-----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, JgCSCD8VXdB8xULyxy2as5cpMFysqSt9osC1P7MhpHGeUgOmEgS4lj+MEFZ2h5GI B7HzlcblQLw7Efha0XvmlQ== /in/edgar/work/0000009548-00-000015/0000009548-00-000015.txt : 20001115 0000009548-00-000015.hdr.sgml : 20001115 ACCESSION NUMBER: 0000009548-00-000015 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000930 FILED AS OF DATE: 20001114 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BANGOR HYDRO ELECTRIC CO CENTRAL INDEX KEY: 0000009548 STANDARD INDUSTRIAL CLASSIFICATION: [4911 ] IRS NUMBER: 010024370 STATE OF INCORPORATION: ME FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-10922 FILM NUMBER: 765577 BUSINESS ADDRESS: STREET 1: 33 STATE ST CITY: BANGOR STATE: ME ZIP: 04401 BUSINESS PHONE: 2079455621 MAIL ADDRESS: STREET 1: PO BOX 932 CITY: BANGOR STATE: ME ZIP: 04401 10-Q 1 0001.txt BANGOR HYDRO 3RD QTR 2000 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarter ended SEPTEMBER 30, 2000 Commission File No. 0-505 ------------------ ----- BANGOR HYDRO-ELECTRIC COMPANY ------------------------------- (Exact Name of Registrant as specified in its Charter) MAINE 01-0024370 - ------------------------------- ----------------- (State or Other Jurisdiction of (I.R.S. Employer Incorporation or Organization) Identification No.) 33 STATE STREET, BANGOR, MAINE 04401 - ---------------------------------------- ---------- (Address of Principal Executive Offices) (Zip Code) Registrant's Telephone Number, including Area Code 207-945-5621 ------------ NONE - ------------------------------------------------------------------- Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report Outstanding Common Stock, $5 Par Value - 7,363,424 Shares September 30, 2000 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ____ ---- FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 2000 PART I - FINANCIAL INFORMATION PAGE Cover Page 1 Index 2 Consolidated Statements of Income 3 Management's Discussion and Analysis of Results of Operations and Financial Condition 4 Consolidated Balance Sheets - September 30, 2000 and December 31, 1999 37 Consolidated Statements of Capitalization 39 Consolidated Statements of Cash Flows 40 Consolidated Statements of Common Stock Investment 41 Notes to the Consolidated Financial Statements 42 PART II - OTHER INFORMATION 56 Item 6 - Exhibits and Reports on Form 8-K 57 Signature Page 58 BANGOR HYDRO-ELECTRIC COMPANY CONSOLIDATED STATEMENTS OF INCOME 000's Omitted Except Per Share Amounts (Unudited)
Three Months Ended Nine Months Ended Sept. 30, Sept. 30, Sept. 30, Sept. 30, 2000 1999 2000 1999 -------- -------- --------- ---------- ELECTRIC OPERATING REVENUES $ 58,641 $ 51,452 $ 157,325 $ 148,973 -------- -------- --------- ---------- OPERATING EXPENSES: Fuel for generation and purchased power $ 32,568 $ 23,183 $ 79,965 $ 60,535 Other operation and maintenance 9,956 7,875 28,748 26,104 Depreciation and amortization 2,461 1,697 6,831 6,563 Amortization of Seabrook Nuclear Unit 424 424 1,274 1,274 Amortization of contract buyouts and restructuring 5,639 5,200 16,672 15,601 Amortization of deferred asset sale gain (2,095) - (4,267) - Taxes - Property and payroll 1,145 1,133 3,742 4,106 State income 454 446 954 1,318 Federal income 1,554 2,163 3,912 5,753 -------- -------- --------- ---------- $ 52,106 $ 42,121 $ 137,831 $ 121,254 -------- -------- --------- ---------- OPERATING INCOME $ 6,535 $ 9,331 $ 19,494 $ 27,719 -------- -------- --------- ---------- OTHER INCOME AND (DEDUCTIONS): Allowance for equity funds used during construction $ 153 $ (382) $ 60 $ (81) Other, net of applicable income taxes 929 438 1,855 1,219 -------- -------- --------- ---------- $ 1,082 $ 56 $ 1,915 $ 1,138 -------- -------- --------- ---------- INCOME BEFORE INTEREST EXPENSE $ 7,617 $ 9,387 $ 21,409 $ 28,857 -------- -------- --------- ---------- INTEREST EXPENSE: Long-term debt $ 3,649 $ 4,120 $ 11,588 $ 14,993 Other 178 238 675 1,102 Allowance for borrowed funds used during construction (150) (8) (71) 61 -------- -------- --------- ---------- $ 3,677 $ 4,350 $ 12,192 $ 16,156 -------- -------- --------- ---------- NET INCOME $ 3,940 $ 5,037 $ 9,217 $ 12,701 DIVIDENDS ON PREFERRED STOCK 66 279 199 836 -------- -------- --------- ---------- EARNINGS APPLICABLE TO COMMON STOCK $ 3,874 $ 4,758 $ 9,018 $ 11,865 ======== ======== ========= ========== WEIGHTED AVERAGE NUMBER OF SHARES 7,363 7,363 7,363 7,363 ======== ======== ========= ========== EARNINGS PER COMMON SHARE, Basic $ .53 $ .65 $ 1.22 $ 1.61 Diluted .46 .57 1.08 1.42 ======== ======== ========= ========== DIVIDENDS DECLARED PER COMMON SHARE $ .20 $ .15 $ .60 $ .30 ======== ======== ========= ========== See notes to the consolidated financial statements.
BANGOR HYDRO-ELECTRIC COMPANY MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION Management's Discussion and Analysis of the Results of Operations and Financial Condition contained in Bangor Hydro-Electric Company's (the Company or Bangor Hydro) Annual Report on Form 10-K for the year ended December 31, 1999 (1999 Form 10-K) should be read in conjunction with the comments below. EARNINGS For the quarters ended September 30, 2000 and 1999 basic earnings per common share were $.53 and $.65, respectively. The difference in earnings from the same quarter in 1999 is in large part attributable to new rates implemented by order of the Maine Public Utilities Commission (MPUC) effective March 1, 2000 that reflect a lower authorized return on equity of 11% in Maine's restructured electric industry. Also affecting third quarter 2000 earnings were costs billed to the Company associated with transmission constraints in New England ($.07 per common share after taxes). Earnings were positively impacted in the third quarter of 1999 by a gain on the sale of a subsidiary as part of the mandatory divestiture of generation assets (See the 1999 Form 10-K for a more complete discussion) and a one-time income tax benefits related to the utilization of investment tax credits and adjustments to the 1998 tax returns filed in September of 1999. The gain on sale of subsidiary and one-time tax benefits resulted in a $.10 increase in basic earnings per common share in the 1999 quarter. Total revenues and expenses for the quarters ended September 30, 2000 and 1999 are difficult to compare because of accounting changes ordered by the MPUC in it's rate order and because of changes associated with the introduction of retail competition for energy providers effective March 1, 2000. Earnings in the third quarter of 2000 were benefited by a gain on sale of a Company subsidiary which resulted in a $.10 per common share benefit to earnings after taxes. For a more complete discussion of this sale see the section on Current Important Activities below. IMPORTANT CURRENT ACTIVITIES PROPOSED MERGER AGREEMENT WITH EMERA - On June 29, 2000, the Company entered into a definitive merger agreement with Emera of Halifax, Nova Scotia, pursuant to which Emera will acquire all of the outstanding shares of common stock of Bangor Hydro for US$26.50 per share in cash. After the closing of the merger, each of Bangor Hydro's outstanding warrants to purchase common stock will entitle the holder to receive US$26.50 in cash, less the exercise price. For a discussion of the common stock warrants, see the notes to the consolidated financial statements in the 1999 Form 10-K. The equity market value of the transaction is approximately $206 million. The transaction will take the form of a merger of Bangor Hydro with a U.S. corporate subsidiary to be formed by Emera. Upon completion of the merger, Bangor Hydro will be a wholly-owned subsidiary of Emera. Bangor Hydro's outstanding debt and preferred stock will not be affected by the transaction. The transaction is subject to a number of approvals, including the approval of Bangor Hydro's shareholders, which was accomplished on October 24, 2000, and regulatory approvals from the MPUC, the Federal Energy Regulatory Commission (FERC), and the Securities and Exchange Commission. Receipt of the approvals necessary for closing is expected to take 9 to 12 months. The merger is part of Emera's strategy to grow its business beyond its current borders. Bangor Hydro will operate as a standalone division of Emera and will be the base for Emera to launch other initiatives. The companies will share best practices learned from their respective utility system operations. Emera is a diversified energy and services company, with 440,000 customers and (Cdn)$2.96 billion in assets. It owns 100% of Nova Scotia Power, Inc., the primary electricity supplier in the province of Nova Scotia. Emera's energy product line also includes bunker oil, diesel fuel and light fuel oil, and the company has a 12.5% interest in the Maritimes & Northeast Pipeline, which delivers Sable Island natural gas to markets in Maritime Canada, and the northeastern United States. IMPLEMENTATION OF COMPETITION IN ELECTRIC UTILITY INDUSTRY - In connection with the state of Maine's electric industry restructuring law, effective March 1, 2000, consumers of electricity have the right to purchase generation services directly from competitive electricity suppliers. The Company's electric rates were changed effective March 1, as well, to reflect the Company's revenue requirement as a transmission and distribution utility, including the recovery of stranded costs. The electric utility industry restructuring and the Company's associated rate proceedings at the MPUC are discussed in more detail in the 1999 Form 10-K. As discussed in the 1999 Form 10-K, the restructuring law also provided for a standard-offer service being available for all customers who do not choose to purchase energy from a competitive supplier starting March 1, 2000. As a result of the bids from competitive energy suppliers to provide energy under the standard- offer service being higher than anticipated, and as ordered by the MPUC, the Company assumed the responsibility of being the standard-offer service provider starting March 1, 2000 for a one-year period. At the end of this period, it is anticipated that the Company will no longer be the standard-offer service provider, although this is dependent upon the level of future bids from competitive energy suppliers to serve the standard-offer load and MPUC approvals. The MPUC established the schedule of rates the Company could charge for this service starting March 1, 2000. The Company has entered into arrangements with third parties to purchase the energy to serve the standard-offer customers. The Company is allowed by the MPUC to defer the difference between revenues realized from the standard-offer sales and the costs incurred to provide this service, including carrying costs on the deferred balance. As a result of this reconciliation mechanism, standard-offer related revenues and expenses do not have any impact on the Company's earnings, although they do result in increases in both categories in the Company's consolidated statements of income. The deferred amount will be recovered from/returned to customers in a future rate proceeding. Since March 1, 2000, when new rates went into effect, the costs of providing the standard offer service have significantly exceeded the revenues realized from customers, and consequently, the Company has recorded a regulatory asset of $5.7 million as of September 30, 2000 (which is included in Other regulatory assets on the Consolidated Balance Sheets). The excess of costs is due principally to unusually high purchased power costs for one day in May 2000, which is discussed below, and higher than anticipated spot energy market prices in the summer of 2000. As a result of the growth in the balance of this regulatory asset, the MPUC approved standard offer service rate increases for customers in each of August and October 2000. These rate increases were necessitated to avoid a deficiency in standard offer service revenues that the Company projected would otherwise result based on actual costs already incurred and projected costs through February 2001. BANGOR GAS INVESTMENT - As discussed in the 1999 Form 10-K, the Company announced in late 1999 that it no longer intended to participate in the Bangor Gas Company, LLC (Bangor Gas) joint venture and intended to sell its joint venture interest. On July 13, 2000, the Company and Penobscot Natural Gas Company (Penobscot Gas), the Company's wholly-owned subsidiary which owned a 50% interest in Bangor Gas, completed a stock purchase agreement to sell the Company's interest in Penobscot Gas to Sempra Energy (Sempra). Sempra had owned the other 50% interest in Bangor Gas. As previously discussed, a one-time gain on the sale of Penobscot Gas of approximately $1.2 million was recognized in the third quarter of 2000 and is included as a component of Other Income in the Consolidated Statements of Income for the quarter ending September 30, 2000. The completion of this sale has no impact on the previously discussed proposed merger agreement with Emera. INCREASE IN COMMON STOCK DIVIDEND - On March 15, 2000 the Company's board of directors declared a cash dividend on its common stock of $.20 per share. The quarterly dividend represented a $.05 increase over the $.15 per share dividend declared in each of the prior three quarters. In June of 1999, the board of directors resumed payment of quarterly common stock dividends after having suspended them in March 1997 due to financial difficulties triggered by problems at the Maine Yankee nuclear generating plant. The Company has a 7% ownership interest in Maine Yankee, which was permanently shut down in 1997 and is now in the process of being decommissioned. The Company's board of directors continues to take a cautious approach to the payment of common dividends. The Company and other Maine utilities are still in the process of implementing changes under Maine's comprehensive electric utility restructuring law, and management is cognizant of continuing uncertainties associated with this transition. MAINE YANKEE - TERMINATION OF DECOMMISSIONING OPERATIONS CONTRACT - As discussed in the 1999 Form 10-K, the Company owns 7% of the common stock of Maine Yankee, which owns and, prior to its permanent closure in 1997, operated an 880 megawatt nuclear generating plant (the Plant) in Wiscasset, Maine. Pursuant to a contract with Maine Yankee, the Company is obligated to pay its pro rata share of Maine Yankee's operating expenses, including decommissioning costs. On May 4, 2000, Maine Yankee notified its decommissioning operations contractor, Stone & Webster Engineering Corporation (Stone & Webster), that it was terminating the decommissioning operations contract pursuant to the terms of the contract. Stone & Webster subsequently notified Maine Yankee that it was disputing Maine Yankee's grounds for terminating the contract. On May 8, 2000, Stone & Webster announced that it had signed a letter of intent with Jacobs Engineering Group, Inc. (Jacobs), regarding a proposed transaction in which Jacobs would acquire substantially all of Stone & Webster's assets in exchange for an immediate credit facility and other consideration, including cash and stock. Stone & Webster said that the credit facility was intended to enable it to address its liquidity difficulties and continue to operate its businesses until the asset sale was completed. Stone & Webster also announced that it intended to seek bankruptcy court approval of the asset sale and credit agreement. On June 2, 2000, Stone & Webster filed a voluntary petition under Chapter 11 of the U.S. Bankruptcy Code with the United States Bankruptcy Court for the District of Delaware. By Sale Order dated July 13, 2000, the Bankruptcy Court approved the sale of substantially all of Stone & Webster's assets to the successful bidder in the Chapter 11 sale, The Shaw Group, Inc. (Shaw), for cash, stock, and the assumption of certain liabilities of Stone & Webster, and the earlier agreement with Jacobs was terminated. Stone & Webster reported that the Shaw transaction was effectively closed on July 14, 2000, and that it would continue to operate as a Debtor-in-Possession subject to the supervision and orders of the Bankruptcy Court. On May 10, 2000, Maine Yankee entered into an interim agreement with Stone & Webster in order to allow decommissioning work to continue and avoid the adverse consequences of an abrupt or inefficient demobilization from the Plant site. After obtaining assignments of several subcontracts from Stone & Webster and upon termination of the interim agreement on July 1, 2000, Maine Yankee, at least temporarily, assumed the general contractor role, utilizing a reduced number of Stone & Webster personnel under a revised new interim agreement. The decommissioning of the Plant site is progressing, with major emphasis being directed to maintaining the schedule on critical-path projects such as construction of the independent spent fuel storage and preparation of the Plant's reactor vessel for eventual shipment to an off-site disposal facility. On June 30, 2000, Federal Insurance Company (Federal), which provided performance and payment bonds in the amount of approximately $37.6 million each in connection with the decommissioning operations contract, filed a Complaint for Declaratory Judgement against Maine Yankee in the United States Bankruptcy Court for the District of Delaware, which was subsequently transferred to the United States District Court in Maine. The Complaint, which seeks a declaration that Federal has no obligation to pay Maine Yankee under the bonds, alleges that Maine Yankee improperly terminated the decommissioning operations contract with Stone & Webster and failed to give proper notice of termination to Federal under the contract, and that Federal therefore had no further obligations under the bonds. Maine Yankee has filed both a counterclaim against Federal in the District Court seeking recovery up to the penalty amounts of the bonds and a proof of claim against Stone & Webster in the Bankruptcy Court seeking recovery of all additional costs resulting from the termination of the Stone & Webster contract. Maine Yankee believes that its termination of the decommissioning operations contract was proper, but cannot predict the outcome of the litigation. Maine Yankee is evaluating all available long-term alternatives for safely and efficiently completing the decommissioning of the Plant site, including the possibilities of contracting with a new decommissioning operations contractor or assuming that function itself on a long-term basis. Maine Yankee expects to complete its review of proposals from prospective successor contractors and select a new contractor, if that is the alternative chosen, by the end of the year. However, Maine Yankee cannot predict at this time what affect the financial difficulties of Stone & Webster and the termination of its decommissioning operations contract with Maine Yankee will have on the cost or schedule of the decommissioning project. In connection with the state of Maine's electric industry restructuring law, the Company was allowed the recovery of Maine Yankee decommissioning costs as a component of its stranded costs. In the Company's rate order from the MPUC that became effective March 1, 2000, the Company was allowed to defer the amount of any future FERC ordered changes in Maine Yankee's decommissioning collections. Consequently, management does not believe that Maine Yankee's current decommissioning contractor difficulties will have a material adverse impact on the Company's results of operations, financial condition or cash flows. MAINE YANKEE REPLACEMENT POWER COSTS - As discussed in the 1999 Form 10-K, under the Maine Yankee settlement agreement, the Maine owners of Maine Yankee are required, for the period from March 1, 2000 through December 1, 2004, to hold Maine retail ratepayers harmless from the amounts by which the replacement power costs for Maine Yankee exceed the replacement power costs assumed in the report to the Maine Yankee board of directors that served as a basis for the plant shutdown decision, up to a maximum cumulative amount of $41 million. The Company's share of that amount would be $5.74 million for the period. During the period March 1 through December 31, 2000, the Company expects to accumulate about $1.7 million as credit against future potential liabilities. In October 2000, the MPUC staff advised the Maine owners that they could not use the two-year entitlement auction price to satisfy the replacement power test required as part of the settlement of Maine Yankee for 2001. If the Maine owners are required to use a current wholesale market index for energy purchases as a benchmark for the replacement power test, the Company could be liable for a significant amount of excess replacement power costs for the 2001 test. Depending upon future wholesale market indices, it is possible that the Company could be liable for some or all of the $5.74 million maximum liability at the end of December 2004. The Company cannot predict the outcome of this issue with the MPUC, and consequently no liability has been recorded as of September 30, 2000. The Company will continue its efforts to mitigate liability. LOSS OF MAJOR CUSTOMER - On August 22, 2000, HoltraChem Manufacturing Company (HoltraChem) announced that it would be ceasing production at its Orrington, Maine manufacturing facility on September 15, 2000 and would close the facility by mid-October of 2000. HoltraChem, a manufacturer of caustic soda and chlorine, has been a major user of the Company's transmission and distribution services, and before the restructuring of the electric utility industry in Maine in March 2000, was a major purchaser of energy from the Company. For the 12 months ended June 30, 2000, the Company earned approximately $1.6 million pre-tax associated with the provision of transmission and distribution services to HoltraChem, or approximately 7% of the Company's total pre-tax income during that period. The Company has no current plans to seek authorization for any rate adjustments from the MPUC to account for the loss of revenues from HoltraChem. The Company has, however, already announced its intention to file a comprehensive rate plan with the MPUC following completion of its pending merger with Emera. Such a rate plan would address the loss of revenues from HoltraChem. REVENUES With the previously discussed implementation of competition in the electric utility industry starting March 1, 2000, and excluding the standard- offer service, the Company is no longer selling electricity to customers. The Company's transmission and distribution (T&D) and stranded cost charges to customers, though, continue to be based on customers' electricity usage measured in kilowatt-hours (KWH). Consequently, discussion related to electric operating revenues will continue to have a KWH sales component. Electric operating revenue increased by $7.2 million in the third quarter of 2000. The increase is due to several factors. Other revenues (not attributable to KWH sales) were approximately $9.7 million greater in the 2000 quarter as compared to 1999 due principally to two factors. First, as a result of the previously discussed deferral mechanism for the standard-offer service revenues and costs, the Company recorded additional revenue of $5.1 million in the third quarter of 2000 to recognize the standard-offer service expenses in excess of revenues. Off-system sales, which are sales related to power pool and interconnection agreements and resales of purchased power, were approximately $2.8 million higher in the 2000 quarter as a result of the Company's requirement to resell the capacity and energy from its six purchased power contracts pursuant to Chapter 307 of Maine's 1997 law restructuring the State's electric industry (See the 1999 Form 10-k for a more complete discussion). Also, primarily as a result of electric generators in the Company's service territory wheeling power over the Company's transmission lines and out of its service territory, the Company recorded approximately $741,000 in higher transmission wheeling revenues in the third quarter of 2000 as compared to the third quarter of 1999. Total electric operating revenues attributable to KWH sales were $2.5 million lower in the third quarter of 2000 than in the third quarter of 1999. Total T&D and stranded cost related KWH sales were 3.5% or 16.6 million KWH's lower in the third quarter of 2000 as compared to the 1999 quarter, largely attributable to reduced sales to the Company's largest special contract customers (19.7 million reduction in KWH sales and $3.4 million reduction in electric operating revenues). As a result of the previously discussed shutdown of Holtrachem on September 15, 2000, sales to this customer were reduced in the third quarter of 2000, and sales to another large industrial customer were lower by 11.8 million KWH's in the 2000 quarter. Sales to this customer, which contribute a relatively low profit margin to the Company, can vary greatly from quarter to quarter as they own self-generation facilities. Reduced revenues for this group of customers were also affected by certain of these large customers choosing a competitive electricity supplier starting March 1, 2000 and not contributing to the Company's standard-offer service revenues. For those who have chosen standard-offer service, corresponding revenues have been impacted by the various associated rate changes in 2000 discussed below. Exclusive of the Company's largest special contract customers, total T&D and stranded cost related KWH sales were flat in the third quarter of 2000 as compared to 1999, however, principally as a result of various rate changes discussed below, associated electric operating revenues increased by $884,000 or 2%. Sales were negatively impacted by colder weather in the third quarter of 2000 as compared to the 1999 quarter. As with the large special contract customers, certain non-special contract commercial customers have been able to purchase electricity from competitive energy providers (10.2 million KWH's or 3% of total non-special contract KWH sales for the third quarter of 2000), and consequently, the Company's electric operating revenues have been reduced Changes in the Company's electric rates also impacted the change in electric operating revenues for the comparative quarters. As a result of the February 2000 rate order from the MPUC, the Company's overall rates, including the impact of the initial standard-offer prices, were reduced by approximately 2.9% starting March 1, 2000. The Company has also implemented various rate changes for its standard-offer service as approved by the MPUC. In June 2000 higher standard-offer service summer rates of approximately 17% for large industrial customers were implemented for the months of June and July, and in August 2000 standard-offer service rates for these customers were increased by an additional 7%. The summer rates ended on September 1, 2000, and the standard-offer service rates were reduced by approximately 19%. Rates for residential and small commercial customers were increased as previously discussed in August 2000 by approximately 2.4%. EXPENSES Fuel for generation and purchased power expense increased $9.4 million in the third quarter of 2000 as compared to 1999. The increased expense was a result of several factors. Total power purchases in the third quarter of 2000 were fairly consistent with those in the 1999 quarter due to the Company continuing to fulfill its existing power purchase contract obligations subsequent to the implementation of the electric industry restructuring on March 1, 2000 and procuring power to serve the standard- offer load. In the third quarter of 2000, though, the Company purchased significantly more power on the spot power market as compared to 1999 as a result of having more power contracts in place in 1999. These resulted in higher fuel and purchased power costs in the third quarter of 2000. With more of the Company's power purchases being made in the spot power market in 2000, the price of the power was negatively affected by very high oil prices in 2000 and new market rules implemented by NEPOOL in May 1999, which set prices for replacement purchases from the pool at market levels related to supply and demand as opposed to actual marginal fuel costs. Increased fuel and purchased power expense was also impacted by higher ISO New England (ISO) expenses in 2000 as compared to 1999, due to the implementation of NEPOOL new market rules in May 1999 and $835,000 in previously discussed ISO costs in the 2000 quarter associated with transmission constraints. Other operation and maintenance (O&M) expense increased by $2.1 million in the third quarter of 2000 as compared to 1999. This increase was due to several factors. Decreasing other O&M expense in the 1999 quarter was a $437,000 increase in overhead expenses allocated to capital projects. This increased overhead allocation in 1999 was principally a result of major construction activities being performed by the Company in connection with the Maine Independence Station, a new 520 megawatt gas fired generation facility in Veazie, Maine, which has subsequently become operational and is connected to the regional transmission power grid. The Company was reimbursed by the owner of the facility for the construction costs incurred, including overhead expense. Other O&M in the third quarter of 1999 was also lower by $314,000 for the impact of an Accounting Order received from the MPUC associated with electric utility industry restructuring related costs, whereby costs that were charged to O&M expense in the first two quarters of 1999 were deferred in the third quarter of 1999. See the 1999 Form 10-K for a discussion of the recovery of these deferred costs. Also increasing other O&M expense was a $357,000 increase in O&M payroll due principally to less labor in the 2000 quarter being charged to capital projects as compared to 1999 as a result of less construction activity in 2000, and the impact of a 4% wage rate increase for bargaining unit employees on January 1, 2000 and various wage rate increases for non- bargaining unit employees. Further increasing other O&M in the third quarter of 2000 was the amortization expense of $204,000 associated with the previously discussed incremental costs deferred in 1999 and the first two months of 2000 in connection with the implementation of the electric utility industry restructuring. Recovery of the cost deferrals was allowed in rates in the Company's February 2000 rate order from the MPUC over a three year period starting March 1, 2000. Also increasing other O&M expense was the timing of regulatory assessments from the MPUC and Office of the Public Advocate (OPA). In the third quarter of 2000, the Company recorded expense of $525,000 associated with the MPUC assessment, while in the 1999 quarter the Company recorded an expense attributable to the OPA assessment amounting to $132,000. The Company recorded the OPA assessment for 2000 in the second quarter of 2000 and the MPUC assessment for 1999 in the second quarter of 1999. Depreciation and amortization expense increased $764,000 in the third quarter of 2000 as compared to the 1999 quarter due principally to two factors, the first being additions to the Company's electric plant in service. Also increasing depreciation expense in the 2000 quarter was the effect of a depreciation study conducted in December 1996, which determined that the Company's reserve for depreciation was overaccumulated by approximately $3.6 million. In connection with the MPUC's rate order in February 1998, the Company was allowed to amortize this balance over a two- year period, starting in February 1998. The amortization was increased in June 1999 as a result of the Company's generation asset sale. See the 1999 Form 10-K for a complete discussion of this transaction. The amortization recorded as a reduction in depreciation expense in the third quarter of 1999 amounted to $613,000. The $439,000 increase in amortization of contract buyouts and restructuring in the 2000 quarter was due to changes, effective March 1, 2000 with the implementation of new rates, in the amortization of the deferred Beaver Wood contract buyout costs and the deferred costs associated with the June 1998 restructuring of the Penobscot Energy Recovery Company (PERC) purchased power contract. The Beaver Wood amortization was $281,000 higher in the third quarter of 2000 and is being amortized at an annual rate of $3.9 million which started March 2000. Prior to the implementation of new rates in March 2000, the Company was recovering deferred PERC restructuring costs at an annual rate of $1 million. Effective March 1, 2000, recovery of PERC restructuring costs was adjusted to include the estimated future value of warrants to be exercised. The adjusted annual amortization amounted to $1.6 million. For a complete discussion of the Beaver Wood purchased power contract buyout and the PERC contract restructuring, see the 1999 Form 10-K. Effective with the March 1, 2000 rate change, the Company began amortizing the deferred asset sale gain over a 70 month period. The annual amortization amounts are to be recorded in an uneven manner in order to levelize the Company's revenue requirement over this period. As a result of an increase in the Company's FERC regulated transmission rates on June 1, 2000, and the Company's desire to not increase rates to its retail customers close to the implementation of electric industry restructuring, which occurred on March 1, 2000, the Company agreed to reduce its MPUC jurisdictional distribution rates in an amount equal to the increase in its transmission rates. The reduction in the distribution rates was accomplished by accelerating the amortization of the deferred asset sale gain by an annualized total of $2.5 million. The Company recorded $491,000 of amortization for each of April and May of 2000 and increased the monthly amortization to $698,000 starting in June 2000. The additional monthly amortization of $207,000 is expected to continue through May 2001. The decrease in total federal and state income taxes was principally a function of lower earnings in the third quarter of 2000 as compared to the 1999 quarter. See Footnote 2 to the Consolidated Financial Statements for a reconciliation of the Company's effective income tax rate. OTHER INCOME AND (DEDUCTIONS) AND INTEREST EXPENSE Allowance for funds used during construction (AFDC), which includes carrying costs on certain regulatory assets and liabilities, increased in 2000 relative to 1999 due mainly to $628,000 in carrying costs being recorded on the deferred asset sale gain in the 1999 quarter. Other income increased by $491,000 in the third quarter of 2000 principally as a result of the previously discussed $708,000, net of tax, gain on sale of Penobscot Gas in July 2000. Offsetting this to some extent was a $310,000, net of tax, gain on sale of the Company's wholly-owned subsidiary, Penobscot Hydro Company, in July 1999 (See the 1999 Form 10-K for a discussion of this sale). Long-term debt interest expense decreased $471,000 in the third quarter of 2000 as compared to 1999 due primarily to a $14 million principal payment at the end of June 2000 on the Finance Authority of Maine Revenue Notes; principal repayments on the Company's 12.25% first mortgage bonds (which were fully repaid in August 1999); monthly principal payments on the $24.8 million medium term notes from July 1999 through September 2000 amounting to $6.5 million; the full redemption of $15 million in outstanding 10.25% series first mortgage bonds in early July 1999; the redemption of $4.2 million in outstanding variable rate Pollution Control Revenue Bonds in early September 1999; and the end of the amortization of the Company's deferred interest rate cap costs in June 2000. Other interest expense decreased due principally to a reduction in the amortization of debt issuance costs in the third quarter of 2000. The amortization decrease was primarily attributable to the end of the amortization period of certain deferred debt issuance costs in June 2000. The Company fully repaid the outstanding balance under its revolving credit line in April 1999, and no new borrowings have subsequently occurred. Dividends on preferred stock decreased $213,000 due principally from the final redemption of the remaining outstanding 8.76% mandatory redeemable preferred stock in October 1999. NINE MONTHS OF 2000 AS COMPARED TO THE NINE MONTHS OF 1999 EARNINGS For the nine months ended September 30, 2000 and 1999 basic earnings per common share were $1.22 and $1.61, respectively. The nine-month earnings declined for the same reasons as mentioned above as well as one-time benefits in the first and second quarters of 1999, respectively, of $802,000 ($.07 per common share after taxes) due to the settlement by NEPOOL of a contract dispute with Hydro-Quebec (HQ) and $896,000 ($.07 per common share after taxes) related to the settlement of a dispute related to NEPOOL. Also contributing to the decreased earnings in 2000 were costs billed to the Company associated with transmission constraints in New England amounting to $1.5 million ($.12 per common share after taxes). The Company also incurred $1.2 million ($.10 per common share after taxes) in incremental costs associated with the Company's proposed merger with Emera in the 2000 period. REVENUES Electric operating revenue increased by $8.4 million in the first nine months of 2000 as compared to the 1999 period. The increase is due to the reasons previously discussed for the third quarter changes, as well as factors in the first two quarters of 2000 and 1999. Prior to the March 1, 2000 electric utility restructuring, electric operating revenues for the first two months of 2000 were $1.8 million greater than the first two months of 1999 due principally to a 3.6% increase in KWH sales and the 1.36% rate increase effective June 1, 1999. Increased KWH sales were positively impacted by colder weather in January and February 2000. Electric operating revenue increases subsequent to March 1, 2000, and through the end of September 2000, were impacted by many of the factors discussed previously for the quarters ending September 30, 2000 and 1999. Other revenues (not attributable to KWH sales) were approximately $10.7 million greater in the 2000 period as compared to 1999. As a result of the previously discussed deferral mechanism for the standard-offer service revenues and costs, the Company recorded additional revenue of $5.7 million for the period from March through September 2000 to recognize the standard- offer service expenses in excess of revenues. Off-system sales were approximately $3.6 million higher in the 2000 period principally as a result of the previously discussed reasons. Also, for the previously discussed reasons, the Company recorded approximately $1.8 million in higher transmission wheeling revenues in the 2000 period as compared to 1999. Offsetting these increases in other revenues was approximately $854,000 of revenue recorded in 1999 attributable to deferred expenses related to the Company's generation asset sale in May 1999 (See the 1999 Form 10-K for a complete discussion of the accounting for the generation asset sale). Total electric operating revenues attributable to KWH sales were $2.3 million lower in the 2000 period than in 1999. Total T&D and stranded cost related KWH sales were principally flat in first nine months of 2000 as compared to 1999, largely attributable to reduced sales to the Company's largest special contract customers (23.4 million reduction in KWH sales and $4.9 million reduction in electric operating revenues). Sales to the previously discussed large industrial customer were lower by 17.3 million KWH's in the 2000 period. Consistent with the third quarter explanation above, reduced revenues for this group of customers were also affected by certain of these large customers choosing a competitive electricity supplier starting March 1, 2000, and for those choosing the standard-offer service, corresponding revenues have been impacted by the various previously discussed standard-offer service rate changes in 2000. Exclusive of the Company's largest special contract customers, total T&D and stranded cost related KWH sales subsequent to February 2000 have been flat as compared to 1999, however, principally as a result of the previously discussed rate changes, associated electric operating revenues increased by $1.4 million or 1.6%. The flat sales were impacted by cooler weather in the summer of 2000 as compared to 1999. As with the large special contract customers, certain non-special contract commercial customers have been able to purchase electricity from competitive energy providers (22.6 million KWH's or 3% of total non-special contract KWH sales for the period subsequent to February 2000), and consequently, the Company's electric operating revenues have been reduced. EXPENSES Fuel for generation and purchased power expense increased $19.4 million in the first nine months of 2000 as compared to 1999. The increase is due principally to the previously discussed reasons for the third quarters of each year, as well as the settlement of the dispute with HQ which resulted in a $747,000 reduction in expense in the first quarter of 1999 the previously discussed settlement of the dispute related to NEPOOL, which resulted in a $896,000 reduction in expense in the second quarter of 1999. As in the third quarter of 2000, NEPOOL and ISO related expenses were greater in the first two quarter of 2000 as compared to 1999, including $672,000 of costs in the first two quarters 2000 costs associated with transmission constraints. Also impacting power cost increases in each period were very unusual circumstances in NEPOOL for one day in each of the respective second quarters, with record-breaking loads occurring while many generators were still out of service on spring maintenance. The result was on-peak power prices that, for the June 1999 event were two to three times as great as would normally occur during June. However, the May 2000 event resulted in prices that were approximately five times as high as the prices paid on the day in June 1999. Due to these unusual one-day events in each quarter, the Company incurred approximately $2 million more in purchased power costs on the day in 2000 as compared to the day in 1999. As a result of the new market rules in NEPOOL and the unusually high power costs for the two days in each quarter, the price of spot market power was approximately $15/megawatt higher in the 2000 quarter as compared to 1999, which greatly increased the purchased power expense. In connection with the previously discussed standard-offer service deferral mechanism, the high power costs for the day in May 2000 have been deferred and are recoverable from customers. Purchased power costs were greater for the first two months of 2000 as a result of the previously discussed increase in KWH sales and by higher power costs. Other O&M expense increased by $2.6 million in the first nine months of 2000 as compared to the first nine months of 1999. The increase attributable to several factors. The largest item increasing other O&M expense in 2000 is $1.2 million in incremental costs associated with the Company's proposed merger with Emera. O&M labor costs were $657,000 greater in the 2000 period than in 1999, principally for the same reasons as discussed for the third quarters above. Also, the labor increase was partially offset by a reduction in the number of employees resulting from the Company's divestiture of its generation assets in late May 1999. As discussed previously, the Company's overhead expenses allocated to capital projects were greater in 1999, principally a result of major construction activities being performed by the Company in connection with the Maine Independence Station. For the first nine months of 2000, overhead allocations to capital projects were $513,740 lower than in the 1999 period. Also increasing other O&M in the 2000 period was $476,000 in amortization expense associated with the previously discussed restructuring related cost deferrals. Decreasing other O&M expense to some extent in the 2000 period was a $805,000 decrease in incremental expenditures related to electric utility industry restructuring activities, costs associated with assessment and testing of systems for year 2000 compliance, and an upgrade to the Company's customer information system which was completed in May 1999. Depreciation and amortization expense increased $496,000 in the 2000 period as compared to 1999 due principally to the previously discussed reasons for the quarters ending September 30, 2000 and 1999. These increases were offset to some extent by reduced depreciation as a result of the generation asset sale in late May 1999. The reasons for the changes in the amortization of contract buyouts and restructuring, amortization of deferred asset sale gain, and state and federal income taxes for the first nine months of 2000 as compared to the first nine months of 1999 are consistent with those previously discussed for the third quarters of 2000 and 1999. The decrease in property and other taxes in the 2000 period was due principally to reductions in property taxes as a result of the sale of the Company's generation assets. This reduction in property taxes was offset to some extent by increased electric plant additions and higher property tax rates. OTHER INCOME AND (DEDUCTIONS) AND INTEREST EXPENSE Total AFDC increased $273,000 in the 2000 period in comparison to the 1999 period. The increase is principally due to the previously discussed carrying costs on the deferred asset sale gain. This increase is offset to some extent by a decrease in carrying costs associated with deferred Maine Yankee and deferred ice storm costs, as a result of the inclusion of these deferred amounts in the Company's rates starting March 1, 2000 and the cessation of the accrual of carrying costs at that time. Also, AFDC on construction work in progress was reduced in the 2000 period, resulting from lower levels of construction activity. The $636,000 increase in other income in the first nine months of 2000 was primarily due to the same reason discussed above for the third quarters of 2000 and 1999. Other income in 2000 was also benefited by increased investment income, principally resulting from the investment of generation asset sale proceeds. The decrease in long-term debt interest expense was due principally to the same reasons discussed for the third quarters of each year. Also impacting the reduction was the redemption of the remaining outstanding principal on the $45 million medium term notes in May 1999 amounting to $38.8 million and a $13.1 million principal payment at the end of June 1999 on the Finance Authority of Maine Revenue Notes. The decreases in other interest expense and preferred dividends in the 2000 period as compared to 1999 were principally a result of the same reasons previously discussed for the third quarters of each year. Also impacting the reduction in other interest expense was $11 million in weighted average borrowings under the Company's revolving credit facility for the first quarter of 1999 as compared to no outstanding borrowings in 2000. LIQUIDITY AND CAPITAL RESOURCES The Consolidated Statements of Cash Flows reflect events in the first nine months of 2000 and 1999 as they affect the Company's liquidity. Net increase in cash from operating activities was $29.8 million in 2000 as compared to $33.3 million in the 1999 period. Negatively impacting cash flows in the 2000 period was $5.6 million in previously discussed deferred costs associated with the Company providing standard-offer service to customers, as well as $1.2 million in deferred costs associated with a deficiency in revenues realized from customers under special rate contracts as compared to revenues from these customers incorporated into the Company's electric rates starting March 1, 2000. The Company was granted a deferral mechanism for the differences in these revenues in its February 2000 rate order from the MPUC. Positively impacting cash flows from operations in the 1999 period was the receipt of a $1.75 million payment related to a terminated purchased power contract (See the 1999 Form 10-K). These decreases in cash flows from operations for 2000 as compared to 1999 were offset to some extent by a $4.6 million reduction in interest payments in 2000 principally as a result of the previously discussed long- term debt principal payments, and the Company incurred $1.7 million in costs associated with the generation asset sale in first nine months of 1999. Construction expenditures were $4.5 million lower in the 2000 period as compared to 1999 as a result of reductions in the construction program in 2000. In the first nine months of 1999 the Company incurred approximately $3.5 million in costs associated with the construction of a major transmission line which was completed in 1999. As discussed in more detail in the 1999 Form 10-K, the Company received approximately $79.6 million in proceeds related to its generation asset sale in late May 1999 and an additional $10 million in late July 1999 in connection with the sale of its wholly-owned subsidiary, Penobscot Hydro. Also positively impacting cash flows in the 1999 period was $6.2 million associated with proceeds deposited in 1998 with a third party trustee associated with the Company's sale of certain property at its Graham Station. In January 1999 the trustee released the $6.2 million to the Company, and the funds were utilized to repay outstanding medium term notes. As previously discussed, the increase in dividends paid on common stock increased in 2000 was a result of the reinstatement of the Company's common dividend in the second quarter of 1999, and the increase in the common dividend from $.15 to $.20 per share in March 2000. The reduction in preferred dividends paid resulted principally from the final redemption of the remaining outstanding 8.76% mandatory redeemable preferred stock in October 1999. The decrease in payments on long-term debt is due principally to the various repayments in 1999 and 2000 previously discussed in connection with the explanations of the changes in long-term debt interest expense for 2000 as compared to 1999. As previously discussed, and principally as a result of generation asset sale proceeds, the Company has continued to maintain full borrowing capacity under its revolving credit facility, with no new borrowings since early April of 1999. For additional discussion of liquidity and capital resources, see the Company's 1999 Form 10-K. ENVIRONMENTAL MATTERS The Company is regulated by the United States Environmental Protection Agency (EPA) as to compliance with the Federal Water Pollution Control Act, the Clean Air Act, and several federal statutes governing the treatment and disposal of hazardous wastes. The Company is also regulated by the Maine Department of Environmental Protection (DEP) under various Maine environmental statutes. The Company is actively engaged in complying with these federal and state acts and statutes, and it has not, to date, encountered material difficulties in connection with such compliance. In 1992, the Company received notice from the DEP that it was investigating the cleanup of several sites in Maine that were used in the past for the disposal of waste oil and other hazardous substances, and that the Company, as a generator of waste oil that was disposed at those sites, may be liable for certain cleanup costs. The Company learned in October 1995 that the EPA placed one of those sites on the National Priorities List under the Comprehensive Environmental Response, Compensation and Liability Act and would pursue potentially responsible parties. With respect to this site, the Company is one of a number of waste generators under investigation. The Company has recorded a liability, based on currently available information, for what it believes are the estimated environmental remediation costs that the Company expects to incur for this waste disposal site. Additional future environmental cleanup costs are not reasonably estimable due to a number of factors, including the unknown magnitude of possible contamination, the appropriate remediation methods, and possible effects of future legislation or regulation and the possible effects of technological changes. At September 30, 2000, the liability recorded by the Company for its estimated environmental remediation costs amounted to $308,000. The Company's actual future environmental remediation costs may be higher as additional factors become known. The Company estimates that during 2000 it will spend approximately $374,000 in operations expense and $51,000 in capital expenditures to comply with environmental standards for air, water and hazardous materials. These amounts may change based on facts and circumstances that occur in the year 2000. DISCLOSURES ABOUT MARKET RISK The Company's major financial market risk exposure is changing interest rates. Changes in interest rates will affect interest paid on variable rate debt and the fair value of fixed rate debt. The Company manages interest rate risk through a combination of both fixed and variable rate debt instruments and an interest rate swap, which is associated with the Company's medium term notes (See Note 13 to the 1999 Form 10-K). As of September 30, 2000, the Company had $13.1 million of medium term notes outstanding which bear floating, LIBOR-based rates (6.62% LIBO rate at September 30, 2000). The interest rate swap fixes the interest rate on the medium term notes at 5.72% for the full notional amount of the debt. See Note 4 to the 1999 Form 10-K for a discussion of these medium term notes. OTHER Management's discussion and analysis of results of operations and financial condition contains items that are "forward-looking" as defined in the Private Securities Litigation Reform Act of 1995. These statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated in the forward-looking statements. Readers should not place undue reliance on forward-looking statements, which reflect management's view only as of the date hereof. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect subsequent events or circumstances. Factors that might cause such differences include, but are not limited to, the Company's proposed merger with Emera, future economic conditions, relationships with lenders, earnings retention and dividend payout policies, electric utility restructuring, developments in the legislative, regulatory and competitive environments in which the Company operates, environmental issues and other circumstances that could affect revenues and costs. BANGOR HYDRO-ELECTRIC COMPANY CONSOLIDATED BALANCE SHEETS 000's Omitted (Unaudited) Sept. 30, Dec. 31, ASSETS 2000 1999 -------- -------- INVESTMENT IN UTILITY PLANT: Electric plant in service, at original cost $ 304,763 $ 306,971 Less - Accumulated depreciation and amortization 85,301 84,825 -------- -------- $ 219,462 $ 222,146 Construction work in progress 12,345 5,668 -------- -------- $ 231,807 $ 227,814 Investments in corporate joint ventures: Maine Yankee Atomic Power Company $ 5,003 $ 5,267 Maine Electric Power Company, Inc. 633 530 -------- -------- Total investment in utility plant $ 237,443 $ 233,611 -------- -------- OTHER INVESTMENTS, principally at cost $ 2,866 $ 3,629 -------- -------- FUNDS HELD BY TRUSTEE, at cost $ 23,045 $ 22,699 -------- -------- CURRENT ASSETS: Cash and cash equivalents $ 13,546 $ 15,691 Accounts receivable, net of reserve 19,701 18,270 Unbilled revenue receivable 9,807 14,128 Inventories, at average cost: Material and supplies 2,670 2,793 Fuel oil 82 45 Prepaid expenses 485 928 -------- -------- Total current assets $ 46,291 $ 51,855 -------- -------- REGULATORY ASSETS AND DEFERRED CHARGES: Investment in Seabrook Nuclear Project, net of accumulated amortization of $33,146 in 2000 and $31,872 in 1999 $ 25,696 $ 26,970 Costs to terminate/restructure power contracts, net of accumulated amortization of $117,533 in 2000 and $100,861 in 1999 104,315 118,565 Maine Yankee decommissioning costs 42,910 46,041 Other regulatory assets 42,835 36,925 Other deferred charges 3,118 3,655 -------- -------- Total regulatory assets and deferred charges $ 218,874 $ 232,156 -------- -------- Total assets $ 528,519 $ 543,950 ======== ======== See notes to the consolidated financial statements. BANGOR HYDRO-ELECTRIC COMPANY CONSOLIDATED BALANCE SHEETS 000's Omitted (Unaudited) Sept. 30, Dec. 31, STOCKHOLDERS' INVESTMENT AND LIABILITIES 2000 1999 -------- -------- CAPITALIZATION: Common stock investment $ 137,112 $ 132,722 Preferred stock 4,734 4,734 Long-term debt, net of current portion 163,580 183,300 -------- -------- Total capitalization $ 305,426 $ 320,756 -------- -------- CURRENT LIABILITIES: Notes payable - banks $ - $ - -------- -------- Other current liabilities - Current portion of long-term debt $ 21,145 $ 19,460 Accounts payable 20,125 14,175 Dividends payable 1,539 1,171 Accrued interest 3,635 2,553 Customers' deposits 497 399 Current income taxes (refundable) payable (7) 4,126 -------- -------- Total other current liabilities $ 46,934 $ 41,884 -------- -------- Total current liabilities $ 46,934 $ 41,884 -------- -------- REGULATORY AND OTHER LONG-TERM LIABILITIES: Deferred income taxes - Seabrook $ 13,330 $ 13,995 Other accumulated deferred income taxes 57,577 55,827 Maine Yankee decommissioning liability 42,910 46,041 Deferred gain on asset sale 24,904 29,357 Other regulatory liabilities 10,563 9,872 Unamortized investment tax credits 1,487 1,592 Accrued pension and postretirement benefit costs 12,250 11,301 Other long-term liabilities 13,138 13,325 -------- -------- Total regulatory and other long-term liabilities $ 176,159 $ 181,310 -------- -------- Total Stockholders' Investment and Liabilities $ 528,519 $ 543,950 ======== ======== See notes to the consolidated financial statements. BANGOR HYDRO-ELECTRIC COMPANY CONSOLIDATED STATEMENTS OF CAPITALIZATION 000's Omitted (Unaudited) Sept. 30, Dec. 31, 2000 1999 --------- --------- COMMON STOCK INVESTMENT Common stock, par value $5 per share- $ 36,817 $ 36,817 Authorized -- 10,000,000 shares Outstanding -- 7,363,424 shares in 2000 and 1999 Amounts paid in excess of par value 58,680 58,890 Retained earnings 41,615 37,015 --------- --------- Total common stock investment $ 137,112 $ 132,722 --------- --------- PREFERRED STOCK Non-participating, cumulative, par value $100 per share, authorized 600,000 shares, not redeemable or redeemable solely at the option of the issuer- 7%, Noncallable, 25,000 shares, authorized and outstanding $ 2,500 $ 2,500 4.25%, Callable at $100, 4,840 shares, authorized and outstanding 484 484 4%, Series A, Callable at $110, 17,500 shares, authorized and outstanding 1,750 1,750 --------- --------- Total preferred stock $ 4,734 $ 4,734 --------- --------- LONG-TERM DEBT First Mortgage Bonds- 10.25% Series due 2020 $ 30,000 $ 30,000 8.98% Series due 2022 20,000 20,000 7.38% Series due 2002 20,000 20,000 7.30% Series due 2003 15,000 15,000 --------- --------- Total first mortgage bonds $ 85,000 $ 85,000 --------- --------- Other Long-Term Debt- Finance Authority of Maine - Taxable Electric Rate Stabilization Revenue Notes, 7.03% Series 1995A, due 2005 $ 86,600 $ 100,600 Medium Term Notes, Variable interest rate- LIBO Rate plus 1.125%, due 2002 13,125 17,160 --------- --------- $ 99,725 $ 117,760 Less: Current portion of long-term debt 21,145 19,460 --------- --------- Total other long-term debt $ 78,580 $ 98,300 --------- --------- Total long-term debt $ 163,580 $ 183,300 --------- --------- Total Capitalization $ 305,426 $ 320,756 ========= ========= See notes to the consolidated financial statements. BANGOR HYDRO-ELECTRIC COMPANY CONSOLIDATED STATEMENTS OF CASH FLOWS 000's Omitted (Unaudited) Nine Months Ended Sept. 30, Sept. 30, 2000 1999 --------- --------- Cash Flows From Operating Activities: Net income $ 9,217 $ 12,701 Adjustments to reconcile net income to net cash from operating activities: Depreciation and amortization 6,831 6,563 Amortization of Seabrook Nuclear Project 1,274 1,274 Amortization of contract buyouts and restructuring 16,672 15,601 Amortization of deferred asset sale gain (4,267) - Other amortizations 1,622 1,832 Allowance for equity funds used during construction (60) 81 Deferred income tax provision and amortization of investment tax credits (1,922) (2,857) Gain on sale of subsidiary (1,196) (523) Changes in assets and liabilities: Costs to restructure purchased power contract (750) (849) Deferred standard-offer service costs (5,664) - Deferred special rate contract revenues (1,232) - Deferred incremental Maine Yankee costs 808 1,699 Deferred costs associated with generation asset sale (63) (1,691) Exercise of PERC warrants-cash paid in lieu of issuing shares (1,758) (2,834) Payment received related to terminated purchased power contract - 1,750 Accounts receivable, net and unbilled revenue 2,890 (179) Accounts payable 5,950 (1,191) Accrued interest 1,082 363 Current and deferred income taxes (1,252) (62) Accrued postretirement benefit costs 1,364 894 Other current assets and liabilities, net 468 412 Other, net (244) 345 --------- --------- Net Increase in Cash From Operating Activities: $ 29,770 $ 33,329 --------- --------- Cash Flows From Investing Activities: Construction expenditures $ (10,810) $ (15,346) Asset sale proceeds - 79,588 Proceeds from sale of subsidiary 1,250 10,000 Release of Graham Station property sale proceeds held by trustee - 6,200 Allowance for borrowed funds used during construction (71) 61 --------- --------- Net (Decrease) Increase in Cash From Investing Activities $ (9,631) $ 80,503 --------- --------- Cash Flows From Financing Activities: Dividends on common stock $ (4,050) $ (1,104) Dividends on preferred stock (199) (822) Payments on long-term debt (18,035) (84,538) Short-term debt, net - (12,000) --------- --------- Net Decrease in Cash From Financing Activities $ (22,284) $ (98,464) --------- --------- Net (Decrease) Increase in Cash and Cash Equivalents $ (2,145) $ 15,368 Cash and Cash Equivalents at Beginning of Period 15,691 2,946 --------- --------- Cash and Cash Equivalents at End of Period $ 13,546 $ 18,314 ========= ========= Cash Paid During the Nine Months For: Interest (Net of Amount Capitalized) $ 10,467 $ 15,066 Income Taxes 9,295 8,800 ========= ========= See notes to consolidated financial statements. BANGOR HYDRO-ELECTRIC COMPANY CONSOLIDATED STATEMENTS OF COMMON STOCK INVESTMENT 000's Omitted (Unaudited) Amounts Total Paid in Common Common Excess of Retained Stock Stock Par Value Earnings Investment BALANCE DECEMBER 31, 1998 $ 36,817 $59,054 $22,993 $118,864 Net income - - 12,701 12,701 Cash dividends declared on- Preferred stock - - (790) (790) Common stock - - (2,209) (2,209) Other - - (46) (46) Exercise of warrants-cash paid in lieu of issuing shares - (351) - (351) ---------- ---------- ---------------------- BALANCE SEPTEMBER 30, 1999 $ 36,817 $58,703 $32,649 $128,169 ========== ========== ====================== BALANCE DECEMBER 31, 1999 $ 36,817 $58,890 $37,015 $132,722 Net income - - 9,217 9,217 Cash dividends declared on- Preferred stock - - (199) (199) Common stock - - (4,418) (4,418) Exercise of warrants-cash paid in lieu of issuing shares - (210) - (210) ---------- ---------- ---------------------- BALANCE SEPTEMBER 30, 2000 $ 36,817 $58,680 $41,615 $137,112 ========== ========== ====================== See notes to the consolidated financial statements. BANGOR HYDRO-ELECTRIC COMPANY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 2000 ------------------ (Unaudited) (1) BASIS OF PRESENTATION AND ACCOUNTING POLICIES: Certain information and footnote disclosures, normally included in financial statements prepared in accordance with generally accepted accounting principles, have been condensed or omitted in this Form 10-Q pursuant to the Rules and Regulations of the Securities and Exchange Commission. However, in the opinion of Bangor Hydro-Electric Company (the Company), the disclosures contained in this Form 10-Q are adequate to make the information presented not misleading. The year end condensed balance sheet data was derived from audited consolidated financial statements but does not include all disclosures required by generally accepted accounting principles. These statements should be read in conjunction with the consolidated financial statements, footnotes and all other information included in the 1999 Form 10-K. In the opinion of the Company, the accompanying unaudited consolidated financial statements reflect all adjustments, including normal recurring accruals, necessary to present fairly the financial position as of September 30, 2000 and the results of operations and cash flows for the periods ended September 30, 2000 and 1999. The Company's significant accounting policies are described in the Notes to the Consolidated Financial Statements included in its 1999 Form 10-K filed with the Securities and Exchange Commission. For interim reporting purposes, the Company follows these same basic accounting policies but considers each interim period as an integral part of an annual period. Accordingly, certain expenses are allocated to interim periods based upon estimates of such expenses for the year. (2) INCOME TAXES: The following table reconciles a provision calculated by multiplying income before federal income taxes by the statutory federal income tax rate to the federal income tax provision: Nine Months Ended Sept. 30, 2000 1999 Amount % Amount % (Dollars in Thousands) Federal income tax provision at statutory rate $5,325 35.0 $7,250 35.0 (Less) plus permanent reductions in tax expense resulting from statutory exclusions from taxable income (113) (.7) 63 .3 ------ ---- ------ ---- Federal income tax provision before effect of temporary differences and investment tax credits $5,212 34.3 $7,313 35.3 Less temporary differences that are flowed through for rate- making and accounting purposes (311) (2.1) (462) (2.3) Less utilization and amortization of investment tax credits (105) (.7) (363) (1.7) ------ ---- ------ ---- Federal income tax provision $4,796 31.5 $6,488 31.3 ====== ==== ====== ==== (3) INVESTMENT IN JOINTLY OWNED FACILITIES: Condensed financial information for Maine Yankee Atomic Power Company (Maine Yankee), Maine Electric Power Company, Inc. (MEPCO), Bangor-Pacific Hydro Associates (BPHA), Chester SVC Partnership (Chester) and Bangor Gas Company, LLC (Bangor Gas) is as follows: MAINE YANKEE MEPCO (Dollars in Thousands - Unaudited) Operations for Nine Months Ended ------------------------------------- Sep. 30, Sep. 30, Sep. 30, Sep. 30, 2000 1999 2000 1999 OPERATIONS: -------- -------- -------- -------- As reported by investee- Operating revenues $ 45,075 $ 53,604 $ 2,818 $ 2,072 ======== ======== ======== ======== Earnings applicable to common stock $ 3,500 $ 3,775 $ 975 $ 3,225 ======== ======== ======== ======== Company's reported equity- Equity in net income $ 245 $ 264 $ 138 $ 458 Add(Deduct)-Effect of adjusting Company's estimate to actual (5) (261) (33) 33 -------- -------- -------- -------- mounts reported by Company $ 240 $ 3 $ 105 $ 491 ======== ======== ======== ======== MAINE YANKEE MEPCO (Dollars in Thousands - Unaudited) Financial Position at --------------------------------------- Sep. 30, Dec. 31, Sep. 30, Dec. 31, 2000 1999 2000 1999 FINANCIAL POSITION: --------- --------- --------- -------- As reported by investee- Total assets $ 968,807 $1,049,972 $ 5,780 $ 8,067 Less- Preferred stock 15,000 15,000 - - Long-term debt 43,200 54,000 - - Other liabilities and deferred credits 839,029 905,994 1,149 4,339 ---------- --------- -------- -------- Net assets $ 71,578 $ 74,978 $ 4,631 $ 3,728 ========== ========== ======== ======== Company's reported equity- Equity in net assets $ 5,010 $ 5,248 $ 658 $ 529 Add(Deduct)- Effect of adjusting Company's estimate to actual (7) 19 (25) 1 ---------- ---------- -------- -------- Amounts reported by Co. $ 5,003 $ 5,267 $ 633 $ 530 ========== ========== ======== ======== BPHA Chester ---------------- -------------- (Dollars in Thousands - Unaudited) Operations for Nine Months Ended ----------------------------------- Sep. 30, Sep. 30, Sep. 30, 1999 2000 1999 --------- --------- --------- OPERATIONS: As reported by investee- Operating revenues $ 4,426 $ 3,198 $ 3,244 ======= ======= ======= Net Income $ 1,730 $ - $ - ======= ======= ======= Company's reported equity in net income $ 865 $ - $ - ======= ======= ======= Financial Position at Sep. 30, Dec. 31, 2000 1999 -------- -------- FINANCIAL POSITION: As reported by investee- Total assets $ 24,311 $25,302 Less- Long-term debt 22,584 23,471 Other liabilities 1,727 1,831 -------- ------- Net assets $ - $ - ======== ======= Company's reported equity in net assets $ - $ - ======== ======= As discussed in the 1999 Form 10-K, the Company owns 7% of the common stock of Maine Yankee, which owns and, prior to its permanent closure in 1997, operated an 880 megawatt nuclear generating plant (the Plant) in Wiscasset, Maine. Pursuant to a contract with Maine Yankee, the Company is obligated to pay its pro rata share of Maine Yankee's operating expenses, including decommissioning costs. On May 4, 2000, Maine Yankee notified its decommissioning operations contractor, Stone & Webster Engineering Corporation (Stone & Webster), that it was terminating the decommissioning operations contract pursuant to the terms of the contract. Stone & Webster subsequently notified Maine Yankee that it was disputing Maine Yankee's grounds for terminating the contract. On May 8, 2000, Stone & Webster announced that it had signed a letter of intent with Jacobs Engineering Group, Inc. (Jacobs), regarding a proposed transaction in which Jacobs would acquire substantially all of Stone & Webster's assets in exchange for an immediate credit facility and other consideration, including cash and stock. Stone & Webster said that the credit facility was intended to enable it to address its liquidity difficulties and continue to operate its businesses until the asset sale was completed. Stone & Webster also announced that it intended to seek bankruptcy court approval of the asset sale and credit agreement. On June 2, 2000, Stone & Webster filed a voluntary petition under Chapter 11 of the U.S. Bankruptcy Code with the United States Bankruptcy Court for the District of Delaware. By Sale Order dated July 13, 2000, the Bankruptcy Court approved the sale of substantially all of Stone & Webster's assets to the successful bidder in the Chapter 11 sale, The Shaw Group, Inc. (Shaw), for cash, stock, and the assumption of certain liabilities of Stone & Webster, and the earlier agreement with Jacobs was terminated. Stone & Webster reported that the Shaw transaction was effectively closed on July 14, 2000, and that it would continue to operate as a Debtor-in-Possession subject to the supervision and orders of the Bankruptcy Court. On May 10, 2000, Maine Yankee entered into an interim agreement with Stone & Webster in order to allow decommissioning work to continue and avoid the adverse consequences of an abrupt or inefficient demobilization from the Plant site. After obtaining assignments of several subcontracts from Stone & Webster and upon termination of the interim agreement on July 1, 2000, Maine Yankee, at least temporarily, assumed the general contractor role, utilizing a reduced number of Stone & Webster personnel under a revised new interim agreement. The decommissioning of the Plant site is progressing, with major emphasis being directed to maintaining the schedule on critical-path projects such as construction of the independent spent fuel storage and preparation of the Plant's reactor vessel for eventual shipment to an off-site disposal facility. On June 30, 2000, Federal Insurance Company (Federal), which provided performance and payment bonds in the amount of approximately $37.6 million each in connection with the decommissioning operations contract, filed a Complaint for Declaratory Judgement against Maine Yankee in the United States Bankruptcy Court for the District of Delaware, which was subsequently transferred to the United States District Court in Maine. The Complaint, which seeks a declaration that Federal has no obligation to pay Maine Yankee under the bonds, alleges that Maine Yankee improperly terminated the decommissioning operations contract with Stone & Webster and failed to give proper notice of termination to Federal under the contract, and that Federal therefore had no further obligations under the bonds. Maine Yankee has filed both a counterclaim against Federal in the District Court seeking recovery up to the penalty amounts of the bonds and a proof of claim against Stone & Webster in the Bankruptcy Court seeking recovery of all additional costs resulting from the termination of the Stone & Webster contract. Maine Yankee believes that its termination of the decommissioning operations contract was proper, but cannot predict the outcome of the litigation. Maine Yankee is evaluating all available long-term alternatives for safely and efficiently completing the decommissioning of the Plant site, including the possibilities of contracting with a new decommissioning operations contractor or assuming that function itself on a long-term basis. Maine Yankee expects to complete its review of proposals from prospective successor contractors and select a new contractor, if that is the alternative chosen, by the end of the year. However, Maine Yankee cannot predict at this time what affect the financial difficulties of Stone & Webster and the termination of its decommissioning operations contract with Maine Yankee will have on the cost or schedule of the decommissioning project. In connection with the state of Maine's electric industry restructuring law, the Company was allowed the recovery of Maine Yankee decommissioning costs as a component of its stranded costs. In the Company's rate order from the MPUC that became effective March 1, 2000, the Company was allowed to defer the amount of any future FERC ordered changes in Maine Yankee's decommissioning collections. As discussed in the 1999 Form 10-K, under the Maine Yankee settlement agreement, the Maine owners of Maine Yankee are required, for the period from March 1, 2000 through December 1, 2004, to hold Maine retail ratepayers harmless from the amounts by which the replacement power costs for Maine Yankee exceed the replacement power costs assumed in the report to the Maine Yankee board of directors that served as a basis for the plant shutdown decision, up to a maximum cumulative amount of $41 million. The Company's share of that amount would be $5.74 million for the period. During the period March 1 through December 31, 2000, the Company expects to accumulate about $1.7 million as credit against future potential liabilities. In October 2000, the MPUC staff advised the Maine owners that they could not use the two-year entitlement auction price to satisfy the replacement power test required as part of the settlement of Maine Yankee for 2001. If the Maine owners are required to use a current wholesale market index for energy purchases as a benchmark for the replacement power test, the Company could be liable for a significant amount of excess replacement power costs for the 2001 test. Depending upon future wholesale market indices, it is possible that the Company could be liable for some or all of the $5.74 million maximum liability at the end of December 2004. The Company cannot predict the outcome of this issue with the MPUC, and consequently no liability has been recorded as of September 30, 2000. The Company will continue its efforts to mitigate liability. As discussed in the 1999 Form 10-K, the Company sold its wholly- owned subsidiary, Penobscot Hydro Co., Inc., which held a 50% ownership interest in BPHA, in July 1999. As discussed in the 1999 Form 10-K, the Company announced in late 1999 that it no longer intended to participate in the Bangor Gas Company, LLC (Bangor Gas) joint venture and intended to sell its joint venture interest. On July 13, 2000, the Company and Penobscot Natural Gas Company (Penobscot Gas), the Company's wholly-owned subsidiary which owned a 50% interest in Bangor Gas, completed a stock purchase agreement to sell the Company's interest in Penobscot Gas to Sempra Energy (Sempra). Sempra had owned the other 50% interest in Bangor Gas. A one-time gain on the sale of Penobscot Gas of approximately $1.2 million was recognized in the third quarter of 2000. The consummation of this sale has no impact on the Company's proposed merger agreement with Emera Inc. (See Note 5). At December 31, 1999, Penobscot Gas had a $328,000 equity investment in Bangor Gas, and for the nine months ending September 30, 2000 and 1999 Penobscot Gas recorded equity losses in Bangor Gas of approximately $274,000 and $170,000 respectively. At December 31, 1999, Bangor Gas' total assets, principally construction work in progress, amounted to $12.5 million. (4) EARNINGS PER SHARE: The following table reconciles basic and diluted earnings per common share assuming all stock warrants were converted to common shares. (Amounts in 000's, except per share data) For the Three Months For the Nine Months Ended Ended -------------------- -------------------- Sep. 30, Sep. 30, Sep. 30, Sep. 30, 2000 1999 2000 1999 -------- -------- -------- -------- Earnings applicable to common stock $ 3,874 $ 4,758 $ 9,018 $ 11,865 -------- -------- -------- -------- Average common shares outstanding 7,363 7,363 7,363 7,363 Plus: incremental shares from assumed conversion 1,049 1,032 959 989 -------- -------- -------- -------- Average common shares outstanding plus assumed warrants converted 8,412 8,395 8,322 8,352 -------- -------- -------- -------- Basic earnings per common share $ .53 $ .65 $ 1.22 $ 1.61 ======== ======= ======== ======= Diluted earnings per common share $ .46 $ .57 $ 1.08 $ 1.42 ======== ======= ======== ======= (5) PROPOSED MERGER AGREEMENT WITH EMERA: On June 29, 2000, the Company entered into a definitive merger agreement with Emera of Halifax, Nova Scotia, pursuant to which Emera will acquire all of the outstanding shares of common stock of the Company for US$26.50 per share in cash. After the closing of the merger, each of the Company's outstanding warrants to purchase common stock will entitle the holder to receive US$26.50 in cash, less the exercise price. For a discussion of the common stock warrants, see the notes to the consolidated financial statements in the 1999 Form 10-K. The equity market value of the transaction is approximately $206 million. The transaction will take the form of a merger of the Company with a U.S. corporate subsidiary to be formed by Emera. Upon completion of the merger, the Company will be a wholly-owned subsidiary of Emera. The Company's outstanding debt and preferred stock will not be affected by the transaction. The transaction is subject to a number of approvals, including the approval of Bangor Hydro's shareholders, which was accomplished on October 24, 2000, and regulatory approvals from the Maine Public Utilities Commission, the Federal Energy Regulatory Commission, and the Securities and Exchange Commission. Receipt of the approvals necessary for closing is expected to take 9 to 12 months. (6) PURCHASED POWER CONTRACT OBLIGATIONS - Under Chapter 307 of Maine's electric utility industry restructuring law, the Company was required to sell all of the energy and capacity associated with its six purchased power contracts. In late 1999 the Company selected Morgan Stanley Dean Witter & Co., subsidiary Morgan Stanley Capital Group, Inc., (Morgan Stanley) as the winning bidder for this energy and capacity. The Company, though still maintains all obligations to the small power producers under the power purchase contracts. These obligations are not presently recorded on the Company's balance sheet and are being charged to expense as incurred in accordance with generally accepted accounting principles. Included in the Company's rates, effective March 1, 2000, are expenses associated with the estimated annual costs under these contracts, net of the estimated amounts to be received from the resale of the power to Morgan Stanley. The net present value of the estimated future purchased power costs under the contracts, net of estimated revenues to be realized associated with the resale of the power amounted to approximately $128.7 million as of September 30, 2000. (7) IMPLEMENTATION OF COMPETITION IN THE ELECTRIC UTILITY INDUSTRY - In connection with the state of Maine's electric industry restructuring law, effective March 1, 2000, consumers of electricity have the right to purchase generation services directly from competitive electricity suppliers. The Company's electric rates were changed effective March 1, as well, to reflect the Company's revenue requirement as a transmission and distribution utility, including the recovery of stranded costs. The electric utility industry restructuring and the Company's associated rate proceedings at MPUC are discussed in more detail in the 1999 Form 10-K. As discussed in the 1999 Form 10-K, the restructuring law also provided for a standard-offer service being available for all customers who do not choose to purchase energy from a competitive supplier starting March 1, 2000. As a result of the bids from competitive energy suppliers to provide energy under the standard-offer service being higher than anticipated, and as ordered by the MPUC, the Company assumed the responsibility of being the standard-offer service provider starting March 1, 2000 for a one-year period. At the end of this period, it is anticipated that the Company will no longer be the standard-offer service provider, although this is dependent upon the level of future bids from competitive energy suppliers to serve the standard-offer load and MPUC approvals. The MPUC established the schedule of rates the Company may charge for this service starting March 1, 2000. The Company has entered into arrangements with third parties to purchase the energy to serve the standard-offer customers. The Company is allowed by the MPUC to defer the difference between revenues realized from the standard-offer sales and the costs incurred to provide this service, including carrying costs on the deferred balance. As a result of this reconciliation mechanism, standard-offer related revenues and expenses do not have any impact on the Company's earnings, although they do result in increases in both categories in the Company's consolidated statements of income. The deferred amount will be recovered from/returned to customers in a future rate proceeding. Since March 1, 2000, when new rates went into effect, the costs of providing the standard offer service have significantly exceeded the revenues realized from customers, and consequently, the Company has recorded a regulatory asset of $5.7 million as of September 30, 2000 (is included in Other regulatory assets on the Consolidated Balance Sheets). The excess of costs is due principally to unusually high purchased power costs for one day in May 2000, which is discussed below, and higher than anticipated spot energy market prices in the summer of 2000. As a result of the growth in the balance of this regulatory asset, the MPUC approved standard offer service rate increases for customers in each of August and October 2000. These rate increases were necessitated to avoid a deficiency in standard offer service revenues that the Company projected would otherwise result based on actual costs already incurred and projected costs through February 2001. This amount is included in Other regulatory assets on the Consolidated Balance Sheets at September 30, 2000. (8) RECLASSIFICATIONS: Certain 1999 amounts have been reclassified to conform with the presentation used in Form 10-Q for the quarter ended September 30, 2000. BANGOR HYDRO-ELECTRIC COMPANY FORM 10-Q FOR PERIOD ENDING SEPTEMBER 30, 2000 PART II ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K EXHIBITS: None. REPORTS ON FORM 8-K: One Current Report on Form 8-K, dated July 13, 2000 was filed in the third quarter of 2000 regarding Bangor Hydro-Electric Company and Emera, Inc., formerly NS Power Holdings Incorporated entering into an Agreement and Plan of Merger dated as of June 29, 2000 providing for a merger transaction between the Company and a wholly-owned indirect subsidiary of Emera. BANGOR HYDRO-ELECTRIC COMPANY FORM 10-Q FOR PERIOD ENDED SEPTEMBER 30, 2000 The information furnished in this report reflects all adjustments which are, in the opinion of management, necessary to a fair statement of the results for the interim period. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. BANGOR HYDRO-ELECTRIC COMPANY (Registrant) Dated: November 14, 2000 /s/ Mathieu A. Poulin ---------------------- Mathieu A. Poulin Treasurer EX-27 2 0002.txt FINANCIAL DATA SCHEDULE FOR 3RD QTR 2000 10-Q
UT This schedule contains summary financial information extracted from Bangor Hydro-Electric Company's Form 10Q, 3rd Quarter 2000 and is qualified in its entirety by reference to such Form 10Q. 0000009548 BANGOR HYDRO-ELECTRIC COMPANY 1,000 9-MOS DEC-31-2000 SEP-30-2000 PER-BOOK 219,462 43,892 46,291 218,874 0 528,519 36,817 58,680 41,615 137,112 0 4,734 163,580 0 0 0 21,145 0 0 0 201,948 528,519 157,325 4,866 132,965 137,831 19,494 1,915 21,409 12,192 9,217 199 9,018 4,418 12,134 29,770 $1.22 $1.08
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