UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
FOR ANNUAL REPORTS OF EMPLOYEE STOCK PURCHASE, SAVINGS AND SIMILAR
PLANS PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
[X] For annual reports of employee stock purchase,
savings and similar plans pursuant to Section
15(d) of the Securities Exchange Act of 1934
For the fiscal year ended December 31, 2000
[ ] Transition report pursuant to Section 15(d) of the
Securities Exchange Act of 1934
For the transition period from to
Commission File Number 1-14768
NSTAR NEGOTIATED SAVINGS PLAN FOR
PRODUCTION AND MAINTENANCE EMPLOYEES
(formerly known as Boston Edison Negotiated Savings
Plan for Production and Maintenance Employees)
(Full title of the plan)
NSTAR
(Name of issuer of the securities held pursuant to the plan)
800 Boylston Street, Boston, Massachusetts 02199
(Address of principal executive offices)
REPORT OF INDEPENDENT ACCOUNTANTS
To the Retirement Plans Committee:
In our opinion, the accompanying statements of net assets
available for benefits and the related statement of changes in
net assets available for benefits present fairly, in all material
respects, the net assets available for benefits of the NSTAR
Negotiated Savings Plan for Production and Maintenance Employees
(the "Plan"), formerly known as the Boston Edison Negotiated
Savings Plan for Production and Maintenance Employees, at
December 31, 2000 and 1999, and the changes in net assets
available for benefits for the year ended December 31, 2000 in
conformity with accounting principles generally accepted in the
United States of America. These financial statements are the
responsibility of the Plan's management; our responsibility is to
express an opinion on these financial statements based on our
audits. We conducted our audits of these statements in
accordance with auditing standards generally accepted in the
United States of America, which require that we plan and perform
the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable
basis for our opinion.
Our audits were conducted for the purpose of forming an opinion
on the basic financial statements taken as a whole. The
supplemental schedule of assets held for investment purposes at
December 31, 2000 is presented for the purpose of additional
analysis and is not a required part of the basic financial
statements but is supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of
1974. This supplemental schedule is the responsibility of the
Plan's management. The supplemental schedule has been subjected
to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated in all
material respects in relation to the basic financial statements
taken as a whole.
/s/ PricewaterhouseCoopers LLP
Boston, Massachusetts
June 28, 2001
NSTAR NEGOTIATED SAVINGS PLAN FOR
PRODUCTION AND MAINTENANCE EMPLOYEES
Statements of Net Assets Available for Benefits
(in thousands)
December 31,
2000 1999
Assets
Investments, at quoted market value:
Registered investment company shares $60,441 $72,574
Fidelity Brokerage Account 6,085 6,004
Common shares of NSTAR 26,520 25,287
Loans to participants 3,218 3,166
Total investments 96,264 107,031
Other assets:
Receivables -
Employee contributions 91 73
Employer contributions 52 34
Total other assets 143 107 7
Net assets available for benefits $96,407 $107,138
======= ========
The accompanying notes are an integral part of these financial
statements.
NSTAR NEGOTIATED SAVINGS PLAN FOR
PRODUCTION AND MAINTENANCE EMPLOYEES
Statement of Changes in Net Assets Available for Benefits
Plan year ended December 31, 2000
(in thousands)
Additions to net assets attributed to:
Investment income
Interest and dividends -
Registered investment company shares and
Common Shares of NSTAR $ 3,518
Fidelity Brokerage Link 268
Interest on participant loans 238
4,024
Contributions:
Employee 6,249
Employer 2,193
8,442
Total additions, net 12,466
Deductions from net assets attributed to:
Benefits paid to participants or beneficiaries 13,582
Deemed distributions from participant loans 241
Net depreciation in fair value of investments 8,466
Total deductions 22,289
Net decrease prior to transfers (9,823)
Transfers to other savings plans (908)
Net decrease (10,731)
Net assets available for benefits:
Beginning of year 107,138
End of year $ 96,407
========
The accompanying notes are in integral part of these financial
statements.
NSTAR NEGOTIATED SAVINGS PLAN FOR
PRODUCTION AND MAINTENANCE EMPLOYEES
Notes to Financial Statements
A. Summary
The following description of the NSTAR Negotiated Savings Plan
for Production and Maintenance Employees (the "Plan"), formerly
known as the Boston Edison Negotiated Savings Plan for Production
and Maintenance Employees, provides only general information.
Participants' benefits under this Plan will be determined in
accordance with the Summary Plan Description document. Effective
January 1, 2000, the current Plan name was adopted following a
corporate merger as described below, and replaced the former
"Boston Edison Negotiated Savings Plan for Production and
Maintenance Employees." Changes in features of the Plan are also
described below.
General
NSTAR is an energy delivery company serving approximately 1.3
million customers in Massachusetts including more than one
million electric customers in 81 communities and 244,000 gas
customers in 51 communities. NSTAR was created through the
merger of BEC Energy (BEC) and Commonwealth Energy System
(COM/Energy) on August 25, 1999 and is an exempt public utility
holding company. As a result of this merger, the NSTAR Stock
Fund replaced the BEC Energy Common Share Fund. Common Shares of
NSTAR are listed on the New York and Boston stock exchanges under
the trading symbol of NST.
The Plan was originally established in 1986 to provide retirement
benefits for participating eligible employees of Boston Edison
Company (the "Company") through a program of salary-reduction
contributions and matching employer contributions. The Plan has
been amended or restated from time to time thereafter. The Plan
is a defined contribution plan subject to the rules and
regulations of the Employee Retirement Income Security Act of
1974 ("ERISA"). The Plan is qualified under section 401(a) of
the Internal Revenue Code (the "Code") and utilizes the special
federal income tax deferral features of section 401(k) of the
Code. The Plan administrators are the NSTAR Retirement Plans
Committee and the NSTAR Pension Management Committee. The Plan
investments are held by Fidelity Investments ("Fidelity"), the
Plan trustee and record keeper.
Participation
Production and Maintenance union employees are eligible to join
the Plan at specified times at age 21 or older with one year of
service, at age 35, or after four years of service regardless of
age.
Contribution Policy
Employees participating in the Plan elect to make contributions
of at least 2% but not more than 17% of their pretax annual
compensation as defined in the Plan. The Company contributes a
matching amount under the Plan equal to 50% of each Participant's
contributions, up to a maximum of 6% of the Participant's
compensation. Effective May 2000, the Company contributes a
matching amount under the Plan equal to 50% of each Participant's
contributions, up to a maximum of 8% of the Participants
compensation. The match is made entirely in common shares of
NSTAR. Refer to Note H for a subsequent change to the Plan.
Investments
Investments in the Plan are directed by the individual Plan
Participants. Currently there are nine investment choices
offered under the Plan: seven mutual funds (Asset Manager,
Magellan, Retirement Government Money Market, Spartan U.S. Equity
Index, Intermediate Bond, International Growth and Income and
Disciplined Equity) managed by Fidelity, the NSTAR Common Share
Fund, and Fidelity Brokerage Link. Fidelity Brokerage Link is a
self-directed brokerage account through which Participants are
able to invest in a variety of securities, including stock,
bonds, mutual funds and certificates of deposit. Participant
contributions and investment earnings are available for
Participant direction. Refer to Note H for a subsequent change
to the Plan.
Participants Accounts
Each Participant account is credited with the Participant's
contribution and an allocation of (a) the Company's contribution
and (b) Plan earnings (based on the Participant's account
balance). The benefit to which a Participant is entitled is the
benefit that can be provided from the Participant's vested
account.
Vesting
Participants are fully vested at all times in the entire balance
of their own contributions to the Plan and are immediately vested
in the Company match.
Payments of Benefits
Benefits paid to Participants on termination of service due to
death, disability, retirement, or other reasons are paid in a
lump-sum amount equal to the value of the vested interest in a
Participant's account.
Plan Termination
While it is the current intention of management to continue the
Plan indefinitely, neither the making of contributions nor the
continuance of the Plan is assumed by management as a contractual
obligation. In the event of Plan termination, the assets will be
distributed to Participants to the extent of their individual
allocations, in accordance with the Plan's distribution
provisions.
Participant Loans
Participants in the Plan for a minimum of 12 months may obtain a
loan from the balance in their elective contribution account.
The loan may not be less than $1,000 nor exceed the lesser of
$50,000 or 50% of the market value of the Participant's elective
contribution account. Loans must be repaid to the Participant's
account over a period not to exceed five years (unless the loan
is for the purchase of a principal residence) via payroll
deductions. The annual interest rate is modified from time to
time to reflect changes in the prime rate or other market
interest indicators.
B. Summary of Significant Accounting Policies
Basis of Accounting and Use of Estimates
The Plan's financial statements have been prepared under the
accrual method of accounting and in accordance with the rules and
regulations of ERISA. The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosures of
contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from
these estimates.
Risks and Uncertainties
The Plan provides for various investment options in any
combination of stock, bonds, fixed income securities, mutual
funds and other investment securities. Investment securities are
exposed to various risks, such as interest rate, market and
credit. Due to the level of risk associated with certain
investment securities and the level of uncertainty related to
changes in the value of investment securities, it is at least
reasonable possible that changes in risks in the near term would
materially affect Participants' account balances and the amounts
reported in the statements of net assets available for plan
benefits and the statement of changes in net assets available for
plan benefits.
Investments Valuation
Plan investments held by Fidelity are stated at fair value. Fair
value of shares of registered investment companies represent the
net asset value of such shares as of the close of business on the
last business day of the year. Fair value of NSTAR common shares
are based on the last quoted market price as of the close of
business on the last day of the year, which was $42.875 per
share. Fair value of the Fidelity Brokerage Link Account assets,
which are primarily common stock and fixed income securities, are
determined using the methods stated above. Participant notes
receivable are valued at cost plus interest which approximates
fair value.
Income Recognition
Income of the NSTAR Common Share Fund consists primarily of
dividends on its common shares. The allocation of each Fund's
earnings to a Participant's account is based on the percentage of
the Participant's units in the Funds and is allocated daily.
Capital gain distributions are included in dividend income.
Dividend income is recorded on the ex-dividend date. Interest
income is recorded on the accrual basis. Purchases and sales of
securities are recorded on a trade-date basis.
Net Appreciation/(Depreciation) in the Fair Value of Investments
Gains and losses are realized upon distributions (including
withdrawals) to Participants and the transfer of all or a portion
of a Participant's account between investment choices. The Plan
presents in the statement of changes in net assets the net
appreciation (depreciation) in the fair value of its investments
which consists of the realized gains or losses and the unrealized
appreciation (depreciation) on those investments.
Contributions
Salary reduction contributions made on behalf of Participants and
matching contributions are recorded in the period payroll
deductions are made from Participants. Contributions receivable
at December 31, 2000 and 1999 represent amounts withheld from
Participants and the corresponding matching contributions
subsequently deposited to the Plan in the following month.
Distributions and withdrawals
Distributions and withdrawal payments are recorded when paid.
Transfers Between Investment Choices
Plan Participants may, with certain limitations, elect to
transfer their elective contribution account balances from any
investment option or options to any of the other options offered
by the Plan on a daily basis.
C. Nonparticipant-Directed Investments
Information about the significant components of the changes in
net assets relating to the nonparticipant-directed investments is
as follows (in thousands):
Year Ended
December 31, 2000
Beginning of period $15,974
Changes in Net Assets -
Contributions $ 2,175
Dividends 212
Net appreciation 1,439
Benefits paid to Participants (1,861)
Transfers (148) 1,817
End of period $17,791
=======
D. Expenses
Brokerage fees, commissions, stock transfer taxes and other
expenses in connection with the purchase, sale or distribution of
securities for each Fund may be charged to such Fund. Any
expense of litigation may be paid by the Plan Trustee and charged
to the Trust Fund or to the Fund or Funds to which the litigation
relates. Expenses and charges incurred in the administration of
the Plan are generally paid by the Company. An administrative
fee relating to the issuance of Plan loans under the Loan Fund is
paid by Plan Participants.
E. Related Party Transactions
Certain Plan investments are shares of mutual funds managed by
Fidelity. Fidelity is the trustee as defined by the Plan and,
therefore, these transactions qualify as party-in-interest.
NSTAR and Boston Edison Company are parties-in-interest as that
term is defined in section 3(14) of ERISA.
F. Reconciliation of Financial Statements to Form 5500
The following is a reconciliation of net assets available for
benefits per these financial statements to the Form 5500 at
December 31, 2000 and 1999 (in thousands):
2000 1999
Net assets available for benefits
per these financial statements $ 96,407 $107,138
Less: Contributions receivable 143 107
Net assets available for benefits
per the Form 5500 $ 96,264 $107,031
======== ========
The following is a reconciliation of contributions received per
these financial statements to the Form 5500 for the year ended
December 31, 2000 (in thousands):
2000
Contributions per these financial $ 8,442
statements
Add: Contributions receivable at
the beginning of the year 107
Less Contributions receivable at
: the end of the year 143
Contributions per the Form 5500 $ 8,406
=======
Contributions are recorded on the Form 5500 when received.
G. Tax Status
The Internal Revenue Service has determined and informed
management by a letter dated May 3, 1995, that the Plan is
designed in accordance with applicable sections of the Internal
Revenue Code. The Plan administrator and tax counsel for the
Plan believe the Plan is designed and is currently being operated
in compliance with the applicable requirements of the Internal
Revenue Code. Therefore, no provision for income taxes has been
included in the Plan's financial statements.
H. Subsequent Event
Effective April 2, 2001, the Plan name became NSTAR Savings Plan.
The Plan's investment options were changed. Plan enhancements
include expedited eligibility and employer matching, more
flexibility in changing the deferral contribution percentage and
the restrictions on transferring funds into and out of the NSTAR
Common Share Fund are removed.
Employer Identification
Number: 04-3466300
Plan Number: 55099
NSTAR NEGOTIATED SAVINGS PLAN FOR
PRODUCTION AND MAINTENANCE EMPLOYEES
Schedule of Assets Held for Investment Purposes at Year End
(in thousands)
December 31, 2000
Market
Value at
Name of Issuer and Title of Issue Cost End of Period
Fidelity Mutual Funds*:
Asset Manager $ 9,291 $ 9,446
Magellan 24,421 30,809
Retirement Government Money Market 5,398 5,398
Spartan U.S. Equity Index 6,361 8,522
Intermediate Bond 187 187
International Growth & Income 1,389 1,360
Disciplined Equity 4,976 4,719
Total Fidelity Mutual Funds 52,023 60,441
Fidelity Brokerage Link* 6,098 6,085
NSTAR Common Share Fund* 15,378 26,520
Total Investments $ 73,499 $ 93,046
======== ========
Participant Notes Receivable* $ 3,218 $ 3,218
(Rates of 6.0% to 8.5%) ======== ========
* Represent parties in interest to the Plan
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the Retirement Plans Committee of the NSTAR Negotiated
Savings Plan for Production and Maintenance Employees has caused
this annual report to be signed on its behalf by the undersigned
hereunto duly authorized.
Date: June 29, 2001 /s/TIMOTHY R. MANNING
Timothy R. Manning
Vice President - Human Resources
and on behalf of the NSTAR
Retirement Plans Committee
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the
Registration Statement on Form S-8 (File No. 33-58457) of the
NSTAR Negotiated Savings Plan for Production and Maintenance
Employees of our report dated June 28, 2001 relating to the
financial statements of the NSTAR Negotiated Savings Plan for
Production and Maintenance Employees, which appears in this Form
11-K.
/s/ PRICEWATERHOUSECOOPERS LLP
Boston, Massachusetts
June 28, 2001