<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 provides a wide range of
energy-related services for its customers. Through its YESCo Controls division,
incorporated in November 1996, such services include comprehensive building
automation with engineering, installation and maintenance of building control
systems. Through its YESCo Mechanical Services division, acquired in July 1996,
<PAGE>
customers are provided comprehensive heating, ventilation and air-conditioning
(HVAC), boiler and refrigeration equipment services and installation. YESCo's
Power division, incorporated in 1997, provides expertise related to the
production of thermal and/or electric power. 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. In fiscal
year 1996, Housatonic Corporation sold its interest in Iroquois Gas Transmission
System.
Yankee Energy, Yankee Gas, NorConn, and YESCo, are predominantly intrastate
in character.
2. Yankee Gas purchases, distributes and sells natural gas to approximately
183,000 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 2,820 miles of distribution mains, 133,033 service
lines, and 183,000 active meters for customer use, all located in Connecticut.
Yankee Gas also owns and operates various propane facilities and six 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 1998:
a. Number of Mcf of natural or manufactured gas distributed at retail:
45,435,168.
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: None.
d. Number of Mcf of natural or manufactured gas purchased
<PAGE>
outside the State of Connecticut, or at the Connecticut state line: In
1998, Yankee Gas purchased 21,972,599 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 toYankee
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 24th day of February, 1999.
YANKEE ENERGY SYSTEM, INC.
By: s/Mary J. Healey
---------------------------------------------
Mary J. Healey
Vice President, General Counsel and Secretary
SEAL
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>
Exhibit 99.A
YANKEE ENERGY SYSTEM, INC. AND SUBSIDIARIES Exhibit A
CONSOLIDATING STATEMENTS OF INCOME (a) Page 1 of 4
TWELVE MONTHS ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
YANKEE
YANKEE YANKEE ENERGY YANKEE
ENERGY GAS NORCONN FINANCIAL ENERGY
SYSTEM SERVICES PROPERTIES HOUSATONIC SERVICES SERVICES, INC.
(parent) COMPANY INC. CORPORATION COMPANY CONSOL.
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
OPERATING REVENUES $263,904 $1,205 261 32,152
LESS: COST OF GAS 128,783
COST OF SALES 26,071
------------------------------------------------------------------------------------------
REVENUES, NET OF COST OF GAS 135,121 1,205 261 6,081
------------------------------------------------------------------------------------------
OTHER OPERATING EXPENSES:
OPERATIONS 2,342 51,559 187 0 78 14,250
MAINTENANCE 6,225
DEPRECIATION 0 18,487 255 182 1,185
FEDERAL AND STATE INCOME TAXES 0 9,318 (21) 0 (8) 0
TAXES OTHER THAN INCOME TAXES 20,534 0 0 (34)
------------------------------------------------------------------------------------------
TOTAL OTHER OPERATING EXPENSES 2,342 106,123 421 0 252 15,401
------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------
OPERATING INCOME (LOSS) (2,342) 28,998 784 0 9 (9,320)
------------------------------------------------------------------------------------------
OTHER INCOME, (EXPENSE) NET:
ALLOWANCE FOR OTHER FUNDS USED
DURING CONSTRUCTION 7
EQUITY IN EARNINGS OF SUBSIDIARIES 10,830
FEDERAL AND STATE INCOME TAXES 805 837 (195) (76) 4,282
OTHER, NET 1,080 (547) 267 418
------------------------------------------------------------------------------------------
OTHER INCOME, (EXPENSE) NET 12,715 297 (195) 0 191 4,700
------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------
INCOME (LOSS) BEFORE INTEREST CHARGES 10,373 29,295 589 0 200 (4,620)
------------------------------------------------------------------------------------------
INTEREST CHARGES:
INTEREST ON LONG-TERM DEBT 11,071 351 0
OTHER INTEREST 735 3,279 (11) 103 930
ALLOWANCE FOR BORROWED FUNDS
USED DURING CONSTRUCTION (1,047) 0
------------------------------------------------------------------------------------------
INTEREST CHARGES, NET 735 13,303 340 0 103 930
------------------------------------------------------------------------------------------
NET INCOME (LOSS) $9,638 $15,992 $249 $0 $97 ($5,550)
------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
RM
SERVICES, ELIMINA- CONSOLI-
INC. TIONS DATED
-----------------------------------------------------------
<S> <C> <C> <C>
OPERATING REVENUES 2,604 $2,953 $297,173
LESS: COST OF GAS 128,783
COST OF SALES 26,071
------------------------------------------------------------
REVENUES, NET OF COST OF GAS 2,604 2,953 142,319
------------------------------------------------------------
OTHER OPERATING EXPENSES:
OPERATIONS 2,328 2,953 67,791
MAINTENANCE 6,225
DEPRECIATION 88 20,197
FEDERAL AND STATE INCOME TAXES 15 9,304
TAXES OTHER THAN INCOME TAXES 103 20,603
------------------------------------------------------------
TOTAL OTHER OPERATING EXPENSES 2,534 2,953 124,120
------------------------------------------------------------
------------------------------------------------------------
OPERATING INCOME (LOSS) 70 0 18,199
------------------------------------------------------------
OTHER INCOME, (EXPENSE) NET:
ALLOWANCE FOR OTHER FUNDS USED
DURING CONSTRUCTION 7
EQUITY IN EARNINGS OF SUBSIDIARIES 10,830 0
FEDERAL AND STATE INCOME TAXES (16) 5,637
OTHER, NET 1,016 202
------------------------------------------------------------
OTHER INCOME, (EXPENSE) NET (16) 11,846 5,846
------------------------------------------------------------
------------------------------------------------------------
INCOME (LOSS) BEFORE INTEREST CHARGES 54 11,846 24,045
------------------------------------------------------------
INTEREST CHARGES:
INTEREST ON LONG-TERM DEBT 11,422
OTHER INTEREST 11 1,016 4,031
ALLOWANCE FOR BORROWED FUNDS 0
USED DURING CONSTRUCTION (1,047)
------------------------------------------------------------
INTEREST CHARGES, NET 11 1,016 14,406
------------------------------------------------------------
NET INCOME (LOSS) $43 $10,830 $9,639
------------------------------------------------------------
------------------------------------------------------------
</TABLE>
(a) Unaudited
NOTE: Individual columns may not add to Consolidated amount due to rounding.
<PAGE>
YANKEE ENERGY SYSTEM, INC. AND SUBSIDIARIES Exhibit A
CONSOLIDATING BALANCE SHEETS (a) Page 2 of 4
ASSETS
AT DECEMBER 31, 1998
(THOUSANDS OF DOLLARS)
<TABLE>
<CAPTION>
YANKEE
YANKEE YANKEE ENERGY
ENERGY GAS NORCONN FINANCIAL
SYSTEM SERVICES PROPERTIES HOUSATONIC SERVICES
(parent) COMPANY INC. CORPORATION COMPANY
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS
UTILITY PLANT, AT ORIGINAL COST $557,302
LESS: ACCUMULATED PROVISION
FOR DEPRECIATION 211,065
--------------------------------------------------------------------------
346,237
CONSTRUCTION WORK IN PROGRESS 23,272
--------------------------------------------------------------------------
TOTAL NET UTILITY PLANT 369,509
--------------------------------------------------------------------------
OTHER PROPERTY AND INVESTMENTS:
OTHER PROPERTY 174 6,433 517
INVESTMENTS IN SUBSIDIARY
COMPANIES, AT EQUITY 174,750
OTHER INVESTMENTS 121
--------------------------------------------------------------------------
TOTAL OTHER PROPERTY AND INVESTMENTS 174,750 295 6,433 0 517
--------------------------------------------------------------------------
CURRENT ASSETS:
CASH 1,767 100 14
ACCOUNTS RECEIVABLE, NET 14,092 46,545 101 330 1,329
FUEL SUPPLIES 1,425
OTHER MATERIAL & SUPPLIES 1,204
DEFERRED GAS COSTS, CURRENT 1,833
ACCRUED UTILITY REVENUES 12,970
PREPAYMENTS AND OTHER 10,746 3
--------------------------------------------------------------------------
TOTAL CURRENT ASSETS 15,859 74,823 101 330 1,346
--------------------------------------------------------------------------
UNAMORTIZED DEBT EXPENSE 794 16
DEFERRED GAS COSTS AND OTHER (794) 6,092 0
RECOVERABLE ENVIRONMENTAL
CLEANUP COSTS 33,569
RECOVERABLE INCOME TAXES 9,681
RECOVERABLE POSTRETIREMENT
BENEFIT COSTS 1,764
OTHER DEFERRED DEBITS 14,190 13 118
--------------------------------------------------------------------------
TOTAL ASSETS $189,815 $510,717 $6,550 $343 $1,981
--------------------------------------------------------------------------
--------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
YANKEE
ENERGY RM
SERVICES SERVICES ELIMINA- CONSOLI-
COMPANY COMPANY TIONS DATED
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ASSETS
UTILITY PLANT, AT ORIGINAL COST $557,302
LESS: ACCUMULATED PROVISION
FOR DEPRECIATION 211,065
-----------------------------------------------------------
346,237
CONSTRUCTION WORK IN PROGRESS 23,272
-----------------------------------------------------------
TOTAL NET UTILITY PLANT 369,509
-----------------------------------------------------------
OTHER PROPERTY AND INVESTMENTS:
OTHER PROPERTY 7,555 394 15,073
INVESTMENTS IN SUBSIDIARY
COMPANIES, AT EQUITY 174,750 0
OTHER INVESTMENTS 5,587 5,708
-----------------------------------------------------------
TOTAL OTHER PROPERTY AND INVESTMENTS 13,142 394 174,750 20,781
-----------------------------------------------------------
CURRENT ASSETS:
CASH 3 1 1,885
ACCOUNTS RECEIVABLE, NET 8,081 708 20,588 50,598
FUEL SUPPLIES 1,425
OTHER MATERIAL & SUPPLIES 969 2,173
DEFERRED GAS COSTS, CURRENT 1,833
ACCRUED UTILITY REVENUES 12,970
PREPAYMENTS AND OTHER 90 21 10,860
-----------------------------------------------------------
TOTAL CURRENT ASSETS 9,143 730 20,588 81,744
-----------------------------------------------------------
UNAMORTIZED DEBT EXPENSE 810
DEFERRED GAS COSTS AND OTHER 0 0 5,298
RECOVERABLE ENVIRONMENTAL
CLEANUP COSTS 33,569
RECOVERABLE INCOME TAXES 9,681
RECOVERABLE POSTRETIREMENT
BENEFIT COSTS 1,764
OTHER DEFERRED DEBITS 5,691 (18) 19,994
-----------------------------------------------------------
TOTAL ASSETS $27,976 $1,106 $195,338 $543,150
-----------------------------------------------------------
-----------------------------------------------------------
</TABLE>
(a) Unaudited
NOTE: Individual columns may not add to Consolidated amount due to rounding.
<PAGE>
YANKEE ENERGY SYSTEM, INC. AND SUBSIDIARIES
CONSOLIDATING BALANCE SHEETS (a)
CAPITALIZATION AND LIABILITIES
Exhibit A
AT DECEMBER 31, 1998 Page 3 of 4
(THOUSANDS OF DOLLARS)
<TABLE>
<CAPTION>
YANKEE
YANKEE YANKEE ENERGY YANKEE
ENERGY GAS NORCONN FINANCIAL ENERGY
SYSTEM SERVICES PROPERTIES HOUSATONIC SERVICES SERVICES, INC
(parent) COMPANY INC. CORPORATION COMPANY CONSOL.
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CAPITALIZATION:
COMMON SHAREHOLDERS' EQUITY $169,919 $159,426 $943 $10 $1,201 $13,024
LONG-TERM DEBT, NET OF CURRENT PORTION 0 125,798 5,250
-----------------------------------------------------------------------------------------
TOTAL CAPITALIZATION 169,919 285,224 6,193 10 1,201 13,024
-----------------------------------------------------------------------------------------
CURRENT LIABILITIES:
NOTES PAYABLE TO ASSOCIATED COMPANIES 0 49 0 66 13,060
NOTES PAYABLE TO BANKS 14,000 72,500
LONG-TERM DEBT, CURRENT PORTION 200 3,367 250
ACCOUNTS PAYABLE 6,202 14,945 11 202 229 2,623
ACCRUED TAXES (958) 1,001 117 0 43 (2,058)
ACCRUED INTEREST 42 3,144 32 0
PIPELINE TRANSITION COSTS 2,276
OTHER CURRENT LIABILITIES 3,918 4 1,632
-----------------------------------------------------------------------------------------
TOTAL CURRENT LIABILITIES 19,486 101,151 459 202 342 15,257
-----------------------------------------------------------------------------------------
ACCUM DEFERRED INCOME TAXES 72,635 (102) (35) (1,195)
ACCUM DEFERRED INVESTMENT TAX CREDITS 8,231
RESERVE FOR ENVIRONMENTAL
CLEANUP COSTS 35,000
POSTRETIREMENT BENEFIT OBLIGATION 3,437
OTHER DEFERRED CREDITS 410 5,039 131 473 890
-----------------------------------------------------------------------------------------
TOTAL CAPITALIZATION AND LIABILITIES $189,815 $510,717 $6,550 $343 $1,981 $27,976
-----------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------
0 0 0 0 0 0
</TABLE>
<TABLE>
<CAPTION>
RM
SERVICES ELIMINA- CONSOLI-
COMPANY TIONS DATED
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CAPITALIZATION:
COMMON SHAREHOLDERS' EQUITY $562 $174,750 $170,335
LONG-TERM DEBT, NET OF CURRENT PORTION 131,048
--------------------------------------------
TOTAL CAPITALIZATION 562 174,750 301,383
--------------------------------------------
CURRENT LIABILITIES:
NOTES PAYABLE TO ASSOCIATED COMPANIES 102 13,277 0
NOTES PAYABLE TO BANKS 86,500
LONG-TERM DEBT, CURRENT PORTION 3,817
ACCOUNTS PAYABLE 313 7,311 17,214
ACCRUED TAXES 25 (1,830)
ACCRUED INTEREST 0 3,218
PIPELINE TRANSITION COSTS 2,276
OTHER CURRENT LIABILITIES 74 5,628
--------------------------------------------
TOTAL CURRENT LIABILITIES 514 20,588 116,823
--------------------------------------------
ACCUM DEFERRED INCOME TAXES 20 71,323
ACCUM DEFERRED INVESTMENT TAX CREDITS 8,231
RESERVE FOR ENVIRONMENTAL
CLEANUP COSTS 35,000
POSTRETIREMENT BENEFIT OBLIGATION 3,437
OTHER DEFERRED CREDITS 10 6,953
--------------------------------------------
TOTAL CAPITALIZATION AND LIABILITIES $1,106 $195,338 $543,150
--------------------------------------------
--------------------------------------------
0 0 0
</TABLE>
(a) Unaudited
NOTE: Individual columns may not add to Consolidated amount due to rounding.
<PAGE>
YANKEE ENERGY SYSTEM, INC. AND SUBSIDIARIES Exhibit A
CONSOLIDATING STATEMENTS OF COMMON SHAREHOLDERS' EQUITY (a) Page 4 of 4
TWELVE MONTHS ENDED DECEMBER 31, 1998
(THOUSANDS OF DOLLARS)
<TABLE>
<CAPTION>
YANKEE
YANKEE YANKEE ENERGY
ENERGY GAS NORCONN FINANCIAL
SYSTEM SERVICES PROPERTIES HOUSATONIC SERVICES
(parent) COMPANY INC. CORPORATION COMPANY
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
COMMON SHARES $52,848 $5 $1 $10 $1
CAPITAL SURPLUS, PAID IN 92,601 80,780 579 921
RETAINED EARNINGS 26,825 78,641 363 0 279
EMPLOYEE STOCK OWNERSHIP
PLAN GUARANTEE (200)
CAPITAL STOCK EXPENSE (2,155)
-------------------------------------------------------------------------------
$169,919 $159,426 $943 $10 $1,201
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
YANKEE
ENERGY RM
SERVICES, INC. SERVICES ELIMINA- CONSOLI-
CONSOL. COMPANY TIONS DATED
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
COMMON SHARES $1 $1 $19 $52,848
CAPITAL SURPLUS, PAID IN 23,922 693 106,896 $92,600
RETAINED EARNINGS (10,899) (132) 67,835 $27,242
EMPLOYEE STOCK OWNERSHIP
PLAN GUARANTEE ($200)
CAPITAL STOCK EXPENSE ($2,155)
---------------------------------------------------------------------
$13,024 $562 $174,750 $170,335
---------------------------------------------------------------------
---------------------------------------------------------------------
</TABLE>
(a) Unaudited
NOTE: Individual columns may not add to Consolidated amount due to rounding.
<PAGE>
Exhibit 99.B
YANKEE ENERGY SYSTEM, INC. AND SUBSIDIARIES EXHIBIT B
FINANCIAL DATA SCHEDULE
<TABLE>
<S> <C>
1. TOTAL ASSETS: $543,150,000
2. TOTAL OPERATING REVENUE: $297,173,000
3. NET INCOME: $9,639,000
</TABLE>
