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Previous: NABI /DE/, 424B3, 1996-12-05 |
Next: NORWEST CORP, S-4, 1996-12-05 |
M
File No. 70-8959
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 1
to
Form U-1
APPLICATION/DECLARATION WITH RESPECT TO THE ORGANIZATION
OF A WHOLLY OWNED SUBSIDIARY RELATED TO AN ACCOUNTS RECEIVABLE
PURCHASE AND SALE PROGRAM AND RELATED TRANSACTIONS
under
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
WESTERN MASSACHUSETTS ELECTRIC COMPANY
174 Brush Hill Avenue
West Springfield, Massachusetts 01089
(Name of companies filing this statement and address of
principal executive office)
NORTHEAST UTILITIES
(Name of top registered holding company parent of declarant)
Robert P. Wax, Esq.
Vice President, Secretary and General Counsel
Northeast Utilities Service Company
P.O. Box 270
Hartford, CT 06141-0270
(Name and address of agent for service)
The Commission is requested to mail signed copies of all
orders, notices, and communications to
David R. McHale, Esq. Jeffrey C. Miller, Esq.
Assistant Treasurer - Finance Assistant General Counsel
Northeast Utilities Service Northeast Utilities Service
Company Company
P.O. Box 270 P.O. Box 270
Hartford, CT 06141-0270 Hartford, CT 06141-0270
Thomas R. Wildman, Esq.
Day, Berry & Howard
CityPlace
Hartford, CT 06103-3499
<PAGE>
The Application/Declaration in this proceeding is hereby amended by the
filing of the exhibits and financial statements listed in the "Index to
Exhibits and Financial Statements Filed with Amendment No. 1 to Form U-1" which
appears on the following page.
SIGNATURES
Pursuant to the requirements of the Public Utility Holding Company Act
of 1935, as amended, the undersigned has duly caused this statement to be
signed on its behalf by the undersigned thereunto duly authorized.
Dated: December 5, 1996
WESTERN MASSACHUSETTS ELECTRIC COMPANY
By_________________________/s/Thomas R.
Wildman
Thomas R. Wildman
A Partner
Day, Berry & Howard
City Place I
Hartford CT 06103-3499
Its Attorney
<PAGE>
INDEX TO EXHIBITS AND FINANCIAL STATEMENTS FILED WITH
AMENDMENT NO. 1
to
Form U-1
of
WESTERN MASSACHUSETTS ELECTRIC COMPANY
(a) Exhibits
G.1 WMECO Financial Data Schedule.
G.2 NU Financial Data Schedule.
H.1 Estimated Expenses -- WMECO.
H.2 Estimated Expenses -- NewCo.
(b) Financial Statements
1. Western Massachusetts Electric Company
1.1 Balance Sheet, per books and pro forma, as of September
30, 1996.
1.2 Income Statement, per books and pro forma, twelve months
ended September 30, 1996.
1.3 Statement of Retained Earnings, per books and pro forma,
twelve months ended September 30, 1996 and Statement of
Capital Structure, per books and pro forma, as of
September 30, 1996.
1.4 Explanation of Pro Forma Adjustments.
2. Northeast Utilities and Subsidiaries
2.1 Consolidated Balance Sheet, per books and pro forma, as
of September 30, 1996.
2.2 Consolidated Income Statement, per books and pro forma,
twelve months ended September 30, 1996.
2.3 Consolidated Statement of Retained Earnings, per books
and pro forma, twelve months ended September 30, 1996,
and Consolidated Statement of Capital Structure, per
books and pro forma, as of September 30, 1996.
2.4 Explanation of Pro Forma Adjustments.
<TABLE>
<CAPTION>
Exhibit G.1
WESTERN MASSACHUSETTS ELECTRIC COMPANY
FINANCIAL DATA SCHEDULE
AS OF SEPTEMBER 30, 1996
(THOUSANDS OF DOLLARS)
PRO FORMA
GIVING EFFECT
ITEM TO PROPOSED
# DESCRIPTION PER BOOK TRANSACTION
<S> <C> <C>
1 Total Net Utility Plant 807,855 807,903
2 Other Property and Investments 94,522 94,522
3 Total Current Assets 74,038 71,778
4 Total Deferred Charges 138,176 138,176
5 Balancing amount for Total Assets 0 0
6 Total Assets 1,114,591 1,112,379
7 Common Stock 26,812 26,812
8 Capital Surplus, Paid In 150,395 150,395
9 Retained Earnings 110,329 108,985
10 Total Common Stockholders Equity 287,536 286,192
11 Preferred Stock Subject to Mandatory
Redemption 21,000 21,000
12 Preferred Stock Not Subject to Mandatory
Redemption 53,500 53,500
13 Long Term Debt, Net 334,238 334,238
14 Short Term Notes 0 0
15 Notes Payable 8,000 8,000
16 Commercial Paper 0 0
17 Long Term Debt-Current Portion 14,700 14,700
18 Preferred Stock-Current Portion 1,500 1,500
19 Obligations Under Capital Leases 29,108 29,108
20 Obligations Under Capital Leases-Current
Portion 2,971 2,971
21 Balancing amount of Capitalization and
Liabilities 362,038 361,170
22 Total Capitalization and Liabilities 1,114,591 1,112,379
23 Gross Operating Revenue 422,461 422,461
24 Federal and State Income Taxes Expense 12,897 12,029
25 Other Operating Expenses 365,965 365,987
26 Total Operating Expenses 378,862 378,016
27 Operating Income (Loss) 43,599 44,445
28 Other Income (Loss), Net 2,448 2,363
29 Income Before Interest Charges 46,047 46,808
30 Total Interest Charges 24,692 26,797
31 Net Income 21,355 20,011
32 Preferred Stock Dividends 5,212 5,212
33 Earnings Available For Common Stock 16,143 14,799
34 Common Stock Dividends 20,226 20,226
35 Total Annual Interest Charges on All Bonds 24,154 24,154
36 Cash Flow From Operations 0 0
37 Earnings Per Share-Primary 0.00 0.00
38 Earnings Per Share-Fully Diluted 0.00 0.00
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Exhibit G.2
NORTHEAST UTILITIES AND SUBSIDIARIES
FINANCIAL DATA SCHEDULE
AS OF SEPTEMBER 30, 1996
(THOUSANDS OF DOLLARS)
PRO FORMA
GIVING EFFECT
ITEM TO PROPOSED
# DESCRIPTION PER BOOK TRANSACTION
<S> <C> <C>
1 Total Net Utility Plant 6,788,878 6,788,926
2 Other Property and Investments 557,288 557,288
3 Total Current Assets 1,019,885 1,017,625
4 Total Deferred Charges 2,028,428 2,028,428
5 Balancing amount for Total Assets 0 0
6 Total Assets 10,394,479 10,392,267
7 Common Stock 680,260 680,260
8 Capital Surplus, Paid In 941,205 941,205
9 Retained Earnings 941,341 940,014
10 Total Common Stockholders Equity 2,381,084 2,379,757
11 Preferred Stock Subject to Mandatory
Redemption 276,000 276,000
12 Preferred Stock Not Subject to Mandatory
Redemption 169,700 169,700
13 Long Term Debt, Net 3,688,530 3,688,530
14 Short Term Notes 0 0
15 Notes Payable 15,000 15,000
16 Commercial Paper 0 0
17 Long Term Debt-Current Portion 279,513 279,513
18 Preferred Stock-Current Portion 1,500 1,500
19 Obligations Under Capital Leases 187,095 187,095
20 Obligations Under Capital Leases-Current
Portion 19,189 19,189
21 Balancing amount of Capitalization and
Liabilities 3,376,868 3,375,983
22 Total Capitalization and Liabilities 10,394,479 10,392,267
23 Gross Operating Revenue 3,836,054 3,836,054
24 Federal and State Income Taxes Expense 156,853 155,968
25 Other Operating Expenses 3,252,035 3,252,057
26 Total Operating Expenses 3,408,888 3,408,025
27 Operating Income (Loss) 427,166 428,029
28 Other Income (Loss), Net 30,549 30,464
29 Income Before Interest Charges 457,715 458,493
30 Total Interest Charges 281,604 283,709
31 Net Income 176,111 174,784
32 Preferred Stock Dividends 33,683 33,683
33 Earnings Available For Common Stock 142,428 141,101
34 Common Stock Dividends 200,027 200,027
35 Total Annual Interest Charges on All Bonds 290,820 290,820
36 Cash Flow From Operations 0 0
37 Earnings Per Share-Primary 1.12 1.11
38 Earnings Per Share-Fully Diluted 1.12 1.11
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Exhibit H.1
SCHEDULE OF FEES, COMMISSIONS AND EXPENSES
WMECO
<S> <C>
Securities and Exchange Commission Filing Fee $2,000
Restructuring Fee 50,000
Legal Fees
Counsel to the Purchaser and Agent 65,000
Counsel to the Applicants 50,000
Rating Agency Fees 15,000
Northeast Utilities Service Company 53,000
(Financial, Accounting, Legal and Other Fees
and Services)
Total Estimate of Fees, Commissions and Expenses $235,000
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Exhibit H.2
SCHEDULE OF FEES, COMMISSIONS AND EXPENSES
NEWCO
<S> <C>
Independent Director Fees $10,000
Total Estimate of Fees, Commissions and Expenses $10,000
</TABLE>
<TABLE>
<CAPTION>
WESTERN MASSACHUSETTS ELECTRIC COMPANY Exhibit 1.1
BALANCE SHEET Page 1 of 2
AS OF SEPTEMBER 30, 1996
(THOUSANDS OF DOLLARS)
PRO FORMA
GIVING EFFECT
PRO FORMA TO PROPOSED
PER BOOK ADJUSTMENTS* TRANSACTION
<S> <C> <C> <C>
ASSETS
UTILITY PLANT, AT ORIGINAL COST:
ELECTRIC $1,250,137 $60 (a) $1,250,197
LESS: ACCUMULATED PROVISION FOR
DEPRECIATION 489,134 12 (b) 489,146
-------- -------- ---------
761,003 48 761,051
CONSTRUCTION WORK IN PROGRESS 16,721 16,721
NUCLEAR FUEL, NET 30,131 30,131
-------- -------- ---------
TOTAL NET UTILITY PLANT 807,855 48 807,903
-------- -------- ---------
OTHER PROPERTY AND INVESTMENTS:
NUCLEAR DECOMMISSIONING TRUST, AT MARKET 74,962 74,962
INVESTMENTS IN REGIONAL NUCLEAR
GENERATING COMPANIES, AT EQUITY 15,315 15,315
OTHER, AT COST 4,245 4,245
-------- -------- ---------
94,522 0 94,522
-------- -------- ---------
CURRENT ASSETS:
CASH AND SPECIAL DEPOSITS 38 33,894 (a) 34,012
(10)(c)
90 (d)
RECEIVABLES, NET 39,553 (36,234)(a) 3,319
RECEIVABLES FROM AFFILIATED COMPANIES 786 786
ACCRUED UTILITY REVENUES 10,023 10,023
FUEL, MATERIAL AND SUPPLIES, AT
AVERAGE COST 4,880 4,880
RECOVERABLE ENERGY COSTS, NET -- CURRENT 8,274
PREPAYMENTS AND OTHER 10,484 10,484
-------- -------- ---------
TOTAL CURRENT ASSETS 74,038 (2,260) 71,778
-------- -------- ---------
DEFERRED CHARGES:
UNAMORTIZED DEBT EXPENSE 1,379 1,379
INCOME TAXES, NET 79,608 79,608
RECOVERABLE ENERGY COSTS 5,437 5,437
UNRECOVERED CONTRACT OBLIGATION-YAEC 13,151 13,151
OTHER 38,601 38,601
-------- -------- ---------
TOTAL DEFERRED CHARGES 138,176 0 138,176
-------- -------- ---------
TOTAL ASSETS $1,114,591 ($2,212) $1,112,379
* EXPLANATION ON EXHIBIT 1.4 PAGE 1 OF 1
<PAGE>
</TABLE>
<TABLE>
<CAPTION>
WESTERN MASSACHUSETTS ELECTRIC COMPANY Exhibit 1.1
BALANCE SHEET Page 2 of 2
AS OF SEPTEMBER 30, 1996
(THOUSANDS OF DOLLARS)
PRO FORMA
GIVING EFFECT
PRO FORMA TO PROPOSED
PER BOOK ADJUSTMENTS* TRANSACTION
<S> <C> <C> <C>
CAPITALIZATION AND LIABILITIES
CAPITALIZATION:
COMMON SHARES $26,812 $26,812
CAPITAL SURPLUS, PAID IN 150,395 150,395
RETAINED EARNINGS 110,329 (1,344) 108,985
-------- -------- ---------
TOTAL COMMON STOCKHOLDER'S EQUITY 287,536 (1,344) 286,192
PREFERRED STOCK NOT SUBJECT TO
MANDATORY REDEMPTION 53,500 53,500
PREFERRED STOCK SUBJECT TO MANDATORY
REDEMPTION 21,000 21,000
LONG-TERM DEBT, NET 334,238 334,238
-------- -------- ---------
TOTAL CAPITALIZATION 696,274 (1,344) 694,930
OBLIGATIONS UNDER CAPITAL LEASES 29,108 29,108
NOTES PAYABLE TO AFFILIATED COMPANIES 8,000 8,000
LONG-TERM DEBT AND PREFERRED STOCK -
CURRENT PORTION 16,200 16,200
OBLIGATIONS UNDER CAPITAL LEASES -
CURRENT PORTION 2,971 2,971
ACCOUNTS PAYABLE 14,762 14,762
ACCOUNTS PAYABLE TO AFFILIATED
COMPANIES 9,294 9,294
ACCRUED TAXES 10,119 (868)(e) 9,251
ACCRUED INTEREST 4,268 4,268
OTHER 16,363 16,363
-------- -------- ---------
TOTAL CURRENT LIABILITIES 81,977 (868) 81,109
DEFERRED CREDITS:
ACCUMULATED DEFERRED INCOME TAXES 248,202 248,202
ACCUMULATED DEFERRED INVESTMENT
TAX CREDITS 25,200 25,200
DEFERRED CONTRACT OBLIGATION-YAEC 13,151 13,151
OTHER 20,679 20,679
-------- -------- ---------
TOTAL DEFERRED CREDITS 307,232 0 307,232
-------- -------- ---------
TOTAL CAPITALIZATION AND
LIABILITIES $1,114,591 ($2,212) $1,112,379
* EXPLANATION ON EXHIBIT 1.4 PAGE 1 OF 1
<PAGE>
</TABLE>
<TABLE>
<CAPTION>
WESTERN MASSACHUSETTS ELECTRIC COMPANY Exhibit 1.2
INCOME STATEMENT Page 1 of 1
FOR 12 MONTHS ENDED SEPTEMBER 30, 1996
(THOUSANDS OF DOLLARS)
PRO FORMA
GIVING EFFECT
PRO FORMA TO PROPOSED
PER BOOK ADJUSTMENTS* TRANSACTION
<S> <C> <C> <C>
OPERATING REVENUE $422,461 $0 $422,461
-------- -------- ---------
OPERATING EXPENSES:
OPERATION -
FUEL PURCHASED AND INTERCHANGE
POWER 101,202 101,202
OTHER 146,847 10 (c) 146,857
MAINTENANCE 48,406 48,406
DEPRECIATION 39,219 12 (b) 39,231
AMORTIZATION/DEFERRALS OF REGULATORY
ASSETS, NET 10,633 10,633
FEDERAL AND STATE INCOME TAXES 12,897 (868)(e) 12,029
TAXES OTHER THAN INCOME TAXES 19,658 19,658
-------- -------- ---------
TOTAL OPERATING EXPENSES 378,862 (846) 378,016
-------- -------- ---------
OPERATING INCOME: 43,599 846 44,445
-------- -------- ---------
OTHER INCOME:
EQUITY IN EARNINGS OF REGIONAL NUCLEAR
GENERATING COMPANIES 1,953 1,953
OTHER, NET 131 (175)(a) 46
90 (d)
INCOME TAXES - CREDIT 364 364
-------- -------- ---------
OTHER INCOME, NET 2,448 (85) 2,363
-------- -------- ---------
INCOME BEFORE INTEREST CHARGES 46,047 761 46,808
-------- -------- ---------
INTEREST CHARGES:
INTEREST ON LONG-TERM DEBT 24,154 24,154
OTHER INTEREST 538 2,105 (a) 2,643
-------- -------- ---------
TOTAL INTEREST CHARGES 24,692 2,105 26,797
-------- -------- ---------
NET INCOME $21,355 ($1,344) $20,011
* EXPLANATION ON EXHIBIT 1.4 PAGE 1 OF 1
<PAGE>
</TABLE>
<TABLE>
<CAPTION>
WESTERN MASSACHUSETTS ELECTRIC COMPANY Exhibit 1.3
STATEMENT OF RETAINED EARNINGS Page 1 of 1
FOR 12 MONTHS ENDED SEPTEMBER 30, 1996
(THOUSANDS OF DOLLARS)
PER BOOK
ADJUSTED TO
PRO FORMA REFLECT
PER BOOK ADJUSTMENTS* PRO FORMA
<S> <C> <C> <C>
BALANCE AT BEGINNING OF PERIOD $114,412 $114,412
NET INCOME 21,355 (1,344) 20,011
CASH DIVIDENDS ON PREFERRED STOCK (5,212) (5,212)
CASH DIVIDEND ON COMMON STOCK (20,226) (20,226)
-------- ------- ---------
BALANCE AT END OF PERIOD $110,329 ($1,344) $108,985
<PAGE>
</TABLE>
<TABLE>
<CAPTION>
WESTERN MASSACHUSETTS ELECTRIC COMPANY
STATEMENT OF CAPITAL STRUCTURE
AS OF SEPTEMBER 30, 1996
(THOUSANDS OF DOLLARS)
PER BOOK
ADJUSTED TO
PRO FORMA REFLECT
% PER BOOK ADJUSTMENTS* PRO FORMA %
<S> <C> <C> <C> <C> <C>
DEBT:
LONG-TERM DEBT, NET 49.0% $348,938 0 $348,938 49.1%
PREFERRED STOCK:
NOT SUBJECT TO REDEMPTION 53,500 53,500
SUBJECT TO REDEMPTION 22,500 22,500
-------- ------- --------
TOTAL PREFERRED STOCK 10.7% 76,000 0 76,000 10.7%
COMMON EQUITY:
COMMON SHARES 26,812 26,812
CAPITAL SURPLUS, PAID IN 150,395 150,395
RETAINED EARNINGS 110,329 (1,344) 108,985
-------- ------- --------
TOTAL COMMON STOCKHOLDER'S EQUITY 40.3% 287,536 (1,344) 286,192 40.2%
-------- ------- --------
TOTAL CAPITAL 100.0% $712,474 (1,344) $711,130 100.0%
* EXPLANATION ON EXHIBIT 1.4 PAGE 1 OF 1
<PAGE>
</TABLE>
<TABLE>
<CAPTION>
WESTERN MASSACHUSETTS ELECTRIC COMPANY Exhibit 1.4
EXPLANATION OF ADJUSTMENTS Page 1 of 1
(THOUSANDS OF DOLLARS)
DEBIT CREDIT
<S> <C> <C>
(a) CASH $33,894
UTILITY PLANT 60
OTHER INCOME, NET 175
INTEREST EXPENSE, OTHER 2,105
ACCOUNTS RECEIVABLE $36,234
</TABLE>
To record an intial sale of 9/30/96 accounts receivable and related upfront
expenditures. The organization costs associated with the creation of NewCo
will be capitalized and roll up into Utility Plant. Of the fees listed on
Exhibit H.1 it is estimated that approximately a third of the legal and NUSCO
fees are related to the creation of NewCo. The remainder of the upfront costs
will be expensed. The cost associated with the initial transaction is based
on the LIBOR as of 11/14/96 [5.38%] + an estimated spread of .43%.
<TABLE>
<CAPTION>
<S> <C> <C>
(b) DEPRECIATION 12
ACCUMULATED PROVISION 12
To record one year's amortization of upfront costs.
(c) OPERATION EXPENSE, OTHER 10
CASH 10
To record independent directors expense.
(d) CASH 90
SERVICING FEE INCOME 90
To record fees related to servicing the accounts receivable.
(e) ACCRUED TAXES 868
FEDERAL AND STATE INCOME TAX EXPENSE 868
</TABLE>
To record the reduction in Federal and State income taxes due to the higher
interest and fee expenses:
$2,212 x 39.23% = 868
NOTE: The above represents the consolidated impact of the sale of undivided
ownership interests in WMECO's accounts receivables. Some of the remaining
receivables are allocated to the purchaser on an interim basis, to protect
against bad debt and other potential losses. As collections reduce previously
sold undivided interests, new receivables will will be sold. The following
elements of the Parent/Sub transactions are eliminated on consolidation of
WMECO and NewCo's accounts.
- - The loss booked by WMECO on the sale of accounts recievable to NewCo is
offset by Unrecognized revenue earned by NewCo as collections are realized
- - Due to/from Parent/Sub Accounts
- - Investment in/equity of NewCo
- - Any remaining interest in NewCo can be dividended back up to Parent
<PAGE>
<TABLE>
<CAPTION>
NORTHEAST UTILITIES AND SUBSIDIARIES Exhibit 2.1
CONSOLIDATED BALANCE SHEET Page 1 of 2
AS OF SEPTEMBER 30, 1996
(THOUSANDS OF DOLLARS)
PRO FORMA
GIVING EFFECT
PRO FORMA TO PROPOSED
PER BOOK ADJUSTMENTS* TRANSACTION
<S> <C> <C> <C>
ASSETS
UTILITY PLANT, AT ORIGINAL COST:
ELECTRIC & OTHER $9,767,433 $60 (a) $9,767,493
LESS: ACCUMULATED PROVISION FOR
DEPRECIATION 3,874,639 12 (b) 3,874,651
--------- --- ----------------
5,892,794 48 5,892,842
UNAMORTIZED ACQUISITION COSTS - PSNH 514,065 514,065
CONSTRUCTION WORK IN PROGRESS 196,059 196,059
NUCLEAR FUEL, NET 185,960 185,960
--------- --- ----------------
TOTAL NET UTILITY PLANT 6,788,878 48 6,788,926
--------- --- ----------------
OTHER PROPERTY AND INVESTMENTS:
NUCLEAR DECOMMISSIONING TRUST, AT MARKET 358,980 358,980
INVESTMENTS IN REGIONAL NUCLEAR
GENERATING COMPANIES, AT EQUITY 84,620 84,620
INVESTMENTS IN TRANSMISSION COMPANIES,
AT EQUITY 22,702 22,702
INVESTMENTS IN CHARTER OAK ENERGY 44,703 44,703
OTHER, AT COST 46,283 46,283
--------- --- ----------------
557,288 0 557,288
--------- --- ----------------
CURRENT ASSETS:
CASH AND SPECIAL DEPOSITS 238,943 33,894 (a) 272,917
(10)(c)
90 (d)
RECEIVABLES, NET 419,501 (36,234)(a) 383,267
ACCRUED UTILITY REVENUES 103,456 103,456
FUEL, MATERIAL AND SUPPLIES, AT
AVERAGE COST 203,041 203,041
PREPAYMENTS AND OTHER 54,944 54,944
--------- --- ----------------
TOTAL CURRENT ASSETS 1,019,885 (2,260) 1,017,625
--------- --- ----------------
DEFERRED CHARGES:
REGULATORY ASSET-INCOME TAXES, NET 1,066,579 1,066,579
UNAMORTIZED DEBT EXPENSE 37,197 37,197
RECOVERABLE ENERGY COSTS, NET 324,608 324,608
DEFERRED CONSERVATION AND LOAD-
MANAGEMENT COSTS 83,225 83,225
COGENERATION COSTS - CLP 76,679 76,679
DEFERRED COSTS - NUCLEAR PLANTS 180,374 180,374
AMORTIZABLE PROPERTY INVESTMENT - 0 0
UNRECOVERED CONTRACT OBLIGATION-YAEC 69,832 69,832
OTHER 189,934 189,934
--------- --- ----------------
TOTAL DEFERRED CHARGES 2,028,428 0 2,028,428
--------- --- ----------------
TOTAL ASSETS $10,394,479 ($2,212) $10,392,267
* EXPLANATION ON EXHIBIT 2.4 PAGE 1 OF 1
<PAGE>
</TABLE>
<TABLE>
<CAPTION>
NORTHEAST UTILITIES AND SUBSIDIARIES Exhibit 2.1
CONSOLIDATED BALANCE SHEET Page 2 of 2
AS OF SEPTEMBER 30, 1996
(THOUSANDS OF DOLLARS)
PRO FORMA
GIVING EFFECT
PRO FORMA TO PROPOSED
PER BOOK ADJUSTMENTS* TRANSACTION
<S> <C> <C> <C>
CAPITALIZATION AND LIABILITIES
CAPITALIZATION:
COMMON SHARES $680,260 $680,260
CAPITAL SURPLUS, PAID IN 941,205 941,205
DEFERRED BENEFIT PLAN-EMPLOYEE STOCK
OWNERSHIP PLAN (181,722) (181,722)
RETAINED EARNINGS 941,341 (1,327) 940,014
---------- --------- -------------
TOTAL COMMON STOCKHOLDER'S EQUITY 2,381,084 (1,327) 2,379,757
PREFERRED STOCK NOT SUBJECT TO
MANDATORY REDEMPTION 169,700 169,700
PREFERRED STOCK SUBJECT TO MANDATORY
REDEMPTION 276,000 276,000
LONG-TERM DEBT, NET 3,688,530 3,688,530
---------- --------- -------------
TOTAL CAPITALIZATION 6,515,314 (1,327) 6,513,987
OBLIGATIONS UNDER CAPITAL LEASES 187,095 187,095
MINORITY INTEREST IN CONSOLIDATED SUBS 99,895 99,895
CURRENT LIABILITIES:
NOTES PAYABLE 15,000 15,000
LONG-TERM DEBT AND PREFERRED STOCK -
CURRENT PORTION 281,013 281,013
OBLIGATIONS UNDER CAPITAL LEASES -
CURRENT PORTION 19,189 19,189
ACCOUNTS PAYABLE 289,656 289,656
ACCRUED TAXES 66,750 (885)(e) 65,865
ACCRUED INTEREST 71,853 71,853
ACCRUED PENSION BENEFITS 91,603 91,603
OTHER 128,037 128,037
---------- --------- -------------
TOTAL CURRENT LIABILITIES 963,101 (885) 962,216
DEFERRED CREDITS:
ACCUMULATED DEFERRED INCOME TAXES 2,083,974 2,083,974
ACCUMULATED DEFERRED INVESTMENT
TAX CREDITS 170,847 170,847
DEFERRED CONTRACT OBLIGATION-YAEC 72,332 72,332
OTHER 301,921 301,921
---------- --------- -------------
TOTAL DEFERRED CREDITS 2,629,074 0 2,629,074
---------- --------- -------------
TOTAL CAPITALIZATION AND
LIABILITIES $10,394,479 ($2,212) $10,392,267
* EXPLANATION ON EXHIBIT 2.4 PAGE 1 OF 1
<PAGE>
</TABLE>
<TABLE>
<CAPTION>
NORTHEAST UTILITIES AND SUBSIDIARIES Exhibit 2.2
CONSOLIDATED INCOME STATEMENT Page 1 of 1
FOR 12 MONTHS ENDED SEPTEMBER 30, 1996
(THOUSANDS OF DOLLARS)
PRO FORMA
GIVING EFFECT
PRO FORMA TO PROPOSED
PER BOOK ADJUSTMENTS* TRANSACTION
<S> <C> <C> <C>
OPERATING REVENUE $3,836,054 $0 $3,836,054
---------- --------- -------------
OPERATING EXPENSES:
OPERATION -
FUEL PURCHASED AND INTERCHANGE
POWER 1,047,954 1,047,954
OTHER 1,098,352 10 (c) 1,098,362
MAINTENANCE 374,018 374,018
DEPRECIATION 359,982 12 (b) 359,994
AMORTIZATION/DEFERRALS OF REGULATORY
ASSETS, NET 112,985 112,985
FEDERAL AND STATE INCOME TAXES 156,853 (885)(e) 155,968
TAXES OTHER THAN INCOME TAXES 258,744 258,744
---------- --------- ------------------
TOTAL OPERATING EXPENSES 3,408,888 (863) 3,408,025
---------- --------- ------------------
OPERATING INCOME: 427,166 863 428,029
---------- --------- ------------------
OTHER INCOME:
DEFERRED NUCLEAR PLANTS RETURN-OTHER
FUNDS 10,801 10,801
EQUITY IN EARNINGS OF REGIONAL NUCLEAR
GENERATING COMPANIES 13,992 13,992
OTHER, NET 16,505 (175)(a) 16,420
90 (d)
INCOME TAXES - CREDIT (10,749) (10,749)
---------- --------- ------------------
OTHER INCOME, NET 30,549 (85) 30,464
---------- --------- ------------------
INCOME BEFORE INTEREST CHARGES 457,715 778 458,493
---------- --------- ------------------
INTEREST CHARGES:
INTEREST ON LONG-TERM DEBT 290,820 290,820
OTHER INTEREST 8,594 2,105 (a) 10,699
DEFERRED NUCLEAR PLANTS RETURN -
BORROWED FUNDS, NET OF INCOME TAX (17,810) (17,810)
---------- --------- ------------------
TOTAL INTEREST CHARGES 281,604 2,105 283,709
---------- --------- ------------------
INCOME BEFORE PREFERRED DIVIDENDS 176,111 (1,327) 174,784
PREFERRED DIVIDENDS OF SUBSIDIARIES 33,683 33,683
---------- --------- ------------------
NET INCOME 142,428 (1,327) 141,101
EARNINGS FOR COMMON SHARE 142,428 (1,327) 141,101
EARNINGS PER COMMON SHARE 1.12 1.11
COMMON SHARES OUTSTANDING (AVERAGE) 127,631,061 127,631,061
* EXPLANATION ON EXHIBIT 2.4 PAGE 1 OF 1
<PAGE>
</TABLE>
<TABLE>
<CAPTION>
NORTHEAST UTILITIES AND SUBSIDIARIES Exhibit 2.3
STATEMENT OF RETAINED EARNINGS Page 1 of 1
FOR 12 MONTHS ENDED SEPTEMBER 30, 1996
(THOUSANDS OF DOLLARS)
PER BOOK
ADJUSTED TO
PRO FORMA REFLECT
PER BOOK ADJUSTMENTS* PRO FORMA
<S> <C> <C> <C>
BALANCE AT BEGINNING OF PERIOD $999,065 $999,065
NET INCOME 176,111 (1,327) 174,784
CASH DIVIDENDS ON PREFERRED STOCK (33,683) (33,683)
CASH DIVIDEND ON COMMON STOCK (200,027) (200,027)
LOSS ON RETIREMENT OF PREFERRED STOCK (125) (125)
---------- --------- ---------------
BALANCE AT END OF PERIOD $941,341 ($1,327) $940,014
<PAGE>
</TABLE>
<TABLE>
<CAPTION>
NORTHEAST UTILITIES AND SUBSIDIARIES
CAPITAL STRUCTURE AS OF SEPTEMBER 30, 1996
(THOUSANDS OF DOLLARS)
FINANCIAL STATEMENT 7.2 PAGE 2 OF 3
PER BOOK
ADJUSTED TO
PRO FORMA REFLECT
% PER BOOK ADJUSTMENTS* PRO FORMA %
<S> <C> <C> <C> <C> <C>
DEBT:
LONG-TERM DEBT, NET 58.4% $3,968,043 $0 $3,968,043 58.4%
PREFERRED STOCK:
NOT SUBJECT TO REDEMPTION 169,700 169,700
SUBJECT TO REDEMPTION 277,500 277,500
---------- ------- -----------
TOTAL PREFERRED STOCK 6.6% 447,200 0 447,200 6.6%
COMMON EQUITY:
COMMON SHARES 680,260 680,260
CAPITAL SURPLUS, PAID IN 941,205 941,205
DEFERRED BENEFIT PLAN-EMPLOYEE STOCK
OWNERSHIP PLAN (181,722) (181,722)
RETAINED EARNINGS 941,341 (1,327) 940,014
---------- ------- -----------
TOTAL COMMON STOCKHOLDER'S EQUITY 35.0% 2,381,084 (1,327) 2,379,757 35.0%
---------- ------- -----------
TOTAL CAPITAL 100.0% $6,796,327 ($1,327) $6,795,000 100.0%
* EXPLANATION ON EXHIBIT 2.4 PAGE 1 OF 1
<PAGE>
</TABLE>
<TABLE>
<CAPTION>
NORTHEAST UTILITIES AND SUBSIDIARIES Exhibit 2.4
EXPLANATION OF ADJUSTMENTS Page 1 of 1
(THOUSANDS OF DOLLARS)
DEBIT CREDIT
<S> <C> <C>
(a) CASH $33,894
UTILITY PLANT 60
OTHER INCOME, NET 175
INTEREST EXPENSE, OTHER 2,105
ACCOUNTS RECEIVABLE $36,234
</TABLE>
To record an intial sale of WMECO 9/30/96 accounts receivable and related
upfront expenditures. The organization costs associated with the creation of
NewCo (a WMECO subsidiary) will be capitalized and roll up into Utility Plant.
Of the fees listed on Exhibit H.1 it is estimated that approximately a third
of the legal and NUSCO fees are related to the creation of NewCo. The
remainder of the upfront costs will be expensed. The cost associated with the
initial transaction is based on the LIBOR as of 11/14/96 [5.38%] + an estimated
spread of .43%.
<TABLE>
<CAPTION>
<S> <C> <C>
(b) DEPRECIATION 12
ACCUMULATED PROVISION 12
To record one year's amortization of upfront costs.
(c) OPERATION EXPENSE, OTHER 10
CASH 10
To record independent directors expense.
(d) CASH 90
SERVICING FEE INCOME 90
To record fees related to servicing the accounts receivable.
(c) ACCRUED TAXES 885
FEDERAL AND STATE INCOME TAX EXPENSE 885
</TABLE>
To record the reduction in Federal and State income taxes due to the higher
interest and fee expenses:
$2,212 x 40.00% = 885
<TABLE> <S> <C>
<ARTICLE> OPUR1
<SUBSIDIARY>
<NAME> WESTERN MASSACHUSETTS ELECTRIC COMPANY
<NUMBER> 2
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 12-MOS 12-MOS
<FISCAL-YEAR-END> SEP-30-1996 SEP-30-1996
<PERIOD-END> SEP-30-1996 SEP-30-1996
<BOOK-VALUE> PER-BOOK PRO-FORMA
<TOTAL-NET-UTILITY-PLANT> 807,855 807,903
<OTHER-PROPERTY-AND-INVEST> 94,522 94,522
<TOTAL-CURRENT-ASSETS> 74,038 71,778
<TOTAL-DEFERRED-CHARGES> 138,176 138,176
<OTHER-ASSETS> 0 0
<TOTAL-ASSETS> 1,114,591 1,112,379
<COMMON> 26,812 26,812
<CAPITAL-SURPLUS-PAID-IN> 150,395 150,395
<RETAINED-EARNINGS> 110,329 108,985
<TOTAL-COMMON-STOCKHOLDERS-EQ> 287,536 286,192
21,000 21,000
53,500 53,500
<LONG-TERM-DEBT-NET> 334,238 334,238
<SHORT-TERM-NOTES> 0 0
<LONG-TERM-NOTES-PAYABLE> 8,000 8,000
<COMMERCIAL-PAPER-OBLIGATIONS> 0 0
<LONG-TERM-DEBT-CURRENT-PORT> 14,700 14,700
1,500 1,500
<CAPITAL-LEASE-OBLIGATIONS> 29,108 29,108
<LEASES-CURRENT> 2,971 2,971
<OTHER-ITEMS-CAPITAL-AND-LIAB> 362,038 361,170
<TOT-CAPITALIZATION-AND-LIAB> 1,114,591 1,112,379
<GROSS-OPERATING-REVENUE> 422,461 422,461
<INCOME-TAX-EXPENSE> 12,897 12,029
<OTHER-OPERATING-EXPENSES> 365,965 365,987
<TOTAL-OPERATING-EXPENSES> 378,862 378,016
<OPERATING-INCOME-LOSS> 43,599 44,445
<OTHER-INCOME-NET> 2,448 2,363
<INCOME-BEFORE-INTEREST-EXPEN> 46,047 46,808
<TOTAL-INTEREST-EXPENSE> 24,692 26,797
<NET-INCOME> 21,355 20,011
5,212 5,212
<EARNINGS-AVAILABLE-FOR-COMM> 16,143 14,799
<COMMON-STOCK-DIVIDENDS> 20,226 20,226
<TOTAL-INTEREST-ON-BONDS> 24,154 24,154
<CASH-FLOW-OPERATIONS> 0 0
<EPS-PRIMARY> 0.00 0.00
<EPS-DILUTED> 0.00 0.00
</TABLE>
<TABLE> <S> <C>
<ARTICLE> OPUR1
<SUBSIDIARY>
<NUMBER> 10
<NAME> NORTHEAST UTILITIES AND SUBSIDIARIES
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 12-MOS 12-MOS
<FISCAL-YEAR-END> SEP-30-1996 SEP-30-1996
<PERIOD-END> SEP-30-1996 SEP-30-1996
<BOOK-VALUE> PER-BOOK PRO-FORMA
<TOTAL-NET-UTILITY-PLANT> 6,788,878 6,788,926
<OTHER-PROPERTY-AND-INVEST> 557,288 557,288
<TOTAL-CURRENT-ASSETS> 1,019,885 1,017,625
<TOTAL-DEFERRED-CHARGES> 2,028,428 2,028,428
<OTHER-ASSETS> 0 0
<TOTAL-ASSETS> 10,394,479 10,392,267
<COMMON> 680,260 680,260
<CAPITAL-SURPLUS-PAID-IN> 941,205 941,205
<RETAINED-EARNINGS> 941,341 940,014
<TOTAL-COMMON-STOCKHOLDERS-EQ> 2,381,084 2,379,757
276,000 276,000
169,700 169,700
<LONG-TERM-DEBT-NET> 3,688,530 3,688,530
<SHORT-TERM-NOTES> 0 0
<LONG-TERM-NOTES-PAYABLE> 15,000 15,000
<COMMERCIAL-PAPER-OBLIGATIONS> 0 0
<LONG-TERM-DEBT-CURRENT-PORT> 279,513 279,513
1,500 1,500
<CAPITAL-LEASE-OBLIGATIONS> 187,095 187,095
<LEASES-CURRENT> 19,189 19,189
<OTHER-ITEMS-CAPITAL-AND-LIAB> 3,376,868 3,375,983
<TOT-CAPITALIZATION-AND-LIAB> 10,394,479 10,392,267
<GROSS-OPERATING-REVENUE> 3,836,054 3,836,054
<INCOME-TAX-EXPENSE> 156,853 155,968
<OTHER-OPERATING-EXPENSES> 3,252,035 3,252,057
<TOTAL-OPERATING-EXPENSES> 3,408,888 3,408,025
<OPERATING-INCOME-LOSS> 427,166 428,029
<OTHER-INCOME-NET> 30,549 30,464
<INCOME-BEFORE-INTEREST-EXPEN> 457,715 458,493
<TOTAL-INTEREST-EXPENSE> 281,604 283,709
<NET-INCOME> 176,111 174,784
33,683 33,683
<EARNINGS-AVAILABLE-FOR-COMM> 142,428 141,101
<COMMON-STOCK-DIVIDENDS> 200,027 200,027
<TOTAL-INTEREST-ON-BONDS> 290,820 290,820
<CASH-FLOW-OPERATIONS> 0 0
<EPS-PRIMARY> 1.12 1.11
<EPS-DILUTED> 1.12 1.11
</TABLE>
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