UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549-1004
FORM U-9C-3
QUARTERLY REPORT PURSUANT TO RULE 58
For the quarterly period ended September 30, 2002
Northeast Utilities
-------------------
(Name of registered holding company)
107 Selden Street, Berlin, CT 06037
-----------------------------------
(Address of Principal Executive Officers)
Name and telephone number of officer to whom inquiries concerning this report
should be directed:
John P. Stack, Vice President-Accounting and Controller
Telephone Number: 860-665-2333
GENERAL INSTRUCTIONS
A. Use of Form
1. A reporting company, as defined herein, shall file a report on this
form within 60 days after the end of each of the first three
quarters, and within 90 days after the end of the fourth quarter,
of the fiscal year of the registered holding company. The period
beginning on the date of effectiveness of rule 58 and ending at the
end of the quarter following the quarter in which the rule becomes
effective shall constitute the initial period for which any
report shall be filed, if applicable.
2. The requirement to provide specific information by means of this
form supersedes any requirement by order of the Commission to provide
identical information by means of periodic certificates under rule
24; but does not so supersede and replace any requirement by order
to provide information by means of an annual report on Form U-13-60.
3. Information with respect to reporting companies that is required by
Form U-13-60 shall be provided exclusively on that form.
4. Notwithstanding the specific requirements of this form, this
Commission may informally request such further information
as, in its opinion, may be necessary or appropriate.
B. Statements of Monetary Amounts and Deficits
1. Amounts included in this form and in related financial statements
may be expressed in whole dollars, thousands of dollars or hundred
thousands of dollars.
2. Deficits and other similar entries shall be indicated by either
brackets or parentheses. An explanation should be provided by
footnote.
C. Formal Requirements
This form, including exhibits, shall be filed with Commission
electronically pursuant to Regulation S-T (17 CFR 232.10 et seq.).
A conformed copy of each such report shall be filed with each state
commission having jurisdiction over the retail rates of a public utility
company that is an associate company of a reporting company. Each report
shall provide the name and telephone number of the person to whom
inquiries concerning this report should be directed.
D. Definitions
As used in this form, the word "reporting company" means an energy-related
company or gas-related company, as defined in rule 58(b). All other words
and terms have the same meaning as in the Public Utility Holding Company
Act of 1935, as amended, and the rules and regulations thereunder.
ITEM 1 - ORGANIZATIONAL CHART
-------------------------------------------------------------------------------
Instructions
-------------------------------------------------------------------------------
1. Complete Item 1 only for the first three calendar quarters of the
fiscal year of the registered holding company.
2. Under the caption "Name of Reporting Company," list each energy-
related and gas-related company and each system company that
directly or indirectly holds securities thereof. Add the
designation "(new)" for each reporting company of which
securities were acquired during the period, and the designation
"(*)" for each inactive company.
3. Under the caption "Percentage of Voting Securities Held," state
the aggregate percentage of the outstanding voting securities of
the reporting company held directly or indirectly by the
registered holding company at the end of the quarter.
4. Provide a narrative description of each reporting company's
activities during the reporting period.
-------------------------------------------------------------------------------
Percentage Activities
Energy of Voting Reported
Name of or Gas Date of State of Securities Nature of During the
Reporting Company Related Organization Organization Held Business Period
----------------- ------- ------------ ------------- ----------------- -------------- ----------
NU Holding 01/04/99 Connecticut 100% by Unregulated (A)
Enterprises, Northeast businesses
Inc. Utilities holding
company
Select Energy 09/26/96 Connecticut 100% by NU Invest in (B)
Energy, Inc. Enterprises, energy-related
Inc. activities
Select Energy 03/17/99 Connecticut 100% by NU Invest in (C)
Energy Enterprises, energy-related
Portland Inc. activities
Pipeline,
Inc. *
Northeast Energy 01/04/99 Connecticut 100% by NU Invest in (D)
Generation Enterprises, energy-related
Services Inc. activities
Company
Select Energy 06/19/90 Massachusetts 100% by Invest in (E)
Energy Enterprises, energy-related
Services, Inc. activities
Inc.
Reeds Ferry Energy 07/15/64 New Hampshire 100% by Invest in (F)
Supply Co., Select Energy energy-related
Inc. Services, Inc. activities
HEC/Tobyhanna Energy 09/28/99 Massachusetts 100% by Invest in (G)
Energy Select Energy energy-related
Project, Inc. Services, Inc. activities
Select Energy 10/12/94 Massachusetts 100% by Invest in (H)
Energy Select Energy energy-related
Contracting, Services, Inc. activities
Inc.
Yankee Holding 02/15/00 Connecticut 100% by Public Utility (I)
Energy Northeast Holding Company
System, Inc. Utilities
Yankee Energy 07/02/93 Connecticut 100% by Invest in (J)
Energy Yankee energy-related
Services Energy activities
Company * System, Inc.
R. M. Energy 11/22/94 Connecticut 10% by Invest in (K)
Services, Yankee Energy energy-related
Inc. System, Inc. activities
Acumentrics Energy 09/13/00 Massachusetts 5% by NU Invest in (L)
Corporation Enterprises, enery-related
Inc. activities
ERI/HEC EFA- Energy 09/30/00 Delaware 50% by Invest in (M)
Med, LLC Select Energy energy-related
Services, Inc. activities
E. S. Boulos Energy 01/19/01 Connecticut 100% by Invest in (N)
Company Northeast energy-related
Generation activities
Services
Company
NGS Energy 01/24/01 Connecticut 100% by Provide (O)
Mechanical, Northeast mechanical
Inc. Generation construction
Services and
Company maintenance
services
HEC/CJTS Energy 03/02/01 Delaware 100% by Facilitate (P)
Energy Select Energy construction
Center LLC Services, financing
Inc.
Select Energy 02/13/96 Delaware 100% by Invest in (Q)
Energy Select Energy energy-related
New York, Inc. activities
Inc.
Woods Energy 07/31/02 Connecticut 100% by Provide (R)
Electrical Northeast electrical
Co., Inc. Generation contracting
New Services services
(A) NU Enterprises, Inc. is not the "reporting company" but is included in
this Item 1 because it holds, directly or indirectly, voting securities
issued by reporting companies as indicated above.
(B) Select Energy, Inc. (Select Energy) is an integrated energy business
that buys, sells, markets and trades electricity, gas and oil and energy-
related products and services to both wholesale and retail customers in
the northeastern United States. Select Energy procures and delivers
energy and capacity required to serve its electric, gas and oil
customers. Under the umbrella of the Select Energy brand, Select
Energy, collectively with its affiliated competitive energy businesses,
provides a wide range of energy products and energy services.
Select Energy is a licensed retail electricity supplier and is
registered with local electric distribution companies in the states of
Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire,
New Jersey, New York, Pennsylvania, Rhode Island and Virginia. Select
Energy is a registered gas marketer with local gas distribution
companies in the states of Connecticut, Delaware, Maine, Maryland,
Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode
Island and Virginia.
(C) Select Energy Portland Pipeline, Inc. (SEPPI) acquired a 5% interest in
Portland Natural Gas Transmission System partnership in March 1999 and
sold this interest in June 2001.
(D) Northeast Generation Services Company (NGS) was established to provide a
full range of energy-related operation and maintenance services for
larger industrial, institutional and power generation customers
throughout the 11-state Northeast area. NGS' current business segments
focus on providing turnkey Manage and Operate Services (MOS) and also a
variety of Specialty Services (SS) and full-scope mechanical
Construction and Maintenance Services (CMS).
MOS is a service that is designed for generation asset owners. NGS has
the ability to offer station management and operation services with a
focus on optimizing the value of that specific asset with the owner.
Within the SS platform, its offerings include electrical maintenance and
laboratory analysis. Within the CMS platform, the product and service
offerings include mechanical construction and maintenance services and
engineering and environmental consulting services, with an emphasis on
power plant systems.
(E) Select Energy Services, Inc. (formerly HEC Inc.) is not the "reporting
company" but is included in this Item 1 because it holds, directly or
indirectly, voting securities issued by reporting companies as indicated
above.
(F) Reed's Ferry Supply Corporation is as an equipment wholesaler which
purchases equipment on behalf of Select Energy Contracting, Inc.
(G) HEC/Tobyhanna Energy Project, Inc. was established as a special purpose
entity to manage the assets of an Energy Savings Performance Contract
(ESPC) project at the Tobyhanna Army Depot.
(H) Select Energy Contracting, Inc. designs, manages and directs the
construction of, and/or installing of mechanical, water, and electrical
systems, energy and other resource consuming equipment.
(I) Yankee Energy System, Inc. is not the "reporting company" but is
included in this Item 1 because it holds, directly or indirectly, voting
securities issued by reporting companies as indicated above.
(J) Yankee Energy Services Company (YESCO) is winding down its energy-
related services for its customers. YESCO has disposed of most of its
assets and is in the process of liquidating the remainder of its assets.
(K) R. M. Services, Inc. provides consumer collection services for companies
throughout the United States.
(L) Acumentrics Corporation develops, manufactures, and distributes advanced
power generation, power quality and power protection devices including a
high-speed flywheel and advanced technology fuel cells.
(M) ERI/HEC EFA-Med, LLC is a Delaware limited liability company that was
formed by Select Energy Services, Inc., and ERI Services, Inc. to enter
into an indefinite delivery/indefinite quantity contract with the U.S.
Navy. Under the contract, the Navy will issue Delivery Orders for
energy services work at U.S. Government facilities located in Bahrain,
Greece, Egypt, Italy, Spain, Turkey, and the United Kingdom. The LLC
will designate either ERI or Select Energy Services, Inc. to perform
each of the Delivery Orders. The LLC will also act as the conduit for
any project-related financing. ERI Services, Inc. and Select Energy
Services, Inc. each own 50% of the LLC.
(N) E. S. Boulos Company (Boulos) is in the electrical contracting business
primarily in Maine, New Hampshire and Massachusetts. Boulos is
registered to do business in Connecticut, Rhode Island, Maine,
Massachusetts, New Hampshire, and Vermont.
(O) NGS Mechanical, Inc. (NGSM) performs mechanical construction and
maintenance services. NGSM is registered to do business in
Massachusetts, New Hampshire, Maine, Vermont, Rhode Island, and New
York.
(P) HEC/CJTS Energy Center LLC (HEC/CTJS) facilitated the construction of an
energy center at the Connecticut Juvenile Training School in Middletown,
Connecticut. HEC/CJTS does not have any employees nor does it conduct
any other activities other than those related to accepting the
assignment of the lease.
(Q) Select Energy New York, Inc. (SENY) is engaged in the brokering,
marketing, transportation, storage, and sale of energy commodities in
the state of New York.
(R) Woods Electrical Co., Inc. (Woods) is in the electrical contracting
business in Connecticut. Woods is registered to do business in
Connecticut, Massachusetts, New Hampshire and Maine.
ITEM 2 - ISSUANCES AND RENEWALS OF SECURITIES AND CAPITAL CONTRIBUTIONS
-------------------------------------------------------------------------------
Instruction
-----------
With respect to a transaction with an associate company, report only the type
and principal amount of securities involved.
------------------------------------------------------------------------------
Person
Company Type of Principal to Whom Collateral Consideration Company Amount of
Issuing Security Amount of Issue or Cost of Security Given With Received for Contributing Capital
Security Issued Security Renewal Capital Was Issued Security Each Security Capital Contribution
--------------- -------- ---------- -------- ------- ---------- ---------- ------------- ------------ ------------
Select
Energy, Inc. No transactions this quarter.
Northeast
Generation NU
Services Enterprises,
Company N/A N/A N/A N/A N/A N/A N/A Inc. $5,250,000
Select Energy
Contracting,
Inc. No transactions this quarter.
Reeds Ferry
Supply Co.,
Inc. No transactions this quarter.
HEC/Tobyhanna
Energy
Project, Inc. No transactions this quarter.
Yankee Energy
Services
Company No transactions this quarter.
R. M.
Services, Inc. No transactions this quarter.
ERI/HEC
EFA-Med, LLC No transactions this quarter.
E.S. Boulos
Company No transactions this quarter.
NGS Mechanical
Company No transactions this quarter.
HEC/CJTS
Energy Select Energy
Center LLC N/A N/A N/A N/A N/A N/A N/A Services, Inc. $2,000,000
Select Energy
New York, Inc. No transactions this quarter.
Woods Northeast Northeast
Electrical Generation Generation
Company, Common Services Services
Inc. Stock $10,000 N/A N/A Company N/A N/A Company $4,990,000
Northeast
Utilities No transactions this quarter.
ITEM 3 - ASSOCIATE TRANSACTIONS
-------------------------------------------------------------------------------
Instructions
------------
1. This item is used to report the performance during the quarter of contracts
among reporting companies and their associate companies, including other
reporting companies, for service, sales and construction. A copy of any
such contract not filed previously should be provided as an exhibit pursuant
to Item 6.B.
2. Parts I and II concern transactions performed by reporting companies on
behalf of associate companies, and transactions performed by associate
companies on behalf of reporting companies, respectively.
-------------------------------------------------------------------------------
Part I - Transactions performed by reporting companies on behalf
of associate companies.
Total Amount
Billed*
Reporting Associate
Company Company Types of Three Months
Rendering Receiving Services Ended
Services Services Rendered September 30, 2002
----------------------- ------------------- -------------- ------------------
(Thousands
of Dollars)
Northeast Select
Generation Energy, Inc. Electrical and
Services Mechanical services $ 15
Company =================
Northeast The
Generation Connecticut
Services Light & Power Electrical and
Company Company Mechanical services $ 21
=================
Northeast Western
Generation Massachusetts Electrical and
Services Electric Company Mechanical services $ 2
Company =================
Northeast Public Service
Generation Company of Electrical and
Services New Hampshire Mechanical services $ 564
Company =================
Northeast Holyoke Water
Generation Power Company Electrical and
Services Mechanical services $ 3,027
Company =================
Northeast Northeast
Generation Generation Electrical and
Services Company Mechanical services $ 5,637
Company =================
Wholesale
Reeds Ferry Select Energy Purchasing
Supply Co., Inc. Contracting, Inc. Services $ 179
=================
Northeast North Atlantic
Generation Energy Service Electrical and
Services Corporation Mechanical services $ (71)
Company =================
Northeast
Generation Yankee Energy Electrical and
Services Services Company Mechanical services $ 24
Company =================
Northeast Northeast
Generation Utilities
Services Service Electrical and
Company Company Mechanical services $ 36
=================
Part II - Transactions performed by associate companies on behalf
of reporting companies.
Total Amount
Billed*
Associate Reporting
Company Company Types of Three Months
Rendering Receiving Services Ended
Services Services Rendered September 30, 2002
----------------------- ------------------- -------------- ------------------
(Thousands
of Dollars)
Public Service Company Select
of New Hampshire Energy, Inc. Miscellaneous $ 3
=================
* 'Total Amount Billed' is direct costs only.
ITEM 4 - SUMMARY OF AGGREGATE INVESTMENT
Investments in energy-related companies:
---------------------------------------
(Thousands of Dollars)
Total consolidated capitalization as of 09/30/02 $6,881,492 line 1
Total capitalization multiplied by 15%
(line 1 multiplied by .15) 1,032,224 line 2
Greater of $50 million or line 2 $1,032,224 line 3
Total current aggregate investment:
(categorized by major line of
energy-related business):
Select Energy, Inc. $637,794
Northeast Generation Services Company 35,879
Select Energy Contracting, Inc. 31,683
Select Energy New York, Inc. 36,692
Woods Electrical Co., Inc. 9,450
Reeds Ferry Supply Co., Inc. 7
HEC/Tobyhanna Energy Project, Inc. -
Yankee Energy Services Company 8,282
E.S. Boulos Company 7,539
R.M. Services, Inc. 13,799
NGS Mechanical, Inc. 10
Acumentrics Corporation 7,500
ERI/HEC EFA-Med, LLC 17
HEC/CJTS Energy Center LLC 12
-----------
Current aggregate investment 788,664
-----------
Elimination * 22,532
-----------
Total current aggregate investment 766,132 line 4
-----------
Difference between the greater of $50 million or 15% of
capitalization and the total aggregate investment of the
registered holding company system $266,092 line 5
===========
*Elimination is for capital contributions made from a parent company who is a
reporting company to a subsidiary who is also a reporting company.
ITEM 5 - OTHER INVESTMENTS
-------------------------------------------------------------------------------
Instruction
-----------
This item concerns investments in energy-related and gas-related companies that
are excluded from the calculation of aggregate investment under rule 58.
-------------------------------------------------------------------------------
Major Line Other Other
of Energy- Investment Investment
Related in Last in This Reason for Difference
Business U-9C-3 Report U-9C-3 Report in Other Investment
------------- ------------- ------------- ------------------------
NONE
ITEM 6 - FINANCIAL STATEMENTS AND EXHIBITS
Instructions
A. Financial Statements
1. Financial statements are required for reporting companies in which
the registered holding company system has at least 50% equity or
other ownership interest. For all other rule 58 companies, the
registered holding company shall make available to the Commission
such financial statements as are available to it.
2. For each reporting company, provide a balance sheet as of the end
of the quarter and income statements for the three-month and year-
to-date periods ending as of the end of the quarter, together with
any notes thereto. Financial statements shall be for the first
three quarters of the fiscal year of the registered holding
company.
3. If a reporting company and each of its subsidiaries engage
exclusively in single category of energy-related or gas-related
activity, consolidated financial statements may be filed.
4. Separate financial statements need not be filed for inactive
companies or for companies engaged solely in the ownership of
interests in energy-related or gas-related companies.
B. Exhibits
1. Copies of contracts required to be provided by Item 3 shall be
filed as exhibits.
2. A certificate stating that a copy of the report for the previous
quarter has been filed with interested state commissions shall be
filed as an exhibit. The certificate shall provide the names and
addresses of the state commissions.
A. Financial Statements
Select Energy, Inc.:
Balance Sheet - As of September 30, 2002
Income Statement - Three months and nine months ended September 30, 2002
Northeast Generation Services Company:
Balance Sheet - As of September 30, 2002
Income Statement - Three months and nine months ended September 30, 2002
Select Energy Contracting, Inc.:
Balance Sheet - As of September 30, 2002
Income Statement - Three months and nine months ended September 30, 2002
Reeds Ferry Supply Co., Inc.:
Balance Sheet - As of September 30, 2002
Income Statement - Three months and nine months ended September 30, 2002
HEC/Tobyhanna Energy Project, Inc.:
Balance Sheet - As of September 30, 2002
Income Statement - Three months and nine months ended September 30, 2002
Yankee Energy Services Company:
Balance Sheet - As of September 30, 2002
Income Statement - Three months and nine months ended September 30, 2002
ERI/HEC EFA-Med, LLC:
Not available as of September 30, 2002
E. S. Boulos Company:
Balance Sheet - As of September 30, 2002
Income Statement - Three months and nine months ended September 30, 2002
NGS Mechanical, Inc.:
Balance Sheet - As of September 30, 2002
Income Statement - Three months and nine months ended September 30, 2002
Northeast Utilities (Parent):
Balance Sheet - As of September 30, 2002
Income Statement - Three months and nine months ended September 30, 2002
Select Energy New York, Inc.:
Balance Sheet - As of September 30, 2002
Income Statement - Three months and nine months ended September 30, 2002
HEC/CJTS Energy Center LLC:
Balance Sheet - As of September 30, 2002
Income Statement - Three months and nine months ended September 30, 2002
Woods Electrical Co., Inc.:
Balance Sheet - As of September 30, 2002
Income Statement - Three months and nine months ended September 30, 2002
B. Exhibits
Exhibit No. Description
----------- -----------
6.B.1.1 Copy of contract required by Item 3 - filed under confidential
treatment pursuant to Rule 104(b).
6.B.1.2a Copy of contract required by Item 3 - filed under confidential
treatment pursuant to Rule 104(b).
6.B.1.2b Copy of contract required by Item 3 - filed under confidential
treatment pursuant to Rule 104(b).
6.B.1.2c Copy of contract required by Item 3 - filed under confidential
treatment pursuant to Rule 104(b).
6.B.1.3a Copy of contract required by Item 3 - filed under confidential
treatment pursuant to Rule 104(b).
6.B.1.3b Copy of contract required by Item 3 - filed under confidential
treatment pursuant to Rule 104(b).
6.B.1.3c Copy of contract required by Item 3 - filed under confidential
treatment pursuant to Rule 104(b).
6.B.1.3d Copy of contract required by Item 3 - filed under confidential
treatment pursuant to Rule 104(b).
6.B.1.4 Copy of contract required by Item 3 - filed under confidential
treatment pursuant to Rule 104(b).
6.B.2.1 The company certifies that a conformed copy of Form U-9C-3 for
the previous quarter was filed with the following state
commissions:
Ms. Louise E. Rickard
Acting Executive Secretary
Department of Public Utility Control
10 Franklin Square
New Britain, CT 06051
Ms. Mary L. Cottrell, Secretary
Massachusetts Department of Telecommunications and Energy
100 Cambridge Street
Boston, MA 02202
Mr. Thomas B. Getz
Executive Director and Secretary
State of New Hampshire
Public Utilities Commission
8 Old Suncook Road, Building One
Concord, NH 03301-7319
SELECT ENERGY, INC.
BALANCE SHEET
(Unaudited)
September 30,
2002
--------------
(Thousands
of Dollars)
ASSETS
------
Current Assets:
Cash $ 3,215
Receivables, net 284,769
Accounts receivable from affiliated companies 121,107
Taxes receivable 5,461
Special deposits 8,514
Unrealized net gains on mark-to-market transactions 138,899
Prepaid wholesale power purchases 28,529
Prepayments and other 46,267
-------------
636,761
-------------
Property, Plant and Equipment:
Competitive energy 12,586
Less: Accumulated provision for depreciation
and amortization 6,357
-------------
6,229
Construction work in progress 3,086
-------------
9,315
-------------
Deferred Debits and Other Assets:
Intangibles, net 18,934
Prepaid pension 2,200
Other 38,871
-------------
60,005
-------------
Total Assets $ 706,081
=============
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
SELECT ENERGY, INC.
BALANCE SHEET
(Unaudited)
September 30,
2002
--------------
(Thousands
of Dollars)
LIABILITIES AND CAPITALIZATION
-------------------------------
Current Liabilities:
Notes payable to affiliated companies $ 193,000
Accounts payable 267,761
Accounts payable to affiliated companies 5,777
Accrued interest 37
Unrealized losses on mark-to-market transactions 51,178
Other 30,023
-------------
547,776
-------------
Deferred Credits and Other Liabilities
Accumulated deferred income taxes 19,774
Other 87,837
-------------
107,611
-------------
Capitalization:
Common Stockholder's Equity:
Common stock, $1 par value - 20,000 shares
authorized and 100 shares outstanding -
Capital surplus, paid in 249,378
Accumulated deficit (202,999)
Accumulated other comprehensive loss 4,315
-------------
Common Stockholder's Equity 50,694
-------------
Total Capitalization 50,694
-------------
Total Liabilities and Capitalization $ 706,081
=============
Note: In the opinion of the Company, all adjustments necessary
for a fair presentation of financial position for the
period shown have been made.
See accompanying notes to financial statements.
SELECT ENERGY, INC.
INCOME STATEMENT
(Unaudited)
Three Months Nine Months
Ended Ended
September 30, September 30,
2002 2002
------------- -------------
(Thousands of Dollars)
Operating Revenues $ 262,543 $ 782,085
------------- -------------
Operating Expenses:
Purchased power, net interchange
power and capacity 292,572 837,858
Other (4,001) 42,850
Depreciation and amortization 2,214 6,177
Taxes other than income taxes 129 3,836
------------- -------------
Total operating expenses 290,914 890,721
------------- -------------
Operating Loss (28,371) (108,636)
Other Income, Net 4,853 10,719
------------- -------------
Loss Before Interest Expense and
Income Tax Benefit (23,518) (97,917)
Interest Expense, Net 1,328 3,830
------------- -------------
Loss Before Income Tax Benefit (24,846) (101,747)
Income Tax Benefit (10,202) (42,651)
------------- -------------
Net Loss $ (14,644) $ (59,096)
============= =============
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
NORTHEAST GENERATION SERVICES COMPANY
BALANCE SHEET
(Unaudited)
September 30,
2002
-------------
(Thousands
of Dollars)
ASSETS
------
Current Assets:
Cash $ 1
Receivables, net 5,668
Accounts receivable from affiliated companies 2,750
Unbilled revenues 6,268
Prepayments and other 3,247
-------------
17,934
-------------
Property, Plant and Equipment:
Competitive energy 1,594
Less: Accumulated provision for depreciation 803
-------------
791
Construction work in progress 791
-------------
1,582
-------------
Deferred Debits and Other Assets:
Accumulated deferred income taxes 592
Intangible assets, net and other 22,755
-------------
23,347
-------------
Total Assets $ 42,863
=============
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
NORTHEAST GENERATION SERVICES COMPANY
BALANCE SHEET
(Unaudited)
September 30,
2002
-------------
(Thousands
of Dollars)
LIABILITIES AND CAPITALIZATION
------------------------------
Current Liabilities:
Notes payable to affiliated companies $ 12,900
Accounts payable 861
Accounts payable to affiliated companies 2,180
Accrued taxes 1,667
Other 1,387
-------------
18,995
-------------
Deferred Credits and Other Liabilities 418
-------------
Capitalization:
Long-term debt 5,000
-------------
Common Stockholder's Equity:
Common stock, $1 par value - 100 shares
authorized and outstanding -
Capital surplus, paid in 15,579
Retained earnings 2,871
-------------
Common Stockholder's Equity 18,450
-------------
Total Capitalization 23,450
-------------
Total Liabilities and Capitalization $ 42,863
=============
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
NORTHEAST GENERATION SERVICES COMPANY
INCOME STATEMENT
(Unaudited)
Three Months Nine Months
Ended Ended
September 30, September 30,
2002 2002
------------- -------------
(Thousands of Dollars)
Operating Revenues $ 15,265 $ 43,730
------------- -------------
Operating Expenses:
Operation -
Other 12,024 35,271
Maintenance 3,068 9,933
Depreciation and amortization 23 69
Taxes other than income taxes 426 1,422
------------- -------------
Total operating expenses 15,541 46,695
------------- -------------
Operating Loss (276) (2,965)
Other Income, Net 591 1,581
------------- -------------
Income/(Loss) Before Interest Expense
and Income Tax Benefit 315 (1,384)
Interest Expense, Net 167 311
------------- -------------
Income/(Loss) Before Income Tax Benefit 148 (1,695)
Income Tax Benefit (344) (1,333)
------------- -------------
Net Income/(Loss) $ 492 $ (362)
============= =============
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
SELECT ENERGY CONTRACTING, INC.
BALANCE SHEET
(Unaudited)
September 30,
2002
--------------
(Thousands
of Dollars)
ASSETS
------
Current Assets:
Cash $ 16
Receivables, net 12,737
Accounts receivables from affiliated companies 3
Materials and supplies, at average cost 341
Prepayments and other 739
-------------
13,836
-------------
Property, Plant and Equipment:
Competitive energy 5,936
Less: Accumulated provision for depreciation 3,693
-------------
2,243
-------------
Deferred Debits and Other Assets:
Goodwill, net 17,220
Other 48
-------------
17,268
-------------
Total Assets $ 33,347
=============
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
SELECT ENERGY CONTRACTING, INC.
BALANCE SHEET
(Unaudited)
September 30,
2002
-------------
(Thousands
of Dollars)
LIABILITIES AND CAPITALIZATION
------------------------------
Current Liabilities:
Accounts payable $ 3,591
Accounts payable to affiliated companies 8,937
Accrued taxes 1,103
Other 1,177
-------------
14,808
-------------
Deferred Credits and Other Liabilities:
Deferred taxes 490
Other 2,117
-------------
2,607
-------------
Capitalization:
Common Stockholder's Equity:
Common stock, $1 par value - 100,000 shares
authorized and 100 shares outstanding -
Capital surplus, paid in 14,910
Retained earnings 1,022
-------------
Common Stockholder's Equity 15,932
-------------
Total Capitalization 15,932
-------------
Total Liabilities and Capitalization $ 33,347
=============
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
SELECT ENERGY CONTRACTING, INC.
INCOME STATEMENT
(Unaudited)
Three Months Nine Months
Ended Ended
September 30, September 30,
2002 2002
------------- -------------
(Thousands of Dollars)
Operating Revenues $ 12,262 $ 42,255
------------- -------------
Operating Expenses:
Operation 11,904 40,088
Maintenance 114 344
Depreciation and amortization 283 849
Taxes other than income taxes 73 263
------------- -------------
Total operating expenses 12,374 41,544
------------- -------------
Operating (Loss)/Income (112) 711
Other Loss, Net (12) (23)
------------- -------------
(Loss)/Income Before Interest Expense and
Income Tax (Benefit)/Expense (124) 688
Interest Expense, Net 78 205
------------- -------------
(Loss)/Income Before Income
Tax (Benefit)/Expense (202) 483
Income Tax (Benefit)/Expense (91) 193
------------- -------------
Net (Loss)/Income $ (111) $ 290
============= =============
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
REEDS FERRY SUPPLY CO., INC.
BALANCE SHEET
(Unaudited)
September 30,
2002
-------------
(Thousands
of Dollars)
ASSETS
------
Current Assets:
Cash $ 5
Receivables, net 28
-------------
33
-------------
Deferred Debits and Other Assets:
Goodwill, net 248
-------------
Total Assets $ 281
=============
LIABILITIES AND CAPITALIZATION
------------------------------
Current Liabilities:
Accounts payable $ 28
Accounts payable to affiliated companies 295
-------------
323
Capitalization: -------------
Common Stockholder's Equity:
Common stock, $1 par value - 200 shares
authorized and 100 shares outstanding 4
Capital surplus, paid in 3
Accumulated deficit (49)
-------------
Common Stockholder's Equity (42)
-------------
Total Capitalization (42)
-------------
Total Liabilities and Capitalization $ 281
=============
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
REEDS FERRY SUPPLY CO., INC.
INCOME STATEMENT
(Unaudited)
Three Months Nine Months
Ended Ended
September 30, September 30,
2002 2002
------------- ------------
(Thousands of Dollars)
Operating Revenues $ 179 $ 652
Operating Expenses 179 652
------------- -------------
Net Income $ - $ -
============= =============
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
HEC/TOBYHANNA ENERGY PROJECT, INC.
BALANCE SHEET
(Unaudited)
September 30,
2002
-------------
(Thousands
of Dollars)
ASSETS
------
Current Assets:
Cash $ 2,639
Receivables, net 881
-------------
3,520
-------------
Property, Plant and Equipment:
Other, net 616
-------------
Deferred Debits and Other Assets:
Contracts receivable 25,800
-------------
Total Assets $ 29,936
=============
LIABILITIES AND CAPITALIZATION
------------------------------
Current Liabilities:
Accounts payable to affiliated companies $ 3,819
Accrued taxes 44
Accrued interest 243
Other 337
-------------
Total current liabilities 4,443
-------------
Capitalization:
Long-Term Debt 24,991
-------------
Common Stockholder's Equity:
Common stock, $1 par value - 100 shares
authorized and outstanding -
Retained earnings 502
-------------
Common Stockholder's Equity 502
-------------
Total Capitalization 25,493
-------------
Total Liabilities and Capitalization $ 29,936
=============
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
HEC/TOBYHANNA ENERGY PROJECT, INC.
INCOME STATEMENT
(Unaudited)
Three Months Nine Months
Ended Ended
September 30, September 30,
2002 2002
------------- -------------
(Thousands of Dollars)
Other Income, Net $ 867 $ 1,860
Interest Expense, Net 491 1,485
------------- -------------
Income Before Income Tax Expense 376 375
Income Tax Expense 23 98
------------- -------------
Net Income $ 353 $ 277
============= =============
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
YANKEE ENERGY SERVICES COMPANY
BALANCE SHEET
(Unaudited)
September 30,
2002
-------------
(Thousands
of Dollars)
ASSETS
------
Current Assets:
Cash $ 32
Receivables, net 5
Taxes receivable 378
-------------
415
-------------
Deferred Debits and Other Assets:
Accumulated deferred income taxes 1,399
Goodwill 405
Other 5,144
-------------
6,948
-------------
Total Assets $ 7,363
=============
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
YANKEE ENERGY SERVICES COMPANY
BALANCE SHEET
(Unaudited)
September 30,
2002
-------------
(Thousands
of Dollars)
LIABILITIES AND CAPITALIZATION
------------------------------
Current Liabilities:
Notes payable to affiliated companies $ 1,266
Accounts payable to affiliated companies 31
-------------
1,297
-------------
Deferred Credits and Other Liabilities
Other 5
-------------
Capitalization:
Common Stockholder's Equity:
Common stock, $0 par value - 10,000 shares
authorized and 200 shares outstanding 1
Capital surplus, paid in 7,881
Accumulated deficit (1,821)
-------------
Common Stockholder's Equity 6,061
-------------
Total Capitalization 6,061
-------------
Total Liabilities and Capitalization $ 7,363
=============
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
YANKEE ENERGY SERVICES COMPANY
INCOME STATEMENT
(Unaudited)
Three Months Nine Months
Ended Ended
September 30, September 30,
2002 2002
-------------- -------------
(Thousands of Dollars)
Operating Revenues $ 5 $ 551
Operating Expenses 39 773
------------- -------------
Operating Loss (34) (222)
Interest Expense, Net 6 60
------------- -------------
Loss Before Income Tax Benefit (40) (282)
Income Tax Benefit (3) (113)
------------- -------------
Net Loss $ (37) $ (169)
============= =============
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
E.S. BOULOS COMPANY
BALANCE SHEET
(Unaudited)
September 30,
2002
-------------
(Thousands
of Dollars)
ASSETS
------
Current Assets:
Receivables, net $ 12,565
Accounts receivable from affiliated companies 607
Unbilled revenues 2,491
Materials and supplies 109
-------------
15,772
-------------
Property, Plant and Equipment:
Competitive energy 721
Less: Accumulated provision for depreciation 175
-------------
546
-------------
Deferred Debits and Other Assets:
Goodwill 6,963
Other 35
-------------
6,998
-------------
Total Assets $ 23,316
=============
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
E.S. BOULOS COMPANY
BALANCE SHEET
(Unaudited)
September 30,
2002
-------------
(Thousands
of Dollars)
LIABILITIES AND CAPITALIZATION
------------------------------
Current Liabilities:
Advance from parent, non-interest bearing $ 2,948
Accounts payable 3,377
Accounts payable to affiliated companies 956
Accrued taxes 600
Other 1,538
-------------
9,419
-------------
Deferred Credits and Other Liabilities 975
-------------
Capitalization:
Common Stockholder's Equity:
Common stock, $1 par value - 100 shares
authorized and outstanding -
Capital surplus, paid in 7,539
Retained earnings 5,383
-------------
Common Stockholder's Equity 12,922
-------------
Total Capitalization 12,922
-------------
Total Liabilities and Capitalization $ 23,316
=============
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
E.S. BOULOS COMPANY
INCOME STATEMENT
(Unaudited)
Three Months Nine Months
Ended Ended
September 30, September 30,
2002 2002
------------- -------------
(Thousands of Dollars)
Operating Revenues $ 17,748 $ 47,977
------------- -------------
Operating Expenses:
Operating 435 1,092
Maintenance 16,116 44,117
Depreciation - 59
------------- -------------
Total operating expenses 16,551 45,268
------------- -------------
Operating Income 1,197 2,709
Other (Loss)/Income, Net (88) 208
------------- -------------
Income Before Income Tax Expense 1,109 2,917
Income Tax Expense 347 940
------------- -------------
Net Income $ 762 $ 1,977
============= =============
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
NGS MECHANICAL, INC.
BALANCE SHEET
(Unaudited)
September 30,
2002
-------------
(Thousands
of Dollars)
ASSETS
------
Current Assets:
Cash $ 10
-------------
Total Assets $ 10
=============
LIABILITIES AND CAPITALIZATION
------------------------------
Current Liabilities:
Accounts payable to affiliated companies $ 2
-------------
Capitalization:
Common Stockholder's Equity:
Common stock, $0 par value - 20,000 shares
authorized and 100 shares outstanding -
Capital surplus, paid in 10
Accumulated deficit (2)
-------------
Common Stockholder's Equity 8
-------------
Total Capitalization 8
-------------
Total Liabilities and Capitalization $ 10
=============
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
NGS MECHANICAL, INC.
INCOME STATEMENT
(Unaudited)
Three Months Nine Months
Ended Ended
September 30, September 30,
2002 2002
-------------- -------------
(Thousands of Dollars)
Operating Revenues $ - $ -
Operating Expenses - 1
------------- ------------
Operating Loss - (1)
Income Tax Expense 1 -
------------- ------------
Net Loss $ (1) $ (1)
============= ============
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
NORTHEAST UTILITIES (PARENT)
BALANCE SHEET
(Unaudited)
September 30,
2002
-------------
(Thousands
of Dollars)
ASSETS
------
Current Assets:
Cash $ 1,315
Notes receivable from affiliated companies 182,600
Receivables, net 460
Accounts receivable from affiliated companies 2,150
Taxes receivable 2,322
Prepayments 202
-------------
189,049
-------------
Other Property and Investment:
Investments in subsidiary companies, at equity 2,450,995
Investments in transmission companies, at equity 12,874
Other 14
-------------
2,463,883
-------------
Deferred Debits and Other Assets 4,995
-------------
Total Assets $ 2,657,927
=============
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
NORTHEAST UTILITIES (PARENT)
BALANCE SHEET
(Unaudited)
September 30,
2002
-------------
(Thousands
of Dollars)
LIABILITIES AND CAPITALIZATION
------------------------------
Current Liabilities:
Notes payable to bank $ 75,000
Long-term debt - current portion 22,000
Accounts payable 51
Accounts payable to affiliated companies 88
Accrued interest 12,393
Other 391
-------------
109,923
-------------
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes 6,608
Other 145
-------------
6,753
-------------
Capitalization:
Long-Term Debt 352,000
-------------
Common Stockholder's Equity:
Common shares, $5 par value - authorized
225,000,000 shares; 149,375,000 shares issued and
129,257,380 shares outstanding 746,875
Capital surplus, paid in 1,109,798
Deferred contribution plan - employee stock
ownership plan (91,982)
Retained earnings 727,204
Accumulated other comprehensive income 6,095
Treasury stock (308,739)
-------------
Common Stockholder's Equity 2,189,251
-------------
Total Capitalization 2,541,251
-------------
Total Liabilities and Capitalization $ 2,657,927
=============
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
NORTHEAST UTILITIES (PARENT)
STATEMENT OF INCOME
(Unaudited)
Three Months Nine Months
Ended Ended
September 30, September 30,
2002 2002
-------------- -------------
(Thousands of Dollars)
Operating Revenues $ - $ -
------------- -------------
Operating Expenses:
Operation expense 2,274 11,430
Taxes other than income taxes 1 27
------------- -------------
Total operating expenses 2,275 11,457
------------- -------------
Operating Loss (2,275) (11,457)
------------- -------------
Other Income, Net:
Equity in earnings of subsidiaries 52,298 109,272
Equity in earnings of transmission companies 571 1,791
Other 2,521 7,642
------------- -------------
Other income, net 55,390 118,705
------------- -------------
Income Before Interest Expense and
Income Tax Benefit 53,115 107,248
------------- -------------
Interest Expense:
Interest on long-term debt 7,185 21,085
Other interest 959 2,066
------------- -------------
Interest expense, net 8,144 23,151
------------- -------------
Income Before Income Tax Benefit 44,971 84,097
Income Tax Benefit (3,604) (11,977)
------------- -------------
Net Income for Common Shares $ 48,575 $ 96,074
============= =============
Basic and Fully Diluted Earnings Per Common Share $ 0.38 $ 0.74
============= =============
Basic Common Shares Outstanding (average) 129,344,724 129,508,840
============= =============
Fully Diluted Common Shares Outstanding (average) 129,508,794 129,737,249
============= =============
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of the results of operations for the period shown have
been made.
See accompanying notes to financial statements.
SELECT ENERGY NEW YORK, INC.
BALANCE SHEET
(Unaudited)
September 30,
2002
-------------
(Thousands
of Dollars)
ASSETS
------
Current Assets:
Cash $ 14,387
Receivables, net 36,196
Accounts receivable from affiliated companies 887
Special deposits 4,188
Unrealized net gains on mark-to-market transactions 12,863
Prepayments and other 16,317
-------------
84,838
-------------
Property Plant and Equipment:
Competitive energy 2,280
Less: Accumulated provision for depreciation
and amortization 2,141
-------------
139
-------------
Deferred Debits and Other Assets 2,793
-------------
Total Assets $ 87,770
=============
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
SELECT ENERGY NEW YORK, INC.
BALANCE SHEET
(Unaudited)
September 30,
2002
-------------
(Thousands
of Dollars)
LIABILITIES AND CAPITALIZATION
------------------------------
Current Liabilities:
Accounts payable $ 20,837
Accounts payable to affiliated companies 5,757
Accrued taxes 540
Unrealized losses on mark-to-market transactions 2,237
Other 3,758
-------------
33,129
-------------
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes 3,584
Other 15
-------------
3,599
-------------
Capitalization:
Long-Term Debt 26,699
-------------
Common Stockholder's Equity:
Common stock, $1 par value - authorized
and outstanding 10,000 shares 10
Capital surplus, paid in 9,983
Retained earnings 13,724
Accumulated comprehensive income 626
-------------
Common Stockholder's Equity 24,343
-------------
Total Capitalization 51,042
-------------
Total Liabilities and Capitalization $ 87,770
=============
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
SELECT ENERGY NEW YORK, INC.
INCOME STATEMENT
(Unaudited)
Three Months Nine Months
Ended Ended
September 30, September 30,
2002 2002
------------- -------------
(Thousands of Dollars)
Operating Revenues $ 73,742 $ 201,767
------------- -------------
Operating Expenses:
Purchased power, net interchange
power and capacity 63,195 177,033
Other 2,530 6,918
Taxes other than income taxes (574) (1,335)
------------- -------------
Total operating expenses 65,151 182,616
------------- -------------
Operating Income 8,591 19,151
Other Income, Net 117 197
------------- -------------
Income Before Interest and
Income Tax Expense 8,708 19,348
Interest Expense, Net 191 580
------------- -------------
Income Before Income Tax Expense 8,517 18,768
Income Tax Expense 3,427 7,739
------------- -------------
Net Income $ 5,090 $ 11,029
============= =============
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
HEC/CJTS ENERGY CENTER LLC
BALANCE SHEET
(Unaudited)
September 30,
2002
-------------
(Thousands
of Dollars)
ASSETS
------
Current Assets:
Cash $ 1
-------------
1
-------------
Total Assets $ 1
=============
LIABILITIES AND CAPITALIZATION
------------------------------
Capitalization:
Common Stockholder's Equity:
Capital surplus, paid in $ 12
Accumulated deficit (11)
-------------
Common Stockholder's Equity 1
-------------
Total Capitalization 1
-------------
Total Liabilities and Capitalization $ 1
=============
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
HEC/CJTS ENERGY CENTER LLC
INCOME STATEMENT
(Unaudited)
Three Months Nine Months
Ended Ended
September 30, September 30,
2002 2002
------------- -------------
(Thousands of Dollars)
Operating Revenues $ - $ -
------------- ------------
Operating Expenses 2 3
------------- ------------
Net Loss $ (2) $ (3)
============= ============
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
WOODS ELECTRICAL CO., INC.
BALANCE SHEET
(Unaudited)
September 30,
2002
-------------
(Thousands
of Dollars)
ASSETS
------
Current Assets:
Cash $ 712
Receivables, net 1,909
Taxes receivable 3
Prepayments and other 31
-------------
2,655
-------------
Property Plant and Equipment:
Competitive energy 230
Less: Accumulated provision for depreciation
and amortization -
-------------
230
-------------
Deferred Debits and Other Assets:
Goodwill and other purchased intangible assets, net 7,568
-------------
7,568
-------------
Total Assets $ 10,453
=============
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
WOODS ELECTRICAL CO., INC.
BALANCE SHEET
(Unaudited)
September 30,
2002
-------------
(Thousands
of Dollars)
LIABILITIES AND CAPITALIZATION
------------------------------
Current Liabilities:
Notes payable to banks $ 733
Accounts payable 86
Other 186
-------------
1,005
-------------
Deferred Credits and Other Liabilities:
Other 38
-------------
38
-------------
Capitalization:
Long-Term Debt 4,450
-------------
Common Stockholder's Equity:
Common stock, $1 par value - 20,000 shares
authorized and 100 shares outstanding -
Capital surplus, paid in 5,000
Accumulated deficit (40)
-------------
Common Stockholder's Equity 4,960
-------------
Total Capitalization 9,410
-------------
Total Liabilities and Capitalization $ 10,453
=============
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
WOODS ELECTRICAL CO., INC.
INCOME STATEMENT
(Unaudited)
Three Months* Nine Months
Ended Ended
September 30, September 30,
2002 2002
------------- -------------
(Thousands of Dollars)
Operating Revenues $ 1,843 $ 1,843
------------- ------------
Operating Expenses:
Other 1,813 1,813
Taxes other than income taxes 14 14
------------- ------------
Total operating expenses 1,827 1,827
-------------- ------------
Operating Income 16 16
------------- ------------
Other Income, Net 2 2
------------- ------------
Income Before Interest
and Income Tax Expense 18 18
------------- ------------
Interest Expense, Net 58 58
------------- ------------
Loss Before Income Tax Expense (40) (40)
------------- ------------
Income Tax Expense - -
------------- ------------
Net Loss $ (40) $ (40)
============= ============
*Woods Electrical Co., Inc. was acquired on July 1, 2002, and these results
reflect activity from July 1, 2002 through September 30, 2002.
Note: In the opinion of the Company, all adjustments necessary for a fair
presentation of financial position for the period shown have been made.
See accompanying notes to financial statements.
Northeast Utilities Parent
Select Energy, Inc.
Northeast Generation Services Company
E.S. Boulos Company
NGS Mechanical, Inc.
Select Energy Contracting, Inc.
Reeds Ferry Supply Co., Inc.
HEC/Tobyhanna Energy Project, Inc.
HEC/CJTS Energy Center LLC
Yankee Energy Services Company
Select Energy New York, Inc.
Woods Electrical Co., Inc.
Notes to Financial Statements (Unaudited)
1. About Northeast Utilities (NU)
Northeast Utilities Parent (NU Parent) is the parent company of the Northeast
Utilities system (NU system). The NU system's regulated utilities furnish
franchised retail electric service in Connecticut, New Hampshire and western
Massachusetts through three wholly owned subsidiaries: The Connecticut Light
and Power Company (CL&P), Public Service Company of New Hampshire (PSNH) and
Western Massachusetts Electric Company. Another wholly owned subsidiary,
North Atlantic Energy Corporation (NAEC), previously sold all of its
entitlement to the capacity and output of the Seabrook Station nuclear unit
(Seabrook) to PSNH under the terms of two life-of-unit, full cost recovery
contracts. On November 1, 2002, CL&P and NAEC consummated the sale of their
ownership interests in Seabrook. A fifth wholly owned subsidiary, Holyoke
Water Power Company, also is engaged in the production of electric power. A
sixth wholly owned subsidiary, Yankee Energy System, Inc. (Yankee) is the
parent company of Yankee Gas Services Company, Connecticut's largest natural
gas distribution system.
Several wholly owned subsidiaries of NU provide support services for the NU
system companies and, in some cases, for other New England utilities.
Northeast Utilities Service Company provides centralized accounting,
administrative, engineering, financial, information resources, legal,
operational, planning, purchasing, and other services to the NU system
companies. North Atlantic Energy Service Corporation previously had
operational responsibility for Seabrook. Three other subsidiaries construct,
acquire or lease some of the property and facilities used by the NU system
companies.
NU Enterprises, Inc. is a wholly owned subsidiary of NU and acts as the
holding company for certain of NU's competitive energy subsidiaries.
Northeast Generation Company was formed to acquire and manage generation
facilities. Select Energy, Inc. (Select Energy), and its subsidiary Select
Energy New York, Inc. (SENY), Northeast Generation Services Company and its
subsidiaries (NGS), Select Energy Services, Inc., and its subsidiaries
(SESI), Mode 1 Communications, Inc. and Woods Network Services, Inc., engage
in a variety of energy-related and telecommunications activities, as
applicable, primarily in the competitive energy retail and wholesale
commodity, marketing and services fields. E.S. Boulos Company (Boulos), NGS
Mechanical, Inc. (NGS Mechanical) and Woods Electrical Co., Inc. (Woods) are
wholly owned subsidiaries of NGS. Select Energy Contracting, Inc. (Select
Energy Contracting), Reeds Ferry Supply Co., Inc. (Reeds Ferry),
HEC/Tobyhanna Energy Project, Inc., (HEC/Tobyhanna), and HEC/CJTS Energy
Center LLC (HEC/CJTS) are wholly owned subsidiaries of SESI. Yankee
maintains certain wholly owned subsidiaries including Yankee Energy Services
Company (YESCO).
Select Energy, SENY, NGS, Boulos, NGS Mechanical, Woods, Select Energy
Contracting, Reeds Ferry, HEC/Tobyhanna, HEC/CJTS, and YESCO are "energy-
related companies" under rule 58. These footnotes are applicable to the rule
58 companies with financial statements filed in this Form U-9C-3 under Item 6
Section A.
2. About Select Energy
Select Energy is an integrated energy business that buys, markets, sells, and
trades electricity, gas, oil and energy-related products and services to both
wholesale and retail customers in the Northeastern United States. Select
Energy procures and delivers energy and capacity required to serve its
electric, gas and oil customers. Select Energy, collectively with its
affiliated competitive energy businesses, provides a wide range of energy
products and energy services.
Select Energy is a licensed retail electricity supplier and is registered
with local electric distribution companies in the states of Connecticut,
Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New
York, Pennsylvania, Rhode Island, and Virginia. Select Energy is a registered
gas marketer with local gas distribution companies in the states of
Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New
Jersey, New York, Pennsylvania, Rhode Island, and Virginia.
3. About NGS
NGS was formed to provide management, operation and maintenance services to
the electric generation market, as well as to large industrial customers, in
the Northeastern United States. NGS also provides consulting services which
include engineering services, construction management, permitting, and
compliance management.
4. About Boulos
Boulos is an electrical contracting company which specializes in high voltage
electrical construction and maintenance in Connecticut, Maine, Massachusetts,
New Hampshire, Rhode Island, and Vermont. Boulos is wholly owned by NGS.
5. About NGS Mechanical
NGS Mechanical was formed to provide mechanical services initially in certain
New England states and New York. NGS Mechanical is wholly owned by NGS.
6. About Select Energy Contracting
Select Energy Contracting designs, manages, and directs the construction of,
and/or installation of mechanical, water and electrical systems, energy and
other resource consuming equipment.
7. About Reeds Ferry
Reeds Ferry is an equipment wholesaler which purchases equipment on behalf of
Select Energy Contracting.
8. About HEC/Tobyhanna
HEC/Tobyhanna was established as a special purpose entity to manage the
assets of an Energy Savings Performance Contract at the Tobyhanna Army Depot.
9. About HEC/CJTS
HEC/CJTS is a special purpose entity formed to facilitate the financing of
SESI's construction of an energy center at the Connecticut Juvenile Training
School in Middletown, Connecticut. HEC/CJTS is wholly owned by SESI.
10. About YESCO
YESCO is winding down its energy-related services for its customers. YESCO
has disposed of most of its assets and is in the process of liquidating the
remainder of its assets.
11. About SENY
SENY is a wholly owned subsidiary of Select Energy and engages in the
brokering, marketing, transportation, storage, and sale of energy commodities
in the state of New York.
12. About Woods
Woods is a wholly owned subsidiary of NGS and is in the electrical
contracting business in the state of Connecticut. Woods is also registered to
do business in Maine, Massachusetts and New Hampshire. NGS acquired Woods on
July 1, 2002, and the results of Woods' operations since July 1, 2002, are
included in this report.
13. Public Utility Regulation
NU is registered with the Securities and Exchange Commission (SEC) as a
holding company under the Public Utility Holding Company Act of 1935 (1935
Act), and the NU system is subject to the provisions of the 1935 Act.
Arrangements among the NU system companies, outside agencies and other
utilities covering interconnections, interchange of electric power and sales
of utility property are subject to regulation by the Federal Energy
Regulatory Commission (FERC) and/or the SEC. The operating subsidiaries are
subject to further regulation for rates, accounting and other matters by the
FERC and/or applicable state regulatory commissions.
14. Presentation
The preparation of financial statements requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
15. New Accounting Standards
In June 2002, the Emerging Issues Task Force (EITF) of the Financial
Accounting Standards Board reached a consensus on EITF Issue No. 02-3,
"Accounting for Contracts Involved in Energy Trading and Risk Management
Activities," requiring energy trading companies to classify revenues and
expenses associated with certain energy trading contracts on a net basis
within revenues, rather than recording the gross revenues and expenses.
Select Energy and SENY currently account for energy trading activities using
the mark-to-market method under EITF Issue No. 98-10, "Accounting for Energy
Trading and Risk Management Activities." EITF Issue No. 98-10 allows energy
trading activities to be presented as revenues and as expenses or on a net
basis in revenues in the income statement. Effective July 1, 2002, Select
Energy and SENY adopted net reporting of revenues and expenses as allowed by
EITF Issue No. 98-10. Prior to July 1, 2002, Select Energy and SENY presented
energy trading activities as revenues and expenses as allowed by EITF Issue
No. 98-10. The adoption of net reporting was applied retroactively to all
periods presented but will have no effect on net income.
On October 25, 2002, the EITF reached additional consensuses in EITF Issue
No. 02-3. These consensuses supercede the consensus the EITF reached in June
2002. The first consensus rescinds EITF Issue No. 98-10, under which Select
Energy currently accounts for energy trading activities. The consensus will
require energy trading companies to follow SFAS No. 133, "Accounting for
Derivative Instruments and Hedging Activities," as amended, for energy
trading activities and to discontinue mark-to- market accounting for
contracts that are not derivatives. Management is currently evaluating the
extent of trading contracts that are not derivatives. The second consensus
requires net reporting of derivative energy trading activities effective
January 1, 2003. Management has already adopted net reporting of trading
activities and will continue to evaluate EITF Issue No. 02-3 as additional
guidance becomes available.
16. Market Risk and Risk Management Instruments
Select Energy provides both full requirement energy services to its customers
and engages in energy trading and marketing activities. Select Energy manages
its exposure to risk from its contractual commitments and provides risk
management services to its customers through forward contracts, futures, over-
the-counter swap agreements, and options (commodity derivatives).
Select Energy has utilized the sensitivity analysis methodology to disclose
quantitative information for its commodity price risks. Sensitivity analysis
provides a presentation of the potential loss of future earnings, fair values
or cash flows from market risk-sensitive instruments over a selected time
period due to one or more hypothetical changes in commodity prices, or other
similar price changes.
Commodity Price Risk - Trading Activities: As market participants in the
Northeast United States, Select Energy and SENY conduct commodity-trading
activities in electricity and its related products, natural gas and oil, and
therefore, experience net open positions. Select Energy and SENY manage these
open positions with strict policies which limit its exposure to market risk
and require daily reporting to management of potential financial exposure.
Under EITF Issue No. 98-10, these instruments are currently adjusted to
market value, and the unrealized gains and losses are recognized in income in
the current period in the consolidated income statement as purchased power,
net interchange power and capacity and in the consolidated balance sheet as
unrealized net gains and unrealized losses on mark-to-market transactions.
The net mark-to-market position at September 30, 2002 had asset values of
$87.7 million for Select Energy and $10.6 million for SENY. These amounts
include intercompany transactions of $16.6 million..
Under sensitivity analysis, the fair value of the portfolio is a function of
the underlying commodity, contract prices and market prices represented by
each derivative commodity contract. For swaps, forward contracts and options,
market value reflects management's best estimates considering over-the-
counter quotations, time value and volatility factors of the underlying
commitments. Exchange-traded futures and options are recorded at market based
on closing exchange prices.
As of September 30, 2002, Select Energy has calculated the market price
resulting from a 10 percent unfavorable change in forward market prices. That
10 percent change would result in approximately a $3.3 million decline in the
fair value of the Select Energy trading portfolio. In the normal course of
business, Select Energy also faces risks that are either nonfinancial or
nonquantifiable. Such risks principally include credit risk, which is not
reflected in this sensitivity analysis.
Commodity Price Risk - Nontrading Derivative Activities: Select Energy
utilizes derivative financial and commodity instruments (derivatives),
including futures and forward contracts, to reduce market risk associated
with fluctuations in the price of electricity and natural gas sold under firm
commitments to certain customers. Select Energy also utilizes derivatives,
including price swap agreements, call and put option contracts, and futures
and forward contracts, to manage the market risk associated with a portion of
its anticipated supply requirements. These derivative instruments have been
designated as cash flow hedging instruments.
When conducting sensitivity analyses of the change in the fair value of
Select Energy's electricity, natural gas and oil nontrading derivatives
portfolio, which would result from a hypothetical change in the future market
price of electricity, natural gas and oil, the fair values of the contracts
are determined from models which take into account estimated future market
prices of electricity, natural gas and oil, the volatility of the market
prices in each period, as well as the time value factors of the underlying
commitments. In most instances, market prices and volatility are determined
from quoted prices on the futures exchange.
Select Energy has determined a hypothetical change in the fair value for its
nontrading derivatives and electricity, natural gas and oil contracts,
assuming a 10 percent unfavorable change in forward market prices. As of
September 30, 2002, an unfavorable 10 percent change in market price would
have resulted in a decline in fair value of approximately $15 million.
The impact of a change in electricity, natural gas and oil prices on Select
Energy's nontrading derivatives contracts on September 30, 2002, is not
necessarily representative of the results that will be realized when these
contracts are physically delivered.
Select Energy also maintains natural gas service agreements with certain
customers to supply gas at fixed prices for terms extending through 2004.
Select Energy has hedged its gas supply risk under these agreements through
New York Mercantile Exchange (NYMEX) contracts. Under these contracts, the
purchase price of a specified quantity of gas is effectively fixed over the
term of the gas service agreements, which also extend through 2004. As of
September 30, 2002, the NYMEX contracts had a notional value of $50.3 million
and a mark-to-market asset value of $4.7 million.
17. Special Deposits
Special deposits include cash collateral posted in connection with various
power purchase and sales agreements.
QUARTERLY REPORT OF NORTHEAST UTILITIES
SIGNATURE CLAUSE
Pursuant to the requirements of the Public Utility Holding Company Act of
1935 and the rules and regulations of the Securities and Exchange Commission
issued thereunder, the undersigned company has duly caused this report to be
signed on its behalf by the undersigned officer thereunto duly authorized.
NORTHEAST UTILITIES
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(Registered Holding Company)
By: /s/ John P. Stack
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(Signature of Signing Officer)
John P. Stack
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Vice President-Accounting and Controller
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Date: November 25, 2002
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