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, 2003
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
there under.
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 of Activities
Energy or Voting Reported
Name of Gas Date of State of Securities Nature of During the
Reporting Company Related Organization Organization Held Business Period
------------------ ---------- ------------ ------------ ------------- --------- ----------
NU Enterprises, Holding 01/04/99 Connecticut 100% by Unregulated (A)
Inc. Northeast businesses
Utilities holding
company
Select Energy, Inc. Energy 09/26/96 Connecticut 100% by NU Energy- (B)
Enterprises, related
Inc. activities
Northeast Energy 01/04/99 Connecticut 100% by NU Energy- (C)
Generation Services Enterprises, related
Company Inc. activities
Select Energy Energy 06/19/90 Massachusetts 100% by NU Energy- (D)
Services, Inc. Enterprises, related
Inc. activities
Reeds Ferry Supply Energy 07/15/64 New Hampshire 100% by Energy- (E)
Co., Inc. Select Energy related
Services, activities
Inc.
HEC/Tobyhanna Energy 09/28/99 Massachusetts 100% by Energy- (F)
Energy Project, Select Energy related
Inc. Services, activities
Inc.
Select Energy Energy 10/12/94 Massachusetts 100% by Energy- (G)
Contracting, Inc. Select Energy related
Services, activities
Inc.
Yankee Energy Holding 02/15/00 Connecticut 100% by Public (H)
System, Inc. Northeast Utility
Utilities Holding
Company
Yankee Energy Energy 07/02/93 Connecticut 100% by Energy- (I)
Services Company Yankee Energy related
System, Inc. activities
R. M. Services, Energy 11/22/94 Connecticut 10% by Yankee Energy- (J)
Inc. Energy related
System, Inc. activities
Acumentrics Energy 09/13/00 Massachusetts 5% by NU Energy- (K)
Corporation Enterprises, related
Inc. activities
ERI/HEC EFA-Med, Energy 09/30/00 Delaware 50% by Select Energy- (L)
LLC Energy related
Services, activities
Inc.
E. S. Boulos Energy 01/10/01 Connecticut 100% by Energy- (M)
Company Northeast related
Generation activities
Services
Company
NGS Mechanical, Energy 01/24/01 Connecticut 100% by Provide (N)
Inc. Northeast mechanical
Generation construction
Services and
Company maintenance
services
HEC/CJTS Energy Energy 03/02/01 Delaware 100% by Facilitate (O)
Center LLC Select Energy construction
Services, financing
Inc.
Select Energy Energy 02/13/96 Delaware 100% by Energy- (P)
New York, Inc. Select related
Energy, Inc. activities
Woods Electrical Energy 07/18/02 Connecticut 100% by Provide (Q)
Co., Inc. Northeast electrical
Generation contracting
Services services
Company
Greenport Power, Energy 02/13/03 Delaware 50% by Energy (R)
LLC Northeast related
Generation construction
Services activities
Company
(A) NU Enterprises, Inc. is not a "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, markets and sells 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 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 and 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) Northeast Generation Services Company (NGS) provides 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), 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. 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.
(D) Select Energy Services, Inc. (formerly HEC Inc.) is not a "reporting
company" but is included in this Item 1 because it holds, directly or
indirectly, voting securities issued by reporting companies as indicated
above.
(E) Reed's Ferry Supply Co., Inc. is an equipment wholesaler which
purchases equipment on behalf of Select Energy Contracting, Inc.
(F) HEC/Tobyhanna Energy Project, Inc. was established as a special purpose
entity to manage the assets of an Energy Savings Performance Contract
project at the Tobyhanna Army Depot.
(G) Select Energy Contracting, Inc. designs, manages and directs the
construction of, and/or installation of mechanical, water, and
electrical systems, energy and other resource consuming equipment.
(H) Yankee Energy System, Inc. is not a "reporting company" but is included
in this Item 1 because it holds, directly or indirectly, voting
securities issued by reporting companies as indicated above.
(I) Yankee Energy Services Company has disposed of most of its assets and is
winding down its energy-related business.
(J) R. M. Services, Inc. provides consumer collection services for companies
throughout the United States.
(K) 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.
(L) ERI/HEC EFA-Med, LLC (ERI/HEC) 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.
ERI/HEC will designate either ERI or Select Energy Services, Inc. to
perform each of the Delivery Orders. ERI/HEC 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.
(M) 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.
(N) 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.
(O) 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 activities other than those related to the lease related to such
project.
(P) Select Energy New York, Inc. is engaged in the brokering, marketing,
transportation, storage, and sale of energy commodities.
(Q) Woods Electrical Co., Inc. is in the electrical contracting business
mainly in Connecticut. Woods is registered to do business in
Connecticut, Massachusetts, Maine and New Hampshire.
(R) Greenport Power LLC (Greenport) is a Delaware limited liability company
that was formed by NGS and Hawkeye Electric LLC (Hawkeye Electric) to
enter into an Engineering, Procurement and Construction Agreement with
Global Commons LLC for the performance of design, engineering,
procurement, construction and other services in connection with an
electrical facility construction project in Greenport, Long Island, New
York. Hawkeye Electric, which is not an affiliate of NU, and NGS each
own 50% of Greenport.
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
--------------- -------- ------------ -------- ------- ------------ ---------- ------------- ------------ -------------
NU
Select Enterprises,
Energy, Inc. N/A N/A N/A N/A N/A N/A N/A Inc. $13,500,000
Northeast
Generation
Services
Company No transactions this quarter.
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,
Inc. No transactions this quarter.
HEC/CJTS
Energy
Center LLC No transactions this quarter.
Select Energy
New York, Inc. No transactions this quarter.
Woods Electrical
Co., Inc. No transactions this quarter.
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, 2003
----------------------- ------------------------ -------------- -------------------
(Thousands
of Dollars)
Northeast Northeast
Generation Generation Electrical and
Services Company Company Mechanical Services $ 6,830
==========
Northeast
Generation Northeast Utilities
Services Company Service Company Miscellaneous $ 15
==========
Northeast The Connecticut
Generation Light and Power Electrical and
Services Company Company Mechanical Services $ 55
==========
Northeast
Generation Holyoke Water Electrical and
Services Company Power Company Mechanical Services $ 3,990
==========
Northeast
Generation Select Energy Electrical and
Services Company Services, Inc. Mechanical Services $ 1,744
==========
Northeast Public Service
Generation Company of Electrical and
Services Company New Hampshire Mechanical Services $ 442
==========
Northeast
Generation Electrical and
Services Company Select Energy, Inc. Mechanical Services $ 15
==========
Northeast
Generation Yankee Energy Electrical and
Services Company Services Company Mechanical Services $ 1
==========
Reeds Ferry Select Energy Wholesale Purchasing
Supply Co., Inc. Contracting, Inc. Services $ 286
==========
Northeast
Generation Wholesale Purchasing
E.S. Boulos Company Services Company Services $ 209
==========
Select Energy Wholesale Purchasing
Select Energy, Inc. New York, Inc. Services $ 3
==========
Northeast Utilities
Select Energy, Inc. Service Company Miscellaneous $ 174
==========
Select Energy
New York, Inc. Select Energy, Inc. Miscellaneous $ 79
==========
* Total Amount Billed is for direct costs only.
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, 2003
----------------------- ------------------------ -------------- -------------------
(Thousands
of Dollars)
Northeast Generation Northeast Generation
Company Services Company Miscellaneous $ 228
==========
Public Service
Company of Northeast Generation
New Hampshire Services Company Miscellaneous $ 18
==========
Public Service
Company of
New Hampshire Select Energy, Inc. Miscellaneous $ 204
==========
The Connecticut
Light and Power Northeast Generation
Company Services Company Miscellaneous $ 55
==========
The Connecticut
Light and Power
Company Select Energy, Inc. Miscellaneous $ 1
==========
Holyoke Water Northeast Generation
Power Company Services Company Miscellaneous $ 223
==========
Western
Massachusetts Northeast Generation
Electric Company Services Company Miscellaneous $ 73
==========
Northeast Utilities Select Energy
Service Company New York, Inc. Miscellaneous $ 92
==========
Northeast Utilities Northeast Generation
Service Company Services Company Miscellaneous $ 1,104
==========
Northeast Utilities
Service Company Select Energy, Inc. Miscellaneous $ 4,302
==========
* Total Amount Billed is for direct costs only.
ITEM 4 - SUMMARY OF AGGREGATE INVESTMENT
Investments in energy-related companies:
----------------------------------------
(Thousands of Dollars)
Total consolidated capitalization as of 09/30/03 $6,747,678 line 1
Total capitalization multiplied by 15%
(line 1 multiplied by .15) 1,012,152 line 2
Greater of $50 million or line 2 $1,012,152 line 3
Total current aggregate investment:
Select Energy, Inc. 795,678
Northeast Generation Services Company 34,416
Select Energy Contracting, Inc. 22,910
Select Energy New York, Inc. 50,280
Woods Electrical Co., Inc. 16,404
Reeds Ferry Supply Co., Inc. 7
HEC/Tobyhanna Energy Project, Inc. -
Yankee Energy Services Company 7,982
E.S. Boulos Company 13,576
R.M. Services, Inc. 14,295
NGS Mechanical, Inc. 10
Acumentrics Corporation 7,500
Greenport, LLC 2,507
ERI/HEC EFA-Med, LLC 9
HEC/CJTS Energy Center LLC 12
------------
Current aggregate investment 965,586
------------
Elimination * 22,508
------------
Total current aggregate investment 943,078 line 4
------------
Difference between the greater of $50 million or 15% of
capitalization and the total aggregate investment of the
registered holding company system $69,074 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, 2003
Income Statement - Three and nine months ended September 30, 2003
Northeast Generation Services Company:
Balance Sheet - As of September 30, 2003
Income Statement - Three and nine months ended September 30, 2003
Select Energy Contracting, Inc.:
Balance Sheet - As of September 30, 2003
Income Statement - Three and nine months ended September 30, 2003
Reeds Ferry Supply Co., Inc.:
Balance Sheet - As of September 30, 2003
Income Statement - Three and nine months ended September 30, 2003
HEC/Tobyhanna Energy Project, Inc.:
Balance Sheet - As of September 30, 2003
Income Statement - Three and nine months ended September 30, 2003
Yankee Energy Services Company:
Balance Sheet - As of September 30, 2003
Income Statement - Three and nine months ended September 30, 2003
ERI/HEC EFA-Med, LLC:
Not available
E. S. Boulos Company:
Balance Sheet - As of September 30, 2003
Income Statement - Three and nine months ended September 30, 2003
NGS Mechanical, Inc.:
Balance Sheet - As of September 30, 2003
Income Statement - Three and nine months ended September 30, 2003
Northeast Utilities (Parent):
Balance Sheet - As of September 30, 2003
Income Statement - Three and nine months ended September 30, 2003
Select Energy New York, Inc.:
Balance Sheet - As of September 30, 2003
Income Statement - Three and nine months ended September 30, 2003
HEC/CJTS Energy Center LLC:
Balance Sheet - As of September 30, 2003
Income Statement - Three and nine months ended September 30, 2003
Woods Electrical Co., Inc.:
Balance Sheet - As of September 30, 2003
Income Statement - Three and nine months ended September 30, 2003
Greenport Power, LLC:
Not available
B. Exhibits
Exhibit No. Description
----------- -----------
6.B.1.1a Copy of contract required by Item 3 - filed under confidential
treatment pursuant to Rule 104(b).
6.B.1.1b 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.1.2d 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.1.4 Copy of contract required by Item 3 - filed under confidential
treatment pursuant to Rule 104(b).
6.B.1.5a Copy of contract required by Item 3 - filed under confidential
treatment pursuant to Rule 104(b).
6.B.1.5b Copy of contract required by Item 3 - filed under confidential
treatment pursuant to Rule 104(b).
6.B.1.5c Copy of contract required by Item 3 - filed under confidential
treatment pursuant to Rule 104(b).
6.B.1.5d Copy of contract required by Item 3 - filed under confidential
treatment pursuant to Rule 104(b).
6.B.1.5e Copy of contract required by Item 3 - filed under confidential
treatment pursuant to Rule 104(b).
6.B.1.5f Copy of contract required by Item 3 - filed under confidential
treatment pursuant to Rule 104(b).
6.B.1.5g Copy of contract required by Item 3 - filed under confidential
treatment pursuant to Rule 104(b).
6.B.1.5h Copy of contract required by Item 3 - filed under confidential
treatment pursuant to Rule 104(b).
6.B.1.6a Copy of contract required by Item 3 - filed under confidential
treatment pursuant to Rule 104(b).
6.B.1.6b Copy of contract required by Item 3 - filed under confidential
treatment pursuant to Rule 104(b).
6.B.1.7a Copy of contract required by Item 3 - filed under confidential
treatment pursuant to Rule 104(b).
6.B.1.7b 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,
2003
-------------
(Thousands
of Dollars)
ASSETS
------
Current Assets:
Receivables, net $ 301,240
Accounts receivable from affiliated companies 218,838
Unbilled revenue 30,783
Special deposits 39,751
Derivative assets 85,957
Prepaid option premiums 12,730
Prepayments and other 17,944
-------------
707,243
-------------
Property, Plant and Equipment:
Competitive energy 14,146
Less: Accumulated depreciation and amortization 10,558
-------------
3,588
Construction work in progress 5,110
-------------
8,698
-------------
Deferred Debits and Other Assets:
Accumulated deferred income taxes 4,566
Goodwill and intangible assets, net 15,327
Prepaid pension 1,625
Long-term accounts receivable 6,313
Long-term contracts assets 41,189
Other 32,580
-------------
101,600
-------------
Total Assets $ 817,541
=============
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,
2003
-------------
(Thousands
of Dollars)
LIABILITIES AND CAPITALIZATION
------------------------------
Current Liabilities:
Notes payable to affiliated companies $ 100,900
Accounts payable 372,852
Accounts payable to affiliated companies 27,749
Accrued taxes 2,947
Derivative liabilities 61,745
Unearned option premiums 15,751
Other 52,489
-------------
634,433
-------------
Deferred Credits and Other Liabilities 3,730
-------------
Capitalization:
Long-Term Debt from NU Parent 150,000
-------------
Common Stockholder's Equity:
Common stock, $1 par value - 20,000 shares
authorized and 100 shares outstanding -
Capital surplus, paid in 262,742
Accumulated deficit (230,840)
Accumulated other comprehensive loss (2,524)
-------------
Common Stockholder's Equity 29,378
-------------
Total Capitalization 179,378
-------------
Total Liabilities and Capitalization $ 817,541
=============
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,
2003 2003
------------- -------------
(Thousands of Dollars)
Operating Revenues $ 1,040,989 $ 2,165,449
------------- ------------
Operating Expenses:
Operation -
Purchased power, net interchange
power and capacity 1,011,488 2,109,374
Other 18,739 48,349
Depreciation and amortization 2,948 8,673
Taxes other than income taxes 1,162 3,390
------------- ------------
Total operating expenses 1,034,337 2,169,786
------------- ------------
Operating Income/(Loss) 6,652 (4,337)
Interest Expense, Net 2,549 5,498
Other (Loss)/Income, Net (2,834) 476
------------- ------------
Income/(Loss) Before Income
Tax Expense/(Benefit) 1,269 (9,359)
Income Tax Expense/(Benefit) 1,603 (4,300)
------------- ------------
Net Loss $ (334) $ (5,059)
============= ============
Note: In the opinion of the Company, all adjustments necessary
for a fair presentation of financial position for the
periods shown have been made.
See accompanying notes to financial statements.
NORTHEAST GENERATION SERVICES COMPANY
BALANCE SHEET
(Unaudited)
September 30,
2003
-------------
(Thousands
of Dollars)
ASSETS
------
Current Assets:
Cash $ 1
Receivables, net 7,697
Accounts receivable from affiliated companies 1,003
Taxes receivable 422
Unbilled revenues 2,223
Fuel, materials and supplies, at average cost 5
Prepayments and other 1,025
-------------
12,376
-------------
Property, Plant and Equipment:
Competitive energy 2,997
Less: Accumulated depreciation 997
-------------
2,000
Construction work in progress 593
-------------
2,593
-------------
Deferred Debits and Other Assets:
Accumulated deferred income taxes 240
Prepaid pension 900
Intangible assets, net and other 23,758
-------------
24,898
-------------
Total Assets $ 39,867
=============
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,
2003
-------------
(Thousands of
Dollars)
LIABILITIES AND CAPITALIZATION
------------------------------
Current Liabilities:
Notes payable to affiliated companies $ 11,700
Accounts payable 4,541
Accounts payable to affiliated companies 2,774
Other 915
--------------
19,930
--------------
Deferred Credits and Other Liabilities 1,065
--------------
Capitalization:
Long-Term Debt 5,000
--------------
Common Stockholder's Equity:
Common stock, $1 par value - 20,000 shares
authorized and 100 shares outstanding -
Capital surplus, paid in 15,468
Accumulated deficit (1,554)
Accumulated comprehensive loss (42)
--------------
Common Stockholder's Equity 13,872
--------------
Total Capitalization 18,872
--------------
Total Liabilities and Capitalization $ 39,867
==============
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,
2003 2003
------------- -------------
(Thousands of Dollars)
Operating Revenues $ 13,764 $ 43,234
------------- -------------
Operating Expenses:
Operation -
Other 9,984 34,138
Maintenance 2,979 8,499
Depreciation and amortization 66 200
Taxes other than income taxes 358 1,347
------------- -------------
Total operating expenses 13,387 44,184
------------- -------------
Operating Income/(Loss) 377 (950)
Interest Expense, Net 151 458
Other (Expense)/Income, Net (1,333) 78
------------- ------------
Loss Before Income Tax (Benefit)/Expense (1,107) (1,330)
Income Tax (Benefit)/Expense (33) 233
------------- ------------
Net Loss $ (1,074) $ (1,563)
============= ============
Note: In the opinion of the Company, all adjustments necessary
for a fair presentation of financial position for the
periods shown have been made.
See accompanying notes to financial statements.
SELECT ENERGY CONTRACTING, INC.
BALANCE SHEET
(Unaudited)
September 30,
2003
--------------
(Thousands
of Dollars)
ASSETS
------
Current Assets:
Cash $ 741
Receivables, net 17,540
Materials and supplies, at average cost 378
Prepayments and other 1,233
-------------
19,892
-------------
Property, Plant and Equipment:
Competitive energy 6,568
Less: Accumulated depreciation 4,489
-------------
2,079
-------------
Deferred Debits and Other Assets:
Goodwill, net 17,220
-------------
Total Assets $ 39,191
=============
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,
2003
-------------
(Thousands
of Dollars)
LIABILITIES AND CAPITALIZATION
------------------------------
Current Liabilities:
Accounts payable $ 5,884
Accounts payable to affiliated companies 11,355
Accrued taxes 99
Other 893
-------------
18,231
-------------
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes 1,174
Other 1,995
-------------
3,169
-------------
Capitalization:
Common Stockholder's Equity:
Common stock, $1 par value - 100,000 shares
authorized and 100 shares outstanding -
Capital surplus, paid in 15,085
Retained earnings 2,706
-------------
Common Stockholder's Equity 17,791
-------------
Total Capitalization 17,791
-------------
Total Liabilities and Capitalization $ 39,191
=============
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,
2003 2003
------------- -------------
(Thousands of Dollars)
Operating Revenues $ 18,491 $ 54,920
------------- -------------
Operating Expenses:
Operation 16,707 49,991
Maintenance 136 453
Depreciation 268 880
Taxes other than income taxes 941 1,611
------------- -------------
Total operating expenses 18,052 52,935
------------- -------------
Operating Income 439 1,985
Interest Expense, Net 45 139
Other Loss, Net (1) (3)
------------- -------------
Income Before Income Tax Expense 393 1,843
Income Tax Expense 173 793
------------- -------------
Net Income $ 220 $ 1,050
============= =============
Note: In the opinion of the Company, all adjustments necessary
for a fair presentation of financial position for the
periods shown have been made.
See accompanying notes to financial statements.
REEDS FERRY SUPPLY CO., INC.
BALANCE SHEET
(Unaudited)
September 30,
2003
-------------
(Thousands
of Dollars)
ASSETS
------
Current Assets:
Cash $ 5
Receivables, net 62
-------------
67
-------------
Deferred Debits and Other Assets:
Goodwill, net 248
-------------
Total Assets $ 315
=============
LIABILITIES AND CAPITALIZATION
------------------------------
Current Liabilities:
Accounts payable $ 62
Accounts payable to affiliated companies 295
-------------
357
Capitalization: -------------
Common Stockholder's Equity:
Common stock, no 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 $ 315
=============
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,
2003 2003
------------- -------------
(Thousands of Dollars)
Operating Revenues $ 286 $ 942
Operating Expenses 286 942
------------- ------------
Net Income $ - $ -
============= ============
Note: In the opinion of the Company, all adjustments necessary
for a fair presentation of financial position for the
periods shown have been made.
See accompanying notes to financial statements.
HEC/TOBYHANNA ENERGY PROJECT, INC.
BALANCE SHEET
(Unaudited)
September 30,
2003
-------------
(Thousands
of Dollars)
ASSETS
------
Current Assets:
Receivables, net $ 1,182
Prepayments and other 584
-------------
1,766
-------------
Deferred Debits and Other Assets:
Contracts receivable 27,504
Other 3,062
-------------
30,566
-------------
Total Assets $ 32,332
=============
LIABILITIES AND CAPITALIZATION
------------------------------
Current Liabilities:
Long-term debt - current portion $ 577
Accounts payable to affiliated companies 6,916
Accrued taxes 65
Accrued interest 236
Other 355
-------------
8,149
-------------
Capitalization:
Long-Term Debt 23,372
-------------
Common Stockholder's Equity:
Common stock, $1 par value - 100 shares
authorized and outstanding -
Retained earnings 811
-------------
Total Common Stockholder's Equity 811
-------------
Total Capitalization 24,183
-------------
Total Liabilities and Capitalization $ 32,332
=============
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,
2003 2003
------------- -------------
(Thousands of Dollars)
Interest Expense, Net $ 471 $ 1,427
Other Income, Net 550 1,711
------------ ------------
Income Before Income Tax Expense 79 284
Income Tax Expense 90 180
------------ ------------
Net (Loss)/Income $ (11) $ 104
============ ============
Note: In the opinion of the Company, all adjustments necessary
for a fair presentation of financial position for the
periods shown have been made.
See accompanying notes to financial statements.
YANKEE ENERGY SERVICES COMPANY
BALANCE SHEET
(Unaudited)
September 30,
2003
-------------
(Thousands
of Dollars)
ASSETS
------
Current Assets:
Cash $ 526
Receivables, net 5
Taxes receivable 13
-------------
544
-------------
Deferred Debits and Other Assets:
Accumulated deferred income taxes 436
Investments and other 4,536
-------------
4,972
-------------
Total Assets $ 5,516
=============
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,
2003
-------------
(Thousands
of Dollars)
LIABILITIES AND CAPITALIZATION
-------------------------------
Current Liabilities:
Notes payable to affiliated companies $ 100
Accounts payable to affiliated companies 455
Other 3
-------------
558
-------------
Deferred Credits and Other Liabilities 5
-------------
Capitalization:
Common Stockholder's Equity:
Common stock, no par value - 10,000 shares
authorized and 200 shares outstanding 1
Capital surplus, paid in 7,881
Accumulated deficit (2,929)
-------------
Common Stockholder's Equity 4,953
-------------
Total Capitalization 4,953
-------------
Total Liabilities and Capitalization $ 5,516
=============
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,
2003 2003
------------- -------------
(Thousands of Dollars)
Operating Revenues $ - $ 9
Operating Expenses 3 13
------------- -------------
Operating Loss (3) (4)
Interest Expense, Net - 4
Other Income, Net - 3
------------- -------------
Loss Before Income Tax (Benefit)/Expense (3) (5)
Income Tax (Benefit)/Expense (1) 2
------------- -------------
Net Loss $ (2) $ (7)
============= =============
Note: In the opinion of the Company, all adjustments necessary
for a fair presentation of financial position for the
periods shown have been made.
See accompanying notes to financial statements.
E.S. BOULOS COMPANY
BALANCE SHEET
(Unaudited)
September 30,
2003
-------------
(Thousands
of Dollars)
ASSETS
------
Current Assets:
Cash $ 156
Receivables, net 8,481
Accounts receivable from affiliated companies 291
Taxes receivable 385
Unbilled revenues 3,050
Materials and supplies 203
------------
12,566
------------
Property, Plant and Equipment:
Competitive energy 989
Less: Accumulated depreciation 329
------------
660
------------
Deferred Debits and Other Assets:
Goodwill 6,993
Other 50
------------
7,043
------------
Total Assets $ 20,269
============
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,
2003
------------
(Thousands
of Dollars)
LIABILITIES AND CAPITALIZATION
-------------------------------
Current Liabilities:
Advance from parent, non-interest bearing $ 2,948
Accounts payable 1,995
Accounts payable to affiliated companies 1,180
Other 348
-------------
6,471
-------------
Deferred Credits and Other Liabilities
Accumulated deferred income taxes 480
Other 538
-------------
1,018
-------------
Capitalization:
Common Stockholder's Equity:
Common stock, no par value - 20,000 shares
authorized and 100 shares outstanding -
Capital surplus, paid in 7,539
Retained earnings 5,241
-------------
Common Stockholder's Equity 12,780
-------------
Total Capitalization 12,780
-------------
Total Liabilities and Capitalization $ 20,269
=============
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,
2003 2003
------------- -------------
(Thousands of Dollars)
Operating Revenues $ 6,988 $ 25,518
------------- -------------
Operating Expenses:
Operation 290 892
Maintenance 8,037 25,746
Depreciation 47 125
------------- -------------
Total operating expenses 8,374 26,763
------------- -------------
Operating Loss (1,386) (1,245)
Other (Loss)/Income, Net (14) 207
------------- -------------
Loss Before Income Tax Benefit (1,400) (1,038)
Income Tax Benefit (558) (158)
------------- -------------
Net Loss $ (842) $ (880)
============= =============
Note: In the opinion of the Company, all adjustments necessary
for a fair presentation of financial position for the
periods shown have been made.
See accompanying notes to financial statements.
NGS MECHANICAL, INC.
BALANCE SHEET
(Unaudited)
September 30,
2003
-------------
(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, no 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,
2003 2003
------------- -------------
(Thousands of Dollars)
Operating Revenues $ - $ -
Operating Expenses - -
------------ ------------
Net Income $ - $ -
============ ============
Note: In the opinion of the Company, all adjustments necessary
for a fair presentation of financial position for the
periods shown have been made.
See accompanying notes to financial statements.
NORTHEAST UTILITIES (PARENT)
BALANCE SHEET
(Unaudited)
September 30,
2003
-------------
(Thousands
of Dollars)
ASSETS
------
Current Assets:
Cash $ 5,159
Notes receivable from affiliated companies 217,600
Notes and accounts receivable 5,292
Accounts receivable from affiliated companies 2,891
Taxes receivable 5,846
Prepayments 1,600
------------
238,388
------------
Deferred Debits and Other Assets:
Investments in subsidiary companies, at equity 2,559,237
Other 15,800
------------
2,575,037
------------
Total Assets $ 2,813,425
============
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,
2003
-------------
(Thousands
of Dollars)
LIABILITIES AND CAPITALIZATION
------------------------------
Current Liabilities:
Notes payable to banks $ 30,000
Long-term debt - current portion 23,000
Accounts payable 4,946
Accounts payable to affiliated companies 305
Accrued interest 13,672
Other 756
-------------
72,679
-------------
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes 4,330
Other 1,898
-------------
6,228
-------------
Capitalization:
Long-Term Debt 480,226
-------------
Common Stockholder's Equity:
Common shares, $5 par value - authorized
225,000,000 shares; 150,098,023 shares issued and
127,254,402 shares outstanding 750,492
Capital surplus, paid in 1,106,466
Deferred contribution plan - employee stock
ownership plan (76,970)
Retained earnings 837,963
Accumulated other comprehensive loss (2,862)
Treasury stock (360,797)
-------------
Common Stockholder's Equity 2,254,292
-------------
Total Capitalization 2,734,518
-------------
Total Liabilities and Capitalization $ 2,813,425
=============
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,
2003 2003
-------------- -------------
(Thousands of Dollars)
Operating Revenues $ - $ -
------------- --------------
Operating Expenses:
Other 1,767 6,127
------------- --------------
Operating Loss (1,767) (6,127)
------------- --------------
Interest Expense 6,323 15,978
------------- --------------
Other Income, Net:
Equity in earnings of subsidiaries 39,820 130,969
Other 4,382 9,168
------------- --------------
Other income, net 44,202 140,137
------------- --------------
Income Before Income Tax Benefit 36,112 118,032
Income Tax Benefit 3,126 8,279
------------- --------------
Net Income $ 39,238 $ 126,311
============= ==============
Note: In the opinion of the Company, all adjustments necessary for a
fair presentation of financial position for the periods
shown have been made.
See accompanying notes to financial statements.
SELECT ENERGY NEW YORK, INC.
BALANCE SHEET
(Unaudited)
September 30,
2003
-------------
(Thousands
of Dollars)
ASSETS
------
Current Assets:
Cash $ 8,089
Special deposits 5,451
Receivables, net 41,905
Accounts receivable from affiliated companies 3,933
Taxes receivable 2,129
Derivative assets 14,320
Prepaid option premiums 5,823
Prepayments and other 12,948
-------------
94,598
-------------
Property, Plant and Equipment:
Competitive energy 607
Less: Accumulated depreciation 339
-------------
268
-------------
Deferred Debits and Other Assets 3,237
-------------
Total Assets $ 98,103
=============
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,
2003
-------------
(Thousands
of Dollars)
LIABILITIES AND CAPITALIZATION
-------------------------------
Current Liabilities:
Accounts payable $ 28,060
Accounts payable to affiliated companies 7,691
Derivative liabilities 4,515
Other 2,037
-------------
42,303
-------------
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes 7,716
Pension obligation 733
Other 51
-------------
8,500
-------------
Capitalization:
Long-Term Debt 14,699
-------------
Common Stockholder's Equity:
Common stock, $1 par value - authorized
and outstanding 10,000 shares 10
Capital surplus, paid in 9,959
Retained earnings 20,870
Accumulated other comprehensive income 1,762
-------------
Common Stockholder's Equity 32,601
-------------
Total Capitalization 47,300
-------------
Total Liabilities and Capitalization $ 98,103
=============
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,
2003 2003
------------- -------------
(Thousands of Dollars)
Operating Revenues $ 85,630 $ 307,207
------------- -------------
Operating Expenses:
Purchased power, net interchange
power and capacity 88,593 299,986
Other 2,368 6,631
Taxes other than income taxes (412) (1,236)
------------- -------------
Total operating expenses 90,549 305,381
------------- -------------
Operating (Loss)/Income (4,919) 1,826
Interest Expense, Net 147 407
Other Income, Net 37 211
------------- -------------
(Loss)/Income Before Income
Tax (Benefit)/Expense (5,029) 1,630
Income Tax (Benefit)/Expense (2,072) 666
------------- -------------
Net (Loss)/Income $ (2,957) $ 964
============= =============
Note: In the opinion of the Company, all adjustments necessary
for a fair presentation of financial position for the
periods shown have been made.
See accompanying notes to financial statements.
HEC/CJTS ENERGY CENTER LLC
BALANCE SHEET
(Unaudited)
September 30,
2003
-------------
(Thousands
of Dollars)
ASSETS
------
Current Assets:
Cash $ 1
-------------
Total Assets $ 1
=============
LIIABILITIES 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,
2003 2003
------------- -------------
(Thousands of Dollars)
Operating Revenues $ - $ -
-------------- -------------
Operating Expenses - -
-------------- -------------
Net Income $ - $ -
============== =============
Note: In the opinion of the Company, all adjustments necessary
for a fair presentation of financial position for the
periods shown have been made.
See accompanying notes to financial statements.
WOODS ELECTRICAL CO., INC.
BALANCE SHEET
(Unaudited)
September 30,
2003
-------------
(Thousands
of Dollars)
ASSETS
------
Current Assets:
Receivables, net $ 2,397
Taxes receivable 382
Unbilled revenue 251
Materials and supplies 57
Prepayments and other 28
-------------
3,115
-------------
Property Plant and Equipment:
Competitive energy 250
Less: Accumulated depreciation 46
-------------
204
-------------
Deferred Debits and Other Assets:
Goodwill and other purchased intangible assets, net 7,718
-------------
Total Assets $ 11,037
=============
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,
2003
-------------
(Thousands
of Dollars)
LIABILITIES AND CAPITALIZATION
-------------------------------
Current Liabilities:
Notes payable to affiliated companies $ 725
Advance from Northeast Generation Services
Company, non-interest bearing 250
Accounts payable 614
Accounts payable to affiliated companies 82
Other 24
-------------
1,695
-------------
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes 198
Other 256
-------------
454
-------------
Capitalization:
Long-Term Debt 4,450
-------------
Common Stockholder's Equity:
Common stock, no par value - 20,000 shares
authorized and 100 shares outstanding -
Capital surplus, paid in 5,000
Accumulated deficit (562)
-------------
Common Stockholder's Equity 4,438
-------------
Total Capitalization 8,888
-------------
Total Liabilities and Capitalization $ 11,037
=============
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,
2003 2003
------------- -------------
(Thousands of Dollars)
Operating Revenues $ 2,571 $ 5,456
------------- -------------
Operating Expenses:
Other 406 1,207
Maintenance 2,091 4,624
Depreciation 61 81
Taxes other than income taxes 9 2
------------- -------------
Total operating expenses 2,567 5,914
------------- -------------
Operating Income/(Loss) 4 (458)
Interest Expense, Net 82 242
Other Income, Net - 3
------------- -------------
Loss Before Income Tax Benefit (78) (697)
Income Tax Benefit (30) (243)
------------- -------------
Net Loss $ (48) $ (454)
============= =============
Note: In the opinion of the Company, all adjustments necessary
for a fair presentation of financial position for the
periods shown have been made.
See accompanying notes to financial statements.
Northeast Utilities (Parent)
Select Energy, Inc.
Select Energy New York, Inc.
Northeast Generation Services Company
E.S. Boulos Company
NGS Mechanical, Inc.
Woods Electrical Co., Inc.
Select Energy Contracting, Inc.
Reeds Ferry Supply Co., Inc.
HEC/Tobyhanna Energy Project, Inc.
HEC/CJTS Energy Center LLC
Yankee Energy Services Company
Notes to Financial Statements (Unaudited)
1. About Northeast Utilities (NU)
Northeast Utilities Parent is the parent company of NU's subsidiaries. NU'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, Public Service
Company of New Hampshire and Western Massachusetts Electric Company. Another
wholly owned subsidiary, North Atlantic Energy Corporation, 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. Seabrook was sold on November 1, 2002. Other
subsidiaries include Holyoke Water Power Company, a company engaged in the
production of electric power, and Yankee Energy System, Inc. (Yankee), 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 NU's
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 NU's companies. Prior to the sale of
Seabrook on November 1, 2002, North Atlantic Energy Service Corporation had
operational responsibility for Seabrook. Three other subsidiaries construct,
acquire or lease some of the property and facilities used by NU's companies.
NU Enterprises, Inc. (NU Enterprises) is a wholly owned subsidiary of NU and
acts as the holding company for certain of NU's subsidiaries. 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, primarily in the competitive energy retail
and wholesale commodity, marketing and services fields. Northeast Generation
Company acquires and manages generation facilities. E.S. Boulos Company
(Boulos), NGS Mechanical, Inc. (NGS Mechanical) and Woods Electrical Co.,
Inc. (Woods Electrical) 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 Electrical, 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 report on Form
U-9C-3 under Item 6 Section A.
2. About Select Energy
Select Energy engages in wholesale and retail energy marketing activities.
Select Energy is an integrated energy business that buys, markets and sells
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 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 and 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 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.
4. About NGS
NGS provides 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.
5. 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.
6. About NGS Mechanical
NGS Mechanical provides mechanical services in certain New England states and
New York. NGS Mechanical is wholly owned by NGS.
7. About Woods Electrical
Woods Electrical is in the electrical contracting business in Connecticut and
is a wholly owned subsidiary of NGS. Woods Electrical is also registered in
the electrical contracting business in Maine, Massachusetts and New
Hampshire. NGS acquired Woods Electrical on July 31, 2002, and the results
of Woods Electrical's operations since July 1, 2002, are included in this
report.
8. About Select Energy Contracting
Select Energy Contracting designs, manages and directs the construction of,
and/or installation of mechanical, water and electrical systems, and other
resource consuming equipment.
9. About Reeds Ferry
Reeds Ferry is an equipment wholesaler which purchases equipment on behalf of
Select Energy Contracting.
10. About HEC/Tobyhanna
HEC/Tobyhanna is a special purpose entity established to manage the assets of
an Energy Savings Performance Contract at the Tobyhanna Army Depot.
11. 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.
12. About YESCO
YESCO has disposed of most of its assets and has wound down its energy-
related services for its customers.
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 is subject to the provisions of the 1935 Act. Arrangements among
NU's 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
Derivative Accounting: Effective January 1, 2001, NU adopted Statement of
Financial Accounting Standards (SFAS) No. 133, "Accounting for Derivative
Instruments and Hedging Activities," as amended. In April 2003, the
Financial Accounting Standards Board (FASB) issued SFAS No. 149, "Amendment
of Statement 133 on Derivative Instruments and Hedging Activities," which
amends SFAS No. 133. This new statement incorporates interpretations that
were included in previous Derivative Implementation Group (DIG) guidance,
clarifies certain conditions, and amends other existing pronouncements. It
is effective for contracts entered into or modified after June 30, 2003. The
new rules indicate that derivative contracts that are subject to unplanned
netting and can be settled for cash versus delivery would no longer qualify
for the normal purchases and sales exception, which would require fair value
accounting. Management has determined that the adoption of SFAS No. 149 did
not change Select Energy's and SENY's accounting for wholesale and retail
marketing contracts that were entered into prior to July 1, 2003, or the
ability of Select Energy or SENY to elect the normal purchases and sales
exception.
Emerging Issues Task Force (EITF) Issue No. 03-11, "Reporting Gains and
Losses on Derivative Instruments That Are Subject to FASB Statement No. 133,
Accounting for Derivative Instruments and Hedging Activities, and 'Not Held
for Trading Purposes' as Defined in EITF Issue No. 02-3, 'Issues related to
Accounting for Contracts Involved in Energy Trading and Risk Management
Activities'" was derived from EITF Issue No. 02-3, which requires net
reporting in the income statement in revenues of energy trading activities.
Issue No. 03-11 addresses income statement classification of derivatives that
are not related to energy trading activities. Prior to Issue No. 03-11, there
was no specific accounting guidance that addressed the classification in the
income statement of Select Energy's and SENY's retail marketing and wholesale
contracts, many of which are derivatives. The only applicable guidance was
EITF Issue No. 99-19, "Reporting Revenue Gross as a Principal versus Net as
an Agent." The indicators of gross revenue reporting include whether the
entity is the primary obligor in the arrangement, whether the entity has
inventory or credit risk, latitude in establishing price, and discretion in
supplier selection. Indicators of net revenue reporting are whether the
supplier is the primary obligor in the arrangement, the entity earns a fixed
amount and the supplier has credit risk.
On July 31, 2003, the EITF reached a consensus in Issue No. 03-11 that
determining whether realized gains and losses on contracts that physically
deliver and are not held for trading purposes should be reported on a net or
gross basis is a matter of judgment that depends on the relevant facts and
circumstances. The EITF indicated that the indicators set forth in Issue No.
99-19 should continue to be considered and provided no new accounting
guidance. Additionally, the consensus recommends disclosure of where the
gains and losses are recorded in the income statement, and whether they are
presented on a net or gross basis. Issue No. 03-11 is effective for Select
Energy and SENY prospectively on October 1, 2003.
Select Energy currently reports the settlement of short-term contracts and
Select Energy and SENY currently report the long-term derivative contracts
that are not held for trading purposes on a gross basis, generally with sales
in revenues and purchases in expenses. Short-term sales and purchases
represent power that is purchased to serve full requirements contracts but is
ultimately not needed based on the actual load of the full requirements
customers. This excess power is sold to the independent system operator or
to other counterparties. Management is currently evaluating the impact of
the consensus in Issue No. 03- 11 as it relates to income statement
classification of Select Energy's short-term energy purchases and sales.
Management will complete this evaluation in the fourth quarter in accordance
with Issue No. 03-11. If management determines that revenues and expenses
related to short-term sales and purchases should be reported net, then there
could be a significant reduction in both Select Energy's revenues and
expenses with no operating income or net income impact. For the first nine
months of 2003, short-term and non-requirements sales amounted to
approximately $600 million.
On June 25, 2003, the DIG cleared Issue No. C-20, which addressed the meaning
of "not clearly and closely related regarding contracts with a price
adjustment feature" as it relates to the election of the normal purchase and
sales exception to derivative accounting. The implementation of this
guidance is required for the fourth quarter of 2003 for Select Energy and
SENY. Management is currently evaluating the impacts of Issue No. C-20, but
believes that when it is implemented, Issue No. C-20 will not have a
significant impact on Select Energy and SENY.
16. Derivative Instruments, Market Risk and Risk Management
A. Derivative Instruments
Effective January 1, 2001, NU adopted SFAS No. 133, as amended by SFAS No.
149 in April 2003. Derivatives that are utilized for trading purposes are
recorded at fair value with changes in fair value included in net income.
Other contracts that are derivatives but do not meet the definition of a cash
flow hedge and cannot be designated as being used for normal purchases or
normal sales are also recorded at fair value with changes in fair value
included in net income. For those contracts that meet the definition of a
derivative and meet the cash flow hedge requirements, the changes in the fair
value of the effective portion of those contracts are generally recognized in
accumulated other comprehensive income, a component of equity, until the
underlying transactions occur. For those contracts that meet the definition
of a derivative and meet the fair value hedge requirements, the changes in
fair value of the effective portion of those contracts are generally
recognized on the balance sheet as both the hedge and the hedged item are
recorded at fair value. For contracts that meet the definition of a
derivative but do not meet the hedging requirements, and for the ineffective
portion of contracts that meet the cash flow hedge requirements, the changes
in fair value of those contracts are recognized currently in net income.
Derivative contracts that are entered into as a normal purchase or sale, will
result in physical delivery, meet the definitions in SFAS No. 149, and are
documented as such, are recorded under accrual accounting.
For information regarding recent accounting changes related to trading
activities, see Note 15, "New Accounting Standards," to the financial
statements.
The tables below summarize Select Energy's and SENY's derivative assets and
liabilities at September 30, 2003. These amounts do not include premiums
paid, which amounted to $18.6 million at September 30, 2003 ($12.8 million
for Select Energy and $5.8 million for SENY). These amounts also do not
include premiums received by Select Energy, which amounted to $15.8 million
at September 30, 2003. The premium amounts relate primarily to energy
trading activities.
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(Millions of Dollars) Assets Liabilities Total
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Select Energy:
Trading $81.9 $ (51.3) $ 30.6
Nontrading 1.0 -- 1.0
Hedging 3.1 (10.5) (7.4)
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Total $86.0 $ (61.8) $ 24.2
==========================================================================
--------------------------------------------------------------------------
(Millions of Dollars) Assets Liabilities Total
--------------------------------------------------------------------------
SENY:
Trading $ 7.5 $ (1.9) $ 5.6
Nontrading 2.6 (1.4) 1.2
Hedging 4.2 (1.2) 3.0
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Total $14.3 $ (4.5) $ 9.8
==========================================================================
Trading: To gather market intelligence and utilize this information in risk
management activities for the wholesale business, Select Energy conducts
limited energy trading activities in electricity, natural gas and oil, and
therefore, experiences net open positions. Select Energy and SENY manage
these open positions with strict policies that limit their exposure to market
risk and require daily reporting to management of potential financial
exposures. Derivatives used in trading activities are recorded at fair value
and included in the balance sheets as derivative assets or liabilities.
Changes in fair value are recognized in operating revenues in the statements
of income in the period of change. The net fair value positions of the
trading portfolio at September 30, 2003 were assets of $30.6 million for
Select Energy and $5.6 million for SENY. These amounts include intercompany
assets and liabilities of $0.4 million.
Select Energy's and SENY's trading portfolio includes New York Mercantile
Exchange (NYMEX) futures and options, the fair value of which is based on
closing exchange prices; over-the-counter forwards and options, the fair
value of which is based on the mid-point of bid and ask market prices;
bilateral contracts for the purchase or sale of electricity or natural gas,
the fair value of which is determined using available information from
external sources; and a long-term bilateral energy purchase contract, the
fair value of which is determined using a model. The trading portfolio also
includes a LIBOR-based interest rate swap to mitigate fair value fluctuations
from changes in the LIBOR-based discount rate used to determine the fair
value of certain trading contracts. SENY's trading portfolio also includes
transmission congestion contracts. The fair value of certain transmission
congestion contracts is based on published market data. Market information
for other transmission congestion contracts is not available, and those
contracts cannot be reliably valued. Management believes the amounts paid for
these contracts, which total $4.6 million, are equal to their fair value.
Nontrading: Nontrading derivative contracts are used for delivery of energy
related to Select Energy's and SENY's retail and wholesale activities. These
contracts are not entered into for trading purposes, but are subject to fair
value accounting because these contracts are derivatives that cannot be
designated as normal purchases or sales, as defined. These contracts cannot
be designated as normal purchases or sales either because they are included
in the New York energy market that settles financially or because the normal
purchase and sale designation was not elected by management. The net fair
values of nontrading derivatives valued at the mid-point of bid and ask
market prices at September 30, 2003 were assets of $1.0 million for Select
Energy and $1.2 million for SENY.
Hedging: Select Energy and SENY utilize derivative financial and commodity
instruments, including futures and forward contracts, to reduce market risk
associated with fluctuations in the price of electricity and natural gas
purchased to meet firm sales commitments to certain customers. Select Energy
and SENY also utilize 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 retail supply requirements.
These derivatives have been designated as cash flow hedging instruments and
are used to reduce the market risk associated with fluctuations in the price
of electricity, natural gas, or oil. A derivative that hedges exposure to the
variable cash flows of a forecasted transaction (a cash flow hedge) is
initially recorded at fair value with changes in fair value recorded in
accumulated other comprehensive income. Hedges impact net income when the
forecasted transaction being hedged occurs, when hedge ineffectiveness is
measured and recorded, when the forecasted transaction being hedged is no
longer probable of occurring, or when there is accumulated other
comprehensive loss and the hedge and the forecasted transaction being hedged
are in a loss position on a combined basis.
Select Energy and SENY maintain natural gas service agreements with certain
customers to supply gas at fixed prices for terms extending through 2005.
Select Energy and SENY have hedged its gas supply component of the risk under
these agreements through NYMEX futures contracts. Under these contracts,
which also extend through 2005, the purchase price of a specified quantity of
gas is effectively fixed over the term of the gas service agreements. At
September 30, 2003, the NYMEX futures contracts had notional values of $81.9
million and were recorded at fair value as a derivative liability of $1.7
million.
Other derivative liabilities, which are valued at the mid-point of bid and
ask market prices, include forwards, options and swaps to hedge Select
Energy's basic generation service contracts in the PJM region and were
recorded at fair value as derivative liabilities of $5 million. Other
derivative liabilities include futures, options and swaps in the New England
region, which were recorded as derivative liabilities with a fair value of
$4.2 million at September 30, 2003.
SENY maintains hedges on its retail sales portfolio through 2004, which were
also valued at the mid-point of bid and ask market prices and recorded at
fair value as a derivative asset of $4.1 million at September 30, 2003.
B. Market Risk Information
Select Energy utilizes the sensitivity analysis methodology to disclose
quantitative information for its commodity price risks. Sensitivity analysis
provides a presentation of the potential loss of future net income, 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. 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, fair 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 fair value based on closing exchange prices.
Trading Portfolio: At September 30, 2003, Select Energy calculated the
market price resulting from a 10 percent change in forward market prices.
That 10 percent change would result in approximately a $0.3 million increase
or decrease 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.
Retail Marketing and Wholesale Portfolio: 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 that
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 quotes on the futures exchange.
Select Energy has determined a hypothetical change in the fair value for its
retail marketing and wholesale portfolio, which includes cash flow hedges and
electricity, natural gas and oil contracts and generation assets, assuming a
10 percent change in forward market prices. At September 30, 2003, a 10
percent change in market price would have resulted in an increase or decrease
in fair value of approximately $3.5 million.
The impact of a change in electricity, natural gas and oil prices on Select
Energy's retail marketing and wholesale portfolio at September 30, 2003, is
not necessarily representative of the results that will be realized when the
commodities provided for in these contracts are physically delivered.
C. Other Risk Management Activities
Credit Risk Management: Credit risk relates to the risk of loss that NU would
incur as a result of non-performance by counterparties pursuant to the terms
of their contractual obligations. NU serves a wide variety of customers and
suppliers that include independent power producers, industrial companies, gas
and electric utilities, oil and gas producers, financial institutions, and
other energy marketers. Margin accounts exist within this diverse group, and
NU realizes interest receipts and payments related to balances outstanding in
these margin accounts. This wide customer and supplier mix generates a need
for a variety of contractual structures, products and terms which, in turn,
requires NU Enterprises to manage the portfolio of market risk inherent in
those transactions in a manner consistent with the parameters established by
NU's risk management process.
Credit risks and market risks at NU Enterprises are monitored regularly by a
Risk Oversight Council operating outside of the business units that create or
actively manage these risk exposures to ensure compliance with NU's stated
risk management policies.
NU tracks and re-balances the risk in its portfolio in accordance with fair
value and other risk management methodologies that utilize forward price
curves in the energy markets to estimate the size and probability of future
potential exposure.
NYMEX traded futures and option contracts are guaranteed by the NYMEX and
have a lower credit risk. Select Energy and SENY have established written
credit policies with regard to its counterparties to minimize overall credit
risk on all types of transactions. These policies require an evaluation of
potential counterparties' financial conditions (including credit ratings),
collateral requirements under certain circumstances (including cash in
advance, letters of credit, and parent guarantees), and the use of
standardized agreements, which allow for the netting of positive and negative
exposures associated with a single counterparty. This evaluation results in
establishing credit limits prior to Select Energy and SENY entering into
trading activities. The appropriateness of these limits is subject to
continuing review. Concentrations among these counterparties may impact NU's
overall exposure to credit risk, either positively or negatively, in that the
counterparties may be similarly affected by changes to economic, regulatory
or other conditions.
At September 30, 2003, Select Energy and SENY maintained collateral balances
from counterparties of $29.2 million. This amount does not include $16
million of special deposits held by outside counterparties. This amount is
included in both special deposits and other current liabilities on the
accompanying balance sheets.
17. Special Deposits
Special deposits primarily consist of collateral balances resulting from
Select Energy and SENY wholesale activities.
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 there under, the undersigned company has duly caused this report to be
signed on its behalf by the undersigned officer thereunto duly authorized.
-------------------
NORTHEAST UTILITIES
(Registered Holding Company)
By: /s/ John P. Stack
----------------------------------------
(Signature of Signing Officer)
John P. Stack
----------------------------------------
Vice President-Accounting and Controller
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Date: November 24, 2003
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