<PAGE>
File No. 70-8783
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
POST-EFFECTIVE 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 companies 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
of the participating companies herein)
Michael E. Jesanis Robert King Wulff
Treasurer Corporation Counsel
25 Research Drive 25 Research Drive
Westborough, MA 01582 Westborough, MA 01582
(Names and addresses of agents for service)
<PAGE>
Item 1 is hereby amended by adding the following new section thereto:
"By its Order dated April 15, 1996 (HCAR 35-26504) (the Order), the
Commission has authorized financings by NEES and/or NEERI for the purpose of
acquiring interests in, financing the acquisition of, and holding the
securities of, exempt wholesale generators (EWGs) (as defined in section 32 of
the Act) and foreign utility companies (FUCOs) (as defined in section 33 of
the Act) as set forth in their Application/Declaration in this File No. 70-
8783, as amended (the Original Statement). At present, under the Order, the
aggregate amount of any such investments or financings, including any
authorized guarantees and assumptions of liability, may not exceed a total
investment cap of $60 million (defined in the original filing as the Total
Authority). NEES and NEERI hereby request that the Commission authorize an
increase in the Total Authority from $60 million to an amount not exceeding
50% of the NEES system's 'consolidated retained earnings', as defined in Rule
53(a)(1)(ii), in the aggregate outstanding at any one time. No such EWG or
FUCO investment or financing will be made unless at the time of the investment
or financing, and after giving effect to the investment or financing, NEES
'aggregate investment', as defined in Rule 53(a)(1)(i), in EWGs, FUCOs and
Project Parents (as such term is defined in the Original Statement) does not
exceed 50% of the NEES system's 'consolidated retained earnings', as defined
in Rule 53(a)(1)(ii).
Neither NEES nor any subsidiary currently has an ownership interest in
an exempt wholesale generator (EWG) as defined in Section 32 of the Act or a
foreign utility company (FUCO) as defined in Section 33 of the Act.
Additionally, neither NEES nor any subsidiary is a party to, or has any rights
under, a service, sales, or construction agreement with an EWG or FUCO. NEES
and its subsidiaries shall comply with the requirements of Rules 53 and 54 of
the Act in connection with EWG and FUCO acquisitions and financings and with
all other requirements and conditions in the Original Statement as amended
hereby and the Order."
2. Item 2, Fees, Commission, and Expenses, is amended by adding the
following thereto:
"Services incidental to this Post-Effective Amendment No. 1 filing are
estimated to not exceed $10,000. This amount includes a $2,000 filing fee
paid by wire transfer to the Commission at the time of filing this Post-
Effective Amendment."
3. Item 3, Applicable Statutory Provisions, is amended by adding the
following thereto:
"The sections of the Act and rules or exemptions thereunder that are
believed to be applicable to the transactions proposed in this filing are:
Sections 6(a), 7, 9(a), 10, 12, 13, 22, 32, 33, and Rules 45, 52, 53, 54, 90,
and 91."
4. Item 4, Regulatory Approval, is amended by adding the following thereto:
"No Federal or State commission or regulatory body, other than the
Commission, has jurisdiction over the proposed transactions in this Post-
Effective Amendment No. 1."
<PAGE>
5. Item 5, Procedure, is amended by adding the following thereto:
"The applicants request that the Commission take action with respect to
this Post-Effective Amendment No. 1 on or before May 5, 1997, or as soon
thereafter as practicable, without a hearing being held.
The applicants (i) do not request a recommended decision by a hearing
officer, (ii) do not request a recommended decision by any other responsible
officer of the Commission, (iii) hereby specify that the Division of
Investment Management may assist in the preparation of the Commission's
decision, and (iv) hereby request that there be no 30-day waiting period
between the date of issuance of the Commission's order and the date on which
it is to become effective."
6. Item 6(a)is amended by adding the following exhibits:
(a) Exhibits
*F-2 Opinion of Counsel
G-1 Financial Data Schedule for NEES (Consolidated)
G-2 Financial Data Schedule for NEES (Parent Company Only)
G-3 Financial Data Schedule for NEERI
H-2 Proposed Form of Notice
*To be filed by amendment
(b) Financial Statements
1-A Balance Sheet of NEES at December 31, 1996, Actual (Parent
Company Only)
1-B Statement of Income and Retained Earnings for NEES for twelve
months ended December 31, 1996, Actual (Parent Company Only)
2-A Consolidated Balance Sheet of NEES at December 31, 1996, Actual
2-B Statement of Consolidated Income for NEES for twelve months ended
December 31, 1996, Actual
3-A Balance Sheet of NEERI at December 31, 1996, Actual
3-B Statement of Income and Retained Earnings for NEERI for twelve
months ended December 31, 1996, Actual
7. Item 7, Environmental Effects, is hereby amended by adding the following
thereto:
"The transactions proposed by this Post-Effective Amendment No. 1 do not
involve a major Federal action significantly affecting the quality of the
human environment."
<PAGE>
SIGNATURE
Pursuant to the requirements of the Public Utility Holding Company Act
of 1935, the undersigned companies have duly caused this Post-Effective
Amendment No. 1 to their Form U-1 Application/Declaration (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
By___________________________________
Michael E. Jesanis
Treasurer
NEW ENGLAND ELECTRIC RESOURCES, INC.
s/John G. Cochrane
By___________________________________
John G. Cochrane
Treasurer
Date: April 8, 1997
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 of Massachusetts. 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 assumes or shall be held to any liability therefor.
<PAGE>
EXHIBIT INDEX
Exhibit No. Description Page
- ----------- ----------- ----
F-2 Opinion of Counsel To be filed
by Amendment
G-1 Financial Data Schedule Filed herewith
for NEES (Consolidated)
G-2 Financial Data Schedule for Filed herewith
NEES (Parent Company only)
G-3 Financial Data Schedule Filed herewith
for NEERI
H-2 Proposed Form of Notice Filed herewith
FINANCIAL STATEMENTS
Financial
Statement No. Description Page
- ------------- ----------- ----
1-A Balance Sheet of NEES at Filed herewith
December 31,1996, Actual
(Parent Company only)
1-B Statement of Income Filed herewith
and Retained Earnings for
NEES for twelve months
ended December 31, 1996,
Actual (Parent Company only)
2-A Consolidated Balance Sheet Filed herewith
of NEES at December 31, 1996,
Actual
2-B Statement of Consolidated Filed herewith
Income for NEES for twelve
months ended December 31,
1996, Actual
3-A Balance Sheet of NEERI at Filed herewith
December 31, 1996, Actual
3-B Statement of Income and Filed herewith
Retained Earnings for NEERI
for twelve months ended December,
31, 1996, Actual
<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>
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<PERIOD-TYPE> 12-MOS
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 3,896,605
<OTHER-PROPERTY-AND-INVEST> 389,146
<TOTAL-CURRENT-ASSETS> 488,880
<TOTAL-DEFERRED-CHARGES> 448,620 <F1>
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 5,223,251
<COMMON> 64,970
<CAPITAL-SURPLUS-PAID-IN> 736,773
<RETAINED-EARNINGS> 887,292
<TOTAL-COMMON-STOCKHOLDERS-EQ> 1,685,417 <F3>
0
126,166 <F2>
<LONG-TERM-DEBT-NET> 1,614,578
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 145,050
<LONG-TERM-DEBT-CURRENT-PORT> 79,705
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 1,572,335
<TOT-CAPITALIZATION-AND-LIAB> 5,223,251
<GROSS-OPERATING-REVENUE> 2,350,698
<INCOME-TAX-EXPENSE> 139,199
<OTHER-OPERATING-EXPENSES> 1,863,381
<TOTAL-OPERATING-EXPENSES> 2,002,580
<OPERATING-INCOME-LOSS> 348,118
<OTHER-INCOME-NET> 2,168
<INCOME-BEFORE-INTEREST-EXPEN> 350,286
<TOTAL-INTEREST-EXPENSE> 127,760
<NET-INCOME> 208,936
6,463 <F2>
<EARNINGS-AVAILABLE-FOR-COMM> 208,936
<COMMON-STOCK-DIVIDENDS> 153,173
<TOTAL-INTEREST-ON-BONDS> 110,479
<CASH-FLOW-OPERATIONS> 522,570
<EPS-PRIMARY> $3.22
<EPS-DILUTED> $3.22
<FN>
<F1> Total deferred charges includes other assets.
<F2> Preferred stock reflects preferred stock of subsidiaries. Preferred
stock dividends reflect preferred stock dividends of subsidiaries and
net gain on reacquisition of preferred stock.
<F3> Total common stockholders equity is reflected net of treasury stock at
cost.
</FN>
<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 SYSTEM
(PARENT COMPANY), AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
<SUBSIDIARY>
<NAME> NEW ENGLAND ELECTRIC SYSTEM (PARENT COMPANY)
<NUMBER> 1
<MULTIPLIER> 1,000
<S> <C>
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<PERIOD-TYPE> 12-MOS
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 0
<OTHER-PROPERTY-AND-INVEST> 1,690,650
<TOTAL-CURRENT-ASSETS> 45,323
<TOTAL-DEFERRED-CHARGES> 2,897
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 1,738,870
<COMMON> 64,969
<CAPITAL-SURPLUS-PAID-IN> 736,567
<RETAINED-EARNINGS> 887,292
<TOTAL-COMMON-STOCKHOLDERS-EQ> 1,688,828
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> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 50,042
<TOT-CAPITALIZATION-AND-LIAB> 1,738,870
<GROSS-OPERATING-REVENUE> 0
<INCOME-TAX-EXPENSE> (169)
<OTHER-OPERATING-EXPENSES> 6,602
<TOTAL-OPERATING-EXPENSES> 6,433
<OPERATING-INCOME-LOSS> (6,433)
<OTHER-INCOME-NET> 215,841
<INCOME-BEFORE-INTEREST-EXPEN> 209,408
<TOTAL-INTEREST-EXPENSE> 316
<NET-INCOME> 209,092
0
<EARNINGS-AVAILABLE-FOR-COMM> 209,092
<COMMON-STOCK-DIVIDENDS> 153,329
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> 0
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<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.
<SUBSIDIARY>
<NAME> NEW ENGLAND ELECTRIC RESOURCES INC.
<NUMBER> 2
<MULTIPLIER> 1,000
<S> <C>
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<PERIOD-TYPE> 12-MOS
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 0
<OTHER-PROPERTY-AND-INVEST> 1,475
<TOTAL-CURRENT-ASSETS> 2,410
<TOTAL-DEFERRED-CHARGES> 0
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 3,885
<COMMON> 1
<CAPITAL-SURPLUS-PAID-IN> 0
<RETAINED-EARNINGS> (5,321)
<TOTAL-COMMON-STOCKHOLDERS-EQ> 3,129 <F1>
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> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 756
<TOT-CAPITALIZATION-AND-LIAB> 3,885
<GROSS-OPERATING-REVENUE> 0
<INCOME-TAX-EXPENSE> 0
<OTHER-OPERATING-EXPENSES> 0
<TOTAL-OPERATING-EXPENSES> 0
<OPERATING-INCOME-LOSS> 0
<OTHER-INCOME-NET> (3,608)
<INCOME-BEFORE-INTEREST-EXPEN> (3,608)
<TOTAL-INTEREST-EXPENSE> 0
<NET-INCOME> (3,608)
0
<EARNINGS-AVAILABLE-FOR-COMM> 0
<COMMON-STOCK-DIVIDENDS> 0
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> 0
<EPS-PRIMARY> 0 <F2>
<EPS-DILUTED> 0 <F2>
<FN>
<F1> Total common stockholders equity includes subordinated notes payable to
parent.
<F2> Per share data is not relevant because the Company's common stock is
wholly-owned by New England Electric System.
</FN>
<PAGE>
EXHIBIT H-2
PROPOSED FORM OF NOTICE
By its Order dated April 15, 1996 (HCAR 35-26504) (the Order), the
Commission has authorized financings by the New England Electric System (NEES)
and/or New England Electric Resources, Inc. (NEERI) for the purpose of
acquiring interests in, financing the acquisition of, and holding the
securities of, exempt wholesale generators (EWGs) (as defined in section 32 of
the Act) and foreign utility companies (FUCOs) (as defined in section 33 of
the Act) as set forth in their Application/Declaration in this File No. 70-
8783, as amended (the Original Statement). At present, under the Order, the
aggregate amount of any such investments or financings, including any
authorized guarantees and assumptions of liability, may not exceed a total
investment cap of $60 million (defined in the original filing as the Total
Authority). NEES and NEERI request that the Commission authorize an increase
in the Total Authority from $60 million to an amount not exceeding 50% of the
NEES system's 'consolidated retained earnings', as defined in Rule
53(a)(1)(ii), in the aggregate outstanding at any one time. No such EWG or
FUCO investment or financing will be made unless at the time of the investment
or financing, and after giving effect to the investment or financing, NEES
'aggregate investment', as defined in Rule 53(a)(1)(i), in EWGs, FUCOs and
Project Parents (as such term is defined in the Original Statement) does not
exceed 50% of the NEES system's 'consolidated retained earnings', as defined
in Rule 53(a)(1)(ii).
Neither NEES nor any subsidiary currently has an ownership interest in an
exempt wholesale generator (EWG) as defined in Section 32 of the Act or a
foreign utility company (FUCO) as defined in Section 33 of the Act.
Additionally, neither NEES nor any subsidiary is a party to, or has any rights
under, a service, sales, or construction agreement with an EWG or FUCO. NEES
and its subsidiaries shall comply with the requirements of Rules 53 and 54 of
the Act in connection with EWG and FUCO acquisitions and financings and with
all other requirements and conditions in the Original Statement, as amended,
and the Order.
<PAGE>
<TABLE>
Financial Statement 1-A
NEW ENGLAND ELECTRIC SYSTEM
(Parent Company Only)
Balance Sheet
At December 31, 1996
(Unaudited)
<CAPTION>
ASSETS
------
(In Thousands)
<S> <C>
Investments:
Common stocks of subsidiaries, at equity $1,651,766
Notes of subsidiaries 35,056
Other investments 3,828
----------
Total investments 1,690,650
----------
Current assets:
Cash 38
Temporary cash investments - subsidiary companies 5,925
Interest and dividends receivable of subsidiaries 39,344
Other current assets 16
----------
Total current assets 45,323
----------
Deferred federal income taxes 2,897
----------
$1,738,870
==========
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
Paid-in capital 736,567
Retained earnings (including $645,456,000 of
undistributed subsidiary earnings) 887,292
----------
Total common share equity 1,688,828
----------
Current liabilities:
Accounts payable 8,434
Other accrued expenses 8
Dividends payable 34,211
----------
Total current liabilities 42,653
----------
Deferred credits 7,389
----------
$1,738,870
</TABLE> ==========
<PAGE>
<TABLE>
Financial Statement 1-B
NEW ENGLAND ELECTRIC SYSTEM
(Parent Company Only)
Statement of Income
Twelve Months Ended December 31, 1996
(Unaudited)
<CAPTION>
(In Thousands)
<S> <C>
Equity in earnings of subsidiaries $ 215,100
Interest income - subsidiaries 634
---------
Total income from subsidiaries 215,734
Other income 107
---------
Total income 215,841
Corporate and fiscal expenses (includes $1,300,000 for
cost of services billed by an affiliated company) 6,602
Federal income taxes (169)
---------
Income before interest 209,408
Interest 316
---------
Net income $ 209,092
=========
Statement of Retained Earnings
Retained earnings at beginning of period $ 831,529
Net income 209,092
Dividends declared on common shares (153,329)
---------
Retained earnings at end of period $ 887,292
=========
</TABLE>
<PAGE>
Financial Statement 2-A
New England Electric System and Subsidiaries
Consolidated Balance Sheets
At December 31, 1996
(thousands of dollars)
<TABLE>
<CAPTION>
1996
----------
<S> <C>
Assets
Utility plant, at original cost $5,692,956
Less accumulated provisions for depreciation
and amortization 1,853,003
----------
3,839,953
Net investment in Seabrook 1 under
rate settlement (Note A)
Construction work in progress 56,652
----------
Net utility plant 3,896,605
----------
Oil and gas properties, at full cost (Note A) 1,286,661
Less accumulated provision for amortization 1,081,940
----------
Net oil and gas properties 204,721
----------
Investments:
Nuclear power companies, at equity (Note D) 47,902
Other subsidiaries, at equity 40,124
Other investments 96,399
----------
Total investments 184,425
----------
Current assets:
Cash 8,477
Accounts receivable, less reserves
of $18,702 and $18,308 262,103
Unbilled revenues 59,093
Fuel, materials, and supplies, at average cost 74,111
Prepaid and other current assets 85,096
----------
Total current assets 488,880
----------
Deferred charges and other assets (Note B) 448,620
----------
$5,223,251
----------
Capitalization and liabilities
Capitalization (see accompanying statements):
Common share equity $1,685,417
Minority interests in consolidated
subsidiaries 46,293
Cumulative preferred stock of subsidiaries 126,166
Long-term debt 1,614,578
----------
Total capitalization 3,472,454
----------
Current liabilities:
Long-term debt due within one year 79,705
Short-term debt 145,050
Accounts payable 148,592
Accrued taxes 14,911
Accrued interest 27,494
Dividends payable 37,276
Other current liabilities (Note F) 109,582
----------
Total current liabilities 562,610
----------
Deferred federal and state income taxes 750,929
Unamortized investment tax credits 91,936
Other reserves and deferred credits 345,322
Commitments and contingencies (Note D) ----------
$5,223,251
----------
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE>
Financial Statement 2-B
New England Electric System and Subsidiaries
Statements of Consolidated Income
Year Ended December 31, 1996
(thousands of dollars, except per share data)
<TABLE>
<CAPTION>
1996
----------
<S> <C>
Operating revenue $ 2,350,698
Operating expenses:
Fuel for generation 334,994
Purchased electric energy 509,400
Other operation 501,090
Maintenance 127,785
Depreciation and amortization 246,379
Taxes, other than income taxes 143,733
Income taxes 139,199
-----------
Total operating expenses 2,002,580
-----------
Operating income 348,118
Other income:
Allowance for equity funds used
during construction
Equity in income of generating
companies 10,334
Other income (expense), net (8,166)
-----------
Operating and other income 350,286
-----------
Interest:
Interest on long-term debt 110,479
Other interest 19,527
Allowance for borrowed funds
used during construction (2,246)
-----------
Total interest 127,760
-----------
Income after interest 222,526
Preferred dividends and net gain
on reacquisition of preferred
stock of subsidiaries 6,463
Minority interests 7,127
-----------
Net income $ 208,936
-----------
Average common shares 64,924,468
Per share data:
Net income $ 3.22
Dividends declared $ 2.360
-----------
</TABLE>
Statements of Consolidated Retained Earnings
Year Ended December 31 (thousands of dollars)
<TABLE>
<CAPTION>
1996
---------
<S> <C>
Retained earnings at beginning of year $ 831,529
Net income 208,936
Dividends declared on common shares (153,173)
---------
Retained earnings at end of year $ 887,292
---------
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE>
Financial Statement 3-A
NEW ENGLAND ELECTRIC RESOURCES, INC.
Balance Sheet
December 31, 1996
(Unaudited, Subject to Adjustment)
<TABLE>
<CAPTION>
ASSETS
- ------
<S> <C>
Current assets:
Cash $ 180,836
Accounts receivable 1,359,932
Accounts receivable from associated companies 2,746
Tax benefit receivable 866,287
-----------
Total current assets 2,409,801
-----------
Investment in Separation Technologies, Inc.,
at cost 999,999
Investment in Monitoring Technologies, Inc.,
at cost 475,001
-----------
Total other assets 1,475,000
-----------
Total assets $ 3,884,801
===========
LIABILITIES AND PARENT COMPANY'S INVESTMENT
- -------------------------------------------
Current liabilities:
Accounts payable to associated companies $ 465,891
Accounts payable 238,342
Tax collections payable 382
-----------
Total current liabilities 704,615
Accumulated deferred income taxes 51,600
-----------
Total liabilities 756,215
Parent company's investment:
Common stock, par value $1 per share 1,000
Subordinated notes payable to parent 8,448,999
Retained deficit (5,321,413)
-----------
Total parent company's investment 3,128,586
-----------
Total liabilities and parent company's
investment $ 3,884,801
===========
</TABLE>
<PAGE>
Financial Statement 3-B
NEW ENGLAND ELECTRIC RESOURCES, INC.
Statement of Income and Retained Deficit
For the Twelve Months Ended December 31, 1996
(Unaudited, Subject to Adjustment)
<TABLE>
<CAPTION>
INCOME
- ------
<S> <C>
Services rendered to nonassociated companies $ 1,379,230
-----------
Total Income $ 1,379,230
-----------
EXPENSE
- -------
Administrative and General Expenses $ 7,339,530
Income taxes (2,352,400)
-----------
Total Expenses 4,987,130
-----------
Net Income/(Loss) $(3,607,900)
===========
Retained earnings/(deficit) at beginning of period (1,713,513)
-----------
Retained earnings/(deficit) at end of period $(5,321,413)
===========
</TABLE>
