NEW ENGLAND POWER COMPANY Statement of Income Six Months Ended June 30, 1998 (Actual and Pro Forma) (Unaudited) Actual AdjustmentsPro Forma ------ -------------------- (In Thousands) Operating revenue, principally from affiliates $759,467$(456,823)$302,644 -------- --------- -------- Operating expenses: Fuel for generation 158,987 (154,447) 4,540 Purchased electric energy 244,674 (88,200) 156,474 Other operation 92,410 (58,059) 34,351 Maintenance 51,920 (39,501) 12,419 Depreciation and amortization 59,146 (26,746) 32,400 Taxes, other than income taxes 35,491 (25,731) 9,760 Income taxes 35,576 (19,525) 16,051 -------- --------- -------- Total operating expenses 678,204 (412,209) 265,995 -------- --------- -------- Operating income 81,263 (44,614) 36,649 Other income: Equity in income of nuclear power companies 2,614 - 2,614 Other income (expense), net (2,492) (97) (2,589) -------- --------- -------- Operating and other income 81,385 (44,711) 36,674 -------- --------- -------- Interest: Interest on long-term debt 19,316 (11,162) 8,154 Other interest 6,250 (3,378) 2,872 Allowance for borrowed funds used during construction - credit (556) 301 (255) -------- --------- -------- Total interest 25,010 (14,239) 10,771 -------- --------- -------- Net income $ 56,375$ (30,472) $ 25,903 ======== ========= ======== The accompanying notes are an integral part of these financial statements. NEW ENGLAND POWER COMPANY Statement of Income Twelve Months Ended December 31, 1997 (Actual and Pro Forma) (Unaudited) Actual Adjustments Pro Forma ------ -------------------- (In Thousands) Operating revenue, principally from affiliates $1,677,903$(990,307) $ 687,596 ---------- ------------------- Operating expenses: Fuel for generation 372,734 (351,897) 20,837 Purchased electric energy 527,647 (189,591) 338,056 Other operation 241,506 (141,367) 100,139 Maintenance 89,820 (48,720) 41,100 Depreciation and amortization 98,024 (52,800) 45,224 Taxes, other than income taxes 67,311 (48,835) 18,476 Income taxes 90,009 (48,840) 41,169 ---------- ------------------- Total operating expenses 1,487,051 (882,050) 605,001 ---------- ------------------- Operating income 190,852 (108,257) 82,595 Other income: Equity in income of nuclear power companies 5,189 - 5,189 Other income (expense), net (3,404) 2,781 (623) ---------- ------------------- Operating and other income 192,637 (105,476) 87,161 ---------- ------------------- Interest: Interest on long-term debt 42,277 (24,203) 18,074 Other interest 7,055 (3,813) 3,242 Allowance for borrowed funds used during construction - credit (1,238) 669 (569) ---------- ------------------- Total interest 48,094 (27,347) 20,747 ---------- ------------------- Net income $ 144,543$ (78,129)$ 66,414 ========== =================== The accompanying notes are an integral part of these financial statements.