copy of contract required by Item 3 - filed under confidential treatment pursuant to Rule 104(b). 6.B.1.3b Copy of contract required by Item 3 - filed under confidential treatment pursuant to Rule 104(b). 6.B.1.3c Copy of contract required by Item 3 - filed under confidential treatment pursuant to Rule 104(b). 6.B.1.3d 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) September 30, 2002 -------------- (Thousands of Dollars) ASSETS - ------ Current Assets: Cash $ 3,215 Receivables, net 284,769 Accounts receivable from affiliated companies 121,107 Taxes receivable 5,461 Special deposits 8,514 Unrealized net gains on mark-to-market transactions 138,899 Prepaid wholesale power purchases 28,529 Prepayments and other 46,267 ------------- 636,761 ------------- Property, Plant and Equipment: Competitive energy 12,586 Less: Accumulated provision for depreciation and amortization 6,357 ------------- 6,229 Construction work in progress 3,086 ------------- 9,315 ------------- Deferred Debits and Other Assets: Intangibles, net 18,934 Prepaid pension 2,200 Other 38,871 ------------- 60,005 ------------- Total Assets $ 706,081 ============= 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) September 30, 2002 -------------- (Thousands of Dollars) LIABILITIES AND CAPITALIZATION - ------------------------------- Current Liabilities: Notes payable to affiliated companies $ 193,000 Accounts payable 267,761 Accounts payable to affiliated companies 5,777 Accrued interest 37 Unrealized losses on mark-to-market transactions 51,178 Other 30,023 ------------- 547,776 ------------- Deferred Credits and Other Liabilities Accumulated deferred income taxes 19,774 Other 87,837 ------------- 107,611 ------------- Capitalization: Common Stockholder's Equity: Common stock, $1 par value - 20,000 shares authorized and 100 shares outstanding - Capital surplus, paid in 249,378 Accumulated deficit (202,999) Accumulated other comprehensive loss 4,315 ------------- Common Stockholder's Equity 50,694 ------------- Total Capitalization 50,694 ------------- Total Liabilities and Capitalization $ 706,081 ============= 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 Nine Months Ended Ended September 30, September 30, 2002 2002 ------------- ------------- (Thousands of Dollars) Operating Revenues $ 262,543 $ 782,085 ------------- ------------- Operating Expenses: Purchased power, net interchange power and capacity 292,572 837,858 Other (4,001) 42,850 Depreciation and amortization 2,214 6,177 Taxes other than income taxes 129 3,836 ------------- ------------- Total operating expenses 290,914 890,721 ------------- ------------- Operating Loss (28,371) (108,636) Other Income, Net 4,853 10,719 ------------- ------------- Loss Before Interest Expense and Income Tax Benefit (23,518) (97,917) Interest Expense, Net 1,328 3,830 ------------- ------------- Loss Before Income Tax Benefit (24,846) (101,747) Income Tax Benefit (10,202) (42,651) ------------- ------------- Net Loss $ (14,644) $ (59,096) ============= ============= 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) September 30, 2002 ------------- (Thousands of Dollars) ASSETS - ------ Current Assets: Cash $ 1 Receivables, net 5,668 Accounts receivable from affiliated companies 2,750 Unbilled revenues 6,268 Prepayments and other 3,247 ------------- 17,934 ------------- Property, Plant and Equipment: Competitive energy 1,594 Less: Accumulated provision for depreciation 803 ------------- 791 Construction work in progress 791 ------------- 1,582 ------------- Deferred Debits and Other Assets: Accumulated deferred income taxes 592 Intangible assets, net and other 22,755 ------------- 23,347 ------------- Total Assets $ 42,863 ============= 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) September 30, 2002 ------------- (Thousands of Dollars) LIABILITIES AND CAPITALIZATION - ------------------------------ Current Liabilities: Notes payable to affiliated companies $ 12,900 Accounts payable 861 Accounts payable to affiliated companies 2,180 Accrued taxes 1,667 Other 1,387 ------------- 18,995 ------------- Deferred Credits and Other Liabilities 418 ------------- Capitalization: Long-term debt 5,000 ------------- Common Stockholder's Equity: Common stock, $1 par value - 100 shares authorized and outstanding - Capital surplus, paid in 15,579 Retained earnings 2,871 ------------- Common Stockholder's Equity 18,450 ------------- Total Capitalization 23,450 ------------- Total Liabilities and Capitalization $ 42,863 ============= 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 Nine Months Ended Ended September 30, September 30, 2002 2002 ------------- ------------- (Thousands of Dollars) Operating Revenues $ 15,265 $ 43,730 ------------- ------------- Operating Expenses: Operation - Other 12,024 35,271 Maintenance 3,068 9,933 Depreciation and amortization 23 69 Taxes other than income taxes 426 1,422 ------------- ------------- Total operating expenses 15,541 46,695 ------------- ------------- Operating Loss (276) (2,965) Other Income, Net 591 1,581 ------------- ------------- Income/(Loss) Before Interest Expense and Income Tax Benefit 315 (1,384) Interest Expense, Net 167 311 ------------- ------------- Income/(Loss) Before Income Tax Benefit 148 (1,695) Income Tax Benefit (344) (1,333) ------------- ------------- Net Income/(Loss) $ 492 $ (362) ============= ============= 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) September 30, 2002 -------------- (Thousands of Dollars) ASSETS - ------ Current Assets: Cash $ 16 Receivables, net 12,737 Accounts receivables from affiliated companies 3 Materials and supplies, at average cost 341 Prepayments and other 739 ------------- 13,836 ------------- Property, Plant and Equipment: Competitive energy 5,936 Less: Accumulated provision for depreciation 3,693 ------------- 2,243 ------------- Deferred Debits and Other Assets: Goodwill, net 17,220 Other 48 ------------- 17,268 ------------- Total Assets $ 33,347 ============= 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) September 30, 2002 ------------- (Thousands of Dollars) LIABILITIES AND CAPITALIZATION - ------------------------------ Current Liabilities: Accounts payable $ 3,591 Accounts payable to affiliated companies 8,937 Accrued taxes 1,103 Other 1,177 ------------- 14,808 ------------- Deferred Credits and Other Liabilities: Deferred taxes 490 Other 2,117 ------------- 2,607 ------------- Capitalization: Common Stockholder's Equity: Common stock, $1 par value - 100,000 shares authorized and 100 shares outstanding - Capital surplus, paid in 14,910 Retained earnings 1,022 ------------- Common Stockholder's Equity 15,932 ------------- Total Capitalization 15,932 ------------- Total Liabilities and Capitalization $ 33,347 ============= 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 Nine Months Ended Ended September 30, September 30, 2002 2002 ------------- ------------- (Thousands of Dollars) Operating Revenues $ 12,262 $ 42,255 ------------- ------------- Operating Expenses: Operation 11,904 40,088 Maintenance 114 344 Depreciation and amortization 283 849 Taxes other than income taxes 73 263 ------------- ------------- Total operating expenses 12,374 41,544 ------------- ------------- Operating (Loss)/Income (112) 711 Other Loss, Net (12) (23) ------------- ------------- (Loss)/Income Before Interest Expense and Income Tax (Benefit)/Expense (124) 688 Interest Expense, Net 78 205 ------------- ------------- (Loss)/Income Before Income Tax (Benefit)/Expense (202) 483 Income Tax (Benefit)/Expense (91) 193 ------------- ------------- Net (Loss)/Income $ (111) $ 290 ============= ============= 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) September 30, 2002 ------------- (Thousands of Dollars) ASSETS - ------ Current Assets: Cash $ 5 Receivables, net 28 ------------- 33 ------------- Deferred Debits and Other Assets: Goodwill, net 248 ------------- Total Assets $ 281 ============= LIABILITIES AND CAPITALIZATION - ------------------------------ Current Liabilities: Accounts payable $ 28 Accounts payable to affiliated companies 295 ------------- 323 Capitalization: ------------- Common Stockholder's Equity: Common stock, $1 par value - 200 shares authorized and 100 shares outstanding 4 Capital surplus, paid in 3 Accumulated deficit (49) ------------- Common Stockholder's Equity (42) ------------- Total Capitalization (42) ------------- Total Liabilities and Capitalization $ 281 ============= 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 Nine Months Ended Ended September 30, September 30, 2002 2002 ------------- ------------ (Thousands of Dollars) Operating Revenues $ 179 $ 652 Operating Expenses 179 652 ------------- ------------- Net Income $ - $ - ============= ============= 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) September 30, 2002 ------------- (Thousands of Dollars) ASSETS - ------ Current Assets: Cash $ 2,639 Receivables, net 881 ------------- 3,520 ------------- Property, Plant and Equipment: Other, net 616 ------------- Deferred Debits and Other Assets: Contracts receivable 25,800 ------------- Total Assets $ 29,936 ============= LIABILITIES AND CAPITALIZATION - ------------------------------ Current Liabilities: Accounts payable to affiliated companies $ 3,819 Accrued taxes 44 Accrued interest 243 Other 337 ------------- Total current liabilities 4,443 ------------- Capitalization: Long-Term Debt 24,991 ------------- Common Stockholder's Equity: Common stock, $1 par value - 100 shares authorized and outstanding - Retained earnings 502 ------------- Common Stockholder's Equity 502 ------------- Total Capitalization 25,493 ------------- Total Liabilities and Capitalization $ 29,936 ============= 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 Nine Months Ended Ended September 30, September 30, 2002 2002 ------------- ------------- (Thousands of Dollars) Other Income, Net $ 867 $ 1,860 Interest Expense, Net 491 1,485 ------------- ------------- Income Before Income Tax Expense 376 375 Income Tax Expense 23 98 ------------- ------------- Net Income $ 353 $ 277 ============= ============= 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) September 30, 2002 ------------- (Thousands of Dollars) ASSETS - ------ Current Assets: Cash $ 32 Receivables, net 5 Taxes receivable 378 ------------- 415 ------------- Deferred Debits and Other Assets: Accumulated deferred income taxes 1,399 Goodwill 405 Other 5,144 ------------- 6,948 ------------- Total Assets $ 7,363 ============= 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) September 30, 2002 ------------- (Thousands of Dollars) LIABILITIES AND CAPITALIZATION - ------------------------------ Current Liabilities: Notes payable to affiliated companies $ 1,266 Accounts payable to affiliated companies 31 ------------- 1,297 ------------- Deferred Credits and Other Liabilities Other 5 ------------- Capitalization: Common Stockholder's Equity: Common stock, $0 par value - 10,000 shares authorized and 200 shares outstanding 1 Capital surplus, paid in 7,881 Accumulated deficit (1,821) ------------- Common Stockholder's Equity 6,061 ------------- Total Capitalization 6,061 ------------- Total Liabilities and Capitalization $ 7,363 ============= 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 Nine Months Ended Ended September 30, September 30, 2002 2002 -------------- ------------- (Thousands of Dollars) Operating Revenues $ 5 $ 551 Operating Expenses 39 773 ------------- ------------- Operating Loss (34) (222) Interest Expense, Net 6 60 ------------- ------------- Loss Before Income Tax Benefit (40) (282) Income Tax Benefit (3) (113) ------------- ------------- Net Loss $ (37) $ (169) ============= ============= 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) September 30, 2002 ------------- (Thousands of Dollars) ASSETS - ------ Current Assets: Receivables, net $ 12,565 Accounts receivable from affiliated companies 607 Unbilled revenues 2,491 Materials and supplies 109 ------------- 15,772 ------------- Property, Plant and Equipment: Competitive energy 721 Less: Accumulated provision for depreciation 175 ------------- 546 ------------- Deferred Debits and Other Assets: Goodwill 6,963 Other 35 ------------- 6,998 ------------- Total Assets $ 23,316 ============= 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) September 30, 2002 ------------- (Thousands of Dollars) LIABILITIES AND CAPITALIZATION - ------------------------------ Current Liabilities: Advance from parent, non-interest bearing $ 2,948 Accounts payable 3,377 Accounts payable to affiliated companies 956 Accrued taxes 600 Other 1,538 ------------- 9,419 ------------- Deferred Credits and Other Liabilities 975 ------------- Capitalization: Common Stockholder's Equity: Common stock, $1 par value - 100 shares authorized and outstanding - Capital surplus, paid in 7,539 Retained earnings 5,383 ------------- Common Stockholder's Equity 12,922 ------------- Total Capitalization 12,922 ------------- Total Liabilities and Capitalization $ 23,316 ============= 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 Nine Months Ended Ended September 30, September 30, 2002 2002 ------------- ------------- (Thousands of Dollars) Operating Revenues $ 17,748 $ 47,977 ------------- ------------- Operating Expenses: Operating 435 1,092 Maintenance 16,116 44,117 Depreciation - 59 ------------- ------------- Total operating expenses 16,551 45,268 ------------- ------------- Operating Income 1,197 2,709 Other (Loss)/Income, Net (88) 208 ------------- ------------- Income Before Income Tax Expense 1,109 2,917 Income Tax Expense 347 940 ------------- ------------- Net Income $ 762 $ 1,977 ============= ============= 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, INC. BALANCE SHEET (Unaudited) September 30, 2002 ------------- (Thousands of Dollars) ASSETS - ------ Current Assets: Cash $ 10 ------------- Total Assets $ 10 ============= LIABILITIES AND CAPITALIZATION - ------------------------------ Current Liabilities: Accounts payable to affiliated companies $ 2 ------------- Capitalization: Common Stockholder's Equity: Common stock, $0 par value - 20,000 shares authorized and 100 shares outstanding - Capital surplus, paid in 10 Accumulated deficit (2) ------------- Common Stockholder's Equity 8 ------------- Total Capitalization 8 ------------- Total Liabilities and Capitalization $ 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, INC. INCOME STATEMENT (Unaudited) Three Months Nine Months Ended Ended September 30, September 30, 2002 2002 -------------- ------------- (Thousands of Dollars) Operating Revenues $ - $ - Operating Expenses - 1 ------------- ------------ Operating Loss - (1) Income Tax Expense 1 - ------------- ------------ Net Loss $ (1) $ (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. NORTHEAST UTILITIES (PARENT) BALANCE SHEET (Unaudited) September 30, 2002 ------------- (Thousands of Dollars) ASSETS - ------ Current Assets: Cash $ 1,315 Notes receivable from affiliated companies 182,600 Receivables, net 460 Accounts receivable from affiliated companies 2,150 Taxes receivable 2,322 Prepayments 202 ------------- 189,049 ------------- Other Property and Investment: Investments in subsidiary companies, at equity 2,450,995 Investments in transmission companies, at equity 12,874 Other 14 ------------- 2,463,883 ------------- Deferred Debits and Other Assets 4,995 ------------- Total Assets $ 2,657,927 ============= 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 (PARENT) BALANCE SHEET (Unaudited) September 30, 2002 ------------- (Thousands of Dollars) LIABILITIES AND CAPITALIZATION - ------------------------------ Current Liabilities: Notes payable to bank $ 75,000 Long-term debt - current portion 22,000 Accounts payable 51 Accounts payable to affiliated companies 88 Accrued interest 12,393 Other 391 ------------- 109,923 ------------- Deferred Credits and Other Liabilities: Accumulated deferred income taxes 6,608 Other 145 ------------- 6,753 ------------- Capitalization: Long-Term Debt 352,000 ------------- Common Stockholder's Equity: Common shares, $5 par value - authorized 225,000,000 shares; 149,375,000 shares issued and 129,257,380 shares outstanding 746,875 Capital surplus, paid in 1,109,798 Deferred contribution plan - employee stock ownership plan (91,982) Retained earnings 727,204 Accumulated other comprehensive income 6,095 Treasury stock (308,739) ------------- Common Stockholder's Equity 2,189,251 ------------- Total Capitalization 2,541,251 ------------- Total Liabilities and Capitalization $ 2,657,927 ============= 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 (PARENT) STATEMENT OF INCOME (Unaudited)
Three Months Nine Months Ended Ended September 30, September 30, 2002 2002 -------------- ------------- (Thousands of Dollars) Operating Revenues $ - $ - ------------- ------------- Operating Expenses: Operation expense 2,274 11,430 Taxes other than income taxes 1 27 ------------- ------------- Total operating expenses 2,275 11,457 ------------- ------------- Operating Loss (2,275) (11,457) ------------- ------------- Other Income, Net: Equity in earnings of subsidiaries 52,298 109,272 Equity in earnings of transmission companies 571 1,791 Other 2,521 7,642 ------------- ------------- Other income, net 55,390 118,705 ------------- ------------- Income Before Interest Expense and Income Tax Benefit 53,115 107,248 ------------- ------------- Interest Expense: Interest on long-term debt 7,185 21,085 Other interest 959 2,066 ------------- ------------- Interest expense, net 8,144 23,151 ------------- ------------- Income Before Income Tax Benefit 44,971 84,097 Income Tax Benefit (3,604) (11,977) ------------- ------------- Net Income for Common Shares $ 48,575 $ 96,074 ============= ============= Basic and Fully Diluted Earnings Per Common Share $ 0.38 $ 0.74 ============= ============= Basic Common Shares Outstanding (average) 129,344,724 129,508,840 ============= ============= Fully Diluted Common Shares Outstanding (average) 129,508,794 129,737,249 ============= =============
Note: In the opinion of the Company, all adjustments necessary for a fair presentation of the results of operations for the period shown have been made. See accompanying notes to financial statements. SELECT ENERGY NEW YORK, INC. BALANCE SHEET (Unaudited) September 30, 2002 ------------- (Thousands of Dollars) ASSETS - ------ Current Assets: Cash $ 14,387 Receivables, net 36,196 Accounts receivable from affiliated companies 887 Special deposits 4,188 Unrealized net gains on mark-to-market transactions 12,863 Prepayments and other 16,317 ------------- 84,838 ------------- Property Plant and Equipment: Competitive energy 2,280 Less: Accumulated provision for depreciation and amortization 2,141 ------------- 139 ------------- Deferred Debits and Other Assets 2,793 ------------- Total Assets $ 87,770 ============= 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) September 30, 2002 ------------- (Thousands of Dollars) LIABILITIES AND CAPITALIZATION - ------------------------------ Current Liabilities: Accounts payable $ 20,837 Accounts payable to affiliated companies 5,757 Accrued taxes 540 Unrealized losses on mark-to-market transactions 2,237 Other 3,758 ------------- 33,129 ------------- Deferred Credits and Other Liabilities: Accumulated deferred income taxes 3,584 Other 15 ------------- 3,599 ------------- Capitalization: Long-Term Debt 26,699 ------------- Common Stockholder's Equity: Common stock, $1 par value - authorized and outstanding 10,000 shares 10 Capital surplus, paid in 9,983 Retained earnings 13,724 Accumulated comprehensive income 626 ------------- Common Stockholder's Equity 24,343 ------------- Total Capitalization 51,042 ------------- Total Liabilities and Capitalization $ 87,770 ============= 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 Nine Months Ended Ended September 30, September 30, 2002 2002 ------------- ------------- (Thousands of Dollars) Operating Revenues $ 73,742 $ 201,767 ------------- ------------- Operating Expenses: Purchased power, net interchange power and capacity 63,195 177,033 Other 2,530 6,918 Taxes other than income taxes (574) (1,335) ------------- ------------- Total operating expenses 65,151 182,616 ------------- ------------- Operating Income 8,591 19,151 Other Income, Net 117 197 ------------- ------------- Income Before Interest and Income Tax Expense 8,708 19,348 Interest Expense, Net 191 580 ------------- ------------- Income Before Income Tax Expense 8,517 18,768 Income Tax Expense 3,427 7,739 ------------- ------------- Net Income $ 5,090 $ 11,029 ============= ============= 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) September 30, 2002 ------------- (Thousands of Dollars) ASSETS - ------ Current Assets: Cash $ 1 ------------- 1 ------------- Total Assets $ 1 ============= LIABILITIES AND CAPITALIZATION - ------------------------------ Capitalization: Common Stockholder's Equity: Capital surplus, paid in $ 12 Accumulated deficit (11) ------------- Common Stockholder's Equity 1 ------------- Total Capitalization 1 ------------- Total Liabilities and Capitalization $ 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 Nine Months Ended Ended September 30, September 30, 2002 2002 ------------- ------------- (Thousands of Dollars) Operating Revenues $ - $ - ------------- ------------ Operating Expenses 2 3 ------------- ------------ Net Loss $ (2) $ (3) ============= ============ 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. WOODS ELECTRICAL CO., INC. BALANCE SHEET (Unaudited) September 30, 2002 ------------- (Thousands of Dollars) ASSETS - ------ Current Assets: Cash $ 712 Receivables, net 1,909 Taxes receivable 3 Prepayments and other 31 ------------- 2,655 ------------- Property Plant and Equipment: Competitive energy 230 Less: Accumulated provision for depreciation and amortization - ------------- 230 ------------- Deferred Debits and Other Assets: Goodwill and other purchased intangible assets, net 7,568 ------------- 7,568 ------------- Total Assets $ 10,453 ============= 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. WOODS ELECTRICAL CO., INC. BALANCE SHEET (Unaudited) September 30, 2002 ------------- (Thousands of Dollars) LIABILITIES AND CAPITALIZATION - ------------------------------ Current Liabilities: Notes payable to banks $ 733 Accounts payable 86 Other 186 ------------- 1,005 ------------- Deferred Credits and Other Liabilities: Other 38 ------------- 38 ------------- Capitalization: Long-Term Debt 4,450 ------------- Common Stockholder's Equity: Common stock, $1 par value - 20,000 shares authorized and 100 shares outstanding - Capital surplus, paid in 5,000 Accumulated deficit (40) ------------- Common Stockholder's Equity 4,960 ------------- Total Capitalization 9,410 ------------- Total Liabilities and Capitalization $ 10,453 ============= 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. WOODS ELECTRICAL CO., INC. INCOME STATEMENT (Unaudited) Three Months* Nine Months Ended Ended September 30, September 30, 2002 2002 ------------- ------------- (Thousands of Dollars) Operating Revenues $ 1,843 $ 1,843 ------------- ------------ Operating Expenses: Other 1,813 1,813 Taxes other than income taxes 14 14 ------------- ------------ Total operating expenses 1,827 1,827 -------------- ------------ Operating Income 16 16 ------------- ------------ Other Income, Net 2 2 ------------- ------------ Income Before Interest and Income Tax Expense 18 18 ------------- ------------ Interest Expense, Net 58 58 ------------- ------------ Loss Before Income Tax Expense (40) (40) ------------- ------------ Income Tax Expense - - ------------- ------------ Net Loss $ (40) $ (40) ============= ============ *Woods Electrical Co., Inc. was acquired on July 1, 2002, and these results reflect activity from July 1, 2002 through September 30, 2002. 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 Parent Select Energy, Inc. Northeast Generation Services Company 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 Yankee Energy Services Company Select Energy New York, Inc. Woods Electrical Co., Inc. Notes to Financial Statements (Unaudited) 1. About Northeast Utilities (NU) Northeast Utilities Parent (NU Parent) 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. Another wholly owned subsidiary, North Atlantic Energy Corporation (NAEC), previously sold 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. On November 1, 2002, CL&P and NAEC consummated the sale of their ownership interests in Seabrook. A fifth wholly owned subsidiary, Holyoke Water Power Company, also is engaged in the production of electric power. A sixth wholly owned subsidiary, Yankee Energy System, Inc. (Yankee) is the parent company of Yankee Gas Services Company, 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 previously had 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. is a wholly owned subsidiary of NU and acts as the holding company for certain of NU's competitive energy subsidiaries. Northeast Generation Company was formed to acquire and manage generation facilities. Select Energy, Inc. (Select Energy), and its subsidiary Select Energy New York, Inc. (SENY), Northeast Generation Services Company and its subsidiaries (NGS), Select Energy Services, Inc., and its subsidiaries (SESI), Mode 1 Communications, Inc. and Woods Network Services, 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), NGS Mechanical, Inc. (NGS Mechanical) and Woods Electrical Co., Inc. (Woods) 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. Yankee maintains certain wholly owned subsidiaries including Yankee Energy Services Company (YESCO). Select Energy, SENY, NGS, Boulos, NGS Mechanical, Woods, Select Energy Contracting, Reeds Ferry, HEC/Tobyhanna, HEC/CJTS, and YESCO are "energy- related companies" under rule 58. These footnotes are applicable to the rule 58 companies with financial statements filed in this Form U-9C-3 under Item 6 Section A. 2. About Select Energy Select Energy is an integrated energy business that buys, markets, sells, and trades 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 Hampshire, 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 Northeastern United States. NGS also provides consulting services which include engineering services, construction management, permitting, and compliance management. 4. About Boulos Boulos is an electrical contracting company which specializes in high voltage electrical construction and maintenance in Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont. Boulos is wholly owned by NGS. 5. About NGS Mechanical NGS Mechanical was formed 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 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 is an equipment wholesaler which purchases equipment on behalf of Select Energy Contracting. 8. About HEC/Tobyhanna 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 is a special purpose entity formed to facilitate the financing of SESI's construction of an energy center at the Connecticut Juvenile Training School in Middletown, Connecticut. HEC/CJTS is wholly owned by SESI. 10. 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. 11. About 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. 12. About Woods Woods is a wholly owned subsidiary of NGS and is in the electrical contracting business in the state of Connecticut. Woods is also registered to do business in Maine, Massachusetts and New Hampshire. NGS acquired Woods on July 1, 2002, and the results of Woods' operations since July 1, 2002, are included in this report. 13. 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. 14. 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. 15. New Accounting Standards In June 2002, the Emerging Issues Task Force (EITF) of the Financial Accounting Standards Board reached a consensus on EITF Issue No. 02-3, "Accounting for Contracts Involved in Energy Trading and Risk Management Activities," requiring energy trading companies to classify revenues and expenses associated with certain energy trading contracts on a net basis within revenues, rather than recording the gross revenues and expenses. Select Energy and SENY currently account for energy trading activities using the mark-to-market method under EITF Issue No. 98-10, "Accounting for Energy Trading and Risk Management Activities." EITF Issue No. 98-10 allows energy trading activities to be presented as revenues and as expenses or on a net basis in revenues in the income statement. Effective July 1, 2002, Select Energy and SENY adopted net reporting of revenues and expenses as allowed by EITF Issue No. 98-10. Prior to July 1, 2002, Select Energy and SENY presented energy trading activities as revenues and expenses as allowed by EITF Issue No. 98-10. The adoption of net reporting was applied retroactively to all periods presented but will have no effect on net income. On October 25, 2002, the EITF reached additional consensuses in EITF Issue No. 02-3. These consensuses supercede the consensus the EITF reached in June 2002. The first consensus rescinds EITF Issue No. 98-10, under which Select Energy currently accounts for energy trading activities. The consensus will require energy trading companies to follow SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities," as amended, for energy trading activities and to discontinue mark-to- market accounting for contracts that are not derivatives. Management is currently evaluating the extent of trading contracts that are not derivatives. The second consensus requires net reporting of derivative energy trading activities effective January 1, 2003. Management has already adopted net reporting of trading activities and will continue to evaluate EITF Issue No. 02-3 as additional guidance becomes available. 16. Market Risk and Risk Management Instruments Select Energy provides both full requirement energy services to its customers and engages in energy trading and marketing activities. Select Energy manages its exposure to risk from its 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 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 market participants in the Northeast United States, Select Energy and SENY conduct commodity-trading activities in electricity and its related products, natural gas and oil, and therefore, experience net open positions. Select Energy and SENY manage these open positions with strict policies which limit its exposure to market risk and require daily reporting to management of potential financial exposure. Under EITF Issue No. 98-10, these instruments are currently adjusted to market value, and the unrealized gains and losses are recognized in income in the current period in the consolidated income statement as purchased power, net interchange power and capacity and in the consolidated balance sheet as unrealized net gains and unrealized losses on mark-to-market transactions. The net mark-to-market position at September 30, 2002 had asset values of $87.7 million for Select Energy and $10.6 million for SENY. These amounts include intercompany transactions of $16.6 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 September 30, 2002, 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 $3.3 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 this sensitivity analysis. Commodity Price Risk - Nontrading Derivative 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 to 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 analyses of the change in the fair value of Select Energy's electricity, natural gas and oil nontrading derivatives portfolio, which would result from a hypothetical change in the future market price of electricity, natural gas and oil, the fair values 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 derivatives and electricity, natural gas and oil contracts, assuming a 10 percent unfavorable change in forward market prices. As of September 30, 2002, an unfavorable 10 percent change in market price would have resulted in a decline in fair value of approximately $15 million. The impact of a change in electricity, natural gas and oil prices on Select Energy's nontrading derivatives contracts on September 30, 2002, 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 New York Mercantile Exchange (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 also extend through 2004. As of September 30, 2002, the NYMEX contracts had a notional value of $50.3 million and a mark-to-market asset value of $4.7 million. 17. Special Deposits Special deposits include cash collateral posted in connection with various power purchase and sales agreements. QUARTERLY REPORT OF NORTHEAST UTILITIES 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: November 25, 2002 ---------------------------------------- -----END PRIVACY-ENHANCED MESSAGE-----