-----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, GFk1dAjTTCoPBNtqwY0WqaFUO6bI3ftoIKPuZTyza/chcFl6GrbaaiizHF2XgWPL 28yIFw7CTxeZKHtG/1Ia1A== 0000906602-97-000132.txt : 19970828 0000906602-97-000132.hdr.sgml : 19970828 ACCESSION NUMBER: 0000906602-97-000132 CONFORMED SUBMISSION TYPE: U-1/A PUBLIC DOCUMENT COUNT: 12 FILED AS OF DATE: 19970827 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: NORTHEAST UTILITIES SYSTEM CENTRAL INDEX KEY: 0000072741 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 042147929 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: U-1/A SEC ACT: 1935 Act SEC FILE NUMBER: 070-09045 FILM NUMBER: 97670977 BUSINESS ADDRESS: STREET 1: 174 BRUSH HILL AVE CITY: WEST SPRINGFIELD STATE: MA ZIP: 01090-0010 BUSINESS PHONE: 4137855871 MAIL ADDRESS: STREET 1: 107 SELDON ST CITY: BERLIN STATE: CT ZIP: 06037-1616 U-1/A 1 U-1 AMENDMENT FILING File No. 70-9045 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 AMENDMENT NO. 1 TO FORM U-1 APPLICATION/DECLARATION WITH RESPECT TO THE ORGANIZATION OF A WHOLLY OWNED SUBSIDIARY RELATED TO AN ACCOUNTS RECEIVABLE PURCHASE AND SALE PROGRAM AND RELATED TRANSACTIONS under THE PUBLIC HOLDING COMPANY ACT OF 1935 THE CONNECTICUT LIGHT AND POWER COMPANY 107 Selden Street Berlin, CT 06037-5457 (Name of companies filing this statement and address of principal executive office) NORTHEAST UTILITIES (Name of top registered holding company parent of declarant) Robert P. Wax, Esq. Vice President, Secretary and General Counsel Northeast Utilities Service Company P.O. Box 270 Hartford, CT 06141-0270 (Name and address of agent for service) The Commission is requested to mail signed copies of all orders, notices, and communications to: David R. McHale Jeffrey C. Miller, Esq. Assistant Treasurer - Finance The Connecticut Light and Power Company Assistant General Counsel Northeast Utilities Service Company Northeast Utilities Service Company P.O. Box 270 P.O. Box 270 Hartford, CT 06141-0270 Hartford, CT 06141-0270 Thomas R. Wildman, Esq. Day, Berry & Howard - CityPlace I Hartford, CT 06103-3499 The Application/Declaration in this proceeding is hereby amended by (i) the filing of the exhibits and financial statements listed in the "Index to Exhibits and Financial Statements Filed with Amendment No. 1 to Form U-1 of The Connecticut Light and Power Company" attached to this Amendment, (ii) restating and resubmitting Paragraphs 3 and 25 to the Application/Declaration to reflect the bracketed changes to the text as follows, and (iii) revising Item VI, Exhibits and Financial Statements, to reflect a more recent "as of" date of various Financial Statements: ITEM I DESCRIPTION OF PROPOSED TRANSACTIONS 3. The Company entered into a Receivables Purchase and Sale Agreement dated July 11, 1996 (as amended, the "Existing Agreement") with Corporate Asset Funding Company, Inc. ("CAFCO"), Citicorp North America, Inc. (the "Agent") and Citibank, N.A. (together with its assignees, the "Banks") under which the Company may sell (from time to time in its discretion and subject to the satisfaction of certain conditions precedent) fractional, undivided ownership interests expressed as a percentage ("Receivable Interests") in (i) billed and unbilled indebtedness of customers as booked to Accounts [142 (excluding amounts booked to Account 142.04)] and 173 under the Federal Energy Regulatory Commission Chart of Accounts ("Receivables") and (ii) certain related assets, including any security or guaranty for any Receivables, all collections thereon, and related records and software (the "Related Assets"). The purchaser(s) of the Receivable Interests (collectively, the "Purchaser") will be either CAFCO or the Banks or their respective successors or assigns. CAFCO is a special purpose Delaware corporation which acquires receivables and other assets and issues commercial paper to finance these acquisitions. The Agent will act as agent for the Purchaser for transactions under the Existing Agreement. ITEM V PROCEDURE 25. The Company hereby waives any recommended decision by a hearing officer or by any other responsible officer of the Commission and waives the 30-day waiting period between the issuance of the Commission's order and the date on which it is to become effective, since it is desired that the Commission's order, when issued, become effective forthwith. The Company consents that the Office of Public Utility Regulation within the Division of Investment Management may assist in the preparation of the Commission's decision and /or order unless the Office opposes the transactions covered by this Application. It is requested that the Commission issue an order authorizing the jurisdictional transactions proposed herein at the earliest practicable date. It is further requested that (i) there not be a recommended decision by the Administrative Law Judge or other responsible officer of the Commission, (ii) the Office of Public Utility Regulation be permitted to assist in the preparation of the Commission's decision, and (iii) the Commission's order [be issued prior to receipt of the DPUC's Order. The Company consents to the Commission's Order being conditioned upon receipt of the DPUC Order.] ITEM VI EXHIBITS AND FINANCIAL STATEMENTS (a) Exhibits A.1 Draft of the Certificate of Incorporation of CRC. A.2 Draft of the Bylaws of CRC. A.3 CL&P's authorizing resolution for purchase of CRC Common Stock. D.1 Application to the DPUC for approval of the transactions described herein. F. Opinion of Counsel to CL&P. G.1 CL&P Financial Data Schedule. G.2 NU Financial Data Schedule. H.1 Estimated Expenses -- CL&P. H.2 Estimated Expenses -- CRC. (b) Financial Statements 1. The Connecticut Light and Power Company 1.1 Balance Sheet, per books and pro forma, as of March 31, 1997. 1.2 Income Statement, per books and pro forma, twelve months ended March 31, 1997. 1.3 Statement of Retained Earnings, per books and pro forma, twelve months ended March 31, 1997 and Statement of Capital Structure, per books and pro forma, as of March 31, 1997. 1.4 Explanation of Pro Forma Adjustments. 2. Northeast Utilities and Subsidiaries 2.1 Consolidated Balance Sheet, per books and pro forma, as of March 31, 1997. 2.2 Consolidated Income Statement, per books and pro forma, twelve month ended March 31, 1997. 2.3 Consolidated Statement of Retained Earnings, per books and pro forma, twelve months ended March 31, 1997, and Consolidated Statement of Capital Structure, per books and pro forma, as of March 31, 1997. 2.4 Explanation of Pro Forma Adjustments. SIGNATURES Pursuant to the requirements of the Public Utility Holding Company Act of 1935, as amended, the undersigned has duly caused this statement to be signed on its behalf by the undersigned thereunto duly authorized. Dated: August 27, 1997 THE CONNECTICUT LIGHT AND POWER COMPANY By /s/John B. Keane John B. Keane Vice President and Treasurer File No. 70-9045 INDEX TO EXHIBITS AND FINANCIAL STATEMENTS FILED WITH AMENDMENT NO. 1 to FORM U-1 of THE CONNECTICUT LIGHT AND POWER COMPANY (a) Exhibits A.1 Draft of the Certificate of Incorporation of CRC. A.2 Draft of the Bylaws of CRC. A.3 CL&P's authorizing resolution for purchase of CRC Common Stock. D.1 Application to the DPUC for approval of the transactions described herein. F. Opinion of Counsel to CL&P. G.1 CL&P Financial Data Schedule. G.2 NU Financial Data Schedule. H.1 Estimated Expenses -- CL&P. H.2 Estimated Expenses -- CRC. (b) Financial Statements 1. The Connecticut Light and Power Company 1.1 Balance Sheet, per books and pro forma, as of March 31, 1997. 1.2 Income Statement, per books and pro forma, twelve months ended March 31, 1997. 1.3 Statement of Retained Earnings, per books and pro forma, twelve months ended March 31, 1997 and Statement of Capital Structure, per books and pro forma, as of March 31, 1997. 1.4 Explanation of Pro Forma Adjustments. 2. Northeast Utilities and Subsidiaries 2.1 Consolidated Balance Sheet, per books and pro forma, as of March 31, 1997. 2.2 Consolidated Income Statement, per books and pro forma, twelve month ended March 31, 1997. 2.3 Consolidated Statement of Retained Earnings, per books and pro forma, twelve months ended March 31, 1997, and Consolidated Statement of Capital Structure, per books and pro forma, as of March 31, 1997. 2.4 Explanation of Pro Forma Adjustments. EX-99 2 EXHIBIT A.1 CERTIFICATION OF INCORPORATION OF CL&P RECEIVABLES CORPORATION The undersigned incorporator hereby forms a corporation under the Business Corporation Act of the State of Connecticut. FIRST: The name of the corporation is CL&P RECEIVABLES CORPORATION. SECOND: The address of the Corporation's initial registered office in the State of Connecticut and the name of its initial registered agent at such address is: Theresa H. Allsop 107 Selden Street Berlin, CT 06037-5227 The residence address of the initial registered agent is: 1008 Mott Hill Road South Glastonbury, CT 06073 The initial registered agent hereby accepts appointment: ____________________________ Name: Theresa H. Allsop THIRD: The nature of the business to be transacted, and the purpose to be promoted or carried out by the Corporation, is to engage exclusively in the following business and activities: 1. To purchase or otherwise acquire accounts, chattel paper, instruments, general intangibles and certain related rights and property (collectively, the "Assets") from its parent or other of its affiliates and to sell such Assets, or an interest therein, to a commercial paper conduit or other financial institution or institutions. 2. To service and collect, or retain a servicer to service and collect, such Assets; and 3. To engage in any lawful act or activity and to exercise any powers permitted to corporations organized under the Connecticut Business Corporation Act, as the same may be amended from time to time, that are incidental to and necessary, suitable or convenient for the accomplishment of the purposes specified in clauses (1) and (2) above. FOURTH: The amount of capital stock of the Corporation hereby authorized is twenty thousand (20,000) shares, without par value, which stock shall all be common stock (the "Common Stock"). 1. Common Stock (a) Except as otherwise expressly provided by law, all voting rights shall be vested in the holders of the Common Stock, and at each meeting of shareholders of the Corporation, each holder of Common Stock shall be entitled to one vote for each share on each matter to come before the meeting. (b) Dividends may be declared upon and paid to the holders of the Common Stock as the Board of Directors shall determine. (c) In the event of voluntary or involuntary liquidation or dissolution of the Corporation, the holders of the Common Stock shall be entitled to share ratably in all assets of the Corporation. 2. Vote Required in Certain Events Without (i) the affirmative vote of 100% of the members of the Board of Directors of the Corporation (including the Independent Director described in Article SEVENTH), and (ii) the affirmative vote of the holders of 100% of the number of shares of the Common Stock outstanding, voting (A) in person or by proxy at a special meeting called for the purpose or (B) by unanimous written consent of the holders of the Common Stock acting without such a meeting, as the case may be, the Corporation shall not amend Article THIRD, this Article FOURTH(2), Article SIXTH or Article SEVENTH of this Certificate of Incorporation, or Article IV Section 4, Article VIII Section 2 or Article IX of the Bylaws of the Corporation. FIFTH: The minimum amount of stated capital with which the Corporation shall commence business is One Thousand Dollars ($1,000). SIXTH: The Corporation shall not, without the affirmative vote of 100% of the members of the Board of Directors of the Corporation (including the Independent Director described in Article SEVENTH), (i) make an assignment for the benefit of creditors, file a petition in bankruptcy, petition or apply to any tribunal for the appointment of a custodian, receiver or any trustee for it or for a substantial part of its property, commence any proceeding under any bankruptcy, reorganization, arrangement, readjustment of debt, dissolution or liquidation law or statute of any jurisdiction, whether now or hereinafter in effect, consent or acquiesce in the filing of any such petition, application, proceeding or appointment of or taking possession by the custodian, receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of the Corporation or any substantial part of its property, or admit its inability to pay its debts generally as they become due or authorize any of the foregoing to be done or taken on behalf of the Corporation or (ii) merge or consolidate with any other entity, or dissolve, liquidate or otherwise terminate its existence; provided that if at any time the Independent Director is not then in office and acting, the Board of Directors shall not vote upon any of the matters set forth in this Article SIXTH unless and until such Independent Director shall have been duly elected. SEVENTH: The Corporation shall at all times (except in the event of death, incapacity, resignation or removal) have at least one director (the "Independent Director") who (i) is not then currently and has not been at any time since August 1, 1992, an officer, director or employee of The Connecticut Light and Power Company or any affiliate or subsidiary of The Connecticut Light and Power Company, (ii) is not a current or former officer or employee of the Corporation and (iii) is not a stockholder of The Connecticut Light and Power Company or any affiliate or subsidiary of The Connecticut Light and Power Company. The Independent Director shall be elected in the same manner as other directors. In the event of the death, incapacity, resignation or removal of the Independent Director, the Board of Directors shall promptly appoint a replacement Independent Director. The Independent Director shall not, in connection with any act or failure to act in connection with any matter described in Article SIXTH, have a duty or other obligation to the Corporation's shareholders (except as may be required specifically by the statutory law of any applicable jurisdiction); instead, the Independent Director's fiduciary duty or other obligations with respect to such act or failure to act in connection with any matter described in Article SIXTH shall be owed to the Corporation, including the Corporation's creditors. Every shareholder of the Corporation shall be deemed to have consented to the foregoing by virtue of such shareholder's purchase of shares of capital stock of the Corporation, and no further act or deed of any shareholder shall be required to evidence such consent. EIGHTH: The personal liability of any Director to the Corporation or its shareholders for monetary damages for breach of duty as a Director is hereby limited to the amount of the compensation received by the Director for serving the Corporation during the year of the violation if such breach did not (a) involve a knowing and culpable violation of law by the Director, (b) enable the Director or an Associate, as defined in Section 33-840 of the Connecticut General Statutes, to receive an improper personal economic gain, (c) show a lack of good faith and a conscious disregard for the duty of the Director to the Corporation under circumstances in which the Director was aware that his or her conduct or omission created an unjustifiable risk of serious injury to the Corporation, (d) constitute a sustained and unexcused pattern of inattention that amounted to an abdication of the Director's duty to the Corporation, or (e) create liability under Section 33-757 of the Connecticut General Statutes. Any lawful repeal or modification of this provision by the shareholders and the Board of Directors of the Corporation shall not adversely affect any right or protection of a Director existing at or prior to the time of such repeal or modification. NINTH: The Corporation shall indemnify and advance expenses to an individual made a party to a proceeding because he/she is or was a Director of the Corporation under Section 33-771 of the Connecticut General Statutes, Revision of 1958, as amended. The Corporation shall also indemnify and advance expenses under Sections 33-770 to 33-778, inclusive, of the Connecticut General Statutes, to any officer, employee or agent of the Corporation who is not a director to the same extent as provided to a director. Dated at Hartford, Connecticut, this day of August, 1997. I hereby declare, under the penalties of false statement, that the statements in the foregoing certificate are true. ________________________________ Sandra Bourgasser-Ketterling Incorporator Day, Berry & Howard CityPlace I Hartford, CT 06103-3499 EX-99 3 EXHIBIT A.2 BYLAWS of CL&P RECEIVABLES CORPORATION ARTICLE I. GENERAL These Bylaws are intended to supplement and implement applicable provisions of law and of the Certificate of Incorporation of this Corporation with respect to the regulation of the affairs of this Corporation. ARTICLE II. MEETINGS OF SHAREHOLDERS SECTION 1. Place of Meeting: Shareholders' meetings shall be held at the principal offices of this Corporation or at such other place, either within or without the State of Connecticut, as shall be designated in the notice of meeting. Elections of directors need not be by ballot. The books of the Corporation may be kept (subject to any provision contained in any applicable statute) outside the State of Connecticut at such place or places as may be designated from time to time by the Board of Directors or in these Bylaws. SECTION 2. Annual Meeting: The Annual Meeting of Shareholders for the election of Directors and the transaction of such other business as may properly be brought before the meeting shall be held in March, April, May, June or July in each year on the day and at the hour designated by the Board of Directors. SECTION 3. Special Meetings: Special meetings may be called at any time by the President or Board of Directors and shall be called by the President upon written request of the holders of not less than one-tenth of the voting power of all shares entitled to vote at the meeting. SECTION 4. Notice of Meetings: Written notice of the date, time and place of each Annual and Special Meeting (a notice of a Special Meeting shall also contain the general purpose or purposes for such meeting) shall be mailed or delivered, at least ten (10) days but not more than sixty (60) days prior to the date of such meeting, to each shareholder entitled to vote at such meeting at his residence or usual place of business as shown on the records of this Corporation, provided that any one or more of such shareholders, as to himself or themselves, may waive such notice in writing or by attendance without protest at such meeting. SECTION 5. Quorum: The holders of a majority of the shares of the issued and outstanding stock entitled to vote at a meeting, present either in person or by proxy, shall constitute a quorum for the transaction of business at such meeting of the shareholders. Except as otherwise provided by law or these Bylaws, all questions shall be decided by a vote of the holders of a majority of the shares present at any meeting of shareholders at which a quorum is present. If a quorum be not present at such meeting, the shareholders present in person or by proxy may adjourn to such future time as shall be agreed upon by them and notice of such adjournment shall be given to the shareholders not present or represented at the meeting. SECTION 6. Shareholders' Action Without Meeting: Any action which, under any provision of the Connecticut Business Corporation Act, may be taken at a meeting of shareholders, may be taken without such a meeting if consent in writing, setting forth the action so taken or to be taken, is signed severally or collectively by all of the persons who would be entitled to vote upon such action at a meeting, or by their duly authorized attorneys. The Secretary of the Corporation shall file such consent or consents with the minutes of the meetings of the shareholders. ARTICLE III. SHARES SECTION 1. Share Certificates: Share certificates shall be in a form adopted by the Board of Directors and shall be signed by the President or by the Secretary. Such certificates shall bear the seal of the Corporation, the name of the person to whom issued, and the number of such shares which such certificate represents. The consideration for which the shares were issued and the date of issue shall be entered on the Corporation's books. SECTION 2. Transfer of Shares: Shares shall be transferred only on the books of the Corporation by the holder thereof in person or by his attorney. ARTICLE IV. DIRECTORS SECTION 1. Number, Election and Term of Office: A Board of not less than three (3) nor more than seven (7) Directors, including the Independent Director described in Article SEVENTH of the Certificate of Incorporation of the Corporation, shall be elected at the organization meeting of the Corporation and thereafter shall be elected by the shareholders entitled to vote at Annual or Special Meetings of Shareholders. The number of positions on the Board of Directors for purposes of incorporation shall be the number fixed by resolution of the incorporator(s). Thereafter, the number of positions on the Board of Directors shall be the number fixed by resolution of the shareholders or Board of Directors, or, in the absence of such resolution, shall be the number of Directors elected at the preceding Annual Meeting of Shareholders. The number of positions on the Board of Directors for any year, as fixed in accordance with the foregoing (hereinafter referred to as the "number of directorships") may be increased or decreased at any time as provided by law, except that there shall always be at least one Independent Director as described in Article SEVENTH of the Certificate of Incorporation of the Corporation. SECTION 2. Removal of Directors: Any Director may be removed from office at any time, with or without cause, by concurrent vote of the holders of not less than a majority of the issued and outstanding shares entitled to vote, at any meeting of shareholders called for that purpose. SECTION 3. Vacancies: Vacancies created by an increase in the number of directorships shall be filled for the unexpired term by action of shareholders. Vacancies occurring by reason other than by increase in the number of directorships shall be filled for the unexpired term by the concurring vote of a majority of the Directors remaining in office, even though such remaining Directors may be less than a majority of the number of directorships (as fixed for the current year in accordance with Article IV, Section 1). If such remaining Directors fail to fill a vacancy, then such vacancy shall be filled by action of shareholders. The vacancy of a position of Independent Director shall be filled only with another person meeting the requirements of an Independent Director as set forth in Article SEVENTH of the Certificate of Incorporation of the Corporation. SECTION 4. Powers: The property, business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors which may exercise all power and do all the things which may be exercised or done by the Corporation subject to provisions of law, the statutes of the State of Connecticut, the Certificate of Incorporation, these Bylaws, and any vote of the shareholders. The Board of Directors is expressly authorized to determine the use and disposition of any surplus and net profits of the Corporation, including the determination of the amount of working capital required, to set apart out of any of the funds of the Corporation, whether or not available for dividends, a reserve or reserves for any proper purpose and to abolish any such reserve in the manner in which it was created. In addition to the foregoing, the Corporation shall conduct its affairs in the following manner: (i) the Corporation will maintain separate bank accounts, corporate records and books of account from those of any direct or ultimate parent of the Corporation or any subsidiary or affiliate of any such parent; (ii) the Corporation will pay from its own funds and assets its operating expenses and liabilities; (iii) except as provided in the Receivables Purchase and Sale Agreement dated __, 1997 to which the Corporation is a party, the Corporation will act solely in its corporate name and through its own authorized officers and agents; and (iv) the Corporation will not pay or guaranty, or hold itself out as liable for, the obligations of its parent or any subsidiary or affiliate of its parent. SECTION 5. Compensation: The Board of Directors shall have the power to fix from time to time the compensation of the Directors and the method of payment thereof. ARTICLE V. MEETINGS OF DIRECTORS SECTION 1. Annual Meetings: A regular meeting of the Board of Directors shall be held without notice immediately after the Annual Meeting of Shareholders, or as soon thereafter as convenient. At such meeting the Board of Directors shall choose and appoint the officers of the Corporation who shall hold their offices, subject to prior removal by the Board of Directors, until the next annual meeting or until their successors are chosen and qualify. SECTION 2. Regular Meetings: All other regular meetings of the Board of Directors may be held without notice at such date, time and place as the Board of Directors may determine and fix by resolution. SECTION 3. Special Meetings: Special meetings of the Board of Directors may be held upon call of the Chairman (if there be one) or the President, or, in the event of the absence or inability of either to act, of a Vice President, or upon call of any one or more Directors. SECTION 4. Notice: Written or oral notice of the date, time and place of all special meetings of the Board of Directors shall be given to each Director personally or mailed to his residence or usual place of business at least 24 hours prior to the date of the meeting, provided that any one or more Directors, as to himself or themselves, may waive such notice in writing or by attendance without protest at such meeting. SECTION 5. Quorum: Directors holding one-third of the number of directorships shall constitute a quorum. Except as otherwise provided by law or these Bylaws, all questions shall be decided by a vote of a majority of the Directors present at any meeting of the Board of Directors at which a quorum is present. SECTION 6. Director Participation in Meetings by Telephone: A director may participate in a meeting of the Board of Directors by means of conference telephone or similar communications equipment enabling all Directors participating in the meeting to hear one another, and participation in a meeting pursuant to this section shall constitute presence in person at such meeting. SECTION 7. Directors' Action Without Meeting: If all the Directors severally or collectively consent in writing to any action taken or to be taken by the Corporation, such action shall be as valid as though it had been authorized at a meeting of the Board of Directors. The Secretary of the Corporation shall file such consent or consents with the minutes of the meetings of the Board of Directors. ARTICLE VI. OFFICERS SECTION 1. Titles, Election and Duties: At its annual meeting the Board of Directors shall elect a President, a Secretary, a Treasurer and, if the Board shall so determine, a Chairman. Each officer shall, subject to the removal provision below, hold office until the next annual election of officers and until his successor shall have been elected and qualified. Any two or more offices may be held by the same person except that the offices of the President and Secretary may not be simultaneously held by the same person. The Board shall also elect at such annual meeting, and may elect at any regular or special meeting, such other officers as may be required for the prompt and orderly transaction of the business of the Corporation, and each officer shall have such authority and shall perform such duties as may be assigned to him from time to time by the Board of Directors. Any officer may be removed, with or without cause, at any time by the Board in its discretion. Vacancies among the officers by reason of death, resignation, removal (with or without cause) or other reason shall be filled by the Board of Directors. Any vacancy occurring in any office may be filled at any regular meeting of the Board or at any special meeting of the Board held for that purpose. In addition to such powers and duties as these Bylaws and the Board of Directors may prescribe, and except as may be otherwise provided by the Board, each officer shall have the powers and perform the duties which by law and general usage appertain to his particular office. SECTION 2. Chairman: The Chairman, if such office shall be filled by the Directors, shall, when present, preside at all meetings of said Board and of the shareholders. He shall have such other authority and shall perform such additional duties as may be assigned to him from time to time by the Board of Directors. SECTION 3. President: The President shall be the chief executive officer of the Corporation and shall be responsible for the general supervision, direction and control of the business and affairs of the Corporation. If the Chairman shall be absent or unable to perform the duties of his office, or if the office of the Chairman shall not have been filled by the Directors, the President shall preside at meetings of the Board of Directors and of the shareholders. He shall have such other authority and shall perform such additional duties as may be assigned to him from time to time by the Board of Directors. SECTION 4. Secretary: The Secretary shall keep the minutes of all meetings of the shareholders and of the Board of Directors. He shall give notice of all meetings of the shareholders and of said Board. He shall record all votes taken at such meetings. He shall be custodian of all contracts, leases, assignments, deeds and other instruments in writing and documents not properly belonging to the office of the Treasurer, and shall perform such additional duties as may be assigned to him from time to time by the Board of Directors, the Chairman, the President or by law. The Secretary shall have the custody of the Corporate Seal of the Corporation and shall affix the same to all instruments requiring a seal except as otherwise provided in these Bylaws. SECTION 5. Assistant Secretaries: One or more Assistant Secretaries shall perform the duties of the Secretary if the Secretary shall be absent or unable to perform the duties of his office. The Assistant Secretaries shall perform such additional duties as may be assigned to them from time to time by the Board of Directors, the Chairman, the President or the Secretary. . SECTION 6. Treasurer: The Treasurer shall have charge of all receipts and disbursements of the Corporation, and shall be the custodian of the Corporation's funds. He shall have full authority to receive and give receipts for all moneys due and payable to the Corporation from any source whatever, and give full discharge for the same, and to endorse checks, drafts and warrants in its name and on its behalf. He shall sign all checks, notes, drafts and similar instruments, except as otherwise provided for the Board of Directors. The Treasurer shall perform such additional duties as may be assigned to him from time to time by the Board of Directors, the Chairman, the President or by law. SECTION 7. Assistant Treasurer: One or more Assistant Treasurers shall perform the duties of the Treasurer if the Treasurer shall be absent or unable to perform the duties of his office. The Assistant Treasurers shall perform such additional duties as may assigned to them from time to time by the Board of Directors, the Chairman, the President or the Treasurer. ARTICLE VII. SEAL The corporate seal shall consist of a circular disc with the name of the Corporation and the words "Connecticut" and "Seal" thereon. ARTICLE VIII. COMMITTEES SECTION 1. The Board of Directors may designate two or more Directors to constitute an executive committee or other committees, which committees shall have and may exercise all such authority of the Board of Directors as shall be provided in such resolution except as limited by Section 2. At the time of such appointment, the Board of Directors may also appoint, in respect to each member of any such committee, another Director to serve as his alternate at any meeting of such committee which such member is unable to attend. Each alternate shall have, during his attendance at a meeting, of such committee, all the rights and obligations of a regular member thereof. Any vacancy on such committee or among alternate members thereof may be filled by the Board of Directors. SECTION 2. Any such committee, to the extent provided in the resolution of the Board of Directors, shall have and may exercise the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation with the exception of any authority the delegation of which is prohibited by Section 33-753(f) of the Connecticut Business Corporation Act, the Certificate of Incorporation or Bylaws of the Corporation. No Committee shall have the power or authority in reference to amending the Certificate of Incorporation, to authorize or take any action described in Article FOURTH (2), Article SEVENTH, or Article EIGHTH, adopting an agreement of merger or consolidation, recommending to the shareholders the sale, lease, or exchange of all or substantially all of the Corporation's property and assets, recommending to the shareholders a dissolution of the Corporation or the revocation of a dissolution, or amending the Bylaws of the Corporation; and, unless the resolution expressly so provides, no such committee shall have the power or authority to declare a dividend or to authorize the issuance of stock. SECTION 3. A majority of any committee shall have the power to act. Committees shall keep full records of their proceedings and shall report the same to the Board of Directors. ARTICLE IX. AMENDMENTS These Bylaws may be altered, amended, added to, or repealed by the affirmative vote of the holders of a majority of the voting power of shares entitled to vote thereon or by an affirmative vote of Directors holding a majority of the number of directorships, except that these Bylaws or any alteration, amendment or repeal thereof shall not in any manner impair, nor impair the intent of Article IV Section 4, Article VIII Section 2 or Article IX of these Bylaws. Any notice of a meeting of shareholders or of the Board of Directors at which these Bylaws are proposed to be altered, amended, added to, or repealed shall include notice of such proposed action. EX-99 4 EXHIBIT A.3 I, the undersigned, HEREBY CERTIFY that at a meeting of the Board of Directors of THE CONNECTICUT LIGHT AND POWER COMPANY, duly called and held on February 10, 1997, at which a quorum was present and acting throughout, the following preamble and resolutions were duly adopted: WHEREAS, the Company has entered into a Receivables Purchase and Sale Agreement dated July 11, 1996 (the "Existing Agreement") under which the Company each month may, in its discretion and subject to the satisfaction of certain conditions precedent, sell to Corporate Asset Funding Company, Inc. or certain banks an undivided interest in certain billed and unbilled accounts receivable and related assets originated by the Company and arising from the sale of electricity and related services to its retail customers (the "Receivables"); and WHEREAS, the Company desires to have any sales of Receivables by it accounted for as sales for financial reporting purposes; and WHEREAS, in order for such sales made after January 1, 1997 to be so treated, they must comply with the requirements of the Statement of Financial Accounting Standards No. 125, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities, No. 162-C, issued in June 1996 by the Financial Accounting Standards Board ("FAS 125"); and WHEREAS, the formation of a wholly owned special purpose corporation to serve as an intermediate transferee/transferor of the Receivables will enable the company to satisfy certain requirements of FAS 125 on terms which are in the Company's interests; and WHEREAS, the Company desires to restructure the accounts receivable purchase and sale program contemplated by the Existing Agreement to include, among other things, the special purpose corporation. NOW, THEREFORE, IT IS RESOLVED, that, subject to all necessary approvals from regulatory agencies, the Company is authorized to (i) organize under the Connecticut Business Corporation Act a wholly owned special purpose corporation (the "SPC") for the sole purpose of acquiring Receivables from the Company and selling Receivables or undivided interests therein to one or more purchasers on terms similar to those set forth in the Existing Agreement; (ii) capitalize the SPC and make equity contributions to it from time to time; and (iii) acquire all of the capital stock of the SPC. RESOLVED, that the Company is authorized to enter into a receivables purchase and sale agreement with the SPC (the "New Agreement") under which the Company will sell Receivables to the SPC on such terms as the officers of the Company executing such agreement shall deem appropriate. RESOLVED, that the Chairman, the President, any Vice President, the Treasurer, and any Assistant Treasurer are severally authorized in the name and on behalf of the Company to execute and deliver the New Agreement, the execution and delivery thereof to be sufficient and conclusive evidence that the same is within the authority conferred by these resolutions. RESOLVED, that the officers of the Company shall cause the Existing Agreement to terminate upon the effectiveness of the New Agreement. RESOLVED, that the officers of the Company are authorized to prepare and file with the Connecticut Department of Public Utility Control and the Securities and Exchange Commission ("SEC"), such applications and, in the case of the SEC, such disclaimers, as they may determine to be necessary to request approval or authorization for the Company to engage in the transactions contemplated by these resolutions or to take any actions necessary or appropriate in connection therewith; and the officers of the Company are severally authorized to file such amendments to the foregoing applications and to take such other actions in relation thereto as they may deem necessary or desirable. RESOLVED, that the officers of the Company are severally authorized to execute and deliver all such other documents and take all such other actions to effect the restructured accounts receivable purchase and sale program contemplated by these resolutions in accordance with the documents relating thereto and the transactions contemplated by the foregoing resolutions as the officer or officers so acting may deem necessary or advisable to carry out the purposes of the foregoing resolutions, the execution and delivery thereof and the taking of such actions to be sufficient and conclusive evidence that the same is within the authority conferred by these resolutions. I DO FURTHER CERTIFY that the foregoing resolutions are still in full force and effect as of this date. IN WITNESS WHEREOF, I have hereunto set my hand and affixed the corporate seal of said Company on this 30{th} day of June, 1997. O. Kay Comendul Assistant Secretary (Seal) EX-99 5 EXHIBIT D.1 STATE OF CONNECTICUT DEPARTMENT OF PUBLIC UTILITY CONTROL SUPPLEMENTAL APPLICATION OF THE CONNECTICUT LIGHT AND POWER COMPANY WITH RESPECT TO THE SALE OF ACCOUNTS RECEIVABLE DOCKET NO. 96-05-24 I. Background 1. On June 5, 1996, in the above referenced docket, the Department of Public Utility Control (the "Department") approved the transactions described in a letter dated May 20, 1996 and subsequent submissions by The Connecticut Light and Power Company ("CL&P" or the "Company"), a public service company within the meaning of Section 16-1 of the General Statutes of Connecticut, revision of 1958, as amended (the "Connecticut General Statutes"), with respect to the sale from time to time of fractional undivided interests ("Receivable Interests") in certain categories of CL&P's billed and unbilled accounts receivable and related assets ("Receivables"), pursuant to Section 16- 43 of the Connecticut General Statutes. Reference is made to the submitted materials and to the Department's decision (the "Decision") for a complete description of the transactions approved by the Department. 2. In accordance with the Decision, CL&P has entered into a Receivables Purchase and Sale Agreement (the "Existing Agreement") dated July 11, 1996 among CL&P, Corporate Asset Funding Company, Inc. ("CAFCO"), Citicorp North America, Inc. (the "Agent") and Citibank, N.A. (together with its assignees, the "Banks") providing for sales from time to time of Receivable Interests. As of the date of this Supplemental Application, CL&P has sales of $100 million outstanding under the Existing Agreement. Since entering into the Existing Agreement, CL&P has at times made sales of Receivable Interests in the full amount of $200 million permitted by the terms of the Existing Agreement. Such sales have assisted CL&P in meeting its short term cash needs, including costs associated with the current outages at the Millstone nuclear units located in Waterford, Connecticut. 3. When entering into the Existing Agreement, CL&P contemplated that sales of Receivable Interests thereunder would be accounted for as sales under generally accepted accounting principles, and CL&P desires such accounting treatment for financial reporting purposes. In order for such transfers made after January 1, 1997 to be so treated, they must comply with the requirements of newly adopted Statement of Financial Accounting Standards No. 125, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities, No. 162-C (June 1996), ("FAS 125") issued in June 1996 by the Financial Accounting Standards Board, an organization which develops accounting standards, including industry standards for U.S. corporations. FAS 125 establishes a standard that differentiates, for accounting purposes, transfers of financial assets that should be considered sales from transfers that should be considered secured borrowings. One requirement for sale treatment under FAS 125 is that transferred assets be isolated from the seller and its creditors, even in bankruptcy or receivership of the seller. Moreover, as a result of recent downgrades in the credit rating of CL&P, CL&P does not meet one requirement of the Existing Agreement (i.e., the requirement that CL&P have a long-term senior debt rating of at least BBB- by Standard & Poor's or Baa3 by Moody's) for sales of Receivable Interests on the most favorable terms contemplated by the Existing Agreement. {1} The other parties to the Existing Agreement have temporarily waived this requirement but have indicated that they will require the restructuring of the purchase and sale program as described herein in order for CL&P to continue to have the full benefits of the program (i.e., to receive the benefits of commercial paper based financing). 4. In order to meet the requirements of FAS 125 and the requirements of the parties to the Existing Agreement, CL&P proposes to form a wholly owned special purpose corporation, CL&P Receivables Corporation ("CRC"), for the sole purpose of purchasing Receivables from CL&P and selling Receivable Interests. A draft of the Certificate of Incorporation of CRC is filed herewith as Exhibit A and a draft of the bylaws of CRC is filed herewith as Exhibit B. CL&P's authorizing resolution for the restructured arrangements is filed herewith as Exhibit C. 5. The restructured purchase and sale arrangements are intended to accomplish the ultimate sales of Receivable Interests in a manner similar to sales under the Existing Agreement. The addition of CRC to these arrangements serves merely as a vehicle to comply with FAS 125 and provide greater protection to the parties to the Existing Agreement by permitting the "isolation" of the Receivables in a special purpose entity which should have no material creditors other than the parties to the arrangements. Compared to the costs of the program under the Existing Agreement, when viewed on an overall basis, the restructured purchase and sale arrangements add only relatively minor costs of the formation and maintenance of CRC as a separate entity. However, as more fully described below, certain fees and other costs associated with the program will also increase due to the decline in CL&P's credit rating. 6. As explained in greater detail below, the proposed restructuring of the purchase and sale program approved in the Decision will not have any effect on CL&P's provision of service to the public nor will it cause an increase in the rates CL&P charges its customers. Furthermore, CL&P does not expect its customers to experience any change in the procedures to collect on outstanding accounts. Thus, CL&P believes that its implementation of the restructured program is in the public interest. 7. CL&P is seeking the Department's approval for the formation of CRC and the restructuring of the program from a one-step to a two-step sales transaction as more fully described below. II. Proposed Transactions 1. The restructured accounts receivable purchase and sale arrangements will consist of two agreements which will replace the Existing Agreement. Under the first agreement (the "Company Agreement"), CL&P will sell or transfer as equity contributions from time to time Receivables to CRC. A draft of the Company Agreement is filed herewith as Exhibit D. The purchase price for any Receivables so sold will reflect a discount based on assumptions concerning the estimated collection period of the Receivables, collections costs and collection risks as well as CRC's anticipated funding costs. Under the second agreement (the "CRC Agreement"), CRC will sell Receivable Interests to CAFCO, the Banks or their respective successors and assigns (collectively, the "Purchaser") from time to time. A draft of the CRC Agreement is filed herewith as Exhibit E. Such Receivable Interests may be funded and repaid on a revolving basis. The size of Receivable Interests will be calculated according to a formula. Such formula will include reserves based on a multiple of historical losses, carrying costs and other costs associated with the agreements. 2. CL&P anticipates that the availability of Receivables will vary from time to time in accordance with electric energy use by its customers. As a result of this and other factors important to the overall structure of the program, the funds CRC has available to make a purchase at any time {2} may not match the cost of Receivables available. The proposed program includes certain mechanisms to accommodate this mismatch. When the amount of Receivables originated by CL&P exceeds the amount of cash CRC has available, either CRC will make the purchase and owe the balance of the purchase price to CL&P on a deferred basis (the unpaid portion will accrue interest or the purchase price will involve a discount to reflect the deferral), or CL&P will make a capital contribution to CRC in the form of the Receivables for which CRC lacks purchase price funds at that time. Conversely, if CRC develops a substantial cash balance (due to collections of previously transferred Receivables exceeding the balance of newly created Receivables available for purchase), CRC will likely dividend the excess cash to CL&P. 3. Under the CRC Agreement, purchases may be funded by the Purchaser's issuance of commercial paper. The minimum purchase price for a Receivable Interest which may be sold in a single transaction will continue to be $5,000,000 with a purchase limit of $200,000,000. 4. The Agent will have the right to appoint a collection agent on behalf of the Purchaser and CRC, to administer and collect receivables and to notify the obligors of the sale of their receivables, at the Agent's option. CL&P will be appointed as the initial collection agent, and only under certain adverse conditions can the Agent appoint a successor collection agent. Therefore, CL&P's customers are not expected to experience any change in current servicing and collection procedures. 5. Certain obligations under the Company Agreement will create limited recourse against CL&P. Such recourse claims include liability for (i) failure to transfer to CRC a first priority ownership interest in the Receivables, (ii) CL&P's breach of its representations, warranties or covenants, and (iii) certain indemnity obligations. In order to secure these obligations, CL&P will grant to the Agent a lien on, and security interest in, any rights which the Company may have in respect of Receivables. The CRC Agreement will create comparable recourse obligations against CRC, and CRC will grant a security interest in the Receivables and certain other rights and remedies (including its rights and remedies under the Company Agreement) to secure such recourse obligations. Neither CRC's nor the Purchaser's recourse to CL&P will include any rights against CL&P should customer defaults on the Receivables result in collections attributable to the Receivable Interests sold to the Purchaser being insufficient to reimburse the Purchaser for the purchase price paid by it for the Receivable Interests and its anticipated yield. The Purchaser bears the risk for any credit losses on the Receivables which exceed the reserves for such losses included in the Receivable Interests. 6. The Company and CRC will be obligated to reimburse the Purchaser, the Agent and the Banks for various costs and expenses associated with the Company Agreement and the CRC Agreement. The Company and CRC will also be required to pay to the Agent certain fees for services in connection with such agreements. CL&P as collection agent will receive fees from CRC and/or the Purchaser. However, CL&P does not anticipate paying any fees to CRC. See Exhibit G for details of fees, commissions and expenses. While CRC may realize a profit on these transactions, such profit will inure to the benefit of CL&P since CL&P will wholly own CRC. 7. CL&P believes that, based upon pricing under the existing facility, funding under the proposed transactions will continue to be more advantageous than other sources of funds available to CL&P. The facility fees related to the restructured program will not exceed 0.250% of the total available amount of $200,000,000, or $500,000 per annum compared to 0.11% or $220,000 per annum for sales under the Existing Agreement (both as compared to a $200,000,000 committed line at 0.500% or $1,000,000 per annum). Funding spreads under the restructured program will remain the same as under the Existing Agreement (not greater than 0.145%), compared to 0.95% under the committed line. The increase in fees from the Existing Agreement to the restructured program is related to the decline in CL&P's credit rating. Only minor costs will be incurred as a result of the creation and maintenance of CRC through the restructuring. See Exhibit G for a complete listing of fees and expenses. 8. The arrangements under the Company Agreement and the CRC Agreement are scheduled to terminate on July 11, 2001. The CRC Agreement allows the Purchaser to assign all of its rights and obligations under the CRC Agreement to other persons, including the providers of its bank facilities. However, any such assignment will not change the nature of the obligations of CL&P or CRC under the Company Agreement and the CRC Agreement. 9. The above-described transactions permit CL&P to accelerate its receipt of cash collections from accounts receivable and thereby increase its ability to meet its short term cash needs. The purchase and sale transactions provide CL&P with needed financial flexibility. This restructured purchase and sale program is one of several financing tools CL&P is pursuing in connection with its overall strategy to meet its anticipated financing needs, including its capital and liquidity requirements. See, e.g., DPUC Docket No. 97-03-23, Application to Issue First and Refunding Mortgage Bonds. 10. The transactions proposed hereunder are subject to certain approvals of the Securities and Exchange Commission (the "SEC") under the Public Utility Holding Company Act of 1935, as amended. The SEC's approval of CL&P's proposed transactions is subject to CL&P's receipt of all necessary state regulatory approvals, including the approval of the Department hereunder. CL&P hereby waives the requirement under Section 16-43 of the General Statutes of Connecticut that the Department act on this Supplemental Application within 30 days. However, CL&P is desirous of obtaining all necessary approvals as soon as possible; accordingly, final approval of this Supplemental Application by the Department is respectfully requested on or before August 15, 1997. A copy of CL&P's application to the SEC is attached as Exhibit F. 11. The financial statements attached as Exhibits H (CL&P) and I (Northeast Utilities), include a balance sheet, income statement, statement of retained earnings, capital structure and explanation of pro forma adjustments which reflect the proposed transactions. III. Additional Information The following additional information is supplied as part of this Supplemental Application: A. The exact legal name of the Applicant and its principal place of business: The Connecticut Light and Power Company 107 Selden Street Berlin, Connecticut 06037-5457 CL&P is a corporation specially chartered by the General Assembly of the State of Connecticut. B. The name, title, address, and telephone number of the attorneys and others to whom correspondence or communications in regard to this Supplemental Application are to be addressed: David R. McHale Assistant Treasurer-Finance Northeast Utilities Service Company P.O. Box 270 Hartford, Connecticut 06141-0270 Telephone: (860) 665-5601 Fax: (860) 665-5457 and Jeffrey C. Miller Assistant General Counsel The Connecticut Light & Power Company c/o Northeast Utilities Service Company P.O. Box 270 Hartford, CT 06141 Telephone: (860) 665-3532 Fax: (860) 665-5504 and Thomas R. Wildman, Esq. Day, Berry & Howard CityPlace Hartford, Connecticut 06103-3499 Telephone: (860) 275-0114 Fax: (860) 275-0343 C. A concise and explicit statement of facts on which the Department is expected to rely in granting this Supplemental Application; 1. As a result of (i) CL&P's determination that it would be beneficial to continue to have the ability to sell Receivable Interests in order to increase its ability to meet its short term cash needs and (ii) CL&P's desire to make such sales in accord with the requirements of FAS 125 in order to obtain "true sale" financial reporting for these sales, CL&P proposes to restructure its accounts receivable sales program as previously approved by the Department. The restructured arrangements involve formation of a wholly owned special purpose subsidiary for the sole purpose of purchasing Receivables from CL&P. The subsidiary will sell Receivable Interests to the Purchaser which will issue commercial paper or utilize other funding arrangements available to it to fund those transactions. 2. The restructured arrangements involving the subsidiary will be for sales of Receivable Interests on terms similar to those previously approved by the Department under the Existing Agreement. 3. The contemplated sales of accounts receivable to the subsidiary will permit the acceleration by 30 to 60 days of anticipated income through the conversion of accounts receivable to cash. The proposed transactions will not result in a rate increase to CL&P's retail customers now or in the future. Furthermore, CL&P does not expect its customers to experience any change in the procedures to service or collect on outstanding accounts since it is intended that CL&P will continue to serve as the collection agent for any accounts receivable sold under the program and can be removed as such collection agent only in certain unlikely circumstances. Thus, it is expected that the restructured program will continue to provide CL&P with important financial flexibility with no change in the rates charged or CL&P's provision of service to the public. 4. CL&P believes that, as in the case of sales under the Existing Agreement, the proposed restructured purchase and sale program will provide it with needed financial flexibility at a time when the company is incurring costs associated with the current outages at the Millstone nuclear plants. CL&P will meet its short-term funding requirements through a combination of internally generated funds, borrowing under existing credit facilities and external financing arrangements such as this program. CL&P has been utilizing the existing program approved in the Decision, and expects that the restructured program will continue to be an important funding option to the Company. 5. CL&P further expects that the proposed program will continue to offer attractive pricing as compared to alternative funding sources. 6. An estimate of the expenses that CL&P will incur in connection with the proposed transaction is filed herewith as Exhibit G. IV. Exhibits CL&P is filing herewith (or, as indicated, will file by amendment) the exhibits listed in Appendix 1 hereto. This Supplemental Application and Appendix 1 set forth all information and exhibits required to be filed by CL&P and which CL&P deems necessary or desirable to support the granting of this Supplemental Application. CL&P, however, hereby reserves the right to file such testimony and additional exhibits as it may consider to be necessary or desirable. V. Requests for Approval WHEREFORE, CL&P respectfully requests the Department's approval, pursuant to Section 16-43 of the Connecticut General Statutes, of the transactions described herein. Dated this 30th day of June, 1997. Respectfully submitted, THE CONNECTICUT LIGHT AND POWER COMPANY By: David R. McHale Assistant Treasurer - Finance **FOOTNOTES** {1} CL&P's current credit ratings are BB+ by Standard & Poor's and Ba1 by Moody's. {2} The only funds available to CRC are those resulting from its participation in the program and CL&P's capital contributions to it. SUPPLEMENTAL APPLICATION OF THE CONNECTICUT LIGHT AND POWER COMPANY WITH RESPECT TO THE SALE OF ACCOUNTS RECEIVABLE DOCKET NO. 96-05-24 APPENDIX 1 LIST OF EXHIBITS {***} A. Draft of the Certificate of Incorporation of CRC. B. Draft of the Bylaws of CRC. C. CL&P's authorizing resolution for the proposed transactions. D. Draft of Company Agreement. E. Draft of CRC Agreement. F. Application to the Securities and Exchange Commission. G. Schedule of Fees, Commissions and Expenses. H. The Connecticut Light and Power Company. H.1 Balance Sheet, per books and pro forma. H.2 Income Statement, per books and pro forma. H.3 Statement of Retained Earnings, per books and pro forma, and Statement of Capital Structure per books and pro forma. H.4 Explanation of Pro Forma Adjustments. I. Northeast Utilities and Subsidiaries. I.1 Consolidated Balance Sheet, per books and pro forma. I.2 Consolidated Income Statement, per books and pro forma. I.3 Consolidated Statement of Retained Earnings, per books and pro forma, and Consolidated Statement of Capital Structure, per books and pro forma. I.4 Explanation of Pro Forma Adjustments. **FOOTNOTES** {***} Please note that all of the Exhibits listed on this Appendix 1 (other than Items D & E) have been filed in both paper form and on diskette. Exhibits to the copy of "SUPPLEMENTAL APPLICATION OF THE CONNECTICUT LIGHT AND POWER COMPANY WITH RESPECT TO THE SALE OF ACCOUNTS RECEIVABLE" filed as Exhibit D.1 to Form U-1/A intentionally omitted. EX-99 6 EXHIBIT F. August 18, 1997 Securities and Exchange Commission 450 Fifth Street, N.W. Washington, D.C. 20549 Re: File No. 70-9045 Application/Declaration of The Connecticut Light and Power Company with Respect to the Organization of a Wholly Owned Subsidiary Related to an Accounts Receivable Purchase and Sale Program Ladies and Gentlemen: I am Assistant General Counsel of Northeast Utilities Service Company ("NUSCO"), the service company subsidiary of Northeast Utilities ("NU"), and I am furnishing this opinion as Exhibit F to the Application/Declaration, as amended, on Form U-1 (the "Declaration") of The Connecticut Light and Power Company ("CL&P"), a subsidiary of NU, to the Commission with respect to the organization by CL&P of a wholly owned subsidiary (CL&P Receivables Corporation or "CRC") related to an accounts receivable purchase and sale program and related transactions, as more fully set forth in the Declaration. In connection with this opinion, I have examined or caused to be examined by counsel associated with or engaged by me, including counsel who are employed by NUSCO, such papers, documents, and records, and have made such examination of law and have satisfied myself as to such other matters as I have deemed relevant or necessary for the purpose of this opinion. I have assumed the authenticity of all documents submitted to me as originals, the genuineness of all signatures, the legal capacity of natural persons, and the conformity to originals of all documents submitted to me as copies. The opinions set forth herein are limited to the laws of the State of Connecticut and the federal laws of the United States. I am a member of the bar of the State of New York. I am not a member of the bar of the State of Connecticut, and do not hold myself out as an expert in the laws of such jurisdiction, although I have made a study of relevant laws of such jurisdiction. In expressing opinions about matters governed by the laws of the State of Connecticut, I have consulted with counsel who are employed by NUSCO and are members of the bars of such jurisdiction. The opinions set forth in paragraph (b) below are subject to the effect of bankruptcy, insolvency, moratorium and other similar laws affecting creditors rights generally and general principles of equity. Based upon and subject to the foregoing, and if the proposed transactions contemplated by the Declaration are carried out in accordance therewith, I am of the opinion that: (a) all Connecticut laws applicable to the proposed transactions will have been complied with; (b) (i) CRC will be validly organized and duly existing under the laws of the State of Connecticut, (ii) the common stock of CRC issued to CL&P will be validly issued, fully paid and nonassessable, and CL&P will be entitled to all of the rights and privileges appertaining to the ownership of 100% of the issued and outstanding common stock of CRC, and (iii) insofar as any interests in receivables sold by CRC as part of such transactions are regulated as the issuance of securities, such securities will be valid and binding obligations of CRC in accordance with their terms; (c) CL&P will legally acquire the common stock of CRC to be acquired by it as part of the proposed transactions; and (d) the consummation of the proposed transactions by CL&P and CRC will not violate the legal rights of the holders of any securities issued by CL&P or CRC or any associate company thereof. Very truly yours, /s/ Jeffrey C. Miller Jeffrey C. Miller EX-27 7
OPUR1 EXHIBIT G.1 THE CONNECTICUT LIGHT AND POWER COMPANY FINANCIAL DATA SCHEDULE AS OF MARCH 31, 1997 (THOUSANDS OF DOLLARS) THE CONNECTICUT LIGHT AND POWER COMPANY 1 1000
PRO FORMA GIVING EFFECT TO PROPOSED DESCRIPTION PER BOOK TRANSACTION MAR-31-1997 MAR-31-1997 MAR-31-1997 MAR-31-1997 YEAR YEAR PER-BOOK PRO-FORMA 3,820,873 3,820,873 384,335 384,335 743,373 541,678 1,327,315 1,327,315 0 0 6,275,896 6,074,201 122,229 122,229 640,077 640,077 535,184 534,201 1,297,490 1,296,507 155,000 155,000 116,200 116,200 1,816,657 1,816,657 0 0 200,000 0 0 0 224,116 224,116 0 0 144,062 144,062 12,370 12,370 2,310,001 2,309,289 6,275,896 6,074,201 2,363,013 2,363,013 (47,865) (47,865) 2,417,934 2,417,934 2,370,069 2,370,069 (7,056) (7,056) 19,084 19,207 12,028 12,151 131,547 132,653 (119,519) (120,502) 15,221 15,221 (134,740) (135,723) 84,339 84,339 130,683 130,683 0 0 0.00 0.00 0.00 0.00
EX-27 8
OPUR1 EXHIBIT G.2 NORTHEAST UTILITIES AND SUBSIDIARIES FINANCIAL DATA SCHEDULE AS OF MARCH 31, 1997 (THOUSANDS OF DOLLARS) NORTHEAST UTILITIES AND SUBSIDIARIES 10 1000
PRO FORMA GIVING EFFECT TO PROPOSED DESCRIPTION PER BOOK TRANSACTION MAR-31-1997 MAR-31-1997 MAR-31-1997 MAR-31-1997 YEAR YEAR PER-BOOK PRO-FORMA 6,672,859 6,672,859 659,054 659,054 1,107,231 905,536 2,230,362 2,230,362 0 0 10,669,506 10,467,811 680,260 680,260 935,784 935,784 817,890 816,907 2,266,065 2,265,082 274,500 274,500 136,200 136,200 3,574,119 3,574,119 0 0 226,250 26,250 0 0 315,338 315,338 26,500 26,500 189,128 189,128 19,832 19,832 3,641,574 3,640,862 10,669,506 10,467,811 3,739,314 3,739,314 35,353 35,353 3,479,521 3,479,521 3,514,874 3,514,874 224,440 224,440 39,943 40,066 264,383 264,506 277,240 278,346 (12,857) (13,840) 33,309 33,309 (46,166) (47,149) 152,330 152,330 283,245 283,245 0 0 (0.36) (0.37) (0.36) (0.37)
EX-99 9 EXHIBIT H.1
SCHEDULE OF ESTIMATED FEES, COMMISSIONS AND EXPENSES CL&P Securities and Exchange Commission Filing Fee $2,000 Legal Fees Counsel to the Purchaser and Agent 65,000 Counsel to the Applicants 50,000 Northeast Utilities Service Company 53,000 (Financial, Accounting, Legal and Other Fees and Services) Total Estimate of Fees, Commissions and Expenses $170,000*
* It is estimated that approximately $60,000 will be related to the set up of CRC. EX-99 10 EXHIBIT H.2
SCHEDULE OF ESTIMATED FEES, COMMISSIONS AND EXPENSES CRC Independent Director Fees $10,000 Audit Fees 15,000 Total Estimate of Fees, Commissions and Expenses $25,000
EX-99 11
THE CONNECTICUT LIGHT AND POWER COMPANY Exhibit 1.1 CONSOLIDATED BALANCE SHEET Page 1 of 2 AS OF MARCH 31, 1997 (THOUSANDS OF DOLLARS) PRO FORMA GIVING EFFECT PRO FORMA TO PROPOSED PER BOOK ADJUSTMENTS* TRANSACTION ----------- ----------- ------------- ASSETS UTILITY PLANT, AT ORIGINAL COST: ELECTRIC $6,312,883 $6,312,883 LESS: ACCUMULATED PROVISION FOR DEPRECIATION 2,722,637 2,722,637 ----------- ----------- ------------- 3,590,246 0 3,590,246 CONSTRUCTION WORK IN PROGRESS 96,735 96,735 NUCLEAR FUEL, NET 133,892 133,892 ----------- ----------- ------------- TOTAL NET UTILITY PLANT 3,820,873 0 3,820,873 ----------- ----------- ------------- OTHER PROPERTY AND INVESTMENTS: NUCLEAR DECOMMISSIONING TRUSTS, AT MARKET 307,230 307,230 INVESTMENTS IN REGIONAL NUCLEAR GENERATING COMPANIES, AT EQUITY 58,369 58,369 OTHER, AT COST 18,736 18,736 ----------- ----------- ------------- 384,335 0 384,335 ----------- ----------- ------------- CURRENT ASSETS: CASH 197 200,000 (a) 198,502 (200,000)(a) 200,000 (b) (195)(c) (1,500)(d) RECEIVABLES, NET 224,041 (190,735)(b) 33,306 RECEIVABLES FROM AFFILIATED COMPANIES 225,864 (200,000)(a) 25,864 ACCRUED UTILITY REVENUES 77,461 (77,445)(b) 16 FUEL, MATERIAL AND SUPPLIES, AT AVERAGE COST 85,110 85,110 TAXES RECEIVABLES 32,414 32,414 RECOVERABLE ENERGY COSTS, NET -- CURRENT 18,724 18,724 PREPAYMENTS AND OTHER 79,562 79,562 INVESTMENT IN SECURITIES 67,074 (b) 68,180 1,106 (d) ----------- ----------- ------------- TOTAL CURRENT ASSETS 743,373 (201,695) 541,678 ----------- ----------- ------------- DEFERRED CHARGES: REGULATORY ASSETS: INCOME TAXES, NET 735,844 735,844 UNRECOVERED CONTRACT OBLIGATIONS 281,527 281,527 DEFERRED DEMAND SIDE MANAGEMENT COSTS 76,947 76,947 NET RECOVERABLE ENERGY COSTS 84,541 84,541 COGENERATION COSTS 58,029 58,029 OTHER 60,173 60,173 UNAMORTIZED DEBT EXPENSE 17,084 17,084 OTHER 13,170 13,170 ----------- ----------- ------------- TOTAL DEFERRED CHARGES 1,327,315 0 1,327,315 ----------- ----------- ------------- TOTAL ASSETS $6,275,896 ($201,695) $6,074,201 =========== =========== ============= * EXPLANATION ON EXHIBIT 1.4 PAGE 1 OF 1
THE CONNECTICUT LIGHT AND POWER COMPANY Exhibit 1.1 CONSOLIDATED BALANCE SHEET Page 2 of 2 AS OF MARCH 31, 1997 (THOUSANDS OF DOLLARS) PRO FORMA GIVING EFFECT PRO FORMA TO PROPOSED PER BOOK ADJUSTMENTS* TRANSACTION ----------- ----------- ------------- CAPITALIZATION AND LIABILITIES CAPITALIZATION: COMMON SHARES $122,229 $122,229 CAPITAL SURPLUS, PAID IN 640,077 640,077 RETAINED EARNINGS 535,184 (983) 534,201 ----------- ----------- ------------- TOTAL COMMON STOCKHOLDER'S EQUITY 1,297,490 (983) 1,296,507 PREFERRED STOCK NOT SUBJECT TO MANDATORY REDEMPTION 116,200 116,200 PREFERRED STOCK SUBJECT TO MANDATORY REDEMPTION 155,000 155,000 LONG-TERM DEBT 1,816,657 1,816,657 ----------- ----------- ------------- TOTAL CAPITALIZATION 3,385,347 (983) 3,384,364 MINORITY INTEREST IN COLSOLIDATED SUBSIDIARY 100,000 100,000 OBLIGATIONS UNDER CAPITAL LEASES 144,062 144,062 NOTES PAYABLE TO BANKS 200,000 (200,000)(a) 0 LONG-TERM DEBT AND PREFERRED STOCK - CURRENT PORTION 224,116 224,116 OBLIGATIONS UNDER CAPITAL LEASES - CURRENT PORTION 12,370 12,370 ACCOUNTS PAYABLE 96,027 96,027 ACCOUNTS PAYABLE TO AFFILIATED COMPANIES 58,008 58,008 ACCRUED TAXES 28,223 (712)(e) 27,511 ACCRUED INTEREST 34,982 34,982 NUCLEAR COMPLIANCE 27,855 27,855 OTHER 23,516 23,516 ----------- ----------- ------------- TOTAL CURRENT LIABILITIES 705,097 (200,712) 504,385 DEFERRED CREDITS: ACCUMULATED DEFERRED INCOME TAXES 1,349,880 1,349,880 ACCUMULATED DEFERRED INVESTMENT TAX CREDITS 133,239 133,239 DEFERRED CONTRACT OBLIGATION 287,773 287,773 OTHER 170,498 170,498 ----------- ----------- ------------- TOTAL DEFERRED CREDITS 1,941,390 0 1,941,390 ----------- ----------- ------------- TOTAL CAPITALIZATION AND LIABILITIES $6,275,896 ($201,695) $6,074,201 =========== =========== ============= * EXPLANATION ON EXHIBIT 1.4 PAGE 1 OF 1
THE CONNECTICUT LIGHT AND POWER COMPANY Exhibit 1.2 CONSOLIDATED INCOME STATEMENT Page 1 of 1 FOR 12 MONTHS ENDED MARCH 31, 1997 (THOUSANDS OF DOLLARS) PRO FORMA GIVING EFFECT PRO FORMA TO PROPOSED PER BOOK ADJUSTMENTS* TRANSACTION OPERATING REVENUE $2,363,013 $0 $2,363,013 ---------- --------- ---------- OPERATING EXPENSES: OPERATION - FUEL PURCHASED AND INTERCHANGE POWER 873,049 873,049 OTHER 730,630 730,630 MAINTENANCE 321,578 321,578 DEPRECIATION 244,312 244,312 AMORTIZATION/DEFERRALS OF REGULATORY ASSETS, NET 76,051 76,051 FEDERAL AND STATE INCOME TAXES (47,865) (47,865) TAXES OTHER THAN INCOME TAXES 172,314 172,314 ---------- --------- ---------- TOTAL OPERATING EXPENSES 2,370,069 0 2,370,069 ---------- --------- ---------- OPERATING INCOME: (7,056) 0 (7,056) ---------- --------- ---------- OTHER INCOME: EQUITY IN EARNINGS OF REGIONAL NUCLEAR GENERATING COMPANIES 6,600 6,600 OTHER, NET 23,557 (195)(c) 22,968 (394)(d) MINORITY INTEREST IN INCOME OF SUBSIDIARY (11,625) (11,625) INCOME TAXES - CREDIT 552 712 (e) 1,264 ---------- --------- ---------- OTHER INCOME, NET 19,084 123 19,207 ---------- --------- ---------- INCOME BEFORE INTEREST CHARGES 12,028 123 12,151 ---------- --------- ---------- INTEREST CHARGES: INTEREST ON LONG-TERM DEBT 130,683 130,683 OTHER INTEREST 864 864 LOSS ON SALE OF ACCOUNTS RECEIVABLE 1,106 (b) 1,106 ---------- --------- ---------- TOTAL INTEREST CHARGES 131,547 1,106 132,653 ---------- --------- ---------- NET INCOME ($119,519) ($983) ($120,502) * EXPLANATION ON EXHIBIT 1.4 PAGE 1 OF 1
THE CONNECTICUT LIGHT AND POWER COMPANY Exhibit 1.3 CONSOLIDATED STATEMENT OF RETAINED EARNINGS Page 1 of 1 FOR 12 MONTHS ENDED MARCH 31, 1997 (THOUSANDS OF DOLLARS) PER BOOK ADJUSTED TO PRO FORMA REFLECT PER BOOK ADJUSTMENTS* PRO FORMA ---------- --------- ---------- BALANCE AT BEGINNING OF PERIOD $754,263 $754,263 NET INCOME (119,519) ($983) (120,502) CASH DIVIDENDS ON PREFERRED STOCK (15,221) (15,221) CASH DIVIDEND ON COMMON STOCK (84,339) (84,339) ---------- --------- ---------- BALANCE AT END OF PERIOD $535,184 ($983) $534,201 ========== ========= ==========
THE CONNECTICUT LIGHT AND POWER COMPANY CONSOLIDATED STATEMENT OF CAPITAL STRUCTURE AS OF MARCH 31, 1997 (THOUSANDS OF DOLLARS) PER BOOK ADJUSTED TO PRO FORMA REFLECT % PER BOOK ADJUSTMENTS* PRO FORMA % DEBT: LONG-TERM DEBT 56.5% $2,040,773 0 $2,040,773 56.6% PREFERRED STOCK: NOT SUBJECT TO REDEMPTION 116,200 116,200 SUBJECT TO REDEMPTION 155,000 155,000 --------- -------- ---------- TOTAL PREFERRED STOCK 7.5% 271,200 0 271,200 7.5% COMMON EQUITY: COMMON SHARES 122,229 122,229 CAPITAL SURPLUS, PAID IN 640,077 640,077 RETAINED EARNINGS 535,184 (983) 534,201 --------- -------- ---------- TOTAL COMMON STOCKHOLDER'S EQUITY 36.0% 1,297,490 (983) 1,296,507 35.9% --------- -------- ---------- TOTAL CAPITAL 100.0% $3,609,463 (983) $3,608,480 100.0% ========= ======== ========== * EXPLANATION ON EXHIBIT 1.4 PAGE 1 OF 1
THE CONNECTICUT LIGHT AND POWER COMPANY Exhibit 1.4 EXPLANATION OF ADJUSTMENTS Page 1 of 1 (THOUSANDS OF DOLLARS) DEBIT CREDIT (a) NOTES PAYABLE TO BANK $200,000 CASH 200,000 RECEIVABLES FROM AFFILIATED COMPANIES $200,000 CASH 200,000 To reverse entries related to funding under the Existing Agreement. (b) CASH $200,000 INVESTMENT IN SECURITIES 67,074 LOSS ON SALE OF ACCOUNTS RECEIVABLE 1,106 RECEIVABLES, NET $190,735 ACCRUED UTILITY REVENUES 77,445 To record a initial sale of 3/31/97 accounts receivable for proceeds of $200,000.
Fair Value % of Total Fair Allocated Book Assets Value of Assets Value Loss ========== =============== ============== ========= Cash Proceeds from sale less funding costs ($200,000 - $1,500 (see (d) below)) $198,500 74.43% $199,606 $1,106 Estimated value of portion retained (($190,735+$77,445) - $200,000) 68,180 25.57% 68,574 ========== =============== ============== $266,680 100% $268,180 ========== =============== ============== (c) LOSS ON INVESTMENT IN SECURITIES - OTHER, NET $195 CASH $195 To record upfront fees associated with establishing the program. (d) LOSS ON INVESTMENT IN SECURITIES - OTHER, NET $394 INVESTMENT IN SECURITIES 1,106 CASH $1,500
To reflect the costs and market valuation associated with the transaction. The costs are based on the March 1997 funding rate of 5.60% plus a spread of .40%. The Loss on Sale of Accounts Receivable and Loss on Investments in Securities, will, over the life of the program reflect the funding and administrative costs of the program.
Proceeds from initial sale of Acounts Receivable $200,000 Funding Rate * 6.00% / (45/360) ------------- Costs associated with initial sale of Accounts Receivable $1,500 ============= (e) ACCRUED TAXES $712 INCOME TAX EXPENSE $712 To record the reduction in Federal and State income taxes: $1,695 x 42.00% = $712
NOTE: CL&P anticipates that the availability of accounts receivable will vary from time to time in accordance with electric energy usage. As a result, the funds that CRC has available to make the purchase may not exactly match the purchase requirement. The proposed program includes certain mechanisms to accommodate this mismatch. When the amount of receivable originated by CL&P exceed the amount of cash CRC has available, either CRC will make the purchase and owe the balance of the purchase price to CL&P on a deferred basis, or CL&P will make a capital contribution to CRC in the form of the receivables for which CRC lacks purchase price funds at that time. Conversely, if CRC develops a substantial cash balance CRC will likely dividend the excess cash to CL&P. Such dividends may represent a return of previous capital contributions by CL&P to CRC. As a reminder, the only funds available to CRC will be those resulting from its participation in the program and CL&P's capital contributions to it. CRC will have no source of funds or obligations outside of the receivables purchase and sale program. Also under the program agreements CRC is required to pay CL&P a servicing fee for servicing the receivables. This being an intercompany transaction, it is eliminated on CL&P's consolidated financial statements, and therefore is not reflected above. EX-99 12
NORTHEAST UTILITIES AND SUBSIDIARIES Exhibit 2.1 CONSOLIDATED BALANCE SHEET Page 1 of 2 AS OF MARCH 31, 1997 (THOUSANDS OF DOLLARS) PRO FORMA GIVING EFFECT PRO FORMA TO PROPOSED PER BOOK ADJUSTMENTS* TRANSACTION ----------- ----------- ------------- ASSETS UTILITY PLANT, AT ORIGINAL COST: ELECTRIC & OTHER $9,911,051 $9,911,051 LESS: ACCUMULATED PROVISION FOR DEPRECIATION 4,061,570 4,061,570 ----------- ----------- ------------- 5,849,481 0 5,849,481 UNAMORTIZED ACQUISITION COSTS - PSNH 469,353 469,353 CONSTRUCTION WORK IN PROGRESS 155,140 155,140 NUCLEAR FUEL, NET 198,885 198,885 ----------- ----------- ------------- TOTAL NET UTILITY PLANT 6,672,859 0 6,672,859 ----------- ----------- ------------- OTHER PROPERTY AND INVESTMENTS: NUCLEAR DECOMMISSIONING TRUSTS, AT MARKET 418,208 418,208 INVESTMENTS IN REGIONAL NUCLEAR GENERATING COMPANIES, AT EQUITY 87,399 87,399 INVESTMENTS IN TRANSMISSION COMPANIES, AT EQUITY 20,342 20,342 INVESTMENTS IN CHARTER OAK ENERGY 87,286 87,286 OTHER, AT COST 45,819 45,819 ----------- ----------- ------------- 659,054 0 659,054 ----------- ----------- ------------- CURRENT ASSETS: CASH AND CASH EQUIVALENTS 261,409 (200,000)(a) 259,714 200,000 (b) (195)(c) (1,500)(d) RECEIVABLES, NET 411,384 (190,735)(b) 220,649 ACCRUED UTILITY REVENUES 121,197 (77,445)(b) 43,752 FUEL, MATERIAL AND SUPPLIES, AT AVERAGE COST 219,036 219,036 PREPAYMENTS AND OTHER 62,245 62,245 RECOVERABLE ENERGY COSTS, NET CURRENT PORTION 31,960 31,960 INVESTMENT IN SECURITIES 67,074 (b) 68,180 1,106 (d) ----------- ----------- ------------- TOTAL CURRENT ASSETS 1,107,231 (201,695) 905,536 ----------- ----------- ------------- DEFERRED CHARGES: REGULATORY ASSET INCOME TAXES - NET 986,477 986,477 DEFERRED COSTS - NUCLEAR PLANTS 190,094 190,094 UNRECOVERED CONTRACT OBLIGATIONS 408,439 408,439 RECOVERABLE ENERGY COSTS, NET 298,069 298,069 DEFERRED DEMAND SIDE MANAGEMENT COSTS 76,947 76,947 COGENERATION COSTS - CLP 58,029 58,029 OTHER 99,335 99,335 UNAMORTIZED DEBT EXPENSE 37,425 37,425 OTHER 75,547 75,547 ----------- ----------- ------------- TOTAL DEFERRED CHARGES 2,230,362 0 2,230,362 ----------- ----------- ------------- TOTAL ASSETS $10,669,506 ($201,695) $10,467,811 =========== =========== ============= * EXPLANATION ON EXHIBIT 2.4 PAGE 1 OF 1
NORTHEAST UTILITIES AND SUBSIDIARIES Exhibit 2.1 CONSOLIDATED BALANCE SHEET Page 2 of 2 AS OF MARCH 31, 1997 (THOUSANDS OF DOLLARS) PRO FORMA GIVING EFFECT PRO FORMA TO PROPOSED PER BOOK ADJUSTMENTS* TRANSACTION ----------- ----------- ------------- CAPITALIZATION AND LIABILITIES CAPITALIZATION: COMMON SHARES $680,260 $680,260 CAPITAL SURPLUS, PAID IN 935,784 935,784 DEFERRED BENEFIT PLAN-EMPLOYEE STOCK OWNERSHIP PLAN (167,869) (167,869) RETAINED EARNINGS 817,890 (983) 816,907 ----------- ----------- ------------- TOTAL COMMON STOCKHOLDER'S EQUITY 2,266,065 (983) 2,265,082 PREFERRED STOCK NOT SUBJECT TO MANDATORY REDEMPTION 136,200 136,200 PREFERRED STOCK SUBJECT TO MANDATORY REDEMPTION 274,500 274,500 LONG-TERM DEBT 3,574,119 3,574,119 ----------- ----------- ------------- TOTAL CAPITALIZATION 6,250,884 (983) 6,249,901 OBLIGATIONS UNDER CAPITAL LEASES 189,128 189,128 MINORITY INTEREST IN CONSOLIDATED SUBS 99,944 99,944 CURRENT LIABILITIES: NOTES PAYABLE TO BANKS 226,250 (200,000)(a) 26,250 LONG-TERM DEBT AND PREFERRED STOCK - CURRENT PORTION 341,838 341,838 OBLIGATIONS UNDER CAPITAL LEASES - CURRENT PORTION 19,832 19,832 ACCOUNTS PAYABLE 328,008 328,008 ACCRUED TAXES 34,430 (712)(e) 33,718 ACCRUED INTEREST 71,187 71,187 ACCRUED PENSION BENEFITS 96,063 96,063 NUCLEAR COMPLIANCE 34,930 34,930 OTHER 76,392 76,392 ----------- ----------- ------------- TOTAL CURRENT LIABILITIES 1,228,930 (200,712) 1,028,218 DEFERRED CREDITS: ACCUMULATED DEFERRED INCOME TAXES 2,024,502 2,024,502 ACCUMULATED DEFERRED INVESTMENT TAX CREDITS 166,776 166,776 DEFERRED CONTRACT OBLIGATIONS 414,685 414,685 OTHER 294,657 294,657 ----------- ----------- ------------- TOTAL DEFERRED CREDITS 2,900,620 0 2,900,620 ----------- ----------- ------------- TOTAL CAPITALIZATION AND LIABILITIES $10,669,506 ($201,695) $10,467,811 =========== =========== ============= * EXPLANATION ON EXHIBIT 2.4 PAGE 1 OF 1
NORTHEAST UTILITIES AND SUBSIDIARIES Exhibit 2.2 CONSOLIDATED INCOME STATEMENT Page 1 of 1 FOR 12 MONTHS ENDED MARCH 31, 1997 (THOUSANDS OF DOLLARS) PRO FORMA GIVING EFFECT PRO FORMA TO PROPOSED PER BOOK ADJUSTMENTS* TRANSACTION ----------- ------------ ------------- OPERATING REVENUE $3,739,314 $0 $3,739,314 ----------- ------------ ------------- OPERATING EXPENSES: OPERATION - FUEL PURCHASED AND INTERCHANGE POWER 1,168,360 1,168,360 OTHER 1,113,301 1,113,301 MAINTENANCE 446,266 446,266 DEPRECIATION 357,742 357,742 AMORTIZATION/DEFERRALS OF REGULATORY ASSETS, NET 139,629 139,629 FEDERAL AND STATE INCOME TAXES 35,353 35,353 TAXES OTHER THAN INCOME TAXES 254,223 254,223 ----------- ------------ ------------- TOTAL OPERATING EXPENSES 3,514,874 0 3,514,874 ----------- ------------ ------------- OPERATING INCOME: 224,440 0 224,440 ----------- ------------ ------------- OTHER INCOME: DEFERRED NUCLEAR PLANTS RETURN-OTHER FUNDS 7,736 7,736 EQUITY IN EARNINGS OF REGIONAL NUCLEAR GENERATING COMPANIES 12,939 12,939 MINORITY INTEREST IN INCOME OF SUBSIDIARY (11,625) (11,625) OTHER, NET 33,623 (195)(c) 33,034 (394)(d) INCOME TAXES - CREDIT (2,730) 712 (e) (2,018) ----------- ------------ ------------- OTHER INCOME, NET 39,943 123 40,066 ----------- ------------ ------------- INCOME BEFORE INTEREST CHARGES 264,383 123 264,506 ----------- ------------ ------------- INTEREST CHARGES: INTEREST ON LONG-TERM DEBT 283,245 283,245 OTHER INTEREST 7,373 7,373 DEFERRED NUCLEAR PLANTS RETURN - BORROWED FUNDS, NET OF INCOME TAX (13,378) (13,378) LOSS ON SALE OF ACCOUNTS RECEIVABLE 1,106 (b) 1,106 ----------- ------------ ------------- TOTAL INTEREST CHARGES 277,240 1,106 278,346 ----------- ------------ ------------- INCOME BEFORE PREFERRED DIVIDENDS (12,857) (983) (13,840) PREFERRED DIVIDENDS OF SUBSIDIARIES 33,309 33,309 ----------- ------------ ------------- NET INCOME (46,166) (983) (47,149) EARNINGS FOR COMMON SHARE (46,166) (983) (47,149) EARNINGS PER COMMON SHARE (0.36) (0.37) COMMON SHARES OUTSTANDING (AVERAGE) 128,627,693 128,627,693 * EXPLANATION ON EXHIBIT 2.4 PAGE 1 OF 1
NORTHEAST UTILITIES AND SUBSIDIARIES Exhibit 2.3 STATEMENT OF RETAINED EARNINGS Page 1 of 1 FOR 12 MONTHS ENDED MARCH 31, 1997 (THOUSANDS OF DOLLARS) PER BOOK ADJUSTED TO PRO FORMA REFLECT PER BOOK ADJUSTMENTS* PRO FORMA ----------- ------------ ------------- BALANCE AT BEGINNING OF PERIOD $1,016,660 $1,016,660 NET INCOME (12,857) ($983) (13,840) CASH DIVIDENDS ON PREFERRED STOCK (33,309) (33,309) CASH DIVIDEND ON COMMON STOCK (152,330) (152,330) LOSS ON RETIREMENT OF PREFERRED STOCK (374) (374) MISCELLANEOUS ELIMINATION 100 100 ----------- ------------ ------------- BALANCE AT END OF PERIOD $817,890 ($983) $816,907 =========== ===========- =============
NORTHEAST UTILITIES AND SUBSIDIARIES CAPITAL STRUCTURE AS OF MARCH 31, 1997 (THOUSANDS OF DOLLARS) PER BOOK ADJUSTED TO PRO FORMA REFLECT % PER BOOK ADJUSTMENTS* PRO FORMA % ----------- ------------ ------------- DEBT: LONG-TERM DEBT, NET 59.4% $3,914,457 $0 $3,914,457 59.4% PREFERRED STOCK: NOT SUBJECT TO REDEMPTION 136,200 136,200 SUBJECT TO REDEMPTION 276,000 276,000 ----------- ------------ ------------- TOTAL PREFERRED STOCK 6.3% 412,200 0 412,200 6.3% COMMON EQUITY: COMMON SHARES 680,260 680,260 CAPITAL SURPLUS, PAID IN 935,784 935,784 DEFERRED BENEFIT PLAN-EMPLOYEE STOCK OWNERSHIP PLAN (167,869) (167,869) RETAINED EARNINGS 817,890 (983) 816,907 ----------- ------------ ------------- TOTAL COMMON STOCKHOLDER'S EQUITY 34.3% 2,266,065 (983) 2,265,082 34.3% ----------- ------------ ------------- TOTAL CAPITAL 100.0% $6,592,722 ($983) $6,591,739 100.0% =========== ===========- ============= * EXPLANATION ON EXHIBIT 2.4 PAGE 1 OF 1
NORTHEAST UTILITIES AND SUBSIDIARIES Exhibit 2.4 EXPLANATION OF ADJUSTMENTS Page 1 of 1 (THOUSANDS OF DOLLARS) DEBIT CREDIT (a) NOTES PAYABLE TO BANK $200,000 CASH 200,000 To reverse entries related to funding under the CL&P Existing Agreement. (b) CASH $200,000 INVESTMENT IN SECURITIES 67,074 LOSS ON SALE OF ACCOUNTS RECEIVABLE 1,106 RECEIVABLES, NET $190,735 ACCRUED UTILITY REVENUES 77,445 To record initial sale of 3/31/97 CL&P accounts receivable for proceeds of $200,000.
Fair Value % of Total Fair Allocated Book Assets Value of Assets Value Loss ========== =============== ============== ========= Cash Proceeds from sale less funding costs ($200,000 - $1,500 (see (d) below)) $198,500 74.43% $199,606 $1,106 Estimated value of portion retained (($190,735+$77,445) - $200,000) 68,180 25.57% 68,574 ========== =============== ============== $266,680 100% $268,180 ========== =============== ============== (c) LOSS ON INVESTMENT IN SECURITIES - OTHER, NET $195 CASH $195 To record upfront fees associated with establishing the CL&P receivables program. (d) LOSS ON INVESTMENT IN SECURITIES - OTHER, NET $394 INVESTMENT IN SECURITIES 1,106 CASH $1,500
To reflect the costs and market valuation associated with the transaction. The costs are based on the March 1997 funding rate of 5.60% plus a spread of .40%. The Loss on Sale of Accounts Receivable and Loss on Investments in Securities, will, over the life of the program reflect the funding and administrative costs of the program. Actual funding costs will vary in accordance with actual collections on accounts receivable.
Proceeds from initial sale of Acounts Receivable $200,000 Funding Rate * 6.00% / (45/360) ------------- Costs associated with initial sale of Accounts Receivable $1,500 ============= (e) ACCRUED TAXES $712 INCOME TAX EXPENSE $712 To record the reduction in Federal and State income taxes: $1,695 x 42.00% = $712
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