<PAGE> 1
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 March 31, 1996
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
incorporation or organization) Identification No.)
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 March 31, 1996
- ----- -----------------------------
Common Stock, $1 par value 48,106,439 shares
<PAGE> 2
Part I - Financial Information
Item 1. Financial Statements
- -----------------------------
<TABLE>
Boston Edison Company
Consolidated Balance Sheets
(Unaudited)
(in thousands)
<CAPTION>
March 31, December 31,
1996 1995
---------- ------------
<S> <C> <C>
Assets
- ------
Utility plant in service, at original cost $4,314,301 $4,315,422
Less: accumulated depreciation 1,476,884 1,439,996
---------- ----------
2,837,417 2,875,426
Nuclear fuel, net 47,662 50,643
Construction work in progress 49,876 29,573
---------- ----------
Net utility plant 2,934,955 2,955,642
Investments in electric companies, at equity 23,524 23,620
Nuclear decommissioning trust 107,293 102,894
Current assets:
Cash and cash equivalents 3,412 5,841
Accounts receivable 230,175 219,114
Accrued unbilled revenues 32,571 37,113
Fuel, materials and supplies,
at average cost 55,985 59,631
Prepaid expenses and other 28,416 23,607
---------- ----------
Total current assets 350,559 345,306
---------- ----------
Regulatory assets:
Redemption premiums 42,930 44,709
Income taxes, net 46,461 46,121
Power contracts 20,242 21,396
Pension and postretirement costs 12,842 13,811
Nuclear outage costs 11,163 13,471
Other 16,894 17,266
---------- ----------
Total regulatory assets 150,532 156,774
Other deferred debits:
Intangible asset - pension 27,386 27,386
Other 27,049 32,227
---------- ----------
Total assets $3,621,298 $3,643,849
========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements
<PAGE> 3
<TABLE>
Boston Edison Company
Consolidated Balance Sheets
(Continued)
(Unaudited)
(in thousands)
<CAPTION>
March 31, December 31,
1996 1995
---------- ----------
<S> <C> <C>
Capitalization and Liabilities
- ------------------------------
Common stock equity:
Common stock $ 734,710 $ 731,689
Retained earnings 256,448 257,749
---------- ----------
Total common stock equity 991,158 989,438
Cumulative preferred stock:
Nonmandatory redeemable series 123,000 123,000
Mandatory redeemable series 92,000 92,000
Long-term debt 1,060,130 1,160,223
Current liabilities:
Long-term debt/preferred stock
due within one year 102,267 102,667
Notes payable 202,060 126,441
Accounts payable 94,273 133,474
Accrued interest 12,324 25,113
Dividends payable 25,402 25,351
Pension benefits 37,852 32,602
Other 151,058 105,442
---------- ----------
Total current liabilities 625,236 551,090
---------- ----------
Deferred credits:
Power contracts 20,242 21,396
Accumulated deferred income taxes 495,730 497,282
Accumulated deferred investment tax credits 61,952 62,970
Nuclear decommissioning reserve 118,390 113,288
Other 33,460 33,162
---------- ----------
Total deferred credits 729,774 728,098
Commitments and contingencies - -
---------- ----------
Total capitalization and liabilities $3,621,298 $3,643,849
========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements
<PAGE> 4
<TABLE>
Boston Edison Company
Consolidated Statements of Income
(Unaudited)
(in thousands, except per share amounts)
<CAPTION>
Three Months Ended March 31,
1996 1995
-------- --------
<S> <C> <C>
Operating revenues $387,849 $379,678
-------- --------
Operating expenses:
Fuel 40,741 40,102
Purchased power 102,055 97,191
Other operations and maintenance 100,841 104,770
Depreciation and amortization 41,965 39,384
Demand side management programs 6,470 11,604
Taxes - property and other 28,789 27,109
Income taxes 14,895 11,909
-------- --------
Total operating expenses 335,756 332,069
-------- --------
Operating income 52,093 47,609
Other income (expense), net 640 171
-------- --------
Operating and other income 52,733 47,780
-------- --------
Interest charges:
Long-term debt 24,990 25,033
Other 2,868 4,692
Allowance for borrowed funds used
during construction (328) (2,147)
-------- --------
Total interest charges 27,530 27,578
-------- --------
Net income 25,203 20,202
Preferred dividends provided 3,890 3,902
-------- --------
Balance available for common stock $ 21,313 $ 16,300
======== ========
Weighted average common shares outstanding 48,071 45,601
====== ======
Earnings per share of common stock $0.44 $0.36
===== =====
Dividends declared per share of common stock $0.470 $0.455
====== ======
</TABLE>
The accompanying notes are an integral part of these financial statements
<PAGE> 5
<TABLE>
Boston Edison Company
Consolidated Statements of Cash Flows
(Unaudited)
(in thousands)
<CAPTION>
Three Months Ended March 31,
1996 1995
-------- -------
<S> <C> <C>
Operating activities:
Net income $ 25,203 $20,202
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 38,911 36,317
Amortization of nuclear fuel 5,701 6,258
Amortization of deferred nuclear outage
costs 2,308 1,930
Other amortization 3,702 3,701
Deferred income taxes (2,252) (1,621)
Investment tax credits (1,018) (1,023)
Allowance for borrowed funds used during
construction (328) (2,147)
Net changes in:
Accounts receivable and accrued
unbilled revenues (6,519) 157
Fuel, materials and supplies 2,464 2,037
Accounts payable (39,201) (24,009)
Other current assets and liabilities 33,319 (21,980)
Other, net 9,749 5,574
-------- -------
Net cash provided by operating activities 72,039 25,396
-------- -------
Investing activities:
Plant expenditures (excluding AFUDC) (21,013) (38,031)
Nuclear fuel expenditures (1,346) (10,691)
Nuclear decommissioning trust investments (4,399) (4,415)
Electric company investments 96 109
-------- -------
Net cash used by investing activities (26,662) (53,028)
-------- -------
Financing activities:
Issuances:
Common stock 3,029 2,630
Redemptions:
Preferred stock 0 (2,000)
Long-term debt (100,000) 0
Net change in notes payable 75,619 49,817
Dividends paid (26,454) (24,645)
-------- -------
Net cash provided (used) by financing activities (47,806) 25,802
-------- -------
Net decrease in cash and cash equivalents (2,429) (1,830)
Cash and cash equivalents at beginning of year 5,841 6,822
-------- -------
Cash and cash equivalents at end of period $ 3,412 $ 4,992
======== =======
Cash paid during the period for:
Interest $ 38,444 $39,892
Less: amounts capitalized 328 2,147
-------- -------
$ 38,116 $37,745
======== =======
Income taxes $ 6,054 $ 9,875
======== =======
</TABLE>
The accompanying notes are an integral part of these financial statements
<PAGE> 6
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) 1995 Form 10-K Annual
Report. 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 March 31, 1996 and the results of operations for the three months ended
March 31, 1996 and 1995 and the cash flows for the three months ended
March 31, 1996, and 1995. Certain reclassifications have been made to the
prior year data to conform to the current presentation. The financial
statements conform with generally accepted accounting principles (GAAP). The
preparation of financial statements in conformity with GAAP requires the
Company to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosures of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from these
estimates.
The results of operations for the three months ended March 31, 1996, are not
indicative of the results which may be expected for the entire year. The
Company's kWh sales and revenues are typically higher in the winter and summer
than in the spring and fall as sales tend to vary with weather conditions. In
addition, the Company bills higher base rates to commercial and industrial
customers during the billing months of June through September as mandated by
the Massachusetts Department of Public Utilities (DPU). Accordingly, greater
than half of the Company's annual earnings typically occurs in the third
quarter.
B) Nature of Operations
--------------------
The Company is an investor-owned regulated public utility operating in the
energy and energy services business. This includes the generation, purchase,
transmission, distribution and sale of electric energy and the development and
implementation of electric demand side management programs. A portion of the
generation is produced by a nuclear unit, Pilgrim Station. The Company
supplies electricity at retail to an area of 590 square miles, including the
City of Boston and 39 surrounding cities and towns. It also supplies
electricity at wholesale for resale to other utilities and municipal electric
departments. Electric operating revenues were 89% retail and 11% wholesale in
1995.
C) Commitments and Contingencies
-----------------------------
In 1991 the Company was named in a lawsuit alleging discriminatory employment
practices under the Age Discrimination in Employment Act of 1967 concerning
employees affected by the Company's 1988 reduction in force. Legal counsel
continues to vigorously defend this case. The Company has also been named as
a party in a lawsuit by Subaru of New England, Inc. and Subaru Distributors
Corporation. The plaintiffs are claiming certain automobiles stored on lots
in South Boston suffered pitting damage caused by emissions from New Boston
Station. The Company believes that it has a strong defense in this case. The
Company is also involved in certain other legal matters. The Company is
unable to fully determine a range of reasonably possible litigation costs in
excess of amounts previously accrued, although based on the information
<PAGE> 7
currently available, it does not expect that any such additional costs will
have a material impact on its financial condition. However, additional
litigation costs that may result from a change in estimates could have a
material impact on the results of a reporting period in the near term.
The Company owns or operates approximately 40 properties where oil or
hazardous materials were previously spilled or released. The Company is
required to clean up these properties in accordance with a timetable developed
by the Massachusetts Department of Environmental Protection and is continuing
to evaluate the costs associated with their cleanup. There are uncertainties
associated with these 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 approximately ten multi-party hazardous
waste sites in Massachusetts and other states where it is alleged to have
generated, transported or disposed of hazardous waste at the sites. At the
majority of these sites the Company is one of many potentially responsible
parties and currently expects to have only a small percentage of the potential
liability. Through March 31, 1996, the Company has accrued approximately $7
million related to its cleanup liabilities. The Company is unable to fully
determine a range of reasonably possible cleanup costs in excess of the
accrued amount, although based on its assessments of the specific site
circumstances, it does not expect any such additional costs to have a material
impact on its financial condition. However, additional provisions for cleanup
costs that may result from a change in estimates could have a material impact
on the results of a reporting period in the near term.
D) Income Taxes
------------
The following table reconciles the federal statutory income tax rate to the
annual estimated effective income tax rate for 1996 and the actual effective
income tax rate for 1995.
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Statutory tax rate 35.0% 35.0%
State income tax, net of federal income
tax benefit 4.2 4.3
Investment tax credits (1.8) (2.3)
Other (0.2) 0.1
---- ----
Effective tax rate 37.2% 37.1%
==== ====
</TABLE>
E) New Accounting Pronouncement
----------------------------
In January 1996 the Company adopted Statement of Financial Accounting
Standards No. 121, Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed Of (SFAS 121). This statement clarifies when
and how to recognize asset impairments. In addition, SFAS 121 requires that
all regulatory assets, which must have a high probability of recovery to be
initially established, continue to meet that high probability standard or be
written off. The adoption of SFAS 121 did not have an effect on the Company's
financial position or results of operations for the first quarter. The impact
of this standard on the Company's plant and regulatory assets will be
determined by regulatory changes implemented by the DPU and the Federal Energy
Regulatory Commission (FERC). Based on the DPU's proposed rules on industry
restructuring, which are discussed in the Outlook for the Future section of
Management's Discussion and Analysis, the Company does not expect SFAS 121 to
have an adverse impact on its financial position or results of operations in
the near term. The Company's conclusion may change as the restructuring of
the electric utility industry in Massachusetts further develops. If recovery
of the Company's plant and regulatory assets is not provided, SFAS 121 could
require a write-down of these assets.
<PAGE> 8
Item 2. Management's Discussion and Analysis
- ---------------------------------------------
Results of Operations - Three Months Ended March 31, 1996 vs. Three Months
- --------------------------------------------------------------------------
Ended March 31, 1995
- --------------------
Earnings per share of common stock for the three months ended March 31, 1996,
amounted to $0.44 as compared to $0.36 for the three months ended March 31,
1995. The increase in earnings is primarily the result of a 5.9% increase in
retail kWh sales, lower operations and maintenance expense and higher Pilgrim
performance revenues. These positive changes were partially offset by higher
depreciation and amortization and property and other tax expenses, and a
decrease in the allowance for borrowed funds used during construction.
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. Refer to Note A to the consolidated
financial statements.
Operating revenues
Operating revenues increased 2.2% in the first quarter of 1996 as follows:
<TABLE>
<CAPTION>
(in thousands)
- ------------------------------------------------------
<S> <C>
Retail electric revenues $14,142
Demand side management revenues (5,545)
Wholesale and other revenues (2,216)
Short-term sales revenues 1,790
- ------------------------------------------------------
Increase in operating revenues $ 8,171
======================================================
</TABLE>
Retail electric revenues increased $14 million. Approximately $7 million of
this increase resulted from the 5.9% increase in retail kWh sales, which was
primarily due to colder weather and an improving economy. Performance
revenues, which vary annually based on the operating performance of Pilgrim
Nuclear Power Station, increased approximately $6 million primarily due to
higher Pilgrim performance in 1996. The annual performance adjustment charge
is discussed further in the Electric Sales and Revenues section.
Demand side management (DSM) revenues decreased $5.5 million due to a planned
decline in DSM program expenditures in 1996.
Operating expenses
Total fuel and purchased power expenses increased $5.5 million. Fuel expense
increased despite a 19% decrease in fossil generation primarily due to higher
oil and gas prices. Purchased power expense increased due to a 19% increase
in kWh purchases. These increases were partially offset by the timing effect
of fuel and purchased power cost collection. Fuel and purchased power
expenses are substantially all recoverable through fuel and purchased power
revenues.
Other operations and maintenance expense decreased $4 million primarily due to
the Company's cost control efforts and lower labor costs resulting from the
1995 corporate restructuring.
The increase in depreciation and amortization expense is due to a higher
depreciable plant base.
<PAGE> 9
The decrease in demand side management programs expense which is consistent
with the decrease in DSM revenues, is due to a planned decline in DSM program
expenditures in 1996.
Property and other taxes increased primarily due to higher property taxes
imposed by a majority of the municipalities in which the Company operates.
Interest charges
Other interest charges decreased due to a lower average short-term debt level
and lower short-term interest rates. The allowance for borrowed funds used
during construction decreased due to lower construction work in progress
balances and shorter construction periods.
Electric Sales and Revenues
- ---------------------------
Electric sales
Retail kWh sales increased 5.9% in the first quarter of 1996. This growth
rate was impacted by colder weather conditions, an improving economy as well
as an additional day of sales in 1996 due to leap year; this rate is not
expected to continue throughout 1996.
Electric revenues
The annual performance adjustment charge provides the Company with
opportunities to improve its financial results. The most significant
potential impact of this performance incentive is based on Pilgrim Station's
annual capacity factor. Pilgrim's capacity factor for the performance year
ended October 1996 is currently expected to be approximately 91%.
Liquidity
- ---------
The Company continues to supplement internally generated funds with external
financings, primarily through the issuance of short-term commercial paper and
bank borrowings. The Company has authority from the FERC 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
March 31, 1996, the Company had $202 million of short-term debt outstanding,
none of which was incurred under the revolving credit agreement. In 1994 the
DPU approved the Company's financing plan to issue up to $500 million of
securities through 1996 using the proceeds to refinance short and long-term
securities and for capital expenditures.
Outlook for the Future
- ----------------------
In April 1996 the FERC issued an open transmission access order, which
approved the provisions in its March 1995 Notice of Proposed Rulemaking. The
order requires all utilities with transmission systems to file open access
tariffs with the FERC, to provide service under those tariffs to transmission
customers comparable to service provided to their electric energy customers
and to take service under the tariffs for wholesale purchases and sales. The
order also supports the full recovery of legitimate and verifiable costs
previously incurred under federal and state regulation. The provisions in the
order provide a framework for significant changes in the electric utility
industry. The Company does not expect the FERC order to significantly impact
its operations, which are primarily retail and regulated by the DPU.
<PAGE> 10
On May 1, 1996 the DPU issued an explanatory statement and proposed rules (the
statement) as a follow-up to its August 1995 order on restructuring of the
electric utility industry. In February 1996 the Company, three other electric
utilities and the Massachusetts Division of Energy Resources submitted
restructuring proposals to the DPU. The statement was developed in order to
address the following twelve issues identified in the proposals:
- market structure
- market power
- transmission
- distribution
- stranded cost calculation and recovery mechanism
- rate unbundling
- performance-based regulation
- environmental regulation and demand side management
- default service
- universal service
- the effect of restructuring on municipal electric companies
- the local and utility tax impacts of restructuring
The statement and its specific proposals are not intended to represent a final
resolution of any issues. Their purpose is to serve as reference points and
to generate response and discussion as the DPU's investigation on industry
restructuring continues.
The statement reiterates the DPU's support for the principles of a
restructured industry identified in the 1995 order, including providing a
reasonable opportunity for the recovery of net, nonmitigatable potentially
strandable costs. In addition, the DPU expressed support for the functional
separation of electric companies into distinct corporate entities and would
provide options for phased incentives for divestment of generation assets.
The statement also supports the unbundling of rates on bills beginning in
January 1997 and a competitive generation market by January 1998. Comments on
the statement and recommended changes to the proposed rules are to be filed by
May 24, after which the DPU will hold public hearings through July 19.
Following the hearings the DPU will accept reply comments and recommended
changes to the proposed rules through August 2. A final DPU order is expected
in September 1996.
As discussed in Note E to the Consolidated Financial Statements, if the DPU's
final regulations do not provide recovery of the Company's plant and
regulatory assets, the Company could be required to write down these assets in
accordance with SFAS 121. The Company is continuing to look at possibilities
for mitigating its potentially strandable costs, including potential revisions
to depreciation and amortization periods. Refer also to the Company's 1995
Form 10-K Annual Report for more information regarding the potential effects
of restructuring of the electric utility industry.
Other Matters
- -------------
Resource regulation
In April 1996 the DPU approved a settlement agreement between the Company and
an independent power producer, JMC Altresco, Inc. The agreement settles a
dispute which originated in 1991 regarding whether the Company should be
ordered to enter into a contract to purchase power from Altresco. Under the
settlement agreement the Company is to pay $9.2 million to Altresco, which is
to be collected from customers over a one-year period through fuel and
<PAGE> 11
purchased power rates. Interested parties have the ability to appeal this
settlement agreement.
Connecticut Yankee
The Company owns 9.5% of the common stock of Connecticut Yankee Atomic Power
Company, which owns a nuclear generating unit. Northeast Utilities, the
majority owner of Connecticut Yankee, operates the unit. In April 1996
Northeast Utilities submitted a plan in response to a Nuclear Regulatory
Commission (NRC) order verifying operational compliance with licensing
documentation at the Connecticut Yankee nuclear unit. The order followed
findings of noncompliance and the subsequent shutdown of three other nuclear
units owned and operated by Northeast Utilities. The NRC is also currently
requiring Northeast Utilities to respond to certain inspection findings at
Connecticut Yankee by May 30 in order to justify continued operation of the
unit. The Company is unable to determine at this time what the impact would
be if the unit were to be shut down.
Safe harbor cautionary statement
The Company occasionally makes forward-looking statements such as forecasts
and projections of expected future performance or statements of its plans and
objectives. These forward-looking statements may be contained in filings with
the Securities and Exchange Commission, press releases and oral statements.
Actual results could potentially differ materially from these statements.
Therefore, no assurances can be given that the outcomes stated in such
forward-looking statements and estimates will be achieved. Refer also to the
safe harbor cautionary statement included in the Company's 1995 Form 10-K
Annual Report.
The above sections include certain forward-looking statements about Pilgrim
Station's performance and environmental and legal issues.
Pilgrim Station's performance could differ from the Company's expectations.
The station's capacity factor could be impacted by changes in regulations or
by unplanned outages resulting from certain operating conditions.
The impacts of various environmental and legal issues could differ from
current expectations. New regulations or changes to existing regulations
could impose additional operating requirements or liabilities. The effects of
changes in specific hazardous waste site conditions and cleanup technology
could affect estimated cleanup liabilities. The impacts of changes in
available information and circumstances regarding legal issues could affect
the estimated litigation costs.
<PAGE> 12
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 1996 $30 1/8 $26 1/4 $0.470
</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 May 10, 1996 was
$25 1/8 per share.
Ratio of earnings to fixed charges and ratio of earnings to fixed charges and
preferred stock dividend requirements:
Twelve months ended March 31, 1996:
----------------------------------
Ratio of earnings to fixed charges 2.47
Ratio of earnings to fixed charges and preferred
stock dividend requirements 2.07
<PAGE> 13
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 March 31, 1996
12.2 - Computation of ratio of earnings to fixed charges
and preferred stock dividend requirements for the
twelve months ended March 31, 1996
Exhibit 15 - Letter re unaudited interim financial information
15.1 - Report of Independent Accountants
Exhibit 27 - Financial Data Schedule
27.1 - Schedule UT
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) and May 31,
1995 (File No. 33-59693); 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), March 17, 1993
(33-59662 and 33-59682) and April 6, 1995 (33-58457)
b) No Form 8-K was filed during the first quarter of 1996.
<PAGE> 14
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: May 13, 1996 /s/ Robert J. Weafer, Jr.
----------------------------
Robert J. Weafer, Jr.
Vice President-Finance,
Controller and Chief
Accounting Officer
<PAGE> 15
<TABLE>
<CAPTION>
Exhibit 12.1
Boston Edison Company
Computation of Ratio of Earnings to Fixed Charges
Twelve Months Ended March 31, 1996
(in thousands)
<S> <C>
Net income from continuing operations $117,311
Income taxes 69,475
Fixed charges 126,870
--------
Total $313,656
========
Interest expense $117,415
Interest component of rentals 9,455
--------
Total $126,870
========
Ratio of earnings to fixed charges 2.47
====
</TABLE>
<PAGE> 16
<TABLE>
<CAPTION>
Exhibit 12.2
Boston Edison Company
Computation of Ratio of Earnings to Fixed Charges
and Preferred Stock Dividend Requirements
Twelve Months Ended March 31, 1996
(in thousands)
<S> <C>
Net income from continuing operations $117,311
Income taxes 69,475
Fixed charges 126,870
--------
Total $313,656
========
Interest expense $117,415
Interest component of rentals 9,455
--------
Subtotal 126,870
--------
Preferred stock dividend requirements 24,746
--------
Total $151,616
========
Ratio of earnings to fixed charges and preferred
stock dividend requirements 2.07
====
</TABLE>
<PAGE> 17
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 March 31, 1996 and the related
statements of income for the three-month periods ended March 31, 1996 and 1995
and statements of cash flows for the three-month periods ended March 31, 1996
and 1995. 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.
April 25, 1996
<PAGE> 18
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 April 25, 1996 on our review of the interim
financial information of Boston Edison Company for the period ended March 31,
1996 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, 33-57840
and 33-59693) and on Form S-8 (File Nos. 33-00810, 33-7558, 33-38434, 33-
48424, 33-48425, 33-59662, 33-59682 and 33-58457). 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.
April 25, 1996
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