File No. 70-8507
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________________________________________
POST-EFFECTIVE AMENDMENT NO. 1
TO FORM U-1
APPLICATION AND DECLARATION
UNDER THE
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
____________________________________________________
NORTHEAST UTILITIES
174 Brush Hill Avenue
West Springfield, Massachusetts 01089
CHARTER OAK ENERGY, INC.
COE DEVELOPMENT CORPORATION
107 Seldon Street
Berlin, CT 06037-1616
____________________________________________________
(Name of company filing this statement and
address of principal executive offices)
NORTHEAST UTILITIES
_____________________________________
(Name of top registered holding
company parent of each applicant or declarant)
Jeffrey C. Miller, Esq.
Assistant General Counsel
NORTHEAST UTILITIES SERVICE COMPANY
P.O. Box 270
Hartford, Connecticut 06140-0270
________________________________________
(Name and address of agent for service)
The Commission is requested to mail copies of
all orders, notices and communications to:
Mark Malaspina, Esq. William S. Lamb, Esq.
Charter Oak Energy, Inc. LeBoeuf, Lamb, Greene & MacRae
P.O. Box 270 L.L.P.
Hartford, CT 06140-0270 125 W. 55th Street
New York, New York 10019-4513
Northeast Utilities ("NU"), West Springfield,
Massachusetts, a registered holding company, and its wholly owned
subsidiaries, Charter Oak Energy, Inc. ("Charter Oak") and COE
Development Corporation ("COE Development"), both located in
Berlin, Connecticut, (collectively, the "Applicants") hereby file
this Post-Effective Amendment Number One to their Application and
Declaration on Form U-1 (HCAR 26213; File No. 70-8507) (the
"Amendment") under Sections 6(a), 7, 9(a), 10, 12(b), 32 and 33
of the Public Utility Holding Company Act of 1935 (the "Act") and
Rules 45 and 53 thereunder, for the purpose of obtaining a
modification of the authority previously granted to the
Applicants in the Securities and Exchange Commission's (the
"Commission") order dated December 30, 1994 (HCAR 26213; File
No. 70-8507) (the "December 1994 Order") to set the aggregate
amount that NU is authorized to invest in Charter Oak, Charter
Oak is authorized to invest in COE Development and Charter Oak
and COE Development are authorized to spend on authorized power
development activities, at $400 million for the period from
January 1, 1995 through December 31, 1996. The Applicants also
wish to clarify certain issues involving their existing authority
to make loans to unaffiliated developers and other matters. The
Applicants have also clarified their existing quarterly reporting
obligations.
Item 1. DESCRIPTION OF PROPOSED TRANSACTIONS
A. Description of Charter Oak
Pursuant to the December 1994 Order, Charter Oak and
COE Development, either independently or through participation in
joint ventures, are presently authorized to pursue preliminary
development activities with regard to investment and
participation in QFs throughout the United States,
independent power production facilities that would constitute a
part of NU's "integrated public utility system" within the
meaning of Section 2(a)(29)(A) of the Act ("Qualified IPPs"), EWGs
and FUCOs and to provide consulting services to such projects.
Charter Oak and COE Development may invest in QFs and Qualified
IPPs after obtaining Commission approval and may invest in, and
finance the acquisition of, EWGs and FUCOs without prior
Commission approval ("Exempt Projects") subject to certain
limitations. In addition, the Applicants also have authority to
issue guarantees and assume the liabilities of subsidiary
companies for pre-development activities, and contingent
liabilities subsequent to operation with regard to Exempt
Projects.
The Applicants also have been authorized to acquire
interests in, finance the acquisition, and hold the securities
of, one or more companies ("Intermediate Companies") engaged
directly or indirectly and exclusively in the business of
acquiring interests in, holding the securities and financing the
acquisition of one or more EWGs and/or FUCOs without filing
specific project applications with the Commission. The
Applicants are authorized to issue guarantees and assume
liabilities subsequent to operation with regard to such projects.
Intermediate Companies may effect adjustments in their ownership
interests in Exempt Projects. Intermediate Companies as well as
the Applicants are also authorized to participate in joint
ventures that are in the business of owning and developing Exempt
Projects. The Applicants may liquidate, dissolve or sell any
Intermediate Company within 45 days after the Applicants
determine that the purpose for owning such Intermediate Company
no longer exists.
The current authorization permits NU to invest, and
Charter Oak to spend, up to an aggregate amount of $200 million
for the period from January 1, 1995 through December 31, 1996 to
finance these activities, subject to certain restrictions. Prior
to January 1, 1995, the Applicants had invested $32 million in
authorized activities leading to an existing aggregate funding
authorization of $232 million. Specifically, NU's investment in
Charter Oak, and Charter Oak's investment in COE Development,
Exempt Projects or Intermediate Companies may take the form of
acquisitions of common stock, capital contributions, open account
advances, and/or subordinated loans (collectively,
"Investments"). Open account advances or subordinated loans
bearing interest do so at a rate based on NU's cost of funds in
effect on the date of issue, but in no case in excess of the
prime rate at a bank designated by NU.
Charter Oak may also obtain debt financing from
unaffiliated third parties, anticipated to be banks, insurance
companies, and other institutional investors ("Debt Financing"),
as long as the total of all Investments together with any Debt
Financing does not exceed the total funding authorization of
Charter Oak. The Debt Financing which Charter Oak may obtain
pursuant to this authorization may not exceed a term of 15 years
or bear a floating interest rate in excess of 6.5% over the then
applicable prime rate (the "Applicable Prime Rate") at a U.S.
money center bank to be designated by NU. Similarly, any Debt
Financing backed by NU's guarantee<F1> is limited to a term of 15
years and will have an interest rate not to exceed 6.5% over the
Applicable Prime Rate. Charter Oak may also pay commitment and
other fees not to exceed 25 basis point per annum on the total
amount of the Debt Financing.
____________________
<F1> Since the Debt Financing is included within the total
funding authorization for Charter Oak, any guarantee by
NU is not counted towards the total funding authorization
limitation.
The Applicants' authority with regard to the issuance
of guarantees and assumptions of liability is also subject to
limitations. Guarantees and assumptions of liability made for
projects requiring prior Commission approval are presently
limited to preliminary development activities and, absent
additional Commission approval, may not involve guarantees
relating to construction financing or permanent financing. The
total value of guarantees and assumptions of liability with
regard to projects requiring prior Commission approval issued
pursuant to existing authority and outstanding at any time may
not presently exceed $20 million. The term of any such guarantee
or assumption of liability may not exceed five years. Until such
time as there is no possibility of a claim against Charter Oak or
NU, the full contingent amount of any guarantees or assumptions
of liabilities count as part of the authorized development
activities limit.
The full contingent amount of guarantees and
assumptions of liability made for preliminary development
activities as well as development activities for Exempt Projects
also count as part of the authorized development activities limit
requested herein. The guarantees and assumptions of liability
relating to Exempt Projects are not, however, subject to any
other specific dollar limit except the overall authorized
development activities limit.
In addition, pursuant to the December 1994 Order,
Intermediate Companies are authorized to acquire interests in
Exempt Projects through the issuance of equity securities and
debt securities, with or without recourse to the Applicants, to
third parties, subject to certain limitations. The aggregate
principal amount of debt securities issued by Intermediate
Companies to persons other than the Applicants may not exceed
$600 million at any one time outstanding.<F2> Within the $600
____________________
<F2> To the extent that Intermediate Companies issue guarantees
of financial obligations of any other company in connection
with their authorized activities, the full contingent amount
of any such guarantees would be considered as outstanding
indebtedness for purposes of this limitation.
million authorization, the aggregate principal amount of recourse
debt may not exceed $150 million at any one time outstanding,
provided that no more than $100 million principal amount of such
debt securities at any time outstanding may be denominated in
currencies other than U.S. dollars, and the respective limitation
for non-recourse debt securities may be not more than $600
million outstanding at any one time and not more than $400
million denominated in currencies other than U.S. dollars,
provided that in any case in which the Applicants directly or
indirectly own less than all of the equity interest of an
Intermediate Company, only that portion of the recourse or non-
recourse indebtedness of such Intermediate Company equal to the
Applicants' equity ownership percentage shall be included for
purposes of the foregoing limitations.
Although the amount and type of securities issued by
Intermediate Companies, and the terms thereof, including (in the
case of any indebtedness) interest rate, maturity, prepayment or
redemption privileges, and the forms of any collateral security
granted with respect thereto, are negotiated on a case by case
basis, no equity security having a stated par value may be issued
or sold by an Intermediate Company for a consideration that is
less than such par value; and any note, bond or other evidence of
indebtedness issued or sold by any Intermediate Company will
mature not later than 30 years from the date of issuance thereof,
and will bear interest at a rate not to exceed the following:
(1) if such note, bond or other indebtedness is U.S. dollar
denominated, at a fixed rate not to exceed 6.5% over the yield to
maturity on an actively traded, non-callable, U.S. Treasury Note
having a maturity equal to the average life of such note, bond or
other indebtedness ("Applicable Treasury Rate"), or at a floating
rate not to exceed 6.5% over the Applicable Prime Rate; and (2)
if such note, bond or other indebtedness is denominated in the
currency of a country other than the United States, at a fixed or
floating rate which, when adjusted (i.e., reduced) for the
excess, if any, of the prevailing rate of inflation in such
country over the then prevailing rate of inflation in the United
States, as reported in official indices published by such country
and the United States government, would be equivalent to a rate
on a U.S. dollar denominated borrowing of identical average life
that does not exceed 10% over the Applicable Treasury Rate, as
the case may be.
Charter Oak has also been granted authority for itself
and its subsidiaries to make loans (on either a recourse or non-
recourse basis) to unaffiliated developers of Authorized Power
Projects as part of its financing of the acquisition of interests
in such projects. Such loans shall count against the overall
funding authorization.
Finally, authority has been given for Charter Oak
employees (who are employees of Northeast Utilities Service
Company) or other NU Service Company employees (collectively,
"Service Company Employees") to provide a de minimis amount of
services to affiliated Intermediate Companies, EWGs (both foreign
and domestic) and FUCOs, subject to certain limitations. Unless
otherwise authorized by the Commission or expressly permitted
under the Act, the total number of Service Company Employees
engaged in rendering such services may exceed, in the aggregate,
0.5% of the total NU holding company system's employees and no
more than 1% of the total of Service Company Employees at any one
time. In addition, unless otherwise authorized by the Commission
or expressly permitted under the Act, the provision of services
to affiliated domestic EWGs and Intermediate Companies will be
made at cost pursuant to Section 13(b) of the Act. The
Applicants may provide such services at market rates to
affiliated foreign EWGs, Foreign Intermediate Companies and
FUCOs, which are companies that do not derive, directly or
indirectly, any material part of their income from sources within
the United States and are not public-utility companies operating
in the United States.
B. Request for Modification of Authorization Regarding
Investments and Expenditures
NU and Charter Oak would like the Commission to modify
the present financing structure between NU and Charter Oak to
increase Charter Oak's funding authorization to $400 million for
the two year period from January 1, 1995 through December 31,
1996. By utilizing up to $400 million in funding over the next
two years, NU and Charter Oak will be able to make the necessary
equity investments in authorized projects while maintaining their
present level of involvement in preliminary development,
development and administrative activities. NU and Charter Oak
are seeking to increase the investment and spending limit to $400
million over the two year period, based on Charter Oak's revised
projection that its 1995-96 administrative, pre-development,
development and equity investment expenses will be approximately
$283 million. The remainder may be used for financial guarantees
as authorized. (A revised statement of estimated expenditures
for 1995-96 is attached as Exhibit H-1.) Accordingly, NU and
Charter Oak request authorization to increase the limitation on
NU's investment in Charter Oak and Charter Oak's authorized
investment in COE Development, and Charter Oak's and COE
Development's expenditures over the two year period, to $400
million from the $200 million presently authorized. As in the
previous authorization, NU's investment in Charter Oak, and
Charter Oak's investment in COE Development, Exempt Projects or
Intermediate Companies may take the form of acquisitions of
common stock, capital contributions, open account advances,
and/or subordinated loans. Open account advances or subordinated
loans bearing interest will do so at a rate based on NU's cost of
funds in effect on the date of issue, but in no case in excess of
the prime rate at a bank designated by NU. Any investment by NU
or Charter Oak in the equity securities of Charter Oak, COE
Development, Intermediate Companies or Exempt Projects that have
a stated par value will be in an amount equal or greater to such
value. The Applicants also request modification of the
permissible terms of commitment and other fees that Charter Oak
may pay in connection with Debt Financing such that they may not
exceed 50 basis points per annum on the total amount of Debt
Financing.
At March 31, 1995, the NU system's consolidated total
capitalization, stockholders' equity and retained earnings were
$6,913,254,000, $2,346,980,000 and $978,001,000, respectively.
The funding authorization sought herein is for up to $400 million
over the two year period. This could result in the investment of
up to $432 million in the aggregate by the Applicants through
December 31, 1996, which as a percentage of the NU system's
consolidated total capitalization, stockholders' equity and
retained earnings at March 31, 1995 would be 6.2%, 18.3% and
43.9%, respectively. As previously noted, NU has already
invested approximately $32 million in Charter Oak to date.
Charter Oak currently has $2.3 million invested in one qualifying
cogeneration facility in Texas, approximately $6.6 million
invested in a foreign utility company in the United Kingdom and
approximately $9 million in a FUCO project under construction in
Argentina. The balance of NU's investment on Charter Oak ($14.1
million) is largely represented by capitalized or written down
development costs. It should be noted that only investments in
and financings related to Exempt Projects and Intermediate
Companies would be made pursuant to the requested general
authority and all other investments and financings would be
submitted to the Commission for prior approval.
C. Clarification of Existing Authority
In order to clarify the extent and nature of their
authority to make loans to unaffiliated developers of Exempt
Projects, the Applicants hereby amend and restate the third
paragraph of Section D of Item 1 of their Application and
Declaration on Form U-1 as follows: Charter Oak also requests
authority for itself and its subsidiaries to make loans (on
either a recourse or non-recourse basis), to unaffiliated
developers of Exempt Projects, or with specific authorization, of
QFs and Qualified IPPs as part of its financing of the
acquisition of interests in such projects. The developer of an
Exempt Project or a QF or Qualified IPP frequently receives a
right to purchase an interest at a reduced price in that project
as part of its compensation. Charter Oak believes it will
benefit from the opportunity to become involved in such projects
through loans to such developers the proceeds of which are used
to purchase the developer's interest in the project. These loans
will enable Charter Oak and its subsidiaries to develop their
business relationships with such developers and the other
participants in the projects, to become involved with the project
itself through the developer and, potentially, to acquire an
equity interest in the project from the developer. The term of
such loans shall not exceed 15 years nor shall such loans bear
interest at a rate in excess of the quarterly interest rate
equivalent to the prime rate at Citibank N.A. If Charter Oak (or
its subsidiaries) makes any loan to such a developer, the full
outstanding amount of such loans shall count against the overall
two-year $400 million funding authorization for Charter Oak.
The Applicants also wish to clarify that Intermediate
Companies may be engaged, directly or indirectly, and exclusively
in the business of acquiring interests in, holding the securities
and financing the acquisition of Exempt Projects and in project
development activities relating to the acquisition of such
interests and securities in the underlying Exempt Projects.
Intermediate Companies may issue guarantees and assume
liabilities in connection with such activities subject to the
terms and conditions specified above with respect to Intermediate
Companies incurring recourse and non-recourse indebtedness.
D. Retained Earnings Tests of Rule 53(a)(1) and 53(b)(2)
As described above, this Application requests approval
for up to $400 million in investments by the NU system in
Intermediate Companies, Exempt Projects and certain other
independent power projects for the two year period from January
1, 1995 through December 31, 1996. Pursuant to the request the
maximum aggregate investment in EWGs, FUCOs and Intermediate
Companies by the NU system, would be no more than $432 million,
which is below fifty percent of the NU system's consolidated
retained earnings as of March 31, 1995. This level of investment
meets the criteria set forth in Sections 32 and 33 of the Act and
Rule 53(a)(1). In addition, because the average consolidated
retained earnings of the NU system have not decreased by 10
percent in the most recent four quarterly periods as compared to
the four previous quarterly periods, the Applicants are not
excluded under Rule 53(b)(2) from the safe harbor.
E. Bankruptcy Exclusion of Rule 53(b)(1)
Neither the Applicants nor any other members of the NU
registered holding company system have been the subject of a
bankruptcy or similar filing while a part of the NU system.
Public Service Company of New Hampshire entered into bankruptcy
proceedings before it was acquired by Northeast Utilities in
June, 1992. Public Service Company of New Hampshire's plan of
reorganization was confirmed by the bankruptcy court on April 20,
1990.
F. Operating Loss Limitations of Rule 53(b)(3)
Although the companies in the U.K. in which Charter Oak
invested had losses attributable to operations in the fiscal year
1994, they did not exceed 5 percent of NU's consolidated retained
earnings. The Applicants presently do not have investments in
any other operational EWGs, FUCOs or Intermediate Companies. The
Paris, Texas qualifying cogeneration facility, in which Charter
Oak has an interest, did not report losses attributable to
operations during 1994. Accordingly, the present investments of
the Applicants in EWGs, FUCOs and Intermediate Companies as well
as other power projects do not present a risk of substantial
adverse impact as described in Sections 32 and 33 of the Act and
Rule 53.
G. Compliance with Safe Harbor Provisions
The Applicants will acquire an interest in, finance the
acquisition and hold the securities of an EWG, FUCO or an
Intermediate Company as authorized by an order pursuant to this
request only if the following two conditions are met: (i) the
investment is within the $400 million authorization for the two
year period, and (ii) the investment satisfies the criteria in
Rule 53(a)(1)-(4) and (b)(1)-(3) or any rules promulgated under
Section 33 of the Act concerning the acquisition of interests in
FUCOs.
H. Maintenance of Books and Records
Charter Oak will continue to comply with Rule 53(a)(2)
and any future rules concerning the acquisition of interests in
FUCOs with regard to the maintenance of books and records in
connection with investments in EWGs, FUCOs or Intermediate
Companies authorized by this Application.
I. Reporting of Activities
Charter Oak will continue to file a report with the
Commission within sixty days of the end of each of the first
three calendar quarters. Each report will include: (1) a
description of the Exempt Project including, but not limited to,
the type, location, size/capacity, amount of investment in, and
percentage and form of ownership; (2) a balance sheet as of the
relevant quarterly reporting date; (3) a quarterly income
statement; (4) a breakdown of the amounts of recourse and non-
recourse debt securities issued to third parties by Intermediate
Companies; (5) a statement of the applicable regulatory status of
any facility that is eligible for exemption as a public-utility
under the Act; and (6) information on intercompany service
transactions involving affiliated Intermediate Companies, EWGs
and FUCOs, including (a) the name of each associate company
providing services, (b) a listing of services provided, (c) the
total dollar amount of services provided, broken down by
associate company, and (d) the aggregate outstanding amount, as
of the relevant quarterly reporting date, of all guarantees
issued by or for the account of Charter Oak or any of its
subsidiary companies formed pursuant to this application-
declaration.
Such report will also provide in reasonable detail
(pursuant to a confidential exhibit, if so requested) terms
(including interest rate and maturity and the basis for inflation
adjustment in the case of non-recourse indebtedness denominated
in any currency other than U.S. dollars) of securities issued by
any Intermediate Company to third persons.
Furthermore, Charter Oak Energy, Inc. hereby agrees to
file with the Commission, on or before May 1 of each year, an
annual report of its activities for the preceding calendar year
using, where applicable, the Form U-13-60 reporting format as
defined in Rule 94.
Item 2. FEES, COMMISSIONS AND EXPENSES
The fees, commissions and expenses of NU and Charter
Oak expected to be paid or incurred, directly or indirectly, in
connection with this Amendment are estimated as follows:
Commission filing fee
relating to Application
on Form U-1 . . . . . . . . . . . . N/A
Legal fees and expenses . . . . . . . $ 4,000
Miscellaneous related expenses
(such as telephone, courier and
travel) . . . . . . . . . . . . 1,000
Total . . . . . . . . . . . . $ 5,000
Item 3. APPLICABLE STATUTORY PROVISIONS
Sections 6(a), 7, 9(a), 10, 12(b), 32 and 33 and
Rules 45 and 53 are applicable to the Applicant's request for
modification if their financing authorization.
Item 4. REGULATORY APPROVAL
No commission, other than this Commission, has
jurisdiction over any of the proposed transactions described in
this Application. Pursuant to Rule 53(a)(4), the Applicants will
file this Application with the Connecticut Department of Public
Utility Control, the Massachusetts Department of Public Utilities
and the New Hampshire Public Utilities Commission.
Item 5. PROCEDURE
It is requested that the Commission issue and publish
no later than June 9, 1995 the requisite notice under Rule 23
with respect to the filing of this Application, such notice to
specify a date not later than July 3, 1995 as the date after
which an order granting and permitting this Application to become
effective may be entered by the Commission and that the
Commission enter not later than July 7, 1995 an appropriate order
granting and permitting this Amendment to become effective.
Applicants respectfully request that appropriate and
timely action be taken by the Commission in this matter.
Applicants hereby waive any recommended decision by a hearing
officer or by any other responsible officer of the Commission and
waive the 30-day waiting period between issuance of the
Commission's order and the date on which it is to become
effective, since it is desired that the Commission's order, when
issued, become effective forthwith. Applicants hereby consent
that the Office of Public Utility Regulation within the Division
of Investment Management may assist in the preparation of the
Commission's decision and/or order unless the Office opposes the
transactions covered by this Application.
Item 6. EXHIBITS AND FINANCIAL STATEMENTS
a) Exhibits
F-1 Opinion of Counsel
G-1 Proposed Form of Notice
H-1 Charter Oak Energy, Inc. 1995-96 Estimated
Expenditures
b) Financial Statements
1.1 Balance Sheet Actual and Pro Forma - NU
(parent only), as of March 31, 1995
1.2 Statement of Income Actual and Pro Forma - NU
(parent only), as of March 31, 1995
2.1 Balance Sheet Actual and Pro Forma -
Charter Oak consolidated, as of March 31, 1995
2.2 Statement of Income Actual and Pro Forma - Charter
Oak consolidated, as of March 31, 1995
3.1 Balance Sheet Actual and Pro Forma -
COE Development, as of March 31, 1995
3.2 Statement of Income Actual and Pro Forma - COE
Development, as of March 31, 1995
4.1 Balance Sheet Actual and Pro Forma -
NU consolidated, as of March 31, 1995
4.2 Statement of Income Actual and Pro Forma -
NU consolidated, as of March 31, 1995
Item 7. INFORMATION AS TO ENVIRONMENTAL EFFECTS
None of the matters that are the subject of this
Application involve a "major federal action" nor do they
"significantly affect the quality of the human environment" as
those terms are used in section 102(2)(C) of the National
Environmental Policy Act. None of the transactions that are the
subject of this Application will result in changes in the
operation of the Applicants that will have an impact on the
environment. The Applicants are not aware of any federal agency
which has prepared or is preparing an environmental impact
statement with respect to the transactions which are the subject
of this Application.
SIGNATURE
Pursuant to the requirements of the Public Utility
Holding Company Act of 1935, the undersigned companies have duly
caused this Amendment to be signed on their behalf by the
undersigned thereunto duly authorized.
NORTHEAST UTILITIES
CHARTER OAK ENERGY, INC.
COE DEVELOPMENT CORPORATION
By: /s/
___________________________________
William S. Lamb
LeBoeuf, Lamb, Greene & MacRae
L.L.P.
A Limited Liability Partnership
Including Professional Corporations
125 W. 55th Street
New York, NY 10019-4513
Attorney for Northeast Utilities,
Charter Oak Energy, Inc. and COE
Development Corporation
Date: June 6, 1995
Exhibit F-1
Jeffrey C. Miller
Selden Street
Berlin, Connecticut 06037
June 2, 1995
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, D.C. 10549
Gentlemen:
As Assistant General Counsel of Northeast Utilities'
(NU) subsidiary, Northeast Utilities Service Company (NUSCO), I
have acted as counsel to NU, and as counsel to its subsidiaries
Charter Oak Energy, Inc. (Charter Oak) and COE Development
Corporation (COE Development), with respect to the Application/
Declaration, as heretofore amended, and Post-Effective Amendment
No. 1 thereto (collectively, the Application) on Form U-1 to the
Securities and Exchange Commission in File No. 70-8507, seeking,
among other things, an increase in the funding for, Charter Oak
and COE Development. I am furnishing this opinion to you in
connection with the Application.
As counsel for NU, Charter Oak and COE Development in this
matter, I am generally familiar with the nature and character of
the businesses of Charter Oak and COE Development. I am a member
of the bar of New York. I am not a member of the bar of the
Commonwealth of Massachusetts, the state in which NU is
organized, nor am I a member of the bar of the State of
Connecticut, the state in which Charter Oak and COE Development
are incorporated, and I do not hold myself out as an expert in
the laws of such states, although I have made a study of such
laws and am associated with and have consulted with other counsel
to NUSCO who are expert in such laws. For purposes of this
opinion, I have relied on advice from counsel employed by NUSCO,
who are members of the bar of the Commonwealth of Massachusetts
and of the State of Connecticut.
In connection with this opinion, I have examined or
caused to be examined the Commissions' orders dated May 17, 1989
(HCA Rel. No. 35-24893), January 28, 1992 (HCA Rel. No. 35-
25461), October 16, 1992 (HCA Rel. No. 35-25655), December 29,
1992 (HCA Rel. No. 35-25721), December 30, 1992 (HCA Rel. No. 35-
25726), September 24, 1993 (HCA Rel. No. 35-25891), January 24,
1994 (HCA Rel. No. 35-25977), September 2, 1994 (HCA Rel. No. 35-
26116), September 30, 1994 (HCA Rel. No. 35-26134) and December
30, 1994 (HCA Rel. No. 35-26213), the Application and the various
exhibits thereto, the minutes of various meetings of the Board of
Trustees of NU and the Boards of Directors of Charter Oak and COE
Development, the laws of the Commonwealth of Massachusetts and
the State of Connecticut, the certificates of incorporation and
by-laws of COE Development and Charter Oak and such other
documents as I deem necessary for the purpose of this opinion. I
assume that the Board of Trustees of NU, the Boards of Directors
of Charter Oak and COE Development and the officials and other
representatives of NU, Charter Oak and COE Development will take
all further corporate action necessary to authorize and implement
certain of the transactions contemplated by the Application. I
also assume that the Securities and Exchange Commission will
issue an order under the Public Utility Holding Company Act of
1935 as requested in the Application, and that all actions taken
thereafter will be in conformity with such order.
Based on the foregoing, I am of the opinion that:
A. All state laws applicable to the transactions described
in the Application have been complied with;
B. Charter Oak and COE Development are validly organized
and duly existing;
C. When issued and sold as described in the Application,
any common stock of Charter Oak, of COE Development and of
intermediate subsidiary companies of Charter Oak, ("Intermediate
Companies") issued and sold in accordance with the Commission's
authorization of the transactions contemplated by the
Application, will be validly issued, fully paid, and non-
assessable, and the holders thereof will be entitled to the
rights and privileges appertaining thereto set forth in the
corporate documents defining such rights and privileges;
D. When acquired as described in the Application, NU will
legally acquire any common stock and other security of Charter
Oak issued and sold in accordance with the Commission's
authorization of the transactions contemplated by the
Application, and Charter Oak will legally acquire any common
stock and other security of COE Development or of Intermediate
Companies issued and sold in accordance with the Commission's
authorization of transactions contemplated by the Application and
Charter Oak, COE Development and Intermediate Companies will
legally acquire any common stock and other security of
unaffiliated developers of QFs, Exempt Projects or Qualified IPPs
issued and sold in accordance with the Commission's authorization
of the transactions contemplated by the Application;
E. When issued as described in the Application, any
evidence of indebtedness issued by Charter Oak or by Intermediate
Companies to non-affiliates, and any NU guarantee in respect
thereof, will be valid and binding obligations of Charter Oak, or
the Intermediate Company and NU, respectively, in accordance with
their terms, subject to laws of general application with respect
to rights and remedies of creditors and subject to equitable
principles;
F. When NU shall have received any necessary consents of
certain lenders as to certain transactions described in the
Application, the consummation of the proposed transactions as
described in the Application will not violate the legal rights of
any holders of securities issued by NU, Charter Oak, COE
Development, or any other existing NU subsidiary company.
I hereby consent to the use of this opinion in connection
with the filing of the Application.
Very truly yours,
/s/
Jeffrey C. Miller
SECURITIES AND EXCHANGE COMMISSION
(Release No. 35- )
Filing Under the Public Utility Holding Company Act of 1935
______________, 1995
Northeast Utilities, Charter Oak Energy, Inc. and COE Development
Corporation (70-8507)
Northeast Utilities ("NU"), 174 Brush Hill Avenue, West
Springfield, Massachusetts 01089, a registered holding company,
and its wholly owned subsidiaries, Charter Oak Energy, Inc.
("Charter Oak") and COE Development Corporation ("COE
Development"), both located at 107 Seldon Street, Berlin,
Connecticut 06037, (collectively, the "Applicants") have filed a
Post-Effective Amendment to their Application and Declaration on
Form U-1 under Sections 6(a), 7, 9(a), 10, 12(b), 32 and 33 of
the Public Utility Holding Company Act of 1935 (the "Act") and
Rules 45 and 53 thereunder, for the purpose of obtaining a
modification of the authority previously granted to the
Applicants in the Securities and Exchange Commission's (the
"Commission") order dated December 30, 1994 (HCAR. 26213; File
No. 70-8507) (the "December 1994 Order"). The Applicants are
seeking to modify this authority to set the aggregate amount that
NU is authorized to invest in Charter Oak, Charter Oak is
authorized to invest in COE Development and Charter Oak and COE
Development are authorized to spend on authorized power
development activities, at $400 million for the period from
January 1, 1995 through December 31, 1996.
Pursuant to the December 1994 Order, Charter Oak and
COE Development are presently authorized to pursue preliminary
development activities with regard to investment and
participation in QFs throughout the United States and independent
power production facilities that would constitute a part of NU's
"integrated public utility system" within the meaning of
Section 2(a)(29)(A) of the Act ("Qualified IPPs") and to provide
consulting services to such projects. Charter Oak and COE
Development may invest in QFs and Qualified IPPs after obtaining
Commission approval and may invest in, and finance the
acquisition of, EWGs and FUCOs subject to certain limitations
("Exempt Projects"). In addition, the Applicants have authority
to issue guarantees and assume the liabilities of subsidiary
companies for pre-development activities, and for both pre-
development and contingent liabilities subsequent to operation
with regard to Exempt Projects, subject to certain restrictions.
The Applicants also have been authorized to acquire
interests in, finance the acquisition, and hold the securities,
of one or more companies ("Intermediate Companies") engaged
directly or indirectly and exclusively in the business of holding
the securities of one or more EWGs and/or FUCOs and in project
development activities relating to the acquisition of such
interests and securities in the underlying projects, without
filing specific project applications with the Commission, and to
issue guarantees and assume liabilities subsequent to operation
with regard to those projects. Intermediate Companies may effect
adjustments in their ownership interests in Exempt Projects.
Intermediate Companies as well as the Applicants are also
authorized to participate in joint ventures that are in the
business of owning and developing Exempt Projects. The
Applicants may liquidate, dissolve or sell any Intermediate
Company within 45 days after the Applicants determine that the
purpose for owning such Intermediate Company no longer exists.
In addition, Intermediate Companies are authorized to
acquire interests in Exempt Projects through the issuance of
equity securities and debt securities, with or without recourse
to the Applicants, to third parties, subject to certain
limitations and to issue guarantees and assume the liabilities in
connection with such activities, subject to certain terms and
conditions.
Charter Oak has also been granted authority for itself
and its subsidiaries to make loans (on either a recourse or non-
recourse basis) to unaffiliated developers of Authorized Power
Projects as part of its financing of the acquisition of interests
in such projects. Such loans shall count against the overall
funding authorization of the Applicants.
Finally, authority has been given for Charter Oak
employees (who are employees of Northeast Utilities Service
Company) or other NU Service Company employees (collectively,
"Service Company Employees") to provide a de minimis amount of
services to affiliated Intermediate Companies, EWGs (both foreign
and domestic) and FUCOs, subject to certain limitations.
The current authorization permits NU to invest, and
Charter Oak to spend, up to an aggregate amount of $200 million
from January 1, 1995 through December 31, 1996 to finance these
activities, subject to certain restrictions. Prior to January 1,
1995, the Applicants had invested $32 million is authorized
activities, leading to an existing funding authorization of $232
million in the aggregate.
The Applicants are requesting authorization to increase
the limitation on NU's investment in Charter Oak and Charter
Oak's authorized investment in COE Development, and Charter Oak's
and COE Developments expenditures to $400 million over the two-
year period from January 1, 1995 through December 31, 1996, for
an aggregate funding authorization of $432 million. By utilizing
up to $400 million in funding over the next two years, the
Applicants state that they will be able to maintain their present
level of involvement in preliminary development, development and
administrative activities and make the necessary equity
investments. The Applicants are seeking to increase the
investment and spending limit to $400 million for the two year
period based on Charter Oak's revised projection that its 1995-96
administrative, pre-development and development expenses alone
(excluding guarantees) will be approximately $283 million. Both
the debt financing and the guarantee by NU of such debt financing
authorized by an order pursuant to this request will not exceed a
term of 15 years or bear an interest rate in excess of 6.5% over
the then applicable prime rate at a U.S. money center bank
designated by NU. The Applicants are also requesting
modification of the permissible terms of commitment and other
fees payable by Charter Oak in connection with Debt Financing
such that they may not exceed 50 basis points per annum on the
total amount of the Debt Financing instead of the 25 basis points
currently authorized.
For the Commission, by the Division of Investment
Management, pursuant to delegated authority.
Exhibit H-1
Estimate of Expenditures for Charter Oak Energy
and Subsidiaries for 1995 and 1996
in ($000)
Development Cost Equity Total
________________ ______ _____
1995 17,000 160,000 177,000
1996 16,000 90,000 106,000
______ _______ _______
TOTAL $33,000 $250,000 $283,000
Amount Available for Guarantees = $117,000
NORTHEAST UTILITIES (PARENT)
BALANCE SHEET
AS OF MARCH 31, 1995
(THOUSANDS OF DOLLARS)
FINANCIAL STATEMENT 1.1
PRO FORMA
GIVING EFFECT
PRO FORMA TO PROPOSED
PER BOOK ADJUSTMENTS TRANSACTION
ASSETS
OTHER PROPERTY AND INVESTMENTS:
INVESTMENTS IN SUBSIDIARY COMPANIES,
AT EQUITY $2,666,887 $2,666,887
INVESTMENTS IN TRANSMISSION
COMPANIES, AT EQUITY 25,996 25,996
OTHER, AT COST 257 257
---------- ---------- ----------
TOTAL OTHER PROPERTY & INVESTMENTS 2,693,140 0 2,693,140
CURRENT ASSETS:
CASH AND SPECIAL DEPOSITS 41 400,000(a) 400,041
NOTES RECEIVABLE FROM AFFILIATED CO'S 2,225 2,225
NOTES AND ACCOUNTS RECEIVABLES 0 0
ACCOUNTS RECEIVABLE FROM
AFFILIATED CO'S 907 907
PREPAYMENTS 187 187
---------- ---------- ----------
TOTAL CURRENT ASSETS 3,360 400,000 403,360
---------- ---------- ----------
DEFERRED CHARGES:
ACCUMULATED DEFERRED INCOME TAXES 8,008 8,008
UNAMORTIZED DEBT EXPENSE 25 25
OTHER 22 22
---------- ---------- ----------
TOTAL DEFERRED CHARGES 8,055 0 8,055
---------- ---------- ----------
TOTAL ASSETS $2,704,555 $400,000 $3,104,555
---------- ---------- ----------
CAPITALIZATION AND LIABILITIES
CAPITALIZATION:
COMMON SHARES $671,052 $671,052
CAPITAL SURPLUS, PAID IN 907,165 907,165
DEFERRED BENEFIT PLAN - ESOP (209,238) (209,238)
RETAINED EARNINGS 978,001 (23,400) 954,601
---------- ---------- ----------
TOTAL COMMON STOCKHOLDER'S EQUITY 2,346,980 (23,400) 2,323,580
LONG-TERM DEBT, NET 218,000 218,000
---------- ---------- ----------
TOTAL CAPITALIZATION 2,564,980 (23,400) 2,541,580
CURRENT LIABILITIES:
NOTES PAYABLE TO BANK 95,000 400,000 (a) 495,000
ACCOUNTS PAYABLE 10,198 10,198
ACCOUNTS PAYABLE TO AFFILIATED COMPANIES 1,485 1,485
CURRENT PORTION OF LONG-TERM DEBT 12,000 12,000
ACCRUED TAXES 5,128 (12,600)(c) (7,472)
ACCRUED INTEREST 5,880 36,000 (b) 41,880
OTHER 9,443 9,443
---------- ---------- ----------
TOTAL CURRENT LIABILITIES 139,134 423,400 562,534
DEFERRED CREDITS:
OTHER 441 441
---------- ---------- ----------
TOTAL DEFERRED CREDITS 441 0 441
---------- ---------- ----------
TOTAL CAPITALIZATION AND
LIABILITIES $2,704,555 $400,000 $3,104,555
---------- ---------- ----------
DEBIT CREDIT
(a) CASH $400,000
NOTES PAYABLE $400,000
To record the additional proposed
borrowing up to the full $400 million
requested.
This is illustative only since
short term debt authoritation would
not allow borowing of this amount.
(b) OTHER INTEREST EXPENSE 36,000
ACCRUED INTEREST 36,000
To record the interest expense on the
additional proposed borrowing at Prime:
$400,000 x 9.00% = 36,000
(c) ACCRUED TAXES 12,600
FEDERAL AND STATE INCOME TAX EXPENSE 12,600
To record the reduction in Federal and State
income taxes due to the higher interest and
fee expenses:
$36,000 x 35.00% = 12,600
NORTHEAST UTILITIES (PARENT)
INCOME STATEMENT
FOR 12 MONTHS ENDED MARCH 31, 1995
(THOUSANDS OF DOLLARS)
FINANCIAL STATEMENT 1.2
PRO FORMA
GIVING EFFECT
PRO FORMA TO PROPOSED
PER BOOK ADJUSTMENTS TRANSACTION
OPERATING REVENUE $0 $0 $0
---------- ---------- ----------
OPERATING EXPENSES:
OPERATION EXPENSE 12,327 12,327
FEDERAL AND STATE INCOME TAXES (11,017) (12,600)(b) (23,617)
TAXES OTHER THAN INCOME TAXES 33 33
---------- ---------- ----------
TOTAL OPERATING EXPENSES 1,343 (12,600) (11,257)
---------- ---------- ----------
OPERATING INCOME (1,343) 12,600 11,257
---------- ---------- ----------
OTHER INCOME:
EQUITY IN EARNINGS OF SUBSIDIARIES 300,218 300,218
EQUITY IN EARNINGS OF TRANSMISSION
COMPANIES 3,360 3,360
OTHER, NET 326 326
---------- ---------- ----------
OTHER INCOME, NET 303,904 0 303,904
---------- ---------- ----------
INCOME BEFORE INTEREST CHARGES 302,561 12,600 315,161
---------- ---------- ----------
INTEREST CHARGES:
INTEREST ON LONG-TERM DEBT 20,279 20,279
OTHER INTEREST 5,012 36,000 (a) 41,012
---------- ---------- ----------
TOTAL INTEREST CHARGES 25,291 36,000 61,291
---------- ---------- ----------
NET INCOME 277,270 (23,400) 253,870
---------- ---------- ----------
EARNINGS FOR COMMON SHARES 277,270 (23,400) 253,870
EARNINGS PER COMMON SHARE 2.22 2.03
COMMON SHARES OUTSTANDING (AVERAGE) 124,864,613 124,864,613
<TABLE>
NORTHEAST UTILITIES (PARENT)
CAPITAL STRUCTURE AS OF MARCH 31, 1995
(THOUSANDS OF DOLLARS)
<CAPTION>
PER BOOK
ADJUSTED TO
PRO FORMA REFLECT
% PER BOOK ADJUSTMENT PRO FORMA %
<S> <C> <C> <C> <C> <C>
DEBT:
LONG-TERM DEBT, NET $230,000 $230,000
---------- ---------- ----------
TOTAL DEBT 8.9% 230,000 0 230,000 9.0%
COMMON EQUITY:
COMMON SHARES 671,052 671,052
CAPITAL SURPLUS, PAID IN 907,165 907,165
DEFERRED BENEFIT PLAN - ESOP (209,238) (209,238)
RETAINED EARNINGS 978,001 (23,400) 954,601
---------- ---------- ----------
TOTAL COMMON STOCKHOLDER'S EQUITY 91.1% 2,346,980 (23,400) 2,323,580 91.0%
---------- ---------- ----------
TOTAL CAPITAL 100.0% $2,576,980 (23,400) $2,553,580 100.0%
</TABLE>
DEBITS CREDITS
(a) OTHER INTEREST EXPENSE 36,000
ACCRUED INTEREST 36,000
To record the interest expense on the
additional proposed borrowing at Prime:
$400,000 x 9.00% = 36,000
(b) ACCRUED TAXES 12,600
FEDERAL AND STATE INCOME TAX EXPENSE 12,600
To record the reduction in Federal and State
income taxes due to the higher interest and
fee expenses:
$36,000 x 35.00% = 12,600
CHARTER OAK ENERGY, INC AND SUBSIDIARIES
BALANCE SHEET
AS OF MARCH 31, 1995
(THOUSANDS OF DOLLARS)
FINANCIAL STATEMENT 2.1
PRO FORMA
GIVING EFFECT
PRO FORMA TO PROPOSED
PER BOOK ADJUSTMENTS TRANSACTION
ASSETS
UTILITY PLANT, AT ORIGINAL COST:
ELECTRIC $52 $52
OTHER 0 0
---------- ---------- ----------
52 0 52
LESS: ACCUMULATED PROVISION FOR
DEPRECIATION 46 46
---------- ---------- ----------
6 0 6
CONSTRUCTION WORK IN PROGRESS 0 0
---------- ---------- ----------
TOTAL NET UTILITY PLANT 6 0 6
OTHER INVESTMENTS, AT COST 15,419 15,419
CURRENT ASSETS:
CASH 479 400,000 (a) 400,479
TAX RECEIVABLES 0 0
RECEIVABLES FROM AFFILIATES 0 0
MATERIALS & SUPPLIES, AT AVERAGE COST 0 0
PREPAYMENTS AND OTHER 0 0
---------- ---------- ----------
TOTAL CURRENT ASSETS 479 400,000 400,479
---------- ---------- ----------
DEFERRED CHARGES 4,126 4,126
---------- ---------- ----------
TOTAL ASSETS $20,030 $400,000 $420,030
---------- ---------- ----------
CAPITALIZATION AND LIABILITIES
CAPITALIZATION:
COMMMON SHARES $0 $0
CAPITAL SURPLUS, PAID IN 31,367 400,000 (a) 431,367
RETAINED EARNINGS (12,859) (12,859)
---------- ---------- ----------
TOTAL COMMON STOCKHOLDER'S EQUITY 18,508 400,000 418,508
DEBT, NET 0 0
---------- ---------- ----------
TOTAL CAPITALIZATION 18,508 400,000 418,508
MINORITY INTEREST IN COMMON EQUITY
OF SUBSIDIARIES 60 60
CURRENT LIABILITIES:
NOTES PAYABLE TO AFFILIATED COMPANY 0 0 0
ACCOUNTS PAYABLE 555 555
ACCOUNTS PAYABLE TO AFFILIATES 374 374
ACCRUED TAXES 375 375
ACCRUED INTEREST 0 0
OTHER 158 158
---------- ---------- ----------
TOTAL CURRENT LIABILITIES 1,462 0 1,462
---------- ---------- ----------
ACCUMULATED DEFERRED INCOME TAXES 0 0
---------- ---------- ----------
TOTAL CAPITALIZATION AND
LIABILITIES $20,030 $400,000 $420,030
DEBITS CREDITS
(a) CASH $400,000
CAPITAL SURPLUS, PAID IN $400,000
To reflect a $400 million investment by NU (parent) in Charter
Oak Energy in 1995 and 1996.
CHARTER OAK ENERGY, INC AND SUBSIDIARIES
INCOME STATEMENT
FOR 12 MONTHS ENDED MARCH 31, 1995
(THOUSANDS OF DOLLARS)
FINANCIAL STATEMENT 2.2
PRO FORMA
GIVING EFFECT
PRO FORMA TO PROPOSED
PER BOOK ADJUSTMENTS TRANSACTION
OPERATING REVENUE $0 $0 $0
---------- ---------- ----------
OPERATING EXPENSES:
OPERATION AND MAINTENANCE 8,082 8,082
DEPRECIATION 668 668
FEDERAL AND STATE INCOME TAXES (3,045) (3,045)
TAXES OTHER THAN INCOME TAXES 24 24
---------- ---------- ----------
TOTAL OPERATING EXPENSES 5,729 0 5,729
---------- ---------- ----------
OPERATING INCOME: (5,729) 0 (5,729)
---------- ---------- ----------
OTHER INCOME:
INVESTMENT INCOME 1,605 1,605
OTHER INCOME, NET 52 52
INCOME TAXES - CREDIT 0 0
---------- ---------- ----------
OTHER INCOME, NET 1,657 0 1,657
---------- ---------- ----------
INCOME BEFORE INTEREST CHARGES (4,072) 0 (4,072)
---------- ---------- ----------
INTEREST CHARGES:
OTHER INTEREST, NET 7 7
---------- ---------- ----------
TOTAL INTEREST CHARGES 7 0 7
---------- ---------- ----------
MINORITY INTEREST IN EARNINGS
IN SUBSIDIARIES 0 0
NET INCOME (4,079) 0 (4,079)
<TABLE>
CHARTER OAK ENERGY, INC AND SUBSIDIARIES
CAPITAL STRUCTURE ON MARCH 31, 1995
(THOUSANDS OF DOLLARS)
<CAPTION>
<S> <C> <C> <C> <C> <C>
PER BOOK
ADJUSTED TO
PRO FORMA REFLECT
% PER BOOK ADJUSTMENT PRO FORMA %
LONG-TERM DEBT 0.0% $0 $0 0.0%
COMMON SHARES 0 0
CAPITAL SURPLUS, PAID IN 31,367 400,000 431,367
RETAINED EARNINGS (12,859) 0 (12,859)
---------- ---------- ----------
TOTAL COMMON STOCKHOLDER EQUITY 100.0% 18,508 400,000 418,508 100.0%
---------- ---------- ----------
TOTAL CAPITAL 100.0% 18,508 400,000 418,508 100.0%
</TABLE>
COE DEVELOPMENT CORPORATION
BALANCE SHEET
AS OF MARCH 31, 1995
(THOUSANDS OF DOLLARS)
FINANCIAL STATEMENT 3.1
PRO FORMA
GIVING EFFECT
PRO FORMA TO PROPOSED
PER BOOK ADJUSTMENTS TRANSACTION
ASSETS
UTILITY PLANT, AT ORIGINAL COST:
ELECTRIC $11 $11
OTHER 0 0
---------- ---------- ----------
11 0 11
LESS: ACCUMULATED PROVISION FOR
DEPRECIATION 5 5
---------- ---------- ----------
6 0 6
CONSTRUCTION WORK IN PROGRESS 0 0
---------- ---------- ----------
TOTAL NET UTILITY PLANT 6 0 6
OTHER INVESTMENTS, AT COST 9,000 9,000
CURRENT ASSETS:
CASH 0 400,000 (a) 400,000
TAX RECEIVABLES 355 355
RECEIVABLES FROM AFFILIATES 1,172 1,172
MATERIALS & SUPPLIES, AT AVERAGE COST 0 0
PREPAYMENTS AND OTHER 0 0
---------- ---------- ----------
TOTAL CURRENT ASSETS 1,527 400,000 401,527
---------- ---------- ----------
DEFERRED CHARGES 1,366 1,366
---------- ---------- ----------
TOTAL ASSETS $11,899 $400,000 $411,899
CAPITALIZATION AND LIABILITIES
CAPITALIZATION:
COMMMON SHARES $0 $0
CAPITAL SURPLUS, PAID IN 19,260 400,000 (a) 419,260
RETAINED EARNINGS (8,215) (8,215)
---------- ---------- ----------
TOTAL COMMON STOCKHOLDER'S EQUITY 11,045 400,000 411,045
DEBT, NET 0 0
---------- ---------- ----------
TOTAL CAPITALIZATION 11,045 400,000 411,045
MINORITY INTEREST IN COMMON EQUITY
OF SUBSIDIARIES 0 0
CURRENT LIABILITIES:
NOTES PAYABLE TO AFFILIATED COMPANY 0 0 0
ACCOUNTS PAYABLE 463 463
ACCOUNTS PAYABLE TO AFFILIATES 246 246
ACCRUED TAXES 16 16
ACCRUED INTEREST 0 0
OTHER 129 129
---------- ---------- ----------
TOTAL CURRENT LIABILITIES 854 0 854
---------- ---------- ----------
ACCUMULATED DEFERRED INCOME TAXES 0 0
---------- ---------- ----------
TOTAL CAPITALIZATION AND
LIABILITIES $11,899 $400,000 $411,899
---------- ---------- ----------
DEBITS CREDITS
(a) CASH $400,000
CAPITAL SURPLUS, PAID IN $400,000
To reflect a $400 million investment by Charter Oak Energy in COE
Development Corporation in 1995 and 1996.
COE DEVELOPMENT CORPORATION
INCOME STATEMENT
FOR 12 MONTHS ENDED MARCH 31,1995
(THOUSANDS OF DOLLARS)
FINANCIAL STATEMENT 3.2
PRO FORMA
GIVING EFFECT
PRO FORMA TO PROPOSED
PER BOOK ADJUSTMENTS TRANSACTION
OPERATING REVENUE $0 $0 $0
---------- ---------- ----------
OPERATING EXPENSES:
OPERATION AND MAINTENANCE 7,128 7,128
DEPRECIATION 3 3
FEDERAL AND STATE INCOME TAXES (3,036) (3,036)
TAXES OTHER THAN INCOME TAXES 0 0
---------- ---------- ----------
TOTAL OPERATING EXPENSES 4,095 0 4,095
---------- ---------- ----------
OPERATING INCOME: (4,095) 0 (4,095)
---------- ---------- ----------
OTHER INCOME:
INVESTMENT INCOME 0 0
OTHER INCOME, NET 0 0
INCOME TAXES - CREDIT 0 0
---------- ---------- ----------
OTHER INCOME, NET 0 0 0
---------- ---------- ----------
INCOME BEFORE INTEREST CHARGES (4,095) 0 (4,095)
---------- ---------- ----------
INTEREST CHARGES:
OTHER INTEREST, NET 0 0
---------- ---------- ----------
TOTAL INTEREST CHARGES 0 0 0
---------- ---------- ----------
MINORITY INTEREST IN EARNINGS
IN SUBSIDIARIES 0 0
NET INCOME (4,095) 0 (4,095)
<TABLE>
COE DEVELOPMENT CORPORATION
CAPITAL STRUCTURE ON MARCH 31,1995
(THOUSANDS OF DOLLARS)
<CAPTION>
PER BOOK
ADJUSTED TO
PRO FORMA REFLECT
% PER BOOK ADJUSTMENT PRO FORMA %
<S> <C> <C> <C> <C> <C>
LONG-TERM DEBT 0.0% $0 $0 0.0%
COMMON SHARES 0 0
CAPITAL SURPLUS, PAID IN 19,260 400,000 419,260
RETAINED EARNINGS (8,215) 0 (8,215)
---------- ---------- ----------
TOTAL COMMON STOCKHOLDER EQUITY 100.0% 11,045 400,000 411,045 100.0%
---------- ---------- ----------
TOTAL CAPITAL 100.0% 11,045 400,000 411,045 100.0%
</TABLE>
NORTHEAST UTILITIES AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
AS OF MARCH 31,1995
(THOUSANDS OF DOLLARS)
FINANCIAL STATEMENT 4.1
PRO FORMA
GIVING EFFECT
PRO FORMA TO PROPOSED
PER BOOK ADJUSTMENTS TRANSACTION
ASSETS
UTILITY PLANT, AT ORIGINAL COST:
ELECTRIC & OTHER $9,514,563 $9,514,563
LESS: ACCUMULATED PROVISION FOR
DEPRECIATION 3,383,124 3,383,124
---------- ---------- ----------
6,131,439 0 6,131,439
CONSTRUCTION WORK IN PROGRESS 194,959 194,959
NUCLEAR FUEL, NET 212,972 212,972
---------- ---------- ----------
TOTAL NET UTILITY PLANT 6,539,370 0 6,539,370
---------- ---------- ----------
OTHER PROPERTY AND INVESTMENTS:
NUCLEAR DECOMMISSIONING TRUST,
AT MARKET 261,919 261,919
INVESTMENTS IN REGIONAL NUCLEAR
GENERATING COMPANIES, AT EQUITY 81,478 81,478
INVESTMENTS IN TRANSMISSION COMPANIES,
AT EQUITY 25,996 25,996
OTHER, AT COST 48,836 48,836
---------- ---------- ----------
418,229 0 418,229
---------- ---------- ----------
CURRENT ASSETS:
CASH AND SPECIAL DEPOSITS 24,718 400,000 (a) 424,718
RECEIVABLES, NET 360,605 360,605
RECEIVABLES FROM AFFILIATED COMPANIES 0 0
ACCRUED UTILITY REVENUES 131,038 131,038
FUEL, MATERIAL AND SUPPLIES, AT
AVERAGE COST 195,905 195,905
RECOVERABLE ENERGY COSTS,
NET-CURRENT POSITION 0 0
PREPAYMENTS AND OTHER 53,125 53,125
---------- ---------- ----------
TOTAL CURRENT ASSETS 765,391 400,000 1,165,391
---------- ---------- ----------
DEFERRED CHARGES:
REGULATORY ASSET-INCOME TAXES, NET 1,135,945 1,135,945
REGULATORY ASSET-PSNH 656,458 656,458
UNAMORTIZED DEBT EXPENSE 37,524 37,524
RECOVERABLE ENERGY COSTS, NET 293,583 293,583
DEFERRED CONSERVATION AND LOAD-
MANAGEMENT COSTS 112,014 112,014
DEFERRED COSTS - NUCLEAR PLANTS 218,700 218,700
UNRECOVERED CONTRACT OBLIGATION-YAEC 152,593 152,593
OTHER 214,217 214,217
---------- ---------- ----------
TOTAL DEFERRED CHARGES 2,821,034 0 2,821,034
---------- ---------- ----------
TOTAL ASSETS $10,544,024 $400,000 $10,944,024
---------- ---------- ----------
CAPITALIZATION AND LIABILITIES
CAPITALIZATION:
COMMON SHARES $671,052 $671,052
CAPITAL SURPLUS, PAID IN 907,165 907,165
DEFERRED BENEFIT PLAN-EMPLOYEE STOCK
OWNERSHIP PLAN (209,238) (209,238)
RETAINED EARNINGS 978,001 (23,400) 954,601
---------- ---------- ----------
TOTAL COMMON STOCKHOLDER'S EQUITY 2,346,980 (23,400) 2,323,580
PREFERRED STOCK NOT SUBJECT TO
MANDATORY REDEMPTION 169,700 169,700
PREFERRED STOCK SUBJECT TO MANDATORY
REDEMPTION 306,250 306,250
LONG-TERM DEBT, NET 3,914,499 3,914,499
---------- ---------- ----------
TOTAL CAPITALIZATION 6,737,429 (23,400) 6,714,029
MINORITY INTEREST IN CONSOLIDATED
SUBSIDARY 100,060 100,060
OBLIGATIONS UNDER CAPITAL LEASES 175,433 175,433
CURRENT LIABILITIES:
NOTES PAYABLE TO BANKS 123,000 400,000 (a) 523,000
COMMERCIAL PAPER 0 0
LONG-TERM DEBT AND PREFERRED STOCK -
CURRENT PORTION 175,825 175,825
OBLIGATIONS UNDER CAPITAL LEASES -
CURRENT PORTION 68,388 68,388
ACCOUNTS PAYABLE 218,840 218,840
ACCOUNTS PAYABLE TO AFFILIATED
COMPANIES 0 0
ACCRUED TAXES 84,779 (12,600)(c) 72,179
ACCRUED INTEREST 85,010 36,000 (b) 121,010
ACCRUED PENSION BENEFITS 90,221 90,221
OTHER 88,063 88,063
---------- ---------- ----------
TOTAL CURRENT LIABILITIES 934,126 423,400 1,357,526
DEFERRED CREDITS:
ACCUMULATED DEFERRED INCOME TAXES 2,006,133 2,006,133
ACCUMULATED DEFERRED INVESTMENT
TAX CREDITS 185,328 185,328
DEFERRED CONTRACT OBLIGATION-YAEC 152,593 152,593
OTHER 252,922 252,922
---------- ---------- ----------
TOTAL DEFERRED CREDITS 2,596,976 0 2,596,976
---------- ---------- ----------
TOTAL CAPITALIZATION AND
LIABILITIES $10,544,024 $400,000 $10,944,024
---------- ---------- ----------
DEBITS CREDITS
(a) CASH $400,000
NOTES PAYABLE $400,000
To record the additional proposed borrowing
up to the full $200 million requested
(b) OTHER INTEREST EXPENSE 36,000
ACCRUED INTEREST 36,000
To record the interest expense on the
additional proposed borrowing at Prime:
$400,000 x 9.00% = 36,000
(c) ACCRUED TAXES 12,600
FEDERAL AND STATE INCOME TAX EXPENSE 12,600
To record the reduction in Federal and State
income taxes due to the higher interest and
fee expenses:
$36,000 x 35.00% = 12,600
NOTE: The prime rate and tax rate reflected
above represent the current rates in effect
as of the filing date.
NORTHEAST UTILITIES AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENT
FOR 12 MONTHS ENDED MARCH 31, 1995
(THOUSANDS OF DOLLARS)
FINANCIAL STATEMENT 4.2
PRO FORMA
GIVING EFFECT
PRO FORMA TO PROPOSED
PER BOOK ADJUSTMENTS TRANSACTION
OPERATING REVENUE $3,621,272 $0 $3,621,272
---------- ---------- ----------
OPERATING EXPENSES:
OPERATION -
FUEL PURCHASED AND INTERCHANGE
POWER 844,489 844,489
OTHER 925,424 925,424
MAINTENANCE 297,937 297,937
DEPRECIATION 339,366 339,366
AMORTIZATION/DEFERRALS OF REGULATORY
ASSETS, NET 140,080 140,080
FEDERAL AND STATE INCOME TAXES 273,909 (12,600)(b) 261,309
TAXES OTHER THAN INCOME TAXES 245,707 245,707
---------- ---------- ----------
TOTAL OPERATING EXPENSES 3,066,912 (12,600) 3,054,312
---------- ---------- ----------
OPERATING INCOME: 554,360 12,600 566,960
---------- ---------- ----------
OTHER INCOME:
DEFERRED NUCLEAR PLANTS RETURN-OTHER
FUNDS 24,703 24,703
EQUITY IN EARNINGS OF REGIONAL NUCLEAR
GENERATING COMPANIES 13,399 13,399
WRITE OFF OF PLANT COSTS 0 0
OTHER, NET 412 412
INCOME TAXES - CREDIT 17,594 17,594
---------- ---------- ----------
OTHER INCOME, NET 56,108 0 56,108
---------- ---------- ----------
INCOME BEFORE INTEREST CHARGES 610,468 12,600 623,068
---------- ---------- ----------
INTEREST CHARGES:
INTEREST ON LONG-TERM DEBT 315,340 315,340
OTHER INTEREST 8,976 36,000 (a) 44,976
DEFERRED NUCLEAR PLANTS RETURN -
BORROWED FUNDS, NET OF INCOME TAX (37,630) (37,630)
---------- ---------- ----------
TOTAL INTEREST CHARGES 286,686 36,000 322,686
---------- ---------- ----------
INCOME BEFORE PREFERRED DIVIDENDS 323,782 (23,400) 300,382
PREFERRED DIVIDENDS OF SUBSIDIARIES 46,512 46,512
---------- ---------- ----------
NET INCOME 277,270 (23,400) 253,870
EARNINGS FOR COMMON SHARE 277,270 (23,400) 253,870
EARNINGS PER COMMON SHARE 2.22 2.03
COMMON SHARES OUTSTANDING (AVERAGE) 124,864,613 124,864,613
<TABLE>
NORTHEAST UTILITIES AND SUBSIDIARIES
CAPITAL STRUCTURE AS OF MARCH 31,1995
(THOUSANDS OF DOLLARS)
<CAPTION>
PER BOOK
ADJUSTED TO
PRO FORMA REFLECT
% PER BOOK ADJUSTMENT PRO FORMA %
<S> <C> <C> <C> <C> <C>
DEBT:
LONG-TERM DEBT, NET 59.1% $4,088,824 0 $4,088,824 59.3%
PREFERRED STOCK:
NOT SUBJECT TO REDEMPTION 171,200 171,200
SUBJECT TO REDEMPTION 306,250 306,250
---------- ---------- ----------
TOTAL PREFERRED STOCK 6.9% 477,450 0 477,450 6.9%
COMMON EQUITY:
COMMON SHARES 671,052 671,052
CAPITAL SURPLUS, PAID IN 907,165 907,165
DEFERRED BENEFIT PLAN-EMPLOYEE
STOCK OWNERSHIP PLAN (209,238) (209,238)
RETAINED EARNINGS 978,001 (23,400) 954,601
---------- ---------- ----------
TOTAL COMMON STOCKHOLDER'S EQUITY 34.0% 2,346,980 (23,400) 2,323,580 33.7%
---------- ---------- ----------
TOTAL CAPITAL 100.0% $6,913,254 (23,400) $6,889,854 100.0%
</TABLE>
DEBITS CREDITS
(a) OTHER INTEREST EXPENSE 36,000
ACCRUED INTEREST 36,000
To record the interest expense on the
additional proposed borrowing at Prime:
$400,000 x 9.00% = 36,000
(b) ACCRUED TAXES 12,600
FEDERAL AND STATE INCOME TAX EXPENSE 12,600
To record the reduction in Federal and State
income taxes due to the higher interest and
fee expenses:
$36,000 x 35.00% = 12,600
NOTE: The prime rate and tax rate reflected
above represent the current rates in effect
as of the filing date.
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> OPUR1
<CIK> 0000072741
<NAME> NORTHEAST UTILITIES (PARENT)
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 3-MOS
<FISCAL-YEAR-END> DEC-31-1995 DEC-31-1995
<PERIOD-END> MAR-31-1995 MAR-31-1995
<BOOK-VALUE> PER-BOOK PRO-FORMA
<TOTAL-NET-UTILITY-PLANT> 0 0
<OTHER-PROPERTY-AND-INVEST> 2,693,140 2,693,140
<TOTAL-CURRENT-ASSETS> 3,360 403,360
<TOTAL-DEFERRED-CHARGES> 8,055 8,055
<OTHER-ASSETS> 0 0
<TOTAL-ASSETS> 2,704,555 3,104,555
<COMMON> 671,052 671,052
<CAPITAL-SURPLUS-PAID-IN> 907,165 907,165
<RETAINED-EARNINGS> 978,001 954,601
<TOTAL-COMMON-STOCKHOLDERS-EQ> 2,346,980 2,323,580
0 0
0 0
<LONG-TERM-DEBT-NET> 218,000 218,000
<SHORT-TERM-NOTES> 95,000 495,000
<LONG-TERM-NOTES-PAYABLE> 0 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0 0
<LONG-TERM-DEBT-CURRENT-PORT> 12,000 12,000
0 0
<CAPITAL-LEASE-OBLIGATIONS> 0 0
<LEASES-CURRENT> 0 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 32,575 55,975
<TOT-CAPITALIZATION-AND-LIAB> 2,704,555 3,104,555
<GROSS-OPERATING-REVENUE> 0 0
<INCOME-TAX-EXPENSE> (11,017) (23,617)
<OTHER-OPERATING-EXPENSES> 12,360 12,360
<TOTAL-OPERATING-EXPENSES> 1,343 (11,257)
<OPERATING-INCOME-LOSS> (1,343) 11,257
<OTHER-INCOME-NET> 303,904 303,904
<INCOME-BEFORE-INTEREST-EXPEN> 302,561 315,161
<TOTAL-INTEREST-EXPENSE> 25,291 61,291
<NET-INCOME> 277,270 253,870
0 0
<EARNINGS-AVAILABLE-FOR-COMM> 277,270 253,870
<COMMON-STOCK-DIVIDENDS> 220,062 220,062
<TOTAL-INTEREST-ON-BONDS> 20,279 20,279
<CASH-FLOW-OPERATIONS> 0 0
<EPS-PRIMARY> 2.22 2.03
<EPS-DILUTED> 2.22 2.03
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> OPUR1
<CIK> 0000888707
<NAME> CHARTER OAK ENERGY, INC.
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 3-MOS
<FISCAL-YEAR-END> DEC-31-1995 DEC-31-1995
<PERIOD-END> MAR-31-1995 MAR-31-1995
<BOOK-VALUE> PER-BOOK PRO-FORMA
<TOTAL-NET-UTILITY-PLANT> 6 6
<OTHER-PROPERTY-AND-INVEST> 15,419 15,419
<TOTAL-CURRENT-ASSETS> 479 400,479
<TOTAL-DEFERRED-CHARGES> 4,126 4,126
<OTHER-ASSETS> 0 0
<TOTAL-ASSETS> 20,030 420,030
<COMMON> 0 0
<CAPITAL-SURPLUS-PAID-IN> 31,367 431,367
<RETAINED-EARNINGS> (12,859) (12,859)
<TOTAL-COMMON-STOCKHOLDERS-EQ> 18,508 418,508
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> 1,522 1,522
<TOT-CAPITALIZATION-AND-LIAB> 20,030 420,030
<GROSS-OPERATING-REVENUE> 0 0
<INCOME-TAX-EXPENSE> (3,045) (3,045)
<OTHER-OPERATING-EXPENSES> 8,774 8,774
<TOTAL-OPERATING-EXPENSES> 5,729 5,729
<OPERATING-INCOME-LOSS> (5,729) (5,729)
<OTHER-INCOME-NET> 1,657 1,657
<INCOME-BEFORE-INTEREST-EXPEN> (4,072) (4,072)
<TOTAL-INTEREST-EXPENSE> 7 7
<NET-INCOME> (4,079) (4,079)
0 0
<EARNINGS-AVAILABLE-FOR-COMM> (4,079) (4,079)
<COMMON-STOCK-DIVIDENDS> 0 0
<TOTAL-INTEREST-ON-BONDS> 0 0
<CASH-FLOW-OPERATIONS> 0 0
<EPS-PRIMARY> 0.00 0.00
<EPS-DILUTED> 0.00 0.00
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> OPUR1
<CIK> 0000906614
<NAME> CHARTER OAK DEVELOPMENT CORPORATION
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 3-MOS
<FISCAL-YEAR-END> DEC-31-1995 DEC-31-1995
<PERIOD-END> MAR-31-1995 MAR-31-1995
<BOOK-VALUE> PER-BOOK PRO-FORMA
<TOTAL-NET-UTILITY-PLANT> 6 6
<OTHER-PROPERTY-AND-INVEST> 9,000 9,000
<TOTAL-CURRENT-ASSETS> 1,527 401,527
<TOTAL-DEFERRED-CHARGES> 1,366 1,366
<OTHER-ASSETS> 0 0
<TOTAL-ASSETS> 11,899 411,899
<COMMON> 0 0
<CAPITAL-SURPLUS-PAID-IN> 19,260 419,260
<RETAINED-EARNINGS> (8,215) (8,215)
<TOTAL-COMMON-STOCKHOLDERS-EQ> 11,045 411,045
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> 854 854
<TOT-CAPITALIZATION-AND-LIAB> 11,899 411,899
<GROSS-OPERATING-REVENUE> 0 0
<INCOME-TAX-EXPENSE> (3,036) (3,036)
<OTHER-OPERATING-EXPENSES> 7,131 7,131
<TOTAL-OPERATING-EXPENSES> 4,095 4,095
<OPERATING-INCOME-LOSS> (4,095) (4,095)
<OTHER-INCOME-NET> 0 0
<INCOME-BEFORE-INTEREST-EXPEN> (4,095) (4,095)
<TOTAL-INTEREST-EXPENSE> 0 0
<NET-INCOME> (4,095) (4,095)
0 0
<EARNINGS-AVAILABLE-FOR-COMM> (4,095) (4,095)
<COMMON-STOCK-DIVIDENDS> 0 0
<TOTAL-INTEREST-ON-BONDS> 0 0
<CASH-FLOW-OPERATIONS> 0 0
<EPS-PRIMARY> 0.00 0.00
<EPS-DILUTED> 0.00 0.00
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> OPUR1
<CIK> 0000072741
<NAME> NORTHEAST UTILITIES AND SUBSIDIARIES
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 3-MOS
<FISCAL-YEAR-END> DEC-31-1995 DEC-31-1995
<PERIOD-END> MAR-31-1995 MAR-31-1995
<BOOK-VALUE> PER-BOOK PRO-FORMA
<TOTAL-NET-UTILITY-PLANT> 6,539,370 6,539,370
<OTHER-PROPERTY-AND-INVEST> 418,229 418,229
<TOTAL-CURRENT-ASSETS> 765,391 1,165,391
<TOTAL-DEFERRED-CHARGES> 2,821,034 2,821,034
<OTHER-ASSETS> 0 0
<TOTAL-ASSETS> 10,544,024 10,944,024
<COMMON> 671,052 671,052
<CAPITAL-SURPLUS-PAID-IN> (209,238) (209,238)
<RETAINED-EARNINGS> 978,001 954,601
<TOTAL-COMMON-STOCKHOLDERS-EQ> 2,346,980 2,323,580
169,700 169,700
306,250 306,250
<LONG-TERM-DEBT-NET> 3,914,499 3,914,499
<SHORT-TERM-NOTES> 123,000 523,000
<LONG-TERM-NOTES-PAYABLE> 0 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0 0
<LONG-TERM-DEBT-CURRENT-PORT> 174,325 174,325
1,500 1,500
<CAPITAL-LEASE-OBLIGATIONS> 175,825 175,825
<LEASES-CURRENT> 68,388 68,388
<OTHER-ITEMS-CAPITAL-AND-LIAB> 3,263,557 3,286,957
<TOT-CAPITALIZATION-AND-LIAB> 10,544,024 10,944,024
<GROSS-OPERATING-REVENUE> 3,621,272 3,621,272
<INCOME-TAX-EXPENSE> 273,909 261,309
<OTHER-OPERATING-EXPENSES> 2,793,003 2,793,003
<TOTAL-OPERATING-EXPENSES> 3,066,912 3,054,312
<OPERATING-INCOME-LOSS> 554,360 566,960
<OTHER-INCOME-NET> 56,108 56,108
<INCOME-BEFORE-INTEREST-EXPEN> 610,468 623,068
<TOTAL-INTEREST-EXPENSE> 286,686 322,686
<NET-INCOME> 323,782 300,382
46,512 46,512
<EARNINGS-AVAILABLE-FOR-COMM> 277,270 253,870
<COMMON-STOCK-DIVIDENDS> 220,062 220,062
<TOTAL-INTEREST-ON-BONDS> 315,340 315,340
<CASH-FLOW-OPERATIONS> 0 0
<EPS-PRIMARY> 2.22 2.03
<EPS-DILUTED> 2.22 2.03
</TABLE>
