October 26, 2005
FILED VIA EDGAR
Mr. Michael Moran
Branch Chief
Securities and Exchange Commission
Division of Corporation Finance
Mail Stop 3561
450 Fifth Street, N. W.
Washington, D.C. 20549
RE: Follow-up Responses to the SEC Review Letter dated June 29, 2005
NSTAR |
File No. 1-14768 |
Form 10-K for the year ended December 31, 2004 |
|
Boston Edison Company |
File No. 1-2301 |
Form 10-K for the year ended December 31, 2004 |
Dear Mr. Moran:
The following are NSTAR's responses to the Commission's Follow-up Review Comment Letter referenced above in connection with the NSTAR and Boston Edison Company 2004 Annual Reports on Forms 10-K. In order to facilitate your review, we have included each of your comments followed by our respective responses.
NSTAR and Boston Edison Company acknowledge that (i) the Staff's comments and any changes to the NSTAR and Boston Edison Company SEC filings in response to the Staff comments does not foreclose the Commission from taking any actions with respect to the filings, (ii) NSTAR and Boston Edison Company are responsible for the adequacy and accuracy of the disclosure in their filings, and (iii) NSTAR and Boston Edison Company may not assert Staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.
NSTAR Form 10-K for the Year Ended December 31, 2004
Comment 1:
| |
| We note your response to comment one of our letter dated June 3, 2005. Please explain in detail why you have not classified your goodwill as a regulatory asset. In this regard, paragraph 30 of SFAS no. 71 indicates that if the regulator permits all or a portion of goodwill to be amortized over a specific time period as an allowable cost for rate-making purposes, the regulator's action provides reasonable assurance of the existence of a regulatory asset. We may have further comment.
|
Response 1: Effective with the filing of NSTAR'S Form 10-Q for the quarter ending September 30, 2005, NSTAR will classify its previously recorded goodwill to a regulatory asset on the Company's Condensed Consolidated Balance Sheet. In addition, as required by SFAS 109, "Accounting for Income Taxes", NSTAR will record the appropriate level of accumulated deferred income taxes on the unamortized balance of goodwill along with the offsetting regulatory asset. This change in accounting will be applied retrospectively to all prior periods reflected on the current financial statements. The attached Exhibit A reflects the pro-forma impact of this adjustment along with the appropriate draft of the footnote disclosure. In addition, as a result of this change NSTAR will reallocate a portion of the previously recorded goodwill from its three non-public rate regulated subsidiaries, collectively, the Commonwealth entities to Boston Edison Company. Similar to NSTAR, Boston Edison Company will classify this goodwill as a regulatory asset and provide the appropriate level of accumulated deferred income taxes. This will align with Boston Edison Company's rate recovery for these costs. This transfer will be effective for the quarter ending September 30, 2005 and will be accounted for in the form of a capital contribution from NSTAR. | |
| |
Boston Edison Company Form 10-K for the Year Ended December 31, 2004
Comment 2:
| |
| We note your response to comment 3 of our letter dated June 3, 2005. The guidance to the implementation of SFAS no. 87, in particular questions 86 and 87, indicates that each subsidiary should account for its participation in the overall single-employer pension plan as a participation in a multiemployer pension plan. The parent company should, of course, account for the pension plan as a single-employer pension plan in its consolidated financial statements. In this regard, explain to us why the reimbursement from Boston Edison's affiliates would not net against the prepaid pension asset, instead of creating an inter-company payable. In this regard, we assume you are only reflecting the amount of pension expense related to Boston Edison on its stand alone consolidated income statement. Quantify the amount of the reimbursement that Boston Edison received in 2004 from affiliates, and indicate to us the period for which such reimbursement relates. It is unclear to us why Boston Edison is reflecting the entire prepaid pension asset on its consolidated balance sheets.
|
Response 2: We agree with your comment relating to the guidance to the implementation of SFAS 87, questions 86 and 87, as it pertains to the suggested accounting treatment of the "parent company" which indicates that it should account for its pension plan as a single-employer pension plan on its consolidated balance sheet. Based on this guidance and the fact that Boston Edison Company is the sponsor of the NSTAR Pension Plan, Boston Edison Company represents the "parent company", as referenced in question 86. In that regard, Boston Edison Company has treated its pension accounting in accordance with SFAS 87 as a single-employer plan. As a result, the reimbursement from Boston Edison's affiliates was not netted against its prepaid pension asset in order to retain its appropriate consolidated level of its prepaid pension asset in accordance with SFAS 87. Boston Edison records the full SFAS 87 pension expense and in turn allocates the portion of pension expense pertaining to other affiliates. Therefore, on a stand alone basis Boston Edison only recognizes net pension expense relating to its business activity which is in accordance with its rate-recovery mechanism approved by the MDTE. As disclosed in Boston Edison's 2004 Form 10-K, the reimbursement received from its affiliates in 2004 amounted to $150.6 million and relates to the years 2000 through 2003. Based on the guidance referenced above, Boston Edison will continue to account for its pension transaction as a single-employer plan and reflect the entire prepaid pension asset or pension liability on its consolidated Balance Sheets.
| |
If you have any questions regarding these responses or require further information, please contact John Moreira, Director of Financial Reporting, at (781) 441-8887 or the undersigned at (781) 441-8801.
Sincerely,
|
/s/ ROBERT J. WEAFER, JR. |
Robert J. Weafer, Jr. |
Vice President, Controller |
and Chief Accounting Officer |
Exhibit A
Part I. Financial Information
Item 1. Financial Statements
NSTAR
Condensed Consolidated Statements of Income - PRELIMINARY
(Unaudited)
(in thousands, except earnings and dividends declared per share data)
|
| Three Months Ended |
|
|
| Nine Months Ended |
| |||||||||
|
|
| September 30, |
|
|
| September 30, |
| ||||||||
|
|
| 2005 |
|
|
| 2004 |
|
|
| 2005 |
|
|
| 2004 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating revenues |
| $ | 858,495 |
|
| $ | 781,510 |
|
| $ | 2,430,545 |
|
| $ | 2,241,205 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchased power and cost of gas sold |
|
| 462,118 |
|
|
| 430,735 |
|
|
| 1,341,648 |
|
|
| 1,248,526 |
|
Operations and maintenance |
|
| 104,780 |
|
|
| 103,182 |
|
|
| 336,190 |
|
|
| 312,833 |
|
* Depreciation and amortization |
|
| 85,722 |
|
|
| 62,052 |
|
|
| 249,268 |
|
|
| 192,602 |
|
Demand side management and renewable energy programs |
|
| 18,768 |
|
|
| 18,165 |
|
|
| 52,133 |
|
|
| 51,233 |
|
Property and other taxes |
|
| 23,643 |
|
|
| 24,904 |
|
|
| 78,630 |
|
|
| 78,677 |
|
* Income taxes |
|
| 43,987 |
|
|
| 41,204 |
|
|
| 90,979 |
|
|
| 95,152 |
|
Total operating expenses |
|
| 739,018 |
|
|
| 680,242 |
|
|
| 2,148,848 |
|
|
| 1,979,023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
|
| 119,477 |
|
|
| 101,268 |
|
|
| 281,697 |
|
|
| 262,182 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (deductions): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income, net |
|
| 3,099 |
|
|
| 1,668 |
|
|
| 5,340 |
|
|
| 5,842 |
|
Other deductions, net |
|
| (399 | ) |
|
| - |
|
|
| (969 | ) |
|
| (417 | ) |
Total other income, net |
|
| 2,700 |
|
|
| 1,668 |
|
|
| 4,371 |
|
|
| 5,425 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest charges: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt |
|
| 30,106 |
|
|
| 30,332 |
|
|
| 90,794 |
|
|
| 88,621 |
|
Transition property securitization |
|
| 12,477 |
|
|
| 6,845 |
|
|
| 33,862 |
|
|
| 21,602 |
|
Short-term debt and other |
|
| 2,134 |
|
|
| 2,222 |
|
|
| 5,073 |
|
|
| 6,250 |
|
Allowance for borrowed funds used during |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
construction (AFUDC) |
|
| (1,039 | ) |
|
| (234 | ) |
|
| (2,560 | ) |
|
| (858 | ) |
Total interest charges |
|
| 43,678 |
|
|
| 39,165 |
|
|
| 127,169 |
|
|
| 115,615 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock dividends of subsidiary |
|
| 490 |
|
|
| 490 |
|
|
| 1,470 |
|
|
| 1,470 |
|
Net income |
| $ | 78,009 |
|
| $ | 63,281 |
|
| $ | 157,429 |
|
| $ | 150,522 |
|
Weighted average common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Basic |
|
| 106,808 |
|
|
| 106,336 |
|
|
| 106,738 |
|
|
| 106,191 |
|
Diluted |
|
| 107,726 |
|
|
| 107,396 |
|
|
| 107,567 |
|
|
| 107,177 |
|
Earnings per common share (Note G): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
| $ | 0.73 |
|
| $ | 0.60 |
|
| $ | 1.47 |
|
| $ | 1.42 |
|
Diluted |
| $ | 0.72 |
|
| $ | 0.59 |
|
| $ | 1.46 |
|
| $ | 1.40 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Dividends declared per common share |
| $ | 0.29 |
|
| $ | 0.2775 |
|
| $ | 0.87 |
|
| $ | 0.8325 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
The accompanying notes are an integral part of the condensed consolidated financial statements.
Statement line items denoted by an asterisk reflect the impact of the change in the classification of Goodwill.
NSTAR
Condensed Consolidated Balance Sheets - PRELIMINARY
(Unaudited)
(in thousands)
|
|
|
|
|
|
|
|
| ||||||||||
|
|
| September 30, |
|
|
| December 31, |
| ||||||||||
|
|
| 2005 |
|
|
| 2004 |
| ||||||||||
Assets |
|
|
|
|
|
|
|
| ||||||||||
|
|
|
|
|
|
|
|
| ||||||||||
Utility plant in service, at original cost |
| $ | 4,545,329 |
|
| $ | 4,412,073 |
| ||||||||||
| Less: accumulated depreciation |
|
| 1,123,753 |
|
|
| 1,090,924 |
| |||||||||
|
|
| 3,421,576 |
|
|
| 3,321,149 |
| ||||||||||
Construction work in progress |
|
| 185,502 |
|
|
| 103,866 |
| ||||||||||
| Net utility plant |
|
| 3,607,078 |
|
|
| 3,425,015 |
| |||||||||
|
|
|
|
|
|
|
|
| ||||||||||
Non-utility property, net |
|
| 146,079 |
|
|
| 154,963 |
| ||||||||||
|
|
|
|
|
|
|
|
| ||||||||||
Equity and other investments |
|
| 75,416 |
|
|
| 72,983 |
| ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||
Current assets: |
|
|
|
|
|
|
|
| ||||||||||
| Cash and cash equivalents |
|
| 14,764 |
|
|
| 12,497 |
| |||||||||
| Restricted cash |
|
| 14,979 |
|
|
| 10,254 |
| |||||||||
| Accounts receivable, net and accrued unbilled revenues |
|
| 360,505 |
|
|
| 355,946 |
| |||||||||
| * Regulatory assets |
|
| 355,845 |
|
|
| 300,238 |
| |||||||||
| Inventory, at average cost |
|
| 109,086 |
|
|
| 86,397 |
| |||||||||
| Income taxes |
|
| 86,104 |
|
|
| 21,063 |
| |||||||||
| Other |
|
| 11,881 |
|
|
| 11,434 |
| |||||||||
|
| Total current assets |
|
| 953,164 |
|
|
| 797,829 |
| ||||||||
|
|
|
|
|
|
|
|
| ||||||||||
Deferred debits: |
|
|
|
|
|
|
|
| ||||||||||
| Regulatory assets - power contracts |
|
| 707,065 |
|
|
| 1,269,651 |
| |||||||||
| Regulatory assets - retiree benefit costs |
|
| 18,145 |
|
|
| 11,897 |
| |||||||||
| * Regulatory assets - goodwill |
|
| 663,578 |
|
|
| 678,698 |
| |||||||||
| Regulatory assets - other |
|
| 954,755 |
|
|
| 595,140 |
| |||||||||
| Prepaid pension |
|
| 313,321 |
|
|
| 297,746 |
| |||||||||
| Other |
|
| 80,539 |
|
|
| 87,434 |
| |||||||||
| Total deferred debits |
|
| 2,737,403 |
|
|
| 2,940,566 |
| |||||||||
|
|
|
|
|
|
|
|
|
| |||||||||
Total assets |
| $ | 7,519,140 |
|
| $ | 7,391,356 |
| ||||||||||
|
|
|
|
|
|
|
|
| ||||||||||
The accompanying notes are an integral part of the condensed consolidated financial statements.
Statement line items denoted by an asterisk reflect the impact of the change in the classification of Goodwill.
NSTAR
Condensed Consolidated Balance Sheets - PRELIMINARY
(Unaudited)
(in thousands)
|
|
|
|
|
|
|
|
| |
|
|
| September 30, |
|
|
| December 31, |
| |
|
|
| 2005 |
|
|
| 2004 |
| |
Capitalization and Liabilities |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
Common equity: |
|
|
|
|
|
|
|
| |
Common shares, par value $1 per share, |
|
|
|
|
|
|
|
| |
200,000,000 shares authorized; 106,808,376 shares in 2005 and |
|
|
|
|
|
|
|
| |
106,550,282 shares in 2004 issued and outstanding (Note G) |
| $ | 106,808 |
|
| $ | 106,550 |
| |
Premium on common shares |
|
| 811,861 |
|
|
| 819,454 |
| |
Retained earnings |
|
| 582,794 |
|
|
| 518,252 |
| |
Accumulated other comprehensive loss |
|
| (3,374 | ) |
|
| (3,374 | ) | |
Total common equity |
|
| 1,498,089 |
|
|
| 1,440,882 |
| |
|
|
|
|
|
|
|
|
| |
Cumulative non-mandatory redeemable preferred |
|
|
|
|
|
|
|
| |
stock of subsidiary |
|
| 43,000 |
|
|
| 43,000 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt |
|
| 1,636,552 |
|
|
| 1,792,654 |
| |
Transition property securitization |
|
| 787,966 |
|
|
| 308,748 |
| |
Total long-term debt |
|
| 2,424,518 |
|
|
| 2,101,402 |
| |
Total capitalization |
|
| 3,965,607 |
|
|
| 3,585,284 |
| |
|
|
|
|
|
|
|
|
| |
Current liabilities: |
|
|
|
|
|
|
|
| |
Long-term debt |
|
| 108,803 |
|
|
| 108,197 |
| |
Transition property securitization |
|
| 138,546 |
|
|
| 41,048 |
| |
Notes payable |
|
| 148,500 |
|
|
| 161,400 |
| |
Deferred income taxes |
|
| 11,047 |
|
|
| 8,072 |
| |
Accounts payable |
|
| 277,234 |
|
|
| 239,613 |
| |
Power contracts |
|
| 176,064 |
|
|
| 171,312 |
| |
Accrued expenses |
|
| 253,951 |
|
|
| 231,490 |
| |
Total current liabilities |
|
| 1,114,145 |
|
|
| 961,132 |
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
Deferred credits: |
|
|
|
|
|
|
|
| |
* Accumulated deferred income taxes and unamortized |
|
|
|
|
|
|
|
| |
investment tax credits |
|
| 1,264,772 |
|
|
| 1,114,588 |
| |
Power contracts |
|
| 707,065 |
|
|
| 1,269,651 |
| |
Pension liability |
|
| 32,657 |
|
|
| 31,296 |
| |
Regulatory liability - cost of removal |
|
| 266,331 |
|
|
| 258,722 |
| |
Other |
|
| 168,563 |
|
|
| 170,683 |
| |
Total deferred credits |
|
| 2,439,388 |
|
|
| 2,844,940 |
| |
|
|
|
|
|
|
|
|
| |
Commitments and contingencies |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
Total capitalization and liabilities |
| $ | 7,519,140 |
|
| $ | 7,391,356 |
| |
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of the condensed consolidated financial statements.
Statement line items denoted by an asterisk reflect the impact of the change in the classification of Goodwill.
NSTAR
Condensed Consolidated Statements of Cash Flows - PRELIMINARY
(Unaudited)
(in thousands)
|
|
| Nine Months Ended |
| |||||
|
|
| September 30, |
| |||||
|
|
| 2005 |
|
|
| 2004 |
| |
Operating activities: |
|
|
|
|
|
|
|
| |
Net income |
| $ | 157,429 |
|
| $ | 150,522 |
| |
Adjustments to reconcile net income to net cash |
|
|
|
|
|
|
|
| |
(used in) provided by operating activities: |
|
|
|
|
|
|
|
| |
* Depreciation and amortization |
|
| 244,249 |
|
|
| 193,183 |
| |
* Deferred income taxes |
|
| 170,918 |
|
|
| 31,795 |
| |
AFUDC |
|
| (2,560 | ) |
|
| (858 | ) | |
Effects of purchase power contract buy-outs |
|
| (554,270 | ) |
|
| - |
| |
Net changes in: |
|
|
|
|
|
|
|
| |
Accounts receivable and accrued unbilled revenues |
|
| (4,559 | ) |
|
| (10,112 | ) | |
Accounts payable |
|
| 47,217 |
|
|
| (37,640 | ) | |
Other current assets |
|
| (143,759 | ) |
|
| 2,903 |
| |
Other current liabilities |
|
| 23,910 |
|
|
| 92,322 |
| |
Net change from other operating activities |
|
| 44,355 |
|
|
| (81,989 | ) | |
Net cash (used in) provided by operating activities |
|
| (17,070 | ) |
|
| 340,126 |
| |
|
|
|
|
|
|
|
|
| |
Investing activities: |
|
|
|
|
|
|
|
| |
Plant expenditures (excluding AFUDC) |
|
| (280,362 | ) |
|
| (198,600 | ) | |
Increase in restricted cash |
|
| (5,425 | ) |
|
| (1,369 | ) | |
Proceeds from sale of property |
|
| 3,500 |
|
|
| 14,252 |
| |
Investments |
|
| (2,537 | ) |
|
| (3,412 | ) | |
Net cash used in investing activities |
|
| (284,824 | ) |
|
| (189,129 | ) | |
|
|
|
|
|
|
|
|
|
|
Financing activities: |
|
|
|
|
|
|
|
| |
Long-term debt redemptions |
|
| (156,408 | ) |
|
| (187,213 | ) | |
Transition property securitization redemptions |
|
| (97,784 | ) |
|
| (51,166 | ) | |
Issuance of transition property securitization |
|
| 674,500 |
|
|
| - |
| |
Issuance of long-term debt |
|
| - |
|
|
| 300,000 |
| |
Debt issue costs |
|
| (6,513 | ) |
|
| (1,851 | ) | |
Net change in notes payable |
|
| (12,900 | ) |
|
| (118,900 | ) | |
Change in disbursement accounts |
|
| (9,596 | ) |
|
| (6,464 | ) | |
Common stock issuance |
|
| 7,146 |
|
|
| 3,965 |
| |
Dividends paid |
|
| (94,284 | ) |
|
| (89,817 | ) | |
Net cash provided by (used in) financing activities |
|
| 304,161 |
|
|
| (151,446 | ) | |
|
|
|
|
|
|
|
|
| |
Net (decrease) increase in cash and cash equivalents |
|
| 2,267 |
|
|
| (449 | ) | |
Cash and cash equivalents at the beginning of the year |
|
| 12,497 |
|
|
| 16,526 |
| |
Cash and cash equivalents at the end of the period |
| $ | 14,764 |
|
| $ | 16,077 |
| |
Supplemental disclosures of cash flow information: |
|
| ======= |
|
|
| ====== |
| |
Cash paid during the period for: |
|
|
|
|
|
|
|
| |
Interest, net of amounts capitalized |
| $ | 122,344 |
|
| $ | 108,361 |
| |
Income taxes, net of refunds |
| $ | 5,144 |
|
| $ | 3,680 |
| |
|
|
|
|
|
|
|
|
| |
Noncash financing activity: |
|
|
|
|
|
|
|
| |
Noncash common stock issuance |
| $ | - |
|
| $ | 4,063 |
| |
The accompanying notes are an integral part of the condensed consolidated financial statements.
Statement line items denoted by an asterisk reflect the impact of the change in the classification of Goodwill.
Note L. Change in Classification of Goodwill
In the third quarter of 2005, NSTAR changed its classification of the amount included in the 2004 Condensed Consolidated Balance Sheet as Goodwill to a Deferred debit - Regulatory asset – goodwill. As a result of this change in classification to a regulatory asset and in accordance with the requirements of SFAS 109, “Accounting for Income Taxes,” the Company recognized $268.2 million of accumulated deferred income taxes on the unamortized balance of Goodwill along with an offsetting regulatory asset as of September 30, 2005. The new classification of goodwill was adopted to better align with the Company's rate structure. For comparative purposes, NSTAR has adopted the new classification retrospectively to the financial statements of prior periods. The regulatory asset, representing the accumulated deferred income taxes, will be amortized over the remaining life of the regulatory asset – goodwill in accordance with the Company’s merger rate order allowing recovery of goodwill and amounts to approximately $7.9 million annually. This additional amortization expense will be entirely offset by a corresponding deferred income tax expense - benefit.
The Company’s Goodwill arose from the merger that created NSTAR in 1999. As a result of a rate order from the MDTE approving the merger, the Company was allowed recovery of goodwill and, therefore, NSTAR has determined that this rate structure allows for amortization of goodwill over the period it is collected from its customers.
This classification change had no effect on prior year earnings and, therefore, there has been no change to previously reported retained earnings.
A summary of the impact of the classification change as of and for the three and six month periods ended March 31, 2005 and June 30, 2005, respectively, is as follows: (in thousands)
| Three Month Period Ended March 31, 2005 | |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| Previously |
|
| As |
|
| Effect of Change |
|
Condensed Consolidated Income Statement |
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
| $ | 74,743 |
| $ | 76,720 |
| $ | 1,977 |
|
Income taxes |
|
| 29,799 |
|
| 27,822 |
|
| (1,977 | ) |
| March 31, 2005 | |||||||||
|
|
| Previously |
|
| As |
|
| Effect of Change |
|
Condensed Consolidated Balance Sheet |
| |||||||||
Regulatory assets - Goodwill |
| $ | - |
| $ | 421,668 |
| $ | 421,668 |
|
Regulatory assets - other |
|
| 1,012,218 |
|
| 1,284,368 |
|
| 272,150 |
|
Accumulated deferred income taxes |
|
| 1,056,197 |
|
| 1,328,347 |
|
| 272,150 |
|
| Three Month Period Ended March 31, 2005 | |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| Previously |
|
| As |
|
| Effect of Change |
|
Condensed Consolidated Statement |
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
| $ | 75,047 |
| $ | 77,024 |
| $ | 1,977 |
|
Deferred income taxes |
|
| 214,807 |
|
| 212,830 |
|
| (1,977 | ) |
| Three Month Period Ended June 30, 2005 | |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| Previously |
|
| As |
|
| Effect of Change |
|
Condensed Consolidated Income Statement |
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
| $ | 84,849 |
| $ | 86,826 |
| $ | 1,977 |
|
Income taxes |
|
| 21,147 |
|
| 19,170 |
|
| (1,977 | ) |
| Six Month Period Ended June 30, 2005 | |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| Previously |
|
| As |
|
| Effect of Change |
|
Condensed Consolidated Income Statement |
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
| $ | 159,592 |
| $ | 163,546 |
| $ | 3,954 |
|
Income taxes |
|
| 50,946 |
|
| 46,992 |
|
| (3,954 | ) |
| June 30, 2005 | |||||||||
|
|
| Previously |
|
| As |
|
| Effect of Change |
|
Condensed Consolidated Balance Sheet |
|
|
|
|
|
|
|
|
|
|
Regulatory assets - Goodwill |
| $ | - |
| $ | 418,605 |
| $ | 418,605 |
|
Regulatory assets - other |
|
| 1,006,233 |
|
| 1,276,406 |
|
| 270,173 |
|
Accumulated deferred income taxes |
|
| 1,036,516 |
|
| 1,306,689 |
|
| 270,173 |
|
| Six Month Period Ended June 30, 2005 | |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| Previously |
|
| As |
|
| Effect of Change |
|
Condensed Consolidated Statement |
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
| $ | 160,200 |
| $ | 164,154 |
| $ | 3,954 |
|
Deferred income taxes |
|
| 198,497 |
|
| 194,543 |
|
| (3,954 | ) |
A summary of the impact of the classification change as of and for the three and nine month periods ended September 30, 2004 and for the years ended December 31, 2004, 2003 and 2002 is as follows: (in thousands)
| Three Month Period Ended September 30, 2004 | |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| Previously |
|
| As |
|
| Effect of Change |
|
Condensed Consolidated Income Statement |
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
| $ | 60,075 |
| $ | 62,052 |
| $ | 1,977 |
|
Income taxes |
|
| 43,181 |
|
| 41,204 |
|
| (1,977 | ) |
| Nine Month Period Ended September 30, 2004 | |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| Previously |
|
| As |
|
| Effect of Change |
|
Condensed Consolidated Income Statement |
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
| $ | 186,671 |
| $ | 192,602 |
| $ | 5,931 |
|
Income taxes |
|
| 101,083 |
|
| 95,152 |
|
| (5,931 | ) |
| Nine Month Period Ended September 30, 2004 | |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| Previously |
|
| As |
|
| Effect of Change |
|
Condensed Consolidated Statement |
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
| $ | 187,252 |
| $ | 193,183 |
| $ | 5,931 |
|
Deferred income taxes |
|
| 37,726 |
|
| 31,795 |
|
| (5,931 | ) |
| Year Ended December 31, 2004 | |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| Previously |
|
| As |
|
| Effect of Change |
|
Consolidated Income Statement |
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
| $ | 246,944 |
| $ | 254,852 |
| $ | 7,908 |
|
Income taxes |
|
| 116,238 |
|
| 108,330 |
|
| (7,908 | ) |
| December 31, 2004 | |||||||||
|
|
| Previously |
|
| As |
|
| Effect of Change |
|
Consolidated Balance Sheet |
|
|
|
|
|
|
|
|
|
|
Regulatory assets - Goodwill |
| $ | - |
| $ | 424,731 |
| $ | 424,731 |
|
Regulatory assets - other |
|
| 595,140 |
|
| 869,267 |
|
| 274,127 |
|
Accumulated deferred income taxes |
|
| 840,461 |
|
| 1,114,588 |
|
| 274,127 |
|
| Year Ended December 31, 2004 | |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| Previously |
|
| As |
|
| Effect of Change |
|
Consolidated Statement of Cash Flows |
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
| $ | 246,363 |
| $ | 254,271 |
| $ | 7,908 |
|
Deferred Income taxes |
|
| 79,570 |
|
| 71,662 |
|
| (7,908 | ) |
| Year Ended December 31, 2003 | |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| Previously |
|
| As |
|
| Effect of Change |
|
Consolidated Income Statement |
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
| $ | 235,516 |
| $ | 243,424 |
| $ | 7,908 |
|
Income taxes |
|
| 121,409 |
|
| 113,501 |
|
| (7,908 | ) |
| December 31, 2003 | |||||||||
|
|
| Previously |
|
| As |
|
| Effect of Change |
|
Consolidated Balance Sheet |
|
|
|
|
|
|
|
|
|
|
Regulatory assets - Goodwill |
| $ | - |
| $ | 436,983 |
| $ | 436,983 |
|
Regulatory assets - other |
|
| 715,849 |
|
| 997,884 |
|
| 282,035 |
|
Accumulated deferred income taxes |
|
| 765,507 |
|
| 1,047,542 |
|
| 282,035 |
|
| Year Ended December 31, 2003 | |||||||||
|
|
| Previously |
|
| As |
|
| Effect of Change |
|
Consolidated Statement of Cash Flows |
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
| $ | 236,336 |
| $ | 244,244 |
| $ | 7,908 |
|
Deferred income taxes |
|
| 128,379 |
|
| 120,471 |
|
| (7,908 | ) |
| Year Ended December 31, 2002 | |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| Previously |
|
| As |
|
| Effect of Change |
|
Consolidated Income Statement |
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
| $ | 239,233 |
| $ | 247,141 |
| $ | 7,908 |
|
Income taxes |
|
| 107,113 |
|
| 99,205 |
|
| (7,908 | ) |
| December 31, 2002 | |||||||||
|
|
| Previously |
|
| As |
|
| Effect of Change |
|
Consolidated Balance Sheet |
|
|
|
|
|
|
|
|
|
|
Regulatory assets - Goodwill |
| $ | - |
| $ | 449,234 |
| $ | 449,234 |
|
Regulatory assets - other |
|
| 782,914 |
|
| 1,072,856 |
|
| 289,942 |
|
Accumulated deferred income taxes |
|
| 675,881 |
|
| 965,823 |
|
| 289,942 |
|
| Year Ended December 31, 2002 | |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| Previously |
|
| As |
|
| Effect of Change |
|
Consolidated Statement of Cash Flows |
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
| $ | 239,800 |
| $ | 247,708 |
| $ | 7,908 |
|
Deferred income taxes |
|
| (13,311 | ) |
| (21,219 | ) |
| (7,908 | ) |
