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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549-1004
Form 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1999
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 2-30057
CANAL ELECTRIC COMPANY
(Exact name of registrant as specified in its charter)
Massachusetts 04-1733577
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Main Street, Cambridge, Massachusetts 02142-9150
(Address of principal executive offices) (Zip Code)
(617) 225-4000
(Registrant's telephone number, including area code)
(Former name, address and fiscal year, if changed since last report.)
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.
Outstanding at
Class of Common Stock May 1, 1999
Common Stock, $25 par value 1,523,200 shares
The Company meets the conditions set forth in General Instruction H(1)(a) and
(b) of Form 10-Q as a wholly-owned subsidiary and is therefore filing this
Form with the reduced disclosure format.
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
CANAL ELECTRIC COMPANY
CONDENSED BALANCE SHEETS
MARCH 31, 1999 AND DECEMBER 31, 1998
ASSETS
(Dollars in thousands)
March 31, December 31,
1999 1998
(Unaudited)
PROPERTY, PLANT AND EQUIPMENT, at original cost$265,470 $265,612
Less - Accumulated depreciation and
amortization 73,811 77,081
191,659 188,531
Add - Construction work in progress 1,960 1,852
Nuclear fuel in process 1,617 1,568
195,236 191,951
INVESTMENTS
Equity in corporate joint venture 2,799 2,800
CURRENT ASSETS
Cash and cash equivalents 86,658 273,729
Advances to affiliates 20,675 27,450
Accounts receivable-
Affiliates 4,316 13,642
Other 2,785 9,736
Inventories 1,235 1,268
Prepaid income taxes 4,669 7,575
Other 1,300 1,543
121,638 334,943
DEFERRED CHARGES
Regulatory assets 18,465 18,745
Other 5,277 5,840
23,742 24,585
$343,415 $554,279
See accompanying notes.
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CANAL ELECTRIC COMPANY
CONDENSED BALANCE SHEETS
MARCH 31, 1999 AND DECEMBER 31, 1998
CAPITALIZATION AND LIABILITIES
(Dollars in thousands)
March 31, December 31,
1999 1998
(Unaudited)
CAPITALIZATION
Common Equity -
Common stock, $25 par value -
Authorized - 2,328,200 shares
Outstanding - 1,523,200 shares,
wholly-owned by Commonwealth
Energy System (Parent) $ 38,080 $ 38,080
Amounts paid in excess of par value 8,321 8,321
Retained earnings 64,458 241,965
110,859 288,366
CAPITAL LEASE OBLIGATIONS 10,410 10,551
CURRENT LIABILITIES
Other Current Liabilities -
Accounts payable -
Affiliates 134,025 137,965
Other 1,504 31,327
Capital lease obligations 567 568
Accrued taxes and other 3,544 3,339
139,640 173,199
DEFERRED CREDITS
Accumulated deferred income taxes 64,686 64,383
Unamortized investment tax credits and other 17,820 17,780
82,506 82,163
COMMITMENTS AND CONTINGENCIES
$343,415 $554,279
See accompanying notes.
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CANAL ELECTRIC COMPANY
CONDENSED STATEMENTS OF INCOME AND RETAINED EARNINGS
FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND 1998
(Dollars in thousands - Unaudited)
1999 1998
ELECTRIC OPERATING REVENUES
Sales to affiliated companies $ 10,729 $28,920
Sales to non-affiliated companies 1,519 19,327
12,248 48,247
OPERATING EXPENSES
Fuel used in production 426 25,768
Electricity purchased for resale 144 148
Other operation and maintenance 3,064 8,718
Depreciation 1,711 5,039
Taxes -
Income 3,134 2,064
Local property 270 696
Payroll and other 194 217
8,943 42,650
OPERATING INCOME 3,305 5,597
OTHER INCOME
Additional gain from sale of assets, net 6,533 -
Other 1,506 129
8,039 129
INCOME BEFORE INTEREST CHARGES 11,344 5,726
INTEREST CHARGES
Long-term debt - 1,978
Other interest charges (26) 178
(26) 2,156
NET INCOME 11,370 3,570
RETAINED EARNINGS -
Beginning of period 241,965 53,130
Dividends on common stock (188,877) -
RETAINED EARNINGS -
End of period $ 64,458 $56,700
See accompanying notes.
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CANAL ELECTRIC COMPANY
CONDENSED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND 1998
(Dollars in thousands - Unaudited)
1999 1998
OPERATING ACTIVITIES
Net income $ 11,370 $ 3,570
Additional gain from sale of assets (10,750) -
Effects of noncash items -
Depreciation and amortization 2,277 5,614
Deferred income taxes and investment
tax credits, net 244 (461)
Earnings from corporate joint venture (117) (117)
Dividends from corporate joint venture 118 107
Change in working capital, exclusive of cash and
cash equivalents, advances to affiliates and
interim financing (14,100) 3,053
All other operating items 1,521 62
Net cash (used for) provided by operating activities (9,437) 11,828
INVESTING ACTIVITIES
Payments from affiliates 6,775 -
Additions to property, plant and equipment (15) (753)
Net cash provided by (used for) investing activities 6,760 (753)
FINANCING ACTIVITIES
Payment of dividends (188,877) -
Reimbursement of transaction costs 4,483 -
Payment of short-term borrowings - (11,650)
Advances from affiliates - 575
Net cash used for financing activities (184,394) (11,075)
Net change in cash and cash equivalents (187,071) -
Cash and cash equivalents at beginning of period 273,729 18
Cash and cash equivalents at end of period $ 86,658 $ 18
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period for:
Interest (net of capitalized amounts) $ - $ 1,673
Income taxes $ 1,457 $ 598
See accompanying notes.
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CANAL ELECTRIC COMPANY
NOTES TO CONDENSED FINANCIAL STATEMENTS
(1) General Information
Canal Electric Company (the Company) is a wholly-owned subsidiary of
Commonwealth Energy System (the Parent). The Parent together with its
subsidiaries is referred to as "COM/Energy." The Parent is an exempt
public utility holding company under the provisions of the Public Utility
Holding Company Act of 1935 and, in addition to its investment in the
Company, has interests in other utility and several nonregulated compa-
nies. In December 1998, the Parent signed an Agreement and Plan of
Merger with BEC Energy, the parent company of Boston Edison Company, that
will create an energy delivery company, that includes the Company,
serving approximately 1.3 million customers located entirely within
Massachusetts including more than one million electric customers in 81
communities and 240,000 gas customers in 51 communities.
The Company is a wholesale electric generating company organized in
1902 under the laws of the Commonwealth of Massachusetts. On December
30, 1998, in response to the significant changes that have taken place in
the utility industry, COM/Energy sold substantially all of its non-
nuclear generating assets, including the Company's generating station, to
affiliates of The Southern Company of Atlanta, Georgia. The Company's
generating stations, located in Sandwich, Massachusetts consisted of two
units: Canal Unit 1, wholly-owned by the Company; and Canal Unit 2,
jointly-owned by the Company and Montaup Electric Company (Montaup) (an
unaffiliated company). The Company also has a 3.52% interest in the
Seabrook 1 nuclear power plant to provide a portion of the capacity and
energy needs of Cambridge Electric Light Company (Cambridge) and Common-
wealth Electric Company (Commonwealth). The Company also procures bulk
electric power at the request of and for its affiliates thereby securing
cost savings for their respective customers by planning for a power
supply on a single system basis.
The Company had 109 regular employees prior to the sale of Canal
Units 1 and 2 on December 30, 1998; however, following the sale, the
Company had no regular employees.
(2) Significant Accounting Policies
(a) Principles of Accounting
The Company's significant accounting policies are described in Note 2
of Notes to Financial Statements included in its 1998 Annual Report on
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 and makes allocations of certain expenses to interim
periods based upon estimates of such expenses for the year.
The unaudited financial statements for the periods ended March 31,
1999 and 1998, reflect, in the opinion of the Company, all adjustments
necessary to summarize fairly the results for such periods. In addition,
certain prior period amounts are reclassified from time to time to
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CANAL ELECTRIC COMPANY
conform with the presentation used in the current period's financial
statements.
Income tax expense is recorded using the statutory rates in effect
applied to book income subject to tax recorded in the interim period.
(b) Regulatory Assets
The Company is regulated as to rates, accounting and other matters by
various authorities, including the FERC and the Massachusetts Department
of Telecommunications and Energy (DTE).
Based on the current regulatory framework, the Company accounts for
the economic effects of regulation in accordance with the provisions of
Statement of Financial Accounting Standards (SFAS) No. 71, "Accounting
for the Effects of Certain Types of Regulation." The Company has
established various regulatory assets in cases where the FERC has
permitted or is expected to permit recovery of specific costs over time.
In the event the criteria for applying SFAS No. 71 are no longer met, the
accounting impact would be an extraordinary, non-cash charge to opera-
tions of an amount that could be material. Criteria that give rise to
the discontinuance of SFAS No. 71 include: 1) increasing competition
restricting the Company's ability to establish prices to recover specific
costs, and 2) a significant change in the current manner in which rates
are set by regulators from cost-based regulation to another form of
regulation. These criteria are reviewed on a regular basis to ensure the
continuing application of SFAS No. 71 is appropriate. Based on the
current evaluation of the various factors and conditions that are
expected to impact future cost recovery, the Company believes that its
regulatory assets are probable of future recovery.
The principal regulatory assets included in deferred charges were as
follows:
March 31, December 31,
1999 1998
(Dollars in thousands)
Deferred income taxes $15,737 $15,737
Seabrook related costs 2,728 3,008
$18,465 $18,745
In November 1997, the Commonwealth of Massachusetts enacted a
comprehensive electric utility industry restructuring bill. On November
19, 1997, the Company, together with Cambridge and Commonwealth filed a
restructuring plan with the DTE. The plan, approved by the DTE on
February 27, 1998, provides that Commonwealth and Cambridge, beginning
March 1, 1998, initiate a ten percent rate reduction for all customer
classes and allow customers to choose their energy supplier. As part of
the plan, the DTE authorized the recovery of certain strandable costs and
provides that certain future costs may be deferred to achieve or maintain
the rate reductions that the restructuring bill mandates. The legisla-
tion gives the DTE the authority to determine the amount of strandable
costs that will be eligible for recovery. Costs that will qualify as
strandable costs and be eligible for recovery include, but are not
limited to, certain above market costs associated with generation
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CANAL ELECTRIC COMPANY
facilities, costs associated with long-term commitments to purchase power
at above market prices from independent power producers and regulatory
assets and associated liabilities related to the generation portion of
the electric business.
(c) Divestiture of Generation Assets
The cost of transitioning to competition will be mitigated, in part,
by the sale of COM/Energy's non-nuclear generating assets. On May 27,
1998, COM/Energy agreed to sell substantially all of its non-nuclear
generating assets (984 MW) to affiliates of The Southern Company of
Atlanta, Georgia. The sale was conducted through an auction process that
was outlined in a restructuring plan filed with the DTE in November 1997
in conjunction with the state's industry restructuring legislation enact-
ed in 1997. The sale was approved by the DTE on October 30, 1998 and by
the FERC on November 12, 1998. Proceeds from the sale of the Company's
non-nuclear generating assets, after construction-related adjustments at
the closing that occurred on December 30, 1998, amounted to approximately
$395 million or 6 times their book value of approximately $65.4 million.
The proceeds from the sale, net of book value, transaction costs and
certain other adjustments amounted to approximately $298 million and will
be used to reduce transition costs of Cambridge and Commonwealth related
to electric industry restructuring that otherwise would have been
collected through a non-bypassable transition charge. An adjustment of
$5.1 million was recorded in the first quarter of 1999 that reduces the
book value to $60.3 million. The Company has determined that this
transaction was not a taxable event because it provided no economic
benefit to the Company.
COM/Energy established Energy Investment Services, Inc. as the
vehicle to invest the net proceeds from the sale of the Company's
generation assets. These proceeds will be invested in a conservative
portfolio of securities that is designed to maintain principal and earn a
reasonable return. Both the principal amount and income earned will be
used to reduce the transition costs that would otherwise be billed to
customers of Cambridge and Commonwealth.
(3) Commitments and Contingencies
Construction
The Company is engaged in a continuous construction program presently
estimated at $9.7 million for the five-year period 1999 through 2003. Of
that amount, $1.2 million is estimated for 1999. As of March 31, 1999,
construction expenditures, including an allowance for funds used during
construction were minimal. The Company expects to finance these expendi-
tures with internally generated funds and short-term borrowings that are
ultimately expected to be repaid with proceeds from the issuance of long-
term debt and equity securities.
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CANAL ELECTRIC COMPANY
Item 2. Management's Discussion and Analysis of Results of Operations
The following is a discussion of certain significant factors which have
affected operating revenues, expenses and net income during the periods
included in the accompanying Condensed Statements of Income. This discussion
should be read in conjunction with the Notes to Condensed Financial Statements
appearing elsewhere in this report.
A summary of the period to period changes in the principal items
included in the Condensed Statements of Income for the three months ended
March 31, 1999 and 1998 and unit sales for these periods is shown below:
Three Months
Ended March 31,
1999 and 1998
Increase (Decrease)
(Dollars in thousands)
Electric Operating Revenues $(35,999) (74.6)%
Operating Expenses -
Fuel used in production (25,342) (98.3)
Electricity purchased for resale (4) (2.7)
Other operation and maintenance (5,654) (64.9)
Depreciation (3,328) (66.0)
Taxes -
Federal and state income 1,070 51.8
Local property and other (449) (49.2)
(33,707) (79.0)
Operating Income (2,292) (41.0)
Other Income 7,910 6,131.8
Income Before Interest Charges 5,618 98.1
Interest Charges (2,182) (101.2)
Net Income $ 7,800 218.5
Unit Sales (MWH) Decrease (1,240,050) (93.7)
The following is a summary of unit sales for the periods indicated:
Unit Sales (MWH)
Three Months
Ended Unit 1 Unit 2 Seabrook 1 Total
March 31, 1999 - - 82,892 82,892
March 31, 1998 895,231 356,160 71,551 1,322,942
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CANAL ELECTRIC COMPANY
Revenue, Fuel and Purchased Power
Operating revenues for the first three months of 1999 decreased nearly
$36 million or 74.6%, due to the sale of the Company's Unit 1 and 2 generation
facilities on December 30, 1998. The sale of these units was an integral part
of COM/Energy's restructuring plan as approved by the DTE. The significant
decrease in unit sales (93.7%) also reflects the absence of power from Units 1
and 2 following their sale. The change in unit sales also reflects the
increased availability of Seabrook.
The significant decrease in fuel used in production of $25.3 million, or
98.3%, during the quarter reflects the aforementioned sale of Units 1 and 2.
Other Operating Expenses
The decreases in other operation and maintenance of $5.7 million (64.9%)
and depreciation of $3.3 million (66%) resulted from the sale of Units 1 and
2. Federal and state income taxes increased due to a higher level of pre-tax
income. The decrease in local property and other taxes of $449,000 (49.2%)
reflects lower property taxes ($426,000) and payroll and other taxes ($23,000)
due to the sale of Units 1 and 2.
Other Income
The significant increase in other income during the quarter was primarily
due to an additional gain, related to the sale of the Company's generating
assets, that resulted from certain adjustments to the assets' book value ($5.1
million), and a reduction in transaction costs ($4.5 million) associated with
the retirement of the Company's long-term debt in 1998. The increase in
interest income ($1.4 million) related to advances to affiliates and short-
term investments also had a positive impact on other income.
Interest Charges
The absence of interest charges for the current quarter resulted from the
retirement of the Company's long and short-term debt with a portion of the
proceeds from the sale of Units 1 and 2.
Forward-Looking Statements
This discussion contains statements which, to the extent it is not a
recitation of historical fact, constitute "forward-looking statements" and is
intended to be subject to the safe harbor protection provided by the Private
Securities Litigation Reform Act of 1995. A number of important factors
affecting the Company's business and financial results could cause actual
results to differ materially from those stated in the forward-looking state-
ments. Those factors include developments in the legislative, regulatory and
competitive environment, certain environmental matters, demands for capital
expenditures and the availability of cash from various sources.
Merger with BEC Energy
The electric utility industry has continued to change in response to
legislative and regulatory mandates that are aimed at lowering prices for
energy by creating a more competitive marketplace. These pressures have
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CANAL ELECTRIC COMPANY
resulted in an increasing trend in the electric industry to seek competitive
advantages and other benefits through business combinations. On December 5,
1998, the Parent and BEC Energy (BEC), headquartered in Boston, Massachusetts,
entered into an Agreement and Plan of Merger (the Merger Agreement). Pursuant
to the Merger Agreement, COM/Energy and BEC will be merged into a new holding
company to be known as NSTAR. The merger is expected to occur shortly after
the satisfaction of certain conditions, including the receipt of certain
regulatory approvals including that of the DTE. The regulatory approval
process is expected to be completed during the second half of 1999.
The merger will create an energy delivery company serving approximately
1.3 million customers located entirely within Massachusetts, including more
than one million electric customers in 81 communities and 240,000 gas custom-
ers in 51 communities.
Shareholder votes on the merger will be held as part of each of
COM/Energy's and BEC's annual shareholder meetings scheduled for June 24,
1999. The Merger Agreement may be terminated under certain circumstances,
including by any party if the merger is not consummated by December 5, 1999,
subject to an automatic extension of six months if the requisite regulatory
approvals have not yet been obtained by such date. The merger will be
accounted for using the purchase method of accounting.
Upon effectiveness of the merger, Thomas J. May, BEC's current Chairman,
President and Chief Executive Officer (CEO), will become the Chairman and CEO
of NSTAR. Russell D. Wright, COM/Energy's current President and CEO, will
become the President and Chief Operating Officer of NSTAR and will serve on
NSTAR's board of trustees. Also, upon effectiveness of the merger, NSTAR's
board of trustees will consist of COM/Energy's and BEC's current trustees.
Year 2000
The Year 2000 issue is the result of computer programs being written using
two digits rather than four to define the applicable year. Any computer
program that has date sensitive software may recognize a date using "00" as
the year 1900 rather than the year 2000. This could result in a temporary
inability to process transactions or engage in normal business activities.
COM/Energy has been involved in Year 2000 compliancy since 1996.
COM/Energy, on a coordinated basis and with the assistance of RCG Informa-
tion Technologies and other consultants, is addressing the Year 2000 issue.
COM/Energy has followed a five-phase process in its Year 2000 compliance
efforts, as follows: Awareness (through a series of internal announcements to
employees and through contacts with vendors); Inventory (all computers,
applications and embedded systems that could potentially be affected by the
Year 2000 problem); Assessment (all applications or components and the impact
on overall business operations and a plan to correct deficiencies and the cost
to do so); Remediation (the modification, upgrade or replacement of deficient
hardware and software applications and infrastructure modifications); and
Testing (a detailed, comprehensive testing program for the modified critical
component, system or software that involves the planning, execution and
analysis of results).
COM/Energy's inventory phase required an assessment of all date sensitive
information and transaction processing computer systems and determined that
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CANAL ELECTRIC COMPANY
approximately 90% of its software systems needed some modifications or
replacement. Plans were developed and are being implemented to correct and
test all affected systems, with priorities assigned based on the importance of
the activity. COM/Energy has identified the software and hardware installa-
tions that are necessary. All installations are expected to be completed and
tested by mid-1999.
COM/Energy has also inventoried its non-information technology systems
that may be date sensitive (facilities, electric and gas operations, energy
supply/production and distribution) that use embedded technology such as
micro-controllers and micro-processors. COM/Energy has completed its assess-
ment of these non-information technology systems and determined that 20% of
these systems required remediation or replacement. COM/Energy is approximate-
ly 94% complete in its efforts to resolve non-compliance with Year 2000
requirements related to these systems and anticipates that these systems will
be updated or replaced and tested by mid-1999.
At present, the remediation phase for information technology as it applies
to hardware and non-technology issues is scheduled for completion by June 1,
1999. The testing phase for Year 2000 compliance is approximately 85%
complete and is scheduled to be concluded by June 30, 1999. All other phases
are complete.
Modifying and testing COM/Energy's information and transaction processing
systems from 1996 through 2000 is currently expected to cost approximately
$9.85 million, including approximately $900,000, $3.1 million and $1.9 million
incurred through 1997, 1998 and the first quarter of 1999, respectively.
Approximately $3.95 million is expected to be spent in the remainder of 1999
and in 2000. Year 2000 costs have been expensed as incurred and will continue
to be funded from operations.
In addition to its internal efforts, COM/Energy has initiated formal
communications with its significant suppliers to determine the extent to which
COM/Energy may be vulnerable to its suppliers' failure to correct their own
Year 2000 issues. As of April 1, 1999, COM/Energy has received responses from
approximately 82% of those entities contacted, and nearly all have indicated
that they are or will be Year 2000 compliant. Failure of COM/Energy's
significant suppliers to address Year 2000 issues could have a material
adverse effect on COM/Energy's operations, although it is not possible at this
time to quantify the amount of business that might be lost or the costs that
could be incurred by COM/Energy. Contact with significant vendors is continu-
ing and inadequate or marginal responses are being pursued by COM/Energy.
COM/Energy is prepared to replace certain suppliers or to initiate other
contingency plans should these vendors not respond to COM/Energy's satisfac-
tion by July 1, 1999.
In addition, parts of the global infrastructure, including national
banking systems, electrical power grids, gas pipelines, transportation
facilities, communications and governmental activities, may not be fully
functional after 1999. Infrastructure failures could significantly reduce
COM/Energy's ability to acquire energy and its ability to serve its customers
as effectively as they are now being served. COM/Energy is identifying
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CANAL ELECTRIC COMPANY
elements of the infrastructure that are critical to its operations and is
obtaining information as to the expected Year 2000 readiness of these ele-
ments.
COM/Energy has started its contingency planning for critical operational
areas that might be effected by the Year 2000 issue if compliance by
COM/Energy is delayed. COM/Energy's gas and electric operations currently
have emergency operating plans as well as information technology disaster
recovery plans as components of its standard operating procedures. These
plans will be enhanced to identify potential Year 2000 risks to normal
operations and the appropriate reaction to these potential failures including
contingency plans that may be required for any third parties that fail to
achieve Year 2000 compliance. All necessary contingency plans are expected to
be completed by June 30, 1999, although in certain cases, especially infra-
structure failures, there may be no practical alternative course of action
available to COM/Energy.
COM/Energy is working with other energy industry entities, both regionally
and nationally with respect to Year 2000 readiness and is cooperating in the
development of local and wide-scale contingency planning.
While COM/Energy believes its efforts to address the Year 2000 issue will
allow it to be successful in avoiding any material adverse effect on
COM/Energy's operations or financial condition, it recognizes that failing to
resolve Year 2000 issues on a timely basis would, in a "most reasonably likely
worst case scenario," significantly limit its ability to acquire and distrib-
ute energy and process its daily business transactions for a period of time,
especially if such failure is coupled with third party or infrastructure
failures. Similarly, COM/Energy could be significantly effected by the
failure of one or more significant suppliers, customers or components of the
infrastructure to conduct their respective operations after 1999. Adverse
affects on COM/Energy could include, among other things, business disruption,
increased costs, loss of business and other similar risks.
The foregoing discussion regarding Year 2000 project timing, effective-
ness, implementation and costs includes forward-looking statements that are
based on management's current evaluation using available information. Factors
that might cause material changes include, but are not limited to, the
availability of key Year 2000 personnel, the readiness of third parties, and
COM/Energy's ability to respond to unforeseen Year 2000 complications.
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CANAL ELECTRIC COMPANY
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 27 - Financial Data Schedule
Filed herewith as Exhibit 1 is the Financial Data Schedule for the
three months ended March 31, 1999.
Filed herewith as Exhibit 2 is the restated Financial Data Schedule
for the year ended December 31, 1998.
(b) Reports on Form 8-K
One report on Form 8-K was filed during the three months ended March
31, 1999. The report dated January 14, 1999 relates to an event that
occurred on December 30, 1998 regarding the sale of substantially all
of the Company's non-nuclear generating assets.
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CANAL ELECTRIC COMPANY
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.
CANAL ELECTRIC COMPANY
(Registrant)
Principal Financial Officer:
JAMES D. RAPPOLI
James D. Rappoli,
Financial Vice President
and Treasurer
Date: May 17, 1999
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
This schedule contains summary financial information extracted from the
balance sheet, statement of income, statement of retained earnings and
statement of cash flows contained in Form 10-Q of Canal Electric Company for
the three months ended March 31, 1999 and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<CIK> 0000016906
<NAME> CANAL ELECTRIC COMPANY
<MULTIPLIER> 1,000
<S> <C>
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> MAR-31-1999
<PERIOD-TYPE> 3-MOS
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 195,236
<OTHER-PROPERTY-AND-INVEST> 2,799
<TOTAL-CURRENT-ASSETS> 121,638
<TOTAL-DEFERRED-CHARGES> 23,742
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 343,415
<COMMON> 38,080
<CAPITAL-SURPLUS-PAID-IN> 8,321
<RETAINED-EARNINGS> 64,458
<TOTAL-COMMON-STOCKHOLDERS-EQ> 110,859
0
0
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<TOTAL-OPERATING-EXPENSES> 8,943
<OPERATING-INCOME-LOSS> 3,305
<OTHER-INCOME-NET> 8,039
<INCOME-BEFORE-INTEREST-EXPEN> 11,344
<TOTAL-INTEREST-EXPENSE> (26)
<NET-INCOME> 11,370
0
<EARNINGS-AVAILABLE-FOR-COMM> 11,370
<COMMON-STOCK-DIVIDENDS> 0
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> (9,437)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
This schedule contains restated summary financial information extracted from
the balance sheet, statement of income, statement of retained earnings and
statement of cash flows contained in Form 10-K of Canal Electric Company for
the fiscal year ended December 31, 1998 and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<RESTATED>
<CIK> 0000016906
<NAME> CANAL ELECTRIC COMPANY
<MULTIPLIER> 1,000
<S> <C>
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> DEC-31-1998
<PERIOD-TYPE> YEAR
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 191,951
<OTHER-PROPERTY-AND-INVEST> 2,800
<TOTAL-CURRENT-ASSETS> 334,943
<TOTAL-DEFERRED-CHARGES> 24,585
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 554,279
<COMMON> 38,080
<CAPITAL-SURPLUS-PAID-IN> 8,321
<RETAINED-EARNINGS> 241,965
<TOTAL-COMMON-STOCKHOLDERS-EQ> 288,366
0
0
<LONG-TERM-DEBT-NET> 0
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 0
0
<CAPITAL-LEASE-OBLIGATIONS> 10,551
<LEASES-CURRENT> 568
<OTHER-ITEMS-CAPITAL-AND-LIAB> 254,794
<TOT-CAPITALIZATION-AND-LIAB> 554,279
<GROSS-OPERATING-REVENUE> 181,833
<INCOME-TAX-EXPENSE> 8,168
<OTHER-OPERATING-EXPENSES> 152,803
<TOTAL-OPERATING-EXPENSES> 160,971
<OPERATING-INCOME-LOSS> 20,862
<OTHER-INCOME-NET> 186,523
<INCOME-BEFORE-INTEREST-EXPEN> 207,385
<TOTAL-INTEREST-EXPENSE> 8,268
<NET-INCOME> 199,117
0
<EARNINGS-AVAILABLE-FOR-COMM> 199,117
<COMMON-STOCK-DIVIDENDS> 10,282
<TOTAL-INTEREST-ON-BONDS> 7,854
<CASH-FLOW-OPERATIONS> 14,063
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
