<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM U-3A-2
STATEMENT BY HOLDING COMPANY CLAIMING EXEMPTION
UNDER RULE U-3A-2
FROM THE PROVISIONS OF
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
YANKEE ENERGY SYSTEM, INC.
hereby files with the Securities and Exchange Commission,
pursuant to Rule 2, its statement claiming exemption as a holding
company from the provisions of the Public Utility Holding Company
Act of 1935, and submits the following information:
1. Yankee Energy System, Inc. ("Yankee Energy") is a
corporation organized under the laws of the State of Connecticut.
Yankee Energy is the holding company for Yankee Gas Services
Company ("Yankee Gas"), a gas utility company, and five
non-utility subsidiaries, NorConn Properties, Inc. ("NorConn"),
Yankee Energy Financial Services Company ("Yankee Financial"),
Yankee Energy Services Company ("YESCo"), R.M. Services, Inc.
("RMS"), and Housatonic Corporation. These companies are
referred to collectively herein as "the Yankee Energy System."
Yankee Energy's business essentially is confined to the ownership
of its subsidiaries. Yankee Gas, the principal subsidiary of Yankee
Energy, is a Connecticut corporation that purchases, distributes and
sells natural gas at retail in Connecticut.
Yankee Energy conducts non-utility operations through five
subsidiaries, NorConn, Yankee Financial, YESCo, RMS, and
Housatonic Corporation. All five non-utility subsidiaries are
Connecticut corporations. NorConn was formed in 1988 to hold
non-utility property interests that may be acquired by the Yankee
Energy System. Yankee Financial, incorporated in 1992, provides
customers with financing for natural gas installations. YESCo is a
full service energy company providing fuel management, project
development, and operations and maintenance services at selected
customer sites. YESCo also has three wholly-owned subsidiaries:
YESCo Power, incorporated in 1997, designs, builds and maintains
on-site facilities for the production of thermal and/or electric power.
YESCo Controls, incorporated in November 1996, specializes in the
engineering, installation, and maintenance of building controls
product for commercial and industrial customers. YESCo
Industrial, acquired by YESCo in July 1996, operates in Connecticut
and Massachusetts and provides comprehensive HVAC, boiler and
refrigeration equipment services and installation. RMS was formed
in 1994 to provide debt collection service to utilities and other
businesses nationwide. Housatonic Corporation was incorporated in
1987 to acquire, own, hold and manage an undivided general
partnership interest in Iroquois Gas Transmission System, a general
partnership organized under the laws of the State of New York.
Yankee Energy and Yankee Gas are predominantly intrastate in
character.
2. Yankee Gas purchases, distributes and sells natural gas to
approximately 181,000 residential, commercial and industrial
users in Connecticut. Its service territory consists of 68
cities and towns, and covers approximately 1,995 square miles,
all in Connecticut.
Yankee Gas' assets include distribution lines (mains and
services), meters, pumps, valves and pressure and flow
controllers, all located in Connecticut. Yankee Gas owns
approximately 2,786 miles of distribution mains, 133,094 service
lines, and 181,000 active meters for customer use, all located in
Connecticut. Yankee Gas also owns various propane facilities and
seven gas storage holders, all located in Connecticut. Yankee Gas
also contracts for storage capacity with other energy and
pipeline companies.
3. The following information is for the calendar year 1997.
a. Number of Mcf of natural or manufactured gas
distributed at retail: 49,719,837.
b. Number of Mcf of natural gas distributed at retail
outside the State of Connecticut: None.
c. Number of Mcf of natural gas sold at wholesale outside
of the State of Connecticut, or at the boundary of the
State of Connecticut: 68,027.
d. Number of Mcf of natural or manufactured gas purchased
outside the State of Connecticut, or at the Connecticut
state line: In 1997, Yankee Gas purchased 32,227,747
Mcf of natural gas. All gas purchased is ultimately
delivered to Connecticut via interstate pipelines.
4. None.
Exhibit A
Attached as Exhibit A is a consolidating statement of income and
surplus for Yankee Energy and its subsidiaries for the last
calendar year, together with a consolidating balance sheet for
Yankee Energy and its subsidiaries as of the close of the last
calendar year.
Exhibit B
Attached as Exhibit B is a Financial Data Schedule which sets forth
1. Total Assets, 2. Total Operating Revenues, and 3. Net Income
applicable to Yankee Energy and its subsidiaries on a consolidated
basis.
The above-named claimant has caused this statement to be duly
executed on its behalf by an authorized officer on this 27th day
of February, 1998.
YANKEE ENERGY SYSTEM, INC.
By: s/Mary J. Healey
Mary J. Healey
Vice President, General Counsel and Secretary
SEAL
<PAGE>
ATTEST: s/Cristi C. Walker
Name: Cristi C. Walker
Title: Attorney
Name, title and address of officer to whom notices and
correspondence concerning this statement should be addressed:
Mary J. Healey
Vice President, General Counsel and Secretary
Yankee Energy System, Inc.
599 Research Parkway
Meriden, CT 06450
<PAGE>
YANKEE ENERGY SYSTEM, INC. AND SUBSIDIARIES EXHIBIT A
CONSOLIDATING STATEMENTS OF INCOME (a)
TWELVE MONTHS ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
YANKEE ENERGY YANKEE GAS NORCONN
SYSTEM (Parent) SERVICES CO. PROPERTIES
__________________________________________
<S> <C> <C> <C>
Operating Revenues $321,479 $1,114
Less: Cost of Gas 174,118
Cost of Sales __________________________________________
Revenues, Net of
Cost of Gas 147,361 1,114
__________________________________________
Other Operating Expenses:
Operations $ 696 54,392 109
Maintenance 5,972
Depreciation 1 17,121 254
Federal and State
Income Taxes 16,608 (26)
Taxes Other Than
Income Taxes 21,288
__________________________________________
Total Other Operating
Expenses 697 115,381 337
__________________________________________
Operating Inc (Loss) (697) 31,980 777
__________________________________________
Other Income, (Expense) Net:
Allowance for Other Funds
Used During Construction 150
Equity in Earnings of
Subsidiaries 17,034
Federal and State
Income Taxes 138 (192)
Other, Net 882 (274)
__________________________________________
Other Inc, (Exp) Net 17,916 14 (192)
__________________________________________
Income (Loss) Before
Interest Charges 17,219 31,994 585
__________________________________________
Interest Charges:
Interest on Long-
Term Debt 11,616 365
Other Interest 51 965 (9)
Allowance for Borrowed
Funds Used During
Construction (537)
__________________________________________
Interest Chrgs, Net 51 12,044 356
__________________________________________
Net Income (Loss) $17,168 $ 19,950 $229
__________________________________________
__________________________________________
</TABLE>
(a) Unaudited
NOTE: Individual columns may not add to Consolidated amount due
to rounding.
YANKEE ENERGY SYSTEM, INC. AND SUBSIDIARIES EXHIBIT A
CONSOLIDATING STATEMENTS OF INCOME (a)
TWELVE MONTHS ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
YANKEE YANKEE
ENERGY ENERGY
HOUSATONIC FINCIAL SRVS SERVICES
CORPORATION COMPANY COMPANY
__________________________________________
<S> <C> <C> <C>
Operating Revenues $ 0 $227 $10,247
Less: Cost of Gas
Cost of Sales $ 4,072
__________________________________________
Revenues, Net of $227 $ 6,175
Cost of Gas
__________________________________________
Other Operating Expenses:
Operations $ 0 $ 86 $9,492
Maintenance
Depreciation 173 442
Federal and State
Income Taxes 435 11 29
Taxes Other Than
Income Taxes 1 2 284
__________________________________________
Total Other Operating
Expenses 436 272 10,227
__________________________________________
Operating Inc (Loss) (436) (45) (4,052)
__________________________________________
Other Income, (Expense) Net:
Allowance for Other Funds
Used During Construction
Equity in Earnings of
Subsidiaries
Federal and State
Income Taxes (16) 2,222
Other, Net 351 98
__________________________________________
Other Inc, (Exp) Net 0 335 2,320
__________________________________________
Income (Loss) Before
Interest Charges (436) 290 (1,732)
__________________________________________
Interest Charges:
Interest on Long-
Term Debt
Other Interest 252 1,018
Allowance for Borrowed
Funds Used During
Construction (78)
__________________________________________
Interest Chrgs, Net 0 252 940
__________________________________________
Net Income (Loss) $ (436) $ 38 $2,672
__________________________________________
__________________________________________
</TABLE>
(a) Unaudited
NOTE: Individual columns may not add to Consolidated amount due
to rounding.
YANKEE ENERGY SYSTEM, INC. AND SUBSIDIARIES EXHIBIT A
CONSOLIDATED STATEMENTS OF INCOME (a)
TWELVE MONTHS ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
RM
SRVCS ELIMI- CONSOLI-
INC. NATIONS DATED
_______________________________________
<S> <C> <C> <C>
Operating Revenues $ 1,588 $ 2,700 $331,955
Less: Cost of Gas 174,118
Cost of Sales 4,072
_______________________________________
Revenues, Net of
Cost of Gas 1,588 2,700 $153,765
_______________________________________
Other Operating Expenses:
Operations 1,588 2,700 $ 63,663
Maintenance 5,972
Depreciation 25 17,996
Federal and State
Income Taxes (1) 17,056
Taxes Other Than
Income Taxes 91 21,666
_______________________________________
Total Other Operating
Expenses 1,703 2,700 126,353
_______________________________________
Operating Inc (Loss) (115) 0 27,412
_______________________________________
Other Income, (Expense) Net:
Allowance for Other Funds
Used During Construction 150
Equity in Earnings of
Subsidiaries 17,034 0
Federal and State
Income Taxes 53 2,205
Other, Net 830 227
_______________________________________
Other Inc, (Exp) Net 53 17,864 2,582
_______________________________________
Income (Loss) Before
Interest Charges (62) 17,864 29,994
________________________________________
Interest Charges:
Interest on Long-
Term Debt 11,981
Other Interest 13 830 1,460
Allowance for Borrowed
Funds Used During 0
Construction (615)
________________________________________
Interest Chrgs, Net 13 830 12,826
________________________________________
Net Income (Loss) $ (75) $ 17,034 $ 17,168
________________________________________
________________________________________
</TABLE>
(a) Unaudited
NOTE: Individual columns may not add to Consolidated amount due
to rounding.
YANKEE ENERGY SYSTEM, INC. AND SUBSIDIARIES EXHIBIT A
CONSOLIDATING BALANCE SHEETS (a)
ASSETS
AT DECEMBER 31, 1997
(THOUSANDS OF DOLLARS)
<TABLE>
<CAPTION>
YANKEE ENERGY YANKEE GAS NORCONN
SYSTEM (Parent) SERVICES CO. PROPERTIES
__________________________________________
<S> <C> <C> <C>
Utility Plant, at
Original Cost $531,416
Less: Accumulated Provision
for Depreciation 196,403
__________________________________________
335,013
Construction Work in Progress 18,724
__________________________________________
Total Net Utility Plant 353,737
__________________________________________
Other Property and Investments:
Other Property 174 6,688
Investments in Subsidiary
Companies, at Equity 164,462
Other Investments 188
__________________________________________
Total Other Property
and Investments 164,462 362 6,688
__________________________________________
Current Assets:
Cash 667 867
Accounts Receivable,
Net 20,230 47,814 91
Fuel Supplies 4,482
Other Material and Supplies 1,311
Deferred Gas Costs, Current 1,937
Accrued Utility Revenues 19,390
Prepayments and Other 9,614
__________________________________________
Total Current Assets 20,897 85,415 91
__________________________________________
Unamortized Debt Expense 846 19
Deferred Gas Costs
and Other (188) 6,068
Recoverable Environmental
Cleanup Costs 31,968
Recoverable Income Taxes 9,430
Recoverable Postretirement
Benefit Costs 1,523
Other Deferred Debits 12,949
__________________________________________
Total Assets $185,171 $502,298 $6,798
__________________________________________
__________________________________________
</TABLE>
(a) Unaudited
NOTE: Individual columns may not add to Consolidated amount due
to rounding.
YANKEE ENERGY SYSTEM, INC. AND SUBSIDIARIES EXHIBIT A
CONSOLIDATING BALANCE SHEETS (a)
ASSETS
AT DECEMBER 31, 1997
(THOUSANDS OF DOLLARS)
<TABLE>
<CAPTION>
YANKEE YANKEE
ENERGY ENERGY
HOUSATONIC FINCIAL SRVS SERVICES
CORPORATION COMPANY COMPANY
__________________________________________
<S> <C> <C> <C>
Utility Plant, at
Original Cost
Less: Accumulated Provision
for Depreciation
__________________________________________
Construction Work in Progress
__________________________________________
Total Net Utility Plant
__________________________________________
Other Property and Investments:
Other Property 685 7,818
Investments in Subsidiary
Companies, at Equity
Other Investments 6,025
__________________________________________
Total Other Property
and Investments 0 685 13,843
__________________________________________
Current Assets:
Cash 24
Accounts Receivable,
Net 4,731 4,542 7,510
Fuel Supplies
Other Material and Supplies 1,528
Deferred Gas Costs, Current
Accrued Utility Revenues
Prepayments and Other 3 (123)
__________________________________________
Total Current Assets 4,731 4,545 8,939
__________________________________________
Unamortized Debt Expense
Deferred Gas Costs and Other 94 811
Recoverable Environmental
Cleanup Costs
Recoverable Income Taxes
Recoverable Postretirement
Benefit Costs
Other Deferred Debits
__________________________________________
Total Assets $ 4,731 $5,324 $23,593
__________________________________________
__________________________________________
</TABLE>
(a) Unaudited
NOTE: Individual columns may not add to Consolidated amount due
to rounding.
YANKEE ENERGY SYSTEM, INC. AND SUBSIDIARIES EXHIBIT A
CONSOLIDATING BALANCE SHEETS (a)
ASSETS
AT DECEMBER 31, 1997
(THOUSANDS OF DOLLARS)
<TABLE>
<CAPTION>
RM
SRVCS ELIMI- CONSOLI-
INC NATION DATED
_______________________________________
<S> <C> <C> <C>
Utility Plant, at
Original Cost $531,416
Less: Accumulated Provision
for Depreciation 196,403
_______________________________________
$335,013
Construction Work in Progress 18,724
_______________________________________
Total Net Utility Plant 353,737
_______________________________________
Other Property and Investments:
Other Property 69 15,434
Investments in Subsidiary
Companies, at Equity 164,462
Other Investments 6,213
_______________________________________
Total Other Property
and Investments 69 164,462 21,647
_______________________________________
Current Assets:
Cash 53 1,611
Accounts Receivable,
Net 137 30,535 54,520
Fuel Supplies 4,482
Other Material and Supplies 2,839
Deferred Gas Costs, Current 1,937
Accrued Utility Revenues 19,390
Prepayments and Other 1 9,495
_______________________________________
Total Current Assets 191 30,535 94,274
_______________________________________
Unamortized Debt Expense 865
Deferred Gas Costs and Other 30 6,755
Recoverable Environmental
Cleanup Costs 31,968
Recoverable Income Taxes 9,430
Recoverable Postretirement
Benefit Costs 1,523
Other Deferred Debits 12,949
_______________________________________
Total Assets $ 230 $194,997 $533,148
_______________________________________
_______________________________________
NOTE: Individual columns may not add to Consolidated amount due
to rounding.
YANKEE ENERGY SYSTEM, INC. AND SUBSIDIARIES EXHIBIT A
CONSOLIDATING BALANCE SHEETS (a)
CAPITALIZATION AND LIABILITIES
AT DECEMBER 31, 1997
(THOUSANDS OF DOLLARS)
</TABLE>
<TABLE>
<CAPTION>
YANKEE ENERGY YANKEE GAS NORCONN
SYSTEM (Parent) SERVICES CO. PROPERTIES
__________________________________________
<S> <C> <C> <C>
Capitalization:
Common Shareholders'
Equity $172,175 $157,747 $1,319
Long-Term Debt, Net of
Current Portion 200 129,165 5,500
__________________________________________
Total Capitalization 172,375 286,912 6,819
__________________________________________
Current Liabilities:
Notes Payable to
Associated Companies (374)
Notes Payable to Banks 7,700 54,500
Long-Term Debt,
Current Portion 400 3,367 250
Accounts Payable 4,758 21,643 29
Accrued Taxes (81) 4,412 123
Accrued Interest 19 3,084 32
Pipeline Transition Costs 3,458
Other Current Liabilities 5,882
__________________________________________
Total Current
Liabilities 12,796 96,346 60
__________________________________________
Accumulated Deferred
Income Taxes 67,265 (81)
Accumulated Deferred Investment
Tax Credits 8,608
Reserve for Environmental
Cleanup Costs 35,000
Postretirement
Benefit Obligation 3,099
Other Deferred Credits 5,068
__________________________________________
Total Capitalization
and Liabilities $185,171 $502,298 $6,798
__________________________________________
__________________________________________
</TABLE>
(a) Unaudited
NOTE: Individual columns may not add to Consolidated amount due
to rounding.
YANKEE ENERGY SYSTEM, INC. AND SUBSIDIARIES EXHIBIT A
CONSOLIDATING BALANCE SHEETS (a)
CAPITALIZATION AND LIABILITIES
AT DECEMBER 31, 1997
(THOUSANDS OF DOLLARS)
<TABLE>
<CAPTION>
YANKEE YANKEE
ENERGY ENERGY
HOUSATONIC FINCIAL SRVS PRODUCTION
CORPORATION COMPANY SRVCS, INC.
__________________________________________
<S> <C> <C> <C>
Capitalization:
Common Shareholders'
Equity $ (407) $ 583 $5,245
Long-Term Debt, Net of
Current Portion
__________________________________________
Total Capitalization (407) 583 5,245
__________________________________________
Current Liabilities:
Notes Payable to
Associated Companies 0 4,051 16,252
Notes Payable to Banks
Long-Term Debt,
Current Portion
Accounts Payable 5,149 38 2,768
Accrued Taxes (11) 0 (2,350)
Accrued Interest 478
Pipeline Transition Costs
Other Current Liabilities 4 240
__________________________________________
Total Current
Liabilities 5,138 4,093 17,388
__________________________________________
Accumulated Deferred
Income Taxes (27) 163
Accumulated Deferred Investment
Tax Credits
Reserve for Environmental
Cleanup Costs
Postretirement
Benefit Obligation
Other Deferred Credits 675 797
__________________________________________
Total Capitalization
and Liabilities $ 4,731 $5,324 $23,593
__________________________________________
__________________________________________
</TABLE>
(a) Unaudited
NOTE: Individual columns may not add to Consolidated amount due
to rounding.
YANKEE ENERGY SYSTEM, INC. AND SUBSIDIARIES EXHIBIT A
CONSOLIDATING BALANCE SHEETS (a)
CAPITALIZATION AND LIABILITIES
AT DECEMBER 31, 1997
(THOUSANDS OF DOLLARS)
<TABLE>
<CAPTION>
RM ELIMINA- CONSOLI-
SRVCS TIONS DATED
INC
________________________________________
<S> <C> <C> <C>
Capitalization:
Common Shareholders'
Equity ($26) $164,462 $172,174
Long-Term Debt, Net of
Current Portion 134,865
________________________________________
Total Capitalization (26) 164,462 307,039
________________________________________
Current Liabilities:
Notes Payable to
Associated Companies 241 20,170 0
Notes Payable to Banks 62,200
Long-Term Debt,
Current Portion 4,017
Accounts Payable 46 10,365 24,066
Accrued Taxes (43) 2,050
Accrued Interest 3,613
Pipeline Transition Costs 3,458
Other Current Liabilities 6 6,132
________________________________________
Total Current
Liabilities 250 30,535 105,536
________________________________________
Accumulated Deferred
Income Taxes 6 67,326
Accumulated Deferred Investment
Tax Credits 8,608
Reserve for Environmental
Cleanup Costs 35,000
Postretirement
Benefit Obligation 3,099
Other Deferred Credits 6,540
________________________________________
Total Capitalization
and Liabilities $230 $194,997 $533,148
________________________________________
________________________________________
</TABLE>
(a) Unaudited
NOTE: Individual columns may not add to Consolidated amount due
to rounding.
YANKEE ENERGY SYSTEM, INC. AND SUBSIDIARIES EXHIBIT A
CONSOLIDATING STATEMENTS OF
COMMON SHAREHOLDERS' EQUITY (a)
TWELVE MONTHS ENDED DECEMBER 31, 1997
(THOUSANDS OF DOLLARS)
<TABLE>
<CAPTION>
YANKEE ENERGY YANKEE GAS NORCONN
SYSTEM (Parent) SERVICES CO. PROPERTIES
__________________________________________
<S> <C> <C> <C>
Common Shares $ 52,368 $ 5 $ 1
Capital Surplus,
Paid In 90,542 80,780 1,100
Retained Earnings 32,020 76,961 218
Employee Stock Ownership
Plan Guarantee (600)
Capital Stock Expense (2,155)
__________________________________________
$172,175 $157,746 $1,319
__________________________________________
__________________________________________
</TABLE>
(a) Unaudited
NOTE: Individual columns may not add to Consolidated amount due
to rounding.
YANKEE ENERGY SYSTEM, INC. AND SUBSIDIARIES EXHIBIT A
CONSOLIDATING STATEMENTS OF
COMMON SHAREHOLDERS' EQUITY (a)
TWELVE MONTHS ENDED DECEMBER 31, 1997
(THOUSANDS OF DOLLARS)
<TABLE>
<CAPTION>
YANKEE YANKEE
ENERGY ENERGY
HOUSATONIC FINCIAL SRVS PRODUCTION
CORPORATION COMPANY SRVCS, INC.
__________________________________________
<S> <C> <C> <C>
Common Shares $ 10 $ 1 $ 1
Capital Surplus,
Paid In 400 10,593
Retained Earnings (418) 182 (5,348)
Employee Stock Ownership
Plan Guarantee
Capital Stock Expense
__________________________________________
($408) $583 $5,246
__________________________________________
__________________________________________
</TABLE>
(a) Unaudited
NOTE: Individual columns may not add to Consolidated amount due
to rounding.
YANKEE ENERGY SYSTEM, INC. AND SUBSIDIARIES EXHIBIT A
CONSOLIDATING STATEMENTS OF
COMMON SHAREHOLDERS' EQUITY (a)
TWELVE MONTHS ENDED DECEMBER 31, 1997
(THOUSANDS OF DOLLARS)
<TABLE>
<CAPTION>
RM ELIMINA- CONSOLI-
SRVCS TIONS DATED
INC
________________________________________
<S> <C> <C> <C>
Common Shares $ 1 $ 19 $52,368
Capital Surplus,
Paid In 149 93,022 90,542
Retained Earnings (176) 71,421 32,018
Employee Stock Ownership
Plan Guarantee (600)
Capital Stock Expense (2,155)
________________________________________
($26) $164,462 $172,173
________________________________________
________________________________________
</TABLE>
(a) Unaudited
NOTE: Individual columns may not add to Consolidated amount due
to rounding.
<PAGE>
YANKEE ENERGY SYSTEM, INC. AND SUBSIDIARIES EXHIBIT B
FINANCIAL DATA SCHEDULE
1. TOTAL ASSETS: $533,148
2. TOTAL OPERATING REVENUE: $331,955
3. NET INCOME: $17,168
