Text

Lilco 1991 Annual Rept
	ML20098D326
Person / Time
Site:	Nine Mile Point
Issue date:	12/31/1991
From:	Catacosinos W; LONG ISLAND LIGHTING CO.
To:	;
Shared Package
ML17056B860	List: ML17056B861; ML17056B862; ML17056B863; ML17056B864; ML20098D326; NMP1L0667, Forwards Niagara Mohawk Power Corp Annual Rept 1991, Rochester Gas & Electric Corp Annual Rept 1991, New York State Electric & Gas Corp 1991 Annual Rept, Central Hudson 1991 Annual Rept & Lilco 1991 Annual Rept;
References
	NUDOCS 9205280203
	Download: ML20098D326 (52)
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^ 4 >([ Lilf0's financial heahh continued to imprme in Conserration Jiusincu The New hk Public Senice 199L Earnings for the year were S239 mi! Son. Commission (PSC has pr6 sided utilities with Gnancial 4 .c p . is or $2.15 per conunon share, and we increased our incentises to promote energy consenation.1.11f0 >:l quartedy conunon stock dhidend b) 13 percent to has implemented one of the most comprehensim (E 42.5 cents per share, effective October 1.1991. comenation programs in the country. Our 'many (( The PSC granted the Company eketric rate consenation programs prmide our customers with ] (g increases of apprmimately four percent for each of opportunities to control their energy costs and e :l the nest three years, a sign that the Commiwion is presene the emironment.- Along with our gas l fulfilling its obligation under the 1989 Shoreham business, we siew cons nation as a growth business s y settlement. The PSC also authorized a oncocar gas unit within the Company. 9 {l rate increase of 4.1 percent. As a resuh, the va> EIceiric linsinen As long Island lifestyles become C,ompany. Grst mortgage and genera! and refunding - -l s more and more dependent on ekvtric appliances, honds were once again upgraded by imestment-rating customers are increasingly looking to us to provide-M agencies, allowing us to borrow money at hmer their homes and businesses with an uninterrupted, mterest rates. s ilow of electncity. We - hae responded with a e entered UNI w. h the country perched m the it n trimming comprehensive : reliability program hn. k of the Persian Gulf W.ar, engendering an n more trees away from power lines and installing escalced concern mer our natmn,s dependence on 'L$ more sophisticated equipment - which is having fore.ign ud. Lil.f0 re ponded to that concern with good results, despite the many storms that aggresive sales of natural gas and a comprehens. ne ?> affect the Cmnpanyi more than 50.000 miles of consenaimn campaign. s$ merhead lines. l>l Narnrul Gus Ilusiness Owr the past two years, we Last summer, the Company received high marks ^ - :l installed gas heat in more than 20,000 homes and ' from gmernment oflicials and our customers for the. succesfully quick response in restnring power following the long Island as <- l husineres on we g g gg market our product and expand our pipelines into damane caused by Hurricane Iloh. The Imrricane's neighborhoods. On long Island 3 'out of 90-mile an hour winds upnoted trees, snapped utility r}l new (>$ every 4 bomes heat with oil which prestnt* us poles and tore down power lines, wreaking hame eh j p i> with an opportunity to conwrt many homes to natural the electric system. Our employees did a superb job ^ q> sl gas heat. in ge* ting power hack to our customers. - ll With the emnp!-tion of the b oquois pipeline which 4 Crenring I'artner314/ps. L1LCO has taken a leadership. is now transporting gas from (.mada to hong Island Jl - position in helping to attract new businesses and mom and a pr posed new pipch.ne from New Jerser to .j, jobs to the community. As a member of the Long. long Island scheduled to be completed m. 1994,we 'a ' A E blami-Partnership, Lilf0 is taling the lead in ~ g'*> wdl hae sufficicut gm supplies to take addatage of developing an economic desclopment program to ,A L[; the demand for natural gas. %,e are po. sed to capand ?>- attract new businewes to the Island.- In additien, the gas hus.meu throughout the 90s.. u;;[.>- .,16' -? >> r l-lG q > s ?> o m> 'Jy e .x m-s L, _a _,

- - _ - _ _ _ _ _ _ - - _ +, _.l c 4- + GG-i 4.- 4: 1 4. 4. 4 1.11r0 recched "SC appnaal of a new rate design sought a new organiiational structure, which wouhl 1 ,] 4-l which offers at t rarlh t-electric rules 10 cornpaniew einpower our eillployees to aAVulne rewponsihihty [or j + ;l l relocating or espanding on long Island. the profitability of the Company and pnnide better >-i 4 in February 1991, we introduced the I ong I dand senice to our customers. j~ 4.. Erictg*s lies, arch and I)eselopriierit i nitia:is e, a Mi selected aii orgaidz4itiorial structure to 4' 4 ( partnership between I.llLO and long istmd's complement very successful Senice First 1 our t 4; acadentic af tfl it %cah'b institutioll% dt'sigiled to program, w hit b aims al prosidIHK our Cu*tonlelS with 4 encourage energy research. The initiathe allows the unparalleled senice. Mi are making great strides 1 4, I'ornlnany lo takt adsanlapC of tbt' re*ParCb ta!cIlls in bt'ro!!dflg a premier senice orgaMIZation as our ) 4 l on long Island in :mpone its operations. employen display genuine care in sening our p 1 custorners. 1' Serriec first As 1991 drew to a cio-e, we witnessed On heldf of 1.lif0's 16ard of I)irectom and I a .) 1 the end of the cold war with the cursonliaary Om< t ew I m M ripim n diads fogom 9 port break-up of the S<niet Union. At 1.11f0. we al*" in 1991. We m mai, e m midu in our peg 4 to pnnide unparalleled s... .:c; yet there is still much j. to accomplish. With the hard work and commitment 1 4. to excellence that has been denmns,trated by 1.Ilf0 j 4 l elliplO)ees, w t-wil.l Contiflue on the steady track . I 4 :-- l 4- \\ I towards senice cscellence. [ ) 4 4, 4 4 t 4 Sincerely, 4+ i 4, ' 31 \\ 4 .I s). y a.W wAA, 4 4-4c 4 4; a 4 l William J. Catacosinos 1 t 1 4. l Chairman and Chief Executive 0))icer y; 4 4 ,e 4 ..l I 4 o 4l .l I 4- .l l 4: l 4 4 1 r 4 ' ' ) [ 4, i 4. .) wg = 4' 4.=

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4 -- ^ 4 j 4. m. Williain J Cataco*inos 4i Chainnan and ChiefIhecutive (Wirer y-V ^ 4. 4. 4; 4.' A')] __ 4- .... ~ -. ~... _, _ -..... _.. _ _ _.... _ ..... -. A../ 5.:.

- ~.. _ - _.. _ ~ _. - . -,. ~... -~. ~.. g y!> w @mlp. e @fo ~ a s .,11 > =. 'e> 4 (> ' Economic davtdopnrent '~ f;%3> $- - Q $

uelects benefit the community.

op. ? < Gk by broadening thu tax base and g : l; >Y.O l> l A lbrtnenhsp u mcreasmg jobs.m tF e region.,, _ g.g. %d' ll - IJICO l*rnidmt Anthony Earle> long bland g.m,: > - u. p 4[ > v :90> .m> , _ => t) ek

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b. jY.8 Creating Partnersit)ps e +> ~ /f g> ~ ,, e ,pr <e=, s.e. x, y,. o ed.%2r #l c. 7d 1.11,C0 has vt out to become a customer. driven organization, proviN anparalleled suvice ef > 4 ?> .y s & jfjl to our customen. We hme impnwed service to customent by responding courteously to customer n,; o ,4C> w 7; inquiries reducing electric service interruptions, responding quickly to electric and gas service ( E l' q? > .H 1 > requests, and meeting commitment dates on new service installations w ;; >

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in 1991, we extended our service goal a step further by taking a leadership role in the long g 3 p$I island community. In February 1991, LILCO created the Long 1sland Enert:y Research and yay QU', ; i & -[ Q $y

Deselopment initiaine. The Initiathe supports research on energy related issues, using long cm. 4 >

J( G Q 4 Island's considerable technological talent to impro3e methods of producing and distributing' t, so wD. n> A? < A> clearicity, natural gas and consenation services. 4 J'e- . L.

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$ ga > In May, we introduced an economic deselopment program designed to attract new busincuesy 2 c_' > TMNl to long Island and to encourage businesses already on the Island to expand. The program m; s> Ww> $s - kl urges emironmentally sensitive gmwth by combining electric rr.te incenthes with energy. efficiency ac i M9fd>> M$y - requirements, filjM. i,>> -. Explains L1LCO President Anthoriy.Earleyt " Economic. deselopment pmjects. benefit 1 - 4.]; h+][$ - -n > the community by broadening the tax base, increasing jobs in the region, and holding down n. s> (;stx;. > - 'Mh the electric rates." J' d> t- ~4> { JF ,.pp. , k - 1%nto righn long Idandh rapidly gnming AlcArthur Airpori handles luah annmuter andjet smice daily - ^yMm $. N MS>>- y.ypg% _..,, ,;2 _,., ,__,,_.,,,.,_,,.,a2,.,_ ,_,w y_ rk.,., N. v.

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-43 d&m, 2-6L A l'artnership 4-trich j 4 1989 1990 1991 fong Idand j 4 <a 4-4' 4 4; ~ 4' 4 4 4 g 4 4. 4-l 4 [ 4-4- h + 4' 4, V 4 4 4 Electric Operations e, 4 4c 4' 4 1.11.C0 significantly imprmed its electric reliability in 1991, a key element in customer satis. L_ 4: 4-faction. 'rhe Company reduce car capital imprmement plan, nmjor equipment merhauls [ 4. 4-and upgrades were conducted at 1.ll CO's Northport, E.E Ih:rrett and Glenwood generating 4 4 faci lilie% The result of these power plant improsements was a Company wide systein a.ailability 4 44,- 4 of 87.1 percent for the year. a 1.11.C0 recon!. l 4-4' 4l .k 4.- }l 4 1%. leji: E111 l'!a:a in l'ninndale h one of the idand's mmt u ell.knnu n ojlire complem. 4V ' 4 4q 4-4'

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By combining its supe.-ior product with ih superb senice organimtion, l.IICO offers customers J>> an attnictise alterratise to oil heat. In 1991, I.llf0 dmeloped a nov full & nice Gas Comersion - j >> pmgram to make the conversion process hawle-free for custowen.. By handling all the necess;ary v 3.. >
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j? detalk from arrenging fimmeing to supplying a contractor. uc offer customers a "one-stop z ;; % > (' } shopping" approach, lnitiated as a pilot program in September, the program bas receised tw .j enthtisiastic response [rofu our cu lomcI% Jnd ljlI'O expects to c\\pand the progmm !sland-wide g Jo in - 1992. + p,., s > .{ f- > s, y > le (Qnllall) $ afKre%$ %e a])toac ) (O na(UI'd [aN Sa es a O r)O M C an 'e%l)all P( pas [ MuIn 15Aten:4:n program, bringing more than 140,000 feet of new pas ni;. tins itito communities sw 5 .3 %[( that ptP\\iously did not hate accew to natural gas sqpplies, i, 7 s. J> d> , >y> -.;p ['hola right: $5tennturerN }$alwr} luu rred nyeruting costs by wn;crting thdr ocryu la natyd pu. ?> V> 'L _ - - - _ _ _ - - -. _ - - = -. _
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E ' .g5 4,_ a -- Conservation Customer Contacts G: v'e ji 4: 4. 4u 346,'J11 4, 5 4 4' 265,057 )? 'l '205,093 ):. s (' 4; A l'arre tshijn jl ].. ]. With s jl,pe 1989 1990 1991 loig Islanti 4; 4: ? / 4" 4: 4-4! 4 y 4Y
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,-r 4 4, 4 4 Y Conservation Services p 4 g# y' 45 4f 4. Nuecewwflil ellergy consenalititt ptogram% prmide Optio.1% for Our ell 4Hiler$ lo he!p 4 ;i. 4.~ ' 4 lhcIn lower dieir ellergy bills, k bile belpitig ],ll (1) theel die consintinit} 5 enet]Q needs. More 4, than 20 percent ut Our enstomers took a<hantage of ihe Company's energy consenation b 4 -' 4; progratnw in 1991, sming an estiinated 209 inegawatts, Or enough power to supply more than [ 4~ 100,000 liutnes. 4; & 4i
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4: 4, Iaxt } car, I.llO T3 new lighting rehale program Offered etistomer i the Opporiunit V to purt 19: L. Ita5e 4'.q, herew in Ntl)Tescent llillb i directly from I.Il,CO aml recrise a $6 whate on nerv bulb Ordered. 1: 7 u 41 l.Ong Islamlers purchased mo: than 60,000 bulbs from I.II.CO in IW1. ); 4~ The Comp iny alwo introduced itn citerg). efficient iefrigeratur rebate progam, Offered in 7 4' 4.5 cot)jlinettoli with local retail appliam e dealers and the New Wrk State Energy Ofiice. The j"l ' 4;, .h 4 ( t L.'5 L program, ifnplemented in July, gme en5tomers up to $120 it) rehaleh for pttrehasing energV, [,' > 4. 4r edicient il frigeratotx ll) (I e end of die ) ear, InOre dian,3.700 nistornets had receiv rd re hates 4 )l, _ ~ e l 4 4 ;;4 s.. ' 3 t'Omerhttion opdons for colltmercial a7d industrial ell %Iomerk here espanded as wt'N, with l l', 4! rekKites availah}e [Or additiofell leebitologies ut)d custottii/ed etietgy-e[(Tient sy pletils, frOgram3 [, h At ,7' 4'. T,Y here designed to help bt45inesse% new' cotistritelion plo,iects, and not-for-profit OrK*inhtatiUll% 4 61 b-4 01ake their facilities as energy efficient as possible. The Company also created spuialized 4.- 44.- %OrkshopM IOT Intig Island'h sch001 administrators, bel ping them choose energy conservation 3 4. . 43 4f -i-t Incasures to lower operating cowls and ease tif,bt %Chool budgels. U' 4.+ ' 4? .ii'0: 4' 5%fa lef': !innp specialist Kawn lluut ciler udt im custonorr IEnby lite}}i tchout ef]ic:iera it~mlation. ' 4;; -v t [
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(68,000; y jj) 4l Gj + z n ~> p; ~ )j ql lc; ll 'W D0 ~ d d Irish c gJ A 1%rtnenhip 'jk s ' ~. >, 1989 1990 1991 long Island r s i f F s cD/ '> ,a Customer Outreach.,. e f/ t a .y + An important part of prosiding unparalleled ser ice to our customees is creating and supporting 1> community outreach programs 1.1100 has put in place special programs for seniors, educators, ll youth and low-income customers, ll For senior citizens, the Company <Jfers Golden 1. ink, a program designed to provide i.eniors l with information on energy issues, community resources, and health news, in 1991, Golden - o
l. ink membership increased by 50 percent to 120,000 members.

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To assist long Island educators,1.11CO spearheaded a special project to deselop emir <mmental e> b wrri< ular inaterials specific to long Island. With the State University at Stony llrook and 1
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26 local sco.ndary school teachers, the Company produced materials on topics such as energy conservation. recycling and solid waste management for long Island schools. =
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4 ; p. For long, Island's youth, the Company initiated many programs, including the I.ll.CO Scout [l Academy, where more than 600 scouts learned about energy, safety and environmentalissues. P= ( ll l'articipation in the Scout Academy assists these youngsters in attaining an energy merit badge. g.. /* 15 y jl The national recession has troubled many 1.ong Island families, and Lil.CO has responded '[ tr> customers in financial crisis by providing trained social workers to help families receive .y p D support services. In addition, our successful " Energy Packager" weatherization program ,,'p 37 pnandes energy conservation assistance to low-income families to help them reduce their s 'E energy bills. I e., - > \\l Phcan right: Wunplen at Santap >gue Elementary get u te.uon in electric safetyfnnn 111.C0 rethee, Enrico Scena. n e s - O
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- 4i r 4c~. Ct + 4'i c1 C: "tc- .- n 4 4, 4 4+ "We are working towaid a ); 4: model that will help us bettet $a serve our customers,, A l'artnership 4 (- 4 11.ith 4; - I.HE0 l'inident Anthony I'atley long Island ye 4a 4-2.. ".f 4-4r 48 e g s-4 / 4 4; 4- + n 4' Building for the Future j'
l.
,-r / + 4::., 4C 1-4+ lti 19911,II.CO will continue io create arnl implement new programs to bring the Company { closer to achicsing its goal of titiparallelett customer senice. The Cotnpariy will hegin to -A 4, 4-implemetit a tuajor Company reorganization p!att, desiglied to further our goal of hectinitig j 4. 4,: a senice-dri\\en organization. )I 4; 1e In the teorganization, the Company will consolidate activities into three distinct husiness jl: t 4f n'iils - Electrie, Ga, and Consenation - with support senices assigned specificauy to each f 4 .g unit. The scorganizatioii will al-o decentralize 'he gas and electric husinesses into geographic 4 ' *4! 4J, 4e 4' regions to bring decision-making chner lo the customer. A "one-stop shopping" feature will h. 4' 4' be Owlahlished for custoiners Co!'dlicting business with I,ll,CO, enabling them to complete all j;: h transactions throut,h a ingle point ol' contact. Implernentation of the reorgania.ation will he jl - gi 4' done ill pliases afid is eXpeCled to tak0 up to three ) cars to complete. 4j 4; 4W I.II.CO emplotees played an integral role in the reorganization process, flepresentati\\es from 4-4J sarious areas of the Company initially studied the new organizational structure and meetings h N[ " wert' held to solicit feedback from all management employees. j 4, 4U *n "We are working towards a model that will imprme information dow, facilitate decision-4 4. 4 {: making, more clearly defice accountahility, and integrale matty company functions into 4 4e 4 Lf. the business units themsches," said I,IILO l'res.ident Anthony Earley. "It is a major tmder- -7 E 4y 4. ,yn taking that wCl help us hetter sene our customers." )' + r 4" 4. 4% 1%to lefh Henunjid beaches on long blandpmt ide recreation - and a chance tu huild castles - to millioru. . $ )r 3 -~j c 49 GE
,m r i ;t Fintncini Rcvicw 7s r, L H,. I (h ers iew The Gnancial siability of the Company had been l jeopardized in the recent past by the contrmern concern- .tshe scar 1991 wa, anothe r year of continued imprme-ing Shoreham and the federal llacke'eer In0uenced and 1 ment in the L,ompans,s financa. l health,.l'his imprcnement J
k..
y?. is es klern ed, m. part, by the elesation by certain rating C,orrupt Orgam.zations Act (111(,.O Ac0 litigation, l'he 1989 i 1 Settlernent was designed to ch..mmate the controursy mer j h 4, apenac< in 1991 of the C,ompany,s h,.rst htgage ilonds Shoreham by prmiding f.or the hansfer of Shorrham to an 3 4 aml General and lleiundm.g Iloml* 1G6.11 llonds) from agency of the 5 tate, reciting the talention to retur'n the tuinimum imestinent grade to one Holt h alMne and the elesu-J tmn of the Company s unstenteil debt by one notch to Company tn inseMment grmle finann. l m>mR.mn ausom-4, a muunmm unestment grade, in addition, one rating agency ing 6xed rate incream of 5.4% and 5.0% m. 1989 and a,.0%, ) r , and Ingding annual rate innean of 4.5, to S'!" ujyraded the Company's preferred stock to minimum m ' ~ imestment grade. This is the secoml time in the pa t two M% in ead ycy incaftn duough M8 kwed utnin scars that the imestment ratine of the Company
secunties
""*"PII""* ";s onginally set forth m the 1989 S,ettlement. The Compans s financial reemery lu gan m, 1989 follow mg have been upgraded.
l Other Wynificant ments in 1991 inchuled:
the 1989 Settlement ami a cim.s action 7ettlement (L, lass P"" d b""I"""'"U ""'""d '"'" b"I* """ ""' h"". Dm ? ""l 990,
Apprmal, by the New brk State Public Senice
'h" 0"*j"y to re ohe the ldCO Act lingation"I '"""' "I'.he Company continud as n ulem'n1 I Commission (PSCL of a three-s ear rate plan ratepay et mg s. ' U grant.g the Company annual electric rate increases l of 4.15% 4.1% aml 4.0%, resperthch, beginning by Me Loinpany inen asing du conunon stock quarterly d, e. u December 1.1991. ~ d"*I N"* "'""I"T4""d"'"' I" 9 """"* The Compam also utilired $100 million of lavexempt i An increase in gas rates of 4.1% effecthe December ,,g,;, ;n j 999, I,1991.
An inen ase in the Cinnpany', conanon stock quartedy I.iquidity and Capital llesourecs
?> dhidemi from 37 % cents per quarter to 12% cents Cash and llevolving Credit 1 per quarter. At December 31,1991, the Company's cash and cash f ?> l{arning-ihr conunon stock for 1991 were $2.15 per equivalents amounted to approximately S'298 millke com- ) common share compared to $2.26 per common share ed m S103 miUion at Decemhn 31,1990, I"' I99U' %j in addition, the Company has an estimated Si l i million
llefinancing of approxincoely $1.2 billion of high. cost mailal!c under a resohing line of credit through October 7[
securities which significantly lowered the Company's I,1992, prmided by its 1989 linohing Credit Agreement p cost of debt and preferred stock. (1989 IlCA). For a hlitionalinformation respecting the 1989 q 3
l-suance of $100 million of low-cost tavexempt itCA, see Note 7 of Notes to finaacial Stateme nts.
j . ~ > securities resulting in substantial sasings for the { j$ Company's ratepayers because there securities carry llate Mattera i signi6cantly lower interest rates than taxable hands. In response to the Company's rate Gling in December a
Completion of the Iroquois Gas Tran4 mission Ssstem, 1990, the PSC approsnt the 1.ong Island 1.igh0ng Company
{ increa<ing the reliability of the Con pany's pas kupply llatemaking and Performance Plan (LilPP) which prmides j and enabbng it to prmide natural gas to an athlitional for annual electric rate increases, before ghing effect to the 40.000 humes. Claw Sdtlement discuecd in Note 4 of Notes to Financial ~* Statements, of 4.15%,4.1% aml 4.0% effecthe December j
The addition c
than 10,000 new ga' y more M91,1992 WW W93, wei4 Tb UlPP is . heatmg m-tallahom,34% of wlu,ch were residential designed to be consistent with the long-term goals of the.1989 i com asmtu. Mdmwn Ow #wi@ d@iw d'h WP k m mip Receipt of a possewinn.only licen3c from the Nuclear risk so that the Company assumes the responsibiliiv for risks ilegulatory Conuni% ion (NitC),hich will pae the way within the control of management. Ilisks largely beyomi the f l> for the transfer of the Shoreham Nuclear Power Station control of management are assume d by the miepmers. (Shorehom) to an agency of the State of New Wrk-The L.RPP prmides for an 1 lh ?eturn ou common. ~> 4-equity for the three ycars commencing December 1,1991. t Under the I.HPP, the Company is allowed to carn up to 60 mhlitional basis points or forfeit up to 38 basis points of the lI l return on common equity as a result ofits performance within ll certain incenthe and/or penalty programs. These progrann s 1[ consis of a customer senice gwrbrmance plan, a demand side management program, a fuel-cost adjustment (l?CAi ^
l incenthe pian and a time-of-use program. The LitPP contain-i
,7' a mechanism whereby carnity in excess of the allowed rate of return on common equity, excluding the impacts of she sarious incentise/penahy prograns will be shared equally. ?l between raiepayers and sharcowners. y> s 5> m
G 4 C 4' 4 C 4 4 In cotij unctiv arl with the 1%9 Sett!cmcrit, the IM$ filiaticitly I'rogrlifil 4 andniriecd the Compam. in 1989, io record on its Iniok-1)nrby the period 1992 to 1993, the Company e tim.tes j a finaru ial Ibwoun c het (l'IIM. The Flh < on-i t of two that it wiU be requirni ci scck niernal..ancing of aPrrov j component, the Itasc Financial Component (liFC) and the imately $ 1.8 billion. Ahhough a portion of this financicg will j ltate iloderation C<unponent (fulCL The Itate \\1oderation be used to meet it operating and capital requirements, mo-t 4 Agterment tint h one of the con,tituent document-nf the will be u ed to n fund n.atur:ug debt. hi athlition, the j 1989 Settienmni, prmide that the Company anmrtire the Company intend. when marke i n.oditions permit. to j liff m er a for13-3 car pctiml, through rate, beginning refinance higlu r+o t debt and prefnsnl 40< k j Juh I,1989, ami permit, a full return on the unan.ortin J 'Ibc Company refinanced apponimately S 1.2 billion of 4 hi her-co t debt and preferied stock in 1991 as follow e j balam. The IWC, a initiall3 estabbshed, icpresent th" g present uune of the future net.after tas ca h Cows pro,idnl
tlc Company i -ued $250 miPion of 8%"h G&H j
to the Company for it-financial s eem ery. The lh1C redert-Ilond-in February, the procen!- of w hich were used j the ddfreem e hetwcen the Companyi rn enue requirement-in \\ larch to redeem, at the applicable regular redemp-4 umler i onu nimnal raicmaking ami the inenuc resulting tion price, S225 1oillion of G&lt Honds, 13 Yo j Irom the inyilementation of tim rate mmination plan provided Series I)ue 1995. j in the it \\1 \\. The HTIC is nuii.dh deferrnl but i-de igned
The Compam is-ocd a total of SH30 million of 8%
l in be full nrmered mer a tena car periml with a full retur" and 9% G& H H md in \\iay, tin proceeds of which 4 3 on the un.unortved I alam e. fim Hit \\ i de igned to hold were used in June te redeem, at timir applicab!c cl rnic rate increase to tim inel, prmidnt for in the 1989 regular intemption pric,%, SS25 mil. ion aggregate Y . entenmnt, subject to adju tment-prmided therein. amonot of higher. coa Galt Ih nd. T m balance of j The raic -trm ture onder the loH9 seulement, as reficctml the net proc.eds w ere used to icimbone the
n ilm 1.f tPP.
intendnl to prmide the Company nith adminaic and olnml> raic rehef ninch, w hen < oupled with Companp neasury hir prniously incurred capital npena; tac, una to pnniac workmg ca ntal. 4 an c-- in the captal markets, will enable the Compam to
.l,he C,ompam also i ned SM nullion of Preferred 4
meet it-operating and capiial rn;uirements. 4 Stock, $,13, a., Scrics.4 m. lla), the proceeds ol.w hich 4 in Lu mber 1991, the PSC..i -m d a rate order grantmg 4 were used m. June m redeem, at it-apph.eanle optional wlu. h became effecthe on a "ra, raic incica-c of C l"o 4 c "a-raic increase reflect co+ redemption price,90 milhon par saloc of Picferred 4 Dece mber I,1991. I he 4 o stock, S3 31, deries.I, 4 ft latt'il ltt c\\lW1 lt11 ItS t'l- (If callita! cTlWm kIlln%, (3lTraIktilb 4 and maintenance nirn,c-and the Companyi ga, npansion . The (:ompany issued S375 rnillion of 9@' G&H 4 4 Honds m Augu-t, the proceeds of wlu. h wrre used 4 c program. I.he ga-rate order contains a weaiher normah. /a. 4 tion ( lau-c w hm. h nn.dcrate-t he impact of sariation in to redeem, at its applicable regular redemphon pnce, 4 4 S330 inillion Ibbentures, I l.a.O"o Series Due 20ll, icmperature on ga rnenues 4 4 nm Ilb W. !b' 'WlIU U) HI / W (W U AM* 4 IIrl 1)cccmkeer 3 l l99l, tile ( lirH}lan) liletl a rnpn%t wilh l lhe P3C to increase ils ga3 lattw e ffecth e December I,1992, nempt sn Uritics in Januar) 7I to reimburse the 4 4 l by 5.h"u or 830 million in addi:,onal rnenues, \\bhough Company \\ treasury for prnioo ly incurred capital j l the Company 'alculated that an increa e of 9 H"o. or $51 n pcm hto res j million, is warranted, the Company proposes to collect col) Con istent with the Company \\ angreeh e relinancing 4 5.8"m in the rate 3 car and defer the balance of the rnluest sin,tegy to fmther rnluce interest co t ta the Company \\ for termcry in later > cars This filing reflects the Compan3% ratepayers, the Company utihzed S 100 million of tavnempt j latest projection-of capital npenditures operation-and securitin in February 1992 to reimburw the CompanyN j maintenance n pe n,c-and continued npansion of it-treasury for prniou-13 incurred capital npenditures in j gas busine. addition, the Company intende, if marict condition, pcrmit, 4 For a further di-curion of the 1989 Settleme nt and Hate during 1992, to refund higher-cost debt and preferred tock. ) \\laners -ce Lies 2 and 3 of Lie to Financial Statements. The Company will also scck permieion to utilize the proceeds from the sale of an additional d 100 milhon of tas-4 4 c\\empt ecurities w hich woldd he Mdd hier in 1992. The 4 proceeds would be applied to reimburse the Company \\ j treasury for piniously incurred capital npenditurn. j The 1989 Setdement committ d Lw York 5 tate to support 4 4 an albication to the (lOmpany of at least $500 million of Lw 4 York State prhate aethity bond solume cap tai a minimum j of S l00 million per yead to permit the sale of las-ncmpt j -ecurities for the Omnpany N benefit. After the i%uance of 4~ 4 b 100 niillion HItavnempt securitie-in l'cht uary 1992, dm 4 Company ha-at least $200 million of thi solume cap j remaining. j 1 4 4 4 4 4 4 d
i l D l 1> [ t> I Capital l(equirements aml Capital l'rmided The chart below indicates the ratings for each of the l l Capital requirements and capital prmided for 1991 aml Company's principal securities at December 31,1991, and g 1990 weic as follow s: the minimum imestment grade ratings used by each agency. Capital lic.e.luirements </n vulhorn of dollam 1991 1990 hod s 's S& P l'it ch D&P Cotatruellott ENE" "* ~ Elect ric $ 137 5 lan G&llliond* llaa2 IIBil-IIHil-111111 ,[ (g 99 79 Dehentures llaa3 lill + 1111 + llHil-T Comimn In_ 13 Preferred %k haa3 1111 + Hl! IIH + 'l otal Con-truction 235 230 \\linimum Imestment Grade llan3 HilH-111111 - 111111 - liefunding. and Disidend* t> D 1.ong-Term D, bi 1.129 82 A Prefened Sto( L 71 la ',"P'"U*"I*." I Preferred AL Dnidend-66 63 The Cornpani,, capitaHzation Olefined as the total oflong. "l Comm.in Nock Diddene i73 125 tenn debt, ineferred stock and conunon shareow ners' equity) at December 31,1991, was appnnimately $7.8 billion, as I. 'l.oial 16 funding and On. lemi, 1,139 2a9 u compared to $ J. 1illion at December 31, 1990, 'l.lu.s 4 ~> Suhtotal 1,671 319 inen me in capiWIi/Mion of qipnaimdely $192 million 5horeham Po t Settlement Co ti 15n 153 n Ocek m iwnwe in hmper-debt associate-l with the Total Capital Hequiremente 8 1,832 $ M2 Compan)'s Onancing actisitic, in l991 and an increase in comtnen sharrownerE (1]uity colnprising 1991 net income of approximately $306 million offset by $2l5 million of L.ajntaI Prodded the ma.. loo gf dollarst I991 t%D cominon and pteferred Stock dn. iends. n (Increa-e) Derrease in Ca h $ (193) $ 237 di I)ceember 31, 1990, capitali/ation increased b) l 1.ong.Ter m Debi 1,532 112 apprmimately $131 million from the December 31,1989, g Prefern-d Nock 63 balance of SL2 billion. This increase in capitalization Financing Costs 188> 2 ~$ internal CWi Generation primarily renect3 an increase in common shareow neri equity 1990 i of $331 illion MM h $2h from t )perahon, 32o 321 million of common and preferred stock d..dends. ne g Total Capital Prmided s I,a32 s n72 At December 31,1991,1990 ami 1989, the components [ forfunher nv.rmation. see the 9aiemnt of Ca4 non of the Companyi capitahzatien ratios were as follows: .D> for 1992, total capital tequirements (e\\Chnling common S stock disidends) are estimated at $608 million, of which !.lapitalisation Hatim 1991 1940 Um9 construction requirements are estimated to be $316 million, l.ong. Term Debt 63.9% n2.3% 63.1% j mandatory refundings are $10 million, preferred stock Preferred Nock 8.8 9.5 9.9 .[ sinking fund requiremens are $ 11 million, preferred stock Connnon Sharrow ners' Eqans 27.3 2m2 27t disidends are $61 million, and Shoreham pmt. settlement 100.0% 100 o % 100.0 % l cmts are estimated at apprmimately $207 million. C) Other Items g Investtuent flating The Compam's securities are raird by \\loodis imestors 'liis 31atters E Senic e, Inc. dloody'sh Standant and' Poor's Corporation The Internal Resenue Senice has conGrmed the Company's (S&l'h Fitch Iraestors Senice, Inc. (Fitchi and Duff and entitlement to the Shoreham abandonment loss deduction j Phelps (D&P). whieh the Company claimed on its 1989 federalincon e tas c> The 1989 Settlement w as intended to imprme the nturn. Principally, as a result of this deduction, the Com-l Ccmpany's credit ratings. In 1989, the rating agencies pany, at December 31,1991, had a net operating les (NOld [ signi6eantly upgraded their ratings on each oithe Companis carnforwant of apprmimately $2.2 billion. Accordingly, for g principal securities. In 1990, the four major independent 1991, the Company's paymens for federal inemne tases were ratir.g agencies upgraded the Company's First \\lortgage minimal. The Company es:imates that the balance of the NOI. t> S Bonds and G&R Bonds to minimum imestment grade. In carryforwan) will be fully utilized to reduce federal income l 1991, the Company's Debentures were similarly upgraded tas pay ments within the 15. year statutory carry forwant period. j to minimum imestment grade by two of these agencies which also upgraded the CompanyN First Ertgage Ibnds and G&R Electric Competition, Conservation ami Supply o ,i l Bonds one lesel. The Company is presently experiencing competition from .l cogeneration and small independent power production y projects. These projects supply ch ctric energy to existing or new industrial and commercial cu-tomers und execss D> r u 9
(_ _ <.J T 4; ; g., 4' ga 4 4 4 4' e lectricity is old to die Cornparl) pursuant to NH* l4 baW bMb O "AbD l j -~ ( n quiremens of the Public l tility llegulatory Policy Act of pg l m8 <Puiu'Al. The Company is unahic io prmid whoher 4 yo, iy93, ca,nino n,, common sn,et we,c appn,simaiei> 4 the solume of electric co tomers gaining access to non. S239 million, or $2.15 per comnmn Amre. Earnings for Y t Company ources will be significant in the future. common so,ck for 1990 we,c appniximately $251 million, 7 During 1991, the Company sponsored sarious l'SC, or $2.26 per common shue, exduding the effect in 1990 {- approsed energy efficient and peak load reduction programs. f h-iuming dange for unbilled gas revenues discussed 4= The Company estimaics these pn grams reduced a,mual ham The deen a# of appunimately $12 million, or I clectric usage by appnninutely 309,(H)0 megawatt Imurs and i1 nu per shme, compared wini 1990 was primarily 1 reduce <l peak eledricity demand by appnnimately 210 6 dde Di iwn w. in non fud operation and -7 l megawath in 1991.1)ue to the uccen of these programs, mi nance ex en es, operating taxes and depreciation 4, the Company collected, thniugh rates, appnnimaicly Sa g;,giy,Usd by higher dede resenues 4 -j ,g million of rnenue incentises during 1991. I'mim 6v comrmn snick n Or 9 d the positive cUcch 1 The Companp curn ni dcctric load forecast indicate that, of du.1989 SHdement for the entire pan Earnings for 7 i with contbed implementation ofis aggnwhe consenati"" common stock in 1990 abo renected a change in the p ] and lomi managemeni pn grams and wah decinnt> pniuded conmann medmd of renignizing gas resenues. Effectise knuarv 1,1940, the Companyi n senues include estimated 7; 4 by independent power pn.ducers anticipated to come on lim, j the Compan3% exi-ting generating facilitie-and contrarb for conekoiou of gm delisered us nauimers, but not yet billed f pun-ha-cd power are adequate to meet the energy demand' m mondi-end, nsulting in the full accrual of ait unbilled gas + on long Island t< the end of the century. nm nues. The cunndshe effect of this accounting charge b increa ed 1990 earnings by nearly $12 million, net of tax Gaa Competition in 1987, the l'nleral Energy Hegulatory Comem.. cUces, or 10 cenu per common share. Excluding this item, w"" e unine for common su>ck in 1990 would hase been 4 WEHQ i-ned an unler allowing gas pipeline companies and roximatd S251 million, or $2.26 per common share. 1 3 a pniducers access to certain of the Comp:my's customers for This would hne been an increase of 31 cents per share oser j the purpo e of supplying compding gas eniye. As of 1989, excluding ibe 1989 non-cash charges to net income j. December 31,1991, apprmimaid3 100 of the Company 3 mtribeble to du 1989 Settlement, the Class Settlement and 4' former large ga cuanmers were pun basing gas directl} die Nine Milo Poim Nuclear Um, r Station, Unit 2 (NMP2) from gas pipeline companies and producers and arranging disdlo u we. Y-for is transportsion through the Company's gas main' The Company recches a fee for this tran portation senice in 1o89,ik Cognm incurred a low 63r conunon stock [L 4 myrmimately S 175 million, or S 1,57 per conunon share 4 which accounted for apprmimately 3% of total gas resenue' Adrewhed Inun nrording non< ash charges to net income I for IWL attributable to the 1989 Settlement and the Claw Setdement. 1. Clean Air Act Under the 1989 Settlement, the Company reconled on j is boa the establishment of the FRA and the write-off of C In late 1990, significant amemhnens ty the federal Clean is imNmem in Shon ham (and other nimed asses). Tlu-I Air Act were adopted. A number of electne unnpes antinpat" nd 6 n miting 6om se wriu -off and the reduction of net j substantud increases in operating cost and capital be n hin fmm dm cewmion of the allowance for fimds j ex pendit ure 4 as a result of the amendments Ihe Company ed during cowmdion (Al'C) accruing on Shoreham, which 4 does not expect to incur any co,b to satisfy these recent amendments with respect to the reduction of sulfur dio miti ated such write-off, totaled approximately $269 million, I ne M tax effect*, or $2.1i per common share. Upon the )i emissions, since the Company already uses fuel with d the Class Settlement, the Company recorded ,1 = dkd e acceptable incis of sulfur. Ilowever, the Company expects that it wdl incur cosb for additmnal continuous emiuion a darge to inmme d appmximately $113 million, net of - j; eUccum $1.02 per common share, which represented 4 monitoring (CEW requiremens and for futun nitrogen nyid" the present salue at June 30,1989 of the tot:; amount of 3: reduction requiremens that ma3 be impo+ed under federal the Class Settlement. 7 or state regulations. The Company esumates that the cost of ic Comns c o&er entenants of NMP2, the PSC M e + in talling CEM and nitmgen mide omtrol equipment, which the Company will >eck to reemer thmugh rates, wdl be and oin imen +d panies readied an agccment in January Y-1990 wie n-et to the construction of NMP2 and iu 7 apprmimatdy $15 million and $100 mdlion, re-pectnely. o cration through January 19, 1990,- Onder the terms of 7' the agreement, the Compann share of disallowed costs -4= Ilusinen Unit' n pu d appimimately Si million, net of tax effecta, or In W92, the Company will continue to enhance it3 orgam-6 cents per common share, and was charged to income in 1 zatienal structure through a corporate reorganization desjgned l 1989 b x dem de 6 Fimncid AccountingStandards l'f l to consolidate actiyities into three separate and distme: Board (FASB) Statement of financial Accounting Standards 4 business imits - Electric Operations, Gas Operations and g AS No. 90, llegulated - Enterprises-Accounting for I' C,on,en anon senices. 33,ngonm,ns una g;a,,ancy g piam coss. 4 4-4 4-4 4-441
s..
l L> t i l l Excluding these three itens, earnings fm conunon stock The merage number of electric customers sened in 1991 l in 1989 would base been appnnimately $213 million, or was approximately 1,005,000, up about 1,000, or 0.4% l $1.92 per common share. mer 1990. The increa e io 1990, compared to 1989, was l Earnings (loc.) per common share for 1991,1990 and about 6,000, or OW%. 1989 are shown below. The presentation reibets pc* sharc Hnenues from fuel cost i djustments were higher in 1991 >I data on the basis of culuding amt including the items primarily due to inescased reemeries of consenation l dercribed alune. expenses, linenues from fuel cost adjustments were higher l in 1990 than in 1989 primarily due to increased oil prices. 1991 p>un U>ao The userage cost of oil burned in the Company's steam Earr.ings, cu luding the generating plants ;n 1991 was $ 17.38 per barrel, compared l follodng items $ 2.15 $ 2.2n $ t 92 with '20.-19 per barrel in 1990. The merage cu.t of nil l
l ohilled Gas Itneoue,
.10 hurned in 1989 was $17.83 per barrel
1989 Settlement (2.41)
On I)cccmher I,1991, the Company aus granted an cler-
Clav. Settlement 0.0 21 tric rate increase of 4.15% and had been granted increases g

MIP2 Disallowance onM of 5.tP% on liecember 1,1990,5.0% on December 1,1989
,[ Earnings (In,s) per and 5ct"4 on I'ebruary 18, 1989. These sate increase. Comnmn %re 82.15 s 2.an s n J,n Iermided inen mental rnenues of $31 million in 1991 and $83 million in 1990. l linennea Gm Ret enne3: In 1991, gas rnenues decreased by $10 [ Total rnenues in 1991, including onenues from recmcry million, or 2.8%, compared to 1990. Hnenue* in 1990 had of fuel co-ts, were S2.5 billion, w hich repn sents an increase decreased S3 million, or 0.8% compared to 1989. The of S102 milhon, or 4.2%, mer 1990 inenues. 'liital nnenues decreases in gas rnenues resulted primarily from sncral for the Company's electric and gas operations for 1991,1990 factors, in the amounts shown in the following table: l and 1989 are show n below: y niliom of dollam 9l19o on 'an (In millo m n/ dollam 1991 1990 1(m9 .ner Comumlgion 8 t?) $ 19; s >> Hnenue* imer Ad<htions 5 4 [ l'Icetric 8 2,198 $ 2.nm, S IJm3 e..: Co.i Adju-tments 05) (21 Ga* 351 ani 365 Hate in, reases 2 4 Total Rnenuc - S 2.519 s 2. t t7 $ 2.3 ta Total 8 (10t s t'n Meerric Ret e mes: In 1991, electric rnenues inen ased SI'? The decrease in merage customer consumption in 1991 l million, or 5. P%, mer 1990. Hnenues in 1990 nad inen ased was ti dekatherms (dthh or 4.9% a; ' was largely attribut2dde [ Sl02 million, or 5.2% mer 1989. The increce in electric to warmer winter weather. Also, many of the Company's large nwenues resuhed primarily from sneral factors in the amouet.s interruptible cu tomers are now purchasing much of their shown in the following table: gas fn m o'her suppliers. While this resuhs in lower sales l and rnenues, there is no effect on net income since pro 69, ~ ;
ln millions.7 diom 9990 uomo from interruptible sales are passed back to firm customers l
Customer Con,umption s la s c01 tiuough fuel cost adjustment credits and are not retained by Customer Additiom 8 12 II" Compan). l'uel Cost Adju tmens to On merage, the total nundier of ga, space heating customem 'E Hate increase
nl 83 sened in 1991 was up alx,ut 10,500, or 4.4% mer 1990, S 112 S 102 including about 4,000 existing customen w ho comerted their l
Total heating systems to gas during the year. Ascrage customer consumption decreased bs 38 kilowatt-N"C"""* I""" I""I C"'I *Ii"*"C"l* "C"' lower in 1991 l hours (kWhh or appnnimatch 0.2% in 1991; imarih as primarily due to town sales. The a erage co i of gas sohl l the result of the npansion of the Compami aggresii e I" I99I " ' $3.29 per dth, compared with S3.19 per dth conenation pn grams, and the continued singghhness of in 1990. The increase in merage gas prices in 1991 was the region's economy. Howner, despite the slight decline in inon than offwt by the deenwe in sales udume. The merage merage mer dl consumption, changes in the customer mix co t of gas sold in 1989 was S3.31 per dth. l resulted in higher rnenues. Weather was not a signincant Effecthe December I,1991, the Company was granted a factor in 1991, in 1990, merage consumption decrea-ed com-F"' rate inenwe af 4.PE, whic h pnnided additional rnenues I pared to 1989 for many of the same reasons plus a decline "I 89 3 '"iC"" in I99 3- -l in sales to other utilities and the lo+ of potential sales resulting in.lanuary 1990, the Company was granted a gas rate l from independent power producers and cogeneration inen ase of approximately 1.3"i This rate increase lumided see'ures, mo.t notably the Grumman Cogeneration project. du Cmnpany with incremental rnenues of S 1 million in 1990 l and another $1.3 million in 1991. The Company did not
l recche any gas raic increases in 1989.
D
4; 4 . i ()lH'raillig alul Mailltettallee FApellses The Coiripany cea*cd aceniing AFC on its insestinent 1 Operating and maintenance (UMI) npenses, neluding in Shoreham, effecthe January 1,1989. AFC has not been j y fuels und pun haw d power, were $323 million in 1991, an a ignificant component of the Company'a earnings since j-increase of S 17 nvlhon, or 9.9% mer 1990. In 1990, these then. Ilowner, other non cash income has been substan-4 OMI npensn increased S 19 million, or Il A%, mer 1989, tial, generated principally by the accretion of the inlC of l~ The incica.c in 1991 was primarily attributable to higher the ITt A. In 1991, the accretion of the H\\lC amounted to j! npen es for employee wages and beneGk, electric pn.due. apprmimately $229 million, or SBl million, net of tax j.' tion, gas distribution and higher prmi, ions for doubtful effecti ln 1990 and 1989, thesc amounts were S297 million, j account
reaccting the continuing weaknew in the region's or S 196 million, net of tax effect*, and S 131 million, or 887 4
economy. The Company continues to pursue aggrewise million, net of tax effect, respectisely. It\\lC carrying (harges j collection practices and has further enhanced its procedures of S 10 million, Sl6 million and Si million for the years j that were implemented in 1990. ended December 31,1991,1990 and 1989, respectisely, 4 The increa,e in 1990 was principally due io higher rescan h are included in other income on the Statement of income. 4 and dnclopment npenditurn, the implementation and For a further disenwinn of the Illa, see Lies I and 2 of i npan ion of aggre he energy conservation programs and Lies to financial Statements. 7 the cost of maintaining electric production plant, reflecting The Company was re<piired to reduce the H\\lC for { the Company's commitment to enhanced customer senice carnings in necu of the su m of the 70 basis point and senice reliabihty. liigher co-tt for employee wages, heahh incenthe cap and the allowed electric rate of return of j insurance and higher pnni ions for doubtful accounk also 12.77% for the rate 3 ear ended Lsember 30, 1991, j-contributed to the increase. Accordingly, the Compatry reduced the R\\lC by approxi. j matel> S 15.3 million. Other tierns The Company is required to adopt SFAS L. 96, Accoun-For a discuwinn of the accounting treatment of the 1989 ting for income Taxes, no later than January 1,1993. The Settlement and the Claw Settlement. ce Lies 2,3 aml 4 impact of SFAS L,96 on the Statement of Income is not of Lies to Financial Stateinens. expected to be material, llowner, the Company estimates 1 in 1991, federal income taxes were appnaimately $182 that had it miopted SFAS L. 96 at December 31,1991, j. million. In 1990 federal income taxes were S183 million, the Company would have rt eorded an accumulated deferred 7 neluding the tax effect of the accounting change for unhilled tax liability and an offsetting regidatory asset of appnnimately 4 In 1989, the Company recorded a fedend S 1.5 billion. See Lte I of Lies to Financial Statements. 4 gas rn en ues. income tax benefit of S t.0 billion, principally resulting from in December N90, the FASB iwued SFAS L.106,- i l the Shoreham abandonment loss deduction. Employers' Accounting for 1%iretirement BeneGts Other 7 Operating taw, predominantly property taws, were $388 Than Pensions. SFAS L.106 will require the Company y million in 1991, compar"d to S370 million in 1990 and $361 to change its method of accounting for such benefits from 4-million in 1989, a papas->ou go basis to an accroal basis by requiring the l-Depreciation npense increa ed by $12 million in 1991 accrual of the npected cost of prmiding po-tretirement j and by S9 million in 1990 primarily auributable to additional benefits mer the period employee service is rendered. The
L plant in senice. Interest npense increased by Sl6 million Company belinn that it will be permitted to record a in 1991 and by $24 million in 1990 principally due to regulatory awet resuhing from the adoption of this statement.
i l increased debt inels, partic"> offset by reductions in Thi-regulatory a-et wm 11 he recovered through rates at 1 interest rates. the time these npenses are funded. This accounting treat-4; in 1991, the Company reconled non cash charges to in. ment is subject to the npproval of the PSC. The Company 1 come of apprmimately $25 million, or S17 million, net of must adopt SFAS L.106 by January 1,1993, and does j. tax effects, for the ongoing carrying costs of its obligation not npcet to do so prior to that date. The Company estimates ji under the Claw Settlement. In 1990, these ongoing charges that had it adopted SPAS L.106 at Drcember 31,1991, 4 - amounted to appnaimately $23 million, or $15 million, net it would hme reconled an accumulated postretirement benefit 4. of tax effers. obligation and a regulatory awet of appnnimately $350 i million. See Ltc 8 of Lies to Financial Statements. j? 4' 4-Selected Financial Data 4.- Additional informatinn respeeling rnenues, expenses, ll electric and gas operating income and operations data, capital j npenditure* and balance sheet information for the last fise 4- ) cars is prmided in Tables I through 1 I of Selected Financial Data. Information with regard to the Company's businen j segments for the last three years is pnnided in Ltc I I of f Lies to finantid satements. 4 4. 4 4 4: 4 4' 4' .Vj 4.. f 4
o ?l R: pert et Ernst & Ycung tt Ind:p;rd:nt Auditcro s>> To the Shiireowners and lloard of Directors of long Island 'E 1.ighting Company i l We hase audited the accompanying balance sheet of long lsland 1.ighting Company as of December 31,1991 and _ ' 'l 1990 and the related statements of income, shareowners'
l e<piity and cash flows for each of the three years in the period l
ended December 31,1991 These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial 'l statements based on our audits. y; We conducted our audits in accordance with generally accepted auditing staedards. Those standards require that we plan and perform the audit to obtain reasont le assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, ', _g esidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the ll acco mting principles used and significant estimates made '[ hy management, as well as etaluating the oserall financial statement presentation. We believe that out audits pro \\ide a reasonable beis for our opinion. In our opinion, the financial statements referred to above p
[
present fairly, in all material respects, the financial position of long Island I.ighting Company at December 31, 1991 end 1990, and the results of its operations and l its cash flows for caen of the three years in the perion ended l December 31,1991 in conformity with generally accepted ,g accounting principles. 31elville, New hrk Il February 6.1992 i
- y
~-
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>>>>>'>>>
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Financial Statements f 4: Staternent of incorne c-4- 4< .-For y ear ended December 31 lin thouwnds ofdollon 4' 4 ~a IIes eIluen neept per dmre amountd 4' 4- - -.. -.. --1991 - 1990 4. Electric Gas _ _ 1989 Totai llnenues $ 2,197,689 1! 4 $ 2,085,605 $ 1,983,288 4J 35s,161 Espen=es 361,242 j' ~ 361,326 2,518,850 4 Operatiore. - fuel and purcha ed pow er 2A 16,847 4-2.347,614 Operations - other 4 \\laintenance 763,702 It 786,999 4 Depreciation, depletion and amortization 3 75,2o 7 772,452 340,518 4. llase Gnatu ial component amortization 117,192 297,518 1-135,291 llegulators liability component amortization 121,820 l29,788 4-112,781 llate modt ration component E 100,971 103,430 1 100,971 lleguhuor jamespor,y liabihty component 016,360) 50,485 )(j; (86,101) amortization (22fl.572) (43,038) Operating taxes (297,214) (131,167) Federal income tai - current '*93,592 j; federal income tas (crediti - deferred and other 388,380 101,160 370,317 4: 515 364,391 1 Total Espenses 3,638 168,937 14.612 4 Operallng Inenine 177,014 i _ _ _ _ _ _. _1,760,15 2 (729.032) j Other lacome and (Deductions) _._ _ _1,641,217_ _. _1,727,191 4y 788,698 4 Allowance for other funds u ed during con trnetion 802,630 4 '620,423 net of Gnancial stability adjustment rnenues Other income and deductions, netllate moderation component carrying charges 2,202 2,940 1989 Settlement 10,156 (51,918) {- 15,683 Class Settlement 32,071 682 27,218 + Federalincome tax en1 t (charge) 7 eferred and oth 32,918 j; 1i d (25,167) (303,947) 4 Total ()ther Income and t Deductions) er (22,574) 0 2,201) 0 86,000) )1= income Nefore Int [rtht Chargeiand Cun $l i5 (2,629) 37,061 322,991 j; Effect of Accounting Change n at e 20,63 ft (188,214) i Interest Charges and (Credits) 825,769 823,268 h-Interest on long-term debt Other interest 432,179 j. Allowance for horrowed funds used during construction 4 72,9, 467,700 7 .__ net oflinancial stability adjustment inenues 30.8 % 453,267 + 40,559 _ ~__ _ _ _. 31,366 $~ TotalI nterest Charges and (Credits) (3, . _._5 92 )______(4,628)__.__ _4 3,3 4 9 yi income 0 oo) llefore Cumulative Effect of Ac 320,221 + Cumulatise Effect of Accounting Change for Unbill d counting Change 503,631 4 305,538 527,982 4 Gas lies enuc* (net of applicable lases of $6 017) e 319,637 r (95,803) f Net Income 6.oni) Preferred stock disidend requirements 11,680 7 305,538 4 Earnings 0.oM for Conunon Stock 331,317 4-66,39i (95,803) 4? 68,161 Ascrage Common Shares Oublanding (000) 79,232 I S 239,144 8 263,156 4, Earning. (i,oo) per Common Share $ 075,035) 4' 111,318 Cumulatis e effect of accounting changeIk fore cumulatise effect of acemm 111,290 4-111,215 7 II.arni$dou) per Conunon Share 2.15 2.26 8 (l57) f I Dividends Declared per Conunon Share .10 2.15 2.36 OI57) 4:. l'eu Forma Earnings - oith Accounting Change _ 4 Applied Itetroactis ely 4- __1,60._$___1.25_ _$ .50 Earnings (lo s) for common stock Earnings (loss) per common share 4 j %e Notes to Mnanchd Statementt $ 231,476 $ (173,251) 8 2,26 8 ( t,56) 1 4= 4; 4[ r c W-
~^
- - - - - ~ _ h -. - -
1> E Italance Sliect 1990-1991
-l A uct
At_Dec_em.ber 31 (In thousandi ofdollun/
$ 3,213.032 ~ $ 3,333,008 565,272 IJtility I'lant 666,908 111,700 Electric 157,195 183,337 Cas 157,511 47,481 Common. 29,81Il Construction work in progrew 4,150,822 Nuylear fuelin process and in reactor 4,331,736 g 1,332,003 _ l,262,743 I,ess - Accumulated depreciation, 2,888,079 [ alepletion and amortization 3,002,733 Total Net Utilits Plant lla,e fmancial component (len accumulated ,__,3,786,103 _ __ _ _3,887,37 3 llegulatory A*sel amorWation of $252,127 and $151,456) 6,381 9,788 j[ Ei.unitilityffopertv and Other inventrnents 102,936 298,098 Current Auct. 21,492 23,207 Cash and cash equis atents Special deposits 216,732 g Customer accounts receivable (leu allowance 210,525 9,694 U for doubtful accounts of $26,935 and $18,684) 6,515 138,917 136,565 l Other accounts receivable 92,138 86,863 Accrued resenue 68,866 ilaterials and supplies at aserage cost 41,002 41,466 4 3,3118 fuel oil at as erage cost 33,819 34,854 l Gas in storage at average cost 726,060 Prepasments and other current assets 881,017 E Total Current Awets 411,443 602,053 Deferred Chargen 225,818 37I1.386 Itate moderation component C2,069 g Shoreham post settlement costs 34,754 79,760 'E Shoreham nuclear fuel 28,435 132,Il75 ' Unamortized storm damage costs 227,713 359,76fl '7 U namortized cost of issuing securities 139,235 78,064 g Accumulated deferred income taxes 101,778 1,33 t,791 l Other 1,860,360 $ IL842,684 ll Total Deferred Charges S 9,513,301 Total Anets ~ See Xoin to Financial Statemenu J> i 1 l i I I i> { i >>y ~ _ ^ ~ ~ . = _. _ _ _ _
4* C4 4 4 41 4 4 4 4 :npitilliatino and 1.lalallit.c. l 4 At Ib ran}.r 3 I t/n th,.oussol< el l d/on) 1991 1990 4' Crpitalimti in 4 1 ongtenn del.: $ 5.001.016 8 1.556.016 j l navnmtm d periniuin.un!(discounti en dcht il I.!!50) 123.125) i 4' 1,9116.1 6 6 1.532,f t91 4 4 l'rr fened stoa L - redenq. tion required 321,912 527.530 j Perfene.. took -- no sedenq, tion reipored '51,371 151.671 j i otal Pr . ird stot L 6 79.2113 6112.2 2 1 4 4' 4 ':ononon
tot L 556 H25 556.620 j.
l'o nduin on capitid 31ock 993.509 992.t(35 4 4 Cap;tal -ha L cspenw (10,216) (12.67(0 4 lietainril eat ning 620.373 560,105 j 4 Total Corntnon 5liarroi ncr* I:quity 2.I30,191 2.067.231 j Total Capitalmdion 7,795.910 7.2112.3 19 4 1 4-Current I,laldlillen Curivat enatoritin of iong tcrni delit 10,000 29.000 Corf erit sedelnptnen sequiternents of perfeited tock 10,616 13.616 4 Acconnu p.n alile arid artrued eslienw* 223,3119 !H9.029 ) Acerred taxes tir t luding federalincarne j-tase-of $27.693 and $28.15'11 60,178 56.2 in 4 Act rut 'l entere t H5,565 69.175 4 Ihsidend pa)alile fe" 2117 53,279 ); Clau Scole: neuf 20.000 20,000 Custorner alepowb 22,661 19All3 4' 4 Total Cur rent I.ialiihtin 192,1195 119.830 3 4 Deferred Credia. 4' 4 l 989 Srtdernent rrt'ilith 173,507 182,720 4 Claw SrIlleturnt ]73,561 167,569 Accunndated deferred inc.i:ue law-IlI ti,053 631,70I Otner (11,035 l 17,17? j; Tual liefeeird Credit, 4 1,287.159 1,102,165 4-4 lienervea foi Cinini, Daninge*, l l'enalons and lienefilm 7,307 H,310 j. 4 Cottittlitillelltm Haiti Cultl(14penelen 4 ~ 4 Total Caplinilzatloei unid 1.laldlitica $ 9.513,301 $ n.lt12.ut1 4-4- l .%e Yutr< la fittans talStatemenh. 4 4 4 4 4 4< 4. <a 4 l 4-4. 4 4 4 41 4 4 4-41 4-4 4 <t 4 4 4 4-4:
4.> 3 Sharcownera* Dpilly 1. Statement _of lietained I;arning. du thoamndi or_douan). _ _ _. _ _ 1991 1990 1989 l llalance at January I 6 560,105 8 436.690 .) 6'19,579 liestricted for preferred stock digislend >l retluireinents at beginning of) car 111,008 Net incorne l.lovd for t.he g c_ar_ _._ _-~ 305,53fl 331,317- - - - - - -(95.803) __ =
y 1165,913 768,007 921,78i Deductions l
Cash dhidends deilared on preferral stock 67,261 68,218 429,749 ~> Cash t'iiidends declared on cornmon stock I711,169 1,19,128 55,61's IM 2% 2.727 Capjtai ayg,xiu n*c_- llalance at December 31 8 620,373 $ 560.105 $ 436,690 l' referred Stock c> At Decernber 31 do thouwndiordJban) 1991 1990 1989 ,.y . -. _........ ~ .[ Call Prie-Per Share Decem.ber. 3.1,1991 l'inal l'ar Value S100 per Share, Cumula'he >l Sharea autho'-ired 7,000,000 7,000,000 7,000,000 +m Shares iwurd ituioutstarujing _ __ 2.,_13ft,993 2,528,400__,,,,_2,621.172 5.00% Serica Il $ 101.00 $ 101.00 $ 10,000 8 10,000 $ 10,000 1.25% Series D 102.00 102.00 7,000 7.000 7,000 ll 1.35% Series E 102.00 102.00 20,000 20,000 20,000-1,35% Series 1' 102.00 102.00 - 5,000 5,000 5,000 -l ' l!8% Series il 102.00 102.00 20,000 20,000 20,000 5 3/1%Serim i Comertible 100.00 100.00 2,371 2,674 3,592 8.12% Series j 101.00 101.00 25,000 25,000 25,000 [ 8.30% Seric* K -103.29 103.29 30,000 30,000 30,000 7.40% 5ctren t.* 103.11 100.00 21,350 22,400 23,150 I$ 8.40% Scries M
103.61 100.00 25,200 26,600 28.000 8.50% Series ll*
101.50 100.00 22,500 26,250 30,000 .i, 9.8_0.% Series S*._ 10_3_.00.._ ___ _10_0. 00. _ __.__5 5,171_1 _. _._5 7.._,916 60,3_75_ ~ =. > Tota _l P.a_r Va_l_ue S_l00_ _ _ _. _ _. __ __..__ _.._..$_ _2 4_3,89 9. $ 252,880 $ 262,417 o> l'ar Valne $25 per Share, Cumulathe -[ Sharcu t.uthoriicd 30,000,000 30,000,000 30,000,000 [ Share
iourd and outstandmL _ _
17,810,000 17,720.000 17,920,000 l j$ $2.4 7 S-ties O' $ 25.25 $ 25.25 $ 26,000 $ 28,000 $ 30,000-J $2<13 Series P 27.75 27.75 i i,000 35,000 35,000 [ $3.31 Series T* 60,000 63.000 'g $2.65 Seriew Y
27.65 25.00 320,000 320,000 320,000 82.35 Serie., */.*
27.35 25,00 65,000 ~ Total P_ar Value_$ 2,5 _. _ _._ _ _.__...._ __ _.. _ ___.._..... _8 __.?. t 6,000 $ 413,000 $. 448,000 l.ca___ Sinking fund... req. uiretr anh 10,616 $ 13,616 $ 13,638 J Total Preferred Stock 8 679.283 : $ 682,221 8 696,779 - p Conunon Stock NT7b'. IY".k"!!i$"b!b!!_#yynA 1991 1990 1989 il l'ar Value $5 per Sharc ' Shawn anthori/ed 150,000,000 150,000,000 150,000,000 '[ Shares i sued and cubtanding 111,365,056 111,321,0H I 111,219,168 ?* . Increase in ha,es outrtandiag_ _ _ 10.975 71,613 - 56,460
[
lnerca.*e :n $5 par salue 205 $ 373 $ 282 Increa.e in premium on rapital stock 611 $ 921 $ -608 h) L .( Decrea c in capital stock npense 8 2 -160 $ 210 $ 13.235 i. l<
Redernplion required, see Note b, See Nntes lo [7nnncial Stalerven!L 15
.:(> '~ .?>. bb
.c t 4 A>i j C *,. !s wit. 4 4 o cg. Sintenient of Cnel Flown 4, 4 For vcar ended theember 31 (In r/mmana. fdollaw 1991 1990 1989 <s t 4 Opernting Activitici ~~ ' ' ~ Nel locome (l.ow) $ 305,538 $ 331.317 (95,803) Adjustinenin to reconelle nel Incmne (losa) to nel 4h cash provided by operating netivities {k 'S Cumulathe effect of necounting change for unhilled gw tevenues (11,680) !)cpreciation, depletion and amortitution 121,820 112,71's 103,430 4?_, Fuel moderation remponent 31,025 3,004 16,971 7 E' Prmision for doubtful accounts 35,131 30,097 12,347 4 U J l m lla c financial corn)ninent amortization 100,971 100,971 50,485 llegulatory liabihty component amortization (86,360) (86,101) (43,038) Itate rnoderation component (22ft,572) (297,214) (131.167) <e "{..y, llate inoderation component carrying chargen (10,156) (15f831 (682) llegulatory liability component 793,592 7'S ,lamesport amortiution 101,160 ,e i 1989 Settlement 303.917 7*" Clau Settlement 25,467 22,574 186,000 4 i feder al meome tases (credit) - deferred nad other 181.138 179,613 (1,052,023) 7F Allowanee far other f unds used during constrm t6n (2,202) (2,980) 1,166 f'i Other 16,610 29,919 -23,189 4p -1 Changen in operating uncta and liabilitlen Accouola receivable (26,015) (22,463) (53,324) Accrued revenue 2,352 30,748 (97,983) 4._.., Materials and supplien, fuel oil and gaa in storage 28,217 (48,0101 (6.681) 4 (e' y Prepayment = and other current assets (1,035) 23,752 23,890 Accounts payable and accrued expennea 31.560 2,345 42,818 Clan Settfenr at (20,1291 - 4m-i Accrued tasen 3,926 (12,187). 66,750 1, ' . 9 t h"E _.. _. _...- _ - (I I'907) Ob9) II+4b6I {f[3 l jf b N.*f Cadd/'"Vid"d.hy Operat ng Activitien j 5:,1211 321,058 240,58tl y lineating Actirltlea <s ; w Con *tt uction and nuclear fuel espenditurer. (235,319) (229,525) (297.396) h financial slahhily adjustment revenuen 96,180 -j [ Construction und nuclear fuel apenditures, jj net oflinancial stability udjustment resenues (235,319) (229,525) (201,216) 7,- I Shoreham post settlement costa (15fict32). -(152,675) (75,044) 4l thher (3f23) 11 1 (393) ['p Nel Cm,h ll e 1in imesting Activitie? (397.70 t) Financing Arthitle. (382,119) (276,653) 1 9 Prueceda from i%uance oflong term debt 1,532,217 112,319 1,541,350 4i s !' l Proceeds from iuuance of short term debt I i1,585 I ~ Iledemption oflong term debt (1,129,000) (82,000) (732,585) -j; lledemption of *hort term debt I (111,585) 4h,* Proce'J.i froni sale of preferred stock 63,130 309,120 72,1 lledempt on of preferred stock (70,638) (.13,659) (307,73ft). %'" i i Prefer red stock dividende paid (65,838) (68,04b) (418,387) U Common stock dividends paid (172;581). (125,192) (27,fl07) $4, l Cost ofissuing long term debt and preferred stoch (88,586); (1,327) (77,9fla) +<, Sl h"L _._...._._.. _ l_ NLC86(PrppedliL@ufidfin,anciny Aethitien _ 3,707 1,598-(2,150) 75 - 72cl38 _(176,307) 283,820 M '] Nel f r crease (llecr ease) in Cash and Cash Equivalents - 8 195,162 ,$ '(237,368)- 8 247,755-7 N.H f Cash end cash equivalents at heg nning of year 8 102,936 - S-340,304 92,549 ,e s ~, l Net increase (decrease) in cash arid cash equh alents -195,162 (237,368) 247,755-h Cash and Cash Equhalents at End of Year 8 298,098 $ 102,936 310,304 P -Interest Paid, before reduction for the allowance k Ib for borrowed funds wd during construction
$ i. 477,210 ~
$ 479,278. 8-475,672 7^ l'ederal income Taxes Paid 8 1,650 8 906 4/ Federal Income Tases lh funded - _612 8 23,5fl8 - S 2,660 i bre Notes to financialStatemthlL 4:,
e i 4 s,.
41, 1
D N tco to Fin ncist Stctom:nto Ltc 1. Sttinmary of Signl0 cant in is GA Al' ha i. Cnancial statement *, FSA resenuca, net Accounting l'olicien of tas e ffnt, amounting to 896 million, eseceded AFC during the > car ended December 31,1989. g .rhe C.ompany
account.mg poh.cies umform to genera,dy accepied accounting principles (GA API as they apply to a Depreciall<m regulated enterpri c Its accounting reconis are maintamed Tk pine W hmision udt Lom dm wiim.
7 in acconlance with the Uniform S,u, tem. of Acenunt. t.mn of straight l.ine raten to the on..ginal cott, in poulm of I prescribed by the Pubh. b.ersice (.amume. ion of the State c depreciabic propern.e* m seruce. The rates are defennmed of b.w brL O'.O and tim i. deral F..ncrgy llegulatory L,om-e hv age life simh.,, performed annually on depren. ble e a em u n m (I.E. lit). g h ni 1%,imion fm auric w sh alent ni j appnnimately 3.3%,3.2% aml 3.2% of resperthe aserage g Financial IIc ource Anet demidik @ mk (a du p 199L 1996 ed 198% t;A AP authorire. recognitum of the emtence of a i equh alent to aplutnimately Depicciat. ion for gas w as o regulaion avel w hen a.t N prohalde that a regulator w d. l perruit
9. 9,%,, n 8,%. ann! 9.,>% of resperthe merace deprec.iable full termery of a inesiously incurred emt. Pur4uant to th" m
f Me m 199 1990 mid 1989. g 1989 Settlement, the Company recorded a regulatory asset know n as the l'inancial fle mrce Au.e' (Fit A). The Fil4 has L.a.h Equivalenta nt Illi.L.i two components, the llase I..mancial Conymm;The itate Cd iW hiddv lipid im ame with and the Itate Moderanon component ilMCI. maturit.ms of three months or less wir purchavd. g Mmleratmn Agicement (ItMAL one of ihe com.titacut documens of the 1989 5citlement, prmiden for the full Unhilled itesenuca reemery of ilm F.il A.1,or a further d.ocuumn of the 1989 't.he Company accrues electric resenuc* for senices dettlement arul the l'ItA, *ce Ltc 2. rendered to customers but not tidled at month.end. Effecthe January 1,1990, the Company adopted the full l L.illity Plant accrual metluni for unbilled ps resenues..Preu.oush. Aihh.oon, to anil replacemens of utiht'c plant are capitah.ico, at ongmal emt, w hich include
material,' labor, merhead and unbilled ga4 resenueM were recoK.nimi on!y for cu%lomerM billed on a b,i. monthly cycle ha3s for the month.m win. h c
an allowante for the cost of b. da med during construct.mu. they were normally not billed. 'l.h.n change better matchen .rhe cost of renewak and bettermenu relai.mg to units of resenuca aml espensem arul prmides com. tency with the W properts s aided to utility plant,.The m%t of property i C,ompany,$ inenue recognition meduul for electric rnenuca. ieplaced, retired or otherw n.e dn.powd of a, deducted from .I.he cunmlatn e elTect of tin.a change at January 1,1990 we utility plant and, generalh, together with d.nmanth.ng wts ,cw any sah age, n. charged to arcunu lated depreciatmn. S t 1.7 nu.llion, net of tas effects, or S.10 per share aml had been.meluded m. net imome for the year ended December .l.he co t of repain and minor renewak.n charged to J.1,1990. The effect of th.n change on income before the maintenance espenw. Ma# propern.e. buch as poles, whc cumulatne effect of accounting change and on earnings for and metersi are accounted f< r on un mmage unit emt ham. common sitwk for the year e mled December 31,1990 we by sear of.mstalian.on. not malettal. ' h Allownllee foe fulld4 Uned Unring Conhtruction The Uniform Systena of Accouns defines the alhiwance I,""I b,!",t Adju unent. The Company s electn,e amt gas tariffs m, elude fuel cost for funds me<t during con tructmn I Al,L,) as the net cost of adp.stment (F,L,A) clauw, alu. h g.rmide for the difference c borrowed funds for consunction purpows ami a reasonable between actual fuel emh and the fuel emb allowed m. the rate of. eturn upon the un.h..o s e<puty when so used. AF.L, b I b, ""P"">
I** '"".N "'"?
"T ""I ""'WRe Cmnpany, i+ not an item of current cakh income. AFC is computed ""'"P'"I*' "" ""E "I ""'" " I '" " these adjmimenu, net of tu effech, to.j"ture pen.""."*l 'I numihty ming a rate permitted by FEllC on that portion of u mu m w hich con h uchon umk.m progrew wh. h.n not meluded. the ic m they w.ll im Idlled o" credited to emtumer8 Prior to the i ..on pany 8 inte base..t,he aserage annual AFL, ra". wa, bout L. efferthener of the e teetne rate unler discuswd m. Ltc 3, gn mg ef fect to compounding, wa-los.W, I l.03,%..nd 12,20% for the ye arm 1991,1990 and 1989, resperthcly. ## ("^ "#" C""" " "" "N"P"} "" ""Y " """ ' s "'."""f I"N ""* *"",P""L)ompany w di continue to collect "I " " N" "I""h"C"0"I i Fmm 1981 up to the effecti enen of the 1989 Settlement, th-posamn by the PSL rhe the C,ompam was prou.ded wa. h addin.onal rnenues through 0"' I".d"* # "d"" I" *. I"e o+ or Om baw fuel co+, the operation of the financial siahdity adjetment (FSA) pursuant to the llM A. I.ffect.ne December 1,1991, La,.e authon.ved bs the i,SL, F.SA rnenues were in ewcw of the fuel corts.m cum of actual electne fuel cow w.dl be cred. d ac anmunn to wlu,ch the L,ompany was entitled under comen-to the llMC as incurred, l tional ratemaking and resuhed in an offet io AFC. Ilecauw g the Company, effecti e January 1,1989, cea ed the accrual of AFC on the Shoreham helcar Power Station (Shorehanu _ c ~> 1>>
u 4'
O.
dl 1 The electric iate order i-ued b the l'SC in Nmember for ratemaking purpmes, certain accumulaini defersc<l 3 1991 antlunited the adoption of a partial pawthnmgh fuel fnleralinemne tase* are deihacted from rate ba.e and amor. j i co t incenihe, effectisc December 1,1991. The partial tiwd or otherw'se upphed as a reduction (increaselin federal j. paw.through fuel co t incenthe includes a mechanism that income las espense in futme > cars. Accumulatwi elefened 4 comp 2ues the Company's actual cost to pn. duce cicetric imestment tax credits aie amortimi rntably mer the lises em rgs again t a targeted fuel salue. The incentise mea ures of the related properties. j the Compan3's ability to pmcha c fuel at the lowc t powihle The las effects of other differences betwe-n income for j. co.t. in pun ha c energy economically from other power sup. financial.taterrent purpmes and for federal income tas 4 phers and t. operate it generating plants at optin.um elli. purposes are accinmted for an unent miju tment in federal tiency. I he shaicownen, are allocated 10% of the impact income tus prmisions. The Financia! Accounting Stamlards j inween actual fuel costs ar.1 tarreted fuel salues up to a lloani WAS10 Statement of Financial Accounting Stamlanl* j, masinmm benelit or in nalty of 20 ha-i guiinis of return on &l'AS) No. 96, Accounting for incorne Tases, is effectise 4 for li. cal cars beginning after Decemler 15,1992.SFAS 1: common equity. The sh.ucowners' portion of the c impacts 3 will be deft ned and pawed through the FC A in the follow-No. 96 will inpdic, among other matters, recognition of the j' ing raic > car. amount of current and deferred tases payable or refundable p at the date of the financial catements as a re ult of all escou. 4. Ga. Take or Pa3 Co ts that base been recognimi in the financial statements atal FEllC ha ruled that, subject to it icgulations, interstate adjustment of deferred income tase* for an enacted < hange j. ga, pipchne companie-may pa+ on ni their cu tomen. certain in tax laws.14r regubted enterprise *, SI'AS No. 96 will j' co t-which re-uhed when demand for natural gas prohibit net of tas acco.mting aml reportbg aml require 4 fnim interstate gas pipeline companies declined due to recognition of a deferrol tas liability for the las benclits which ) changing market omditiom. In 1989, the PSC determined are lhiwed through to its customers and the niuity component that 87Ji% of the,,e cost. Lnown as take or. pay flOPi cmts, of AFC. A regulatory awet or liability will be recognised wdi be seemered hum ratepayers. The Company wrote relating to such itens ifit is probable that the future increa,e 4^ off in 1989 cpprosimately $3.1 million, net of tas effects or decrease in tases payatile thereon shall be reemerni from whit h represents the estimated non reemetable portion or n turned to customo n, through future rates. The Company j of TOP costs. does not espect to adopt SFAS No. 96 prior to January 1, y 1993, which will prmide whlitional tina for the Company Capitalitation-Premiums. Discounts and thpen ca to complete its n aluation and analpis of SFAS No. 94 The 1-Premium., or di counts and expenses related to the impact of SFAS No. 96 on the Statement of income is not 1-inuance oflong.ierm debt are amonimi mer the life of each espected to be materiai. Ilowner, the Company estimates j. iuue. Unamoriiecd pn miums or di counts ami npense-that had it miopted 3FAS No. 96 at December 31,1991, 4. relaled to i%es of long term debt that are refinanced are the Company wouhl hme reconled an accumniated de ferrni amortired aml icemerni through rain mer the shorter life tas liability mul an off*cttie-regulatory aw i c.f appnnimatMy j. of the redeemed or new iv nes. Capital stock npense r,latnl $1.5 billion. j io that portion of preferrni *tock that is required to be in June 1991, the FASil haued an espmure draft (ED) 4 rederteni is w ritten off as an miju tment to retained earnings of a proposed SFAS v hich, if miopted, wouhl replace U upon redemption unlew the preferred stock is redeemed SFAS No. 96 and be effecthe for fiscal years beginning after j' below par salue. In that case, any resulting gain, m t of the December 15,1992. While the ED, as cunently propmed, j-related capital stock npen c, is reconled as additional contains certain prm% ions ihat differ from SVAS No. 96, 4-premium on capital tock. The capital stock npense and the Company estimmes that the impact of adopting the 1 tedemption emts anoriated with redeeming Preferred Stml ED v ouhl not signilicantly differ from that of adopting j Serie* T, l', V, W und N and the emt ofinuance J Preferred SFAS No. 96. 4-4 Stock Series I and Z are reconini aw deferH d charge *= and 4 are being amortiu d and reemered thn ugh rato mer the llesenea for Claims, Damagra, Pensiona and llenefin %^' ten > car lim, of Series Y and Z. 1 mse* arising from claims against the Company and j partially self-insured. estraordinary storm lo ses are Federal Income Tases Amounts prmided are credited to the reser es based 4- 'Ihe Company prmides deferred Interalincome tases with upon nperience, risk of Ims, actuarial estimates amilor 1 re-pect to certain difference
between net income before specific orders of the PSC l
income tases and enable income in certain instances when j apprmed h) the PSC, as di closed in Note 10. The Co. pany 4.. defers the benefit of 60% of pre-1982 gas and pre-19f5 li electric and 100% oi all other imestment tas credits with j. respect to regulated propettics, when reali/ed on ita las j -. j 4-1 returns. 4 4 4-4' 4-4' 4L 4? 4= 4-s~ g
~ s l i l $dk 2, TlH-l9b bO$liclNPIlk "WI b .( o,, e e
s. : 71,1989, the Compan) aml ilm State of ide w. tem irliability aml muatmn. The 161L. mitially w wrt lin Gmernoo entered into the 1984 Kettle-inc, cases mhe diDerence between inenueu re uhing from f
.y mt ie,ol a ng, in ione, relating to the Lompany atul the implementation of the rate moderation plan prmided for p I g i.r. sc +., . r s. aners, for the transfer of Slu,rcham in the 1Bi A and resenue requirements under comentional y c. d wt decommioioning. The 1989 Settlement rat. making, together with a carrying charge based on the c inimiention of the partica that the Company shall Mh,wed rme of retmn on rme ba,.c are defern d ural will e m), uendy dern w and i npected h,1,c fMiy ammtired ,1 to ime tment grade financial condition and that U 6 .mpany and the State of New Wrk anticipate that the 4,,yym e n.4 bs die p ar 2000 m tlic*e deferred resenue ic<luin ment
l
. sC shall en ure that the future impact. on rain are t" 0 The Company recognized a loa in June 1989, of be minimired to the masimum nieni practicable. It in the I E Compan> % pm.ition that these objectisn can le achiesed, snidmma Sb2 malion, net of te effech which primarib Amed dd diffeance betw een the recorded coua ? in part, through dw continued receipt of adequate and tirnely l rate relief, of the Company % imestment in Simtcham and Hokuni and the liFC. Up.n the effectisenew of the 1989 Settlement, th" Compan) simultaneously recorded on its llalance Sheel the Under thr 1989 Setdenwnt, certain tas her eliu attributable 3 retirement of its imntment of apprmimately 81.2 billion p, g, gg,g. ham Mmndonment are to be khared betwFn l in shoreham and flokum Hesource Corimration Otokum) rmepmers and shan ownen,. A regulatory tiability of approsi-l and the e,tabli.hment of the Fila. inateh' $791 million wa', reconled in ju m 1989 to pn+ene The IWC, a component of the Fila, a4 initialb establi h-un 3,Eum cepsisalent to the ratepayer tu benefits attrilnatable w dw Shmeham M>andonna nt. Thin anmm.t is being E cd, reprewnt* the present salue of the futme net.after tas ech Hows wloch ine 101 A prmided the Company for its amonised aser a ten >rar jeriod on a straight line basia from l financial reemery. At June 30,1989, the iWC wa, approxi-dw effmisr dme of the 1989 Seidement. The tas henc0t mately $ 1.0 billion. The IWC, which 6 gramed rate be" sing imm dm Mmndonmem lou deduction has been offwt l treatment under the term of the HM A, is included m, the apina dv corrnponding regulatory liability in the j Company % rnenue requircruena through mi amortizatio" Compy% HMance Sheet a. it couhl not hme been fully h.chuled in rates mer lory ears on a kttmpht hne bN9 recognired under GAAP were it not for the fact that iu beginning juh 1, luB9. As of December 31,1991 and . b mmed undtr the 1989 Settlement through the gy >l 1990, the unamodued balance of the IWC wm apprmimately regMMEry liMiility off et.
l S3.8 bilhon and $3.9 billion, respectisel).
Th.1989 Sedemem amount on the Statement of income The HMC. a component of the FHA, which wd. l prmide of appmdmmely $301 mahon for the year ended Decemlmr the Company wiih a substannal amonni of non-cash n 1989, principMiy reaccu the net dimen nce between the E r.anings mer the nest enerni > cars, ic0cets the difference write.on of Simrcham and Hokmn, the etabli*hment of the l between the Company % rnenue re<piit e ments under UFC ami an a@uument reqMred to corre pond with the comentional raternaking and the re,enues resMtmg from the dmM wWrmem amount, implenmniation of the rate moderation plan prmided for m T6 Su nww of income n accis an amottiration of the l the 161 A. Thi rate moderation plan is de iped to hold Cm s imc4 ment in a proposed generating station in ? elect,ic rat" incremn m the Inch prmided for in the HM A, LunespErt of apprmimately $101 million for the year ciuled l subj.et to the adju iments prmided foi therein. The HMC Dander 31,1989, which we ouiet by deferred federal ii based on forecau data Gled in connection with tb HM A. income tas credia of an equnalent amount. l A* a rnuh of the electric rate onier, discuwed in Note 3, Simreham post seidement costs. (decommi sioning. l effectis e Dect mb 1,1991, the llMC is adjusted for me b b of pmpeny mn and other cosu m incurrnh certain Nine Mile Poini Nmicar Powec Station, Unit 2 are being capitalized and amortired and reemered through BMP2) operation and maintenance espen*n and fuel rmn mer a forty-year period on a Araight line remaining i credits rnuhing from the Company % electric fuel adjustment y;7y g; .l clame discuwed in Ltc 1. Prior to Decender I,1991, th" Upn the cHMiu new of dw 1989 Setdement, Shoreham HMC wm adjusted to re0cci actual property tasn, cost of nucleu fuel w e n cWined to deferred chargn and i* being ,3 a,bnim, remmd. interest npense, energy conenatmn and ammiiW and n cmered tbough rmn mer a forty-year 44 on a a@M.line n mMning life basis. The 1989 Settlement credits on the Halance sheet . l of approdmately Sl74 mi}} ion, net of amortiZalion, i renect an adju+tment of the lx,ok write-off to the n gotiated 1989 Settlement amount and are being amortiied mer a len9 ear period. 4.>>> r ' C) 1> - y
4-4 4 4 'l lie l l4 6 tn pan) l#4 lleg sw t h.It the in ef ultitilip tlatrliersi lint flue 'tTonributiori $$ plotided through a int-(liu '? 4 afiordol dm i 1(i imder the 1989 Nidenmnt confor m to thai redorn the innpart of espesinicing riernic sale. l G \\ \\P. for gnupose of adtnini teritig it l'niforto % *tenn are ignific antly abmc or lmlow the ll(PP forera I h) j of h ount-F l itC lu-aiLptni dm p n.. i-io n-of pmi<hng a ihnl.umual to i margin leu ! olefined as sales j SIV %. 90, llegulated F.nicepriw-- \\t countiru for entnoc*, net of fuel and gro s m eipt, tau h that the 4 Ahandninnents arul lh allowance of Plant Costs, whic't vt-Conipam will in cise mer the three raic ) cat under the ) forth the i riferia for icrognon.n of regulatory creatol e et-Li(PP The dilference* between the actual electric net j re uiting froni ab.mdoornent. N nerdingh, dm Company inenoes arnt ilm aninial net niaryin h,el will be deferrni j behnn that the an iumting ircainmni afforded the !M n n-on a inonthly ha i during tlm raic scar. Tim deferrn! 4-foun in Fl itC standard for m conniing and a-ci nrogni. balanns resuking ftorn the rmi niargin. co tonmr senire j tion of regulaton recated auch. Perfonnance phn. tune-of.u c intentiu prograin. pioperty j Tim Coinpany h.o sridnl certain ih pun with a contrar-taxe. intenst expen+ asui ware rate will be ncited at the 4 for in ronnn hon with the t on fr uction of ' horchJrn. rinl o[ca( b rate ) car. 'I bc llll'P e-tablisbo! a barid w bereb) for a di<u-ion of the pending tran fer of 'howhain, the fint Sl3 inillion of the total imi deferrah will be u ed j ce toe o, in inrica c or derrea c the H\\1C bannwe. The total net defer. j rah in eu c. of $ 15 miilo,n wiU be wfunded 1i or reem eied 4 4 NHte 3. itate 31atters frorn Ilm rateliace in dm foHowing tache inorith period 4 4 lpepinning in ApriI. Nirongb t'm b EIcetric 4 Punnunt to the 1489 blthunent, di eth"d in Note 1 d"' The npenw attrition coniponent 1"1"'it' dn. Conipany to j rnale udpbirnenu for npen es including certain operation j Gunpam ren hed electric rate iiu reaw- ( onteniplated b) amd in50 nann npenu's pn'p"It) t " "" " '" I I"' "' "'I the ll\\1 \\ for each of the thrt e rate ycan ended Nou ndnlH hge% The e adhbbnenk r* corni/c that certain co t an uni. m Hu A n.niemphon ihat om L,ompan) wi
nen am, are una,oidable Ac o indation and ch>ng" in apply to dm P.{ for targetol annna'Iam im re+e of lY" the businew. Tim LHPP im ludn um annual renouiliation j
4 to 3.0"o in each year for an righivar period lay, nung u Den.mbo n 199i.In:npoo-eiotheC"mpam,'* 61ing of remain npenen for wage rain, loopedy unes. interest cha,yes ana acm. uni siac manavenmni mm co+ ihe in livrendu r 1990, the PK opinosal dn. Long 14 uni acferral ami amortization of < enain co u for enhannul j Lighnng Compam Haienuking arul Perfonnann-It" reliabilih arni operating and inaintenance,4unt the applica. j iLitppi ni % c m h-r 1991 which pimpn for annu/ iion of y innation indn to other npenses for ibe rate > can cJernir rate increaw. heloie giung effect to 13m t a n' , gn iise Decernber 1,1992 and 1993. rnim iion enguin d by the Cla+ %ctdement diw urnl in Not" 4 L of 1.15%. L I N and LON. clin tiw December 1.1901, The LitPP pimidn for an l l.6"s return on conunon j 1492 and 1993. w perthel e The LUPP h jecrgnni to L" equii> for electric operation for the three 3can conuncre. j con i tent wiih the H M AN hog-term y,ai including: tai d'" Dernnbrr 1.1991. L'nder the 1.ItPP, the Company h j in alh.wed to carn up to 60 additional ba h poins, or forfeit menwi3 of the HFC da ih wrowry of the ll\\1C i" 4 apprmimatrl) ten y car-: id the CornpanO return to ins e-t. up m 38 beis poins, of the teturn on conunon equity a-l a inuh of ik performance within certain inecathe and'or j metit giade 0" o uj coinhtiore and Oh the ( mpan)
lycejpt oi.ulequate and timely rate wlict. One ponen>al ob.ier'""
rmN Timu propann norht of a customer ,,f the LHPP h hi rea-ign rid so that the Con,p.un aou""' wnice perfornance plan. a DMI program, a time.of.uw 4 inevnth e program and a partial paw.through fuel co t j the rnpon-ihilit3 or rid wohin the control of management. f wherce rids largeh beyond the control of nianagenn nt incentiw plan. diu owed in Note 1. W LitPP contains a j mechanhm whereby earning in mens of the aHowed r-te wouhl he a-mned by the ratepayers 'lhe LHPP w0 erb 4 on ondate of the long-r a n ge lowret of the Conqia n > ' 01 rnuin on com. min equity, nehnling the irnparb of du-j rnenor requirenmnk, whit h wa the ba h of the HM AN sarious incenthe<penahy program
will be hared equally j
6 N en repycn ami shan owners. initial three rair increa-n. The LHPP cont.uns three major Prior to December 1,199i, the HM A prmided that carimd j component -wwnue wronciliation. neen" auroion iuni returrs on conunon opdty in neew of targerni anown! ratn reconciliatiofb ain! "'rfin'In'nWC 5
C"b '*
4 1 of return, as adju ted, were to be app ied to redun the NMC ). l or mitigate ratn, as determined by the PN; at the end of j cat h rate y car. Tim Com}uny carun) $(33 nuWon in nem 4 of its targeted allownl sate of return for the rate year ended l Nm ember 30.1991 but did not earn in nees., ofis aHowed j iate of return for the rate 3 cars ended Nmember 30,1990 4 4 aln) 1989 4 18 4 4 4 4 4 41 4 4 4 l dl - 1 4 l 4 1 4 4 a
=_ - - -.- -= To a%ist in reemering the llMC within a ten 3 ear period of appnaimatel3 S25 inillion aml $23 million, respec. ,l under the rates prmided by the I.llPP, the Company, in thcly, represent the increase in present salue of the Class
l acconlance with the I IIPP, will creibt the llMC with ses cral Settlement liabihty. The amount recorded on the Statement
>g defened ratepayer benefits inchnling any amounts collecini of locome for 19i19 of Sitve milhon reprewnts the piewn: in escen of actual fuel co+t, in licecmber 1991, ilw salue of the Clam Settlement at June 30,1989 plus the 3 Compan3 applini $57.6 million e,f presiously deferreil credits innease in present salue of the Clau Settlement liability for mal relateil carr3 ng changes for amounts collerted in eseem the emainder of 1989.
l i
r> of actual fuel em.ts as a reduction to the itMC. Othei Ll miscellancons defened ciedits were al o applied as a Note 5. Nine Mlle l'olnt Nuclear l reduction to the llMC in December 1991. l'ower Station, Unit 2 The Company has an 18% undhided interest in NMP2 p, l In Nmember 1991, the PSC iwued a rate onler granting whu h is ojuvated by Niagara Mohawk Power Corporation ( M near o wego, ew i,nik Ownerdup of p'2 is vl a ga* rate inervase of 4.1% which became effecthe on '""11 y p nitenanN du Company 18%), NMPC (l1%), @b"" h. II'"'" fd,"4"d b,a* Corporadon 0 8 1* December 1,1991. The gas rate increase reHerts costs related to espected lesels of capital esponditures, operationa '""! I'I"i " b"9"n anon and Central Iludnin k,'"'i I'I""",. 'bl"'P.oratuin W At Deynnher
l and maintenance espen*es ami the Company's gas espansion I'"
~ 'l program. The ga* rate order contains a weather normaliia-d"d'""'P"") " '" '"u'F P ""l i""*""""'
N M E2 *"' 8 796 I
L *E tion clause which moderate
the impact of suriations in
- r '"EI""' "."' ludnl. ""he C.d depredation of $80 milli) "I ""C* I"T
cmperature on gas rnenues which k me mt ompany's late base, Output of 5
On December 31,1991, the Company filed a rninest with 2, wlnch has u awgn capabihty of 1,080 megawatt *, E the PSC to increase its gas rate
effecthe Dn ember 1,1992
? shand,n the same pniportmns as the cotenanta respec. i in 5.8%r $30 million in mhlitional resenues. Although ,I tiie Company calculated that an increase of 9.8% or $51 ine owner $Mp intensts. Uns operating espenses of NMP2 I midion is warranted, the Company proposes to collect only an aho allocatni to the egenant* in the same proportions "' dair ns;adne owiutslup mtcrew. The Company e share -l 5.8% in the rate 3 car and defer the balance of the request for reemery in later 3 cars, together with a return thereon. "I d"se espenses y m, ehuled, the appropriate operatmg m .E This filing redeeta the Company's latest projections of capital "M*"'n on se.Natement of Inconne. ne Company 6 "'luinW to pnnide its respeethe shan of Gnancing for any l espenditures, opnations and rnaintenance espenses and the ""P '"I "ddi'I""* to NM P2. Nuclear fuel costa awiciated with I l continued espansion of its gas businew. MlP2 are being amorlized on the ha*is of the <piantity of I"'at produced for the generation of electricity. Note.l. The Claim Settlenient A settlement agreement reached in 1989 (NMP2 -l In February 1989, the Company and certain ofits fonner Setdement) among the cotenanta of NMP2 aiul other parties [?- -l officers entned into an agreement (Claw 5cidementi that and subsequendy appnned by the PSCf recohed certain ll resobed a chillawsuit against the Company hionght under ratemaking i%ues iegarding tre construction of NMP2 and i 1 ,l ihe federal llacketeer in0uenced and Corrupt Organizations its operation through January 19 W90. In December 'i> Act OllCO Act). The lawsuit which the Cla* Settlement 1989, ther"mpany reconled $7.3 million, et of tax effecu. l resohed had alleged that the Company made inadequate as a charge to earnings, which represents the nT:et of the ,l disclosures before lhe PSC concerning the comtruction and NMP2 Settlement. Under the terms of the NMP2 Sett!cnent. 3 completion of nuclear gene, ting facilitiem The Claw the Company is hmited to nunering S716 inWion oforiginal phmt cost.4 from its r te gavers, net of tax effects. Lttlement provides for rate reduction, aggregating S390 a ,y million to be made to the ratepayeri monthly electric bills NMPC hn% contreawd wNh the United States Dt jurtment 17 mer a ten year period, as well as appnnimately $10 million of Energy for' the disposal of nuclear fuel in 1991, the ?; for attornc>i fees and espensecand certain other costs . Company reimburwd NMPC for its 18% share of the cost associated with the Claw Sett ement w hich were paid in 1990. .under the contract at a rate of $1.00 per megawatt hour of l g ? j$ As a result of the Class Settlement, the Company's electric net generation. 17 rate incicans after December 1990 on merage will be approximately.2% in 3% per year lower than they wouhl 9[ otherwise base been during the balance of the Claw Settle. Jl ment period which end* in the year 2000. The anmunts "MQl recorded on the Statement of income for 1991 and 1990. ~> ~> ?> ~>> ik 5* (> i 0> -p t>.. -,y I>. ,4f >> + 7:.. e: m> .j
4 G' 4 '. 4* G4: 4 4' liased upon a shaly peiformed by NMi>C, the Company'* l' reference Stock 4; shair of the decommiwinning costs for NMP2 is cutimated None of tim authoriecd 7,500,000 shares of non. j to he $37 million (in 1989 dollars) aw+ning that decom. participating preference stock, par salue $ 1 per share, w hich j miwin ning will commence in 2027 or $237 milhon (in 2027 ranks junior to the prefened stml, are outstanding. 7 dollar >d. The Compan3% duue of estimated decommiwion. 4-ing cost me being proiidnt for in ebx tne rate
and are being Common Stock l:
<brged to operations as depreciation cymnse. The amount of the 150,000,003 shares of authoriecd common stock i of arrumulated decommioioning costs collected from the
n. Decernher 31, 1991, 1,882,586 shares were resermi p'
Compam % ratepay ers ihmugh December 31,1991 was $3.7 for sale ihmugh the Company % Cmployer Stock Purchase 4: million. ' Amounts collected by the Company for the 11an to emp oyees with at least one year of scoice and 1 l decommiuioning of the contaminated portion of the MlP2 13th268 shares were resened for comersion of the j; plant. which apprmimate 81% of total decommiuioning Series l Comestible heferred Sim L at a rate of $17.15 per j' msts, are held in an independent decommissioning tnot fund. share. In addition, the Company has resened 6,802,217 + This fund complies with regulations iuned by the Nuclear shares for the Automatic Dhidend lleimestment Plan which I-llegulatory Commiwion (NHO gmerning the funding of has been suspended since February 1981. Common and j nuclem plant decommi%ioning costs. The Company % funding preferred stock disidend limitations in the mortgage securing y,, plan for its share of deco nmiwioning costs will prmide the Company % First Mortga :c lionds are not material. There 4 reasonable a-urance that, at the time of termination of opera. are no dhidend limitations contained in the Company's other i, tion, adequate funds for the decommi%ioning of the debt instruments. 7 Compann share of the contaminated portion of MlP2 plant 4 will he asailable. The Internal llesenue Senice (lib) has Note 7. Long-Term Debt 7' rulcil that the Company % decommiwioning trust enects the h. requirements of a quahfied fund order apph.rahle prmisions ach td the C,ompany,8 four mortgages H a 1 on sub-of. he federal im ome u 1 :... I.h r. lib. ruling allows the stantially all of the L,ompany,a properties. 4 t f ^ ', tornpany s conhihution, the decommiasioning trutt to he 4! deductible for income tax purposes for the tat year in which l',Irst Mortgage 4-they are made. All of the bonds issued under the brut Mortgage, m.elmhng 4 4-dw. ied Me h 19M M A4 d wida Tw j. Note 6. L,ulutal b. lock of the GXII Mmtgage (GS 11 Trustee) m. additional $ccurity 4 4-for L.encral and itefund.mg Ilonds (G&!! Ilonds), are secured a Preferred Stock by the lien of the First Mortgage. Fi,st Mortgage lionds i ': 1 Pn red stock dhider.ds are cumulathe. At December pledged with the G&lt Trustee do not represent out-i j al,1991,1990 aml 1989 there were no preferred stock staruling indebtedness of the Company. Amounts of such 'j 4-dhidends in arrears. On Septend,cr 1,1989, the Company pledged bonds outstanding were 8957 million and $449 7 resumed regular dhidend pay ments on its preferred stock million at December 31,1991 and 1990, respecthely. The j_ by paying all dhidends, then in arrears, amounting e annual First Mortgage de reciation fund and sinking fund j; c apprmimately $390 mdlion. requirements for 1991, due not later than June 30,1992, 4' Hedemption of sarious series of preferred stock is efTected are estimated at $ 179 million and 818.villion, respecthely. I j through the operation of s arions sinking fund ptmisions. On The Company exocets to meet these requirements with 1 i July 25,1989, simuhancous with the declaration of all pre-property additions and retired First Mortgage !!onds. ferred stock dhidends then in arrears, the Company satisfied 4 sinking fund requirements totaling appnaimately $56 milhon [' ihen in arrears on all series of preferred stock by crediting ll l prniously acquired shares of preferred stock hehl in the C Company's treasury. The aggregate par value of preferred 41 4 stock required to be redeemed in each of the 3cara 1992 7 _ u, l through 1996 is $ 1 I inilhon. ' d 4-Iri May 109l, the Cotnpany sold 2,600,000 shares of l' referred Stock, S2.35, Series Z, cumulathc, par salue $25 j;T -.] per share. The Company used the proceeds fmm the issuan e IU ' "3 a i ~ of the Series Z Preferred Stock to call, at its applicable 7, l' l redempdon price, Preferred Stock, $3.31, Series T. 8 4 4 t 4 4; 4 s 4s . +-; .g. 4s on 4 4: 4 4 4: 4 '. -Il c 4, 11' WiSO
/ l- -Jp i.> ,/' ~l Galt Mortgage The a,ount of credit available under the 198!) ItCA after L 4: l The lien of the G&lt \\lortgage in nuhordinate to the lien Octohe: 1,1992 will he $261 million through October 1, of the first Ertgage. The annual Galt Erteage sinking 1993. The Company has, with the apprmal of the NItC,- fund requirement for 1991, due not later than June 30 dnlicated an anmont of the 1989 IICA sufficient to 3 ll 1992, i* estimateil at $27 million. The Company exiu et* cmcr estimated, not yet incurml. ni ts attributable to the
l 80 satisfy thi requirement with retired G&lt ilonds denimmie.ioning of Shoreham. At Decen.her 31,1991, the l
Company estimatra thar $186 million wouhl represent r Third Wrigage/1989 Teren lean Agreernent the amount of e timated, not yet incurred, decornmiwlon-O '> l The Third %lortgage is <dunilinate to the liens of the First ing cost 4 After October I,1992, the amount available Ertgage and the G H Lrtguge. The bank debt secured under the 1989 f tC A, not miuired for the decommioioning 7
[l[
by the Third \\lortgage wa<. restructured on June 30,1989. of Shoreham, will he reduent from $111 million to ut which inne, the Company entered into the 1989 Ameral-apprmimately $78 million. lloweser, the amount available ~ ed md itestated ite tructuring Crnlit Ap-ement (1984 Term uruler the 1989 IICA will increase a4 decommiwioning jl 1 oan Agreement) pursuant to which the Gunpan) is to pay ort are paid by the Company through meam other than t; to its lending hank
approxinwtely $116 million in sisteen the 1989 ItCA.
r> substantially equal consecutige quarterly installments ~ )il conunencir.h on Ja usary 1,1993 and eruling on October Autluirity financing Notea "i ' 3 1,1996. Pur*oant to the 1939 Term 1,oan Agreement, the Authmity l'inancing Notes are iwned by the Company to ll Company has the option to commit to one of three interest the Nv w Yoil State Fnergy itesearch und Deieloinnent i> rates including:(at the Adjmte.1 Certincate of Deim it Hate Audmrits (NYSEHDA) to secure certain tawesempt Pollo. I (CD llate) w hich is a rate based on the certincate of derunit tion Cor$ trol itesenue liond* (PCllil-), FJectric facilities rates of certain of the lendng banks (b) the Base Itate which itesenue !!ond* JEFHik) amt industrial Deselopment is generally a rate based on Citibank, N. A,% prime rate and itesenne liond* inued by NYSEliD A. Certain of timse tomb - - 1 i, tel the Eunnlollar Itate whit h is a rate hael on the london are supimrted by letters of credit and are subject to periodic [, ' 17 Inte hank Offering Itate (1.lBOHb tender at which time their interest rates are subject in re. 7 determination. When sud letlers of credit esphe the ?[ Fourth Mortgage Dimpany is required to obtain either an estension of the The Fourth brigage m ures $85 milhon of the Company's letter of credit oriuhstitute etedit backup. If neither can 1> f$ obligation.4 under the letter of credit described below muh r he obtained, the bonds must he redeemed unlew the ,z e 47 the heading Authority financing Noteg. Through an inter-Compan) purchases the Imnds in lieu of redemption and S, 7l creditor Agreemt nt, the letter of credit bank secumd by the subsequently remarkets them. j> Fourth brigage hold
a hen on Company property that is All of the outstanding EFHlh are supported by letters of 1>
equal in rank to the lien held by the banks secured by the credit pursuant to which the letter of credit banks base agreed ^ ll Third Ertgage. to pay the principal, interest and premimn on any lendered (Q> EFHik,in the aggregate, up to apprmimately S 109 million 1989 Herobing Credit Agreement for each issue in the esent of default. The obligation af the l On June 30,1989, the Company and certain of its lending Gunpany la reimburse the letter of credit banks iiunseenn'd. N $l lumLs entered into ihr 1989 licsohing Credit Agreement .These teners of credit espire on January 21,1991, June 1 3 (1989 HCAb The Company has an estimated $114 million 3,1993 and Octohe'r 31,1991 for the 199f EFitik,1990 f,3 mailahh under this $300 million rewhing line of credit EFillh and 1989 ElRik, resperthely. thnmgh Oe...her 1,1992. All or part of the remaining $186 The 1985 PCHlh are mpported by a letier of credit, $a > - million has been dedicated for the pugmes descriled below, pun nant to which the letter of credit bank, partially secured ] 7 f ;[ This line of credit is secun d by a Orst lien upon the by the Fourth Leigage in the amount of $85 million, hm E W' ! > Company's accounts recchable and fuel oilimentories The agree 1, in the esent of defank to pay the principal, interest g Company has the option to commit to one of three interest and premium on the tendered PCHib, in the eggregate, up ' Vl rates including: (a) the CD Hate, (19 the Ha c Hate and (c) to appnnimately Sl65 million; This letter of ciedit npires ," s N7 the Eurodollar Itate; The Company has agreed to pay a on heh 31,1993. fee of one quartei of one percent per annum en the Qr a'W]; >l out tanding under the 1989 HCAc The irrmination date of unu*ed portion. At Occcmber 31,1991, no amoun_t* were O ;g j the 1989 ItCA may he cuended for one->ea(periods upon -/ + the acceptance by the lending banks of the Company's yT ;W > request delhered to the lending banks prior to April I in-il each year beginning in 1992. l t;s> 1 , >99$> I { "'f ; j>. j> l ..9> j <D5!k .0> ,nq f p s 7 -:_y , $-3* i > M d> n Z1 > ,,-n-, --..--.,.- ~ - -
_r
e., %
4 Af C,*. '. q L 4 4{,ll'yl 4, ?[l long Terns Debt at Decemher 31 lin alus,and.ofd<dlan) $%lb Virst 51ortpage Ilonels forludes 1*ledgedllandst - - - Scric. 'J991, _- hj _31* '"r i'F. _..I"'C'""'H"'" _ 19?0_ 4 = 2;L jh% A..cu*t 1,1991 5% 1. 25,000 April 1,1993 1.10 % hl 14000 40,000 C,..# June 1,1941 4 5/H% N 25,000 25,000 june 1,1995 4.55 % O 23a600 25,000 j ff % 4h% Wrch I,1996 5 1/4 % P 40,000 10,000 April 1,1997 5 1/2 % Q 35,000 35,000 $ M,d September I,1999 H,20% H 35,000 35.000
f.$
Septeinher 1. 2000 91/8% S 25,000 25.000 $5 M jhM' April 1. 2001 71/4% U 10,000 10.000 December I,2001 71/2% V 50,000 50,000 sC, - j h Qj Septernher 1. 2002 7 5/8 % W 50,000 50.000 De.cember 1. 2. 00_3_.. - -.. -. - - - =. - - - -- - 6 0,000 - - - -. -60.000
NO 8 1/H %
X 1 m e,3, Totaj i'hyt yorjge llmuls 7125,00q _ _ ;1(0,0 M j Q ', General ami liefumling floml* hhb J une 1. I W5 13 1/1% 225,000
O
April 15,1996 11 1/1% 250.000 YkN hv1,1996 11 3 /4 % i15,000 4 fMl Februan ' J 5,1997 !! 3/1% 250,000 $dQM hr' h 1,1999 9.75 % 63,000 -67 000 c June 1,2006 9 5/H % 70,000 70.000 l)ccernt er 1,2006 !! 5/H% 50,000 50,000 4, by1,2007 ft 5!H% 115,000 (15,000 j b,y April I, '008 9.20% 75,000 75,000 4 Qh ! April 15. 2015 11 7/H% 275,000 7% Ws1.2021 93/4% l15,000 4N . _ _ _.._ M_ l. 202 4 _ _ _. _ _ 9 5 /8% _ I"ta!9"""'al dFI II"f"*li"8 II"'"I' _373ff00 __ _ _ _, _ jyM ._._ _ I *I9II'UUU .u -l U97 U(!O. Third hjortgage $[M$ . - -1939 Term 1. oat A. gr.eeme.nt (13#0/0.-_. - h.3% _ 1-16, F i-416.311 e p,,[, Debe qture* jpW l April 1.1993 11 3/H% 375,000 375,000 <e n d j[.t;' Nm ember 15.1993 11.70 % 175,000 175,000 Juce 15.199 8 10.25 % 100,000 - 400,000 t'R Nm ember IS,1991 11.75 % 175,000-175,000 l', h' % June 15,1999 10.875 % 350,000 350,000 jp$ l Nmember 15,2014 I l.50% 350,000 <e C N 1 e June 15.2019 11.375 % 35{l,000 350,000 Total Debentures 1,1125,000 2.175,000, , $ME Authortly Financing Note, .$k % i. Pollution Contiol llesenue llond* Decemher I,2006 7.5% 1976 A 211,375 211.375 )$ 4 December 1,2009 7.8% 197911 19.100' 19,100 j@$ . October 1,2012 11 1/1%*. .1982 17,200 17,200 M&M Wrch I,2016 5.375%*
1985 A.Il 150,000 150,000 jy d l
Electric facilities liesenue lloml* jQQ 5eptember 1,2019 5.35% * * * ' 19119 A.Il 100.000 .100,000 4W, June 1.2020 6%*" 1990A 100,000 100,000 ijflM . December 1.2020. 5.4 % * " 199IA 100,000 <e/ Q( . hhlustrial Des elopment 1(esenue llomi< Yb1m l. December n,2006 7.5% 1976 4,11 2,000 2,000 . jp@ Jo@ Autho@ Onancin@n,__ ___ 51 M75_;1 }h675 7[
b TotalI.ung Term Debt 5.011,016 4,5115.0 16 l{M l
!"? d 'F""I58t"$IEL __ _.. _._ 10.000 29,0(JO - i Total 1.ong. Term Debt 1.eu Curient Lturities 85,001.016 81.556.016 - u YB) 4e s v
Tendered cu rr> thierynn, not tender Octoluer 199 I
" Tendered annually on krch 1
*

Tendered urekly
<a & : longterm debt due in the no rpre yars b $10,000 (1992), $ 703.585 il993), $ 716,585 Il991), $ l.10.585 () 993) and $570,585 (l996), jy ;Y ,, yl-, 4? 4& - 4 h q,. %: q(.
<e l 4'
,y
T 'W> >
,pt,f>
(h I u, I ' o ;ll Note 11. llellrement lienelh I' lam, Asumptiom used in accounting for the Priman Plan were: The Cmnpany maintains a primary defined benent pension s,,,> 1991 1996 4989 sN> pl.m (Primary Plan) whit h emeni substannally c,l empkn ees, Hl a supplemental plan (Supplemental Plan) which em en, Ley Discount ta e 7.75 % 7.25 % 7.5% l I? J$ executivt s and a retirement plan which emers the lloard Rate of future compen*ation inacasca 3.3% 6w 6n of Directors (Directors' Planb All pension costs are 1,orne Y~s / E by the Company. The Company's fundmg policy is to Ingaenn rate f nqurn on aucts 7.0% 7.0% 7.0% n,c contnhute annually to the Primary Plan a minimum amount J- ,l consi tent with the requirements of the Employee lleiirement The Primary Plan assets at fair salue piimarily include f; locome Security Act of 1974 (ElllSA) plus such additional cash, cash equivalents, group unnuities, bonds and listed j amounts, if any, as the Company may deternine to equity securities. be appropriate from time to time. Penninn benefits are Pursuant to an order issued by the PSC in 1987, the i f7 established by crediting the employee with an amount deter. Company had deferred approximatel) $7.3 million which w as the excess of pension expense collected from its 1 mined using the base salary for each year the employee is s
g a participant in the plan, plus an additional amount credited ratepayers through 1989 mer t nt determined under 5fAS i
i 1e foi each year the emplo3ce remains a patticipant beyond No. 87, Employers' Accounting for Pensions. Subsequently, ( h ' yl the age of 50. Employees are sested in the pension plan the Company's rates were based on pension expense deter-
[
after fise years of senice with the Company. mined under SFAS L. 87. The portion attributable to elec. tric operations of approximately $4.6 million, was credited 2 i[> to *:,e llMC on December 1.1991 in accordance with the Primary Plan The Primary Plani funded status and amounts recognized 1.hPP, discussed in Note 3. The portion that is attributable in the Balance Sheet at December 31.1991 and 1990 were to gas operations of approximately $2.7 million, will be a* followe amortized to income mer a three year period beginning c/> December 1,1991, in accordame with the gas rate order. (in tiuwmub of eldlant i99I i940 Actua;hst prewnt salue of benefit ,) l} obligation Supplemental Plan E4 Vested beneGa S 375,326 8 383,805 The Supplement al Plan provides supr,lemental death and 'i > Nomested leneGt. 5,315 6,459 retirement benefits for officers and other key executhes 5$ Accumulded benefit chlication 8 380.611 8 390.26 without contribution from such employco.. The Supplemental u. an is a nonajualiGed plan under the Internal Revenue Code, ^ plan auets at fair salue 8 519,816 3 468.050
i. DE Attuarial prewnt salue of Death in nefits are currently provided by insurance. The
' prderted henciit obligation i16,718 461.797 prmision for retirement benefits, which is unftmded, totaled N ~ approximately $675,000,- $561,000 and $546,000 73 l rojected benefit obligation -+ and were remgnized as an expense.m 1991,1990 and less than plan aucta 8 73,098 8 3.253 JE Unrecognited jarmary 1. nel 1989, nspectively. The cost of this plan is hcrne by the l obligations 33,113 25.922 Cmnpany's shareowners. Unrecognized nelyain (114,389) (30,741) U I'"C '"' H"" Net accrued pension cost 8 48,178: $ s t.566) .3> The Directors' Plan, adopted m February 1990, provides Periodic pension cet for 1991,1990 and 1989 for the benents to directors who are not officers of the Company. S Primary Plan included the following components: Directors who have sened in - that capacity for mnre ' '.g j[ than Gve years qualify as participants under the plan, The C '[ tin rhomand, ut,tullow 1991 1990 1989 Directori Plan is a nonqualified plan under the Internal '7 a> senice cosa benefits camed llesenue Code. The provision for retirement benefits, which - %%l during the period 8 It,323 8 12,720 $ 10.797 is nn6mied, totaled approximately $ 101,000 and $99,000 - 43 Interert cost on pn.jected and weie recognized an expense in.1991 and ~ 1990, % N> beneGi obligation and respecthely. j[
enice emt 33,698 32,26-1 31,458
@4 j> Actual retum on p!an assets (63,873) 123,121) (19,316) Net amortitation and,leferral 33.569 (5.4491 22h55 T 3: <1> Net teriodic pemion cosi S 17.715 s 16.414 S 15 #9s D >"gp+ (> gp 9> q. M; ' 4 : ,p o> gd c> L y 9: y>> pbs,> l> r swbed~ ~. .,.m
=- - j[k,$s 4 4 ny' Y 4 ', L 4 n 1 r 4 1%tretirement Ilenefits Other Than l'enelona Note 9. Conunitments and Contingenclea 4: In addition to prmiding pension benc0ts, the Company hM g,;,
,n prmides certain heahh care and life insurance benefits for Mww The Compuay is one of sescral co-defendants
+- cmployees may become eligible for these benents if they in a number of consolidated asbesmiactions pending in I 'w'J retired ernployees. Sub<tantially dl of the Comp my
reach retirement age while worLt. sor the Company.The e both New %L State Supreme Court and the federal district l5 \\
mns 6 Om Smde rn ad Ecu rn Dimim of New bd $Ye and similar benefits for artise - uployees are pimided g, & M m Yod &w MMml. The damages which f;4l through insurance cornpanies whose preimums are based on uie benefits paid during ihr 3 car, The cost of prmiding hm 6 n d-ded in each of these action
range up 4
these bene 6t* on a pay.a+you go metkul wn4 8,17,312,000, to $55 rnillion, including punitise damages, against all $P m S29.110,000 and $27,155,000 for 1991,1990 and 1989' defemlants. In the State court, the Company :s a party in 7 nyrensely, and were recognited a an e pense as premium' some of the cons >1idated case
which proceeded to trial in 7 27 1992. In addidon, on dr kdcral h ul, kial to deermine em paid. The cost of providmg these benefits for were apprmimakl 2,100 retireca, is not separable from the c<rd mdimi mion mi du mmiont of pkindffi danmgu M[
3 le been compkwd in.17 cony >lidau d cues in wisich dm [4 of prmiding benefit. for approximately 6,000 active Company and sescral other parties had been imphaded by 4n' employee $ for the 3 cars 1989 through 1991. In Deecmber 1990, the FASil wsued SF AS No.100' e eb ma subda n Tim compny b one of numen>m li^ d&dm s & mm b bund liabk br a share of $38 7m Employcri Accoundng for Postretirement lienefits Oilwr WHio in damy s brded to 21 of duu 17 plaintiffs. A Than Pen ions. SPAS No. 106 establishes accountmg 41 standanl* for employ eri accountmg for such benents. SFAS oM ulal m deemie dw aumde Whis lialiility bepn N l' ' in th W91. No.106 williceluire the Company to change its method of
'~
Pmw m woWnd a dado % dm Conany be accounting for such benehts from a pay.a -you.go bam, t, been imohed in settlement negotiations to resohe these State un accrual ben by requiring the accrual of the expected co*t of prmiding postretirement benents over the pc iod the and federal claims. In addition, the Company ha* com-emplo3 ce *enwe a rendered. The Company b beses it menced fourth. party actions against certain of its insurers U? wdi be penuitted to record a regulatory awet resuh;.ng from seeking in lemniDeation for liability and defense costs in thesc $$3@ cases uma is aho invoked in court ordered settlement discus-ji M the adoption of thn statement. The regubtory asset wouhl be reemried through rates at the time these espenses ar" sion* ir these mauera. Itased upon the progress of these k)"- 4 funded. This accounting treatment is subject to PSC approval. mgwia iom and other factors, the Company believes that The Company must adopt SFAS No.106 by January 1,1993 g, y,,ude 4 dws - J nw meriSHy impact the 1E 4 and does not expect to do so prior to that date. 'ihe Lom. GumM amine 4 dw Cgay. h[I
D Comre h*t & Company i also intohed in litigation T
pany estin.ates that had it adopted SFAS No. 106 at IS December 31,1991, it wouhl kne n corded an amumulated im Sdfdk Cwmy in widch he prdn are seding a br Om odwr'uHm d M d drontract concern-ll \\ N po tretirement beneSt ohhgauon and a regulatory awi of approxunately $350 mdhon, ing the preparation of an offsite emergency response plan jh-W for Shoreham which, pursuant to the 1989 Settlement, the p( LS' Company agreed to neser operate. In its proposed M ', # 4 I counterclaims, Suffolk County seeks signi6 cant damages for aucged fraud in the inducement. breach of contract by the M:M Company, tortious conduct and fraudtdently procured utility $el *'* rates, as well as $700 million in alleged punitise damages. The Company has mmed the court to impose sanction
on T
Suffolk County relating to these claims on the bask that the jf ' allegations are frisolous and ignore significant precedent, jbg including the NRC's appnnal of the Company's esacuation 4 ?M g plan for Shoreham and sarious Second Circuit Court of sd Appears decisiom in related litigation between the parties. $$ < 3 In addition, the Company has argued that there is no beis Ry for punithe damages in this case, The Company iraends to g $g@W 4 sigorously prosecute its claims against Suffolk County and 74 to dr fend again t Suffolk County's counterclaims. 1 41 C* 4< 4: im 4E 45 4 ?, 4s4 4( 1 4 e' --2 4. 4 ( ' F: s'5 (f c m 4 6. - 4 f-T 4 ? '.a 4f V, ~ - ~ ~ ~' * ~ ~ ' ~~ _., v.bl$O
g __ Q> l%. >
m. ' ' I '
i , '.f4; Transfer of Shoreham Note 10. Feeleral luconic Tases T J >.l> The 1989 Settlement prmides for the transfer of St oreham On April i. 1989, the Company rereivni a prh ate leuer v. to the long Idand Power Anthority d.Il,A and for its decom-wlu. h statnt that the Company would ruling from the IIIS. c o> mmmmeg. The L,ompany and 1.11,A hme filed on apph. ca. e 1 he entitled, for federalincome las purjumes to an al andon. e> i tmn wnh the Nilt., w in. h a. pendm.g, to trander Shoreham. c n i
~~: =>~~
ment low deduct.mn m connection with Shoreham, upon pom.cwn n-only licen e *o 1.H,,.. Lil,A ha* also filed a decom. 1 ef fecthenew of the 1989 Settlement..The Company cla.mmd .e3 4: mmmnmg plan for Shoreham with the NltL,. 3; an handonment low deduct.mn on m.1989 fnlesalinoime 'A> tas return of approsimately $1.8 billion. The Company's net L,ommitments >'t> operat.mg hen carryforwani.a est.imated to be apprmh i .The L.ompany has entered.mio sulntantial commitments mately $2.2 billion at I ccember 31,1991. 8 4> for fow.l fuel, gas supply, purcha cd power and trans. minion On January h,,1990, the Compan3 tocchnl a llewime .I F 4> far. ih.d es, fhe costa awociated with these commitments are s Iteport d. lhiwmg certa.m dnhat.to m ela.n.wd by .y normaih reemered f. rom raiepayers through prou.. A gent. v.D* sa smns m the L,ompany on.ts tax re'urm for the years umler tmdit. i mt >
~~cy the L.ompany s rate schedulen.~~
.The Itnenue Agent.a lleport reflects propmed adjustment * . *g, to the Company', federal income tax returm for 1981 L < >* Nuclear i,lant Insurance wlu. h,.f Sust3med, woubt y.ne rne to las c i 1> through 1984 '4 - m-> ,fhe C,ompany has property damage insurance and flurd. 4 deh..nennes totaling appnnimately 5117
~~m. h.d on..i,he e;~~
?> party bodily m. : jury and property liability imurance for its C.ompany n protesting some of the adjustrnents arn) sects 18% share m. NMP2 and for Shoreham.,The premiums for m, an adnn..imiratn. -e ami, if necewarv, a judinal rniew of the 4 a> this emerage are not matenal. The poh..cica for th.n emerage conclu< tom reached m. the Hewtme Agent.a lleport,. Tim 7> prmide for retroacthe premium assenmenta under certam Company cannot predict esther the (m.ung or the marmer.m circumstances. Masimum retroacthe premium avessments w hu. h th.n matter wd. l be reiohed. If. howner, lhe uhimate couhl he as much as approximately S4.7 m.dh.on. I.or th,spos.. mon of any or all mat'ers raised m. the Rnenue Agent. s w,*> property damage at each nuclear generatmg ute, the NIK,.
~~o7>~~
requires a rninimum of S 1.06 bilh.on of emerage. 'l,he NHL, Heport.n ad,etu to tin Cornpiniy. the Cornpariy eya et* that any defk.u newn that may arise will he sulntantially offset c> ham phen the Company a partial exemption from these hy the.
~~operating Ims carryhacks asson. ted with the m" 's.~~
requirements for Shoreham. a o s sy """H not lune a matemd effect on the C."ompany s h( " ""E M d> Under certain circumstances, the Company may he bN> assewed additional amounts in the event of a nuclear """ b"."" "' ""E 0 b S$ incident. Under agreements established pursuant to the Price U" ""' " "' "I ". " * "' * ""' '"' "" N' 0 9, ""' M"'* ""I ?Nl Anderson Act, the Compant couhl he assessed up to for Gnann."! Matenu nt purposes abr M n appnatmately M?d> approximately $74 miHion per nuclear incident in any one g n??> $206 imlhon.,These credits npire by the year 2002. In 9 -> -gcar at at Y nuclear um.t, but not.m e.*cas of appnnimately .A a> acconlance wa,th the Tas Reform Act of 1986 (,FR A 86h n y> $12 m.dh..on m payments, per 3 rar for each.meulent. The i,n.ee "'"""I"')"""'"I"? I98
~~,, "U"*"~~
" "* ""'h.'".I."he amount of the red Ms Anderson Act also limit $ liabihty for third.pany bodily injury '""d I" n uny! by 35% d M> and thinhparty property damage arising out of a nuclear ~ not he aHown! as a en dit for any other inable year, TM.$ occurrence at each unit to 67A billion. n i> The Cornpany has not prmided deferred taws on apprmi. i';M $ mately $500 million of sarious other deductions and LQl dqacciation method differences for property.placed in .44; senice prior to 1981 which in conformity with the rate. making practices of the PSC, hme been Gowed through. X, ($ These various other How through in.ieductions, w hich are M$d deductible currently for tai purposes hut capitaliznl for Qj]l-accounting and ratemaking purposes, include certain taxes, MM > a portion of -Al'C, pensions and n rtain other emplo3ce SS$ henents. See Note I with respect to a change in tix method $l M%jf , of accounting for income tawowhich the Compacy nuot adopt by no later than 1993, aw W dp +*m }> lly' g> wy @*9 m: Ok h 101 l > m# G > o. 'h> W7 %m m > iMM> %s ys > 3:iq > Wcs > k-1.Qjk
- -. ~ - - 4 (. C.] 4k. 4: e 4, r The federalincorne las amount. inichuled iei the Staternent of ineoine differ froin the aenourit* which ic$ ult fto n appi,leig 4i the tatutory frderal n.come las rate to net incorne (lon) befmc income tase*, The i.Jde hebm ets forth the reasoni6 for jf. i rueb difFrenien. The 1989 diflerence remit p.incipally becau e the las lusi. atuibutahic to Shosthan was leu than its ji y recostled hasis for financial statement purpowem and the f 1(A and ecstain other 19h9 ScHlement itemn teemded by the j h [] Cornpany pursuant to the 19119 Settlemet t hne no las basis. 4'O MM-4 //n rhoinumh q/ dolloni 1991_ _ 1990 1 9119 - 4 ;f, ', 4, % of % of % of 4; it: l're tas Pre-in Pre-tas jc f.enount luctHite -- Atnount int otor A mount I,ederalincome tas, per statement of --im om.e (I N, 4, 4 l: c, - W incorne - em rent 8 515 3.6 % 11,612 j a sf J I)cleried atul othrt ($ce %te 1) 4;. 1989 Settlement $I[ Shotchain abandantnefit 10,677 3.239 (907,467) 4 i,- e. e Jame port ret ou ry (101.160) 4;, 4 Ilokum He*ources Corporation 2H.100 133,977) jF 9 l(ate moderation component 77,715 101.053 11.597 4h + ? [jf, Other 19H9 5ettlement item < (13,6311) 113.577) (37,500)
~~horeham post settlement cost.~~
~~50,373 01,875 6,636 d,~~
~~Contiactor litigdion *cttlement (Ill,75f t)~~
~~~ 4? Cla~~
~~Settlement (2,0 311)~~
(53l) 163.210) ji4, _ Interest capitalind 12,562) (3,220) 13.752) Acuued milny resenue* 727 (2.110 3) %lortgage according tas 1,653 '5t!9) (687) 4 s Accelerated las dr pr eciation 30.117 33.312 36.212 Yf Call pt emium* 18.196 (3.111) 12.152 j$ Fuel cost adio tenent * (?.2tr91 1,379 4,451 4;L I ~_ Nine \\lile l'oint 2 deferred rescoues 4.151 f Capitalind os erhead 1810 2,2117 1.272 4 f(clired debt cost-9,1115 $ h., Other igeny, net 7 ;[; O Total Deferred _ _ J 70"i _ 36.3210 16.25H) 1111,1 311 - 179.613--,. - - - -,.. _ l.*a [ _, 11.052,023) Total federal income tus espense (credit) lill,653 iP3.2HI (1,037,111) jk ,S Income llou) hefore cumulatis e efTeet 4/ b [O u of accounting change ,105,5311 319.637 (95.1103) l income it ow) liefore Cunndatisc Effect of 4,c n 4E'- (h ' ", Accounting Change aml income Tasca S t87,191 8 502,918-3 (l.133.214) Statutory federalim ome las (credit! $ 165.615 3 1.0 % $ 170,992 31.0% $ (3n5,293) 31.0% 4 4 Additium (reductions)in federal -j(,. income las sewulting from: 4r *' 1989 Settlement jh,;;y Shoreham ahar.donment 1.003 0.11 -4,035 0.8 '(691.212) 61,0 j[ $ jarnesport recoscry 20.101 (1.R) 4I llo(um !!csources Corporation (31,0151. 3.0 h..i, Itale moderation component (7.360; 0.7 4fV'~ (19,821)- 1.8 Other 1989 Senlement itenw Allowance for fi % used during O j Q'lW construction ( 1,310; - (0.3) (2,573) (0,5) 31,527 . (2.10 4: l.icn date properly tases 277 0.1' (3,757) J1.8) 20,034 (l.in b ;, Tas credis (2,9110) -(u 6) 1,537 - 0.3 13.531 -(1.2)
~~P f Execu of book depreciation mer he' tas depreciation 13,1 O!l 2.7 11.987 2.4 '~~
10.812 (1.0) j N, Interest capitalized 1,232 0.9 _ 6,03) 1.2 : 3,251 (0,3)..4k 4 --Other items, tiel. '(1,3221 (0.3) 29 0.0 1,031 (0.11 $[J; l j Total l'cderallneomeTax Espense (Credit! $ 1111.653 37.3% $ 183.2n1 -
~~36. Ps 8 (1,037,111) 91,5% *i 1~~
4r ii. 4N s 4t i 4) 4. ,f i j[j[' i 4h '4%. 4 !;{ 1 4-s + ,. ~.. = --
y> '<r.j> 1 1> th Note j I. Seginenin of Iltie6lltean lsuhlic utilit) opetalitig cornpany engaged in the generatiott, distributiott and bale of f. The Coalpany is a ,I elettric energy atul the purch9c, d'stribution and sale of natural gas to residential and commercial customerk in Nawau j and Suffolk Countirm and.a. Ilockaway Peninsula in Queens County, all on 1.ong h, land, New York Identifiable awets i }> lsy seginent inclinle net utility plant, financial resource assel, materials and kupplies (escluding cominon), accrural res enues, s> gas in storage, fuel and deferred charges (excluding conunon). Assets utilized for metall Cmnpany operations consist of f other property aml intestinentn, cash, temporary cash imestmentn, special deposits, accounta receivable, prepay ments and other cutscal awets, unamortired dehl expense and other drietred charges, s 4 3* p - _ _ _ ~ _. _. _.. _ -.. _ _ _ _ _. _ _ _ _. _...... _. _ _.. ll l'or ) car ended December 3, dn t/musandiof_dollant_. _ _. 1991 1990 1989 i> Operating res ennen t( Electric $ 2.197.6119 $ 2.085,605 $ 1,983,288 Cas 351,161 361,212 361,326 1 J ;[ Total S 2,5 111.115 0 $ 2,416.817 $ 2,347.614 3,
~~>j Operating es pensen (evluding income tanes)~~
.t > l'In tric $ l.252,105 $ 1,141,050 $ 2,115,991 ^ * ($ G4, 33fl.295 322,515 325,617 Total S 1.590,700 $ l.463.565 $ 2,441,61 i + Operating incoine (lon) fhefore income tavs) c7 Electric $ 915,281 $ 's11,555 $ (132,706) /. Cas _.. _.. _... _ _ _ _. __ _ __.. __ _._. 1 2_.,_8 6_6_ __..__._ _. _3_f t.,.7_2 7__ __ _3_8,7_09 .-s; Total 9511,150 983.282 (93,997) Al'C, net of FS4 rnenues (5,79l) (7,568) 98,267 i '4 Other income and deduction * (17,063) (20,327) 456,317 Interest charges 523,1116 508,259 1111,6 3 3 J' ?$ locome lase,-operating 169,152 180,652 (714,420) J inconne lawn--non operating 12,201 2,629 (322,991) j income (lou) before cumulatise effect
~~g., t >~~
of accountmg change 305,5311 319,627 (95.803) j Cumulatiw effect of accounting change +<. (net of taval 11,680 gn ,Ti'j> Net income (los*) S 305,5311 $ 331,317 (95,803) llepreciation, depletion and amortir.ution ,[ Elet trie 110,037 99,922 8 91,759 Ga* 1 l.7113 12,862 11,671 ,'fl Total 8 121,It20 $ 112,784 $ 103,430 ?> 3 . 3 (jon*iruction and nuclear fuel expenditurce* q> lslectrie 141,356 $ 151,425 8 148,388 ,. ll Ga* 93,195 81,010 51,662 -q, ,l,otal $ 237,531 $ 232,465 $ 200,050-r> m
~~A';>~~
iE At Dn mber 3 i (In dmmam6 ordollani 1991 1990 1989 >3 Identillable anacts < ]'> (jlectric l $ 7.9116,8fl7 $ 7,613,963 $ 7,133,161 621,570 510,355. 151,417 ,as 4 Total 11,608,157 8,181,3I8 7,581,608 Assets utilized for merall Comp..any operations 931,1114 658,366 935,430 a_. f Total As*ct* $ 9,513.301 $ 8,812,684 $ 8.520.038 e >> s l5
~~Includes non-cash allmranrepr otherfunds used during construction and ncludes Simreham post settlement costs.~~
-;. x ; > ,1 - a> .s ; v, t> w c F- >- S w > 6, n [-f Yi.f
--,. M ? " ~ ~ 46 4,, ?.5 4i ! 4 4 s, v.n 4 4 t :p
~~4. :., nc.~~
~~Nute 12. Quarterly Fisinricial liiforniatieni~~
~~i$: id (l 'naudited) l' 4 ; &:^~~
4 Operating rewnuci, & 'g !!n alwusar<d, of dol!nts escept eartsings per wmme.harr1 l991 1940 g jy ::p l'or the quarter ended En h 31 8 667,291 8 665,531 jf; M.g June 30 511.356 510,788 4: ? I 4 lg~ "M Septernber 30 7311,592 707,820 wi Decernir 31 601,6011 562,708 jic.n Operating incenne ll For the qu.u1er crated Wrch 31 8 207,fl30 $ 202,899 j a'yl June 30 166.fl30 167,410 4V.< 4... ~ Septeinier 30 26f t,01 I 282.101 4 U V..7 Decernher 31 115,997 150,217 ji Nel inconic 4h 'k j (< ai for the quarter cirled Erch 31 8 116,101 $ 90,356(a) l},) June 30 5 0,0119 47,780' j( Septeinher 30 111. t-69 156,8111 j;+ $ Decernher 31 21,596 36,333 Earning. for connuun *tork 4 For the qu: uter ended Wrch 31 S 69,567 3 73,205ia) $$ M... f are 30 33,013 30,6H1 j fb.' September 30 1211,175 139,815 j[; $ Decernber 31 !!,3119 19.425 4 u,7 41 T Eneilitige per colltuloit mitart' b y For the quaner ended Erch 31 .62 S .66 (a) ${ 4 June 30 .30 .2a - j?% Septernler 30 1.15 1.26 jhj-. Decernher 31 . 0 11 .16 < # j, 4y : (al l';(Jh1it e Januart 1,149(), the Comtwarn a hattged in snethod <![neronntingpr tanbilled gm retcrates. The runndalite r;(fect of tids dsar'{te * $' y ) .n increawd net iruome in approximatd> Si1.7 mulion. net <!f tan r[lects, or 5.11 per corr, sum share, pr the fint quarter, jj. i) 4: c; 4L I!M 4E ry o 4; m-4.gj3 4y4 ( j.M i 4.y5 < W;l 4; 1, 2, 4 ':, < i _.. 4 Q ;y-4: At ;. a Q:-'. t 4, di e 4;y [ h g h, t 4 t / -{ g r,, n 4 j V '[ )h jll 4h 'i. 4L-4 LT " t, l. 4 lr ;-3 Ag; ~x 4 )+ U.g; .u 4;. 1 4l !,f.A, I g gy. h.i ^ ;) 4,, g i.- AI' .b 4 '/ 4w a 4 E; 3 A . A po ~ di 1M'
3 -l S:losted Fin:nald Dcto 'E ..I991 -- - 1990 1989 l911tl -.I 9117 .l Sununary of Operationa (See Lies so financial Statements) Talde 1 Total resennes (000J $ 2,5 811,1150 $ 2,446.1117 $ 2,317,614 $ 2.137.831 s 2.072,077 Total operating income (los*) (000) liefore federal income tasca 8 9511.150 $ 983.282 $ 193,997) $ 701,019 $ 670,32i I ,7 After federalinemne taxes $ 71111.6 9 8 $ 1102,630 $ 620.123 4 500,931l $ 382,601 locome (Inas!,cfare cumulathe effect I i - '> of ac< ounting changes (0001 8 305.5311 $ 319.637 (95.803) $ 2911.190 $ 269,1188 l. l Cumulathe effect of accounting change for I1.680 j unhilled gas resenue (net of taxes)(000) Cumulaihe effect of accounting change for L$ disallowed costs (net of taxes) (000) - $ (1.315.1101 L l Earnings (loe) for common stock (000i $ 239,111 $ 263,156 $ (175.035) $ 0.121, 28) $ 192.312 N -l As crage common shares outstanding 1000) 111.3111 111,290 111.215 111,177 111,129 Earnings doe) per common share l ll liefore cumulathe effect of accounting changes 2.15 4 2.26 (1.57) $ 2.02 $ l.73 .10 (12.10) l Cumulatise effect of accountingeljariges Earninen flow) per common share S 2.15 $ 2.36 f1.57) $ (10.08) 8 1,73 [ Pro forma car Engs - with accounting changes 4 E for unbilled gas resenues and disallowed project costs applied retroacthely Farnings (1o%) for common stock (OOC) $ 251.176 '8 1173,251) $ 223.712 $ 177.411 = ..l Em nines dos *) per common share 2.26 (l.56i $ 2.01 $ 1.60 l Common stock dhidends declared per share 8 1.60 $ 1.25 .50 L g Common stock dhidend* paid per share S 1.55 $ 1.125 $ .25 llook salue per common simre at year end S 19.13 9 18.57 17.45 8 19.61 $ 29.71 >:l Conunon shareowners at scar etal 90,135 82.903 85.112 93.267 106.1l' l Itatio of earning
~~to lhed charges 1.93 1.98 1.95~~
.02 llatio of carnings to combined (hed charge. E and preferred stock dhidends 1,60 1.61-1.58 1.56 l Itatio of earnings to lhed charges ( .l tescluding AFC and 101C) 1.18 1.39 + 1.60 1.60 l llatio of earn;ng* to combined fixed charges l and preferred stock dhidends l (culuding AFC amt il%1C) 1.23 1,15 1.30 1.24 % Comparn had!w earmngs.o emer)hed rhargn, ik Operatlone and 31aintenance lhpense lletail, f/n rhomamh ord J!an) Table 2 ~> o ~>ll Total payroll and emplo3 cc benefits 120,293 $ 378.831 $ - 319,212 $ 333.350 $ 315.114 l.ess - Charged to construction and other 123.!!311 97,650 117,761 121.990 115,315 7 Pay roll and Employ ee lienefits Charged __to 0 i.e_ ratio _ns ___, 296,155 281,181 231,481' 203,369 199.799 l [ fuels -~ clectric operations 351,1159 411,158 461,576 410.174 422.997 Fuels - gas ol.eratmm 175,016 175,877 188,139 172,131 174,610 Purchased xiwer costs 197.151-168,749 - 128.368-88,465 93.188 1 l Fuel cost adjustments deferred l1,613 (2,085) (5.6311 3,359 (5,10l). IE Total fuel and Purchased Poner 768,702 786.999 772,452 671,429 . 6a3.6_69 3 A_ll oth_er _ _ _ 2 2 6,3_0_ I_._.__1._91.608 - 195.825, 151.52.7._ _?1 _2.201 L (. Total Operations and Alaintenance Expense 81,291,161 ' $ 1.2n2,808 $ 1,1938 $ 1,n32.325 $ 1,o27,689 ,-l Empio>ees ai necember ai 6,605 6,630 a.239 6.2ni 6,378 L _r .m
AL 4-k 4' 4' 1991 1990 1 9119 1911b 1987 4; 4, Elcetric Operating inconye,tt, tho,,,wndufdullong Table 3 j: lloenuca 4z C llemidential $ 1,017,190 $ 997,t:68 8 915,611 $ fl35,581 $ !!00,952 j Corumercial and industrial 1,070,0911 1,017.3fl7 981,740 883,267 819,626 p Other system resenues 17,838 46,673 42,232 40,518 49.791 j! Total systern reienues 2,165,126 2,061,928 1,939,616 1,759,369 1,700,369 j; Sales to other utilit es 23,010 24,140 12,880 21,152 11,889 jj i Oll"7l".s enues " 22p,_ jl!@L_ 792 3.112 6,603 jj Tual lles enue. 2,197,6fl9 2,0115,6 05 1,983,2t:8 1,786,933 _ l,718.861_ 1 Espen e. 1 Operations - fuel and purchased pmier 593,656 611,122 581,313 501,99ft 511,079 j; Operations - other 296,798 271.608 237,931 195.283 187.573 4i \\laintenance 127.116 118,515 115,502 %,599-litt431 + 4" D< preciation 110,037 99,922 91.759 82,811 63,840 j{ llase Gnancial cornponent amortization 100,971 100,971 50Att5 j; llegulatory liability comlmnent 4i . 4: canottization (86,360) (86,101) 03,038) 4, Ratt moderation component (22ft,572) (297,214) (131.167) 1 llegula:ary liability emnponent 793.592 -l ,latt.e* post amortdation 104,160 4 Operat:ng taxes 33ft,129 322,197 312,856 262,644 250,047. - b Federal income tax - current 315 3,138 14,612 111,394_ 61,095 Fegral ing onugis - e,Menyfjuul_iipu r__, ___,, 173,259 169,274 _ _, (738,500) _ 166,557 208.951 ' ji jj Tgal t:3 pen c _ J2_6,179 _l,313_,162_1,392.105 1,324,286 1,374,019 $[ ^ E ceteic Operoth0r ineoine 8 771,510 8 772,113 8 591,183 $ 462,647 8 314,842 - 4> 4' 4. 4-4l 4 y{ Ga=ppera!iryg Incynne (h thowanduirdo!!anj_ ___ f Table 4 j fles enues e 4:' f(cWdential, firm - + pace heating 190,976 $ 198,731 $ 209.192 $ 201,312 $ 198.303- - j (' * - other 2 9,3113' 30,851 31,692-31,803 32 fl77 - 4> Ln re*idential, firm - space heating 70,938 68,411 72,351 68,114 63,267_ 1- - other 25,515_ 26.501 28,674 28,078 28,443 i ~ Total liim iesennes 316,812 324,530 341,909 -329,307 318,890-1 lijterruptihte resenues 21,686 30,515 19,226 18,821 24.150 Total i,u.icm resenues 3311,498 355,015~ 361,135 348,128. 313,010 ll Sales to otho utilities 4,970 Other res enues 12,663 6,197 ' 3,191 2,773 5,206
[
~~fld.IP'E""?" _ _ _ _ _______._ _3 51,161 361,242 364,326 350,901' 353,216 Yk' Espeii c. g. 4:~~
~~i Operations - fuel I75,016 175.877 188,139 -~~
172,431 174.610 :k Operations - other 78,169. 68,910 59.5fl7 53,415 -53,140 hy \\laintenance 20,016 16,746 - 14,286 12,599 - -12,856-jf Depreciation, depletion and amortization 1-1,783 12,862 11,67 l 10,785 -10,065_. - 4i Operating tates 19,951 48,120 51.935 -48,220..
~~50,112~~

~~'k-l'c(leral income in - current. .500 19,482~~
~~j i };~~
~~)$Pdinf1?did.t fELred and odun _,,._ (l.322) 7,740 9,468' 15,160 - j4,811) pt d Tntal Eyx;i.yy 333,973 330,755:. '335,086 312,610 l 315,454 ijf 0~~
~~Gas Operathig ineoine.-~~
~~17,188 ' $ 30,187 $ ~ 29,240 $ - 38,291' S' 37,762 -k 4; -4i 4' . 4 _- 4 44,% 4-~~
~~4n 4s~~
,+--,-- --- r - - ~
4 ^ .-p'jk n> ]l -~. - - - - - ~ 1991 1990 1989 19ftli 1 9117 Tahic 5 Electriefales and Custorners M> Sale. -- enillions oi Li, n $E llesidential 7,0?.2 7,022 7,063 6,979 6.603 97 Convercial at:d industrial 11,322 8,359 8.636 8,566 II,00 i m?> Other 469 472 470 495 439
~~t. c>~~
D> Sprem v4cr 15,813 15,853 16.169 16,010 15.016 N7 Salen to other utilities 598 532 633 433 239 y" >> Total Sale, 16,1I1 16,385 16,802 16,473 1 5 2115 s 3Ml Customer - monthly average 'TD llesidential 89tl,97 i 895.294 890,406 !32,962 1172,i19 Coomercia and industrial 101,740 101,562 100,181 98,450 95,871 i Others 4,540 4,501 4,452 4,436 4.3fl9 [m>l Customees - total monthly at era; e 1,005.254 1,001,360 .995,339 985.848 972,679 [I Cuntoineradatal at sear end 1,005,363 1,001,441 996,488 989,097 976,928 + llenhiential 0.j$ kWh per customer 7,111 2 7,811 7,932 7,90L 7,569 llesenue per kWh I 1,92 c - 14.21c 12.95c 11.97C 12.13C D> Commercial am; indit@!al 7 Ill,797 82,30% 85,913 87,005 83,487-M LWh per custo ner llesenuc per kWh 12.Il6v 12.17(. II.37c 10.31 C 10.62C 'j; s l Spiem 1l kWh per customer 16,326 16,363 16,881 16,709 15,714 4> Splem resenue pa kWh 13.69 C 13.010 12.000 10.970 11.30c g.,- l' R$ G_as S._a)e s_a_n d Cu._.t c_m e r_n__ __ _____.__ __._._- Table 6 Salem - thousandr, af dth
~~h. m l llewider,tial - space heating 29,687 29,fl10 32,024 31,276~~
- 29,239 I}$ - other 3.195-3,448 3,491 3,589 3,952 k'W No's n,idential - space heating i1,636 11,271'. I 1,54fl 11.054 10,055 g jl 4,171 4,352 4.539 4,580 4,389 - other h ~ Nl Total firrn males 48,689 48,881 51.602 50,499 47,635 Inten ruptible males 1,53_8 6,347 5,300 5,078 6(156 p "}j[ y Totai nstem salem 53,227 55,228 56,902 55,577 51,091 2,218 l> - Sa_les to other utilities pj> Total Sales 53,227 55,228 56,902 55,577 56,309 ,,?> ( j ;l> Q Cuntomers - monthly userage llesidential-space heating 220,562 211,400 204,982 198,919 192,550 "P ; j) $ - other 1 71,5111 176,000 179,415 181,926-181,411 j [ Non residental-space heating 30,153 29,072 27,733 25,979 24,231 M> - otrier 11,003 11,310 11,517 11,725- .11,778 mD
~~b^ $~~
~~h> Total firm customein 433,599 427,782-423,647 418,579 412,973 Interruptible customers 472 410 359 325 301~~
~~1...~~
~~r.>' )> Customers - total monthly agerage 431,071 428,192 424,006 418,904 413,274 ,G 3 > Cuytomers - total atj car end 136,853 43,0.57_1 426,060 421,429 415,629~~
~~jl Hesidential~~
~ 85.8 92.4 - - 91.5 883 7> dth per customer 83.9 ', [$ llesente per dth 8 6,70 $ 6.?0 $ 6.7f1 $ ~ 6.69 8 6.84 ,g a?> Non residential,lirm ~ '.f hll dth per customer 381,3 386.9 409.9 '414.6 4011 ((,-j llesenue per dth 8 6,10 - $ 6.08 $ 6.28 $- 6.15 $ 6.35 i ? jg Spiem g [> dth per customer 122,6. 128.9 134.2 132.7 136.3 s) jl-Sptem revenue per dth - 6.36 $ 6.43 $ 6.35' 8 6.26 $ - 6.34 (;di t / > qw. m-:> Nf Q
4 4 4-4- ec, 4 4 1991.. 1990 Electric Operation. 1989 _1988 1987 4, Lsp*rgy - toiCions of kWh __ Table 7 j? Net generation 13,570 13,981 15,220 15.228 11,001 4 Poper purcha cd arul (sold)- nel Total spiern requirements
~~l 63fl, _ _ _ 2_,989~~
_2,087__ _ _ l,9 t o __ 2,616 j. I 7,20n 10,970 !7,307 17,168 16,520 3: Comp [my u c and unaccounted for Sptem a,alen (l. 395) _)),117.) _ ( 1, l 'H_4 _. j l.1281 _ _ _ ( 1,1741 j-15,1113 15,853 16, t 09 16.010 15.016 p Sales to other utilities Total Energy Asailalde . _.. _ __.._ _.5 911 _ _. _532 _. _. _ _ 3. _3 _._. -133-_...._9 6 23 g 1 16.111 16,385 16,802 16,173 15.285 4 l'cik Dennand - mW 4. j; Station coincident demand 3,085 3,260 3,178 3,31i 3,333 4, Purchased or J old)-- net Srtem l'eak llemand 11 1, 9. ___ 126 _ 510 _ _ _ 175 __ _ _ 213 7 3,90l 3.686 3,688 3.822 3,576 j Spleni Capability - mW 4 4 1.11 CO station, 1,0 711 4,077 1,066 3.831 3,799 j; Nine Mile Point 2 (1.ll.CO's I11% share) 198 191 191 191 4 firn! purchases - net 211 300 400 482_ _ _ 550 $j-Total Capabihn 1,516 1.571 1,660 4,510 4.3 19 j Fnel Con urc.ed io.. rilecMc Operattone 4' Oil - thousatuls of barrels 15.311 16,101 20A80 19.927 18,621 Gas - thousand* of dth
~~l2,928 36,477 26,490 29.126 29,762 4~~
Nuclear-thousands of mW dap '5i 108 105 11 7 )31 Total - billions of ihu 129,937 139.1174 151,669 153,828 146,536 j' Dollars per million litu 2.61 3.07 2.86 2.53 2.86 4-Cents per kWh of not generation 2.730 3.21c 3.000 2.67 c 3.01 e ji lleat rate - litu per net kWh 10, Ill t 10,561 10,701 10,515 10,509 4 4.- Fuci 511% IPert entapr t{.splem requiren,enh) 4-4 Oil 50% 56% 67 % 68 % 69 % j; Cas lit 20 13 15 16 4 Purchased Power 25 20 16 13 15 I Nuclear fuel 7 4 1 1 4. 4-Total 100% 100 % 100 % 100 % 100 % j; 4 4 4_, hppgath _n* i Energy - thousands of d:h _ Tabl_e 1) j.j; Natural gas 55,519 55A07 66,3a9 58,743 58,832 4' [lanufartun y gas and change in stocye 60 (15) 53 (18) (63) ) Total Natural and Manufactured Gas 55,639 55,392 60,02 58,725 58,769 Y' i$t$1 fdem retjuirement* 55,639 55,392 60Al2 58,72a a6,551 Y' Company use and unaccounted for (2,l12) (1611 13,5101 (3,148) (2,160) j2 s Sptem sales 53,227 55,228 56.902 55,577 51,091 ll Sales to other utilitica _2,218 4 Total Energs Asailabic 53,227 55,228 56,902 55,577 56,309 4 i 4 MM '""_ni Day Sendout ghh___ 135,050 406,177 162,610 431,9 to 404,679 jf Splein Capability - dth per da., 1. Natural gas 507.3l-1 507,314 461,788 411,596 -388,400 4i' 1,NG manufactured or I.P gas 128,200 128,200 145,600 115,600 145,600 l l Total Capability 635.514 635.514 607,388 557,196 534,000 lL Calendar Degree Days .n A~ 4' (659 ear aserage 5,032) 1,378 4,139 5,169 5.162 1,805 ) 4-4* 4-4 4 4 s 4. 4i 4" 4* c
s >> ~ >>> .. -.... -. ~. - 1991 1990 1989 1988 19a7 Con _.ieunii_.n.s_ pen.isnred JnZaldL_.---_T. ~ ~ ~~~ _Taide 9 Electric Production 32,5l1 36,400 $ 59,880 $ 419,028 $ 153.511 . l Tranunioion 12.152 23A 18 9,022 13,379 23.668 Distribution 71,770 82,975 66,679 61,653 32,209 NCHff"I(id'I*ICS'*rl'? /"ril _ _ _. __ _._._- __9'IIIIU_. _ _ j l,765L 3p15 __,17.227__19 689 Electric Total 129,613 111.02t! 139,196 514,287 529,110 Gan Total !!9,950 78,766 49,817 37,518 31.270 Continon Total I 7,9 511 12,671 11,007 9,352 17,795 l Total Construction Ewenditures 8 237,551 $ 232,165 $ 200,050 $ 561,157 8 5111,175 'Inclwin rwn.uoh allanuncepr otherfunds used during con.stmrtion and neludn.%elmen put settlement nuts. t> - ~ - Tahic10 U llalaneyFheet fin thousand, vfd dlara Aucta l Utihty plant $ 1,33 3,736 $ 4,150,822 $ 3,939.410 $ 8,017,017 $ 9,274,103 I,ew - Accumulated depreciation, ?$ d_epletion and amortiration 1,332,003_ _1,262,743 _ _1,1511,253_ 1,071 9231. 980 @66 Total Net Utility Plant 3,002,733 2,888,079 2,781.157 6,915.121 8,291.037 llegulatory asEt 3,7116,10 3 3.8117.3 7 3 3,988,311 ~ ' " Nonutility property and othen imestments 9,7118 6.381 6,050 69,271 6ft,763 Current assets Illt 1,017 -726,060 982,032 571,931 606,579 Deferred charges J, flate moderation component 602,053 411,443 102,971 Shorebm post settlement cost, 3 711.3116 225,81tl 75,0 t 1 Shortham nuclear fuel 79,760 92,069 97,925 Accrmulated deferred income taxes $ 39,235 359.768 262,298 525,029 127,061 Other 360,926 215,693 221,217 211,979 227,247 T__otal._De_ferred_Ch._arge_s _._ ~ ___.- 1,1160,360 1,334,791 762,455 740,008 351,308 Total Arets 8 9,513,301 $ 8,812,6111 8 8,520,0311 S 8,326,337 8 9,323,687 ,g Capitalizabon and Liabilities Capitaliration 4$ long term debt S 5,001,016 8 4,556,016 8 4,560,016 S 3,149,1121 $ 3,724,601 .; [ Unan.ortized premium and (di counti on debt (14,1150) (23,125) (28,587) (25,0111 (26,616) l Preferred stock - redemption required 521,912 527,550-511,187 513,926 520,788 Preferred stock - no tedenydon required 151,371 151,674 155,592 221,050 221,051 Treasury skick, at cost (58,430) (40, 81) Ll lletained earnings restricted for preferred stock dividend requirements 311,008 265,288 j j Common stock and premium 1,550,331 1,549,505 1,547,971 1.557,293 1,556,928 Capital stavk apene (10,216) -(42,676) (12,9161- - (56,151). (56,144) => iletained earning 620,373 560A05 436,690 679,579 1,801.919. ..m . ' T__ota_l_Capitafiration 7,795.9 t o 7,282,319 7,169,953 6,623.083 7,966,904 ,p j Current Ibhilities 192,895 119,830 470,885 583,017 339,573
~~j Deferred Credits 1989 Settlement credits~~
-173,507-182,720 ~ 191,933 , l Class Settlement 173,568 167,569 161.0 to Actumulated deferred income taxes !!!6,053 631,701 430,933 963,975 921,397- "l Other 111,035 117,172 81.443 144,015 83,217 t> Total Deferred Credits 1,217,159 1,102,165 - 868,3 4 9_,_h 10,7,9._90_._. 1,001 _,614 1,> flesenes for Claims, Damages, Pensions 5$ .._andfenefits _ _ _, ___________gg_,ia.3,10 __ 10,851~ 12,247 12.596 htal Capitalization and IJahilities ' S 9,513.3W $ 8,812,68i S 8,520,038 $ 8,326,337 8 9,323,687 l c> ?> b>:> 3); p j.-
~~l M~~
4 4 4 1991 1990 1989 l'mn 1987 4 4 Cqdialiinthin llatio=* Table 1 I 4 4 long-tenn sieht 6 j a,e 62 % 63% 33 % 17 % j l'acha rni stoi k 9 10 10 15 12 4 (loninnen t1lnity 27 2H 27 32 Il 4 4 4 Tota!( apaldli/alion 100% I t H N, 100 % 100 % 100 % 44 et
~~lia Itulo r nrrent muttantin ofIn stirrns tirfst nrul twierst stulempitort reaparrenrralA tyfpn)hntul st u k.~~
n 4 4 4 4 4 4 Connnon anni l' referred Stock I' rice. Table 12 I 4' The Conanon Sn.ek <.f tlm Cornpany is traded on the New brL 5tm L Esch uige arnl the l'acific 5tock Eu hange. The l'refened l 5tock 8100 par s alue. Senes 11. E, l. J. A and 5 and the l'refroed Stot L S25 par s alne. Scric* O. I'. Y and Z of the Company j arc. and serie- 'I wa iraded on the \\cw L L Stock Exchangc. The tahic licinw indicates the high and low prices on the j_ New hik Sto< L Eschange li-hng of cornposile traosaction* for the 3 eats 1991 and 1990. 4 4 4 1991 1990 j Quarter Quarter j first 5ccond Third Fontth I'irst Sceond Thini Fourth 4 Cominun 5tock liigh 23's 23 % 21's 25 20% 19% 21 % 21% inw 19 21% 22% 23 % 18 5 17% 17% 17 % j l'referre i Stock 4 4 Senes 11 5.00 % liigh 53's 51 56% 5H 50% 19% 50 19'.ir low 18 51% 53 52 19 16 18 17% _ j Sci ic-l, l.35 % lligh 17 16 % 19 5'? 44% 12 % 11 11% low 13 % -11 % 15 17 % 12 10 % 11 41% 4-4 Series i 5%% liigh 136 l31 136 1 41 % 116 112 IIH 115 5 Iow 123 131 131 139 110% 109 114 109 4 Scric J 8.12"u liigh H54 H6 91 ol 82 79 81% 78 % j l ein 7H H2% 83 88% 77 74 75 77 4 Scric. N 8.3H % lligh H5 88 91 97 Ha 49 % 83 HI j 4 is. 78 H3% H5 91 78 7 7.% 78 % 77% 4 Series O S2.17 Ifigh 25 % 26 % 27 27% 2:l% 21% 25 % 25 % j 4 l.ow 21% 21% 25 26 23 % 23 % 21% 23 % 4 Series l' $2.13 liigh 25 % 27 % 27% 28 25% 21 25 21% j 4. low 21% 21% 25% 26% 23% 22% 21% 23 % 4 Serk s S 9.80% liigh 99g 101 102 % 105 97% 96% 99% 97 4 4 Im _. _ 6 % 100 10l 102 93% 92 93 98 4 9 Serie T $3.31 liigh 27% 27 % 26 % 26% 26% 27 4 y Inw 26 2fs 4 25% 25 % 25% 25% 4. Series Y $2.65 liigh 27 27% 28 28He 26% 26 26% 26% 4 4 low 25 25% 26% 26% 21% 21% 21% 24% 4 4 Series Z $2.35 liigh 25 % 26% 28% 4-4 IM% 25% 21% 26 4 4 4 Ihr l'rtfene.l SicM l' $100 par tetlur. 3rdrA l} 4..G% iA tituted in the ourr the-rswater snarlet arul na pr,ce data i.s ruailable. Ihr 1* referred j' Stock clix) par n o!no. Series 1; II, l.11 and ll Preferred Stock are held pdtately. 4 4 4 4 4 4 4 4' 4 4 4 4 4 4-4 4' 4 . a
! n ;9 i' ;>l C:rp rcto inferm:ti:n 4 Eheentise OIOces Altlul#! SI4'eIIllE !l 175 East Oh! Country lloail The \\nnual \\lecting of Sharcownern will be behl on l> llicknilic, NY l1801 \\lonilay, April 13.1992 at 3:00 p.in. In connection with Cornnion Stock 1.inteel this inecting, proxies will be solicite<l by the Cornpany, A notice of the meeting, a prosy stateinent aral a proxy will New York Stock Eschange he mailed i. sbarrowners in \\ larch. '5> l'acific Sto< L Eschange Forni 10.K Annual lleport Ticker S):nbol: 1.11. mmpain will forn. h, w. hout charge, a copy of the .l'he (., ~ is it -l Tran.fer Agent and llegi trar Cornpann Annual lleport, Form 10.K, as filed with the Il Cominon Stock ami l'erferred Stock SecuritiE and Eschange C(numioion, upon wrinen sc<luest !l The llank of New York to: long 1 land 1.ighting Company, line tor lielation<, j Sharehohler Senices Dept. 175 Ea i Obl Country linad, Ilickeille, NY I 1801 1ith Floor 101 Ilarclay Street 'ul New York,'NY 10286 1258 ',l 1 800-524 1458 l >> Sharenwner ' Agent for Antoinutic Disidend llelinestinent I'lan 'ihe llank of New York Disidend lleitnestment Dept. 1Ith Floor 101 Ilarclav Street New York,'NY 10286-1258 ' ll 1 800 524-1458 s r c> l> l> ..,;y 1> +> .p = 4 .p ,p i 1 - p s> f.-' 1> s> '6: s?> G> < -fi 6,M.', j > < Q: > 1 }. g.. ? > ' / ", q> . -. ~ f>
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D' rect:ro i Willhan J. Cet:eorinos Winfield E. Froinin ' lilehird L. Schni:len:ce Chainpan of the llaani arul . Ifetired Vice President Director Chief Executisc Officer Eaton Corporation Center for Energy and 1.ong Idand Lighting Company Electrical 1:ngineering Environmental Policy llesearch. A. J:enes llarneo. Ilaeli A. Paterson Mawachusetts Institute of Technology - . Dean '..., - Partne-George J. Sideris School of Public and ' Meyt4,.meri, English itetired Senior Vice President Finance ' Ensironmental Affairs & K!cin PC Long Island Lighting Company Indiana Uni {ersity Law JEn 11. Tahnage George Ilugliarello Ehen W. Pyne Partner - Presiderit. Corporate Director 11.1L Talmage & Son Polyteelmic Unhersity and Consultant }i remdent andnth,ony F, Earley, Jr. g('f; '"'l];"r" '. Agriculture "')r' "i lent Phyllie S. Vineyard I dibn* N A* DI'"C Chief 0perating 0fficer Longlsland Community limg Island Lighting Company Foundation Officers 'Willlun J. Cataco.1: o.. Arthur C. Marquardt Yletor A. Staffieri - Chairman of the lloard and Vice President General Counsel and Chief Exceuthe Ollicer ' Sirategic Ilusinen Planning Corporate Secretary Anthony F. Earley, Jr.. Ilrlan it. McCaffrey Pre 3ident and ~ Viec Pre ^ident . Andrev it flagogna Chief Operating Officer.. Administration Trepurer 'junca T.' Fly' n joEph W. MeDonne'l u Group Vice President Vice President' Thornas J. Vallely.111 Controller - Engineering and Operat.inna Communications lierbert M. Lehnan Ihiph T. llrandilino -Williaan G. Schiffniacher ' Anistant General Counsel - Vice President .Vice President ' Electric Operations and Aoistant Corporate Finance Sec.etary . Willihm N.'Dirnoular - Vice President. - Itchert II. Steger Kathleen A. Marion ' Vice President Information Systemi - Fossil Produc 'on . Assistant Corpos: ate Secretary'and Anistant
~~s. - and Technology.. -~~
Willlain E. Steiger, Jr. to'the Chairman ' Hohert X. Kelleher b 'DVice President '.Vice Preshlen' t Engineering and Construction lluman liesources Chrletian G. M'ilding John D. Leonard, Jr. ,.. Vice President. - Vice President. Conservation and {l ' Corporate Servien and. .. - Load Management Nu' clear Operationis - ' g.,j,p,, p, ggg,,, y7,. Ad:m M.' Madsen ~
~~Vice President '~~
- Vice Prnident - Gas Operations Cdrporaie Planningi ' WhlJiY6nnglint 1 vice Presidene Customer Itelations, i L f E* + 2 4 >l f. n 8- _____m__
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