<PAGE>
File No. 70-8783
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
AMENDMENT NO. 1
TO
FORM U-1
APPLICATION/DECLARATION
UNDER
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
NEW ENGLAND ELECTRIC SYSTEM
and
NEW ENGLAND ELECTRIC RESOURCES, INC.
(Name of company filing this statement)
25 Research Drive, Westborough, Massachusetts 01582
(Address of principal executive offices)
NEW ENGLAND ELECTRIC SYSTEM
(Name of top registered holding company parent in system)
Michael E. Jesanis Robert King Wulff
Treasurer Corporation Counsel
25 Research Drive 25 Research Drive
Westborough, Massachusetts 01582 Westborough, Massachusetts 01582
(Names and addresses of agents for service)
<PAGE>
Item 6(a) is hereby amended by supplying the following Exhibits:
G-1 Financial Data Schedule for NEERI
G-2 Financial Data Schedule for NEES (Parent Company Only)
G-3 Financial Data Schedule for NEES (Consolidated)
Item 6(b) is hereby amended by supplying the following Financial Statements
1-A Balance Sheet of NEES at September 30, 1995, Actual and Pro
Forma (Parent Company Only)
1-B Statement of Income and Retained Earnings for NEES for twelve
months ended September 30, 1995, Actual and Pro Forma (Parent
Company Only)
2-A Consolidated Balance Sheet of NEES at September 30, 1995,
Actual and Pro Forma
2-B Statement of Consolidated Income for NEES for twelve months
ended September 30, 1995, Actual and Pro Forma
3-A Balance Sheet of NEERI at September 30, 1995, Actual and Pro
Forma
3-B Statement of Loss and Retained Deficit for NEERI for twelve
months ended September 30, 1995, Actual and Pro-Forma
<PAGE>
SIGNATURE
Pursuant to the requirements of the Public Utility Holding Company Act of
1935, the undersigned companies have duly caused this Amendment No. 1 to their
Application/Declaration on Form U-1 (Commission's File No. 70-8783) to be
signed on their behalf, as indicated by the undersigned officers thereunto duly
authorized by such companies.
NEW ENGLAND ELECTRIC SYSTEM
s/Michael E. Jesanis
_____________________________________
Michael E. Jesanis, Treasurer
NEW ENGLAND ELECTRIC RESOURCES, INC.
s/John G. Cochrane
_____________________________________
John G. Cochrane, Treasurer
Dated: January 29, 1996
The name "New England Electric System" means the trustee or trustees for the
time being (as trustee or trustees but not personally) under an agreement and
declaration of trust dated January 2, 1926, as amended, which is hereby
referred to, and a copy of which as amended has been filed with the Secretary of
the Commonwealth. Any agreement, obligation or liability made, entered into or
incurred by or on behalf of New England Electric System binds only its trust
estate, and no shareholder, director, trustee, officer or agent thereof assumed
or shall be held to any liability therefore.
<PAGE>
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION PAGE
- ----------- ----------- ----
B Form of Subordinated Note Previously filed
F Opinion of Counsel To be filed by
amendment
G-1 Financial Data Schedule Filed herewith
for NEERI
G-2 Financial Data Schedule Filed herewith
for NEES (Parent Company Only)
G-3 Financial Data Schedule Filed herewith
for NEES (Consolidated)
H Proposed Form of Notice Previously filed
FINANCIAL STATEMENT INDEX
FINANCIAL
STATEMENT
NO. DESCRIPTION PAGE
- --------- ----------- ----
1-A Balance Sheet of NEES at Filed herewith
September 30, 1995, Actual
and Pro Forma (Parent Company Only)
1-B Statement of Income and Retained Filed herewith
Earnings for NEES for twelve months
ended September 30, 1995, Actual
and Pro Forma (Parent Company Only)
2-A Consolidated Balance Sheet of NEES Filed herewith
at September 30, 1995, Actual
and Pro Forma
2-B Statement of Consolidated Income Filed herewith
for NEES for twelve months
ended September 30, 1995,
Actual and Pro Forma
3-A Balance Sheet of NEERI at Filed herewith
September 30, 1995, Actual and
Pro Forma
3-B Statement of Loss and Retained Filed herewith
Deficit for NEERI for twelve months
ended September 30, 1995, Actual and
Pro Forma
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> OPUR1
<LEGEND> THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
THE BALANCE SHEET AND RELATED STATEMENTS OF INCOME, RETAINED EARNINGS
AND CASH FLOWS OF NEW ENGLAND ELECTRIC RESOURCES, INC., AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 12-MOS 12-MOS
<FISCAL-YEAR-END> DEC-31-1995 DEC-31-1995
<PERIOD-END> SEP-30-1995 SEP-30-1995
<BOOK-VALUE> PER-BOOK PRO-FORMA
<TOTAL-NET-UTILITY-PLANT> 0 0
<OTHER-PROPERTY-AND-INVEST> 1,000 61,000
<TOTAL-CURRENT-ASSETS> 828 828
<TOTAL-DEFERRED-CHARGES> 226 <F1> 226 <F1>
<OTHER-ASSETS> 0 0
<TOTAL-ASSETS> 2,054 62,054
<COMMON> 1 1
<CAPITAL-SURPLUS-PAID-IN> 0 30,000
<RETAINED-EARNINGS> (1,271) (1,271)
<TOTAL-COMMON-STOCKHOLDERS-EQ> 1,704 <F2> 31,704 <F2>
0 0
0 0
<LONG-TERM-DEBT-NET> 0 0
<SHORT-TERM-NOTES> 0 0
<LONG-TERM-NOTES-PAYABLE> 0 30,000
<COMMERCIAL-PAPER-OBLIGATIONS> 0 0
<LONG-TERM-DEBT-CURRENT-PORT> 0 0
0 0
<CAPITAL-LEASE-OBLIGATIONS> 0 0
<LEASES-CURRENT> 0 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 350 350
<TOT-CAPITALIZATION-AND-LIAB> 2,054 62,054
<GROSS-OPERATING-REVENUE> 0 0
<INCOME-TAX-EXPENSE> 0 0
<OTHER-OPERATING-EXPENSES> 0 0
<TOTAL-OPERATING-EXPENSES> 0 0
<OPERATING-INCOME-LOSS> 0 0
<OTHER-INCOME-NET> (1,025) 25
<INCOME-BEFORE-INTEREST-EXPEN> (1,025) 25
<TOTAL-INTEREST-EXPENSE> 0 3,000
<NET-INCOME> (1,025) (2,975)
0 0
<EARNINGS-AVAILABLE-FOR-COMM> 0 0
<COMMON-STOCK-DIVIDENDS> 0 0
<TOTAL-INTEREST-ON-BONDS> 0 0
<CASH-FLOW-OPERATIONS> 0 0
<EPS-PRIMARY> 0 <F3> 0 <F3>
<EPS-DILUTED> 0 <F3> 0 <F3>
<FN>
<F1> Total deferred charges includes other assets.
<F2> Total common stockholders equity includes subordinated notes payable to
the parent.
<F3> Per share data is not relevant because the Company's common stock is
wholly-owned by New England Electric System.
</FN>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> OPUR1
<LEGEND> THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE BALANCE SHEET AND RELATED STATEMENTS OF INCOME, RETAINED
EARNINGS AND CASH FLOWS OF THE NEW ENGLAND ELECTRIC SYSTEM (PARENT
COMPANY), AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 12-MOS 12-MOS
<FISCAL-YEAR-END> DEC-31-1995 DEC-31-1995
<PERIOD-END> SEP-30-1995 SEP-30-1995
<BOOK-VALUE> PER-BOOK PRO-FORMA
<TOTAL-NET-UTILITY-PLANT> 0 0
<OTHER-PROPERTY-AND-INVEST> 1,619,835 1,649,835
<TOTAL-CURRENT-ASSETS> 42,423 12,423
<TOTAL-DEFERRED-CHARGES> 2,281 2,281
<OTHER-ASSETS> 0 0
<TOTAL-ASSETS> 1,664,539 1,664,539
<COMMON> 64,969 64,969
<CAPITAL-SURPLUS-PAID-IN> 736,567 736,567
<RETAINED-EARNINGS> 820,090 820,090
<TOTAL-COMMON-STOCKHOLDERS-EQ> 1,621,626 1,621,626
0 0
0 0
<LONG-TERM-DEBT-NET> 0 0
<SHORT-TERM-NOTES> 0 0
<LONG-TERM-NOTES-PAYABLE> 0 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0 0
<LONG-TERM-DEBT-CURRENT-PORT> 0 0
0 0
<CAPITAL-LEASE-OBLIGATIONS> 0 0
<LEASES-CURRENT> 0 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 42,913 42,913
<TOT-CAPITALIZATION-AND-LIAB> 1,664,539 1,664,539
<GROSS-OPERATING-REVENUE> 0 0
<INCOME-TAX-EXPENSE> 0 0
<OTHER-OPERATING-EXPENSES> 0 0
<TOTAL-OPERATING-EXPENSES> 0 0
<OPERATING-INCOME-LOSS> 0 0
<OTHER-INCOME-NET> 192,990 192,990
<INCOME-BEFORE-INTEREST-EXPEN> 192,990 192,990
<TOTAL-INTEREST-EXPENSE> 259 259
<NET-INCOME> 192,731 192,731
0 0
<EARNINGS-AVAILABLE-FOR-COMM> 192,731 192,731
<COMMON-STOCK-DIVIDENDS> 151,326 151,326
<TOTAL-INTEREST-ON-BONDS> 0 0
<CASH-FLOW-OPERATIONS> 0 0
<EPS-PRIMARY> 0 0
<EPS-DILUTED> 0 0
<TABLE> <S> <C>
<PAGE>
<ARTICLE> OPUR1
<LEGEND> THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE CONSOLIDATED BALANCE SHEET AND RELATED CONSOLIDATED
STATEMENTS OF INCOME, RETAINED EARNINGS AND CASH FLOWS OF NEW
ENGLAND ELECTRIC SYSTEM, AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 12-MOS 12-MOS
<FISCAL-YEAR-END> DEC-31-1995 DEC-31-1994
<PERIOD-END> SEP-30-1995 SEP-30-1994
<BOOK-VALUE> PER-BOOK PRO-FORMA
<TOTAL-NET-UTILITY-PLANT> 3,834,159 3,834,159
<OTHER-PROPERTY-AND-INVEST> 385,374 415,374
<TOTAL-CURRENT-ASSETS> 501,419 501,419
<TOTAL-DEFERRED-CHARGES> 426,849 <F1> 426,849 <F1>
<OTHER-ASSETS> 0 0
<TOTAL-ASSETS> 5,147,801 5,177,801
<COMMON> 64,970 64,970
<CAPITAL-SURPLUS-PAID-IN> 736,823 736,823
<RETAINED-EARNINGS> 820,090 820,090
<TOTAL-COMMON-STOCKHOLDERS-EQ> 1,620,367 <F4> 1,620,367 <F4>
0 0
147,016 <F2> 147,016 <F2>
<LONG-TERM-DEBT-NET> 1,639,356 1,669,356
<SHORT-TERM-NOTES> 192,600 <F3> 192,600 <F3>
<LONG-TERM-NOTES-PAYABLE> 0 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0 0
<LONG-TERM-DEBT-CURRENT-PORT> 22,520 22,520
0 0
<CAPITAL-LEASE-OBLIGATIONS> 0 0
<LEASES-CURRENT> 0 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 1,525,942 1,525,942
<TOT-CAPITALIZATION-AND-LIAB> 5,147,801 5,177,801
<GROSS-OPERATING-REVENUE> 2,248,401 2,248,401
<INCOME-TAX-EXPENSE> 117,670 116,620
<OTHER-OPERATING-EXPENSES> 1,832,580 1,832,580
<TOTAL-OPERATING-EXPENSES> 1,950,250 1,949,200
<OPERATING-INCOME-LOSS> 298,151 299,201
<OTHER-INCOME-NET> 17,752 17,752
<INCOME-BEFORE-INTEREST-EXPEN> 315,903 316,953
<TOTAL-INTEREST-EXPENSE> 106,751 109,751
<NET-INCOME> 192,731 190,781
8,689 <F2> 8,689 <F2>
<EARNINGS-AVAILABLE-FOR-COMM> 192,731 190,781
<COMMON-STOCK-DIVIDENDS> 151,326 151,326
<TOTAL-INTEREST-ON-BONDS> 105,284 108,284
<CASH-FLOW-OPERATIONS> 401,167 399,217
<EPS-PRIMARY> $2.97 $2.94
<EPS-DILUTED> $2.97 $2.94
<FN>
<F1> Total deferred charges includes other assets and accrued Yankee Atomic
costs.
<F2> Preferred stock reflects preferred stock of subsidiaries. Preferred stock
dividends reflect preferred stock dividends of subsidiaries.
<F3> Short-term notes includes commercial paper obligations and notes payable
to banks.
<F4> Total common stockholders equity is reflected net of treasury stock at
cost.
</FN>
<PAGE>
<TABLE>
Financial Statement 1-A
Page 1 of 2
NEW ENGLAND ELECTRIC SYSTEM
(Parent Company Only)
Balance Sheet
At September 30, 1995
(Actual and Pro Forma)
(Unaudited)
ASSETS
------
<CAPTION>
ActualAdjustments Pro Forma
----------------- ---------
(In Thousands)
<S> <C> <C> <C>
Investments:
Common stocks of subsidiaries, at equity $1,564,667 $ 30,000$1,594,667
Notes of subsidiaries 52,842 52,842
Other investments 2,326 2,326
---------- ------------------
Total investments 1,619,835 30,000 1,649,835
---------- ------------------
Current assets:
Cash 16 (16)
Temporary cash investments - subsidiary companies 33,875 (29,984) 3,891
Interest and dividends receivable of subsidiaries 8,454 8,454
Other current assets 78 78
---------- ------------------
Total current assets 42,423 (30,000) 12,423
---------- ------------------
Deferred federal income taxes 2,281 2,281
---------- ------------------
$1,664,539 $ -0-$1,664,539
========== ==================
CAPITALIZATION AND LIABILITIES
------------------------------
Common share equity:
Common shares, par value $1 per share:
Authorized - 150,000,000 shares
Issued - 64,969,652 shares $ 64,969 $ 64,969
Paid-in capital 736,567 736,567
Retained earnings (including $588,695,000 of
undistributed subsidiary earnings) 820,090 820,090
-----------------------------
Total common share equity 1,621,626 1,621,626
-----------------------------
Current liabilities:
Accounts payable (including $33,000 to subsidiaries) 701 701
Other accrued expenses 1,430 1,430
Dividends payable 34,843 34,843
---------- ------------------
Total current liabilities 36,974 36,974
---------- ------------------
deferred credits 5,939 5,939
---------- ------------------
$1,664,539 $ -0-$1,664,539
========== ==================
</TABLE>
<PAGE>
Financial Statement 1-A
Page 2 of 2
NEW ENGLAND ELECTRIC SYSTEM
(Parent Company Only)
The pro forma adjustments to show the estimated effect of the proposed
transactions on the foregoing Balance Sheet at September 30, 1995 are as
follows:
Debit - Common stocks of subsidiaries at equity $30,000,000
Credit - Cash $ 16,000
Temporary cash investments - subsidiary
companies $29,984,000
To reflect a capital contribution to New England Electric Resources, Inc.
through the utilization of cash and temporary cash investments of subsidiaries.
<PAGE>
Financial Statement 1-B
Page 1 of 1
NEW ENGLAND ELECTRIC SYSTEM
(Parent Company Only)
Statement of Income
Twelve Months Ended September 30, 1995
(Unaudited)
(In Thousands)
Equity in earnings of subsidiaries $ 195,852
Interest income - subsidiaries 479
---------
Total income from subsidiaries 196,331
Other income 67
---------
Total income 196,398
Corporate and fiscal expenses (includes $1,752,000
for cost of services billed by an affiliated company) 3,054
Federal income taxes 354
---------
Income before interest 192,990
Interest 259
---------
Net income $ 192,731
=========
Statement of Retained Earnings
Retained earnings at beginning of period $ 778,685
Net income 192,731
Dividends declared on common shares (151,326)
---------
Retained earnings at end of period $ 820,090
=========
<PAGE>
<TABLE>
Financial Statement 2-A
Page 1 of 2
NEW ENGLAND ELECTRIC SYSTEM AND SUBSIDIARIES
Consolidated Balance Sheet
At September 30, 1995
(Actual and Pro Forma)
(Unaudited)
ASSETS
------
<CAPTION>
ActualAdjustments Pro Forma
----------------- ---------
(In Thousands)
<S> <C> <C> <C>
Utility plant, at original cost $ 5,240,449 $5,240,449
Less accumulated provisions for
depreciation and amortization 1,701,562 1,701,562
----------- ------------------
3,538,887 3,538,887
Net investment in Seabrook 1 under
rate settlement 19,012 19,012
Construction work in progress 276,260 276,260
----------- ------------------
Net utility plant 3,834,159 3,834,159
----------- ------------------
Oil and gas properties, at full cost 1,260,927 1,260,927
Less accumulated provision for amortization 1,018,531 1,018,531
----------- ------------------
Net oil and gas properties 242,396 242,396
----------- ------------------
Investments:
Nuclear power companies, at equity 47,080 47,080
Other subsidiaries, at equity 40,790 $ 30,000 70,790
Other investments, at cost 55,108 55,108
----------- ------------------
Total investments 142,978 30,000 172,978
----------- ------------------
Current assets:
Cash 7,795 7,795
Accounts receivable, less reserves of $18,910,000 268,548 268,548
Unbilled revenues 47,300 47,300
Fuel, materials and supplies, at average cost 99,269 99,269
Prepaid and other current assets 78,507 78,507
----------- ------------------
Total current assets 501,419 501,419
----------- ------------------
Accrued Yankee Atomic costs 104,257 104,257
Deferred charges and other assets 322,592 322,592
----------- ------------------
$ 5,147,801 $ 30,000$5,177,801
=========== ==================
CAPITALIZATION AND LIABILITIES
------------------------------
Capitalization:
Common share equity:
Common shares, par value $1 per share:
Authorized - 150,000,000 shares
Issued - 64,969,652 shares $ 64,970 $ 64,970
Paid-in capital 736,823 736,823
Retained earnings 820,090 820,090
----------- ------------------
1,621,883 1,621,883
Less 45,196 shares of treasury stock, at cost 1,516 1,516
----------- ------------------
Total common share equity 1,620,367 1,620,367
Minority interests in consolidated subsidiaries 49,620 49,620
Cumulative preferred stock of subsidiaries 147,016 147,016
Long-term debt 1,639,356 $ 30,0001,669,356
----------- ------------------
Total capitalization 3,456,359 30,0003,486,359
----------- ------------------
Current liabilities:
Long-term debt due within one year 22,520 22,520
Short-term debt 192,600 192,600
Accounts payable 141,414 141,414
Accrued taxes 25,731 25,731
Accrued interest 23,469 23,469
Dividends payable 39,262 39,262
Other current liabilities 92,562 92,562
----------- ------------------
Total current liabilities 537,558 537,558
----------- ------------------
Deferred federal and state income taxes 765,366 765,366
Unamortized investment tax credits 92,910 92,910
Accrued Yankee Atomic costs 104,257 104,257
Other reserves and deferred credits 191,351 191,351
----------- ------------------
$ 5,147,801 $ 30,000$5,177,801
=========== ==================
</TABLE>
<PAGE>
Financial Statement 2-A
Page 2 of 2
NEW ENGLAND ELECTRIC SYSTEM AND SUBSIDIARIES
The pro forma adjustments to show the estimated effect of the proposed
transaction on the foregoing consolidated Balance Sheet at September 30, 1995
are as follows:
Debit - Cash $30,000,000
Credit - Long-term debt $30,000,000
To reflect the receipt of cash through the issuance of long-term debt by a
wholly-owned subsidiary.
Debit - Other subsidiaries, at equity $30,000,000
Credit - Cash $30,000,000
To reflect the use of proceeds from the above issuance of long-term notes to
fund a proposed investment in a wholly-owned subsidiary.
<PAGE>
<TABLE>
Financial Statement 2-B
Page 1 of 2
NEW ENGLAND ELECTRIC SYSTEM AND SUBSIDIARIES
Statement of Consolidated Income
Twelve Months Ended September 30, 1995
(Actual and Pro Forma)
(Unaudited)
<CAPTION>
Actual AdjustmentsPro Forma
------ --------------------
(In Thousands)
<S> <C> <C> <C>
Operating revenue $2,248,401 $2,248,401
---------- ------- ----------
Operating expenses:
Fuel for generation 221,209 221,209
Purchased electric energy 554,381 554,381
Other operation 506,576 506,576
Maintenance 154,850 154,850
Depreciation and amortization 269,265 269,265
Taxes, other than income taxes 126,299 126,299
Income taxes 117,670 $(1,050) 116,620
---------- ------- ----------
Total operating expenses 1,950,250 (1,050) 1,949,200
---------- ------- ----------
Operating income 298,151 1,050 299,201
Other income:
Allowance for equity funds used during
construction 10,690 10,690
Equity in income of generating companies 9,728 9,728
Other income (expense) - net (2,666) (2,666)
---------- ------- ----------
Operating and other income 315,903 1,050 316,953
---------- ------- ----------
Interest:
Interest on long-term debt 105,284 3,000 108,284
Other interest 14,961 14,961
Allowance for borrowed funds used during
construction (13,494) (13,494)
---------- ------- ----------
Total interest 106,751 3,000 109,751
---------- ------- ----------
Income after interest 209,152 (1,950) 207,202
Preferred dividends of subsidiaries 8,689 8,689
Minority interests 7,732 7,732
---------- ------- ----------
Net income $ 192,731 $(1,950)$ 190,781
========== ======= ==========
Average common shares 64,955,646 64,955,646
Net income per common share $2.97 $(0.03) $2.94
Statement of Retained Earnings
(Actual and Pro Forma)
Retained earnings at beginning of period $ 778,685 $ 778,685
Net income 192,731 $(1,950) 190,781
Dividends declared on common shares (151,326) (151,326)
---------- ------- ----------
Retained earnings at end of period $ 820,090 $(1,950) $ 818,140
========== ======= ==========
</TABLE>
<PAGE>
Financial Statement 2-B
Page 2 of 2
NEW ENGLAND ELECTRIC SYSTEM AND SUBSIDIARIES
The pro forma adjustments to show the estimated effect of the proposed
transaction on the foregoing consolidated Income Statement for the twelve
months ended September 30, 1995 are as follows:
Debit - Interest on long-term debt $3,000,000
Amount calculated on $30,000,000 principal amount of New Note issue at an
assumed interest rate of 10 percent.
Credit - Income taxes $1,050,000
To reflect the federal income tax effect as a result of the above adjustment
to interest expense.
<PAGE>
<TABLE>
Financial Statement 3-A
Page 1 of 2
NEW ENGLAND ELECTRIC RESOURCES, INC.
Balance Sheet
At September 30, 1995
(Actual and Pro Forma)
(Unaudited)
ASSETS
------
<CAPTION>
ActualAdjustmentsPro Forma
--------------------------
(In Thousands)
<S> <C> <C> <C>
Investments:
Common stock of subsidiary, at equity $ 60,000 $ 60,000
Other investments, at cost $ 1,000 1,000
------- -------- --------
Total 1,000 60,000 61,000
------- -------- --------
Current assets:
Cash 171 171
Accounts receivable 299 299
Tax benefit receivable 358 358
------- -------- --------
Total current assets 828 828
------- -------- --------
Deferred charges and other assets 226 226
------- -------- --------
$ 2,054 $ 60,000 $ 62,054
======= ======== ========
PARENT COMPANY'S INVESTMENT AND LIABILITIES
-------------------------------------------
Common stock, par value $1 per share $ 1 $ 1
Subordinated notes payable to parent 2,974 2,974
Other paid-in capital $ 30,000 30,000
Retained deficit (1,271) (1,271)
------- -------- --------
Total 1,704 30,000 31,704
Long-term notes 30,000 30,000
------- -------- --------
Total capitalization 1,704 60,000 61,704
------- -------- --------
Current liabilities:
Accounts payable to associated companies 36 36
Accounts payable 15 15
------- -------- --------
Total current liabilities 51 51
------- -------- --------
Deferred income taxes 299 299
------- -------- --------
$ 2,054 $ 60,000 $ 62,054
======= ======== ========
</TABLE>
<PAGE>
Financial Statement 3-A
Page 2 of 2
NEW ENGLAND ELECTRIC RESOURCES, INC.
The pro forma adjustments to show the estimated effect of the proposed
transactions on the foregoing Balance Sheet at September 30, 1995 are as
follows:
Debit - Cash $30,000,000
Credit - Other paid-in capital $30,000,000
To reflect the receipt of a capital contribution from New England Electric
System.
Debit - Cash $30,000,000
Credit - Long-term notes $30,000,000
To reflect the receipt of cash through the issuance of long-term notes by
the wholly-owned subsidiary.
Debit - Common stock of subsidiary, at equity $60,000,000
Credit - Cash $60,000,000
To reflect the use of the above capital contribution and proceeds from the
issuance of long-term notes to fund a proposed investment in a wholly-owned
subsidiary.
Note: The pro forma financials assume $30 million capital contribution from
New England Electric System to New England Electric Resources, Inc. and $30
million non-recourse debt financing from third parties to a wholly-owned
subsidiary of New England Electric Resources, Inc.
<PAGE>
<TABLE>
Financial Statement 3-B
Page 1 of 2
NEW ENGLAND ELECTRIC RESOURCES, INC.
Statement of Loss and Retained Deficit
Twelve Months Ended September 30, 1995
(Actual and Pro Forma)
(Unaudited)
<CAPTION>
Actual Adjustments Pro Forma
------ ----------- ---------
(In Thousands)
<S> <C> <C> <C>
Services rendered to nonassociated companies $ 110 $ 110
Miscellaneous loss (250) (250)
------- ------- -------
Total income (140) (140)
------- ------- -------
Outside services employed 1,559 1,559
Interest on long-term notes $ 3,000 3,000
Income taxes (674) (1,050) (1,724)
------- ------- -------
Total expense 885 1,950 2,835
------- ------- -------
Net loss $(1,025) $(1,950) $(2,975)
======= ======= =======
Retained deficit at beginning of period $ (246) $ (246)
------- ------- -------
Retained deficit at end of period $(1,271) $(1,950) $(3,221)
======= ======= =======
</TABLE>
<PAGE>
Financial Statement 3-B
Page 2 of 2
NEW ENGLAND ELECTRIC RESOURCES, INC.
The pro forma adjustments to show the estimated effect of the proposed
transactions as applied to the foregoing Statement of Loss and Retained Deficit
for the twelve months ended September 30, 1995 are as follows:
Debit - Interest on long-term notes $3,000,000
Amount calculated on $30,000,000 principal amount of New Note issue at
assumed interest rate of 10 percent.
Credit - Income taxes $1,050,000
To reflect the federal income tax effect as a result of the above
adjustment to interest expense.
