ML20035G198

From kanterella
Jump to navigation Jump to search
Annual Rept,1992
ML20035G198
Person / Time
Site: Vermont Yankee File:NorthStar Vermont Yankee icon.png
Issue date: 12/31/1992
From: Weigand G
VERMONT YANKEE NUCLEAR POWER CORP.
To:
NRC OFFICE OF INFORMATION RESOURCES MANAGEMENT (IRM)
References
BVY-93-44, NUDOCS 9304260291
Download: ML20035G198 (27)
v • d • e


Text

{{#Wiki_filter:m- ~ VERMONT YANKEE. NUCLEAR POWER CORPORATION n. gx-Ferry Road. Brattleboro, VT 05301-7002 ) ENGINEERING OFFICE 580 MAIN STRE CT DOL 10N. t/ A O t 740 (508t 77%711 ) April 21,1993 ) United States Nuclear Regulatory Commission ATrN: Document Control Desk Washington, DC 20555 Refe ences: a. License No. DPR-28 (Docket No. 50-271)

Subject:

Vermont Yankee Nuclear Power Corporation Annual Financial Report

Dear Sir:

In accordance with the provisions of 10CFR50.71(b), enclosed please find one (1) copy of Vermont Yankee Nuclear Power Corporation's annual financial report, including the certified financial statements, for 1992. Should you have any questions regarding this report, please contact this office. Very truly yours, VERMONT YANKEE NUCLEAR POWER CORPORATION M 01 l d6BT( Leonard A.Tremblay,Jr. 26003. Senior ticensing ungineer o cc with enclosure: USNRC Region I Administrator USNRC Resident Inspector-VYNPS USNRC Project Manager-VYNPS Y e3042soae1 93o421 good 1 gor s====ggi

1 VERMONT YANKEE NUCLEAR POWER CORPORATION ANNUAL REPORT 1992

Contents Page Description of Business 1 President's Letter 2 liighlights 3 Common Stock Ownership 3 Financial Review 4 i Statements ofIncome and Retained Earnings 5 l llalance Sheets Assets 6 Capitalization and Liabilities 7 'l Statements of Cash Flows 8 Notes to Financial Statements '9 Independent Auditors' Report 24 Board of Directors 25 Officers 25

VERMONT YANKEE NUCLEAR POWER CORPORATION FERRY ROAD BRATTLEBORO, VERMONT 05301-7002 Description of Business Vennont Yankee Nuclear Pov er Corporation was incorporated under the laws of Vermont on August 4, 196G. The Company was formed by a group of New England utilities fbr the purpose of constructing and operating a nuclear-powervd generating plant <the " Plant"). The Plant commenced commercial operation on November 30,1972 and has been in full operation since that time except for maintenance and refueling shutdowns. The Plant's operating license, originally due to expire in December,2007, has been extended to March,2012. The Plant is located in Vernon, Vennont and has a design net electrical capacity of approximately 514 megawatts. The common stock of Vermont Yankee is owned by thirteen utilities, nine of which are the sponsoring utilities that are entitled to and obligated to purchase the output of the Plant. Under the terms of the Company's Power Contracts each sponsor is obligated to pay Vermont Yankee monthly, regardless of the Plant's operating level or whether or not it is operating, an amount equal to its entitlement percentage of Vermont Yankee's total fuel costs, operating expenses, decommissioning costs and an allowed return on equity. Also, under the terms of the Capital Funds Agreements with its spon-sors, the sponsors are committed to make funds available for changes or replacements needed to maintain or restore operation of the Plant or to obtain or maintain licenses necessary for the operation of the Plant. The names of the sponsors and their respective entitlement percentages of the capacity and output of the Plant are as follows: i Entitlement l Spani,or Percentage . l 1 i Central Vermont Public Service Corporation 35.0% i Green Mountain Power Corporation 20.0 l New England Power Corporation 20.0 l The Connecticut Light and Power Company 9.5 l l Central Maine Power Company 4.0 Public Service Company of New Ilampshire 4.0 Western Massachusetts Electric Company 2.5 Montaup Electric Company 2.5 Cambridge Electric Light Company 2.5 100.0% l }- )

President's Letter Vermont Yankee ended 1992 by setting a national record for plant operations and distinguishing itself as a leader in the nuclear industry. Our capacity factor fbr the year was 84#7, which is the highest ever achieved by a United States boiling water reactor during a year in which there was a refueling outage. General Electric ranked Vermont Yankee as the top boiling water reactor in the country and second in the world for plant as ailability for the two-year period 1991 through 1991 Vermont Yankee's average capacity factor fbr the period 1988 throunh 1992 was Hi.6'i, abnost twenty percentage points higher than that of the U.S. industry. This five-y ear average ranks Vermont Yankee as one of the best nuclear plants in the country and the world. During 1992, Vermont Yankee conducted a 45-day refueling and maintenance outage. Several major projects were completed to further enhance plant safety and reliability. Among those projects were replacement of tuo of the Plant's fiedwater heaters, installation of four new cooling units in the Plant's primary containment, and replacement of the Plant's main transfbrmer. Seseral important financial activities also took place during 1992. Vermont Yankee received a favorable tax ruling in 1992 which, together with the passage of the Energv Policy Act of 1992, will save the Company and our customers millions of dollars in decommissionine co.ts over the remaining life of the Plant. We adopted Statement of Financial Accounting Standard No.106," Employers' Accounting for Post-Hetirement Benefits Other than Pensions", and began pre-funding this liability. Finally, during 1992. Vermont Yankee reduced its long-term debt by approximately S3 million and increased its decom-missioning and spent fuel disposal fee fund balances by almost $23 million. Overall.1992 was an excellent year fbr Vermont Yankee. We have been able to maintain a consistently high level of performance which is recognized throughout the industry. February 12.1993 J. Gary Weigand l e 2

Highlights 1992 1991 9 Change Financial (dollars in millions): Operating revenues. $175.9 $151.7 15.9 Net income. 7.9 8.5 (7.1) Total assets. 438.2 417.6 4.9 Average number of shares of common stock outstanding (thousands).. 392 394 (0.5) Per Share of Common Stock: Earnings per average common share.. $20.18 $21.56 (6.4) Dividends paid per common share.. 20.15 23.71 (15.0) Book value per common share (year end).. 138.29 138.26 (0.0) Operating: Kilowatt-hour sales (billions).. 3.7 4.1 (9.8) Cost per kilowatt-hours (cents). 4.71 3.69 27.6 Number of employees (year end).. 338 336 0.6 - Common Stock Ownership Percer4tage Shares Owned Owned Central Vermont Public Service Corporation.. 31.37c 122,653 New England Power Company.. 20.0 78,402 Green Mountain Power Corporation. 17.9 70,088 Connecticut Light and Power Corporation. 9.5 37,242 Central Maine Power Company. 4.0 15,681-Public Service Company of New Hampshire 4.0 15,681 j Burlington Electric Department.. 3.6 1A,301 l Montaup Electric Company.. 2.5 3,801 Cambridge Eketric Light Company. 2.5 ' 9,801 Western Massachusetts Electric Company. 2.5 9,800 Vermont Elertric Cooperative. Inc... 1.0 4,213 Washington Electric Cooperative, Inc..~.... 0.6 2,431 Lyndonville Electric Department.. 0.6 2.387 100.07< 392.481 3

Financial Review Operating revenues of the Company are billed and received from customers based on the terms of the Power Contracts. Under those contracts, custumers are severally required to pay the Company an amount equal to their respective entitkment share of15e Company's total fuel costs, operating expenses with respect to the Plant, and a return on net unit investment as defined in such power contracts. Operating revenues increased in 1992 from 1991 by 15.99, primarily as a result of higher operating, maintenance, depreciation and decommissioning expenses, offset, in part, by lowei nuclear fuel expense. Nuclear fuel expense decreased by $3.6 million, or 14.69, in 1992 from 1991. The decreased fuel expense was a result of a decline in the cost of nuclear fuel materials and senices and a 9FV decrease in electrical generation in 1992 from 1991 due to the fact that a scheduled refueling and maintenance outage was undertaken during 1992 and not during 1991. Other operating expenses increasea 22.39 to $73.0 million in 1992 from $59.7 million in 1991. This increase was the result of costs associated with the scheduled refueling and maintenance outage in 1992 and an increase in costs related to the disposal oflow-level radioactive waste. In addition,1991 operating expenses included the reversal of a $2.8 million contract cancellation fee, originally recorded in 1990, following successful negotiations with the s endor. Maintenance expense increased by $14.2 million in 1992 from 1991 primarily because there was a sched-uled refueling and maintenance outage in 1992. The plant operates on an eighteen-month refueling cycle. The last prior scheduled refueling outage was completed in October,1990. Depreciation expense increased by $1.5 million and decommissioning expense increased by $2.6 million in 1992 from 1991, primarily as a result of rate reductions in 1991 related to an extension in the tenn of the Plant's operating license from December,2007 to Alarch,2012. The rate reductions were approved by the Federal Energy Regulatory Commission on February 28,1991, with the new rates effective on January 1,1990. Other income, net of other deductions, increased by $1.0 million in 1992 from 1991 primarily because a loss on the e, ale of securities and a partial reversal of accrued interest income due from the IRS reduced other income in 1991. Other than these items, other income remained relatively unchanged in 1992 as a higher disposal fee defeasance fund balance offset the efket oflower prevailing interest rates. lower interest rates did, however, result in a $2.0 million decrease in interest expense in 1992 from 1991. Net income for 1992 was $0.6 million less than the net income for 1991. The decrease in 1992 from 1991 was the result of refinements to the Company's formula for determining net income and a decrease in common equity following the Company's repurchase of approximately 29 of the outstanding shares of common stock in 1991. During the fourth quarter of 1992 the Company paid its seventy-fifth c4msecutive quarterly dividend to common shareholders. 4

Statements ofIncome and Retained Earnings Years ended December 31, 19ft2 lif91 19ff0 (Dollars in thousands except per share amountM Operating revenues. $175.919 $151,722 $166.583 Operating expenwes: Nuclear fuel expense. 21,240 24,864 22.110 Other operating expense 72,967 59,666 64,677 Maintenance. 27,878 13,664 26,578 Depreciation. 13.253 11.800 14,852 Decommissioning expense inote 2 L 10,649 8.065 11,536 Taxes on income ' note 10). 3,401 3.485 1,669 Property and other taxes.. 10.227 10,294 5,246 Total operating expenses.. 159.615 131,838 146.668 Operating income. 16.304 19.884 19.915 Other income and (deductions): Net earning.e on decommissioning fund (notes 2,5 and 11).. 5,395 1,423 2,741 Decommissioning expense (note 2 t (5,395i (4,423i 12,741) Allowance fbr equity funds used during construction.. 89 124 126 Intetwt. 2,046 1,377 3,634 Taxes on other income (note 10). (756) (447) t1,397) Ot her. net. (199) (917) (55) 1.180 137 2.308 Income befbre interest expense. 17.484 20.021 22.223 Interest expense: Interest on long-term debt. 7,101 7,684 7,889 Interest on disposal costs of spent nuclear fuel t note S t. 2,801 4.312 5,319 Allowance fbr borrowed funds used during construction. (339) (4656 (451) Total interest expense 9.563 11,531 12.757 Net income. 7.921 8,490 9,466 Retained earnings at beginning ofyear.. 1,166 1,982 5,444 9,087 10,472 14,910 Dividends declared. 7.909 9,306 12.928 Retained earnings at end of year. $1.178 $1.166 $ 1.982 Average number of shares outstanding in thousands.. 392 394 400 Net income per average share of common stock outstanding.. S 20.18 $ 21.56 $ 23.66 Dividends per average share of common stock outstanding.. $ 20.15 $ 23.7) $ 32.32 See accompanying notes to financial statements. 5

- Balance Sheets Assets Decemler 31, IMf2 11FJ1 (Dollars in thousanda Utility plant: Electric plant, at cost (note 61. $362,278 $355,564 Less accumulated depreciation. 185,263 173,827 177,015 181,737 Construction work in progress.. 6,408 4.188 Net electric plant. 183,423 185.925 Nuclear fuel, at cost: Assemblies in reactor.. 74,025 83,213 Fuel in process. 5.236 637 i Fuel in stock.. 22,863 i Spent fuel. "59,199 227,040 338,460 333,753 Less accumulated amortization of burned nuclear fuel. 302,369 985.326 36.098 48,427 Less accumulated amortization of final core nuclear fuel. 6.487 5.687 Net nuclear fuel.... 29.611 42,740 Net utility plant. 213,034 228,665 Current assets: Cash and temporary investments (note 7).. 1,922 5,068 Accounts receivable from sponsors.. 15,407 15,535 Other accounts receivable. 2,715 3,275 - 16.862 16,408 Materials and supplies. 4.381 3.222. Prepaid expenses Total current assets.. 41.287 43,508 Deferred charges: Deferred decommissioning costs (note 2).. 34,389 33,655 . Accumulated defermd income taxes.... 10,378 10,358. Deferred DOE enrichment site decontamination and decommissioning fee (note 4). 18,143 4,994 8.029-Other deferred charges fnote 4).. 67.904 52,042 Total deferred charges. . Long-term funds at amortized cost: 82,091 66,085 Decommissioning fund (notes 2,5,7 and 11). 33,892 27,317 Disposal fee defeasance fund (notes 5,7,8 and 11).. 115.983 93,402. Totallong-term funds.. $4_38,208 $417.617 See accompanying notes to financial statements. 6

Balance Sheets Capitalization and Liabilities December 31, 1992 1991 (Dollarm in thoua,and,-) Capitalization: Common stock equity: Common stock, $100 par value; authorized 100.100 shares; issued 400,014 shares of which 7,533 are held in Treasury. S 40.001 S 40,001 Additional paid-in capital. 14.227 14,227 Treasury stock (7,533 shares at cost ). 11,131) ( 1,131 > Retained earning. 1,178 1,166 Total common stock equity. 54,275 54.263 Long-term obligations, net i notes 6 and s ). 44,193 77,093 Total capitalization. 128.468 131,356 Commitments and contingencies inotes 2,14 and 15) Disposal G e and accrued interest for spent nuclear fuel < notes 7 and S L 78.239 75,437 Current liabilities: Accrued liabilities. 22,743 28,759 Accounts payable 2,591 2,798 Accrued interest. 974 1,092 Accrued taxes. 1.472 1,048 Total current liabilities. 27,780 33,697 Accrued decommissioning costs inote 2 L 117,601 101,550 Accumulated deferred income taxes. 58.9G3 61,112 Accumulated deferred investment tax credits. 7,590 8,231 l'namortized gain on reacquired debt, net.. 1,732 2,582 Accrued DOE enrichment site decontamination and decommissioning fee (note 41.. 17,220 Other deferred credits.. 615 3.652 Total deferred credite o03.721 177.127 8438.20S $417,617 See accompanying notes to fmancial statement s. 7

- Statements of Cash Flows Yearn ended December 31. 1992 1991 1990 (Dollars in thousands) Cash flows from operating activities: Net income.. $ 7,921 $ 8,490 $ 9,466 Adjustments to reconcile net income to net cash provided by operating activities: Amortization of nuclear fuel...~. 18,143 21,002 20,020 Depreciation... 13,253 11,800 14,852 10,649 8,065 11,536 Decommissioning expense. 2,802 4,312 5,319 Nuclear fuel disposal fee interest accrual. - Interest and dividends on disposal fee defeasance fund C,385) (1,495). (1,398) (Increase) decrease in accounts receivable... 688 (129) (5,373) (Increase) decrease in prepaid expenses... (1,159) 163 (664) (Increase) in materials and supplies inventory. (454) (1,531) (2,121) Increase (decrease) in accounts payable and accrued liabilities. (7.453) 5,495 10,475 Increase (decrease) in interest and taxes payable.. 306 (760) 862 (Decrease)in deferred taxes. (2,183) (801) (4,524).. (Decrease)in deferred investment tax credits. (641) (740) (426) Other....... (1,396) (1,776) (1,612) Total adjustments...._...... 31,170 43,605 46,946 . Net cash provided by operating activities.. 39,091 52,095 56,412 Cash flows from investing activities: Electric plant additions. (10,750). (6,596) (2,390) Nuclear fuel additions. (4,707) (18,444) (20,760) (10,612)' ' (8,323) (11,526) Payments to decommissioning fund... Payments to disposal fee defeasance fund.. (5,190) (8,216) . (5,930) Other... 1,841 (31,259)- (41,579) (38,765)- Net cash used in investing activities. Cash flows from financing.2ctivities: Dividend payments.. (7,909) (9,306) (12,928) Purchase of treasury stock... (1,131) Issuance of Series G first mortgage bonds 25,000 Issuance of Series H first mortgage bonds.. 10,485 Payments oflong term obligations (114,284) (66,597) (87,617) Borrowings under long-term agreements... 111.215 53,798 - 63,200 Net cash used in financing activities (10,978) (12,751) (12,345). Net increase (decrease)in cash and temporary (3,146) - (2.235) 5,302 investments.. Cash and temporary investments at beginning ofyear(note 11)...... 5,068 7,303 2,001 Cash and temporary invcstments at end ofyear.... $ 1.922 $ 5,068 $ 7,303 i See accompanying notes to financial statements. j i i 1 8 j . E.

Notes to Financial Statements NOTE 1. Summary of Significant Accounting Policies (a) Regniations and Opemtions The Company is subject to regulations prescribed by the Federal Energy Regulatory Commission ("FERC"), the Securities and Exchange Commission ("SEC") and the Public Service Board of the State of Vermont with respect to matters such as accounting, transactions subject to the Public Utility Holding Company Act of 1935, and securities issues. The Company is also subject to regulation by the Nuclear Regulatory Commission FNRC") for nuclear plant licensing and safety, and by federal and state agencies for environmental matters such as air quality, water quality and land use. The Company recognizes revenue pursuant to the terms of the Power Contracts and Additional Power Contracts. The Sponsors, a group of nine New England utilities, are severally obligated to pay the Company each month their entitlement percentage of amounts equal to the Company's total fuel costs and operating expenses ofits Plant, plus an allowed return on equity (since December 1,1989,12.25%). Such contracts also obligate the Sponsors to ma'ke decommissioning payments through the end of the Plant's service life and the completion of the decommissioning of the Plant. All Sponsors are committed to such payments regardless of the Plant's operating level or whether the Plant is out of service during the period. Under the terms of the Capital Funds Agreements, the Sponsors are committed, subject to obtaining necessary regulatory authorizations, to make funds available to obtain or maintain licenses necessary to keep the Plant in operation. (b) Depreciation and Maintenance Electric plant is being depreciated on the straight-line method at rates designed to fully depreciate all depreciable properties over the lesser of estimated useful lives or the Plant's remaining NRC license hfe. The operating license originally expired in 2007, but in December 1990 was extended to 2012. See note 3 for a discussion of the Plant's NRC license extension and the prospective treatment of depreciation. Depreciation expense was equivalent to overall effective rates of 3.56%,3.23% and 4.08% for the years 1992,1991 and 1990, respectively. Renewals and betterments constituting retirement units are charged to electric plant. Minor renewals and betterments are charged to maintenance expense. When properties are retired, the original cost, plus cost of removal, less salvage is charged to the accumulated provision for depreciation. (c) Amortization qfNuclear Fuel The cost of nuclear fuel is amortized to expense based on the rate of burn-up of the individual assemblies comprising the total core. The Company also provides for the costs of disposing of spent nuclear fuel at rates specified by the United States Department of Energy (" DOE") under a contract for disposal between the Company and the DOE. See note 8. In 1985, the Company began amortizing to expense on a straight-line basis seventy-five percent of the estimated costs of the final unspent nuclear fuel core which is expected to be in place at the expiration of the Plant's NRC operating license. Effective December 1,1989, the Company began amortizing one hun-dred percent of these costs in conformity with rates authorized by the FERC. See note 3 for a discussion of the Plant's NRC operating license extension and the prospective treatment of f' mal core amortization. (Continued) 9 1 __]

Notes to Financial Statements id) Amurtiuttion ut3hiterials und Sapplio In 1985, the Company began amortizing to expense a formula amount designed to fully amortize the cost of the material and supplies inventory which is expected to be on hand at the expiration of the Plant'.s NRC operating license. See note 3 fbr a discussion of the Plant's NRC operating license extension and the prospective treatment of materials and supplies amortization. ic) Long-te rm Fands The Company accounts fbr its investments in long-term funds at amortized cost since it has both the intent and ability to hold these in\\estments for the fbreseeable future. Amortized cost represents the cost to purchase the investment, net of any unamortized premiums or discounts. See notes 5 and 7. rfi Amortivition qf Gain on Reacquin d Ih bt The difference hetween the amount paid upon reacquisition of any debt security and the face value thereof plus any unamortized premium less any related unamortized debt expense and reacquisition costs, or less any unamortized discount, related debt expense and reacquisition costs applicable tu the debt redeemed, retired and canteled is deferred by the Company and amortized to expense on a straight-line basis over the remaining life of the respective security issues. \\ l Alluanuce_the F nds Un d Daring Construction (y) n Allowance for funds used during construction cAFUDC7 is the estimated cost of funds used to finance the Company's constructioa work in progress and nuclear fuel in process which is not recovered from the Sponsors through current revenues. The allowance is not realized in cash currently, but under the Power Contracts the allowance will be recovered in cash over the Plant's service life because of higher l revenues associated with higher depreciation and amortization expense. l AFUDC was capitalized at overall effective rates of 6.820,6.98's and 7.090 fbr 1992,1991 and 1990, respectively, using the grors rate method. !h) Eh covimissroniug The Company is accruing the estimated costs of decommissioning its Plant over the Plant's remaining NRC license life. Any amendments to these estimated costs are accounted for prospectively. See note 2. See note 3 for a discussion of the Plant's NRC license extension and the prospective treatment of decom-missioning costs. n) Tn.ru on income The tax effects of timing differences are accounted fbr in accordance with the rate-making policies of the FERC. Provisions for deferred income taxes reflect the tax eirects of all timing difTerences. Invertment tax credits have been defirred and are being amortized to income over the lives of the related assets. See note 10. (j) Cash Equirolents For purposes of the Statements of Cash Flows, the Company considers all highly liquid short-term investments with an original maturity of three months or less to he cash equivalents. < Continued ) 10

Notes to Financial Statements (k) Reclanificatims Certain information in the 1990 and 1991 financial statements has been reclassified to conform with tha 1992 presentation (I) Ec rnings perShare Earaings per common share have been computed by dividing earnings available to common stock by the weigh &d average number of shares outstanding during the year. NOTE 2. Decommissioning The Company accrues estimated decommissioning costs for its nuclear plant based on studies by an independent engineering firm which assumes that decommissioning will be accomplished by the prompt removal and dumantling method. This method requires that radioactive materials be removed from the plant site and that all buildings and facilities be dismantled immediately after shutdown. Studies esti-mate that approximately six years would be mquired to dismantle the Plant at shutdown, remove wastes and restore the site. The Company has implemented rates based on a settlement agreement with the i FERC which allowed $190 million, in 1988 dollars, as the estimated decommissioning costs. This allowed. amount is used to compute the Company's liability and billings to the Sponsors. Based on an assumed in-flation rate of 69 per annum and an expiration of the Plant's NRC operating license in 2012, the esti-mated cost of decommissioning at the end of 2012 is approximately $769 million. The present value of the pro rata portion of decommissioning costs recorded to date is $117.6 million. Billings to Sponsors for estimated decommissioning costs commenced during 1983, at which time the Company mcorded a deferred charge for the present value of the pro rata portion of decommissioning costs applicable to operations of the Plant for prior periods. Current period decommissioning costs not funded through billings to Sponsors or earnings on decommissioning fund assets are also deferred. i These deferred costs will be amortized to expense as they are funded over the remaining life of the NRC operating license. By August,1994, pursuant to the FERC rate settlement, the Company must file a revised estimate of. decommissioning costs and a revised schedule of future annual decommissioning fund collections reflect ' ing the historical differences between assumed and actual rates ofinflation and the historical differences between assumed and actual rates of earnings on decommisAning fund assets. This filing and subse-quent Elings are required to be made within four years of the most recent FERC approval of decommis-sioning cost estimates and rates. In March,1988, the Internal Revenue Senice issued the final regulations implementing Section 46SA of the Code and delineating the criteria for establishing a qualified decommissioning trust, deposits into which would be allowed as a curmnt deduction for tax purposes. In accordance with these regulations, the Company established the Vermont Yankee Decommissioning Trust, pursuant to an Indenture of Trust, - dated March 11,1988. In August,1991, the Internal Revenue Service issued a letter, pursuant to the - above regulations, establishing a revised Ruling Amount ibr 1991 and subsequent years which conforms. to the most recently approved FERC decommissioning rate settlement. Cash received from Sponsorr - ' ant decommissioning costs is deposited into the Decommissioning Trust in either the Qualified Funt : b, amounts deductible pursuant to the IRS letter) or the Nonqual-ified Fund (i.e., excess collections ptu suant to FERC authorizr9n dich are not currently deductible). Funds held by the Trust are invested in high grade U.S. government securities and municipal obligations. Interest earned by the Decommissioning Trust assets is recorded in other income and deductions, with an equal amount representing the current period decommissioning cost funded by such earnings reflected as decommissioning expense in other income and deductions. (Continued) 11 ... ~....................

4 Notes to Financial Statements Decommissioning expense for 1991 included an adjustment of approximately $2.1 million resulting from the Company's rate reduction filing approved by the FERC on February 28,1991. This filing was in response to an amendment of the nuclear plant's operating license issued by the NRC on December 17, 1990. The amendment extended the term of the operating license from December,2007 to March,2012. The adjustment reflected the approved retroactive effect on decommissioning expense to January,1990. NOTE 3. FERC Rate Case Matters On January 2,1990, the FERC issued an order granting the Company's motion to implement rates based on the proposed settlement agreement on an interim basis, subject to refund, effective as of L)ecember 1,1989. The proposed settlement agreement specified a return on equity of 12.259, an allowance for the estimated cost of decommissioning of $190 million in 1988 dollars, and that the Company be allowed to amortize 100% of the final fuel core as compared to the 759 previously allowed. The proposed settlement agreement was approved on August 1,1990. Under the settlement as approved, decommissioning charges, depreciation and amortization were calculated based on a service life ending in December, 2007. On April 27,1989, Vermont Yankee filed an appli:ation with the NRC to extend the term of the operating license to 2012, so that the Plant may ope > ate for forty years after it entered commercial sersice in 1972. On December 17,1990 the NRC issued an amendment to the operating license extending its l term to March 21,2012. The Company submitted a rate reduction filing with the FERC to reflect in rates .l the adjustments to decommissioning, depreciation and amortization resulting from the license extension. l The Company proposed to make this reduction effective as ofMarch 1,1991 and, since the extension was issued in 1990, to reflect the necessary adjustment for the period January 1,1990 through February 28,1991. On February 28,1991, the FERC approved the Cempany's rate reduction filing. The efTects of this ruling were accounted for prospectively in fiscal year 1991, producing a net revenue reduction of approxi. mately $7.4 million in 1991 which reflected the retroactive treatment to January 1,1990. This ruling i resulted in reduced revenue requirements in 1992 of approximately $3.5 million with similar reductions expected in future years. NOTE 4. Other Deferred Charges and Credits In October,1992 Congress passed the Energy Policy Act r(1992 v,hich requires, among other things, that certain utilities help pay for the cleanup of the DOE's enrichnvent facilities over a fifteen-year period. .The Company's annual fee of approximately $1.2 million is estin.s ted based on the historical share of enrichment service provided by the DOE and is indexed to inflation. These fees will not be adjusted for future business as the DOE's future cost of sales will include a decentamination and decommissioning - component. ' At December 31,1992 the Company has recognized a deferred credit and a corresponding regulatory asset representing its total estimated fee payments for the fifteen-year period. The Act stipulates that the - . annual fee shall be fully recoverable in rates in the same manner as other fuel costs. Approximately $3.3 and $3.2 million of the $5.0 and $8.0 million in other deferred charges at - December 31,1992 and 1991, respectively, relate to payments made to the Vermont Low Level Radioactive Waste Authority ("VLLRWA"), an agency of the State of Vernwnt for the siting and construc-tion of a low. level waste disposal facility. Payrnents made to the VLLRWA not pertaining directly to the. siting and construction of a specific low-level waste disposal facility are being expensed currently. -(Continued) 12

l Notes to Financial Statements l NOTE 5. Iamg term Funds The book value and estimated market value oflong-term fund investment securities at December 31, is as follows: 1992 1991 Itook Market ikiok Market value value value value (Dollarn in thousands) Decommissioning fund: U.S. Treasury obligations.. $ 22,000 $ 23,067 $35,921 $38,055 Municipal obligations. 57,141 59,009 28,799 30,152 Accrued interest and money market funds. 2.950 2.950 1,365 1,365 l 82,091 85,026 66.085 69,572 Disposal fee defeasance fund: Short-term investments. 26,457 26,457 14,716 14,716 Corporate bonds and notes.. 6,110. 5,940 12,075 11,476 Accrued interest and money market funds. 1,325 1,325 526 526 33.892 33.722 27,317 26,718-Totallong. term fund investments.. $115.983 $118,748 $93.402 ' $96,290 - At December 31,1992 and 1991, gross unrealized gains and losses pertaining to the long-term invest-ment securities were as follows: 1992 1991 (Dollarm in thousands) ' Unrealized losses on U.S. Treasury obligations.... _.... (4) $ - Unrealized gains on U.S. Treasury obligations. $ 1,071 $ 2,134 Unrealized gains on Municipal obligations.. $ 1,895 $1.353 Unrealized losses on Municipal obligations. $ (27) $- Unrealized gains on short-tenn investment... Unrealized losses on corporate bonds and notes.. $ (170) $ (599) Maturities of short-term obligations, bonds and notes (face amount) at December 31,1992 are as fol-lows (dollars in thousands): Within one year.... .. $ 31,319 - Two to five years.. 6,642 Five to seven years.... 21,025 Over seven years.. 53,750 $112,736 i h (Continued) 13 j._.

Notes to Financial Statements NOTE 6. Long-term Obligations A summary oflong-term obligations at December 31.1992 and 1991 is as follows: 1992 1991 (Dullara in thouwmdd First mortgage bonds: Series B - 8.50% due 1998.. $ 1.307 $ 1,307 Series C - 7.70% due 1998.. 1,612 1,612 Series D-10.125% due 2007... 23.147 27,234 Series E - 9.875% due 2007. 5,703 5,703 Series F - 9.375% due 2007.. 5,704 5,704 Series G - 8.949 due 1995.. 25,000 25,000 Series 11-8.259 due 1996.. 8.388 10,485 Total first mortgage bonds.. 70,861 77,045 Eurodollar Agreement commercial paper.. 3,292 .) j Unamortized premium on debt.. 40 48 Total long-term obligations.. $ 74,193 $ 77.093 l l The first mortgage bonds are is. sued under, have the terms and provirions set fbrth in, and are ratably and equally with all other bonds outstamding thereunder secured by, an Indenture of Mortgage dated as l of October 1,1970 between the Company and the Trustee, as modified and supplemented by twelve sup-plemental indentures. All bonds are secured by a first lien on utility plant, exclusive of nuclear fuel, and a pledge of the Power Contracts and the Additional Power Contracts (except for fuel paymentsI and the Capital Funds Agreements with Sponsors. Annual sinking fund requirements for Series B and Series C first mortgage bonds will be partially met by depositing bonds held in treasury. The bonds held in t rea-sury will be sufficient to meet the sinking fund requirements for these bonds through 1996. Cash sinking .i fund requirements for Series D, Series E and Series F first mortgage bonds will commence in 1999. There are no sinking fund requirements on the Series G first mortgage bonds. Cash sinking fund requirements for the Series H first mortgage bonds amount to approximately $2.1 million per year for the years 1992 through 1995. In July,1991 the Company issued $10.5 million of Series H 8.25% first mortgage bonds stated to mature on June 1,1996. The Company applied the proceeds of the sale of the bonds to retire the remain-ing Series A 9.6259 first mortgage bonds. The Company has a $75.0 million Eurodollar Credit Agreement which expires on December 31,1994 subject to three optional one-year extensions. The Company issued commercial paper under this agree-ment with weighted average interest rates of 3.959 for 1992 and 6.56% for 1991. Payment of the commer-cial paper is supported by the Eurodollar Credit Agreement which is secured by the nuclear core of the : Company's generating facility. There was an outstanding balance under this Agreement of $3.3 million as of December 31,1992 and no outstanding balance as of December 31,1991. NOTE 7. Disclosures About the Fair Value of Financial Instruments Cash and temporary investments, trade receivables, accounts receivable from sponsors, accounts payable and accrued liabilities: ' The carrying amount approximates fair value because of the short maturity of these instruments. (Continued). 14

Notes to Financial Statements Ismg-term Funds: The fair values oflong-term funds are estimated based on qtmted market prices for these or similar investment s. l Long-tenn Debt: The fair values of each of the Company's long-tenn debt instruments are estimated based on the quoted market prices for the same or similar issues or on the current rates offered to the Company for debt of the same remaining maturities. The estimated fair value of the Company's financial instruments are summarized as follows: At December 31.1992 Carr, sing Amount Estimated Fair Value i Decommissioning fund. $82,091 $85,026 Disposal fee defeasance fund. 33,892 33,722 12mg-term debt.. 74,193 78,235 Disposal fee and accrued interest.. 78.239 78,239 i Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgement and therefore cannot be detennined with precision. Changes in assumptions could significantly affect the estimates. l NOTE 8. Disposal Fee for Spent Nuclear Fuel l The Company has a contract with the United States Department of Energy PDOE") for the perma-nent disposal of spent nuclear fuel. Under the terms of this contract,in exchange for the one. time fee discussed below and a current fee of 1 mil per kwh of net generation paid quarterly, the DOE agrees to provide disposal services when a facility fbr spent nuclear fuel and other high-level radioactive waste is available, which is required by current statute to be prior to January 31,1998. The DOE contract obligates the Company to pay a one-time fee of approximately $39.3 million for disposal costs for all spent fuel discharged through April 7,1983. Although such amount has been col-lected in rates from the Sponsors, the Company has elected to defer p'ayment of the fee to the DOE as pennitted by the DOE contract. The fee must be paid no later than the first delivery of spent nuclear fuel to the DOE. Interest accrues on the unpaid obligation based on the thirteen-week Treasury Bill rate and is compounded quarterly. Through 1990 the Company deposited approximately $15.9 million in an irrevocable trust to be used exclusively for defeasing this obligation at some future date, provided the DOE complies with the terms of the aforementioned contract. In 1991 and 1992, respectively, the Company deposited additional amounts of approximately $8.2 and $5.2 million into this trust. On December 31,1991'the DOE issued a final rule amending the Standard Contract for Disposal of Spent Nuclear Fuel and/or High-level Radioactive Waste. The amended final rule conforms with a March 17,1989 ruling of the U.S. Court of Appeals for the District of Columbia that the 1 mil per kilowatt hour fee in the Standard Contract should be based on net electricity generated and sold. The impact of the amendment on the Company was to reduce the basis for the fee by 6% on an ongoing bar.is and to establish a receivable from the DOE at December 31,1991 of $2.2 million for previous overbdlings and accrued interest. The Company has recognized in its rates the full impact of the amended final rule to the Standard Contract. < Continued) 15 -.....r4. ii. iiI.s.

Notes to Financial Statements The DOE is refunding the overpayments, including interest, to utilities over the next fouryears via credits against future quarterly payments. The credits will be utilized in two phases. In the first phase, principal overpayments and interest through March 31,1992 will be credited during the period 1992 through 1994. In the second phase, additional accrued interest for the period April 1,1992 to September 30,1994 will be credited during 1995. Interest is based on the 90-day Treasury Bill Auction Bond Equivalent and will continue to accrue on amounts remaining to be credited. At December 31,1992 approximately $1.6 million in principal and interest is reflected in other accounts receivable. NOTE 9. Short Term Borrowings The Company had lines of credit from various banks totalling $6.3 million at December 31,1992 and 1991. The maximum amount of short-term borrowings outstanding at any month-end during 1992,1991 and 1990 was approximately $0.6 million, $0.4 million and $0.0 million, respectively. The average daily amount of short-term borrowings outstanding was approximately $0.1 million for each of the three years with weighted average interest rates of 6.12 % in 1992,8.199 in 1991 and 9.779 in 1990. There were no amounts outstanding under these lines of credit as of December 31,1992 and 1991. NOTE 10. Taxes on Income The components ofincome tax expense for the years ended December 31,1992,1991 and 1990 are as follows: 1992 1991 191M) (Dollars in thousands) Taxes on operating income: Current federal income tax. $4,926 $4,003 $5,251 Deferred federal income tax.. (1,840) (1,285) (3,675) Current state income tax.. 1,285-1,024 1,368 Deferred state income tax. (329) 483= (849) Investment tax credit adjustment. (641) (740) (426) 3,401-3.485 1,669 1 Tuxes on other income: q Current federalincome tax.. 598 353 1,124 Current state income tax.. 158 94 273 756 447 1.397 Total income taxes.. $4,157 $3,932 $3,066 A reconciliation of the Company's effective income tax rates with the federal statutory rate is as follows: '1992 1991 1990 i - 34.0% 34.0 % 34.0%< Federal statutory rate.. State income taxes, net of federal income tax benefit 6.1 6.1 5.2 Investment credit.. (5.3) (6.0) (7.3) Book depreciation in excess of tax basis.. 1.9 1.7 2.7 0.9 0.9 (1.8) AFUDC equity... (3.1) (6.7) (8.8) - Flowback ofexcess deferred taxes. (0.1) 1.7 - 0.5 Other.... 34.4 % 31.7% 24.5% (Continued) 16

Notes to Financial Statements The items comprising deferred income tax expense are as follows: 1992 1991 1990 tDollars in thousand4 Decommissioning expense not currently deductible $ (104) $ 14 S (281) Tax depreciation over (under) financial statement depreciation. (679 955 (2,160) Tax fuel amortization over (under) financial statement amortization. (637) (1,389) (141) Pension expense not currently deductible. (192i (562 (232) Postemployment benefits expense not currently deductible. (141) Low-level waste deduction over (under) financial statement expense. 139 825 (71) Flowback of excess deferred taxes. (376) (8286 (1,101: Other. (179) 184 (538) $ (2,169) $ (801) $ (4.524) In February 1992, the Financial Accounting Stamdards Board issued Statement of Financial Account-ing Standards No.109, Accounting for Income Taxes'. This Statement will require the Company to change from the deferred method to the liability method of accounting for income taxes in 1993. The liability method accounts fbr deferred income taxes by applying enacted statutory rates in effect at the balance sheet date to differences between the book basis and the tax basis of assets tmd liabilities. Upon adoption in 1993, the Company plans to apply the provisions of this new statement without restat-ing prior years' financial statements. This new statement requires recognition of deferred tax liabilities for f a) income tax benefits associ-ated with timing difTerences previously passed on to customers and (b) the equity component of allowance for funds uned during construction, and of a deferred tax asset for the tax efTect of the accumulated deferred investment tax credits. It also requires the adjustment of deferred tax liabilities or assets for an enacted change in tax laws or rates, among other things. Although the Company does not expect this new statement to have a material impact on its cash flow, results of operations or financial position because of the effect of rate regulation, the changes discussed above will require the Company to recognize an adjustment to accumulated deferred income taxes and a corresponding regulatory asset or liability to customers (in amounts equal to the required deferred income tax adjustment) to reflect the future revenues or reduction in revenues that will be required when the above temporary differences turn around and are recovered or settled in rates. In addition, this new state-ment will require a reclassification of certain deferred income tax liabilities to liabilities to customers in order to reflect the Company's obligation to flow back deferred income taxes provided at rates higher than the current 349 federal tax rate. The net effect of these changes resulting from this new statement will be to decrease net deferred income tax liabilities and to establish a net regulatory liability to customers of approximately $10 million. t Continued) 17

Notes to Financial Statements NOTE 11. Supplemental Cash Flow Information The following information supplements the cash flow information provided in the Statements of Cash Flows: 1992-1991 1990 (Dullars in thousands) Cash paid during the year for: Interest (net of amount capitalized). $ 7,062 $ 7.990 $ 7.359 Income taxes.. $ 6.192 $ 4,793 $ 6,683 Decommissioning fund activity <see notes 5 and 7): Cash received from Sponsors. $ 10,612 $ 8,323 $ 11,526 Investment earnings.. 7,351 5,558 3,318 Income taxes paid.. (1.956) (1,135) (577) i Net increase.. 16,007 12,746 14,267 Balances at beginning of year.. 66,084 53,339 39.072 $ 82,091 $ 66,085 $ 53.339 Balances at end of year. Postemployment medical benents fund activity: 1992 1991 1990 (Dollarm in thousands) Investment income. 109 Reimbursement to the Company. (1,264) Net increase (decrease).. (1,155) Balance at beginning ofyear. 1.155 Balance at end ofyear.. In November,1988 the Company's Board of Directors approved the funding of $1.1 million for postem-ployment medical benefits based on an estimate calculated by the Company's actuary. The Company sub-sequently deposited $1.1 million into an escrow account established to accumulate these funds. In 1989 the Company reversed the liability established for postemployment medical benefits, as these amounts are included in the current FERC approved rate settlement as a component of decommissioning. In 1990 the Company transfen ed this fund to the Company's operating account. (See note 13 for a discussion of. postretirement benefits other than pensions.) DOE defeasance fund activity (see notes 5 and 8): 1992 1991 1990 (Dollars in thousands) Payments from the Company..... $' 5,190 $ 8,216 $ 5,930 - 1,385 - 1,495 1,398 Investment income.. Net increase.. -. 6,575 9,711' 7,328-27,317 17,606' 10,278 ' Balance at beginning ofyear....... $33,892 $27.317- $17.606' Balance at end ofyear. -(Continued) 18

Notes to Financial Statements NOTE 12. Pension Plans The Company has two noncontnbutory trusteed pension plans covering substantially all ofits regular employees. The Company's funding policy is to fond the net periodic pension expense accrued each year. Benefits are based on age. years of service and the level of compensation during the final years of em ployment. The aggregate funded etatus of the Company's pension plans as of December 31,1992 and 1991 is as follou s: Decemher 31. 1992 1991 (Dollars in thousanda Vested benefits.. S 6,518 $ 5.017 Nonvested benefits. 918 851 Accumulated benefit obligation.. 7,466 5.898 Additional benefits related to future compensation levels. 7.728 8.823 Projected benefit obligation. 15,194 14,721 Fair value of plan assets, inte.sted primarily in equities and bonds.. 13,791 _11.640 Pnijected benefit obligation in excess of plan assets. S 1,403 $ 3.081 Certain changes in the items shown above are not recognized as they occur, but are amortized system-atically over subsequent periods. Unrecognized amounts still to be amortized and the amount which is included in the balance sheet appear below. Decemtwr 31, 19tt2 1991 < Dollars in thousando --~~~ Unrecognized net transition obligation. $ 1,057 $ 1,117 Unrecognized net gain. (4,939) (2.430) m Pension liability included in balance sheet. 4.610 4,377 Unrecognized prior service costs.. 675 17 Projected he,efit obligation in excess of plan ns.<et.s $_1 A03 S 3,081 The weighted average discount rate was 8.0's as of December 31,1992 and 1991. The rate ofincrease in future compensation levels used in determining the actuarial present value of the pn>jected benefit obli-gation was 6.59, and the expected long-term rate of return on plan assets was 8.59 as of December 31, 1992 and 1991. (Continued) 19

Notes to Financial Statements Net pension expense for the three years ending December 31,1992 included the following components: 1992 1991 IMO (Dollars in thousands) Service cost - benefits earned. $ 1,275 $ 1,147 $ 1,047 Interest cost on projected benefit obligation. 1,305 1,104 959 Actual (return) loss on plan assets. I867) (2.124) ' 118 Net amortization and deferral. 78 1,452 (730) Net pension expense. $ 1,791 $ 1,579 $ 1.394 NOTE 13. Postretirement Benefits Other Than Pensions In December,1990 the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No.106,

  • Employers' Accounting for Postretirement Benefits Other Than Pensions" (SFAS 106). This statement requires companies to use accrual accounting fbr postretirement benefits other than pensions for fiscal years beginning after December 15,1992. Under the " pay-as-you-go" method, employers paid fbr such retiree benefits as the costs were incurred, and utilities recovered such costs in rates as they were paid. Under SFAS 106, employers must book as a current expense the esti-mated cost of prm-iding postretirement benefits other than pensions to current retirees and existing em-ployees when they retire.

The Company adopted SFAS 106 on January 1,1992. The incremental cost, alxwe the amount col-lected through decommissioning billings, approximately $1.6 million, has been included in the Company's monthly power billings to Sponsors beginning with the January,1992 power bill. The Company is funding. this liability by placing monies in separate trusts. In order to maximize the deductible contributions per-mitted under IRS regulations, the Company has amended its pension plans and established separate VEBA trusts for management and union employees. In December,1992 the FERC issued its policy statement setting forth how utilities can recover in rates the increased costs associated with the implementation of SFAS 106. The policy statement specifies three conditions that must be met before FERC will consider companies' election of the accrual method: (a) the Company must agree to make cash deposits to an irrevocable external trust fund, at least quar-terly, in amounts that are proportional and, on an annual basis, equal to the annual test period allowance for postretirement benefits other than pensions:(b) the Company must agree to maximize the use ofin-come tax deductions for contributions to funds of this nature; and (c)in order to recover the transition obligation, the Company must file a general rate change within three years of adoption of SFAS 106. (Continued) .l 20 u 'i

Notes to Financial Statements The following table presents the plan's funded status reconciled with amounts recognized in the Company's balance sheet at December 31,1992 (dollars in thousando: Accumulated postretirement benefit obligation: Retirees. $ 1,277 Fully eligible active plan participants.. 1,332 i Other active participants.. 9.935 i Tota accumulated post retirement benefit obligation.. 12,544 l Fair valut of pian assets iavested primarily in short-term investments.. 1.595 j Accumulated postrelrement benefit l obligation in excee Jp'an assets. $10.949 l t 1 Unrecognized net transition obligation. $10,314 Unrecognized net gain.. (126) Accrued postretirement benefit cost included in other liabil.ities.. 761 Accumulated postretirement benefit obligation in excess of plan assets.. $10.949 Net periodic postretirement benefit cost for 1992 includes the following components: Service cost. $ 958 Interest cost. 941 Net amortization and deferral. 543 Net periodic postretirement benefit cost. $ 2.442 For measurement purposes, a 169 annual rate ofincrease in the per capita cost of covered benents (ie., health care cost trend ratchvas assumed for 1992; the rate was assumed to decrease gradually to 79 by the year 2001 and remain at that level thereafter. The health care cost trend rate assumption has a significant efTect on the amounts reported. For example, increasing the assumed health care cost trend rates by one percentage point in each year would increase the accumulated postretirement benefit obliga-tion as of December 31,1992 by $2.9 million and the aggregate of the service and interest cost components of net periodic post retirement benefit cost for the year ended December 31,1992 by $0.4 million. The v.eighted-average discount rate used in determining the accumulated postretirement benefit j' obligation was 89 at December 31,1992. (Continued) 21 I

Notes to Financial Statements j NOTE 14. Lease Commitments The Company leases equipment and systems under non-cancelable operating leases. Charges against income for rentals under these leases were approximately $2.6 million, $3.7 million, and $3.4 million in 1992,1991 and 1990, respectively. Minimum future rentals as of December 31,1992 are as follows. Annual Fiscal years ended rentalm (Dollars in thousands) 1993.. $3,545 l 1994. 3,204 l 2,869 1995.. 1996. 2,709 1997 and after..... 8,087 i i NOTE 15. Commitments and Contingencies In February,1993 the Vermont Public Service Board issued an order which requires the Company to pay its share of expenses incurred by the Vermont Low Level Waste Authority for the period April,1993 I through June,1994, currently capped at $4.5 million. In addition,in accordance with Vermont Act 296, the order established a fund for the long-term care of any eventual Vermont low-level waste disposal facil-ity. Based on this order the Company must make annual payment.s of approximately $0.8 million into the long-term care fund. The Company has approximately $160 million of" requirements based" purchase contracts for nuclear - fuel needs to meet substantially all ofits power production requirements through 2002. Under these con-tracts, any disruption of operating activity would allow the Company to cancel or postpone deliveries until - l actually needed. The Company has contracted for uranium enrichment services through 2002. The Company also has an enrichment contract with the DOE which expires in 2001; however, the Company has exercised its a right to partially terminate the DOE contract for the period 1990 to 1996. [ The Company has commitments for capital expenditures amounting to approximately $0.7 million for [ 1993. i The Price-Anderson Act provides, among other things, that the liability for damages resulting from a } nuclear incident would not exceed the greater of $560 million or the amount of financial protection re-quired of the licensee (presently about $7.8 billion). Under the NRC regulations promulgated pursuant to i the Price-Anderson Act, the Company has insured against this exposure by purchasing the maximum available private insurance ($200 million) and maintaining an indemnity agreement with the NRC. Under a mandatory industry-wide program, owners of operating nuclear facilities (including the - Company) may be assessed a retrospective premium of up to $66.2 million for each reactor owned in the l event of any one nuclear incident occurring at any licensed commercial reactor in the United States, with j a maximum assessment of $10 million per year per reactor owned. Such retrospective premium is subject .j - to inflation-based indexing at five-year intervals after 1988 and, if the sum of all public liability claims i and legal costs arising from any nuclear incident exceeds the maximum amount of financial protection, I then each such owner can be assessed up to an additional 5% of the maximum retrospective assessment i i i i (Continued) -l 22' l

Notes to Financial Statements NOTE 16. Unaudited Quarterly Financial Information The following quarterly financial infbrmation is unaudited and in the opinion of management includes all adjustments (consisting only of normal recurring accruals > necessary for a fair statement of results of operations for such periods. Quarter ended March . lune September December (Dollars in thousanda - except per share amountM 1992 Operating revenues.. $ 50,600 $ 46,393 $ 38.450 $ 40,476 Fuel ex pense

  • 4.236 4,670 5,999 6,335 Other operating expenses
  • 18,815 19,081 16,220 18.851 31aintenance expense'-

13,593 8,644 2,353 3,288 0;ierating income. 4,395 4.441 4,308 3,160 Net income

  • 2,215 2,254 2,206 1,246 d

Net income per average share of common stock.. 5.64 5.74 5.61 3.19 { 1991 Operating revenues.. $ 32,947 $ 36,250 $ 38,765 $ 43,760 Fuel expense

  • 6,281 5,629 6,096 6,858 Other operating expenses
  • 11,014 14,083 16,370 18,199 Alaintenance expenwc*

2.289 2.899 9,94 e a.536 Operating income. 6.226 4,639 4,586 4,433 Net income 9,350 2,044 1.937 2,159 Net income per average share of commm. <tock. 5.91 5.21 4.94 5.50

  • These selected expenses fluctuate from yt. irter to quarter due to Plant outages. In 1992, the majority of the outage activity occurred in the first quarter. There was no outage in 1991. The operating ex-penses not presented remain relatively constant.

" Fourth quarter 1992 net income includes an adjustment based upon certain refinements to the billing formula m,ed in the computation of net income. (Continued) 23

t 1 i Independent Auditors' Report KPMG Peat Marwick The Stockholders and Board of Directors Vermont Yankee Nuclear Power Corporation: We have audited the accompanying balance sheets of Vermont Yankee Nuclear Power Corporation as of December 31,1992 and 1991, and the related statements ofincome and retained earnings and cash flows for each of the years in the three-year period ended December 31,1992. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. 1 We conducted our audits in accordance with generally accepted auditing standards. Those standards -{ require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing q the accounting principles used and significant estimates made by management, as well as evaluating J the everall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Vermont Yankee Nuclear Power Corporation at December 31,1992 and 1991, and the results ofits operations and cash flows for each of the years in the three-year period ended December 31,1992, in confbrmity with generally accepted accounting principles. As discussed in note 13, the Company adopted the provisions of Statement of Financial Accounting Standards Number 106 Employers' Accounting ihr Postretirement Benefits Other than Pensions,in 1992. I IN k A. WL u Boston, Massachusetts February 5,1993 l 24

Board of Directors FREDERic E. GREENstw, SR., Vice President and DONAt.D G. PARDUs, Chairman and Chief Executive General Counsel, New England Power Company, Omcer, Eastern Utilities Associates, Boston, Westborough, Massachusetts Massachusetts JOSEPH llAltRINGMN, Vice President, New England GERA!.D C. POrl.IN, Vice President, Engineering, - Power Company, Westborough, Massachusetts Central Maine Power Company, Augusta, Maine DOrGIAs G. HYDE, Executive Vice President and A. NOR31AN TERRERr, senior Vice President, Green Chief Operating Omcer, Green Mountain Power Mountain Power Corporation, South Burlington, Corporation, South Burlington, Vermont Vermont JsHN B. KrANE, Vice President, Secretary and THOh1AS C. WEDH, Chairman, Vermont Yankee General Counsel, Northeast Utilities, Hartford, Nuclear Power Corporation, Brattleboro, Vermont, Connecticut President and Chief Executive Omcer, Central Vermont Public Service Corporation, Rutland, F. RAY KErsER, JR., Esq., Keyser, Crowley & Meub, Vermont Chairman, Central Vermont Public Service Corporation, Rutland Vermont J. GARY WEIGAND, President and Chief Executive Omcer, Vermont Yankee Nuclear Power GORnON P. Mnis, President and Chief Executive Corporation, Brattleboro, Vermont Omcer, ELCON Management Services, St. Johnsbury, Vermont Russet 1 D. WRicur, President and Chief Operating Omcer, Commonwealth Electric Company, JOnN F. OPERA, Executive Vice President, Nuclear Wareham, Massachusetts Northeast Utilities Service Company, Hartford, Connecticut i i Officers THO%tAS C. WEBn, Chairman J. GARY WFH;AND, President and Chief Executive Omcer WARREN P. McRPuy, Senior Vice President, Brut 2 W. WIGUErr, Vice President, Finance and Operations

  • Treasurer DONAw A. rem, Vice President Operations JOHN P. O'CONNOR, Controller and Secretary J AstEs P. PEL1rrIER, Vice President, Engineering THOh1AS W. BENNET, JIt., Manager of Financial Planning Assistant Treasurer JonN A. RirstrER, Esq., Assistant Secretary
  • n, signed Anuary a 1993.

(This report is not to be considered an offer to sell or buy or solicitation of an offer to sell or buy any security) 25 ... _ _ __-_ _ _ _ _ _ _}}

Retrieved from "https://kanterella.com/w/index.php?title=ML20035G198&oldid=4574836"