SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[x] Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended September 30, 1994
or
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from __________ to __________
Commission file number 1-2301
BOSTON EDISON COMPANY
(Exact name of registrant as specified in its charter)
Massachusetts 04-1278810
- ------------- ----------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
800 Boylston Street, Boston, Massachusetts 02199
- ------------------------------------------ -----
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 617-424-2000
-------------
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
----- -----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at September 30, 1994
- ----- ---------------------------------
Common Stock, $1 par value 45,421,127 shares
<PAGE>
Part I - Financial Information
Item 1. Financial Statements
- ------------------------------
<TABLE>
<CAPTION>
Boston Edison Company
Consolidated Balance Sheets
(Unaudited)
(in thousands)
September 30, December 31,
1994 1993
------------ ------------
<S> <C> <C>
Assets
Utility plant in service $3,985,354 $3,904,776
Less: accumulated depreciation 1,347,044 1,258,359
---------- ----------
Utility plant, net 2,638,310 2,646,417
Nuclear fuel, net 45,504 53,390
Construction work in progress 189,286 144,835
---------- ----------
Total property, plant and equipment 2,873,100 2,844,642
Investments in electric companies 24,497 24,292
Nuclear decommissioning fund 77,810 66,060
Current assets:
Cash and cash equivalents 5,325 8,768
Accounts receivable 202,166 171,098
Accrued unbilled revenues 34,943 29,823
Fuel, materials and supplies 73,791 79,381
Prepaid expenses and other 11,445 9,738
---------- ----------
Total current assets 327,670 298,808
Deferred debits:
Power contracts 30,916 36,275
Cancelled nuclear unit 4,767 19,067
Nuclear outage costs 19,734 25,524
Pension and postretirement costs 27,737 24,416
Redemption premiums 54,586 59,116
Regulatory asset - income taxes, net 42,857 26,916
Other 47,927 52,183
---------- ----------
Total assets $3,531,601 $3,477,299
========== ==========
Capitalization and Liabilities
Common stock equity:
Common stock $ 665,725 $ 657,782
Retained earnings 261,008 218,697
---------- ----------
Total common stock equity 926,733 876,479
Cumulative preferred stock:
Non-mandatory redeemable series 123,000 123,000
Mandatory redeemable series 94,000 96,000
First mortgage bonds 21,400 40,000
Sewage facility revenue bonds, net 31,754 32,497
Debentures 1,205,000 1,200,000
Current liabilities:
Long-term debt/preferred stock
due within one year 2,400 2,000
Notes payable 181,914 204,151
Accounts payable 122,258 144,760
Interest accrued 12,051 25,467
Dividends payable 22,800 22,696
Other 65,874 27,336
---------- ----------
Total current liabilities 407,297 426,410
Deferred credits:
Power contracts 30,916 36,275
Accumulated deferred income taxes 516,214 484,796
Accumulated deferred investment tax credits 68,085 71,140
Nuclear decommissioning reserve 87,419 73,744
Other 19,783 16,958
Commitments and contingencies - -
---------- ----------
Total capitalization and liabilities $3,531,601 $3,477,299
========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
Boston Edison Company
Consolidated Statements of Income
(Unaudited)
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1994 1993 1994 1993
---- ---- ---- ----
<S> <C> <C> <C> <C>
Operating revenues $449,094 $436,024 $1,195,198 $1,136,850
-------- -------- ---------- ----------
Operating expenses:
Fuel 41,919 51,301 125,589 131,163
Purchased power 94,208 91,907 267,819 282,991
Other operations and
maintenance 109,825 105,841 320,640 300,238
Depreciation and amortization 39,417 35,827 117,842 104,320
Amortization of deferred
cost of cancelled
nuclear unit 4,948 - 14,844 -
Demand side management
programs 9,405 10,774 27,451 29,116
Taxes - property and other 25,038 22,981 76,370 69,947
Income taxes 27,735 21,074 51,854 31,753
-------- -------- ---------- ----------
Total operating expenses 352,495 339,705 1,002,409 949,528
-------- -------- ---------- ----------
Operating income 96,599 96,319 192,789 187,322
Other income (expense), net 819 580 2,477 (577)
-------- -------- ---------- ----------
Operating and other income 97,418 96,899 195,266 186,745
-------- -------- ---------- ----------
Interest charges:
Long-term debt 25,560 25,763 77,346 76,727
Other 3,934 2,244 9,182 6,940
Allowance for borrowed funds
used during construction (2,258) (1,123) (5,238) (5,218)
-------- -------- ---------- ----------
Total interest charges 27,236 26,884 81,290 78,449
-------- -------- ---------- ----------
Net income 70,182 70,015 113,976 108,296
Preferred dividends provided 3,926 3,962 11,839 11,742
-------- -------- ---------- ----------
Balance available for common
stock $ 66,256 $ 66,053 $102,137 $ 96,554
======== ======== ========== ==========
Average common shares
outstanding 45,382 45,005 45,286 44,913
======== ======== ========== ==========
Earnings per share of
common stock $1.46 $1.47 $2.26 $2.15
====== ===== ===== =====
Dividends declared per
common share $0.440 $0.425 $1.320 $1.275
====== ====== ====== ======
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
Boston Edison Company
Consolidated Statements of Cash Flows
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
Nine Months Ended September 30,
1994 1993
---- ----
<S> <C> <C>
Operating activities:
Net income $113,976 $108,296
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation 107,581 94,201
Amortization of nuclear fuel 16,738 15,952
Amortization of deferred cost of
cancelled nuclear unit, net 14,301 -
Other amortization 10,456 5,108
Allowance for borrowed funds used during
construction (5,238) (5,218)
Deferred income taxes 12,113 3,669
Investment tax credits (3,054) (3,225)
Amortization (deferral) of nuclear
outage costs, net 5,791 (9,484)
Net changes in:
Accounts receivable and accrued unbilled
revenues (36,188) (21,286)
Fuel, materials and supplies 2,044 8,500
Accounts payable (22,502) (18,655)
Other current assets and liabilities 23,519 15,340
Other, net 20,026 837
-------- --------
Net cash provided by operating activities 259,563 194,035
-------- --------
Investing activities:
Plant and nuclear fuel expenditures (134,318) (165,660)
Capitalized demand side management
expenditures (15,325) (20,214)
Investments (11,955) (10,213)
-------- --------
Net cash used by investing activities (161,598) (196,087)
-------- --------
Financing activities:
Issuance of long-term debt 15,000 815,000
Issuance of common stock 7,978 8,192
Issuance of preferred stock - 40,000
Retirement of long-term debt (28,600) (648,625)
Redemption of preferred stock (2,000) (40,000)
Change in notes payable (22,237) (101,000)
Dividends paid (71,549) (69,264)
-------- --------
Net cash provided (used) by financing
activities (101,408) 4,303
-------- --------
Increase/(decrease) in cash and cash equivalents (3,443) 2,251
Cash and cash equivalents at beginning of year 8,768 3,947
-------- --------
Cash and cash equivalents at end of period $ 5,325 $ 6,198
======== ========
Cash paid during the period for:
Interest $ 99,944 $ 92,777
Less: amounts capitalized 5,238 5,218
-------- --------
$ 94,706 $ 87,559
======== ========
Income taxes $ 28,690 $ 23,724
======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
Notes to Consolidated Financial Statements
- ------------------------------------------
A) Basis of Presentation
---------------------
The accompanying unaudited consolidated financial statements should be read in
conjunction with the Boston Edison Company (the Company) 1993 Form 10-K Annual
Report and Forms 10-Q for the periods ended March 31, 1994 and June 30, 1994.
In the opinion of the Company, the accompanying unaudited consolidated
financial statements reflect all adjustments (which are all of a normal
recurring nature) necessary to present fairly the financial position as of
September 30, 1994 and the results of operations for the three and nine months
ended September 30, 1994 and 1993 and the cash flows for the nine months ended
September 30, 1994 and 1993. Certain prior year balances have been
reclassified to reflect current classifications.
The results of operations for the three and nine months ended September 30,
1994 are not indicative of the results which may be expected for the entire
year. The Company's kWh sales and revenues are seasonal in nature, with both
being lower in the spring and fall seasons. In addition, pursuant to retail
rate orders of the Massachusetts Department of Public Utilities (DPU), base
retail rates billed to commercial and industrial customers are higher in the
billing months of June through September. Accordingly, a significant portion
of the Company's annual earnings occurs in the third quarter.
B) Commitments and Contingencies
-----------------------------
In March 1991 the Company was named in a lawsuit alleging discriminatory
employment practices under the Age Discrimination in Employment Act of 1967
concerning 46 employees affected by the Company's 1988 reduction in force.
Legal counsel is vigorously defending this case. Based on the information
presently available, the Company does not expect that this litigation or
certain other legal matters in which the Company is currently involved will
have a material impact on financial condition. However, an unfavorable
decision ordered against the Company could have a material impact on quarterly
earnings.
State regulations revised in 1993 require that properties where releases of
hazardous materials occurred in the past be further cleaned up according to a
timetable developed by the Massachusetts Department of Environmental
Protection. The Company continues to evaluate the potential costs associated
with the cleanup of sites where it has been identified as the owner or
operator. There are uncertainties associated with these potential costs due
to the complexities of cleanup technology, regulatory requirements and the
particular characteristics of the different sites. The Company also continues
to face possible liability as a potentially responsible party in the cleanup
of certain other multi-party hazardous waste sites in Massachusetts and other
states. At the majority of these other sites the Company is one of many
potentially responsible parties and its alleged share of the responsibility is
a small percentage. The Company does not expect any of its potential cleanup
liabilities to have a material impact on its financial condition or annual
results of operations, although provisions for cleanup costs could have a
material impact on quarterly earnings.
In September 1994 the Company received a favorable decision from the Norfolk
Superior Court regarding its lawsuit against the Massachusetts Metropolitan
District Commission (MDC). The Company filed suit in 1992 related to an
eminent domain taking of certain Company-owned property in 1989. The Court's
decision is subject to appeal by the MDC. If upheld, the decision would
result in an additional award to the Company of $4.5 million plus interest.
<PAGE>
C) Income Taxes
------------
The annual estimated effective income tax rate for 1994 and the actual
effective income tax rate for 1993 and the reasons for their differences from
the statutory federal income tax rate are explained below:
<TABLE>
<CAPTION>
1994 1993
---- ----
<S> <C> <C>
Statutory tax rate 35.0% 35.0%
State income tax, net of federal income
tax benefit 4.3 4.2
Investment tax credits (2.2) (2.6)
Reversal of deferred taxes -
settlement agreement (5.5) (13.0)
Other (0.1) (0.2)
----- -----
Effective tax rate 31.5% 23.4%
===== =====
</TABLE>
D) Long-Term Securities
--------------------
The Company will redeem the last series of first mortgage bonds, Series S, in
November 1994. As a result, the First Mortgage Bond Indenture that had
mortgaged all Company property since 1940 has been terminated.
Item 2. Management's Discussion and Analysis
- ---------------------------------------------
Results of Operations - Three Months ended September 30, 1994 vs. Three Months
- ------------------------------------------------------------------------------
ended September 30, 1993
- ------------------------
Earnings per common share for the three months ended September 30, 1994
amounted to $1.46 as compared to $1.47 per common share for the three months
ended September 30, 1993. The third quarter results reflect the elimination
of certain purchased power expenses due to the October 1993 expiration of a
long-term contract, a $29 million annual rate increase effective November 1993
and a 2.4% increase in retail kWh sales. These were offset by lower wholesale
and performance revenues and higher depreciation and amortization, income tax
and operations and maintenance expenses.
The results of operations for the quarter are not indicative of the results
which may be expected for the entire year due to the seasonality of the
Company's kWh sales and revenues. See Note A to the consolidated financial
statements.
Operating revenues
- ------------------
Operating revenues increased 3.0% as follows:
<TABLE>
<CAPTION>
(in thousands)
-------------------------------------------------------
<S> <C>
Retail electric revenues $31,279
Demand side management revenues (2,195)
Wholesale and other revenues (9,576)
Short-term sales revenues (6,438)
-------------------------------------------------------
Increase in operating revenues $13,070
=======================================================
</TABLE>
Retail electric revenues increased $31 million. The November 1993 retail rate
increase resulted in $12.5 million of the increased revenues and approximately
$6 million was due to the 2.4% increase in retail kWh sales. Performance
revenues, which vary annually based on the operating
<PAGE>
performance of Pilgrim Nuclear Power Station, decreased $3.4 million as a
result of the current outage at the station which is discussed in the
financial condition section. Fuel and purchased power revenues increased
$16.2 million primarily due to the recovery of certain new purchased power
expenses.
The decrease in wholesale and other revenues is primarily due to potential
customer contract issues and the current outage at Pilgrim Station.
Decreased short-term sales revenues are the result of lower nuclear generating
availability. Revenues from short-term sales reduce fuel and purchased power
billings to retail customers and therefore have no effect on earnings.
Operating expenses
- ------------------
Total fuel and purchased power expenses decreased $7 million. Fuel expense
decreased due to a 20% decrease in Company generation and lower fossil fuel
prices. Purchased power expense reflects both higher interchange purchases
and lower costs associated with a long-term contract that expired in October
1993. The timing effect of fuel and purchased power cost collection partially
offset the decrease in total fuel and purchased power costs.
Other operations and maintenance expense increased primarily due to a $1.9
million increase in pension expense and increases in other employee benefit
expenses. In accordance with the 1992 settlement agreement the Company
records pension expense based upon the estimated funding of the pension plan
for the year.
Depreciation and amortization expense increased primarily due to a higher
depreciable plant balance. In 1994 the Company resumed amortization of the
deferred costs of the cancelled Pilgrim 2 nuclear unit. In accordance with
the 1992 settlement agreement the Company did not expense any of these costs
in 1993.
The Company's effective annual income tax rate for 1994 is currently estimated
to be 31.5% vs. an actual rate of 23.4% for 1993. The higher rate is the
result of a $10 million decrease in annual adjustments to deferred income
taxes in accordance with the 1992 settlement agreement.
Results of Operations - Nine Months ended September 30, 1994 vs. Nine Months
- ----------------------------------------------------------------------------
ended September 30, 1993
- ------------------------
Earnings per common share for the nine months ended September 30, 1994
amounted to $2.26 as compared to $2.15 per common share for the nine months
ended September 30, 1993. The increase in earnings is primarily the result of
the elimination of certain purchased power expenses due to the expiration of a
long-term contract, a $29 million annual rate increase effective November 1993
and a 2.7% increase in retail kWh sales. These were partially offset by
higher depreciation and amortization, operations and maintenance and income
tax expenses and lower wholesale revenues.
The results of operations for the nine months ended September 30, 1994 are not
indicative of the results which may be expected for the entire year due to the
seasonality of the Company's kWh sales and revenues. See Note A to the
consolidated financial statements.
<PAGE>
Operating revenues
- ------------------
Operating revenues increased 5.1% as follows:
<TABLE>
<CAPTION>
(in thousands)
------------------------------------------------------
<S> <C>
Retail electric revenues $60,571
Demand side management revenues 1,877
Wholesale and other revenues (4,551)
Short-term sales revenues 451
------------------------------------------------------
Increase in operating revenues $58,348
======================================================
</TABLE>
Retail electric revenues increased $61 million. The November 1993 retail rate
increase resulted in $22.3 million of the increased revenues and approximately
$11 million was due to the 2.7% increase in retail kWh sales. Fuel and
purchased power revenues increased $27.2 million primarily due to the recovery
of certain new purchased power expenses.
The decrease in wholesale and other revenues is primarily due to potential
customer contract issues and the current outage at Pilgrim Station.
Operating expenses
- ------------------
Total fuel and purchased power expenses decreased $21 million. The decrease
in purchased power expense is primarily due to lower costs resulting from the
expiration of a long-term contract in October 1993. The decrease in fuel
expense is primarily due to lower fossil fuel prices.
Other operations and maintenance expense increased primarily due to a $10.1
million increase in pension expense and increases in other employee benefit
expenses.
Depreciation and amortization expense increased primarily due to a higher
depreciable plant balance. In 1994 the Company resumed amortization of the
deferred costs of the cancelled Pilgrim 2 nuclear unit. In accordance with
the 1992 settlement agreement the Company did not expense any of these costs
in 1993.
The Company's effective annual income tax rate for 1994 is currently estimated
to be 31.5% vs. an actual rate of 23.4% for 1993 as discussed in the results
of operations for the third quarter.
Financial Condition
- -------------------
The Company's 1992 settlement agreement with the DPU provides increased
revenues from retail customers over the three-year period ending October
1995. Additionally, a long-term purchased power contract with annual charges
of approximately $60 million expired in October 1993 with no related change
in revenues. The settlement agreement also limits the annual rate of return
on equity during the three-year period to 11.75%, excluding any penalties or
rewards from performance incentives.
The most significant impact that performance incentives can have on the
Company's financial results is based on Pilgrim Station's annual capacity
factor. Effective November 1993 an annual capacity factor between 60% and 68%
will provide approximately $45 million of revenues through the performance
adjustment charge. For each percentage point increase in capacity factor
above 68%, annual revenues will increase by approximately $650,000. For each
percentage point decrease in capacity factor below 60% (to a minimum of 35%),
annual revenues will decrease by
<PAGE>
approximately $750,000. The capacity factor for the recently concluded
performance year (November 1993 through October 1994) was 72.3%.
On August 29, 1994, Pilgrim Station automatically shut down as a result of a
non-nuclear problem with its electrical generator. The plant is expected to
be shut down until mid-December in order to complete necessary repairs. Some
maintenance work originally scheduled for the 1995 refueling outage will also
be completed during the current outage. The power needs usually met
by the station are being covered by other Company facilities or purchased
from other suppliers as necessary. The current recovery of the incremental
purchased power costs through fuel and purchased power revenues will be
subject to review by the DPU under its generating unit performance program.
Liquidity
- ---------
The Company supplements internally generated funds with external financings,
primarily the issuance of short-term commercial paper and bank borrowings. A
net decrease in the Company's borrowing requirements in 1994 is primarily the
result of higher cash from operations and lower plant expenditures. The
Company has authority from the Federal Energy Regulatory Commission to issue
up to $350 million of short-term debt. The Company has a $200 million
revolving credit agreement and arrangements with several banks to provide
additional short-term credit on a committed as well as on an uncommitted and
as available basis. At September 30, 1994 the Company had $182 million of
short-term debt outstanding, none of which was incurred under the revolving
credit agreement.
Outlook for the Future
- ----------------------
A significant portion of the Company's electricity sales is made to commercial
customers rather than industrial customers. As a result the Company's sales
have been only moderately impacted by the decline in the local economy.
Retail electricity sales increased 2.7% in the first nine months of 1994 due
in part to several periods of extreme weather conditions in Massachusetts.
However, this growth rate is not expected to continue.
In September 1994 the DPU issued an order in response to a remand from the
Massachusetts Supreme Judicial Court (SJC) regarding the Company's appeal of a
previous DPU order requiring the purchase of 132 megawatts of power from
Altresco Lynn, LP, an independent power producer. This DPU order requires the
Company to negotiate for power with Altresco. The Company filed an appeal of
this order with the SJC in October.
Other Matters
- -------------
In August 1994 Boston Energy Technology Group (BETG), the Company's
unregulated subsidiary, acquired a substantial majority interest in Coneco
Corporation. Coneco provides engineering and project management services to
energy and water conservation project developers and contractors. The
Company's investment in BETG is not substantial and it does not anticipate
BETG to significantly impact the results of operations in the next several
years.
<PAGE>
Part II - Other Information
Item 5. Other Information
- --------------------------
The following additional information is furnished in connection with the
Registration Statement on Form S-3 of the Registrant (File No. 33-57840),
filed with the Securities and Exchange Commission on February 3, 1993.
Price and dividend information per share of common stock:
<TABLE>
<CAPTION>
Price
------------------- Dividend
High Low Paid
---- --- --------
<S> <C> <C> <C>
First quarter 1994 $29 7/8 $26 $0.44
Second quarter 1994 29 1/8 25 1/4 0.44
Third quarter 1994 27 5/8 22 3/4 0.44
</TABLE>
The last sales price of the Company's common stock on the New York Stock
Exchange as reported in the Wall Street Journal for November 9, 1994 was
$22 3/4 per share.
Ratio of earnings to fixed charges and ratio of earnings to fixed charges and
preferred stock dividend requirements:
Twelve months ended September 30, 1994:
--------------------------------------
Ratio of earnings to fixed charges 2.37X
Ratio of earnings to fixed charges and preferred
stock dividend requirements 2.03X
Item 6. Exhibits and Reports on Form 8-K
- -----------------------------------------
a) Exhibits filed herewith:
Exhibit 12 - Computation of ratio of earnings to fixed charges
12.1 - Computation of ratio of earnings to fixed charges
for the twelve months ended September 30, 1994
12.2 - Computation of ratio of earnings to fixed charges
and preferred stock dividend requirements for the
twelve months ended September 30, 1994
Exhibit 15 - Letter re unaudited interim financial
information
15.1 - Report of Independent Accountants
Exhibit 27 - Financial Data Schedule
27.1 - Schedule UT
<PAGE>
Exhibit 99 - Additional Exhibits
99.1 - Letter of Independent Accountants
Re Form S-3 Registration Statements filed by the
Company on September 14, 1990 (File No. 33-36824),
February 3, 1993 (File No. 33-57840); Form S-8
Registration Statements filed by the Company on
October 10, 1985 (File No. 33-00810), July 28, 1986
(File No. 33-7558), December 31, 1990 (File No.
33-38434), June 5, 1992 (33-48424 and 33-48425)
and March 17, 1993 (33-59662 and 33-59682)
<PAGE>
Signature
---------
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.
BOSTON EDISON COMPANY
---------------------
(Registrant)
Date: November 10, 1994 /s/ Robert J. Weafer, Jr.
------------------------
Robert J. Weafer, Jr.
Vice President, Controller
and Chief Accounting
Officer
<PAGE>
<TABLE>
<CAPTION>
Exhibit 12.1
Boston Edison Company
Computation of Ratio of Earnings to Fixed Charges
Twelve Months Ended September 30, 1994
(in thousands)
<S> <C>
Net income from continuing operations $123,898
Income taxes 56,388
Fixed charges 131,491
--------
Total $311,777
========
Interest expense $117,012
Interest component of rentals 14,479
--------
Total $131,491
========
Ratio of earnings to fixed charges 2.37
====
</TABLE>
<PAGE>
<TABLE>
Exhibit 12.2
Boston Edison Company
Computation of Ratio of Earnings to Fixed Charges
and Preferred Stock Dividend Requirements
Twelve Months Ended September 30, 1994
(in thousands)
<S> <C>
Net income from continuing operations $123,898
Income taxes 56,388
Fixed charges 131,491
--------
Total $311,777
========
Interest expense $117,012
Interest component of rentals 14,479
--------
Subtotal 131,491
--------
Preferred stock dividend requirements 22,456
--------
Total $153,947
========
Ratio of earnings to fixed charges and preferred
stock dividend requirements 2.03
====
</TABLE>
<PAGE>
Exhibit 15.1
Report of Independent Accountants
To the Stockholders and Directors
of Boston Edison Company
We have reviewed the accompanying consolidated balance sheet of Boston Edison
Company (the Company) and subsidiaries as of September 30, 1994 and the
related statements of income and cash flows for the three and nine-month
periods ended September 30, 1994 and 1993. These financial statements are the
responsibility of the Company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures
to financial data and making inquiries of persons responsible for financial
and accounting matters. It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing standards, the
objective of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the accompanying financial statements in order for them to
be in conformity with generally accepted accounting principles.
Boston, Massachusetts COOPERS & LYBRAND L.L.P.
October 27, 1994
<PAGE>
Exhibit 99.1
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Boston Edison Company
Registration on Form
S-3 and Form S-8
We are aware that our report dated October 27, 1994 on our review of the
interim financial information of Boston Edison Company for the period ended
September 30, 1994 and included in this Form 10-Q is incorporated by reference
in the Company's registration statements on Form S-3 (File Nos. 33-36824 and
33-57840) and on Form S-8 (File Nos.33-00810, 33-7558, 33-38434, 33-48424, 33-
48425, 33-59662 and 33-59682). Pursuant to Rule 436(c) under the Securities
Act of 1933, this report should not be considered a part of the registration
statements prepared or certified by us within the meaning of Sections 7 and 11
of that Act.
Boston, Massachusetts COOPERS & LYBRAND L.L.P.
October 27, 1994
<PAGE>
<TABLE> <S> <C>
<ARTICLE> UT
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1993
<PERIOD-END> SEP-30-1994
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 2,638,310
<OTHER-PROPERTY-AND-INVEST> 337,097
<TOTAL-CURRENT-ASSETS> 327,670
<TOTAL-DEFERRED-CHARGES> 228,524
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 3,531,601
<COMMON> 45,421
<CAPITAL-SURPLUS-PAID-IN> 620,304
<RETAINED-EARNINGS> 261,008
<TOTAL-COMMON-STOCKHOLDERS-EQ> 926,733
94,000
123,000
<LONG-TERM-DEBT-NET> 1,258,154
<SHORT-TERM-NOTES> 84,914
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 97,000
<LONG-TERM-DEBT-CURRENT-PORT> 400
2,000
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 945,400
<TOT-CAPITALIZATION-AND-LIAB> 3,531,601
<GROSS-OPERATING-REVENUE> 1,195,198
<INCOME-TAX-EXPENSE> 51,854
<OTHER-OPERATING-EXPENSES> 950,555
<TOTAL-OPERATING-EXPENSES> 1,002,409
<OPERATING-INCOME-LOSS> 192,789
<OTHER-INCOME-NET> 2,477
<INCOME-BEFORE-INTEREST-EXPEN> 195,266
<TOTAL-INTEREST-EXPENSE> 81,290
<NET-INCOME> 113,976
11,839
<EARNINGS-AVAILABLE-FOR-COMM> 102,137
<COMMON-STOCK-DIVIDENDS> 59,826
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> 259,563
<EPS-PRIMARY> 2.26
<EPS-DILUTED> 2.26
</TABLE>
