SNRC-1799, Lilco 1990 Annual Rept
| ML20070T484 | |
| Person / Time | |
|---|---|
| Site: | Shoreham File:Long Island Lighting Company icon.png |
| Issue date: | 12/31/1990 |
| From: | Catecosinos W, Leonard J LONG ISLAND LIGHTING CO. |
| To: | NRC OFFICE OF INFORMATION RESOURCES MANAGEMENT (IRM) |
| References | |
| SNRC-1799, NUDOCS 9104040224 | |
| Download: ML20070T484 (51) | |
Text
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/ECOamiaw ih LONG ISLAND LIGHTING COM PANY I
at,wer. m w a r.nw we w a woma SHOREH AM NUCLE AR POWER STATION PO BOX 010. NORTH COUNTRY RO AD
- W ADING RIVER. N Y. I 1792 JOHN D LEONARD, JR-MCE PRESOENT. OFFICE OF CORPORATE SERvCES AND VCE PRESOENT OFFICE OF NUCLEf R SNRC-1799 MAR 10 1991 U. S. Nuclear Regulatory Commission ATTN: Document Control Desk Washington, D.C. 20555 Annual Financial Report Shoreham Nuclear Power Station - Unit 1 Docket No. 50-322 Gentlemen:
The purpose of this letter is to transmit the financial information required by 10CFR50.71(b). Attached please find a copy of the Long Island Lighting Company's 1990 Annual Financial Report.
If there are any questions concerning this information, please contact this office.
Very truly yours, i ,',' l [
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. .% ,5 Jishi'D. Leonard, Jr.
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Vice\ President, Office _of Corporate Services
( and )/ ice President, Of fice of Nuclear
~ ~D Eik / ab Attachment cc: S. Brown I T. T. Martin B. Norris 9104040224 901231
- PDR ADOCK 05000322 I
~~
.. h Long Islcnd Lighting Company
- n. 1990 Annual Rcport
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(nnn o ucn t) Long Island Lighting Coinpany supplies i t it cos eostjinissos electric and gas service to ros a n Asi, ost .'
Nas'sau and Suffolk Counties and the llockaway or un courAsY' uni myo, .
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Peninsula in Queens County, otsurns o2 un.Au Arn o,. The service area covers 1,230 square inites '
nacincny AssuAn s, with a population of isoucino surnv uou uns approximately 2.3 inillion people.
2 40,000 pours.
LILCO's h,630 employees are dedicated to providing unparalleled service to the Cornpany's 1 inillion electnc and 430,000 gas customen.
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Table orContents
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I To Our Shareownen 2
(oN utu ona) hC".lC Fint__ _ .. ,
____5 Ka rin CAtt rcAat is Electric Service 6
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LLANsish Ho% to (Avi (itai be!YkCe g) 7.NikGY ANDIO% lW ntilI AMILY'% ' ~ ' ' ~ ' " ' " ' ' " ' ~ " - ' " - - ~ ' ' ~ ' ' - " " * ' ' ~
LU CIRIL titui MirH A '"~ " '. ~ I_ . .
ran SAVINGlOWF.R nout Custoiner Service 13 ist kGY AeDii, Blfr Looking Ahead 14 inecnn e. Insiuu, n wm - - - - - -
ivusann is Lit CO's Financial lleviev 16 HAkD.iAYL lisiscY SricMitsT lleport of'l! dependent Aliditors 22 MAnussi nuns uns Audited Financial Staternents A unutst raou int Ae""
and Notes 23 ro nu r insin a - - -- -
ADuin ute uw um S(' lated Fuyndal Ipi _ 42
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To Cur Sh re:wn:rs ,
We marked a new beginning in 1990 as we put their er ergy bdis. The new programs otrered the past behind us and repositioned the Company .ustomen energy-etlicient fluorescent lightbulbs, to meet the competitive challenges oia new decade. weatherization kits and water heating products at discounted prices through our toll-free energy FINANCIAL Hl.ALTH hotline. We provided free home energy audits and For the fint time since F183 Lit.CO's first weathecization workshops to help customers save
, mortgage and general and reftmding bonds were as much as 20 percent on their energy bills.
rated investment grade by leading investment-rating gas ExPANMoN agencies, allowing us to borrow money at lower interest rates. Earnings for the year were S263 As oil prices soared, natural gas moved to the million,in stark contrast to 1989's S175 million loss. forefront as a cost-etrective, domestically available i We increased our quarterly common stock dividend fuel alternative. With approximately 75 percent of the homes on Long Island using oil for space heating i this year by 50 percent, from 25 cents per share to 37H cents per share. compared to 11 percent nationwide, customers flooded iILCO with inquiries about gas heat Stavici FlusT conveniont We manhalled our resources to punue Providing unparalleled customer service has gas convenion leads aggressively, succeedmg in become our top priority for the decade, a goal that installing Mio residential gas heat customers, requires the participation of each and every LILCO 72 percent more than in 1989.
employee. During 1990, we developed the mission increasing deinand thr gas heat meant increas-statement on the cover of this report and set in ing our gas supply as well. We concentrated on motion the " Service First" program, our blueprint developing new resources, the most promising of for achieving service excellence. The plan targets which is the Iroquois pipeline. The 3Mbmile pipe-specific goals for meeting the competitive challenges line will bring Canadian natural gas to Long Island, of the 1990s increasing our gas reliability and enabling us to provide natural gas to an additional 40,000 homes.
T.mi Gutt C,iusts A LILCO subsidiary purchased a one percent share With evenn in the Persian Gulf causing oil pa.ces
. of the Iroquois pipeline this year, making' us a partner i to increase by 70 percent, LILCO's costs for '
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producing electricity increased acwnhngly. We moved quickly to implement measures that would Ilu Ann try Tiu. Kr s minimize the impact on customers. With additional cogeneration sources, increased The Company purch.tsed oil on the spot market conservation and a sluggish economy, we anticipated at discounted prices, substituted natural gas ihr slower electric sales in 1990. I)espite this, we oil to generate electricity, and introduced new continued to expand our electric service, imtalling conservation programs to help our customers reduce our one-milli <,uth customer this year.
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froKI'anls dl.lt speelfkcally target flew constfUetlon alld i
not-li>r-profit customen. The Public Service !
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.Q- Conuniwion (PS(:) has saongly supported out e
cndeavon in the area of energy conservation, 1-l providing financial incentives for mcreased l participation in conservation progr.uns.
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Oa December 1,1990, the PSC approved a five percent electnc rate increase,in accordance with th -
19S9 Shorch.un settlement agreement. This increase, i
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. .. p provide the Company with adthtional cash tlow. We also filed a one-year,7.7 percent gas rate request and
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. . . . . . . [y ..L 3 . . an electric rate request proposing five percent I
increases each year for the next three yean.
Williatn J. Catacosinos Chainnan and Chicj'lixecutive Gjker On behalf oithe lloard of t )irecton, I thank you ti r your support dunng the didicult 6nancial 4
Reliabilit' became our focus, as we sought to tinies of the Mos and your continued interest as enhance customer service through system "" "' 'h ChdU"P's of tht new decade. With I
improvements. Thanks to our aggrewive power plant our dahcation to unparaHeled cuuoiner wnin and maintenance programs, a comprehensive energy dt tennination to unprove the reliabdity and comervation plan and increasing supplies from ediciency ofour oper tions, our steady progiess uill
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independent power producen, electric supply more than met demand. We concentrated on Smcerely, reducing customer outages and decreasing restora- ,
tion response time, two of the most pronunent indicaton of reliability.
l William J. Catacosinos I
CONsI H v!N G l5Ni kGY I:xecutice Gjlicer
- LILCO's conservation and load management plan, the most aggressive energy conservation plan in New York State and one of the most I
aggressive in the country, expanded in 1990 to include new residei.tial programs, and connnercial
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- S;rvlio First 84 1990 presented LILCO with a unique challenge.1.ike many other utilities, we entered a decade with customers expecting more and better service. A company's perf5rmance is n longer l judged merely on the product supplie, d b tu on the ' quality of service with which it is provided.
"We realized that for the Company to grow and succeed in 5
_ the '90s we must provide unparalleled service," said Company President Anthony Earley. "To do that, we had to develop a clear, "We realized that for conunon undentanding of the needs ofour customers and create the Company to grow .
a corporate culture that emphasized meeting those needs.,,
and succeed in Employees on all levek were involved in a teara effort ,
the '90s we must provide I to develop a mission stacment that encompawed our dem. e i unparalleled service." . i to provide unparalleled service to our customers and return '
- Anthony F. Earley,Jr. LILCO to financial health. The result was the stement on l 14esident and
' Cirief 0;vrating Other the cover of this report, a statement that embodies our new l
" Service Fint" spirit.
i With our mission statement in place, we began working to j make it a reality. We developed clear, measurable goals Rir achieving service excellence and provided the training necessary for each employee to reach those goals. We developed focus groups and quality circles to locate and resolve problems and to recommend improvement; throughout the Company.
Though still in its initial stage, we believe the Service First progr,un provides us with the framework necessary R>r building (PHOTO LEFT) a customer.driVcn Corporate culture at 1.II.CO.
EXPL AININc LILCO's CU170MIR OUTREACH PROGR Ahts 11,MT ONE WAY j inAT CUSTOMER SERVICE ?
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Electr13 Servl30 .
Lil.CO entered the 199(h in a much stronger power supply position than in previous yean. Peak demand this past sununer reached 3A86 megawatts. With a capacity of 4,663 tnrgawatts, the Company's supply exceeded demand and for the tint time in tive yean, we did not have to call on our custamen to help Trees Trimmed To improve Rollability prevent power shortages on our hottest suminer days. n ,, ,,, 4., ,
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We improved our power supply by restoring a 185-mepawatt 3o0 unit at the E.E llarrett plant, expanding our electric conservation -
plan by 37 percent and increasing our supply from independent power producen. These measures allowed I II.CO to maintain a 21 percent reserve in 1990. -
Throughout the year, l.II CO employees concentrated on improving the reliability of our electric system by decreasing the ,
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frequency and length of electrical outages. "Providmg rehable ,
electric service is critical to achieving service excellence," explains um llill Schidinacher. vice president of Electric Operations.
In F>90 that meant trimming trees along 1,760 miles of electnc ;
h lines; installing 50D00 new, more rehable wire connecton; ;gg replacing 40 miles of bare wire with more resistant, plasuc-coveted nss em pn, wire; checking 300 circuits for potential trouble spots usmg infrared scanning, and installing 200 switches to restore power instantly following an outage, without dispatching a crew.
By the end of the year,1.11 CO had decreased the average number ofeustomer power interruptions to one everv 8.6 months, a 25 percent improvement over 1989. We also reduced average (rnom waio livuwsuothun restoration tirne to 64 minutes, 20 percent taster nu m nlma than our 1989 record of 80 minutes, the best "'^""N^~"'""""'""
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Natural gas played an increasingly important role in Lil CO's energy plan in 1990. As events in the Middle liast caused oil prices to soar, I.lLCO intensified its gas marketing program, completing more than (dm new residential gas heat conversions by year-end.
Residential "The Company has an aggressive plan for gas expansion in the Gus Heat Conversions 199(h," said Walter Wilu., vice president of Gas Operations. "With about 75 percent of our customers heating with oil, we see a very _ '>_;
7,5m viable market for increased g.n sales. llising oil prices and customer imm?
1 J concerns about high energy bills allowed us to accelerate our plan N,ha for increasing gas heat conversions."
fjj Following the Iraqi invasion of Kuwait, we doubled ky h the size of our gas marketing department and substantially ,
lQj gg ,g i>94':. reinforced our field comtruction crews by temporarily reassign-
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gy [f j , ing employees from other parts of the company to coordinate 2.sm g'p Mqh/ %A %jh))y 2,h 4 the gas conversion process.
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y pm u.- :@ , fulfilling the overwhelming demand for gas heat meant quickly g} Nh identifying those houses that were located near gas pipelines and m i9s9 em inains. We created a sophisticated computer program to enable our employees to fmd a customer's neighborhood on a com-puterized map, detennine the location of the nearest gas main and assess the feasibility of supplying gas to the home, all in a matter of minutes.
In 1990, we also aggressively pursued ,iew sources of puOrOttro natural gas. A LILCO subsidiary purchased a one percent LILCO Gu stRvict .
uscHANics KrNstni DvG sN share in the Iroquois pipeline, making us a partner in (titT) ANDjAMEs Mt aPu r' gg. '
pg.t. %' 1992 the Iropois @eline svill WORK ON A Nt% GAS M AIN TH A f
%I1.0 HELP U% INCREAu provide m with enough gas .
to fuel more GAi %UPPLY TO OUR NoeTu -
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0;n:crvati:n 5 rvin Although LilCO already had the most aggressive energy conservation plan in New York State, we set even higher megawatt-savmg goals for lW. The plan reduced electric demand by 185 megawatts, a 37 percent improvement over 1989. We also targeted previously untapped emtotner septuents by introducing Total Energy C onservation l
Program Participants new programs designed to encourage energy-e Ticiency in new f,,, g,,,u,a .,,g 30 construction and not-for-profit secton. The year also saw the in-3 io troduction of a prognim t,romoting energy conwrvation in Long _
lsland elementary and secondary schools. _
More and more customers participated in the Company's con- -
f]"$j e servation prognuns, particularly the Ove new residential programs g[h-m ..
introduced in response to the Persian Gulf cnsis. The prognuns -
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ww 3 q i helped custamen lower their energy bills through free home cJ c 4 M 74 energy audits, free weatherization workshops and three separate p*t? k . [7 um.y[ :
catalog programs. Through m 800 number, customen were able Jo~ ~ "% g?d~ p;'gi.f~p q f-to purchase Guarescent light bulbs, home weatherization kits and @, Q g (a mQ
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water heating conservation products at discounted pnces. y,
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s "We had an overwhehning response to our new prognuns with h; T...
.x M " M}" m[C]u-more than 20,(KK1 calls received foDowing the programs' October p,w p,m p,,1 10 kick-otT," said Chris Wilding. vice president of Conservation and Load Management. "lly the end of the year, more than 9,(KKi customers had purchased energy-e tricient products and participated in the workshops."
To further assist our customen in lowering their energy costs, the Company is currently investigating new bghting and (einiro nnarr) llf1 PING CUsToMEas appliance energv-sivmg programs, as well as a progrant towin rutin rNracY nius is
- ed,iciency in new ose or til CO's that would proniote energy ,,,, cos a ,s s. g, ,
home construction. -
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4 One of ont strongest efforts in improving service this year came from LILCO's " front line"- our customer representatives.
Te improved our customer phone contacts and increased speciali7ed services.
Customer LILCO customer representatives in out.11 business offices
. Calls Answered J- (in shouwnda - and four emergency centers answered more than 2.3 inillion calk
. . _ . _ . . . _ . . in Fno. As part of the Service Fint prognun, we set goah to answer O e 2.vo
- phone calls quickly and efliciently. To provide our cmtomen with better service, representatives were specially trained to answer <
. questions on a variety of LILCO services, so that most customer I inquiries can be handled in the initial call We also introduced innovative programs designed to help
- customers with special needs. In 1990, LILCO established a Language Line, a 140-language interpretation service to assist:
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non-English speaking customers. We introduced our fint -
i Spanish-language brochure, " Sus Derechos Como Cliente 4
ltesidencial de LILCO ("Your Itights as a LILCO Cmtomer"),
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j and established a multilingual speaker's bureau that is available twa m' w>o to give presentations in 17 languages.
We expanded a prognun-that helps customen in.fmancial t,
distress by connecting them with conununity and state resources, providing these services for 837 families last year. And we established a program that weatherizes the homes aflow-income customen. The program mes conservation as a way to lower - .
(ruurOtm) energy costs and - identities available state and local.
' LILCO ENFAGY PACKAGER MrxE Daar.vN woeES govertimem assistance that can help customen pay wrnicovtuNutur AGENCIESTO gg HELP cfflTOMER5 gc
ACCESS AVAILABLF. FMRCY CONSERV ArtON FUND $. _T f ,(
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Our commitment to providing unparalleled service will be the key to productivity and growth in the 1990s. Recognizing and responding to the needs of our customers continues to be our primary goal.
The new service culture is being nurtured through ut.co walning Programs Offered communication and training. Employce-established focus
" groups and quality teams examine and re-examine the way _
am LILCO functions, identifying areas for service improvements. -
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Extensive employee training will centinue, with 207 ditrerent v 'n d
programs in 1991, diq'g o
2-Natural gas is still an area with tremendous growth orpor-
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tunities. Combining the Company's aggressiv>: marketing plan
{t $fj. jb w9 with new supplies of natural gas will allow us to provide this 43
'y hRl np low -cost heating alternative to more of our customers in ym g a Q pgn the years ahead. inn f 7 h.m.,iT # "jp@~~M And we will continue to help our customers manage their iyQ( f;Wj M h L*g ge &g P;p energy bills through conservation. Growing customer awarence, 9 fa ~iM fg 0 %
of environmental concerns, along with increasing energy costs, Lyl lj L M. d W t
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has heightened interest in energy-saving strategies. We are nss nso imi responding to that interest by investigating new residentia'. lighting and refrigeration incentive programs and energy efficiency in new home construction.
The customer-driven culture we are building at LILCO is helping us to explore new aad better ways to provide service to our customets. The past year was a turning point (enO10 w.in)
. . sezasst suure.. cu f.or the Company and our continuing dedication to m,_,,,,
service excellence will enable us to meet the o'5 rt o'r ' G^'
Exrasuus Ta, o xisc sisrtM challenges of the decade.
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Financial Review
- Overview
- The addnion of approximately 10,500 new gas heating imtaliatiom. 50% of which were residential ,
.The year 1990 was another year of.achievemeats f.or the i dy dodigk nmeer of homes Company and re6ccted a continuing and furthenng h&C - onverted to gas heat in 1989, improvement in its Gnancial picture. This improvement is evidenced, in part, by the elevation in 1990, of the The uncertainty surroundmg oil prices has provided Company's First Mortgage llonds and General and the Company with an opportunity to expand its gas Refunding Bonds (G&R lionds) to investment grade by the busineu as customen look to natural gas heat to rating agencies. reduce their eDrgy bilh.
This is the 6rst time since 1983 that LILCO securities The year 1989 marked a year of financial tramition for have been rated investment grade-a signiticant milestone the Company fiP10 wing a settlement (1989 Settlement) of in the turnaround of the Company. the controveny concerning the Shoreham Nuclear Power ,
t6- Other achievements in 1990 included: Station (Shorch.un) and the Class Settlement. Prior to 1989,
~~
- Dismical by a United States Coun of Appeak of the Gnancial viability of the Company Nd beenjeopardued Suffolk County's claim against the Company under by the Shoreham controversy and the ItiCO Act htigation
.ne federal Itacketeer influenced and Corrupt became of the uncenainties they pre ented and became the ,
Organizatiom Act (IllCO Act) and atfirmation of Company had not been pennitted to recover a significant a class action settlement (Clau Settlement) entered portion of its invesunent in Shoreham.
into between the Company and its ratepayen in 1989 This all changed in 1989 with the 1989 Settlement with to resolve the IllCO Act htigation. New York State (State) and the Class Settlement. The 1989
- Increase in the Company's common stock Settlement was designed to chnunate the controveny over quartei y dividend frrm 25 cents per quarter to 37% Shoreham by providing for the tramfer of Shoreham to an cents per quarter, agency of the State, reciting the intention to retum 1.lLCO to investment grade nnancial condnion, autho-izing fixed
.The Company resumed the payment of. dividend' in 1989, endmg a five year pe ti during which no W89 md 1990 dd & Cow h dividends had been paid on [as preferred stock dy orreceiving, and targeting annual rate increases of common stock, UN 5RM s M dmb dgh 1998.
in conjunction with the 1989 Settlement, the Company
- Eamings fbr common stock tiir 1990 of approxi- tiled a rate request in late December 1990 which states that mately 5263 million or $2.36 per conunon share- the filing is comistent with the ratemaking principles compared to a lo s in 1989 ofS175 million or S 1.57 established by the Public Service Commiuion of the Statc per common share- of New York (PSC) under the 1989 Setdement. In its
- Usc of S100 million of tax-exempt secunties in 1990 proposal, the Company weks to increase electric rates fbilowing utilization of $100 million of tax-exempt by 5DA a year beginning on December 1 m 1991,1992 securities in 1989, the proceeds of which were used and 1993, respectively.
to reimburse the Company's treasury for previomly Ahhough the proposed rates .o na retlect the impact incurred capital expenditures. of the Clau Settlement, the Company estimates that, as a Financing with tax-exempt securities saves racepayen resuh of the Class Settlement, ratepayen will pay milliom of dollars became these securities carry app xintuely A to .E leu than they wouhl otherwise significandy lower interut rates than taxable bonds. hm paid unda the ratn pmpmed by the Company in the For the three years pnor to 1989, the Company had new 6hng. The Claw Settlement provides the Company's been precluded from ming this type of 6nancing. customen with approximately 5390 milhon m rate
, reductiom to be apphed to their monthly electric bilh over
- Iteceipt of a a. W electric rate increase m. t)ecember a ten year period that began in December 1990.
1990, following the receipt of two electric rate increases of 5 4% and 5hM in 1989.
These three rate increases, on an annualized basis, represent approximatelf $240 million of additional l cash Gow. Prior to these increases; the Company l
had not received an electric rate increase in more than three yean.
- Redemption of $75 milhon of G< Honds,12E Series due in 1992 without the need for addition:.1 extemal financing.
---s-IINat I nit l 00 ~l f)y l tap [ gig { l{pyppyy %pfyggp (gyghgg. ggjygg g 1.lquidity C<nnp.uin entalcinent on as tidetalinwmc ta rcturn in in omjunction wah the 1989 %cttlement, the P5C q abandonnwnt kw dnluenon for Sho:chani as a reudt authorised the Company to iccord on as books a finannat of dw Pg9 kulcinent The nonpany clainwd thh liesource Auct (litA) tiut reprewnt, the prewn: value of (Wucuon for PM9 and, at Decanber 31,19% in net the tiiture net-atter ta cash ihnv5 whnh are provukJ the era Jing low (NOl > carrytiirward anung pnncipaHy fmm Company tin its financial recovery. The Comomy recorded the los was euniwnl to bc $12 biHion. Hw Onnpany tha regulatory awet on as books inJune 19*# at ,m amount runnatn that the balance of the NOL carrytiirward wdl of appionmately $4 billmn. The PSC is pctmitting the ""Y "'b#'.I to redun fnina, uinune in pquucnts Comomy to amortue a cumponent of the IRA over a tiinv- u no the b year uatutory carporw atd pruod.
vcar penod (w hich amortuatum started m 1949) and to Anm mM for FM the Gunpan6 cash paynwnt ihr recover a full return on the un.nnottired balance.
I" "I"'""""'d*""' d""""d-Prior to 19X9, a ugmticant poruon of the Companv% 1 he rate inctsasa ,a contetuplated under the 1989 L carninp Wcri reprewfited by the allowagt(c [og titudg MM N N @ IMb be (EnpJny Nh med during construction (AI C). AFC is a non. cash pre-tn mtcreu coverage ratm targen of 1.3 to 1.4 stnht to inwmc that reprewnts the con of borrowed tunn m 1991 and an allowed rate of return on comnmn timth for comtruction purposn and a re.non.dde rate nimh of 123596 ni 1991 and tapeted betwnn 1150"t upon a utihty's other timds w hen su uwd. \horcham '" IIOb"" in PN1 In 1990 the pre-tax mterest mverage accounted for wbstannally all of the AlC th.a w,n was 1.2 tunes and the allown! rate of return on 6onunon previoudy aedard to income. "l"" Y " d' IM for the next wveral years, a mbstantial porunn of I he rate uructure under the 19M9 hettlement F, intended
' the Companyi carninp wdl aho be non. cash earning to pronde the Coinpany wnh the adaluate and timely rate tenccting the rate uructure *mdce the 19d4 %etdement. rchet wbkh, when coupled wah ando to the capaal for 19no, the nonnash earninp, net of tas etreca, were innken, wn enable the Company to mect its operating
- 5227 milhon. The Company estunatn that it non< ash and capaal requnement earninp. net of ta rifcca, muhl approximate su% and The 198, Sculanent conunittnl the State to ldiocaw decreaw to Sub of earmnp fbr the years 1991 and 1992 to dw Coinpany up to $500 nulhon of New Yott State and further dcoraw thereafter, pnvate aconty bond volume (ap (at a minnnnm of sito in in new deetnc rate tihng, the Company uata that ""thon per ye.n through 1993), to penna the sale of it expeca to fully rnover thew non cash canunp tn-exempt wcuritin for the Companyi benefit. In accumulatal under the 1989 Nettlement over twelve vcart conjuncuon with the 19M9 Settlena nt, the Company was The Juumptiofh Med in thh rJte filmg have been up lated dh V (" "IdNU $1( I"ItbOll ObIbc \obunt* CJP in each of from thme awumptiom that were med in the in89 the yean 1989 and Uno settlement. The updated awumptiom retket current f or a further datuuion of the 19K9 Neulement, we
, conditium, includmp, among othen. demand threcast that Note 2 of Notn to I mancial htatements, ate cMrendy lower than thow uwd in conjunction with t December 31,1"d, the (?ompany's cash atal c,hh the 19M9 Setdement, equivalenn amounted to approximately $103 million, Although thew updated awumptiom would have tcquned unnpaint to 5340 nulhon at December 31,19W) and rate mercaws m excns of those targeted m the 1989 593 nnHion on henniber 31,198& hi addition, the Settlement, the Company has propmed to fuHy recover the Gunpany has $300 milhon of cred t avadable to a non-cash carning by 2001 (as compared to 1999 under the duough Wroba I,1991;nonded by the 1989 Itevolving 1984 Settlement)4o that the Comomy's rate requeus are Unht Agreement (1989 ItCA). ~l his ime ofrieda h wrured unwktent wnh thow targted under the 1089 heidement. by the Cmnpann accounn receivable and fuel oil inventories. The terminanon date of the 19X9 ItCA may be extended for one year periods upon the Comomd requeu, u hich mmt be made not later than June of vIch year beginningin PNI. At December 31.1990 no amounn '
were oubtandmg under the 1989 ItCA.
a Y
t hiting the pennd 1991 to l'i95, the Company ntunatn Capital requirements and upital provuled fot IWO and, that it will be requaed to seek external fmancing of 19H9 weic as followC approxhnately $2.5 billion. Although a pertion of this linanemg will be med to meet its operatic.g and upital Capital licquirements _ _ 1990, _ i9N,4 _,
requirements, mmt will be med to refund naturing debt. 9,,,,o.% ,n y u p,a Accordmgly, durmg 1991: Construction
- The Company utihred 51n milhon of tax-esempt f in tne secunties inJanuary 1991 to reimburse the Companyi Non Nmlear $ 125 5 12t treasury for previomly incurred opit.d expendnutet Nutlear shordum - 104
- The Company plam to wil 5250 nulhon cf Galt Uw m Pomt 2 (NMP2) 9 6 llor'ds, the proceeds of which would be uwd to tud 4 8.
redeem $225 milhon GMt llonds. 13% Senn 1otal ticctnc 13H 37 1b due.m 1995. g,, 79 ,,
- The Company n wcking permimon to utthie the conunen 13 In proceeds frorn the sale of another $1W milhon ef tax- h d niintm son 230 297 e xempt weuritin which would be sold later in 1W1. i n, i sg gu.wnun - 96
' " ~ ,
The proceeds would be applicJ to reimburw the ,
I" ' ""'""'"""
Company's treasury for previomly meurted capital expend' turn. Itefundings and 1)isidends l ong.1 cnn licht H2 621
- I mally, the Cotupany has available its 1989 ItCA to Shm / M n N M - - -
112 support 1991 capital requirementt gynt [ g3,3 jg;
'I he Company filed a gas rate requnt in lateJanuary 1991 Pretc,ted Stot L I4 3nM with the PSC seeking an annual mcrease in rate rehef prekned Stot t 1)n niemh 6N 41M approximatmg 535 raillion, or 7.7%,, to become efTective Connnon stoa l>nidemh 125 2n on licecmber 1,1991. 1 reasury sem L - -I lotal Ittfnighng and Dnademh 2H9 1,t m Capital itequirements and Capital Provided g,g gy 3 ;
in 1990, capital requirements amounted to $672 mdhon Mmrde Poa kulemem Com 153 7 ',
and comnted of comtruction requirements, refutuhnp.
Total capi t4 gequhements s 672 5 1.876 l dwidends and Shoreham post settlement costt Comtructmn ,
requirements were $230 milhon, refundmp amounded to _
596 tudhon and dwidend payments on the Company's cephal Provide; 1990 19H9
~
preferred stock and common stock amounted to 568 milhon g,,,,,, ,,,,,, u g,y and $125 million, respectively. Shoreham post settlement (locrea e m) W d C,nh Ibbn.n 5 237 5 (247) costs m 1990 amounted to $153 milhon, mcludmg $73 f ong.Tenn WM 112 1,542 million of property taxes. shon-lenn 1)ctit - il2 For 1991, total opital requirements (excluding conunon Prefttied stm L - 3n9 stock dividendQ are estimated at $506 nullion, of which I nunung Costi 2 (81) comtruction requirements are ntimated to be 5246 mdlion. Intemal Ca'h Generanon refundmp are $29 mdlian, preferred stock Unkmg timd ho'" U.l" r.uions M 2.M requirements are $14 million, preferred stock dividends are Tmal Capital Puvided '
5 672 5 1.876
$67 million, and Shoreham post settlement com are ntimated at approumately $150 nullion, includmg 577 For further mtbnnatio ce the Statement of Cash f lows -
milhon of property taxet flowever, the overall les el of and Note 1 of No,e to f inancial Sutemenit f or Shoreham pmt settlement com in 1901 will largely depend infonn.uion with rop ..t to tinancial stabihty adjmtment on the proceedmp currently before the Nuclear llegulatory (iSA) revenun, see Noin 1 and 2 of Notn to Emannal Conuniwion. I or a fimhcr diwuuion respecting Shoreham, St,nemenn, we Note 9 of Noen to Financial Statemenn.
. ~ _ - - . ~ - . - - . - - . . -~ ~ _ - - - _ - - - - ~ ~ ~ - --- - -
8 i
Investnient Hatity, Results of' Operations 1 I The 1989 Settlement we intended to improve the gjn;n ,
Genpany's cre&t ratmp, and in 1989 the rating agencie'
, in Pr% cannnp for common sto6 L were approumately 4 bficarntly upgraded dleir rJhrlp on cJL h of die Collipally %
$2(d mdlloih or 52.3n per (osiititori dure, w ha h aclicca j ncipal secun.ic' i
the positive ellects of the inM9 settlement for the entire year.
t hinng 1990, cac h of the ratmg agencin f.urther upgragled Iwnnp f.it coinnnin uock in PN aho retin t a i hange its ratinp on the Company's pnncipal iemritics temiong
) m dw Gqum's method of rnognizing gas resenuet in ratinp at December 31, lyl of unnimum im otment LHrawepinuh 1, PNO, the Company % revenues include grade for the Companyi lint Mortgage lion h and ;
estimated comumption of gas dehrered to (usionicts, but CsAN IIondt mit et I4lled at niontII+Othi, tcMdting in tlic IIdI accrual The Companybecontics are rated by Momiv,s Investor',
obli unbill: d ga revenuet ~1he cumulauve clicit of this Service. Inc. (Moody'sh Standard and Poor,s Lorporat"? at unnng s hange un reard Pm e,umnp by approunutely iy (S& P). I m h investon Servicr, Inc. (htdo and Duti ~
512 inilhon, nd of t.o. edbca. of Hu enn per unmnon sture.
and Phelps (DAP).
bdudmg tlns item, carninp 6ir uunmon sto(L in 1990 Tbc durt below mdicates the ratmp f.or cash of the ,
Companyi prinapal wcuntin at December 31, Pm aiul dd har bem appaniutdy 051 nullnin, or $126 per the minimurn investment grade ratmp med by each agency.
wmmon duw In 1989, the nep.my inmned a h>w ha connnon stock i
Moody's SAE Illdt _ DAE of Jppro(niiately 5175 inillion, or 51.57 per (ommon share rnulung tiom recordmg non-cah (harge4 to net inconic lint Mortgage 110mh llaa3 tillib lillib lillll ~
G< llotals llaa3 tillll' Illlll' lillli-abmy dw 1989 Settlement and the Clan Settlement Debenturn llal ilth lith 1111 b"""""E '
preferred Stos t ba2 Illh till lilk U"M d* "IC '"I' ""N "Y "" ""
in luioks the wntc-otl)*f o in tenuinmg itwesunent m Minirsiurii Inn estmeru Grade fina3 111111 - Illlll- 111111-Shoreham und other related awen) aint the nublidunent of the IItA. The net low rnuhing therchon). and the reducoon ofnet mcome enulting lium the cewation of Al C ;
Capitahradon '
actnnng on Shorcham, whuh mitigated s n h wnte-off, Cyitahration (defined a the coul of long-term debt, muled appmxunacly $269 nulhon, no of tax benefin, or preferred uock and cnmmon durcownen' nputy) we C H per common share. Upon the eficcovenew of the Clas approximatdy $7J bilhon at December 31, PN, an mcreme Seulement, the Company rewnled a charge to mmme of fiom $7.2 billion at December 31,19H9.1hc approsinute emimmly 5113 million, nn of ux bcnclin, or 51.02
$112 million increne in capitalitation pnmarily telleen the per monnon dure, Much n prnented the prcwn value, inocaw in the Companfs retamed earninp winch tellen' yone 34 Pmo of the mul amount of the Claw Settlement.
the PJ90 carnir p for common uock of $263 million offset, Aho, the Company ,
in part, by the dedaration of common stock dmdends. Point Nuclear Power unon,k,Umtthe2 other (NMP2),cotenann the PSC and of Nmc Mile Capitahration, at December 31,1989 was approxunatdy other minnted panin reached an agreement inJanuary Um
$M7 n,ilhon higher than the Daember 31,1988 balance with rnpcct to the comtro tion of NMP2 and in opera-of 56.6 bilhon. The incnase in capitahration refleco the tion ihmugh lanuary 19, 1990 Under the tenm of the increaw in debt awociated with the 1989 financing activity' agt:cment, the Companyi share of thsallowed com would partially offset by the payment of dwidends Onchuhng the
' wrepe appmsinutdy $7 million, net of tax benefin, payment of $390 million of pretcried uock thvalends m or 6 cena per connnon dure, and thew cosa were charged arrean), and a redonion in retained canunp cauwd by the '
to mcome in 19M9 m accontance wuh Sutement ofi inancul
- Companyi 1989 nei low Accounting Sundank No. 90 (SFAS No. 90).
At December 31,1990,1989 and 19hM, the componen" Exchulmg thne three itena, cannnp for common uock of the Company % capuahration ranos were a follow" in 1989 wouhlluve been approxinutely $213 million, or 4 , O Capitallration Itatlos 1990 IW9 1988 in 19xM, the Compny incurred a low for common stock Long-Term Debt. 62.2 % 63 A SIN of approximatdy 51.1 luthon, or 510.0M per common share Preferred Smck- 9,4 %7 15A rnuhing from a non-cash write-down attribuuble to Common shucownen' Equiry 28.4 211 _32 9 adopting SI AS No. 90. 't he write down amounted to 100.0 % loo in ihn nN dpproximately $1,3 bilhon, net of tax benetin, or $12.10
- per connnon share arul rnuhed pnncipally from terum com of Shorcluin and NMP2 whah the PSC detennined the Company nuy not recover. licfore this write-down, cartunp Ior common Mock m !98N Were approxklute!y
$224 milhon, or $2.02 per connnon share.
, m-,~~ . - , , . , - , - , - -n -_-w,,, .- ,.,,,,,-n- ----.~----,wwwn -re,-,e --a- r m w,- m m e- , ~w-- w e-s- m v p wrg w-*,><*~ mv+e ep -s w' ~ Y t
liart ;tp (hml pet iotttinon shate 6it 1990,19M9 and Avrtage customer cornuniptiott det te.iwd by $17 198x are shown Iwlow,'I he presentatum tetietts per shaic Lihm au-bours (LWh). of approumately 3.P)... in Uni, datJ on the bEis of CUhidmg and includittp the llenn pilntafily at the result af sliter factors (1) salci to other dewribed alm e. utthfies were down by 101 intlhon kWh; (2) about 211
__.. tinlhon kWh in potcnttal ules were lost to mdependent 1990 19x0 14N8 power producers atul cogener,tuon ventures, most notable 1,anung% F-ulmimg (lic of which b the Grtuuman Corporation and (3) the succewful I ollowing itettn 5 2,26 5 1.92 5 2.n2 iinpleinentation of the Companyi .iggremvc cornervatmn
- Uninlled Gas llrvennes ,10 -
progrann. Weather won tiot a ugmt'icant tactor iti IV!NI. In e 1989 hetticment -
(2.41) 1954, average cotautuption inticawd sontpared to 198H,
- Cl.ns Settlenient -
(i.n2) -
due to tolder weather in the 6utrth quarter of 19H9, olfwt
- $F % No 9n -
( n#Ljl 2J) m part, by i cooler sununer ,md the implementation of 2 Linungs (I am) l'cr energy conwrvation progranu Connnan Wre $ 2.36 & tl.57n $ 410.0S) I he average number of electnc (ustonters wrved iti l'FNi
% 8 apptostinatcly 1911J klO, up about 6M iil, or O 6"b over Exchhhng thew itelin, the favorabh varialu e between 19M9 'I he itiercaw in 19N9 coinpared to 19K8 was 1990 and 1989 carmnp was due to higher revenues atal about 9,5an, or 12%.
lower liederal income t1 % in lif!O othet, itt part, by ingher lleveliues froin hiel(ost ad httnents were highet in 1990, fuel expeturb and higher operatnig cNpelbes and operating prun nly due to unteawd oil pricet I he average ont of tases The overall variance betwer01989 when (ompared tul burned in the ('oiiipanyi strain generatmg plants in to 1988, on the bMis of cMludmg the itena hsted, We due UNn we $20.49 pet battel, compared with $17,83 pet to higher operating expernes and operating taxes in 1989 banel u,1989. The average t mt of oil burned ni 1988 we olTset, in part, by higher revenuet $15 "A per barrel.
'b I)cccmber 1,1990, the Cornpatty was gt,inted a rate ReYt'llues increar of 5.trN arid had tetrived leicteaws of h.4% on
, Total revenun m 199ti, itx hiding +evenues froni recovery Icbruary 15,1989 and a trs on I)ccernber 1,1989. I heme of fuel cost % were $2.4 bdhon, which reprewnts an mercase rate increaws provnled additional revenues of 5H3 milhon of $49 inillion, or 4.2%, over 19M9 reverW 4. Total revetnics m 1990. No r.ite inn teaws were granted in 1988.
6st the Colnpanyi electne .ind g8 0lvrattoin for 199t l,1989 Ca t krtynun; 111 1990, gas revenuet dcctcard by $4
.tud 19M8 are shown below: nulhon, or Oh, contpared to 19H9. lle\ chues m 19H9 had merened 513 milhon, or 18% t ompared to 198H, Tbc 1990 19H9 19Kh incre.ncs (decreaws) in gas tevenues reuthed pntnanl) on unlium of b L m fronn the hillowiiig factorC llevennes I.lectru 5 2,086 $ 1,9M3 5 1,787 90/H9 89/HH Gn 361 M q gy ,,yy,n g pgg Total Itcs cnun $ 2,447 1 2348$ ?.th
~
( muunct Connunprion $ (10) $5 t :mtomrt Adthnons 4 4 l]<viric Rnytmes: in 1990, electric revenues mcteerd $103 ) url Cmt Adjusnnenu Q) 4 milhon, or G over 1989. llevenues in 1989 had mercawd N # I ""*'
4 ~
$196 millio;_ or 11Rh',, over 1988. The increaws iti electric Tot al 5 (4) $ 1T revenues resuhed pnmanly from the liillowmg factorv The decrece m average customer coiwomption in 1990 90/H9 89/xx wa 5 dekathenns (dth). or 3%, and was largely attnbutable bn m, ben M Lni to wirmer winter weather, I he year 1990 was, on acerage, CustonRV Comumptnin $ (69) $ 29 the Wannest year recorded in the (loinpatl[ wrVice terTitor'y Cmtomet Additiom 12 17 More such records have been Lept.
I uct Cmt Adpntments 77 75 lt,ne inctrases H3 7%
Total $ 103 % 196
um 4
I( Iveta[( IMnl et [,d% (@kol neb s(IN nI won k ek k@!AIs
'tpproxilliately 428 013), up about 4,Ulill, or 1J N, oVer 1989
. . bot J d140%loit of die a(Tottunng (f eattnel't of tlie 19H9 in addittoti to the tiew cthtomer% over $,000 exotmp Settlernent and the Clau hettlenient, see Notes 2 arn! 3, tesidential customen converted their heanng systettn to g.w tespectWely, of Notes to Fuuncial Statementt mmtly in the second half of tomt in PNo, federal income taxes u etc approximately $183 llevenues fmm fuel cost adjustmenn w cre lower m Pr% million, eu hidmg the tax etTni of the accountmg diaige due primarily to lower gas pnces and lowet salet The tbr unbdic.! gas tevenuet in 19N9, the Company recorded average cost of gauold in IWi was 53.19 per dth. compared a federal mcome tax benetit of 51.1 Inthon, principally with 53.11 per dth in 1989. The average cmt of gas sold reudting from the $horeham abandonment low deduction in 1988 was 53.10 per tith. and the Claw Nettlenu nt. federal income taxes in 1988 were in Januarv Pr% the Company was granted a gas rate approximately $112 mdhon. Clungn in fideral income taxn mercaw of appnnimately 1.3% or $5.5 mdlion amiually, are aho due to variatmos in ntt mwmc before taxn and .
1 hk rate mercaw provided the Company with revenues recognition of invntment tax creditt 21 of 54 nullion in 19% The Company did not recene any Operarang taxes predomuuntiy property taxes were 5370 gas rate increaws m 1989 or 198H milhon in W% compared to 5364 milhon in 1989 and $311 linthon ill l988.
Oper'atltig and Malritesisitice E.xpetist s I)cptni.ition experne itgreawd by 59 inilhon in 199(i Lxchidmg fuch and purchawd pover, operaung and by 510 nullion in 1989, prunarib attributable to and Inainteliance (OAM) experan were S476 nothon in addinonal plant m service. Interest expeme increawd by 524 1990, an increaw of 549 nullion, or i1.4% over 1989 nulhon in 1990 and 554 nnlhon in 1989, pnncipally due in 1989, thew O&M expemn imreased 569 nulhon, or to financing acovity in both yean. Changn in debt leveh
!9.4%, over 198N. and changn in internt ratn were contributing facton to
~Ille increaw in l994) Wat in path attributable to hipber changes lin internt expenw ni both yeart provniom for doubttid accounts reflectmg the weaknow in in 1990, the Company recorded non-cash chargn to the economy of the regmn. Although the Company bcliern mcome of approxonately 523 mdlism, or $15 million, net that the increawd level in account receivable arrean h of tax benefits tbr the ongomg cattying costs ofin obhgation temporary, neverthelew, the Company has expanded its under the Claw hettlement. In 1989 thew ongomg chargn procedurn and imtituted more aggreuive collection amounted to approsunately $ 16 nulhon, or $11 milhon, net practicet Also contnbuting to the inercase in OAM expemn of tas benefits in a&btion to the charge to income recorded in 1990 were higher rnearch and development expenditurn on June 30, 1989, rnuhmg from the Clan Settlement on variom project includmg improving the fuel etliciency becoming effective, in the CempanyN generating plants and increases in c'cetne in order to linut the Company's rate of return to 12.75%
and gas distnbution OAM expcndituret A significant .n allowed by the PSC's rate order thr the 1991 rate year, portion of the operating costs are attnbutable to t mh of whic h began on December 1,199n. carnings tbr 1990 were maintaining production plant and enhanced system rehabihty adnnted downward by 56.6 milhon.
in an effort to funher unpmvc cmtomer wrvice. The succeu
<- of this contmued edbet u evidenced by the extraorthnary Selected Finanelal Data perfbnnance and rehabihty of the Companyi electric mtem Addmonal mtbnnation rnpecting revenues expenws, and generating facihtiet Iligher cmts for employee wagn cleetnc and gas operating income and operationulata, capital and heahh imurante aho contributed to these increawt expenditutn and balance sheet mtbrmation Ihr the last live The inercaws in_1989 were principally attributable io ye.m n provided in Tables 1 through 10 of Selected i mancial the implement,ition of an aggtnuve energy comerva. Data Intbrmation with regard to the Company's bminew tion program, the tint full year of NMP2 operation and wgmenn ihr the last three yean is provided m Note 10 of the (mn of maintaining production plant. Iligher msa Notes to 1inancial Statements thr employer wagn and heahh insurance aho contnbuted to thne increasn.
Meport of Ernst & Young Independent A"'^:t:ra ,
l o tht sharcownen and thurd oflhrectoruit I ong htand Iighung Conipany -
We base authted the actoinpanying balante sheet ofI ong Idand laghnng Conipany as ofl)cerinber 31,1% and 109) and the related statements of meoine, sharcownen' equity and cash flows tiir cas h of the three yean in the penod ended liecember 31,1990. 'I bese finanual statements are the responubihty of the Compan) \ management Our responub;hty n to espress an opuuon on thne tinaneul stateillents based on out audits.
Tc toilducted our atidith til at t ordante With get)(rally
_ 22. anepted auchtmg standards. Tho' standards requite that we plan and pertonn the audit to obtain reasonable awurans e abellt Wiletller the fif tJoelal statelfic!1ts are fre( of flutert,ll tilbstalefilellt. $11 audit llidades cNalilllling, till a test bash, evidence supporting the amounn and dmlosurn in the financial statemenn. An auda also mdudn auesung the accountmg pnneipin uwd and ugintit ant estimato maae by inanagement, as well as evaluatmg the ocerall imancul statement presentation, We beheve that our audin proude a reasonable basis for our o;4:non.
In our (. pinion, the finannal statemeno refen e i to above prnellt ialtly, 111 all inaterial rn}ict a, the titumial poution of I ong idand Iightmg Company at I)e(cIllber 31,1991) and l')W), arid the rnula ot'its opera-tiom and its cash tlows for each of the three yean m the period ended licecmber 31,1900 in 6 onti>rnuts with generally ac cepted acc ounung pnnapIn.
e uavdie. sew yo,t
- aneaci, e,9i {~A <p a ~_T
('s 3.-)
(
J.
A',
Fhpanolai St:t:monts Staternent ofincome l'or year ended December 31 du thoui.ma (Mars e.uqift sh. rr mpm:3 L _ _ 1990 ,
1989 1988 itevenues I.lectne 5 2,085,605 $ 1,983,288 $ 1,786,933 Gas 361,242 364,326 350,901 Total llevenues _ . . _ . _ _
2,446,847 2,347,614- - 2.137,834 Expenses Operatiom - finel and purchased power 786,999 772,452 674,429 -
Operatiom - other 340,518 297,518 248,698 Maintenance 135,291 129,788 109.198 Depreciation, depletion and amortiratmn i12,784 103,430 93,596 liase fmancial component amortitation 100,971 50,485 -
23 llegulatory liability component amortitation (86,101) (43,038) -
Itate moderation component (297,214) (131,167) -
llegulatory habihty component - 793,592 -
Jamesport amortiranon - 104,160 -
Operating taxes 370,317 364,391 310,864 deralincome tax - current 3,638 14,612 18,395
[ederalincome tax (credit)-deferred an31other
_ , _ _ ,,_177,014 , _ _
(729.032) 181,716 l!!I E3PC"*' _
1,644,217_ 1,727,1_91, ,
j ,636,896 _
i Operating Income 802,630 620,423 300,938 Other incorne and (Deductioni)
Allowance for other timds used during comtruction, net of fmancial stability adjmtment revenuei 2,940 (54,91ty 75,491 ,
Other income and (deductiom) 42,901 33,630 (10,049) 1989 Settlement -
(303,947) -
Clau Scttlement (22,574) (186/kk)) -
I'C$0fdl"!guny tycreyht (charge) -- dgferred and other ,
, _ 2,629),_
( 322,991 88,364 l 3!al gthci ngonic l andpyfuythey,q,_____ - _ ,_. _, _
2q,638 (188,244) 153,706 income liefore Interest Charges and Cunmlative
_Efpet tyfAccounting Changes ,823,268_ _ 33,179 4 654,644 !
- Interest Charges and (Credits) _ _ _ _ _ _ _ _
Interest on long-tenn debt 467,700 453,267 410,966 Other interest 40,559 31,366 19,702 Allowance for borrowed funds med during comtruction, net of fmancia! stabil adjmtment revenues (4,62M) 43,349' (74,514)
Total Interest Charges and (Credits) 503,631 527,982 - 356,154, I"C""'c (I*yss) liefore Cumulative Elfect of AccountingElyanges ,
319,637 (95,803) '298,490 Cumulative Effect of Accounting Change for Unbilled Gas llevenues (nct of applicable taxes of 56,017) 11,680 - -
Cumulative Efrect af Accounting Change for Disallowed Costs jnet of applicable _ taxes of_5448,978), _ _ _ _ _ _ _ _ _
_ _ _ - -_l,345,110)
(_
Net income (Imss) 331,317 (95,803) (1,046,620)
Preferred stotk dailer3 drequirements
_ _ _ _ _ _ , , .68,161 79,232 74,508 Earnings (less) for Common Stock $ 263.156 $ (175.035) 5 (1,121,128) 1 Ayerage Conmmn Shares Outstanding (000). _ _ _ _ __11,290__
1 111,215_ _,_ , 111,177 ;
Earnings (Loss) per Conunon Sharc
- liefore cumulatwe etTect of accounting changes 5 2,26 5 (1.57) 5 2.02 -
. Gymulative ciTect ofacyounting changey __ __ ___
.10 .___- _ 2.10) (1 Earnings (Loss) per Conunon Share $ 2.36 $ (1.57) 5 (10.08) plyifendspeclaicd per Qy!nnmyypiare
$,_j.2{ _ J_,_ .50 $ , _ - -
Pro Forma Earnings-with Accounting Changes Applied Retroactively Earr 'ngs (loss) (br common stot k $ 251,476 $ (173,251) $ 223,712 Earnine (km) per common share $ 2,26 5 (1.56) -5 2.01 cre Nous to I:inawial stat < nua nts.
i
11alance Slicet Aucts At Den mber 31 du thn an h el M'ma 1990 1989 Utility Plant I lectric $ 3,213.032 $ 3,115,879 Gas 565,272 519,979 Conunon 141,700 131,ns9 Construction work m progress 183,337 128,H20 Nuclear fact m proten and m reactor 47,481 42,743 4,150,H22 3,939,410 24 1 cu - Aconnulated deprecunon, depletion and amortizanon 1,262,743 1,158,253 Iotal Net Unhty I'lant 2,888,079 2.781,1;7 llegulatory Asset llase fmancial component (less accumulated ann rtiranon of $151,456 and $50,48;) _
3,887,373 3,98x 344 Other Property and Investenents Nonutility property, pnncipally at cost 4,327 4,574 Other investments and dspouts 2.054 1.47h
'lotal Other l'roperty and Investments 6,3 H I 6,h5t l Current Assets C,wh and cash cymvalenn 102,936 340,304
$pecial deposits 21,492 27,636 Customer accounts recenab!c (lew allowance for doubtful accounts of $18,6x4 and 55,072) 216,732 221,156 Other accounts recenable 9,694 12,901 Accrued resenue 138,917 173,031 Materials and supplies a average cost 92,138 82,776 I uct oil at average cost 68.866 30,232 Gas in norage at average (ost 41,466 35,422 l> repayments and other current awets 33,Hl9 52,571 Total Current Awets 726,060 982,032 Deferred Charges llate inoderation coinponent 411,443 102,971 Shoreham post settlement costs 225,818 75,044 Shoicham nuclear fuel 92,069 97,925 Unamornied storm damage (osts 34,754 40,002 Unamortized cost of muing securines 132,875 150.610 Accumulated deferred income taxes 359,768 262,29K Other 78,064 32,705 Total Deterred Charges 1,334,791 762,455 Total Aucts S H,842,684 5 H,520,038 Sr Lt.s to Ananaa! /suremenn
e Cepliallratioti aind Liabilities _ _ , _ _ _ __ _
10M9
.A._t Deerinbe.r 31 (lu #hemam6 ef kl!.m) _ . . . . .
. . _ - . _ , _ . . . _ . . ._ _ _._ __1990._ . _ . _ _ -
Capitallrution 1.onptenu debt $ 4,556,016 5 4,5Ni,016 Unanmnited premium and
_.kimount) on delf t, , _ _ , . _ _ _ .
(23,125) _
, _. ._ _ 2_8,587) (
4.53M91 - _ ._... _i531 42y 1 Preferred stock - redemption regmred $27,550 541,187 DEIIMDtoCL 29Uedginption reclaired _
154,674 _
. _ _ _ __155,592 i7d Tpt,al, P eti ]S . S, tot k , _ . _ _ _ . _ , _ ._ _ _
682,2 2 4 ._ - , _, _ fi9(i,779 Common stock 556,620 556,247 Premium on capital stock - 992,H85 991,724 Capital stock expeme (42,676) (42,916)
I.lfs'Jedid"! 'E _
i _ . _ __._., _ __.. _ ._- . _ - . ._. _ _. ._56M 05 __ ._ 43f! fi90
-Total Conunon Slwrowr!rrf Ihp!i tL _ ., , 2f!6h234 .._11 941,745 Tptal Cap.italization _ _ _,, _. ,
7,2H2,3 49 7,169,953 Current Liabilities Current matunties of long-term debt 29,000 7,(Wlo-Cutrent redemption requirements i of preferred stock 13,616 13,638 Accounts payable and accrued expemes 189,029 207,795-
^
- Accrued taes (includmg ibderal income taes of $28,453 and 525,631) 56,2 4H 98A35 Acenied interest 69,175 64,425 Divittends payable 53,279 39,173 Clau Settlernent 20,000 21,960
, ElDUS)."Cr SP d D$It' __ _ ___ _ _ _ . _19.4 N3_ _ __
I8.459 Total Current ,yabdities __ . _ _ _ _ _ , _
1449,830
_ _ 4] O,885 Delined Credits 1989 Settlement (reditu 182,720 191,933 i Clav Settlement 167.569 164,040 Accumulated deferred intome taci 634,704 430,933 !
N ier _ _ . _ _ _
_ i 117,l72_._ _ _, _ ,8_l ,4 4 3 -
IntAIMrred J'rnhts _ . . . _ . _ _ . . _ . . . . . _ . _ _ _ . _ _ _ _ l.102..M5 _ _._ _N,349 Ileserves for Clairns, Damages,
_ Penilgns an31 !!cn.ejlts_ _ _ _ __, _ _ _ . . ._ ._
,,_ H,340_ _ _, . _ 10,851 Cornmitnu_nts and Contingencies __ _. _ ._ ,_ _ _ _,_ _. , .
Total Capitalization and Liabilitics $ 8,842,684 5 8,520,03H sa Men to lhnamial st.ncmenn.
e Sharcowners' Equity At licternbt r 31 the thou,,nish er ,l.ill.na 1990 1989 1988 Staternent ofllrtained l!arningt llalancc, January 1 $ 436,690 $ 679,579 $ 1,801,919 Ad3 - Reuncted fbt preferred unck dwidend requorments at bepnning of year - 341,mx 265,2HS Aall (deduct) - Net unorne (low) for the year 331,317 (95,803) (1,046,62a) l)cduct - Cash dmdcods declared on pretened stotk 68,21H 429,749 -
1)cduct - Cash dmjends declared on counnon stock 139,128 55,618 -
1)cdm - Capaal stock expense 256 2,727 -
liedos t - ltestnctt d thr prefened stock dwidend
~y '
requurint ots at end of year . ,
341,mx llalante,1)cccinber 31 $ 560,405 5 436B80 s 679.579 Call Prue Per Sharc 1)cccmber 31, Iwo l'inal_
l' referred Stock Par Wlue 5100 per Share, Cumulauve:
Share. authonted 7,000,000 7p kip o 7p o,i k en Shares usurd and outuandmg 2,528,400 2,624,172 2,715,1 t o
$harcs hdd m treasury * - - 283,500 59ts Senes 11 5101.m 5101 00 $ 10,000 $ log o 5 10,mo 4.2% %enes I) 102D 6 102 00 7,000 79 0 79 0 4.35% Ncncs l' 102 00 1023 0 20,000 209 0 20p o 4.35% Series i 102Ao 102J 0 5,000 59 0 590 51/NE Nenes iI 102 oil 102J O 20,000 20p C 20p o 5 3/4"n Senes I Convertible 100.00 1( kip i 2.674 3,592 4,050 N.I2% Senes J l01 J o 101Jo 25,000 25p o 25p o M..kr u $cnes K 103.29 103.29 30,000 30p o 309 0 7.4(r6 henes 1 *
- 103 66 ImJo 22,400 23,450 27,650 8 4% Senes M*
- 10192 14 30 26,600 2Xp o 3390 M St r?,, Senes it *
- h!2 00 26,250 30 9 o 1003.0 459 0 9.hi rl, Senes $*
- 103on 10010 57,916 60,375 72,562 Total Par Value 5100 5 252,840 5 262,417 S 2';9,862 Pat Wlue $25 per Sharc, Cumulauvc:
Shares tuthorized 30,000,000 309 op o 30p op o Shares mued and outstandmg 17,720,000 17,920 9 0 17,140 9 0 Shares hcid m treasury * - -
1,06090
$2.47 helics li' * $ 25.25 S 25.25 5 28,000 $ '~,iop o S 40,I k w i S2.13 Nenes P 28.5" 27.~75 35,000 359 0 35 9 o
$3,31 5enes 'l *
- 25.75 25J o 60,000 63 9 80 75,G00 54 25 henes U * * - - - -
659 0
$3.50 Series V * * - - - -
7590
$152 Series W - - -
65p o
$150 henes X * * - - - -
100 9 o 52.6; Series Y *
- 27.65 25J o 320,000 320 9 o -
Total Par Value $25 $ 443,000 $ 44S 9 0 5 4558 0 1.cu - Smkmg hmd requiremenu $ 13,616 5 13,638 5 19,888 l .cw - Treamry unck at cou* - -
5s,430 Add - Itetamed earnings restncted for
_ pteferred stock dwulend regt_ntemenn - -
341,ons-Total PreferTod Stock $ 6H2,224 S 696,779 s 1,017,552 Conunon Stork Par Value 55 per Share Shares authonicd 150,000,000 150p o p o 1509 o#o Shares asued and outstandmg i11,324.081 111,249,4t,X l11,193 9 18 increase m shares ountandmg _ 74,613 56,400 43,190 increaW in 5b par Value $ 373 $ 2N2 5 2lt, increaw in prennom on carnal sto(L 5 924 S bos s 149 increa,e (decrease) m t apital sta k ewcnw $ (240) s (13,235) $ 7 S e %to os thua,wal matenwntw *Ih u to nu et annaat ,h&mg jwn! ,c,tuurnu nte * *ltulenst ten rugmrat, su %te ! ,
, $3f"""' " N.9"E __ _ _ _ . _ .-
/
' For year ended December 31 pn rgiu,and,,fdollow _ 1990 _ 1989 1988 Op: rating Activitics:
Net income (Loss) $ 331,317 $ (95,N03) 5 (1,046,620) -1 Adjustinents to reconcile net incorne (loss) to net c:sh provided by operating activitics:
Cmuulative effect of accounting change ihr unbilled gas revenues (i1,680) - -
L,) *
- Cumulative etTect of accounting change for dnatlowed costs - - 1,345,110 Depreciation, depletion and amortiranon i12,784 103,430 93,596 l'rovision for doubtful accounts 30.097 12,347 H,694 Base fmancial component amortiration 100,971 50,4 H5 -
llegulatory hability component amortiration (86,101) (43,03H) -
Itate moderation component (297,214) (131,167) - 27 llegulatory liability component ' - 793,592 -
Jamesport amortization - 104,160 -
19"' Settlement - 303,947 -
Cl . 3citic ment 22,574 186,000 --
Federal income taxes (credit)- deferred and other 179,643 (1,052.023) 93.452 Allowance for other funds med during comtruction (2,940) I,166 (177,656)
Other 18,040 39,478 19,682 Ch:nges in operating assets and liabilitics:
Accounts receivable (22,463) (53,324) (33,269)
Accrued revenue 30,748 (97,983) (31,1H5)
Materials and supplies, fuel oil and gas in storage (48,040) (6,6Hl)- H,414 Prepayments and other current aucts 23,752 23,H90 4,965 Accounts payable and accrued expemes 2,345 42,818 11,814 Clan Settlement (20,129) - -
Accrued taxes (42,IH7) 66,750 9.577 01 h gr_ _ ..,, , _ , . (45?L
._ . [7,456) ji,695 Net Cash Provided by Operating Activmes _
321,05H _ 240,588_ 312,269 Investing Activities:
Comtruction and nuclear fuel expendnutn (229,525) (297.396) (5H6.514)
Financial stability adjmtment revenun _ _
96.180- 2{0,013-
' Comtruction and nuclear fuel experiditures, net of fmancial stabihty adjmtment revenues (229,525) (201,216) (3H3,501) ,
' Shorch,im pmt settlement costs (152,675) (75,044) -
lleceivable- Nine Mile Point 2 wetlement - -
52,200 Other _
Hi , ,(3?3) _ _ _ _1532)
Nc( Cash Used in investing Activ_itici .. _ _ _ _
(3H2,119) 3 76,653)_ ,(331,833)
Financing Activitics:
Proceeds from iuuance oflong tenn debt i12.319 1,541,350 -
Proceeds from iuuance ofshort teon debt - 111,585 - !
lledemption oflong-term debt (H2,000) (732,585) (81,195)
~ lledemption ofshort tenu debt -
(I i 1.585) -
Proceeds from sale of preferred sto< L -
309.120 -
lledemption of preferred stock (13,659) (307,738) -
Preferred stock dwidends paid (6H,046) (4 IH,38h -
Common stock dividends paid (125,192)' (27,807) -
Acquisition of trecury stock - - (1,400) (17,549)
Cost of suuing long-tenn debt ;1,327) (53,I56) (2HO)
Cost related to the sale ofpreferred stock -
(24,827) --
- Other 1,598 p50L _ 356-Net Cagt Pryyided byJUwd irppnancing Activines _
_(176,307); 283,820 (98,66H)
Net increne (Decrease) in Cash and Cah Equivalents S (237,368) 5 247,755 s (118,232)
Ca.h and cah equwalcuts at beginning of year $ 340,304 5 92,549 $ 210,781 NetjncySee (dgreaclin Sash and caQp3 valents i J237,368) . 247,755 _
(118,232)
Cah and Cah Equivalents at End of Year 5 102,936 $ 340,304 5 92,549
. See Mw rs nnandal Starnnentu
N:tro to Finanti St:t:mont3 ,
Note 1. Suminary ol' Significant Depreciation and Anmrtiradon Accounting l'olicies ~l he pnn nuun t;u deprn anon nuk nom the applaa-llic ('olnpJoy's Ju ourttilig poluin 1 oritbrin to generally non of so.ught hne rain to the ongmal i ost, by group %
of deprenable properon in wtva c. I he rates arc detcrmmed accepted auountmg pmmiples (GA AP) .n thev appit to a rego!ated enterprise It% uTounting reconb arc nlJtutallied by age.htc stuthn pcnormed annualh on Jcptn uble in anordance with the L,'mfbrm Nystem of Au otma propcrtlet IIcptcGatton was equivalent to approVmately
. 32 o,3 1 and M 'lbrclectncaiul2 C .2 97 anJ 2 W pre cnbni by the i,ubhc Service (.ommmion of the Statt for gas of ics;m tu c .n nage depin iable plant una for the of N,cW 't,ork (l,SL.) Jihl the I cdcral l$nctgy llcgulatory inno anJ 19% rnpu tn ch.
s can i'm, Commtwion tl l itL.).
Utility Plant Abandotunents and Disallow unces ol' Plant Costs in Dn ember 1%n. the I nunt ial Au ounnng stamlards g Addinom to and replacemcnn of unhty plant are lloard d Ahlh nsunt statement of I manual Acmunt.
i capitahted at origmal nnt, whK h includo iliaterial, labot overhead mJ an allowam e tbr the nnt of finah incJ thumg ing standards N AM No 90, Itegulated i nterprnn--
.. An ounung for Abarulonmenn aml I humm am n of Plant unntruction (AI L.), net of im.un ial staluhty aJimtment (I sA) revenuet ,t,he cost of renewals aint bettermenn (.ost \l Ah N,o 4tl reqtorn, ainong other mattert that a lou be recogmerd w hen it bn omo probable that unts of relating to uinn of property n aJded to utihty plant. .I bc cost of property replaced, reured or otherw nc dninned of.
a pl.mt u di be dnalkm al thr taremakmg purposc on the n dnlueted f ron' ) utility plant athl, gef terall% togelber w llh mst < f an abandonn! plant n m cu ns of the prncnt s alue dnnlantlHig 4 osti }c% ally sal % Ige, n (llJf pl d' to ,K ( unlul.ited of ths turure in enuo npn tni to be scahrni relatn e to
~
the ah nhloncd plant As a tt unh ot adoptmg hl A\ N,o 9a deprco. anon. T.he ont of rep.nn and mitmi tenewah n eth 6 tn e lannan- 1,1"% t he ( ..ompam s lWs finamial charged to maintename expeme Mm propertin o, ut h as -
staicmena retkct a wruc-d m n of net auch, amountmg to polc% wire and meters) arc accounted tbr on an n t rage unit cost basn by year of mstalianon- apptosunately 513 bdhon. m t of tn c0n n, or 512 In per monnon share, wlm h wa u munted tbr a the cumulatnc Allowance (br 1.unds Used During L,onstruct,on etln t of a c hange m as t ounnng penuplc. Ihn wntc.
.I.he Umtbnu system of Account detion Al(,, u tm h dow n relatnl pnnapalh to u rt,nn com of shoich.nn n not an item of current cah inmme, a the net cost of determirncd to he iluprudent by the l'M. l11 19h3 and bl borrowed funds for mmerm tion purpows and a it.nonable the ntunate e of Jannan . I m of the (,ompany,s shair of Nmc Mdc Pomt N.ucle.o Pourt stanon, Umt 2 rate of return upon the unhtyi nputy. w ben so mcd M, n computed monthly ming a rate permitted by iI Hl. on (NMP2) msa m nu w of the amount pnn nicd m the PNi that pomon of mmtrm non woik m progrew ((.%,IP) wlm-h NMP2 wtticinctit anning the iotenann of N.MI'2. An n not mcluded m the CompanyN rate bac. .I he portum addilloflaI adDntinent rLlatnig to NMI'2 w n recorded it Dn ember Um, w ha h n dm msnt m Notn 4 and 11. In of Al(.. relatmg to bonowed thods a meluded m the Intnrst junc 19%. the (.ompany rn orded the cdccts of the C,hargn and (C,rnhts) secuon of the Statement of ha ome.
i S A revenun, wluch were anthonted by the PM. .
1989 $ctticment and m lin embct 19so in onled an and iccewcJ fron 'W4 up to the effectn enew of thc aJ,hnonal < harer to canongs tch,cenng accmom to (crtam 191 > N.ettlemem, provided the Company with .ulhtion.d otunain iclatmg to the Im9 Ncttlement, w hh h arc rn enues, w hich w ere m nceu of. the amounts to dncowed m Notn 2 and 11.
i which the Company we enutled under comennonal N,uclear Plant Decommim,om. ng L,osts ratemalmg and reduced the cost of comirucnon through .
"b .'
an oWwt to Ali: " " " " * " b
.i be average alinual Al(., rate, Without givnig et[ct t to nun for NMP2 are bemg prouded for m cln tnc ratn mmpouluhng W,n I1.Uh,12.2(r$ and 12.12%, for the )can "' "N' "E '" "E "'^ ""E" " '" " U " "
1990, 1989 'and 19xR, respectively. 'I he a crage annual 1 or a fun naiwion of!"NMP2 do omnnusonmg J
ALC rate, rict of tax, which had been principally applied t osis we Note 4.
to the Shorcham Nuclear hmer Stanon (shorcham)
CWIP, without gwmg etTect to mmpoumhng, we 9.m L,ap,uaHradonJrciniunn. Diumunu and bpenin for the vear 1988
""'"*"!" "' d"'"u nn and npc ows niand to the nulam C of long-term debt arc Jrnortt/cd OVcr the in n of l}le twucs (lapital stos k c\pcine relatrd to that pornon of pret'enni sim k required to be ruicemed is u nuco-od .n an aJ.nnonent to ret.nned cannngs upon rnicmption unless the prcthrtui st4% k n it.decined bc}oW pal Olble, Ill u hn ll 6 he ally rnult!!!/ patti, fict t.ii (Inc relaf al t aplia! stot k c Npctne n in (o dcd as a ldohma! prennum on (apual stik k l
l l
l 1
l l
- dem.a mh5 A me_ A 44 m.4 W hhW F 45 f L 4 k.~h, 4 w h_Eu a M -A-' -aM.w-' __44.mdAJ.l.L. Atas.wwf.pe4__'_f_
4-e
. The capital stock expense and redemption anu awocuted Fuct Cost Adjustinents with redeeming Preferred Stock Serin % V. W and X and t he Company's electric and ga tarilliinclude niel unt the cmt ofimunce of Preferred Stock Senn Y are bemg adjustment dausn icptnentmg the ditlerenic between actual
(! amortued over ten yeart fuel emts and the liiel cmts allowed in the Company's i- base tantf ratn. The Company, to at hieve a proper matching fleserves for Claina Danuiges, Pernloris arid llerietits of onts and revenun, defers thne adjustnienn, tiet of
< two arning from dainn agaimt the Company and related mcone tax carcen. to tinwe future periods in
- cxtraordinary Storm kmn are paroall, sdf mmred. w hit h they wd! be billed or ercdued to customen. l'unnant Amounn provided are nedged to the rnerves b.ned upon to the lux 9 Sn& ment, the Company tramfened the experience, risk of lon, actuarial ntinutn and/or speotic den tred balance of si1 A iielhon of electric niel ema g . orden of the P5C collected from customen m esceu of in actual fuel own as of April 15, 1989, to a deferred credit account, Revenues and flates 'I he Company a currently recording electnc thel mst ll EfTective January 1, IV% the Company changed m odicutd from ratepayen m exccu of actual fuel costs as method of accountmg for unbilled gas tevenun to indade a habihty, until the final dispmition of such hibdity is
, cirimated commuption and related revenun ihr all g.n deternuned by the PSC servicn dehvered to cmtomen but not yt t bdled at memh- l hitC had ruled that, subject to its regulanons, mientate end. Prevmmly, unbilled gas revenun were recogmied imly pipchne comp. min may pan on to their customen certain ,
ihr emtomen billed on a bi monthly cyde basis ib the emt winch rnufted when demand for natural gas from month in winch they were nomully not billed. Thn change, mientate gas pipcime companin dedined due to dunging which was made in cmpuncuon with the Company's pas market muihnont in 19S9, the PSC detennined that 87.5%
rate raw conduded in January 1990. resuhs in betta ofihne cmn, know n as take-or-pay (1 OP) cmn. will be
. _ matching ot'revenun and expemn and pmvideuominency recovered from ratepayen, and, accordmgly, the Company with the Company's revenue recogninon method Ihr w rote otr in 19xna pproximatdy $31 nullion, net of tas electric revenuet The errect of the t hange on income belbre etreca, whuh reprew na the nunuted non-recoverable the cumulauve eflect of accounting changn and carr,;ngs pornon of I OP cout j thr common stock ihr the year ended liercmber 31.100 was not nuterial. Federal income Taxes Effccuve January 1,19M, the Company recorded an The Company provida deferred federal income taxes auet for unbilled electnc revenun. tbr all customen through unh rnpect to certam ddlerences between net income i 1)ei ember 31, in87, and a corrnponding habihty amountmg berbre meome taxn and t.nable income in certam imtancn to 563.2 milhon to conibnn to an order of the PSC in in when approved by the PSC, as dmimed m Note M. The 1)cccmber 1987 rate deenion, Previomly, unbilled electnc Company defen the benefit of 6% of pre-1982 gas and revenun were recognited only for cuuomen billed on a prc-lux 3 decine and 10% of all other invntment tax 4
bi-momhly cycle basis for the month in winch they am credm, with rnpca to regu!ated propertin, when realized nonnally not bdled. Punuant to the same order, the on us tax returnt Company was allowed to amortire the hability and, For ratemaking purpmes, certain accumulated deferred
- thcrefore. increase electne revenues by approximately $1.8 f.deral income taxe are deducted from rate base and -
milhon per month. The liabihty was fblly amortued at amortired or otherwiw apphed at a reduction (increne) in
- i)ccember 31,19no. faleral inwmc tax expeme in future yean. Accumulated
- OnJan,ury 25,1991, the Company tiled a request with deferred investment tex cretha are amortued ratably over the PSC to increase in ge rates etrect ve l>n ember 1,1991 the hvo of the related propertiet ,
by 7.7% or 535 million in additional revenun. This The tax edien ofother differences between income for requnt redecn the expamion of the Companvi gas financial statement purpows and Ihr federal income tax
- bminew and pre ents in latnt projectiom of capital purpmes are accounted tbr as current adjmtmenn in federal eXperidtturn and operatiorn and maintenance expeinet in income tax provisiont adJition, the Company is proposing a weather nonnahiation in l')cecmber 1987, the FASil iwned SFAS No. 96,
- dauw, cominent wah the PSC's approval of weather Accounting thr income Taxn, edictive for tiscal yean adjuument -dausn for other New Wik gas utilities, to beginning after ikcember 15,198x. The FASil subsequendy '
eliminate the errect of weather on the revenue level to be deferred the errective date of SFAS No. 46 to fiscal yean ntab!ohed by the PSC. begmning atier I)ecember 15, 1991. SFAS No. 96 will Electnc rates under the 1989 Settlement are dacuwed require, among other matten, recognition of the amount m Note 2. cf current and deferred taxes payable or refundable at the date of the finandal uatements as a resuk of all evenn that have been recogniicd in the fmancial uatemenn and
adjustment of deferred income taxes for an enacted change Upon the etTectivenew of the 1989 Settleinent, the ,
_in tax laws. I or regulated enterpnses, SFAS No. 96 will Company simultancomly recorded on its llalance Sheet prohibit net of tax anountmg and tcportmg and require the retirement ofits myntment in Shoreham and llokum recognition of a deferred tax liabihty thr the tax benefits Itnomces Corporation (llokum) and the estabhshment of which are tion ed through to its cmtomen and the esputy a regulatory awet known as the I mannal llemurce Awet component of Al C A regulatory anet or habihty shouki (FllA). The Itate Moderation Agreement (ItMA), one of be tecognized relatmg to such items ifit h probable that the constituent docutuents of the 1989 Settlernent, provides the future increaw or decre.nc in taxes payable thereon for the tidl recovery of the Fila. The IitA has two shall be recovered from or returned to custonters thf ough components the liase l inaticial Cotnponent (llFC) and the future rateL The Company does not expect to adopt $FAS ltate Moderation componctit (ItMC). 'I he liFC, which No. 96 pnot to January 1,1992, whish u dl provide as imoally estabhshed, represents the prewnt value of the additionalinne for the Company to nnnplete its evaluatiott filture net-aher-tax cash flows which the itMA provided l" and analysis of SF AN No. 90. The unpact of SFAS No. 96 the Company fbr its finansial recovery, The liFC, which on the StJtcinent ofIncome h not c".pected to be inJterial, b granted ratt baw trediment under the terna of the itMA, Ilowever, the Comp.uly estimam that had it adopted SFAS n included in the Conipanyi revenue requireittents No. 96 at December 31,1990, the Company would have through an amortintmn included m rates over a 40 year recorded an JecumulJted defeth d tax habihty and an penod on J strJlph(-hne bJsk% begmningjuly 1,1989. 'I he otTsetting regulatory awet of approximately $1.5 bilhon. l(MC, w hich wdl proude the Company with a substantial amount of non-cash earnings over the next several yean, Supplernental information for Statement le0ccts the ditference between the Companyi revenue of Cash Flows requirements under conventional ratemaking and the The Company considen as cash equivalents all highly revenues resultmg from the implementation of the rate hquid investments wah a matunty of three months or len nmJeration plan pronded for m the ItMA. This rate when purchased. 'I he Company made federal mcume tax moderation plan is deugt.ed to hold electnc rate inercaws payment < of 59 nom o and sl7pw m dunng the ycan 19W to the levels pronded for in the itMA, subject to the and 1988, ropectively. The Company did not make any adjmtments provuled for therem. The itMC is based on federal meome tax payments dunng 1989. Addaionally, the ibtecast data tiled in connection with the itMA, adjusted Company received retimds of federal income taxes appheable to retlest actual property t nes, cost of asbestos removal, to prior yean of $23,588doo, $2#.np o and $7,827,(o0 internt expense, energy conwrvauon and load management dunng the yean 1990 1989 and 19x8, respectively. The program cwts cosa to provide added electne system Company made intere:t payments totahng 5479,278 9 0, rehabihty and innation. The llMC initially inercases as the
$475Ji729 0 and 5422,7809 0, bs fore the reducuon of the differe nee betu een revenues resulting from the allowance ihr borrowed timds uwd during construenon, implementation of the rate moderation plan provided for during the yean 1990,1989 and 1988, respectively, m the itMA and revenue requirements under conven-tional ratemaking, together w th a canymg charge based on Note 2. The 1989 Settlement the allowed rate of return on rate baw, are deferred and
. will mbsequently decrea e and n expected, based on the On i ebruary 28,1989, the Company and tue State of.
rate fding discuwed below, to be ftdly amortized by the year New York (by its Governor) entered into the 1989 901 m tb dded avec girmem m mvmd
$cttlement wuling rtain inues relating to the Company Immedutely prior to the etTectiveness of the 1989 and providmg, among other matten, for the tramfer of. Settlement, the amount of the Company's investment in Shoreham and its subsequent decommtmomng. l'he 1989 Shoreham and llokum was approximately $4.2 billion. At Setdement recites the mtention of the paran that the Inne 30,1989, the llFC was approximately $4.0 bilhan. The Company shall be returned to investment grade f manc al Eompany rec ognized a low inJune 1989, of approximately condition and that the Company and the State of New York
$62 milhon, net of tax eticcts, which pnmanly retlected the anticipate that the PSC shall ensure that the future impacts thtrerence between the recorded costs of the Compauv's on rates are to be minimized to the maxunum extent investment in Shoreham and llokum and the llFC. As a practicable It n the Company's posmon that these objecuves result of the PSC's approval of the itMA in April 1989, the .
can be achieved, m part, through the continued receipt of C u W hevd - h the remaining approvah adequate and timely rate rebet.
m- for the efTectivenew of the 1989 Settlement would be obtamed and that the 1989 Settlement would become effective. Accordingly, the Company, etTective January 1,1989, cea ed the accrual of AFC on Shoreham in its GAAP basis nnancial statements, the result of which was to reduce net mcome by approximately $200 million
- through June 1989 The discontinuance of accruing AFC on Shoreham had no etTect on the Company's cash Gow and mitigated the foregomg write-otI remiting l
i
h from the effectivenew of the 1989 Setdement. The FSA the ItMA. To keep the llMC amortization petiod liom revenue otTset to AFC execeded AlC recended during mcreasing beyond twelve years, the Companyi fihng the year ended 1)ecember 31,1989 through the date of contaim a propmal to credit wveral defencd rate-the etTectivenew of the 1989 Settlement, at which time payer benefits directly to the itMC, includmg amounts the FSA revenues ceased. collected in execu of actual fuel costs and any earned The total amount of I SA revenues, net of tax returm in ncew of targeted allowed retmm, that may effects, was 5% and $203 milhon durin 1989 and materialire. I he Company has also propmed a met haimm 1988, respectively. to reduce the unpact of expenenemg clet tric ules that The itMA targets an allowed common esptity retum of are significantly below the Companyi forecast by providmg 12.77% for the year endmg November 30, ti?>l and the minimum level of ules revenues net of fuel and grow contemplates that the Comp.my will apply to the PSC for receipts taxes, that the Company mmt receive to f dly the targeted annnal rate increaws of 4.5% to 5.tr4 m amortire the itMC within twelve years in thn rate fihng.
each year ihr an eight year period beginning 1)cccmber 1, the Company has propmed that the 70 basis point int entive H 1991. The Company may retain an adduional 70 bads be limited to 50 pointt points of the earned return on common e6pnty in excew A regulatory habibtv of approximately $794 nulhou was of the targeted allowed return as a result of reducing recorded in June 1989, to prewrve an amount equivalent preferred stock dividend requirements adjmted ihr to the ratepayer tax benefus attributable to the Shoreham scheduled sinking fund requirements, and ifit succewfully abandonment and n being amortired over a ten year penod implements an aggrewive conservation and demand on a straight-hne basis from the etli'ctive date of the 1989 side management program. Earned returm on common Settlement. Under the 1989 Settlement, certain tas benefits equity in execu of the targeted allowed returm, adjmted of the tramactiom are to be shared between ratepayen and thr the thregoing, will be apphed to reduce the itMC or sharrownen. The tax benefit arising from the abandonment mitigate rates, as determined by the PSC at the end ofcach low deduction has been othet agaimt the corresponding rate year. The Cc:npany did not earn in excess of the regulatory habihty in the Companyi llalance Sheet as it targeted allowed returm, as adju ted, for the yean ended could not have been fully rnognized under GAAP were November 30,1990 or November 30,1989 it not for the fact that its recovery is awured under the 1989 On 1)ecember 28, Pm, the Cr mpany filed a rate request Settlement through the regulatory liabihty otTwt.
with the PSC to implement the initial targeted rate increan The 1989 Settlement amount on the Siatement of hicome established in the 1989 Settlement. If approved by the PSC, of approumately 5 \04 nulhon ihr the year ended 1)ecember the Company's propoul would mcreaw electnc ratn by 31,1989, pnncipally reflects the net th0' erem e between the SDL a year begmning on 1)ecember 1 in 1991,1992 and write-otT of Shoreham and llokum, the cuabinhment of 1993, respectively, betbre giving etreet to the rate reductium the liFC, and the adjustment required to cmrespond with required by the Clau Settlement discuwed in Note 3. The the negotiated settlement amount, Company's request is comistent with the ratemaking Upon he c0ccuvenew of the 1989 Settlement, nucleat principin estabhshed by the PSC when it approved the fuel rehted to Shoreham was reclamtied to dell tred chargn itMA. The retum on equity is aho consistent with the itMA. and is bemg amort red and tecovered through ratn over
'The allowed common equity returm contemplated by the a 40 year period on a straight-line remaining hic basit
' Company under the new rate filing are 12.2% for the year Shoreham post settlement costs (deconuniwioning, payments endmg November 30,1992 and 1135% fbr the years ending m heu of prope ty taxn and other costs as incurred) are November 30,1993 and 1994, being capitahved and amortired and recovered through
.The itMA nintemplain that the original awumptions rates over a 40 year per od on a straight-kne remaining underlying the ItMA conid change, with the PSC hfe basis under the ItMA.
considering any changes i i the awumptiom upon wluch the lhe 1989 Settlement credits on the llalance Sheet targeted increa es were based. The auumptiom set Ibrth in of approximately 5183 million, net of amortiration, retlects the tihng have been updated to redect current condaiom, an adjmtment of the book write-otr to the negotiated including, among othen, reduced demand (brecastt 1 he 1989 Settlement amount, and is being amortiicd over a
. updated assumptiom would have required rate increan in 10 ycar period.
execu of the targeted amounts envisioned by the itM A m The Company believn that the accoimting treatment order to fully amortire the itMC in approximately ten yeart anbrded the iIRA under the 1989 Settlement confonm to
-Ilowever,in order to hmit the rate request to the targeted G A.AP. For purpows of administering as Uniform System levels, the Company pniposn that the itMC be ftdly of Accounts I:LitC has adopted the providom of Sl'AS No, icu vered in a twelve year period. In this fihng, the itMC 9n wlmh sets forth the criteria for recognition of regulatory balaace is projected to peak m 1994 at about $1 bilhon rather created awet resultmg from abandonmentt Accordingly, than the approximately $830 million origmally awumed in- the Company believes that the accounting treatment anbrded the litA confonm to I EllCi standards fbr accounting and awet recogmtion of regulatory created awett For a dkeuwion of the events and uncertainties which challenge the 1989 Settlement see Note 9.
1
]
e Oe e te NN ekk e tienk in cI a setkclnent a I(iv nt in 1986 (1956 NMP2
. willementh the Ph(I had linnled the (Inittpanyi tecovery On i. ebruary 14.1989, the Company and (ertam of m .
f rom .in latepayen of the costs mt utted in the (onstruction Ibrmer 00isen elitered into an agteement K, law Settlement) et NMP2 to S72,. imlhon, net of.tas efl.ectt I urthermore, wttimg a cini bwsuit agamst the L,ompany brought under oli (letober 24,191), the Ph(,, approved a settlement the fnletal llacketect Intluenced and Corrupt Organvanom agreement (twn NMP2 settlement) among the (,ompany.
Act (l(10,0 Act), allegmg that the (,ompany made other cotenana of NMP2 and other panics meludmg the madequate dadosurn beli,re the P$L. minernmg the New 'i ork State Attorney b.encral and Stati. of the PNL. ,
comtruction and wmpleuon ut.nudcar generating faciliues and seekmg damago on behalf of the daw of all prnent .
?"I""P """ ' "'" " "8 '"un rmarding the ( onsuucmin of NMP' and in operation through January 19,19m I he and iortner ratepJ)ert 1)unlig 199W the deenions of tiie 1900 NMP2 setdement aho dnposn of appeah (onternmg Dntrict C.ourt damhsing the illLO Act lawsuit and n approving the Claw Settlement werc aninned by thc Unned the mi WPq wulanent and protndings relatal to the prudence of the mienann wah rnpes t to NMI, Statn t,ourt of.Appeah and no further appeak wete taken.
outJges l< riot to jJtnhafy 2tl, l9'hl. Undet the ternn of.t he I he Llaw hettlement, prmidn for rate reducoota 1990 NMP2 wttlement the (.ompany n lumted to aggregating 5390 milhon to be made to the ntepaven. .
en overmg 57 th milhon of. ongmal plam msn fann ns ruonthly electric bilh over a ten year period. as u ell as .
, eatepa crs net of tas eHectt .I he etTn t of the 1990 NMP2 approxanately $10 milhon for attorneys fen and espernn
"" "'*"#'""'"'*"'""' " "*P""Y
- and certain other msts awociated with the Claw Settlement.
_ 1)ecember 1989, as thu uoed m Note 11.
During 1990, the Cornpany inade paymenn of $10 mdhon for %Rh costs arid $10 milhon in utnfacoon of.t he danm NMP(. has mntracted wuh the Umted Statn 1)crartment
"'. "'W ' " # N"' .'. ',"*Pd"Y of the fonner ratepayert Itate reductiom maler the Claw hettlement began m 1)ecember 1990 and wdl contmue n rennbunmg NMP(, T""for"'it "18% share of the ont under through May 2000. Upon the etrecovenew of the Claw Settlement, the Company recorded the prnent value of the
" "I *"'" " ~"* "E""Y
' "I.' " #'"I"*'
- P" " ! *""" "" ""' " """" " ""I* *" "" E" "' " " "" -
o sn fin NMP2, hawd upon a uudy perlonned by NMP( f .,
L, law $cttlement atJune 30,1989 e a charge to income.
n 5 3. , nullmn (Ill 19M9 dollah) awaltung dlJl de-i Notc 4. Nine Mile l'olnt Nuclear '" ' """"'"" "' 2"27 "' 5237 ""Hion (ni Power Station, Unit 2 "2"" ' " "d""'"'
" " " " "" F"I h " '" "" " " ' " I " " " " '" ' d d " " " " " " ~
uomng msn mllected from the ( ompany,s ratepayen The Company ha an 18% undwided mternt in NMP2 through December 31,1990 we 521 mdhon. Amount w hich h operated by Niagara Mohawk l', wer Corporanon collected by the Company tbr the decomnumonmg of the (NMPC) near Oswego, New YorL Ownenhip of NMP2 cont unmated portion of the NMP2 plant, whuh b thared by Ove cotenmtu the Company (18S,h NMPC appmsnaate SW of total deconunimoning msts are to be (41%h New York State Elcetric & G.n (18%), Itochnter held in an mdependent decommunmning tnnt timd, Gas and Electric Corporation (14%) and Central Ilutkon estahinhed punuant to regulanom mued by the Nudcar Ge A Llectric Corporation (9N,). .At !)cccmber 31,1990, llegulatory Comunwon (NitC) govermng the fundmg of the Company \ net utility plant investment in NMP2 was nudcar plant deconunnsioning crott The Companyi plan SSl6 mithon, net of accumulated &precianon of $60 to fimd the tnnt we .ubmitted to the NitC tin approval milhon, which is induded in the Companyi rate base, m July 1990. The Companyi fundmp plan for Output of NMP2, which has a doign capabihty of 1,osa decommmmning msts will provide resonable awarance megawatts,inhared in the ume proportiom as the mienanti that, at the inne of ternunation of operation, adequate tionh rnpcetive owm nhip intere"s. The operating expemes of ihr the decomnumoning of the nuaanunated ponion of NMP2 are aho aHoratul to the cotenants in the ume NMP2 plant wdl be avadable. The Company k wesing a proportiom a their rnpecove ownenhip mtercut I he ruhng from the Internal itevenue Sctyk e (lits) in order to
, Company's share of thew expemes are mduded in the obtam quahtied um lear decomnuwinning tbnd statm for the appropnate operating expemes in the Statement ofincome. independent deconunhuoning trust fund. Thh uatm will The Company is required to pronde in respective share aDow the contnbutiom for the demnunimomng unn for of financing for any capital Jddniom to NMP2. Nudear contaminated plant to be deduct ble the meome tax purposes fuel msn awociated with NMP2 are bemg arnortiecd on m the tas year they are made, the basis of the quantity of heat produced Ihr the generation of deettiaty. I or regidatory purposn, Apnl 5,1988 ha been recognized as the commercial operation date for NMP2.
1 i
, NMPC has been notified by the NltC that NMP2 ha Note 6. Long-Tersti Debt been categorired "a teil uiring dose momtonng" An .
industry spomoted ovenight group perfbnned a site Each of the Conipanis ibur nuingages n a ben on evaluauon of NMP2 and reported deficiencies m wver,d substantially all of the Companyi propertiet
- key area. NMI'C has made conunitmenn to address thew fmdmgs. l..arst Mortgage The Company has been infonned by NMPC that, dunng AH of the bonsh inued under he First Mortgage, the fint reibchng outage at NMP2, NMPC diwovered a nicludmg thow iuued af terJune 1, PD5 and pledged with potentid problem with 'a pipe wekk The NRC ha infonned the Irustre of the (;&R Mongage (G&R Tnntre) a NMPC that the pipe weld muu be reimpected. The d ""al wcurity for Gncral and Refunding Hands (G& R Compmy estimates that its share of the cosa of the Hond4 are secured by the hen of the Iirst Mongage, lant reuupection and,if necewary, the repair, wdl not be matenal. ongage Bona pkdged wah the G&R Truster do not The Company beheves that it will bc able to recover most reprewnt outuandmg indebtedness of the Company, ~
33
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of thew costs. Amounh of such pledged bonds outuandmg were $449 milhon at December 31, Uno and Um9. The annu.d first Note 5. Capital Stock Mongage depreennon fund rqmrement of m9 mdhn Preferred Stock and sinking fund reqmrement of $12 milhon were satisfied Prefened uock dividends are cumnlauve. On September with property additmm and retired Fint Mongage Hon &,
1,1989, the Company paid dwidena amounting to respnuMy, ni january 19%
< approximately $390 miUion on all series of preferred stm L, then in arrean. At December 31, 1990, there were em U A N M"K"E" I he hen of the G&R Mortgage is subordmate to the hen
- preferred stock dividena in arrean. Redemption of various cries of preferred sto(L is etrected through the of the Rnt Mongage The annual G&R Mortgage sinking operation of variom sinking fund proviuons. OnJuly 25 tund retporernent ihr 19% due not later thanJune 30, FWl, is esumated at $26 milhon. The Company expcets to sainfy 1989, simultancom with the dedaration of all preferred stock dividens in arrean, the Company satalied sinking d"' '"4"*""~"' *id' retired G& R Hon &.
fund requiremena totahng approximately $56 milhon then in arrean on all series of preferred stock by creditmg gni Mortgage /1989 Term Loan Agreement previously acquired shares of prefened stock Iicld in the The Ihird Mongage is subordmate to the hem of Company % trecury. The aggregate par value of preferred die hnt Mongage and the G&R Mongage. The bank ,
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umk required to be redeemed m each of the yean 1991 Mt nured by die linni Mortgage was restructured through 1995 is $13.6 million. In October 1989, the onJune M 1989, at whkh utne, the Conipany entered mio Company whl 12,800,0% hares of Preferred Stock, $2 65, the 1989 Aniended and Restated Restmcturing Credit Series Y, cumulative, par value $25 per share. The Company
^ E'" '" C "' (IW9 Tenn loan Agreement) punuant to uwd the proceeds from the issuance of the Series Y Preferred which the Company n to pay to in lenthng banks Stock to call at applicable redemption prices in high cou
'PP'"xinntely $446 nullion in sixteen substantially Preferred Stock Series U,V,W and X. equal consecuuve quarterly instaHmenn unnmenemg on ;
January 1,1993 and endmg on Ocmber 1.1996. Punuant Preference Stock m the 1989 Term Loan Agreement, the Company has the None of the authorited 7,500,000 shares of opuon to connnit to one of three intereu rates indudmg:
(a) Adjmted Certificate of Deposit flate (CD hate) winch nonparticipating prefetence Mo(k, par value $1 per share, is a rMe bawd on the ceruficate of deposit rates of certain which ranksjunior to the preferred uock, are outuananp'.
of the lendmg banks, (b) Hase Rate which n generaHy a Conunon Stock iate based on Citibank, N.A/s prime rate and (c) 1.urodollar Of the 150,000,000 shares of authorized common stock Rate w hich is a rate based on the London Interbank Otli ring at December 31, PMO,1,905,929 shares were reserved Raw MHOE At Dewinber 3h 19% the Cmnpany for sale to all employees and 155,948 shares were reserved hd approxunnely $Mi nWhon outuanang under the for convenion of the Series ! Convenible Preferred "#" l""n lo n Agruna nt at thc LlHOR Rate which
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Stock at a rate of $17.15 per share. In addinon, the Company had reserved 6,802,247 shares for the Automatic Dividend Reinvestment Plan which has been unpended since February 1984. Common and preferred tock dividend limitatiom contained in the mortgage wcuring the Company's Bru Mortgage Honds are not material There are no dividend limitatiom contained in the Companyi other debt imtruments.
I:ourth Mortgage Authority 1-inancing Notes l he heurth Mortgage secures SM mdhon of the Authonty I mancing Notn are moed by the Ciunpany Company \ obhganom under the letter of eresht dewribed to the New York ht.ite linergs Itnean h and lievelopment below under the headmg Authority huanemg Notet Authont) (NYht ilDA) to sceure t ertam tas-exempt Through an Intentedaor Agreement. the letter of uedit Pollunon Control llevenue lionds (PCittl4 Licetra bank seemed by the f ourth Mongage bokh a ben on l ac ihues Itevenue ihmsh (l l itth) and Imhnuial Company property that is equal in rank to the hen hdd Des clopment llevenue lionds toued by NYSi llD A by the banks seemed by the Th'cd Mortgage.
, Certam of these tuinsh are supported by letten of t redit and are subjett to pentuhe tender at w hich ome then mterest 1989 Itevolving Credit Agreement rates are subject to redeternunanon When such letten of OnJune 30.1989, the Company and certam ofits lendmg credit expire, the Company n nputed to obtam either an banks entered into the 1989 llevohing Creda Agreement e sternmn of the letter of creda or mbsatute medit ba, Lup.
_t 3 (1989 ItCA) which provhlo creda to the Company through it neaher can be obtamed, the bomh mmt be redeemed October I,1992, secured by a 6nt hen upon as accounn unlew the Company purchases the bonds m heu of recenable and fuel od inventory, of up to 5300 nnihon, tedempoon and mbsequently remarken them.
The Company has the opuon to comnnt to one of three The $100 nuthon ofi I ltlk mued in 1990 are wheduled mternt rates induthnp (a) the Cl) llate, (b) the liase Itate to be tendered by the holden on June 1,1991. ~l b- $100 and (c) the 1:urodollar Itate. Currently, the 19s9 ItCA n nulhon ofITillh mued m 1989 are wheduled to be tendered unmed and remams avadable to the Company. 'I he by the holden on $cptember 3,1991. The 1990 and 1989 Company has agtced to pay a fee of one quarter of one Ll'ltth are each mpported by h tten of tred;t punuant to percent per annum on the unmed poruon. The terminanon whuh the letter of creda bank has agreed to pay the date of the 1989 ItC A may be extended for one year perioth pnnetpal, mterest and prenuum on any tendered El-lllh, upon the Companyi request dehvered to the lendmg banks m the aggtegate, up to approxnnatdy $109 nulhon int each in June of each year beginning in 1991. mue m the event of default. I he obhganon of the Company to rennburw the letter of creda bank n omeeured 'I kne Debentures letten of oeda expire on June 3,1993 and December 31, On Apnl 17, 1989 the Company mued $375 nnthon 1991, for the 1990 1.1 Itth and 1989 I I lith, respettn dy.
of debentures,113/s% Serin Due 1993. OnJuly 1I,1989, 'I he Company mucd an addaional S100 nulhon of the Company issued $1.1 bilhon of debentures (5400 I IItih m January 1991 wah an unnal internt rate of m, mdhon,10.25", herin Due 1994; S350 mdhon,10.875% Thne i IIllh are scheduled to be tendered by the hohlen henes Duc 1999 and $350 mdlion,11.375N 5eries Duc on I eeember 1,1991 Ihe 1991 1Ilith are mpported 2019). The Company med 5535 nulhon of the proceeds by a letter of credit punumt to which the letter of credit hom the iwuanec of the debenturn :o redeem, at appbc able bank has agreed to pay the pnnapal, mternt and redemption pnen, $495 million principal atnount of high prenuum on any tendered 1991 t iltth, m the aggregate, mternt rate G< lionds m Augtnt 1989. 'l he Company's up to approximedy 5109 nulhon m the event of detauh.
debentures are equal in rank wah all other umecured The obbganon of the Company to rennbune the letter indebtednew of the Company. of ernht bank h mnceured 'I he leuer of creda expan on January 24,1994 1 he $150 nulhon of PCitlh moed by NYSI ltDA m 1985 are deemed to be tendered by the hokien cath March 1.
The letter of credit bank, parually wcured by the l'ourth Mortgag< m the amount of SH5 nuthon, has agrced, m the event of default to pay the pnnapal, mternt and premium on the tendered PCillh, in the aggregat e, up to approximately $165 nnlhon Tha lettet of eredit expirn on heftember Ib,1992. Approxirnately Sl7 milhou of PClllh mued by NYSt.llDA m 1982 may be tendered by the botten every three yeart the next smh tender will occur in October 1991. The remaming 547 unthon of PCitlh were iwued at varymg thed rato and are not subject to tender, a
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Note 7, Itetirement llenefit I'lans Al.}2fCP"N. 3I @!.f!?'",me o/ dsiky _ 1990 1989 T he Coinpany manitains a pnniary defined benefit IIrst hlortgage llouds toado /Whrd lonJo }$ctnion plan (Prnuar) Plan) w hi(h covers 6ulntantully all 5% 5 erin 1. Due 1991 & 25,000 $ ;5pn enipk<yces, a suppleinental plan (Lupplemental Plan) w hu h 4.4tf% Serin M Due IW3 40,000 40 9 ): covers Lev executives and a retirrinent plah which covers 4%% Senn N Due IW4 25,000 25.9 M 25,000 the lloard ol ihret ton (Directori Plan). All remion unts 4.55% Senn O Due IWS 25 9 " are lome by the Company. The (.ompany 5 funding poliev 5%% Senn P Due 1996 40,000 aos o -
$b% Senn Q liue 1997 35,000 35,Mi o wn annudy to b Nng Nu a nununum 8,2tf4 Series il Due IVW 3 5,0(10 35 # O ainuunt 6 otnotetit with the rnluirements OI the 1 tuployee
'.%% Senes S Due 20W 25,000 25.i n o lletireinent Inanne Secunty Act of 1974 (1:ltiSA) pha such 7h% Senn U Due 2nol 40,000 aup M addinonal amounts, if any, as the Company may determine 7% Serin V 1)ue 2W1 50,000 5"# k' to be appro, riatr from tirne to time. Penuon benefits are u 7h"f, Series W Due 2002 50,006 Ao.m" detenEmd by creditmg the employee wah an amount l h 5 "rF d Due.2003 ._ _ J? ,000 0 finA n dek m s d W @ 6 4 h a t p r h g im c fita}frgMonge lion ( _ _ 450.000 4509 0 n a participant m the plan, phn an addinonal amount creihted General and Refunding llonds for each year the employee remann a participant beyond 12%% Serin Due 1992 - 75pn the age of 50. Employen are vntcJ m the remion plan 13%% Senn Due 1995 225,000 2259 0 atter five yean of wrvice with the (:ompanw '
11%% Senn Due 1996 250,000 250D M 9.75% Serin Due 19W 67,000 749xi 70,000 Prhmry Plan 9h% Scnn Due 20nn 70Mm I, "d'Y I,Id" ' I""
8% Senn Due 29o 50,000 Sopn .I- "#'"'d"dd*""""'""E"i#Cd 8%% Senes Due 2007 H5,000 H5po ni the llalaner Sheet at Des ember 31,1990 and 1989 were 9.20% Senn Due 2008 75.000 75p o as followv ll'A% Senn Due 2nl5 275,000 2'5 A M .._ ,
Total General and 1990 19H9
_,..N CN'"d.J."6 I I""M .
_ j.,097@00 Ig9.nx n tAnnone of dew +
Third Mortgage 4 toadal prnent value of benef t j939 Tenn loan Agreement _ _ 44fg341 446,341 ,8' benefn $ 3H3,H05 5 3M,535 Other Long-Tenn Debt ,,
Nonvnted beneGn 6d59 17p_46 enn Due IW3
^""*" " " """ * $
11 375,000 37590 ll.7tr% Scrin Due IW3 175,000 175D o Plan , met at fair value $ 46H,050 $ 454,159 10.25% Senn Due IW4 400,000 4toAH Anuanal prnent value of 11.75% Serin Due IW4 175,000 175 A M ~~ m ~eted benefn nblpnon 464 423,769
~t 797 10.875% Serin Due 1999 350,000 350Alo 11.59% Senn Due 2014 350,000 350Ao Pngnied benem_ oMganon 11.375% Senn Due 2019 350,000 350A o Ic" than plan awets 5 3,253 $ 30,390 Unrecogum d Januar) 1, net Total Debenturn 2,175,000 2 l?5 AM obbganom 25,922 27,N55 Authori y Finanong Notes (current r.ne) Unrecogured net pm V0,741) (56,535)
Pollution Control Revenue liond' M mpud Deema pemon ont 5 (1,566) $ 1,710 -
1976 Senn Due .'no6 (7.5%) 28,375 28,375 1979 Senes Due 2009 (7.H%) 19.100- 19,100 Net penodic pemion cmt for 1990,1989 and 1988 for 1982 Senn Due 2012 (H%%) 17.200 17,2("
the Primary Plan included the following componenn:
1985 Senn Due 2016 (5.75%) 150,000 15090 Electric Facihtin Revenue llona 1990 1989 1988 100,000 D O,000 1989 Series Due 2019 (6.3 %)
1990 Senn Due 2020 (6.5%) 1h0,000 .,
% 4,wg yg herme wst - benent camed Indmtrial Development Revenue lionJs
& iring de period $ 12,720 $ 10,797 $ 9,800 1976 Senn Due 20n6 (7.5%) 2,000 2Do
" u on pnucced Total Authority Huancing N_otn. ..-- 416,675-
-116,675_
_ benefit obhgation and IYdI. OtJJer [gpTern1 Debt.,__2,591,675, 2 A91,675 service cost 32,264 31,45M 29 # 4
^""'I'"" "" P d" l d"ets (23,121) (49,316) (349,1)
T 4,585,016 4,567,016 Clotal Net amornranon aad deferra! (5,449L 22.955 g,773 urrentLong-Tenn Matunnn Debt 2h000, _ 'Wm Net nenodic penuon cnst $ 16,414 s sua g 13 rm, Total Long.Tenn Debt I cu Current Matunties S 4,556,016 5 4,59i.m6
- lhe agryte of the Compny's lmtcrm das he m the nur k yws n 129,000 (199I), t10,000 (l992L $ 70.t,P.t (l 99 k lTI U U (1994) and $365,%3 (199.9 1
, Awumptiom nsed in accounting for the Primary Postrctirement lienefits Other Than Pensions ,
Plan were: In addition to providmg pemion benefits, the Company provides certain health care and life imurance benefite, for 1990 1989 19 % retired employect Substantially all of the Company's thount rate 7.25 % 7.5% 8.trs. C*P I"YCC' inay become chgib!c for these benefit *. if they Itaic of Ibture compemanon reach retirement age while working for the Company. These increaws 6.0% tam 6ps and similar benc6ts for active employees are provided Long-term rate of return through imurance comp.aies whose premiums are bawd on auen 7.0% 7.0% 7 t r4 on the bc acfits paid during the year. The cmt of providing thew benctits on a pay-awyou-go method w.n $29A10# 0, The Primary Plan aucts at fair alue primarily include $27,155JMK) and $23,298JX0 lbr 1990,1989 and 1988, cash, cash equivalents, group annuities, bonds and listed respectively, and were recognized as an expense as prennums 36 equity wcuntiet were paid. The cost of providing thow benetin for Pursuant to an order inued by the PSC in 1987, the approximately 2,100 retirecs,is not wparable fmm the cost Company has deferred a total of $7.3 million as of!)cccmber of providing benefits (br approximately 5,900 active 31,1990, which represents the excess of pemion expeme employees ihr the yean 1988 through 1990 collected from its ratepayen over that determined under in l)ecember 1990, the FASil inued Si AS No.106, SI AS No. S7, Employen' Accounting for Pensiont Employen' Accounting for Postretirement llenc6ts Other Than Pemiom. SI AS No.100 estabinhes accouming Supplemental Plan standards ihr employers' accounting thr such benefits SFAS The Supplement;,1 Plan provides, without contnbouon No.106 w di require the Company to (hange its method from such employees, supplemental death and retire- of accounting for such benefits from a pay-as-you-go basis ment benetin for ollicen and other Ley executives. The to an accrual basi <, by requinng the accrual of the expected Supplemental Plan is a non-quahfied plan under the cost of provaling pmtretirement benefin over the penod Internal llevenue Code. I)eath benefits are currently the employee service is rendered. T! c Company nmst adopt provided by imurance. Itetirement benefits, which are SFAS No.106 byJanuary 1,1993 and does not expect to unfunded, total approximately $561JKK), $546JKK) and do so pnor to that date. The Company has not yet
$688D K), and were recognited as an expenw in 1990,19H9 completed its analysis and therefore cannot determine the and 1988, respectively. impact on the Company's financial statements of adopting SFAS No.106. The Company beheves that the PSC would lloard of Directors Plan permit it to record a regulatory awet ihr any increaw m The 1)irecter's Plan, adopted m February 1990, provides expenw rvsulung from the adopoon of this statement which benefits in directors who are not otTicen of the Company. would be recovered through rates at the time thew expenses I)irecton who have served in that capacity for more than are funded; this accountmg is subject to PSC approval.
five yean qualify a participants under the plan. The retirement benefits under the plan are unfunded and the expenw thr 1990 was not material. This plan is a non-qualified plan under the Internal llevenue Code.
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. Note 8. Federal luceme Taxes The federal income tax amounts included in the Statement of incon'e difier from the amounts which rnult front applying the statutory federal income tax rate to net income (loss) before income t.txn. The table below sets forth the reasons for such dilTerences. The 1989 difference results principally becatae the tax basis attributable to Shoreham was less than its recorded basis fbr fmancial statement purposes and the Fila and sertain other 1989 Settlemem iterm recorded by the Company pursuant to the 1989 Settlement have no tax basis.
(In rhomands of Mars) 1990 1489 1988
% of % of % of
- Pre-tax Pre-tax Pre-tax Amount income Amount income Amount income
- Fedml income tax, per x.auna.
- er y
income - current 5 3,tdis 5 11,612 5 18,395 -*
Deferred and other (see Note 1):
1989 Settlement Shoreham abandonment 3,239 (907,467) -
Jamesport recovery -
(104,160) -
llokum itesources Corporation -
(35,977) -
Itate moderatmn component 101,053 44,597 -
Other 1989 Settlement items _ (13,577) (3',500) -
Shoreham post settlement costs 61,475 6,656 -
Class Settlement (534) (01,240) -
Interest capitahied (3,220) (3,752) 185 Accrued utility revenues 727 (2,803) 8,131 Deferred tax credits (424) (580) (13,611) !
Accelerated tax depreciation 33,342 36,242 47,926 Call premiurm (3,111) 12,452 (221)
Fuel cmt adjmtments 4,879 4,451 1,448 ,
Nine Mile Point 2 deferred revenues _- 4,151 (4,151)
Capitalized overheads 2,287 1,2"'2 55,504 TitA 86 benefits 2,059 1.283 1,659 Other items, net (8,552) _ (7 p l8) _ _ _( ,3A 18L __
Total Deferred 179,643 . (1,052,023)_ 93,452 Total federal income tax expeme ' credit) 183,281 (1,037,4I!) 111,847 income (loss) before cumulanvc etTect of accounting changes 319,637 (95,803) 298,490 Income (!am) liefore Cumulative Etreet of Accounting Changes and income Taxes 5 502,918 5 (1,133,214) 5 410,337
- Statutory federal income tax (credit) 5 170,992 34.0 % 5 (385,293) 34.0% 5 139,515 34.0%
Additions (reductiom) in federal income tax resulting from:
1989 Settlement ,
Shoreham abandonment 4,035 0.8 (691,242) 61.0 - -
Jamespart recovery - -
20.101 (1.8) - -
llokum itesources Corporation _ - -
(34,015) 3m - -
Itate moderation component - -
(7,360) 0.7 - -
Other 1989 Settlement iterns - -
(19,826.i _ l .8 Allowance Ihr funds tned during comtruction (2,573) (0.5) 31,527 (2.8) (54,89m (13 4) 1icn date property taxes (8,757) (1.8) 20,034 (1.8) (2,67 ' (0.9)
Tax credits 1,537 0.3 13,531 (1.2) 4,153 1.0 ,
Excess of book depreciation over -
j tax depreciation 11,987 2.4 10,842 (1,0) 10.014 2.4 ,
t TRA 86 benefits 2,059 0.4 1,283 (0.1) 1,659 04 interest capitalized 6,031 1.2 T,251 (0.3) 8,066 2.0 Other items, net (2,030) (0.4) (252) 0.0 6,012 1.5 Total Federal income Tax fixpeme (Credit) 5 183,281 36.4 % 5 (1.037 411) 91.5% 5 111,847 27.3% ;
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( k] k((d 1, N , I Ac k oIIIpdIls !b bb b a
- I ruhng from the lits w hu h stated that the Cornpans u ould The 1989 hettleinent be enuded, for tcdcral mcome tas purposes. to .u' l he 1984 \cttlement prolubiti the Conipany troin abatalof OUent low didin tloH ln 4 000* **N 'U"'
ppegggng sltore}Lun at any les el of pow er. !n turIbeIalh e upon etFcctn cm - f Ue lei $cttlement. The Compam of dm rqmrenu nt, du Cinnpany has remos cd the nudcar Jaimed an .ibandonment hm deduction on its UNu federal tuel trom Shorchami reattot aiul apphed to the NitC for mt omc tas retum of approumatelv 513 luun n The wls from certam of the obhganom impmed by the tull-Companvi net operating lou carrvforw ard n esumated t" p wer operaung hccme. T he 1989 Setdement aho be approNintitely C bdhon at !hemb )I' I I provlues tot the trarnter of 5 iorehant to die 1 ong Nand On lanuary 8. UN. the Company teicwed a llevenac p m er Authonts (llPA) and the decommmiomng of Agent s lleport dnaHowmg certam deductuins clauncJ by shorcham tidhiwme authorvanon from the NltC The the Company on its tas tctunn for the ytan under audit. Con ve em Ih.H this tramfer wdl be completed 3h 1 he itcvemic Agent's lleport rene,n propowd aJjmtmerits wtthout creatmg a default uruler die Company \ inortgaget to the Companyi federal nuome tax retunn for 144 1 hc Company and L.lpA have tiled an appheation with the thmugh 140 wlm b. if smtamed would pve rne to tas NitC. which n pendmg. to tramfer shoreham's operatmg defiaencies totahne epproumately N mdhon. ,I he hceme to 1.lPA,1 IPA has filed a decomnuwionmg plan liir Company b pmtestmg some of the adjmtments arul $ck' Mioreham with the Nitt in proceedmgs before the NltC an admmntranvc and. if nt cewarv, a judiaal review of the ad de mma dw Murch.nn-hhng River Central Sdmol condmiom reached m the llevenue Apenti Report. ,I he lhstn( t and haentna and 1:npneen for Secure Energy, Inc.
Company cannot predict nther the tunmg or the manner mo an dw Compnvi ediira to fuhiH us ob,iecoves m w hich dm tnatter wdl be remlved If. how ever, the mula the F#K9 Settlement. In addinoa, three actmm uhunate dnpounon of am or au matters rahed in the bmught ag.nmt the Companv and othen, c hallengmg the llevenue Agenti lleport n advene to the Company, the UN9 Settl'ement have been appealed by the plamuth to the Company expects that any detinenacs that may arne wu New York Court of Appeah where they are stdl pendmg be subuannalh othet by the net operatmg low carnbaks T hr 6nt seeks. among other thmgs, to enjoin the defuel-awoaated wah the shoreham abandonment low dedynn"" mg at shoreham and to dedare that one of the documenu and thm any unpact would not have a matenal edert "" of the 1989 $cttlement is nuH and voul. The second case the Companyi fmannal ondman or t ash Dow' . sccks a nulgment dedarmg one of the documenn of the The amount ofinvestment tas credit 01 C) canytorward Do Y %dtdement nuH .md vmd and enjounng the propmed for finannal statement purpmes atter 194h n approxnnatdy trnfer of Shorcham. The thud caw wels to annul the s142 nulhon. Thew credm exput by the year 2ml I" duermnanon of the Pr which granteJ the Company rate accordame with the las itefonn Act of 10% fillA M"' ind m connecuon with the 1980 $cttlement.
11(: anowabic as credm to t.a rciono for yt an atter 14C 1 k Compny bacses that under the HMA the mmt be reduc ed by W The amount of the redu<non w di (b unv wdl be able to recm er from m s mtomen not be aHow ed as a c n da for any othe. taxahle year-au pnulem cosn relatmg to Shorcham, meurred after l he (.ompany h,n not provided deterred taxes on thc etTectn enew of the Um4 Setdement. through dcctne approxnnately SW nuthon of vanom other deducnom and r nes over the balance of a forty 9 ear penod etuhng depre(tatioli niethod dlIIerdu n W PIDpC IIY plJECd 'U 3@ ]k (bngny helleves that the itMA wdl service pnot to 1%1 w hnh, m c onfornuty wah +bc remam m fon c regaidlew of an mahdity to tramin ratcmakmg practKn of the PNC, have been flowed through. Mmrde Tlu Company has no reamn to beheve that the Thew various other Dow-through tas dedu6 tiom, w hu h PsC wdl fad to honor its conmutments, contamed are deducoble currently for tax purpmes but capitahied im in the itM A, respecung rate imrcaws tint the yean bepnn-accounnng and ratemalmg purposes, mdude ( ertam taxn' Ikabe* 1.19"1 through 1)ccember 1,1998 or a porunn of Al C penem and (crtam other empinvce r of dw FR A and other los9 hettlement-related benefm. see Note I wnh rnpret to M AS No. 96 whu h ddcrred Marget the Company mmt ajopt by no later than 1941 T he PSC required the Compan) to defer the eticet of cnt.un Tit A h6 ta s t hanges, inchuhng the bu er corporate iederal iin ome to rate, for tuture dnpmmon.1 hn rhul!cd m !cCo!dmg ali addinon.d N ! m h% b1 UU "U and s1
- nothon or nu ome ta espeme m 190't 19" and 1% rnpcetwely.
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. Litigation ' Commitments .
Adcfros: The Company is a co-defendant with nunu. The Company has entervd into mbstantial conunit-
- facturers, datnbutors, contractors and other utihties in ments nir ihmt fuel, gas mpply and purchawd posver. ,
penonal injury and wrongful death actiom brought by The (mts of fuel, gas supply and purchawd power are approximately 800 plaintiffs in New York County Supreme nonnally recovered from ratepayen through proviuons Court and in the United States Dnmct Court thr the E# tern m the Company's rate schedules. The Company has Dhtnet of New York allepng exposure since the 1930s to aho entered into a contract with New York Power asbestos in buildings The damages demanded in each of Authority to pay for a new interconnection between thew complaints range up to $55 million, including puninve Westchester and Nawau Counties. The Company wdl seek ,
damages, agaimt all defendants. To date, the caws of 91 to recover the costs of the interconnection, estimated at plaintiffs have proceeded to pre-trial discovery of which 25 approximately $314 million, from its ratepayen.
cases have been dispowd of. The Compar y has been dmniu- :
ed in 24 of these ca es and has settled one case for a Jc Nuclear Plant Insurance M mininnu amount. Diwovery is continuing with respect to T he Company has propeny damage imurance and third-the remaining claims. party boddy injury and property hability inmrance (br its Ennrenmental Martm: Th'e Company has been named 18% share in Nine Mile Point 2 and for Shoreham. The 1
by the United States Environmental Protection Agency pretniums tbr this coverage are not material. The policies as a potentially responsible party fbr the disposal of for this coverage provide ihr retroactive premium awemnents certain wastes at three ditTerent ides. While the outcome of under certain circunntancet Maimum retroactive premium these matten is not certain, based upon the Company % aweuments could be as much as approximately S6 million.
past experience in similar matten and the respective For property damage at each nuclear generating site, the .
fmancial condition of the other parues involved, the NitC requires a minimum of $ 1.06 billion of coverage. Tlw
- Company does not beheve chew nutten will have a matenal NltC has pren the Company a partial exemption from these i impact on its financial condition. requirements for Shoreham.
Contract Suit: The Company is aho invo!ved in Under certain circunntances, the Company may be. ,
litigation agaimt Sut1bik County in which both parties are awcwed additional amounts in the event of a nuclear incident. .
. seeking damages for the other's alleged breach of contract Under agreements estabbshed pursuant .to the Price -
conceming the preparation of an offsite ernergency response Andenon Act, the Company could be aueued up to l plan fbt Shoreham. In its propmed counterclaims. Sutlb1L approximately 574 million per nuclear incident in any one County seeks damages in the amount of $146 milhon year at any nuclear unit, but not in execu of approximately fbr alleged fraud in the inducement, breach of contract $12 million m payments per year fbr each incident. The
by the Company, tortious conduct and fraudulently Price Anderson Act aho lunits liabihty thr third-party boddy 4
procured utihty rates, as well as $700 milhon in alleged injury and third-party property damage arising out of a punitive damaget The Company has moved the court nuclear occurrence at each unit to $7.4 bilhon.
to impose smctiom on SufToR County relating to these clainn on the bois that the allegatmru are frivolom and ignore sigmticant precedent, induding the NitC's approval of the Company's evactation plan Ihr Shoreham and variom r
- Second Circuit Court of Appeal's decisions in related htigation between the partiet in addition, the Company .
has argued that there is no basis tbr puninvc damagts in this case. The Company iw,,ds to vigoroudy prosecute its
- claims against Sutibik County and to defend agaimt >
SutTolk Countvi counterclaimt -
r 1
'l 2
1 i
- o ,
Note 10. Segments of Business . ;
The Company is a public utihty operating company engaged in the pencration, dntribution and ute of electric energy and the purchase, datnbution and sale of natural gas to residential and commercial customen in Nawau and SutTolk Counties and the Itockaway Peninsula in Queern County, all on 1 ong Idand, New York. Identifiable assets by segment include net utihty plant, financial remurce awet, matenah and supphes (excluding common), accrued revenues, gas in storage, fuel and deferred charges (excluding conunon). Assets utilized for overall Cornpany operatioin conmt of other property and investments, cash, temporary cash investruents, special depmits, accounts receivable, prepayments and other current anets, unamortited debt expetne and other deferred charges.
1 Iln themands elJsllarn .
For year ended December 31 1990 1989 1988 i
40 Operating revenues:
Electric 5 2,085,605 5 1,983,288 $ 1,786,933 1 Gas 361,242 _ ._. _,_, _ 364,326 350,901 Total 5 2,446,847 5 2,347,614 5 2,137,834 Operating expenses: texduds in,eme tam)
Electric 5 1,141,050 $ 2,115,994 5 1,139,335 Gas _ _ _ . _ _ 322,515, .
325,617 29.7,450 Total $ 1,463,565 5 2A41,611 5 1,436,785 Operating incorne (loss): /Npre inmmr tam!
Electric $ 944,555 5 (132.706) $ 647,598.
Gas 38,727 38,709 53.451
- Total 983,282 (93,997) 701,049 ' 3 AFC, net of ISA revenues (7,568) 98,267 .(150,005)
Other income and deductiom (20,327) 456.317 10,049 Interest charges 508,259 484,633 430,668 Income taxes---operating 180,652 (714,420) 200,111 incpme t.ax.crnmyteIatutg__. , ._ .._ , . _ _ , _ _ _,2,6 2 9 _,__,p22,991L___ ,_ ,_,188,294)
Income (low) before cmnulative etTeet of accounting changes 319,637 (9;,803) 298,490 Cumulative etTect of accounting changes
-..{ t of, taxes) .
, 11,680 --
_ {1,345tl10)
Net income Oow) $ 331,317 5 (95,803) 5(1,046,620)
Depreciation, depletion and arnortization:
Electric $ 99,922 S 91,759 5 82,811 i Gas 12,862 11,671 10,735
-Total $- 112,784 5 103,430 $ 93,596 Construction and nuclear fuel expenditures:*
Electrie $ 151,425 5 .148,388 5 521,971 G35 -
. _ = _ . _ . . _ _ . _ _ _ - 81.104 0 _._. , , ___ _5 lg2_,__ _ _,_.J 186 Total $ 232,465 $ 200,050- 5 561,157 Identifiable assets: (at December 31)
Electric - $ 7,643,963 5 7.133,161 5 7,221 A72 Gas 540,355 .
451,447 410,115
- Total ' 8,184,318 7,584/h8 7,631,587 Awets utilized for overall Company operatiom 658,366, 935,430 694,750 Tot d Aucts S 8,842,684 $ 8,520,038 5 8,326,337
- Iruludes nonnash allowarucpr otherpnds wed Junng wratnution and exdudes wrcham post ustinnent wits.
~ . _ . - . . . - - . . _ ~ . . - . . _
1 e
, Note 11. Quarterly Financial Information (UruuditrJ) tin thawanh of dellars curpt ramingyvypon aarr>
- 1990 1989 Operating revenues:
for the quarter etnied March 31 5 665,531 5 606,733 June 30 $10,788 509,670 September 30 707,820 064,169 December 31 562,708 567,042 Operating income:
For the quaner ended March 31 5 202,899 $ 137,WO 4I june 30 167.410 109,9M Septembes 30 282,104 261,490 December 31 156,117 111,965 Net income (loss):
For the quaner emled March 31 5 90,356 (a) $ 5,5?! (b)
June 30 47,780 (215,314) (b)
Septeinber 30 156.848 139,028 December 31 36,333 - (25.108) (c)
Earnings (loss) for comenon stock:
Fcr the quaner ended March 31 5 73,205 (a) $ (14.271) (b)
June 30 30,681 (234,588) (b)
September 30 139,845 (19,314 December 31 19,425 (45,490) (c)
Earnings (loss) per common share:
For the quaner ended March 31 S .66 (a) $ (.13) (b)
June 30 _
.28 (2.11) (b)
September 30 1.26 1.07 December 31 .16 (.40) (c)
(a) EtTecti,e January 1,1990, the Company clunged its method of accounting for unbilled ga revetmes. The cumulative etlict of this change iikreased net income by approxunately $11.7 million, net of tax errects, or 5.11 per common share, for the fmt quarter. ,
(b) Etreetive January 1,1989, the Company ceased accruing AFC on Shoreham which reduced net income by approximately
$100 million, or 5.90 per common share, in each of the fint and second quarten. Addaionally, inJune 1989, the Company recognized kwes in connection with the 1989 Settlement and the Clau Settlement of approxinutely $62 million, net of tax etTects, and $113 million, net of tax etTects respectively, or s.55 and $1.02 per common share.
. (c) in December 1989, the Company recorded an additional charge to carninp of $7,2 milhon, net of tax etTects, or $.06 per conunon share, to reflect revisions to certain esthrutes relanng to the 1989 Settlement, in adchtion, as 1 result of an ag*eement in principle, reached in early 1990 on the tenm of the 1990 NMP2 settlement, in December 1989, the Company recorded a charge to caminp of $7.3 million, net of tax etTects, or 5.07 per common share, Further, as a result of a l'SC order relating to gas take-or-pay costs, the Company recorded, during the thurth quarter of 1989, a charge to caminp of $3.1 million, net of tax effects or S.03 per common share
I i
Select d Financl:1 D b i
. . . . _ . - _ . - . _ _ . . . - . ~ . _ . , _ . . , . _ . . _ . _ , . _ 1990 _ __ _--_1989 _ .. _1988 _ _ .198 _7.. .- _1_986 l
Sununary of Operations (su Lrrs is Fmawial stasementsi Table 1 Total revenues (000) S 2,446,847 $ 2.347,614 5 2,137,834 5 2,072,077 $ 1,977,121 Total operatmg income Oow) (000) j liefore federal income taxes $ 983,282 $ (93.997) S 701.049 $ 670,324 5 640,021 After federalincome tasn 5 802,630 $ 620,423 5 500,938 $ 382,(04 5 387,077
, Income (low) befbre cumulative ciliet l of accounti.ig changes (Rio) $ 319,637 5 (95.803) $ 298,490 S 269,888 5 316,675 I Cumulatwe etl'ect of accounting change for unbilled gas revenun (net of taxes) (00G $ 11,680 - - - -
Cumulative eflict of accounting change for 42 5 (1,345, 10)- - ;
dnallowed com (net of taxes) (un) - - -
12arninp (low) Ihr conunon stock (000) $ 263.156 5 (175,035) $ (1,121.128) 5 192,312 5 236,864 Average conunon shares outstanding (000) 111,290 111,215 111,177 111,129 111,085 Earninp Oow) per common dure before cumulative effect of accounting changes $ 2.26 s (1.57) 5 2.02 $ 1,73 5 2.13 Earni_np (kW uer conunon share $ 2.36 5 (1.57) 5 (10.08) $ l.73 5 2.13 Conunon mick dividouh declared per share $ 1.25 $ .50 - - -
J ikiok value per common share at year end $ 18.57 5 17.45 5 19.61 5 29.71 $ 27.99 Connnon sharrowners at year end 82,903 85,142 93,267 106.117 117,962 Itatio of earninp to fixed chargo 1.98
- 1.95 2.02 2.17 Itatio of carninp to combined fixed chargn and preferred snick dwidends 1.64
- 1.58 1.56 1 68 Itatia of carninp to fixed charges (excluding AFC and ItMC) 1.39 1.60 l Ao 1.53 Itatio of carninp toi ombined fixed charges {
.md preferred stock dividends
- 1,18 (excluding AFC and itMC) 1.15 1.30 1.24 Pro Ibrma carning - with accounting changes for Unbilled gas revenun Jnd diullowed pniject costs applied retroactively:
,. Earning (low) for common stock (0n0) $ 251,476 $ (173.251) S 223,712 S 177,414 5 30,364 lhirning (low) per conunon share $ 2.26 -S (1.56) 5 2,01 5 1.60 S. .28
- The Company had nb camays a cowrjhed dsarys.
_. . _ . _ . _ . , _ . - - . _ _ . . _ . = - . . _ _ . - - _ - - , . _ . - - - . _ _ _ _ _
Optrations and Maintenance Expense Details (In tho.nandi ordWlars! _ __ _ _ . ]I}ble 2 Total payroll and employee benefits S 378,831 5 '49.242 5 333.359 5 315,114 5 -283,427 I cu - Charged to comtruction and other 97,650 ,, f 117,761_ 129,990 115,315 ;i. lp2,987 Payroll and Employer lienefits Charged . _
t9.9Pcfdtio"L_ _ __ _ _.__ _ . 2 8,1,181 _23!,481 203,369 , 199.799 , 180,440 Fuck - electric operatiom .444,458 461,576 410.174 422,9'n 311,872 i:uch a gas operatiom 175,877 188.139 172,431 174,610 205,616
- Purchased power costs 168,749 128,36x 88,465 93,186 134,347 d"CIll$..ajmtnugLdefened ; _ , , _ _
_ (2,085)., J4111_ _ 3,359 _ _(5,104), 14_,180 Totappelju.! d pu'chayed_ipqt_ _ , _ _ 186.9?9,. 772 452 674,429. 685,689, fy66.015 - .
194,628 195,825' 154 j27, _ - J42,2,01 _ , _142pl4 A.U.".@CT._.-
Total Operatiom and Maintenance Expeme $ 1,262,808 $ 1,199,758 $ 1,032,325 5 1,027/,89 5 088,969.
Employees at December 31 __
6,630 6,239 6,281 6,378 6.219 i:
I-l erm.-,wwe
- - ._ . . -.. - - . - - . - . . . - - _ _ . _ . .. _ . - . . - - - . - . . . . ~ . . - - -
o 1990 . _ 198_9 _ _ _ _ . _ 1988 1987 1986 Elcetric Operating in,c.o_nicJryJ] ends gf dollarg _ _ _ _ _ _ _ _ Tabl._c3 llevenues ltesidential $ 997,868 $ 915,644 S 835,584 5 800,952 $ 744,898 Conunercial and industnal 1,017,387 481,740 883,267 849,626 804,387 Qther . _ _ , , __ __ _ ,, , __ _ 46,21_0 _ _ 43,024 43,930 56,394 51,447 System revenue 2,061,465 1,940,408 1,762,781 1,706.972 1,600,732 Sales to other utilities 24,140 42,880 24.152 11,889 11.057 Total llevenues 2,085,605 1,983,288 1,786,933 1,718,861 __ 1,61_l ]89, Expenses Operations - fuel and purchased power 611,122 584,313 501,998 511,079 460,399 o Operatiom - other 271,608 237,931 195,283 187,573 173,702 Maintenance 118,545 115,502 96,599 88,431 91,611 Depreciation 99.922 91,759 82,811 63,840 61,194 Base financial component amortization 100,971 50,485 - - -
' llegulatory liability component amortization (86,101) (43,038) - .- --
Itate moderation component (297,214) (131,167) - - -
Itegulatory liabihty component - 793,592 - - -
JJmesport amortization - l(4,160 - - -
Operating taxes 322,197 312,456 262,644 250,047 230,508 Federal inconu tax - current 3,138 14,612 18,394- 64,095 24,352 Federal income tax - deferregi and other _169,27_4 ,_ (738,500). 166,.$57 208,i>34, _ _218,256
- l'otal Expenyt_ _, ___ _ _1,3_13,462_ _l,3'f2,105 _l 324,236 , , 1@74,014 _ l.260,122 Electric Operating income s 772.143 5 591,183 $ 462,647 5 344,842 5 351,667 G_as Operatiry income (In alwm.m.h of Miarn Table 4 llevenues llesidential - space heating
- S 198,734 $ 209,192 5 201,312 $ 194,303 S 207,937
- other 30,854 31,692 31,803 32,877 35,393 Non-c:sidential, finn - space heating
- 68,441 72,351 68,114 63.267 68,380
- other 26,501 28,674 28,078 28.443 31,473 Tetal finn sales revenue 324,530 341,909 329,307 318,890 343,183 I"terrup.uble .ules
, __ _ , _30,515 _ _ l,9.226, _ _ ,18,82_1 2i l_50 _ _ 22,132 _
Total system ules tevenue 355,045 361,135 348,128- 343,040 . 365,315 Sales to other utilities - - - 4,970 -
Total sales revenue 355,045 361,135 348,128 348,oio 365,315 othegerenu_e,_ 6,197 3,191 2,773 .
5,206 17 Total llevenues _ 361,242 _364J26 350,901 353,216 365,332 Expenses Operatiom - fuel 175,877 188,139 172,431 l'i 4,610 205,616 Operatiom - other 68,910 59,5S7- 53,415 53,140 46,607 Maintenance 16,746 14,286 12,599 12,856 11,034 Depreciation, depletion and amoraration . 12,862 11,671 '10,785 10,065 8,945 Operating taxes 48,~ 20 51,935 48,220 50,112 47,484 Federal income tax - current 500 - - 19,482 16,895
- Federal income tax - deferred and other 7,740' 9,468 15,160 _j4.81l}_ (6,6,59)
'ljotal,Expemes -330,755 335,086 312,610 315 ,54 329,922 '
Gas Operating income __
$ 30,487 $ 29.240 $ 38,291 S 37,762 5- 35,410
- In the hea.4m d.nsyhanom, the remnes slwwn wm allgm wed iruludiry nenheatnN rw.
. , . - - - - - - y -
c._ .m _ _ . , .__-m .y, , ,%_, y,,.. . , _ , . , , . _ , , , m7,,y,.y...,m._ . , , . , , , , . , _ , , .,,y,,,,.J,,.y , , , , , , , , ,.,,.,.,y._., ._om3
.-____-.m._ _.__ _ _ _ ._ _ _.____ _...___ _ ._.._ ._._....._ _ _....._.._ _.__ . _ _ _ _ _ _ . .
I i
- l
. _ . . . - . ~ . . _ _ . . - . . _ _ _ . _ - - _ _ - . . _ _ _ - - - - . - - - - - - ~ !
i 1990 1989 1988- .- -1987 . - .1986 -
l Electric Sales and Custonicts_._ _ _._ _._. _ . . . . . _ _ _ _ _ _ _ . _. _ _ . _ ___ J able 5 ;
Sales - millions of LWh Itesidential 7,022 7,063 6,979 6,603 6,251 Commercial and industrial 8,359 H,636 8,566 8,0(4 7,713 Qther _ _ _ _ . _ _ _ , _ _ _ _ , _ 472 _ _ 470 _ 495 , _ 439. . _ 429 System i, ales 15,853 16,169 16,040 15,046 14.393 Sales to other utilities $32 633 433 239 244 Total Sales 16,385 16,802 16.473 15.285 14.637 Custoiners - monthly average Itesidential 895,294 890,406 8x2,962 872A19 861,011 44 Commercial and mdustnal 101,562 100A81 98A50 95,871 93.228 i
~ . Othen ..__ ,4,504__4 A52 _ _ 4 A36 -4,389 4,36]
Custotuers - total monthly average 1,001,360 995,339 985,848 - 972,679 .958,601
- Custoniers 7t otal atjyar eni l __,__ __ _ _ __ _)@b441_, 9911AH8, 989,097 976,928__ 963,197 Itesidential LWh per emtomer 7,844 7,932 7,905 7,569 7,260 Ilf!C*30 ff f.kWh 1___.,_,,__.,__,___._,___
._14 1 21(_,_ C 96e _ !lyr 12.1,h* _ _il.22v Conunercial and Industrial LWh_ per customer 82,304 85,943 87M05 83,487 8.',732 Ilf.N""e PELWL _.. _._ ._. _._ ._ - . _ _. _ _.12.17 f ,11.37c __10.31v. 10.62r _ 10A3e Systern - total revenue per LWh sold 13,0l f 12.00v 10.97c 11.35v 11.12v G__as Sal.es _and_Custe. ne_ r_s.. _ .._ _ . _ . . . _ . , _ ,. -_ _ _ Table 6 Sales - thousands of dth Itesidential - space heating
- 29,810 32,024 31,276 29.239 28A38 c.
- other 3d48 3A91 3,589 3,952 3,629 '
Non-residential - space heating
- 11,271 11,548 11,054 '10,055 9,711
_ _ _. _ _ _._.o_ther_ _ . _ _ _ . . _ . _ . - , _ _ _..._. _4,3 5 2.. .
_ _4,5 3_9 . _ _4.,.5_80. _ _. 4_ ,38_')__4,5_33 ,
Total finn sales 48,881 51f02 50A99 47,635 46,311 Interruptjblejales__ _ _,__,___, _6,347,_ 5.300 _,5M8 _pA56_ 5,5117 _ .
Total system sales 55,228 56 902 55,577 54/N1 51,818 Sales to other utilities - - - 2,218 -
Total Sales 55,228 56.902 55,577 . 56,309 51,818 :
Custorners - nwnthly average Itesidential - space heatmg* 211.400 '04,982. 198,949 192,550 '186,625
- other - 176,0e ' 79A15 181,926 184 A11 -186,600 Non-residential- space heating
- 29,07 27,733 25,979 24,234 22,514-
___._._.... _ ~~ ".I.!er_ ._ _ _ _ __,_
n__ __j.,1,310__11,517, ,, 11 725 2 _,11 778 1 . 1,1,,889 Total finn customen 427,782 423,647 418,579 412.973 407,628 Interruptible_customen -
410 359 _ 325- 301 - 289-
- - Custoiners - total monthly average 428,192' 424 006 418, % 4- 413.274. 407,917 I Custpnners - tf3gl at year, end,____,, _,__ _ ___ 430,571 _426p60_ _421 A29 .,,415,629; _ 410,064 Degree days - billed _ _ _ . _ _ _ . . , _
4,344 _ _,_4,987 ,_5A74_,_4,802 4,795 Ilesidential dth per customer 85,8 92A 91.5 88.0 ' 85.9 -
llevenue perjltin. _ _ _ . _ __,
.,$ ,_6 90_ S_6.l( 5Jf,9.Lfg4_$_ ]p Non residential, finn
'dth per customer 386.9 409.9 414.6 401.1 414.0 =
I.lf. venue _per dth . _ _ _ _ __.
$ j .08 _5_ i28 S.,_ f3.15 _5 6.35 5,_ 7.01 Systeni - total revenue per firm dth sold S 6.64 5 6.63 $ 6.52 5 6.69 $ 7.41,
- In the hearing cLwfications, the salec sheum weer allgas uxd imludmg ownheatmg me.
='
E _
4
_ . ~ _ . _ - . , __ _ _ _ . - _ . . _ _ - _ _ _ . . . _ , _ . _ _
y -. -
1990.- _ -.1989_ ._-. _19__88 _ ._. _1987 _ _19_86
. EI'Ciricpperations ._ _ _ _ _ _ _ _
_ _ Table.,7 Energy - millions of LWh
- Net generation 13,981 15.220 15.228 14,004 11,707 Power p,urchased and (sold) -- net _ ,2,989 _2,087 1,940_a516_ 3,9M
' Total systeni requirements 16,970 17,307 17,168 16,520 15,659 Company me and unascounted for _ _ _ _ _ _, _ (1,117)__(1,138) _ (1,128L_(if7_4)_(1,2,6(j)
- 5ystem sales 15,853 16,169 16,040 15,046 14.393 Sales to other utilities
$32 633 433 239 244
-Total Sales 16,385 16,802 16,473 15,285 14,637 Peak Demand - mW as Station coincident demand 3,260 3,178 3,347 3,333 2,969
~~
Purchased or (sold) - net _ , _ , _ _
_ _ _ 426 _ 510 _ _ 475 _ _ _ 243 _ 17 2 S; stem Peak Denund 3,686 3.688 3,822 3,576 3,441 Systetu Capability - mW l.lLCO stations - 4,077 4,066 3,834 3,799 3;?43 Firm purchase or (tale) - net 300 400 482 550 _ 45_4 Total Capabihty 4,377 4.466 4,216 4,349 1197 Fuel Consumed for Electric Operations Oil - thouut.d5 of barreb 16,401 20,480 19,927 18,624 15,625 Gai - thouunds of deh 36,477 26.490 29,126 29,762; 26,103 Nucleat - thouunds of mW days 108 105 87 - -
-Total - billiom of litu 139,871 154,(69 153,828 146,53^ 124,098
_ Uoll.m per nullion litu 5 3,07 3 2.86 S 2.53 $ 2.86 5 2.51 Cents per kWh of net generation 3,24 C 3.06e 2.67c 3. Ole 2.66c Heat rate - lieu per net LWh 10,564 10,704 10,545 10,509 .600
.- m a_._._, _. _. . - -
Gas , Operations _ _ .
__ Table 8 Energy - thousands of dth
, Natural gas 55,407 60,359 58,743 58,832 53,035
' MariufactureJytsjmd ch.ange i_n s.torage , _ __. _ _ (15) 53 _(18)__(63)_ Jj
- Total Natural and Manufactured Gas -
55,392 60,412 58,725 58,769 53,100
. Total system requirements 55,392 60,412 58,725 56,55: 53,100 Company use and unaccounted tor,___,
_ _,_(164) (3J10)_Q,148) (2,460)_ _ (I 282)
System sales - 55,228 - 56.902 55,577 54,091 51,818 Sales to 6ther utilities - - 2,218
- Total Sales - 55,228 56,902 55,577 56,309 51,818 1
Maximum Day Sendoutl - dth , , , _ 406,177 _ 462,610, 431,940 -404,679 _ 365,99,l_
System Capability - dth per day JNatural gas 507,344' 461,788 411,596 388,400 345,200 1.NG manu,1,tt ured ar LP,ps _12_8,,200 145,600 145,600 145,600 145,600 Total Capabdity 635,544 607,388- -557,196 534,00() 490,800 -
Calendar Degree Days
'(64-year aver. ige 5,044) 4.139 5.169 5.162 4,805 4,715
-l i
- o. :
. _ . _ _ _ . , . - . . . - - . ~ . _ . , _ . - - . . . _ . - . ~ . . - - - - - - . - - . - - . - . - .-
1990 1989 1988 - . . - - 1987.- - - 1986 i
9?".hruetion @pendituresjpt@iu3 ands ofdsam) __ . _ _ _ _ _ Table 9 Electric j Production S '36,400 5 59,880 5 419.028- 3 453,544 5 603,916 c Trammiwion 23,418 9,022 13,379 23,668 6.451 Distribution 82,975 66,679 64,653 32,209 50,847 General .
,{6403L,____(4p77) _lj88_,_____ qd]O _ J_1_65 Electric Total 136,290 130,904 498,648 515,891 665,379 Gas Total 78,766 49,847 37,518 34,270 31,978 Conunon Total - 12,671 11,007 9,352 17,795 5,434 YNalComtrubr$hhmkitur$ $ 227 527 5 151,75[ $ 545,5[ $ 3,7h5[S hob 2.h91 u,
Nuclear Fuel S 4,738 S 8,292 S 15,639 $ 13,219 $ 10,353
- 1mluJn non, cash allouumepr othnjhnJ< weJ Jumy comsm, tion and v.uluJa %echam rest utth ment cost >.
. - - . - . _ .. - - - .~ - - -- . -.- -. . -
Ualance Shu thousandw(dollan) Table 10 Assets -
Utility plant S 4,150,822 5 3,939,410 S 8,017,047 8 9,274,103 5 8,706,857-Lew- Accumulated deprecian.
_ depletion and amortizatic , 1,262,743 1,158,253 1,071,923 980,066 916,246 ;
Total Net Utihty Pl.mt 2,888,079 2,781.6 7 6,945,124 8,294,037 7,790,611 ,
llegulatory auet 3,887,373 3,988,344 - - -
= Other property and mvestmenta 6,381 6,050 69,271 68,763 68,383 ,
Currynt anets - _,,;,,,_ 72M)60__ _?82,032 571,934 606.579 702,825 i Deferrr brges: 1 Nm
- ion component 411,443 102,971 -- - - 1
- Shun settlement costs ' 225,818 75,044 - - -
SE .- ' 'ar fuel 92,069 97,925 - - -
Ac, w " erred income taxes 359,768 262,298 525,029 127,061 65,799 gthe . -,_._,,,__ _,,24 5,693_ 224,217 214,979 227.247 230,537 j Total i. 4 m 2arges 1,334,791 762.455 740,008 354,308 296,336 Total As $ 8,842,684 5 8,520,038 S 8,326,337 $ 9,323,687 S 8,858,155 Capitalia. tion and Liabilities Capitalization:
n Long-tenu debt - S 4,556,016 S 4,560,016 S 3,449,821 5 3,724/i01 S 3,805,796 )
Unamorti~d premium and (dhceunt) on debt (23,12,5) (28,587) (25,011) (26,646) (28,281) xIWferred smck - redemption required 527,550 541,187 513.924 520,788 527,465
- Preferred stock - no redemption required 154,674 155,592 221,050 221,051 221,053
. Treasury' stock, at cost - -
(58,430) (40,881) (25,7
' Retained earnings restricted for preferred stock
. dividend requirements ' - - 341,008 265,288 1&
Common stock and premium 1,549,505 1,547,971 1.557,293 ' 556,928
, 1.556A s j (42,676) (42,916) (56,i51) (56,144) (56,138)
. Capital stock expense '
.Setajpgd earnings .__ _,_,, ,_ _.__ 560,40,5 _ _ 436 #10 _ 679,579 _l,801A)19_ 1,p),268 f
Total Capitalization _ _.
7,282,349' 7,169f>53 _6,623,083_7,966, M4__7,797/>96
.C._urrent Liabilities .
449,83_0-. _- _470,8_85 _._58_3,01_7_.- _ __33_9,57_3 .. _ _. __277,173 .-
Deferred Credits:
1989 Settlement credits 182,720 191,933 - - --
Class Settlement 167,569 164,040 - - --
Accumulated deferred income taxc t 634,704 430,933 963,975 921,397 692,758 Other - __.117d 72 ._ _ 81,441 __l 44,0,15 _ . . 83,217 75,195 Totali cferred f Credits ._ __
1,1()2,165_ _ _ 868,3,49 1 ,97,990 _ _ 1.01.4,614 __ 767,953
- Rescives ihr Claim , Damages, Pemiom and l3cnefits 15,033
_ _ _ _ _ _ _ ,,, 8,3_4 0 _ ,_ 10,851 _ 12J47_ _ 12596 _
ETotal Capitalization and Liabilities S 8,842,684 5 8,520,038 5 8,326.337 5 9.323fA7 S 8,858,155
L 0-l _ _ _ . . _ _ _ - . _-___,._._
, C_orn_ano_n a_nd l_'re.ferred Stock I' rices Table 11
-The Common Stock of the Company h traded on the New York Stock lixchange and the Pacific Stock t!xchange. The Preferred Stock $100 par value Series IL lt I,J, K and S and the l'refened Stock S25 par valus, Series 0, P. T and Y of the Company are, and Senes U, V, W ano X were, traded on the New York Stock Exchange. The table below indicates the high and low prices on the New York Stock Exchange hsting of composite transactions ihr the years 1989 and 19w).
1989 1 M1 Quarter Quarter Fint Second Third Fourth Fint Second Third l'ourth Conunon Stock liigh 15% 17 % 19 20 % 20 % 19% 21% 21%
Low 12 % 14 % 16% 17 % 18% 17 % 17 % 17 %
47 Preferred Stock -
Series 11 5%. Iligh 60 % 68 74 % 51% 50% 49's 50 49%
Low 51 % N1%. 46% 46% 49 46 48 47%
Series E 4.35% 1ligh 54 % 58 % 64 44 % 44 % 42% 44 44% -
Low 44 52 41 41 42 40% 41 41%
Series 1 5%% liigh 106 122 134 % 117 116 112 118 115 Low 100 107 106 % 104 % 110 % 109 114 1(n Series j _ 8.12% liigh 97 % 106% 112 % 82 82 79 81% 78%
Low 80% 96% 7P4 76% 77 74 75 77 Series K 8.3(fM iligh - 100% 109 11E4 84 85 79% 83 81 1.ow 83 % 97 % 76% 76 78 77% 78% 77 %
Series O S2.47 Iligh 31% - 34 36% 25 % 24% 24 % 25% 25 %
Low 26% 31% 23 % 23 % 23 % 23 % 24% 23 %
Series P S2.43 1ligh 30% 33 35 25% 25 % 24 25 24 %
Low 25% 29 22% 22 % 23 % 22 % 21% 23 %
Series S .9.8UM - i ligh 122 131 ~142 96 97 % 96% 99 % 97
. Low 106 123 92% 94 93 % 92 95 94 Series T $3.31 High 38% 40% 42% 26% 26% 26% 26% 27
! low ' 32 38 % 25 % - 25% 25 % 25 % 25% 25 %
Series U S4.25 liigh 43N 46% 48 % 27 % - - - -
Low 36% 43% 26% 26% - - - -
Series V $3.50 Lligh .40% 42% 44 % M% - - - -
Low 33 % 39% 26 26% - - - -
Series WS3.52 Iligh 42% 44% 46% 29 % - -- - -
Low 35 % 28 % 29 - - - -
Series X $3.5J liigh' 40, .2% 44 27% - - - -
Low 33% 39% 26 26% - - - -
Series Y S2.65 High -- - -
26% 26% 26 26% 26%
tow - - -
25 24 % 24 % 24 % -- 24 %
. The Preferred Stock $i00 par vahie, Series I) 4.25% is traded in the over-the-munter market and no price data is available. .
The PreFrred Stock $100 par vahie, Series F,11. !, M and it Preferred Stock are held privately.
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Csrporcto inf rm tl3n o Executive OfUces Anntal Mc6u .
175 !!ast Okl Country Itoad The Aiciual Meetnig of Sharrownen will be hekt on flickwille, NY 11801 Tuesday, ',i y 7 19" . a: 3:00 p in. In connection with
'I"' '"."'i"8' I"oxuywdl lit sohened by the Coinpany.
Conunon Stock Listed A notice of the meenng, a prmy statrinent, and a proxy New York Stock Euhange wgj g, maikd to eareownen in Marcit Pacitic Stock Exchange E"'"'IU # ^""""I N#P"
Ticker Symbol: LIL The Company wdl furnish, without charge, a copy of the Transfer Agents Company's Annual Iteport, l'orm to-K, as filed with the Conunon Stock Secunnes and !!xchange Conunission, upon untien request Manufacturers llanover Trust Company to: Investor Itclatiom, l.ong Island Iightmg Company,
- 450 West 33rd Street 175 I;ast Old Country linad, I hckwille, NY l1801 (
New York, NY 10nol 800-647-4273 preferred Stock The first National llank of Iloston 50 Mornucy lloulevard 1)orchester, M A 02102 800-442 2001 llegistrar Conunon and Preferred Stock Mellon Securities Trmt Company 120 llroadway New York, NY 10271 Sharcowned Agent for Automatic-Dividend lleinvestruent Plan Manufacturen llanover Trust Company thvidend lleinvestment 1)cpartment P.O. llox 24850, Church Street Station New York, NY 10242 800-647-4273 c.
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t birosters Ctfisers 4 Williain J. Catacosinos Willian:J. Catacosinos Joseph W. McDonnell Chairnun of the lloard and Chairman ot'the lloard und Vice President Chief Executive Orlicer Chief Executive Ollicer Communications Long htmd 1.ightmg Company hdiom F. Ea%-@ V'illiam G. Sddihade Anthony F. Earley,Jr. President and Vice President President and Chief Operating Ollicer Electric Operatiom Chief Operating Otlicer .
Leng Island I ighting Company Georgej. Siderts stobert II. Steger S V Pr id F Vi Psdm George llugliarello and ChiefI mancial Oflicer Fouil Production I olytechm.e University Jarnes T. Flynn Williain E. Steiger,Jr.
Group Vice Preu. dent Vice l'resulent Winfield E. Fronim Engineering and Operations Engineenng and Construction Itetired Vice President p Eaton Corporation
,F. Ilrandifino Christian G. Wilding Electrical Engmeenng V Pnds Via Pmids Fi Cm ah md Lionel M. Goldbei g V,illiaan N. Dirnoulas Load Management S.enior Vice President Alexander & Alexander VWP de Walw F. M'iln@
of New York. Ine. I" " " " ' " N"#*' 5 inwam and 'l echnology L.'# P'#'id#"'
as Operatiom liasil A. Paterson 11 bert X. Kelleher EdwardJ. Youngling p Vice Preudent Vice Preudent an Resourm Cuuoma HeLuiom Meyer, Suoni. English
& Klein. PC John D. Leonard,Jr. Victor A. StafIleri Law Vice President General Counsel and -
Eben W. Pyne 'P"' ' # "d " "" "'P"" # b"'#'*4
"' "# P"" N ""'
Corporate Director Michael Czutuak and Consultant Adam M. Madsen Controller and Chief W.ll. Grace anu Company Vice President Accounting Oilicer itetired Senior Vice l' resident Corporate Planning Citibank, N. A. Andrew 11. Itagogna Arthur C. Marquardt .!reasurer John H. Tahnage Vice President I3artner Straq;ic llusinew Planmng lierbert M. Le.iman 11.11. Talmage & Son ^"I"""* (,'ennal L,ounsd uhun- Ii"."" It" McCall. rey and Awistant Corporate Vice Preu. dent Secretary Phyllis S. Vineyard Adminiuration Director Kaddeen A. Man.on Long hland Connuunity Au want Corporate Foundation Suretag and Aniuant to the Chairman 1
BULK RATE Long Island Lighting Comp:ny US POSTAGE I
175 East Old Country Itoad PAID
, Hickwille, New York 11801 Hicksvillo, NY
- Permit No 254 l
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