SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 8
(AMENDMENT NO. 10)
TO
FORM U-1
APPLICATION/DECLARATION WITH RESPECT TO (1) PROPOSED REVOLVING CREDIT
FACILITY FOR NORTHEAST UTILITIES ("NU"), THE CONNECTICUT LIGHT AND POWER
COMPANY ("CL&P") AND WESTERN MASSACHUSETTTS ELECTRIC COMPANY ("WMECO") AND
(2) INCREASES AND EXTENSIONS OF SHORT-TERM BORROWING LIMITS OF NU, CL&P,
WMECO, PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE, HOLYOKE WATER POWER COMPANY
AND NORTH ATLANTIC ENERGY CORPORATION
UNDER
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
Northeast Utilities The Connecticut Light
Western Massachusetts Electric Company and Power Company
174 Brush Hill Avenue 107 Selden Street
West Springfield, MA 01090-0010 Berlin, CT 06037
Holyoke Water Power Company Public Service Company of New Hampshire
Canal Street North Atlantic Energy Corporation
Holyoke, MA 01040 1000 Elm Street
Manchester, NH 03015
(Name of companies filing this statement and addresses of principal executive
offices)
NORTHEAST UTILITIES
(Name of top registered holding company)
Robert P. Wax, Esq.
Vice President, Secretary and General Counsel
Northeast Utilities Service Company
107 Selden Street
Berlin, CT 06037
(Name and address of agent for service)
The Commission is requested to mail signed copies of all orders, notices and
communications to:
Jeffrey C. Miller, Esq. David R. McHale
Assistant General Counsel Assistant Treasurer - Finance
Northeast Utilities Service Company Northeast Utilities Service Company
107 Selden Street 107 Selden Street
Berlin, CT 06037 Berlin, CT 06037
Richard C. MacKenzie, Esq.
Day, Berry & Howard
CityPlace I
Hartford, CT 06103-3499
The Application/Declaration in this proceeding is further amended by the
amendment and restatement in full of Post-Effective Amendment No. 7
(Amendment No. 9), as follows:
BACKGROUND
1. By Order dated November 20, 1996 (HCAR No. 35-26612), Supplemental Order
dated February 11, 1997 (HCAR No. 35-26665), Supplemental Order dated March
25, 1997 (HCAR No. 35-26692) and Supplemental Order dated May 29, 1997 (HCAR
35-26721) in this File No. 70-8875 (collectively, the "Orders"), the
Commission, among other things, authorized Northeast Utilities ("NU"), The
Connecticut Light and Power Company ("CL&P"), Western Massachusetts Electric
Company ("WMECO") and Public Service Company of New Hampshire ("PSNH") to
issue short-term notes from time to time through December 31, 2000 pursuant
to formal and informal lines of credit. Pursuant to the Orders, each
borrower has its own maximum outstanding borrowing limit which, in the case
of NU, is $150 million.
2. Primarily because of the financial impact of the increased costs
associated with the current nuclear outages on the NU system and other
difficulties related to the Millstone nuclear generating units, NU is
currently unable to borrow under the existing revolving credit facility
("Existing Revolver") which was entered into pursuant to the Orders.
Reference is made to Exhibit B.4(a) in this file. In accordance with the
authority granted by the Orders relating to the issuance of short-term debt,
NU is negotiating with a lender to enter into a supplementary revolving
credit facility in the aggregate principal amount of up to $25 million which
would have less restrictive terms and conditions than the Existing Revolver.
Advances from this credit facility will be used to meet NU's debt service
requirements under its ESOP and to support its other financial requirements,
as set forth in Exhibit H.8, until such time as NU begins to receive
dividends from its subsidiaries again. Failure of NU to pay principal on the
notes between NU and its lenders relating to the ESOP would constitute an
immediate default, and failure to pay interest is a default after 30 days.
In either case the Trustee, IBJ Shroder Bank and Trust Company, or holders of
25% or more of the ESOP notes may declare the entire outstanding amount to be
due and payable.
3. The purpose of this Amendment is to seek authorization pursuant to
Sections 6(a), 7 and 12(b) of the Act and Rules 43, 45 and 54 thereunder to
increase the interest rate applicable to short-term borrowings by NU to an
amount not to exceed the greater of (i) four percentage points over the LIBOR
rate and (ii) three percentage points over the lender's base rate. The
current maximum interest rate under the Orders is two percentage points above
the Federal Funds Effective Rate, and the bank with whom NU is negotiating
has sought an interest rate which could exceed the cap specified in the
Orders.
4. The Orders also authorize the payment of fees by NU pursuant to formal
and informal credit lines in an amount not to exceed 0.30% per annum. NU is
hereby filing this Amendment to obtain authorization to increase the maximum
annual fee payment to an amount not to exceed 1.00% per annum.
AMENDMENTS TO THE APPLICATION
To reflect the foregoing, the Application/Declaration in this proceeding
is further amended as follows:
5. The second sentence of paragraph 23 is deleted and replaced with the
following to take into account the proposed increase in interest payments by
NU under the supplemental revolving credit facility:
"The interest rate in any case will not exceed two percentage points
above the Federal Funds Effective Rate, except that in the case of
short-term notes issued by NU, the interest rate will not exceed the
higher of four percentage points over the LIBOR rate and three
percentage points over the Lender's base rate."
6. The third sentence of paragraph 25 is deleted and replaced with the
following to take into account the proposed increase in annual fees to be
paid by NU:
"Compensating balance requirements will not exceed 5% of the committed
line amount, and fees will not exceed 30 basis points per annum, except
that in the case of short-term notes issued by NU, fees will not exceed
100 basis points per annum."
7. The issuance of notes by NU under the terms of the proposed revolving
credit agreement is within the parameters set forth in Section 7(d) of the
Act. As the notes will be unsecured, of a duration of fewer than 270 days
and their issuance will have a minimal impact on the capital structure of the
NU system, as demonstrated in Exhibits 1.2.1 and 7.2.1, the notes are a
reasonable addition to NU's existing security structure and thus the
standards of Section 7(d)(1) will be met. As NU will be restricted from
borrowing under the new facility unless its subsidiaries can pay an equal
amount of dividends to NU and NU does not expect to commence payment of a
dividend to its shareholders in the immediate future, it expects to maintain
the ability to repay any funds borrowed under the new facility and thus the
requirement of Section 7(d)(2) that the security be reasonably adapted to the
earnings power of NU will be met. In light of the fact that NU cannot borrow
under the terms of the Existing Credit Agreement and proposes to use any
borrowed funds to support its ESOP and to support its other financial
obligations, as set forth in Exhibit H.8, the issuance of the notes is
necessary for the economical and efficient operation of NU's lawful business,
as required by Section 7(d)(3). NU believes that the proposed terms and
conditions of the note issuances, as well as the fees, commissions and other
remuneration to be paid in connection with such issuances, as referenced in
Financial Statement 1.2.1, are reasonable in light of NU's current financial
condition and in the public interest and thus the standards of Section
7(d)(4) will be met. The requirements of Section 7(d)(5) are inapplicable,
as there is no guaranty or other assumption of liability at issue. The terms
and conditions of the issuance and sale of the proposed notes have been
reached by arms-length negotiation with the bank involved and are
conventional and appropriate to NU's present financial circumstances. The
proceeds are needed to ensure NU will have sufficient funds to meet its
financial obligations while the Millstone nuclear units are being returned to
service, with the first such unit, Millstone 3, presently being expected to
restart late in the first quarter of 1998. Thus the issuance and sale of the
notes will not be detrimental to the public interest of investors or
consumers and the standards of Section 7(d)(6) are satisfied.
8. The following additional exhibits and financial statements are filed
herewith:
(a) Exhibits
*F.3 Opinion of Counsel
G.2.1 Revised Financial Data Schedule for NU (parent company only)
G.2.2 Financial Data Schedule for NU (consolidated)
H.8 NU (Parent) 1998 Forecast Cash Flow Statement
* To be filed by further post-effective amendment
(b) Financial Statements
1. Northeast Utilities
1.1.1 Revised Balance Sheet, per books and pro forma, as of September
30, 1997.
1.2.1 Revised Statement of Income, per books and pro forma, for 12
months ended September 30, 1997 and Capital Structure, per books and pro
forma, as of September 30, 1997.
7. Northeast Utilities and Subsidiaries (Consolidated)
7.1.1 Consolidated Balance Sheet, per books and pro forma, as of
September 30, 1997.
7.2.1 Consolidated Statement of Income, per books and pro forma, for 12
months ended September 30, 1997 and Capital Structure, per books and pro
forma, as of September 30, 1997
SIGNATURES
Pursuant to the requirements of the Public Utility Holding Company Act
of 1935, as amended, the undersigned have duly caused this Amendment to be
signed on behalf of each of them by the undersigned thereunto duly
authorized.
Date: December 31, 1997
NORTHEAST UTILITIES
THE CONNECTICUT LIGHT AND POWER COMPANY
WESTERN MASSACHUSETTS ELECTRIC COMPANY
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE
HOLYOKE WATER POWER COMPANY
NORTH ATLANTIC ENERGY CORPORATION
By: /s/David R. McHale
Assistant Treasurer - Finance
<TABLE> <S> <C>
<ARTICLE> OPUR1
<RESTATED>
<MULTIPLIER> 1000
<FISCAL-YEAR-END> SEP-30-1997 SEP-30-1997
<PERIOD-END> SEP-30-1997 SEP-30-1997
<PERIOD-TYPE> YEAR YEAR
<BOOK-VALUE> PER-BOOK PRO-FORMA
<TOTAL-NET-UTILITY-PLANT> 0 0
<OTHER-PROPERTY-AND-INVEST> 2,345,372 2,345,372
<TOTAL-CURRENT-ASSETS> 31,650 56,245
<TOTAL-DEFERRED-CHARGES> 2,487 2,487
<OTHER-ASSETS> 0 0
<TOTAL-ASSETS> 2,379,509 2,404,104
<COMMON> 684,003 684,003
<CAPITAL-SURPLUS-PAID-IN> 933,080 933,080
<RETAINED-EARNINGS> 701,707 699,874
<TOTAL-COMMON-STOCKHOLDERS-EQ> 2,161,284 2,159,451
0 0
0 0
<LONG-TERM-DEBT-NET> 188,000 188,000
<SHORT-TERM-NOTES> 0 25,000
<LONG-TERM-NOTES-PAYABLE> 0 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0 0
<LONG-TERM-DEBT-CURRENT-PORT> 16,000 16,000
0 0
<CAPITAL-LEASE-OBLIGATIONS> 0 0
<LEASES-CURRENT> 0 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 14,225 15,653
<TOT-CAPITALIZATION-AND-LIAB> 2,379,509 2,404,104
<GROSS-OPERATING-REVENUE> 0 0
<INCOME-TAX-EXPENSE> (10,834) (11,821)
<OTHER-OPERATING-EXPENSES> 9,852 10,257
<TOTAL-OPERATING-EXPENSES> (982) (1,564)
<OPERATING-INCOME-LOSS> 982 1,564
<OTHER-INCOME-NET> (156,315) (156,315)
<INCOME-BEFORE-INTEREST-EXPEN> (155,333) (154,751)
<TOTAL-INTEREST-EXPENSE> 19,717 22,132
<NET-INCOME> (175,050) (176,883)
0 0
<EARNINGS-AVAILABLE-FOR-COMM> (175,050) (176,883)
<COMMON-STOCK-DIVIDENDS> 64,210 64,210
<TOTAL-INTEREST-ON-BONDS> 17,910 17,910
<CASH-FLOW-OPERATIONS> 0 0
<EPS-PRIMARY> (1.36) (1.37)
<EPS-DILUTED> (1.36) (1.37)
</TABLE>
<TABLE> <S> <C>
<ARTICLE> OPUR1
<SUBSIDIARY>
<NAME> NORTHEAST UTILITIES AND SUBSIDIARIES
<NUMBER> 10
<MULTIPLIER> 1000
<FISCAL-YEAR-END> SEP-30-1997 SEP-30-1997
<PERIOD-END> SEP-30-1997 SEP-30-1997
<PERIOD-TYPE> YEAR YEAR
<BOOK-VALUE> PER-BOOK PRO-FORMA
<TOTAL-NET-UTILITY-PLANT> 6,537,278 6,537,278
<OTHER-PROPERTY-AND-INVEST> 745,019 745,019
<TOTAL-CURRENT-ASSETS> 1,005,865 1,030,460
<TOTAL-DEFERRED-CHARGES> 2,323,855 2,323,855
<OTHER-ASSETS> 0 0
<TOTAL-ASSETS> 10,612,017 10,636,612
<COMMON> 684,003 684,003
<CAPITAL-SURPLUS-PAID-IN> 933,080 933,080
<RETAINED-EARNINGS> 701,707 699,874
<TOTAL-COMMON-STOCKHOLDERS-EQ> 2,161,284 2,159,451
245,750 245,750
136,200 136,200
<LONG-TERM-DEBT-NET> 3,653,646 3,653,646
<SHORT-TERM-NOTES> 150,000 175,000
<LONG-TERM-NOTES-PAYABLE> 0 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0 0
<LONG-TERM-DEBT-CURRENT-PORT> 249,146 249,146
30,250 30,250
<CAPITAL-LEASE-OBLIGATIONS> 172,202 172,202
<LEASES-CURRENT> 35,928 35,928
<OTHER-ITEMS-CAPITAL-AND-LIAB> 3,777,611 3,779,039
<TOT-CAPITALIZATION-AND-LIAB> 10,612,017 10,636,612
<GROSS-OPERATING-REVENUE> 3,792,342 3,792,342
<INCOME-TAX-EXPENSE> (30,943) (31,930)
<OTHER-OPERATING-EXPENSES> 3,717,251 3,717,656
<TOTAL-OPERATING-EXPENSES> 3,686,308 3,685,726
<OPERATING-INCOME-LOSS> 106,034 106,616
<OTHER-INCOME-NET> 23,672 23,672
<INCOME-BEFORE-INTEREST-EXPEN> 129,706 130,288
<TOTAL-INTEREST-EXPENSE> 273,243 275,658
<NET-INCOME> (143,537) (145,370)
31,513 31,513
<EARNINGS-AVAILABLE-FOR-COMM> (175,050) (176,883)
<COMMON-STOCK-DIVIDENDS> 64,210 64,210
<TOTAL-INTEREST-ON-BONDS> 280,272 280,272
<CASH-FLOW-OPERATIONS> 0 0
<EPS-PRIMARY> (1.36) (1.37)
<EPS-DILUTED> (1.36) (1.37)
</TABLE>
<TABLE>
Cash Flow Statement - NU Parent - Exhibit H.8 - Page 1 of 2
<CAPTION>
Jan-98 Feb-98 Mar-98 Apr-98 May-98 Jun-98
<S> <C> <C> <C> <C> <C> <C>
Cash on Hand (12/31/97) 22,700 37,041 34,254 42,546 24,870 24,101
Sources
Federal Tax Refund - - - - - -
Lawsuits Settlement - - 17,000 - - -
COE Proceeds 17,000
ESOP Drip Proceeds 1,206 1,212 1,217 1,223 1,229 1,235
Total Sources 18,206 1,212 18,217 1,223 1,229 1,235
Uses
Select Partners (1) 833 833 833 833 833 833
Other Parent (2) 642 642 642 642 642 642
Mode 1 (3) 117 117 117 117 117 117
COE Administration (4) 1,273 73 73 73 73 73
COE Project Require. (4) - 2,000 - - - 2,000
Portland Pipeline (1) 1,000 333 333 333 333 333
Fed Tax Realloc - Subs(5) - - - 16,900 - -
ESOP Interest (6) - - 1,927 - - 6,349
ESOP Sinking Fund (6) - - 6,000 - - -
Total Uses 3,865 3,998 9,925 18,898 1,998 10,347
Cash (end of month) 37,041 34,254 42,546 24,870 24,101 14,988
Dividends Available 240,034 155,953
CL&P (140,530) (162,152)
WMECO 5,625 11,882
PSNH 178,908 72,073
NNECO 2,000 2,000
NAEC 53,501 69,998
Note: Page 1 of 2 reflects forecasted cash flows for NU Parent from January 1998 to December 1998.
Page 2 of 2 takes the forecasted cash flows from Page 1 of 2 and reduces the sources of funds
by the Charter Oak Energy project sale proceeds and by the federal tax refund. The purpose of
providing two scenarios is to show the negative impact on cash flows in the event that certain
proceeds are not received as forecasted. Both scenarios assume Millstone 3 at 100% power
on 5/1/98, Millstone 2 at 100% power on 7/1/98 and no subsidiary dividend payments in 1998.
(1) Investment made pursuant to Rule 58 under the Act.
(2) Operating expenses of NU Parent.
(3) Exempt telecommunications company pursuant to 34(a)(1) of the Act.
(4) Reference File No. 70-8507.
(5) Amended and Restated Tax Allocation Agreements pursuant to Rule 45 of the Act.
(6) Reference File No. 70-7883 and 70-7954.
</TABLE>
<TABLE>
<CAPTION>
Totals
Jul-98 Aug-98 Sep-98 Oct-98 Nov-98 Dec-98 1998
<S> <C> <C> <C> <C> <C> <C> <C>
Cash on Hand
(12/31/97) 14,988 14,230 13,477 25,055 24,314 23,913
Sources
Federal Tax
Refund - - 16,000 - - 16,000
Lawsuits
settlement - - - - - - 17,000
COE Proceeds 17,000
ESOP Drip
Proceeds 1,240 1,246 1,252 1,258 1,264 1,270 14,852
Total Sources 1,240 1,246 17,252 1,258 1,264 1,270 64,852
Uses
Select
Partners (1) 833 833 833 833 833 833 9,998
Other Parent (2) 642 642 642 642 642 642 7,708
Mode 1 (3) 117 117 117 117 117 117 1,400
COE Admin. (4) 73 73 73 73 73 73 2,076
COE Proj.
Require. (4) - - 2,000 - - - 6,000
Portland
Pipeline (1) 333 333 333 333 - - 4,000
Fed Tax Reall -
Subs.(5) - - - - - - 16,900
ESOP Interest (6) - - 1,676 - - 6,349 16,301
ESOP Sinking
Fund (6) - - - - - 11,000 17,000
Total Uses 1,998 1,998 5,674 1,998 1,665 19,014 81,383
Cash
(end of month) 14,230 13,477 25,055 24,314 23,913 6,169
Dividends
Available 215,938 224,514
CL&P (145,922) (132,648)
WMECO 22,149 23,500
PSNH 103,750 101,193
NNECO 2,000 2,000
NAEC 88,039 97,821
Note: Page 1 of 2 reflects forecasted cash flows for NU Parent from January 1998 to December 1998.
Page 2 of 2 takes the forecasted cash flows from Page 1 of 2 and reduces the sources of funds
by the Charter Oak Energy project sale proceeds and by the federal tax refund. The purpose of
providing two scenarios is to show the negative impact on cash flows in the event that certain
proceeds are not received as forecasted. Both scenarios assume Millstone 3 at 100% power
on 5/1/98, Millstone 2 at 100% power on 7/1/98 and no subsidiary dividend payments in 1998.
(1) Investment made pursuant to Rule 58 under the Act.
(2) Operating expenses of NU Parent.
(3) Exempt telecommunications company pursuant to 34(a)(1) of the Act.
(4) Reference File No. 70-8507.
(5) Amended and Restated Tax Allocation Agreements pursuant to Rule 45 of the Act.
(6) Reference File No. 70-7883 and 70-7954.
</TABLE>
<TABLE>
Cash Flow Statement - NU Parent - Exhibit H.8 - Page 2 of 2
<CAPTION>
Jan-98 Feb-98 Mar-98 Apr-98 May-98 Jun-98
<S> <C> <C> <C> <C> <C> <C>
Cash on Hand (12/31/97) 22,700 20,041 17,254 25,546 7,870 7,101
Sources
Federal Tax Refund (out) - - - - - -
Lawsuits Settlement - - 17,000 - - -
COE Sales (out) - - - - - -
ESOP Drip Proceeds 1,206 1,212 1,217 1,223 1,229 1,235
Total Sources 1,206 1,212 18,217 1,223 1,229 1,235
Uses
Select Partners (1) 833 833 833 833 833 833
Other Parent (2) 642 642 642 642 642 642
Mode 1 (3) 117 117 117 117 117 117
COE Administration (4) 1,273 73 73 73 73 73
COE Project Require. (4) - 2,000 - - - 2,000
Portland Pipeline (1) 1,000 333 333 333 333 333
Fed. Tax Realloc.
to Subs.(5) - - - 16,900 - -
ESOP Interest (6) - - 1,927 - - 6,349
ESOP Sinking Fund (6) - - 6,000 - - -
Total Uses 3,865 3,998 9,925 18,898 1,998 10,347
Cash (end of month) 20,041 17,254 25,546 7,870 7,101 (2,012)
Dividends Available 240,034 155,953
CL&P (140,530) (162,152)
WMECO 5,625 11,882
PSNH 178,908 72,073
NNECO 2,000 2,000
NAEC 53,501 69,998
Note: Page 1 of 2 reflects forecasted cash flows for NU Parent from January 1998 to December 1998.
Page 2 of 2 takes the forecasted cash flows from Page 1 of 2 and reduces the sources of funds
by the Charter Oak Energy project sale proceeds and by the federal tax refund. The purpose of
providing two scenarios is to show the negative impact on cash flows in the event that certain
proceeds are not received as forecasted. Both scenarios assume Millstone 3 at 100% power
on 5/1/98, Millstone 2 at 100% power on 7/1/98 and no subsidiary dividend payments in 1998.
(1) Investment made pursuant to Rule 58 under the Act.
(2) Operating expenses of NU Parent.
(3) Exempt telecommunications company pursuant to 34(a)(1) of the Act.
(4) Reference File No. 70-8507.
(5) Amended and Restated Tax Allocation Agreements pursuant to Rule 45 of the Act.
(6) Reference File No. 70-7883 and 70-7954.
</TABLE>
<TABLE>
<CAPTION>
Totals
Jul-98 Aug-98 Sep-98 Oct-98 Nov-98 Dec-98 1998
<S> <C> <C> <C> <C> <C> <C> <C>
Cash on Hand
(12/31/97) (2,012) (2,770) (3,523) (7,945) (8,686) (9,087)
Sources
Fed. Tax
Refund(out) - - - - - - -
Lawsuits
Settlement - - - - - - 17,000
COE Sales (out) - - - - - - -
ESOP Drip
Proceeds 1,240 1,246 1,252 1,258 1,264 1,270 14,852
Total Sources 1,240 1,246 1,252 1,258 1,264 1,270 31,852
Uses
Select
Partners (1) 833 833 833 833 833 833 9,998
Other Parent (2) 642 642 642 642 642 642 7,708
Mode 1 (3) 117 117 117 117 117 117 1,400
COE Admin. (4) 73 73 73 73 73 73 2,076
COE Proj.
Require. (4) - - 2,000 - - - 6,000
Portland
Pipeline (1) 333 333 333 333 - - 4,000
Fed. Tax Realloc
- Subs (5) - - - - - - 16,900
ESOP
Interest (6) - - 1,676 - - 6,349 16,301
ESOP Sinking
Fund (6) - - - - - 11,000 17,000
Total Uses 1,998 1,998 5,674 1,998 1,665 19,014 81,383
Cash
(end of month) (2,770) (3,523) (7,945) (8,686) (9,087) (26,831)
Dividends
Available 215,938 224,514
CL&P (145,922) (132,648)
WMECO 22,149 23,500
PSNH 103,750 101,193
NNECO 2,000 2,000
NAEC 88,039 97,821
Note: Page 1 of 2 reflects forecasted cash flows for NU Parent from January 1998 to December 1998.
Page 2 of 2 takes the forecasted cash flows from Page 1 of 2 and reduces the sources of funds
by the Charter Oak Energy project sale proceeds and by the federal tax refund. The purpose of
providing two scenarios is to show the negative impact on cash flows in the event that certain
proceeds are not received as forecasted. Both scenarios assume Millstone 3 at 100% power
on 5/1/98, Millstone 2 at 100% power on 7/1/98 and no subsidiary dividend payments in 1998.
(1) Investment made pursuant to Rule 58 under the Act.
(2) Operating expenses of NU Parent.
(3) Exempt telecommunications company pursuant to 34(a)(1) of the Act.
(4) Reference File No. 70-8507.
(5) Amended and Restated Tax Allocation Agreements pursuant to Rule 45 of the Act.
(6) Reference File No. 70-7883 and 70-7954.
</TABLE>
NORTHEAST UTILITIES (PARENT)
BALANCE SHEET
AS OF SEPTEMBER 30, 1997
(THOUSANDS OF DOLLARS)
FINANCIAL STATEMENT 1.1.1
PAGE 1 OF 2
PRO FORMA
GIVING EFFECT
PRO FORMA TO PROPOSED
PER BOOK ADJUSTMENTS* TRANSACTION
ASSETS
OTHER PROPERTY AND INVESTMENTS:
INVESTMENTS IN SUB. CO'S
AT EQUITY $2,323,774 $2,323,774
INVESTMENTS IN TRANSMISSION
COMPANIES, AT EQUITY 21,191 21,191
OTHER, AT COST 407 407
---------------------------------------
TOTAL OTHER PROPERTY &
INVESTMENTS 2,345,372 0 2,345,372
CURRENT ASSETS:
CASH AND SPECIAL DEPOSITS 10 24,595 (a) 24,605
NOTES REC. FROM AFF. CO'S 29,900 29,900
NOTES AND ACCOUNTS REC. 699 699
ACCOUNTS REC. FROM AFF. CO'S 641 641
PREPAYMENTS 400 400
---------------------------------------------
TOTAL CURRENT ASSETS 31,650 24,595 56,245
---------------------------------------------
DEFERRED CHARGES:
ACCUMULATED DEF. INCOME TAXES 2,173 2,173
UNAMORTIZED DEBT EXPENSE 267 267
OTHER 47 47
---------------------------------------------
TOTAL DEFERRED CHARGES 2,487 0 2,487
---------------------------------------------
TOTAL ASSETS $2,379,509 $24,595 $2,404,104
*EXPLANATION AT FINANCIAL STATEMENT 1.2.1 PAGE 3 OF 3
NORTHEAST UTILITIES (PARENT)
BALANCE SHEET
AS OF SEPTEMBER 30, 1997
(THOUSANDS OF DOLLARS)
FINANCIAL STATEMENT 1.1.1
PAGE 2 OF 2
PRO FORMA
GIVING EFFECT
PRO FORMA TO PROPOSED
PER BOOK ADJUSTMENTS* TRANSACTION
CAPITALIZATION AND LIABILITIES
CAPITALIZATION:
COMMON SHARES $684,003 $684,003
CAPITAL SURPLUS, PAID IN 933,080 933,080
DEF. BENEFIT PLAN - ESOP (157,506) (157,506)
RETAINED EARNINGS 701,707 (1,833) 699,874
---------------------------------------------
TOTAL COMMON STOCKHOLDER'S
EQUITY 2,161,284 (1,833) 2,159,451
LONG-TERM DEBT, NET 188,000 188,000
---------------------------------------------
TOTAL CAPITALIZATION 2,349,284 (1,833) 2,347,451
CURRENT LIABILITIES:
NOTES PAYABLE TO BANK 0 25,000 (a) 25,000
ACCOUNTS PAYABLE 1,939 1,939
ACCOUNTS PAYABLE TO AFF. CO'S 516 516
CURR. POR. OF LONG-TERM DEBT 16,000 16,000
ACCRUED INTEREST 4,840 2,415 (b) 7,255
ACCRUED TAXES 6,356 (987)(c) 5,369
OTHER 130 130
----------------------- -------------------
TOTAL CURRENT LIABILITIES 29,781 26,428 56,209
DEFERRED CREDITS:
OTHER 444 444
---------------------------------------------
TOTAL DEFERRED CREDITS 444 0 444
---------------------------------------------
TOTAL CAPITALIZATION AND
LIABILITIES $2,379,509 $24,595 $2,404,104
*EXPLANATION AT FINANCIAL STATEMENT 1.2.1 PAGE 3 OF 3
NORTHEAST UTILITIES (PARENT)
INCOME STATEMENT
FOR 12 MONTHS ENDED SEPTEMBER 30, 1997
(THOUSANDS OF DOLLARS)
FINANCIAL STATEMENT 1.2.1
PAGE 1 OF 3
PRO FORMA
GIVING EFFECT
PRO FORMA TO PROPOSED
PER BOOK ADJUSTMENTS* TRANSACTION
OPERATING REVENUE $0 $0 $0
---------------------------------------------
OPERATING EXPENSES:
OPERATION EXPENSE 9,788 405 (a) 10,193
FED. AND STATE INCOME TAXES (10,834) (987)(c) (11,821)
TAXES OTHER THAN INCOME TAXES 64 64
---------------------------------------------
TOTAL OPERATING EXPENSES (982) (582) (1,564)
---------------------------------------------
OPERATING INCOME 982 582 1,564
---------------------------------------------
OTHER INCOME (LOSS):
EQUITY IN EARNINGS OF SUBS. (161,118) (161,118)
EQUITY IN EARNINGS OF
TRANSMISSION COMPANIES 3,019 3,019
OTHER, NET 1,784 1,784
---------------------------------------------
OTHER LOSS, NET (156,315) 0 (156,315)
---------------------------------------------
LOSS BEFORE INTEREST CHARGES (155,333) 582 (154,751)
---------------------------------------------
INTEREST CHARGES:
INTEREST ON LONG-TERM DEBT 17,910 17,910
OTHER INTEREST 1,807 2,415 (b) 4,222
---------------------------------------------
TOTAL INTEREST CHARGES 19,717 2,415 22,132
---------------------------------------------
NET INCOME (175,050) (1,833) (176,883)
---------------------------------------------
EARNINGS FOR COMMON SHARES (175,050) (1,833) (176,883)
EARNINGS PER COMMON SHARE (1.36) (1.37)
COMMON SHARES OUTSTANDING
(AVERAGE) 129,122,239 129,122,239
*EXPLANATION AT FINANCIAL STATEMENT 1.2.1 PAGE 3 OF 3
NORTHEAST UTILITIES (PARENT)
CAPITAL STRUCTURE AS OF SEPTEMBER 30, 1997
(THOUSANDS OF DOLLARS)
FINANCIAL STATEMENT 1.2.1
PAGE 2 OF 3
PER BOOK
ADJUSTED TO
PRO FORMA REFLECT
% PER BOOK ADJUSTMENT PRO FORMA %
DEBT:
NOTES PAYABLE TO BANK $0 $25,000 $25,000
LONG-TERM DEBT 204,000 204,000
---------------------------------------------
TOTAL DEBT 8.6% 204,000 25,000 229,000 9.6%
COMMON EQUITY:
COMMON SHARES 684,003 684,003
CAPITAL SURPLUS, PAID IN 933,080 933,080
DEFERRED BENEFIT PLAN
-ESOP (157,506) (157,506)
RETAINED EARNINGS 701,707 (1,833) 699,874
---------------------------------------------
TOTAL COMMON STOCKHOLDER'S
EQUITY 91.4% 2,161,284 (1,833) 2,159,451 90.4%
---------------------------------------------
TOTAL CAPITAL 100.0%$2,365,284 23,167 $2,388,451 100.0%
EXPLANATION OF ADJUSTMENTS
(THOUSANDS OF DOLLARS)
FINANCIAL STATEMENT 1.2.1 PAGE 3 OF 3
DEBIT CREDIT
(a) CASH $24,595
OPERATION EXPENSE 405
NOTES PAYABLE TO BANK $25,000
To record the borrowing of up to the entire $25 million available to the
company under the additional
facility and related structuring fees and legal expenses.
(b) OTHER INTEREST EXPENSE 2,415
ACCRUED INTEREST 2,415
To record interest expense on the additional proposed borrowing at LIBOR as
of 11/10/97 [5.66%] + 4.00%
$25,000 x 9.66% = 2,415
(c) ACCRUED TAXES 987
FEDERAL AND STATE INCOME TAX EXPENSE 987
To record the reduction in income taxes due to the higher expenses:
$2,820 x 35.00% = 987
Note: The journal entries above reflect an interest rate of LIBOR plus four
percentage points which is the maximum under the LIBOR option that the
Company is seeking for the duration of the Commission's Order in this docket.
However, based on a LIBOR rate quote as of 11/10/97 of 5.66%,
a borrowing spread of three percentage points (3.00%) as currently
contemplated in the new revolver's terms and conditions, a structuring fee of
$375,000 (1.50%), and estimated legal expenses of $30,000 (.12%) the
effective cost of borrowing to NU on this new revolver would be 10.28%. The
facility does not contain compensating balance requirements, however NU will
be required to pay a commitment fee of 62.5 basis points on the unused
portion of the facility.
NORTHEAST UTILITIES AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
AS OF SEPTEMBER 30, 1997
(THOUSANDS OF DOLLARS)
FINANCIAL STATEMENT 7.1.1
PAGE 1 OF 2
PRO FORMA
GIVING EFFECT
PRO FORMA TO PROPOSED
PER BOOK ADJUSTMENTS* TRANSACTION
ASSETS
UTILITY PLANT, AT COST:
ELECTRIC $9,802,205 $9,802,205
OTHER 189,561 189,561
--------------------------------------------
$9,991,766 9,991,766
LESS: ACC.PROV. FOR DEPREC. 4,243,306 4,243,306
--------------------------------------------
5,748,460 0 5,748,460
UNAMORT. PSNH ACQ. COSTS 424,641 424,641
CONSTRUCT. WORK IN PROGRESS 168,381 168,381
NUCLEAR FUEL, NET 195,796 195,796
--------------------------------------------
TOTAL NET UTILITY PLANT 6,537,278 0 6,537,278
--------------------------------------------
OTHER PROPERTY AND INVESTMENTS:
NUC. DECOM. TRUSTS, AT MKT. 470,424 470,424
INVESTMENTS IN SUB. CO'S
AT EQUITY 90,804 90,804
INVESTMENTS IN TRANSMISSION
COMPANIES, AT EQUITY 21,191 21,191
INVESTMENTS IN CHARTER OAK
ENERGY, INC. PROJECTS 78,417 78,417
OTHER, AT COST 84,183 84,183
--------------------------------------------
TOTAL OTHER PROPERTY &
INVESTMENTS 745,019 0 745,019
CURRENT ASSETS:
CASH AND CASH EQUIVALENTS 213,084 24,595 (a) 237,679
SPECIAL DEPOSITS 669 669
RECEIVABLES, NET 365,409 365,409
ACCRUED UTILITY REVENUES 106,882 106,882
FUEL, MATERIALS AND SUPPLIES,
AT AVERAGE COST 213,557 213,557
RECOV. ENERGY COST, NET --
CURRENT PORTION 41,460 41,460
PREPAYMENTS AND OTHER 64,804 64,804
--------------------------------------------
TOTAL CURRENT ASSETS 1,005,865 24,595 1,030,460
--------------------------------------------
DEFERRED CHARGES:
REGULATORY ASSETS:
INCOME TAXES, NET 948,594 948,594
DEF. COSTS - NUC. PLANTS 200,438 200,438
UNREC. CONTRACTUAL OBLIGS 555,380 555,380
REC. ENERGY COSTS, NET 322,853 322,853
DEF. DEMAND SIDE MGMT.
COSTS 45,652 45,652
COGENERATION COST 42,269 42,269
OTHER 96,279 96,279
UNAMORTIZED DEBT EXPENSE 39,912 39,912
OTHER 72,478 72,478
--------------------------------------------
TOTAL DEFERRED CHARGES 2,323,855 0 2,323,855
--------------------------------------------
TOTAL ASSETS $10,612,017 $24,595 $10,636,612
*EXPLANATION AT FINANCIAL STATEMENT 7.2.1 PAGE 3 OF 3
NORTHEAST UTILITIES AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
AS OF SEPTEMBER 30, 1997
(THOUSANDS OF DOLLARS)
FINANCIAL STATEMENT 7.1.1 PAGE 2 OF 2
PRO FORMA
GIVING EFFECT
PRO FORMA TO PROPOSED
PER BOOK ADJUSTMENTS* TRANSACTION
CAPITALIZATION AND LIABILITIES
CAPITALIZATION:
COMMON SHARES $684,003 $684,003
CAPITAL SURPLUS, PAID IN 933,080 933,080
DEF. BENEFIT PLAN - ESOP (157,506) (157,506)
RETAINED EARNINGS 701,707 (1,833) 699,874
--------------------------------------------
TOTAL COMMON STOCKHOLDER'S
EQUITY 2,161,284 (1,833) 2,159,451
PREF. STOCK NOT SUBJECT TO
MANDATORY REDEMPTION 136,200 136,200
PREF. STOCK SUBJECT TO
MANDATORY REDEMPTION 245,750 245,750
LONG-TERM DEBT 3,653,646 3,653,646
--------------------------------------------
TOTAL CAPITALIZATION 6,196,880 (1,833) 6,195,047
MINORITY INTEREST IN CONS. SUBS 99,855 99,855
OBLIGATIONS UNDER CAP. LEASES 172,202 172,202
CURRENT LIABILITIES:
NOTES PAYABLE TO BANK 150,000 25,000 (a) 175,000
LONG-TERM DEBT AND PREF. STOCK
CURRENT PORTION 279,396 279,396
OBLIGATIONS UNDER CAP. LEASES
CURRENT PORTION 35,928 35,928
ACCOUNTS PAYABLE 322,207 322,207
ACCRUED TAXES 41,656 (987)(c) 40,669
ACCRUED INTEREST 63,162 2,415 (b) 65,577
ACCRUED PENSION BENEFITS 88,099 88,099
NUCLEAR COMPLIANCE 100,160 100,160
OTHER 99,242 99,242
---------------------- -------------------
TOTAL CURRENT LIABILITIES 1,179,850 26,428 1,206,278
DEFERRED CREDITS:
ACCUM. DEF. INCOME TAXES 1,958,684 1,958,684
ACCUM. DEF.INVEST.TAX CREDIT 161,238 161,238
DEF. CONTRACTUAL OBLIGATIONS 564,129 564,129
OTHER 279,179 279,179
--------------------------------------------
TOTAL DEFERRED CREDITS 2,963,230 0 2,963,230
--------------------------------------------
TOTAL CAPITALIZATION AND
LIABILITIES $10,612,017 $24,595 $10,636,612
*EXPLANATION AT FINANCIAL STATEMENT 7.2.1 PAGE 3 OF 3
NORTHEAST UTILITIES AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENT
FOR 12 MONTHS ENDED SEPTEMBER 30, 1997
(THOUSANDS OF DOLLARS)
FINANCIAL STATEMENT 7.2.1
PAGE 1 OF 3
PRO FORMA
GIVING EFFECT
PRO FORMA TO PROPOSED
PER BOOK ADJUSTMENTS* TRANSACTION
OPERATING REVENUE $3,792,342 $0 $3,792,342
--------------------------------------------
OPERATING EXPENSES:
OPERATION
FUEL, PURCH. AND NET
INTERCHANGE POWER 1,274,969 1,274,969
OTHER 1,193,967 405 (a) 1,194,372
MAINTENANCE 506,480 506,480
DEPRECIATION 357,079 357,079
AMORT. OF REG. ASSETS, NET 133,596 133,596
FED. AND STATE INCOME TAXES (30,943) (987)(c) (31,930)
TAXES OTHER THAN INC. TAXES 251,160 251,160
--------------------------------------------
TOTAL OPERATING EXPENSES 3,686,308 (582) 3,685,726
--------------------------------------------
OPERATING INCOME 106,034 582 106,616
--------------------------------------------
OTHER INCOME (LOSS):
DEF. NUCLEAR PLANTS RETURN
OTHER FUNDS 7,076 7,076
EQUITY IN EARNINGS OF REG.
NUCLEAR GEN. AND TRANS. 11,803 11,803
OTHER, NET 7,492 7,492
MIN. INT. IN INCOME OF SUB (9,300) (9,300)
INCOME TAXES 6,601 6,601
--------------------------------------------
OTHER INCOME, NET 23,672 0 23,672
--------------------------------------------
INCOME BEFORE INTEREST CHARGES 129,706 582 130,288
--------------------------------------------
INTEREST CHARGES:
INTEREST ON LONG-TERM DEBT 280,272 280,272
OTHER INTEREST 6,277 2,415 (b) 8,692
DEF. NUC. PLANTS RETURN
BORROWED FUNDS (13,306) (13,306)
--------------------------------------------
INTEREST CHARGES, NET 273,243 2,415 275,658
--------------------------------------------
LOSS BEFORE PREF. DIVIDEN (143,537) (1,833) (145,370)
PREF. DIVIDENDS OF SUBS 31,513 31,513
--------------------------------------------
NET (LOSS) / INCOME (175,050) (1,833) (176,883)
EARNINGS FOR COMMON SHARES (175,050) (1,833) (176,883)
EARNINGS PER COMMON SHARE (1.36) (1.37)
COMMON SHARES OUTSTANDING
(AVERAGE) 129,122,239 129,122,239
*EXPLANATION AT FINANCIAL STATEMENT 7.2.1 PAGE 3 OF 3
NORTHEAST UTILITIES AND SUBSIDIARIES
CAPITAL STRUCTURE AS OF SEPTEMBER 30, 1997
(THOUSANDS OF DOLLARS)
FINANCIAL STATEMENT 7.2.1
PAGE 2 OF 3
PER BOOK
ADJUSTED TO
PRO FORMA REFLECT
% PER BOOK ADJUSTMENT PRO FORMA %
DEBT:
NOTES PAYABLE TO BANK $150,000 $25,000 $175,000
LONG-TERM DEBT 3,902,792 3,902,792
--------------------------------------------
TOTAL DEBT 61.2% 4,052,792 25,000 4,077,792 61.3%
PREFERRED STOCK:
NOT SUBJECT TO REDEMPTION 136,200 136,200
SUBJECT TO REDEMPTION 276,000 276,000
--------------------------------------------
TOTAL PREF. STOCK 6.2% 412,200 0 412,200 6.2%
COMMON EQUITY:
COMMON SHARES 684,003 684,003
CAPITAL SURPLUS, PAID IN 933,080 933,080
DEFERRED BENEFIT PLAN
-ESOP (157,506) (157,506)
RETAINED EARNINGS 701,707 (1,833) 699,874
--------------------------------------------
TOTAL COMMON STOCKHOLDER'S
EQUITY 32.6% 2,161,284 (1,833) 2,159,451 32.5%
--------------------------------------------
TOTAL CAPITAL 100.0%$6,626,276 23,167 $6,649,443 100.0%
EXPLANATION OF ADJUSTMENTS
(THOUSANDS OF DOLLARS)
FINANCIAL STATEMENT 7.2.1
PAGE 3 OF 3
DEBIT CREDIT
(a) CASH $24,595
OPERATION EXPENSE 405
NOTES PAYABLE TO BANK $25,000
To record the borrowing of up to the entire $25 million available to NU
Parent under the additional
facility and related structuring fees and legal expenses.
(b) OTHER INTEREST EXPENSE 2,415
ACCRUED INTEREST 2,415
To record interest expense on the additional proposed borrowing at LIBOR as
of 11/10/97 [5.66%] +
4.00%
$25,000 x 9.66% 2,415
(c) ACCRUED TAXES 987
FEDERAL AND STATE INCOME TAX EXPENSE 987
To record the reduction in income taxes due to the higher expenses:
$2,820 x 35.00% 987
