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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark one)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2002
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number 1-12527
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BAYCORP HOLDINGS, LTD.
(Exact name of registrant as specified in its charter)
------------------------------------------------------
DELAWARE 02-0488443
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
51 DOW HIGHWAY, SUITE 7 03903
ELIOT, MAINE
(Address of principal executive offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (207) 451-9573
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
--- ---
Class Outstanding at August 2, 2002
- --------------------------------------- -----------------------------
Common Stock, $0.01 Par Value per Share 8,540,869
BAYCORP HOLDINGS, LTD.
INDEX
PART I - FINANCIAL INFORMATION:
Item 1 - Financial Statements:
Consolidated Statements of Income and Comprehensive Income -
Three and Six Months Ended June 30, 2002 and 2001 ............. 3
Consolidated Balance Sheets -
at June 30, 2002 and December 31, 2001 .......................... 4-5
Consolidated Statements of Cash Flows -
Six Months Ended June 30, 2002 and 2001 ......................... 6
Notes to Financial Statements ....................................... 7
Item 2 - Management's Discussion and Analysis of Financial Condition
and Results of Operations ...................................... 13-18
Item 3 - Quantitative and Qualitative Disclosures About Market Risk 18
PART II - OTHER INFORMATION:
Item 4 - Submission of Matters to a Vote of Security Holders ........ 19
Item 6 - Exhibits and Reports on Form 8-K ........................... 19
Signature ........................................................... 20
Exhibit Index ....................................................... 21
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BAYCORP HOLDINGS, LTD.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(UNAUDITED)
(Dollars in Thousands, except shares and per share data)
Three Months Ended June 30, Six Months Ended June 30,
2002 2001 2002 2001
---- ---- ---- ----
Operating Revenues $ 10,126 $ 19,470 $ 25,494 $ 38,737
Operating Expenses
Production 6,832 5,513 13,418 10,939
Transmission 291 270 539 534
Purchased Power 71 3,589 263 17,327
Unrealized Gain on Firm Energy Contracts 0 (7,006) 0 (13,320)
Administrative & General 2,269 1,363 4,253 3,178
Depreciation & Amortization 939 998 1,880 1,995
Taxes other than Income 939 951 1,810 1,914
----------- ----------- ----------- -----------
Total Operating Expenses 11,341 5,678 22,163 22,567
Operating Income (1,215) 13,792 3,331 16,170
Other (Income) Deductions:
Interest and Dividend Income (145) (154) (275) (324)
Decommissioning Cost Accretion 1,232 815 2,463 1,630
Decommissioning Trust Fund Income (448) (408) (805) (760)
Equity Loss in HoustonStreet Investment 0 0 0 450
Other (Income) deductions (131) (4) 27 58
----------- ----------- ----------- -----------
Total Other Deductions 508 249 1,410 1,054
Income (Loss) Before Income Taxes (1,723) 13,543 1,921 15,116
Income Taxes 0 0 0 0
----------- ----------- ----------- -----------
Net Income (Loss) (1,723) 13,543 1,921 15,116
Other Comprehensive Income,
Unrealized Loss on Securities (205) (249) (701) (212)
----------- ----------- ----------- -----------
Comprehensive Income (Loss) ($ 1,928) $ 13,294 $ 1,220 $ 14,904
=========== =========== =========== ===========
Weighted Average Shares Outstanding - Basic 8,390,226 8,334,264 8,392,390 8,334,264
Weighted Average Shares Outstanding - Diluted 8,390,226 8,613,602 8,692,600 8,574,208
Basic Net Income (Loss) Per Share $ (0.20) $ 1.63 $ 0.23 $ 1.81
Diluted Net Income (Loss) Per Share $ (0.20) $ 1.57 $ 0.22 $ 1.76
(The accompanying notes are an integral part of these consolidated statements.)
3
BAYCORP HOLDINGS, LTD.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(Dollars in Thousands)
June 30, December 31,
2002 2001
---- ----
ASSETS
Current Assets:
Cash & Cash Equivalents $ 5,269 $ 15,278
Restricted Cash - Escrow 357 1,903
Short-term Investments, at market 14,821 0
Accounts Receivable (Net of allowance of $1,100) 4,621 6,291
Accounts Receivable from Related Party 25 0
Materials & Supplies, net 4,593 4,708
Prepayments & Other Assets 1,282 1,372
--------- ---------
Total Current Assets 30,968 29,552
Property, Plant & Equipment and Fuel:
Utility Plant Assets 124,607 123,923
Less: Accumulated Depreciation (24,603) (22,944)
--------- ---------
Net Property, Plant & Equipment 100,004 100,979
Nuclear Fuel 16,653 23,365
Less: Accumulated Amortization (7,356) (12,096)
--------- ---------
Net Nuclear Fuel 9,297 11,269
Net Property, Plant & Equipment and Fuel 109,301 112,248
Other Assets:
Decommissioning Trust Fund 32,798 32,048
Deferred Debits & Other 680 424
--------- ---------
Total Other Assets 33,478 32,472
TOTAL ASSETS $ 173,747 $ 174,272
========= =========
(The accompanying notes are an integral part of these consolidated statements.)
4
BAYCORP HOLDINGS, LTD.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(Dollars in Thousands)
June 30, December 31,
2002 2001
---- ----
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts Payable and Accrued Expenses $ 238 $ 1,607
Accrued Taxes 478 392
Accrued Misc. Seabrook Liabilities 570 1,115
Accrued Legal and Professional Expenses 185 244
Miscellaneous Current Liabilities 65 3,558
--------- ---------
Total Current Liabilities 1,536 6,916
Operating Reserves:
Decommissioning Liability 87,986 85,523
Miscellaneous Other 386 386
--------- ---------
Total Operating Reserves 88,372 85,909
Other Liabilities & Deferred Credits 8,709 7,892
Commitments & Contingencies
Stockholders' Equity:
Common stock, $.01 par value,
Authorized - 20,000,000 shares,
Issued and Outstanding - 8,767,250 and 8,586,316, respectively 88 86
Less: Treasury Stock - 226,381 and 185,052 shares,
respectively, at cost (1,772) (1,396)
Additional Paid-in Capital 94,499 93,357
Deferred Compensation (413) --
Accumulated Other Comprehensive Income (Loss) (478) 223
Accumulated Deficit (16,794) (18,715)
--------- ---------
Total Stockholders' Equity 75,130 73,555
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 173,747 $ 174,272
========= =========
(The accompanying notes are an integral part of these consolidated statements.)
5
BAYCORP HOLDINGS, LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(Dollars in Thousands)
Six Months Six Months
Ended Ended
June 30, 2002 June 30, 2001
------------- -------------
Net cash flow from operating activities:
Net income $ 1,921 $ 15,116
Adjustments to reconcile net earnings to net
cash (used in) provided by operating activities:
Equity loss in HoustonStreet investment 0 450
Depreciation and amortization 1,880 1,995
Amortization of nuclear fuel 2,070 2,070
Unrealized gain on firm energy trading contracts 0 (13,320)
Non-cash compensation expense 563 0
Decommissioning trust accretion 2,463 1,630
Decommissioning trust interest and other charges (806) (439)
(Increase) decrease in accounts and other receivable 1,645 (3,024)
(Increase) decrease in materials & supplies 4 (4)
Increase in prepaids, deferred debits and other assets (166) (1,435)
Decrease in accounts payable and accrued expenses (1,368) (6,722)
Increase (decrease) in misc. and other liabilities (3,181) 5,439
-------- --------
Net cash provided by operating activities 5,025 1,756
Net cash flows from investing activities:
Capital additions (794) (902)
Nuclear fuel additions (98) (126)
Payments to decommissioning fund (697) (1,308)
Investment in HoustonStreet 0 (450)
Decrease in restricted cash 1,546 1,784
Short term investments, net (14,768) 2,808
-------- --------
Net cash (used in) provided by investing activities (14,811) 1,806
Net cash from financing activities:
Stock option exercise 153 0
Reacquired capital stock (376) 0
Other investments 0 0
-------- --------
Net cash used in financing activities (223) 0
Net increase (decrease) in cash and cash equivalents (10,009) 3,562
Cash and cash equivalents, beginning of period 15,278 9,071
-------- --------
Cash and cash equivalents, end of period $ 5,269 $ 12,633
======== ========
Supplemental Disclosure of Cash Flow Information:
Cash paid for income taxes $ 705 $ 14
Supplemental Disclosure of Non-cash Financing Activities:
Stock option exercise in exchange for promissory notes $ 737 $ 0
(The accompanying notes are an integral part of these consolidated statements.)
6
BAYCORP HOLDINGS, LTD.
NOTES TO FINANCIAL STATEMENTS
NOTE A - THE COMPANY
BayCorp Holdings, Ltd. ("BayCorp" or the "Company") is a holding
company incorporated in Delaware in 1996. BayCorp owns two subsidiaries that
generate and sell wholesale electricity, Great Bay Power Corporation ("Great
Bay") and Little Bay Power Corporation ("Little Bay"), each of which is
wholly-owned as of June 30, 2002. In addition, BayCorp owns 45.9% of
HoustonStreet Exchange, Inc. ("HoustonStreet"), an Internet-based independent
crude oil and refined products trading exchange.
Great Bay and Little Bay generate and sell wholesale electricity. Their
principal asset is a combined 15% joint ownership interest in the Seabrook
Nuclear Power Project in Seabrook, New Hampshire (the "Seabrook Project" or
"Seabrook"). This ownership interest entitles the companies to approximately 174
megawatts ("MWs") of the Seabrook Project's power output. Great Bay and Little
Bay are exempt wholesale generators ("EWGs") under the Public Utility Holding
Company Act of 1935 ("PUHCA"). Unlike regulated public utilities, Great Bay and
Little Bay have no franchise area or captive customers. The companies sell their
power in the competitive wholesale power markets. HoustonStreet, an equity
investment of BayCorp, developed and operates HoustonStreet.com.
In October 2000, the Company announced that it reached an agreement
with Northeast Utilities ("NU") under which the Company's generating
subsidiaries, Great Bay and Little Bay, will include their aggregate 15%
ownership share of the Seabrook Project in the current auction of NU's
subsidiaries' shares of the Seabrook Project. Under the terms of the agreement,
BayCorp will receive the sales price established by the auction process. In the
event that the sale yields proceeds for BayCorp of more than $87.2 million,
BayCorp and NU will share the excess proceeds. Should BayCorp's sales proceeds
be less than $87.2 million, NU will make up the difference below that amount on
a dollar for dollar basis up to a maximum of $17.4 million. Under the agreement,
BayCorp will be paid separately for nuclear fuel and inventory. The agreement
also limits any top-off amount required to be funded by BayCorp for
decommissioning as part of the sale process at the amount required by the
Nuclear Regulatory Commission ("NRC") regulations.
On April 15, 2002, the Company announced that BayCorp and other selling
owners reached an agreement with FPL Group, Inc. ("FPL Group") for the sale of
approximately 88% of the Seabrook Project. Under the terms of the purchase and
sale agreement and BayCorp's agreement with NU, Baycorp expects to receive
approximately $117 million for its 15% ownership interest in Seabrook, nuclear
fuel and inventory. This amount assumes a December 31, 2002 closing and is based
upon expected balances for nuclear fuel and inventory and other purchase price
adjustments. This amount is net of the sharing of proceeds with NU under the
October 2000 agreement and also net of any top-off amount required to fund
BayCorp's share of the Seabrook decommissioning liability. Under the terms of
the agreement with FPL Group, BayCorp and the other selling owners are required
to top-off the decommissioning trust fund to ensure that the decommissioning
fund balance is sufficient to satisfy the requirements of the New Hampshire
Decommissioning Financing Committee ("NDFC") at the time of closing. The
decommissioning top off and the amount received for nuclear fuel and inventory
are subject to adjustment to reflect actual values at the time of closing.
As part of the sale, BayCorp will transfer to FPL Group nearly all of
its liabilities associated with Seabrook, including the decommissioning
liability. BayCorp will retain all of its cash and other assets in addition to
the sale proceeds. In addition to the sale proceeds, on December 31, 2002
BayCorp expects to have net working capital of approximately $22-$25 million
assuming a 92% capacity factor for the
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BAYCORP HOLDINGS, LTD.
balance of the year. This figure includes a reduction for expected tax
liabilities and an increase for the cash that would be received by the company
upon the exercise of all outstanding stock options. Other assets of BayCorp
include an above market power sales contract, an equity interest in
HoustonStreet and expected net operating loss carryforwards of approximately $70
million after the sale of the Seabrook interests. Assuming the exercise of all
options currently outstanding, BayCorp would have approximately 9.49 million
shares outstanding. The sale is subject to BayCorp shareholder approval and
various regulatory approvals, including the New Hampshire Public Utilities
Commission ("NHPUC"), the Connecticut Department of Public Utility Control
("CDPUC"), the Federal Energy Regulatory Commission ("FERC") and the NRC.
BayCorp expects the closing to occur around the end of 2002.
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The unaudited financial statements included herein have been prepared
on behalf of the Company pursuant to the rules and regulations of the Securities
and Exchange Commission ("SEC") and include, in the opinion of management, all
adjustments, consisting of normal recurring adjustments, necessary for a fair
presentation of interim period results. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been omitted or condensed
pursuant to such rules and regulations. The Company believes, however, its
disclosures herein, when read in conjunction with the Company's audited
financial statements for the year ended December 31, 2001 as filed in Form 10-K,
are adequate to make the information presented not misleading. The Company's
significant accounting policies are described in Note 1 of Notes to Consolidated
Financial Statements included in the Company's 10-K. The results for the interim
periods are not necessarily indicative of the results to be expected for the
full fiscal year.
Previously, Great Bay utilized unit contingent and firm forward sales
contracts to maximize the value of its 174 MW power supply from the Seabrook
Project. The Company follows the provisions of SFAS 133 Accounting for
Derivative Activities and Hedging Activities. The Company marked the related
contracts to market based on the estimated contract replacement value at each
balance sheet date. The Company had not entered into any forward firm energy
contracts as of June 30, 2002, nor does it expect to in 2002, in light of its
expected sale of its ownership interest in the Seabrook Project in 2002. As a
result, as of June 30, 2002, the Company had no unrealized loss or gain on the
mark-to-market of forward firm energy contracts recorded in accrued expenses.
The net change in unrealized gain/loss on firm forward energy contracts included
in the accompanying consolidated statements of income for the quarters ended
June 30, 2002 and June 30, 2001 was $0 and a gain of approximately $7,006,000,
respectively, and for the six months ended June 30, 2002 and June 30, 2001 was
$0 and a gain of approximately $13,320,000, respectively.
NOTE C - COMMITMENTS AND CONTINGENCIES
Nuclear Power, Energy and Utility Regulation
The Seabrook Project and Great Bay and Little Bay, as part owners of a
licensed nuclear facility, are subject to the broad jurisdiction of the NRC,
which is empowered to authorize the siting, construction and operation of
nuclear reactors after consideration of public health and safety, environmental
and antitrust matters. Great Bay and Little Bay have been, and will be, affected
to the extent of their proportionate share by the cost of any such requirements
made applicable to the Seabrook Project.
Great Bay and Little Bay are also subject to the jurisdiction of the
FERC under Parts II and III of the Federal Power Act and, as a result, are
required to file with FERC all contracts for the sale of
8
BAYCORP HOLDINGS, LTD.
electricity. FERC has the authority to suspend the rates at which Great Bay and
Little Bay propose to sell power, to allow such rates to go into effect subject
to refund and to modify a proposed or existing rate if FERC determines that such
rate is not "just and reasonable." FERC's jurisdiction also includes, among
other things, the sale, lease, merger, consolidation or other disposition of
facilities, interconnection of certain facilities, account and services and
property records.
Because they both are EWG's, Great Bay and Little Bay are not subject
to the jurisdiction of the SEC under PUHCA. In order to maintain their EWG
status, Great Bay and Little Bay must continue to engage exclusively in the
business of owning and/or operating all or part of one or more "eligible
facilities" and to sell electricity only at wholesale (i.e. not to end users)
and activities incidental thereto. An "eligible facility" is a facility used for
the generation of electric energy exclusively at wholesale or used for the
generation of electric energy and leased to one or more public utility
companies. The term "facility" may include a portion of a facility. In the case
of Great Bay and Little Bay, their combined 15% joint ownership interest in the
Seabrook Project comprises an "eligible facility."
Utility Deregulation; Public Controversy Concerning Nuclear Power Plants
The NHPUC and the regulatory authorities with jurisdiction over
utilities in New Hampshire and state legislatures of several other states in
which Great Bay and Little Bay sell electricity are considering or are
implementing initiatives relating to the deregulation of the electric utility
industry. Simultaneously with the deregulation initiatives occurring in each of
the New England states, the New England Power Pool ("NEPOOL") restructured to
create and maintain open, non-discriminatory, competitive, unbundled markets for
energy, capacity, and ancillary services. All of the deregulation initiatives
open electricity markets to competition in the affected states. While Great Bay
and Little Bay believe they are low-cost producers of electricity and will
benefit from the deregulation of the electric industry, it is not possible to
predict the impact of these various initiatives on the companies.
Nuclear units in the United States have been subject to widespread
criticism and opposition, which has led to construction delays, cost overruns,
licensing delays and other difficulties. Various groups have sought to prohibit
the completion and operation of nuclear units and the disposal of nuclear waste
by litigation, legislation and participation in administrative proceedings. The
Seabrook Project was the subject of significant public controversy during its
construction and licensing and remains controversial. An increase in public
concerns regarding the Seabrook Project or nuclear power in general could
adversely affect the operating license of Seabrook Unit 1. While the Company
cannot predict the ultimate effect of such controversy, it is possible that it
could result in a premature shutdown of the unit.
In the event of a permanent shutdown of any unit, NRC regulations
require that the unit be completely decontaminated of any residual
radioactivity. While the owners of the Seabrook Project are accumulating monies
in a trust fund to pay decommissioning costs, if these costs exceed the amount
of the trust fund, the current owners at such time will be liable for the
excess.
Decommissioning Liability
Based on the Financial Accounting Standards Board's ("FASB") tentative
conclusions, reflected on the February 7, 1996 Exposure Draft titled "Accounting
for Certain Liabilities Related to Closure and Removal of Long-Lived Assets,"
Great Bay and Little Bay have recognized as a liability their proportionate
share of the present value of the estimated cost of Seabrook Project
decommissioning. For Great Bay, the initial recognition of this liability was
capitalized as part of the Fair Value of the Utility
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BAYCORP HOLDINGS, LTD.
Plant at November 23, 1994. For Little Bay, the amount was provided for in the
purchase price allocation at the date Little Bay acquired its interest in
Seabrook.
New Hampshire enacted a law in 1981 requiring the creation of a
state-managed fund to finance decommissioning of any nuclear units in the state.
The Seabrook Project's decommissioning estimate and funding schedule is subject
to review each year by the NDFC. This estimate is based on a number of
assumptions. Changes in assumptions for such things as labor and material costs,
technology, inflation and timing of decommissioning could cause these estimates
to change, possibly materially, in the near term. In November 2001, the NDFC
issued an order that established a decommissioning funding schedule in
anticipation of the sale of a majority of the ownership interests in Seabrook.
The NDFC set an accelerated funding schedule for the years 2002 through 2006.
For the years 2007 and beyond, the funding schedule assumes contributions will
be made until 2026. The order also established the requirement for a lump sum
"top-off" payment at closing. The current estimated cost to decommission the
Seabrook Project (based on NDFC Docket 2001-1) is approximately $555.6 million
in 2001 dollars, assuming for decommissioning purposes, a remaining 25-year life
for the facility and a future cost escalation of 5.25% per year. The Company's
pro-rata share of this estimated cost of decommissioning in 2001 dollars is
$83.3 million.
The Staff of the SEC has questioned certain of the current accounting
practices of the electric utility industry regarding the recognition,
measurement and classification of decommissioning costs for nuclear generating
stations and joint owners in the financial statements of these entities. In
response to these questions, the FASB agreed to review the accounting for
nuclear decommissioning costs and, as a result, in August 2001, the FASB
approved the issuance of Statement of Financial Accounting Standards (SFAS) No.
143, "Accounting for Retirement Obligations." SFAS No. 143 provides accounting
requirements for the recognition and measurement of liabilities associated with
the retirement of long-lived assets and requires entities to record the fair
value of a liability for an asset retirement obligation in the period in which
it is incurred. Great Bay's and Little Bay's accounting for decommissioning is
based on the initial FASB exposure draft. The new statement requires that an
obligation associated with the retirement of a tangible long-lived asset be
recognized as a liability when incurred, and that the amount of the liability
resulting from (a) the passage of time and (b) revisions to either the timing or
amount of estimated cash flows should also be recognized. The new statement also
requires that, upon initial recognition of a liability for an asset retirement
obligation, an entity capitalize that cost by recognizing an increase in the
carrying amount of the related long-lived asset.
The new statement requires the initial measurement of the liability to
be based on fair value, where the fair value is the amount that an entity would
be required to pay in an active market to settle the asset retirement obligation
in a current transaction in circumstances other than a forced liquidation or
settlement. Because in most circumstances, a market for settling asset
retirement obligations does not exist, the FASB described an expected present
value technique for estimating fair value. If the new statement is adopted,
Great Bay's and Little Bay's decommissioning liability and annual provision for
decommissioning accretion could change relative to 2002. The new statement is
effective for the Company on January 1, 2003. Great Bay and Little Bay have not
quantified the impact, if any, that the new statement will have on the
consolidated financial statements.
Great Bay and Little Bay, based on the initial FASB exposure draft,
have been recognizing a liability based on the present value of the estimated
future cash outflows required to satisfy their obligations using a risk free
rate. As of June 30, 2002, the estimated undiscounted cash outflows for Great
Bay and Little Bay, for decommissioning, based on the November 2001 NDFC study,
with decommissioning expenditures starting in 2024 and being completed in 2046,
was $418.3 million, which
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BAYCORP HOLDINGS, LTD.
discounted at an average rate of 4.75%, over the funding period, to June 30,
2002, represented a liability of approximately $88 million reflected in the
accompanying balance sheet. In accordance with the initial FASB exposure draft,
the company's wholly-owned subsidiaries record any adjustments to the
decommissioning liability due to changes in estimates in the utility plant
account.
Great Bay and Little Bay accrete their share of the Seabrook Project's
decommissioning liability. This accretion is a non-cash charge and recognizes
their liability related to the closure and decommissioning of their nuclear
plant in current year dollars over the licensing period of the plant. The
non-cash accretion charge recorded in the accompanied consolidated statements of
income was $1,232,000 and $815,000 for the three months ended June 30, 2002 and
June 30, 2001, respectively and $2,463,000 and $1,630,000 for the six months
ended June 30, 2002 and June 30, 2001, respectively. The change in the accretion
between years reflects adjustments to the estimated cost of decommissioning by
the NDFC.
Funds collected by Seabrook for decommissioning are deposited in an
external irrevocable trust pending their ultimate use. The earnings on the
external trusts also accumulate in the fund balance. The trust funds are
restricted for use in paying the decommissioning of Unit 1. The investments in
the trusts are recorded as investments available for sale. Great Bay and Little
Bay have therefore reported their investment in trust fund assets at market
value and any unrealized gains and losses are reflected in equity. There was an
unrealized holding loss of approximately $532,000 as of June 30, 2002.
Although the owners of Seabrook are accumulating funds in an external
trust to defray decommissioning costs, these costs could substantially exceed
the value of the trust fund, and the owners, including Great Bay and Little Bay,
would remain liable for the excess.
In June 1998, the New Hampshire State legislature enacted legislation
that provides that in the event of a default by Great Bay on its payments to the
decommissioning fund, the other Seabrook joint owners would be obligated to pay
their proportional share of such default. As a result of the enactment of this
legislation, the staff of the NRC notified Great Bay in July 1998 of the staff's
determination that Great Bay complies with the decommissioning funding assurance
requirements under NRC regulations.
In response to the obligations imposed on the other joint owners under
the New Hampshire legislation, Great Bay agreed to make accelerated payments to
the Seabrook decommissioning fund such that Great Bay will have contributed
sufficient funds by the year 2015 to allow sufficient monies to accumulate, with
no further payments by Great Bay to the fund, to the full estimated amount of
Great Bay's decommissioning obligation by the time the current Seabrook
operating license expires in 2026. Based on the currently approved funding
schedule and Great Bay's accelerated funding schedule, Great Bay's
decommissioning payments will be approximately $1.4 million in 2002 and would
escalate at 4% each year thereafter through 2015. Little Bay's share of
decommissioning costs was prefunded by Montaup, the owner of the 2.9% interest
in the Seabrook Project that Little Bay acquired in November 1999, and as such,
periodic payments have not been required. As part of that acquisition, Montaup
transferred approximately $12.4 million into Little Bay's decommissioning
account, an irrevocable trust earmarked for Little Bay's share of Seabrook
decommissioning expenses. As of June 30, 2002 the fair market value of the
Little Bay decommissioning account was approximately $13.6 million.
On November 15, 1992, Great Bay and its predecessor's former parent,
Eastern Utilities ("EUA") entered into a settlement agreement that resolved
certain proceedings against EUA. Under the settlement agreement in 1992, EUA
agreed to guarantee up to $10 million of Great Bay's future decommissioning
costs of Seabrook Unit 1.
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BAYCORP HOLDINGS, LTD.
NOTE D - INVESTMENT IN HOUSTONSTREET
As of December 31, 1999, the Company owned 100% of HoustonStreet.
During 2000, HoustonStreet raised additional equity from outside investors and
as a result the Company's ownership fell below 50%. Subsequently, the Company
wrote its investment in HoustonStreet down to zero and suspended recognition of
additional HoustonStreet losses. Prior year financial statements are presented
in conformance with the equity method of accounting. Prior to the
deconsolidation, the Company recognized its share of the losses of HoustonStreet
in the consolidated financial statements. Summarized financial information for
the Company's investment in HoustonStreet, as accounted for by the equity
method, is as follows:
HoustonStreet:
Six Months ended Year ended Year ended
June 30, December 31, December 31,
2002 2001 2000
---- ---- ----
Total Assets $ 1,070,500 $ 1,256,400 $ 11,958,600
Total Liabilities 14,577,300 14,784,100 15,395,800
Commission Revenues 516,300 1,899,500 523,400
Other Revenues 725,000 -- --
Net Loss (150,300) (10,156,000) (40,046,800)
Company's Equity in net loss (69,000) (4,661,600) (22,259,000)
As of June 30, 2002, the Company had no investments or receivables from
HoustonStreet recognized on the accompanying balance sheet. The Company
suspended recognition of equity losses beginning in 2000 after its ownership in
HoustonStreet fell below 50%. The Company has no obligations to further fund
HoustonStreet.
NOTE E - EQUITY
BayCorp has never paid cash dividends on its common stock. Any future
dividends depend on future earnings, BayCorp's financial condition and other
factors.
In March 2002, in connection with the exercise of stock options, the
Company received promissory notes and stock pledge agreements from its
President, Frank Getman, and a director, John Tillinghast. The notes and
agreements were executed in order to allow for the exercise of certain stock
options before they expired. The notes were given in lieu of cash payments for
the exercise price of the options. The total exercise price of these options
was $737,126. Mr. Getman and Mr. Tillinghast have pledged 150,434 shares under
these agreements. The notes are due on the earlier of (i) December 31, 2003 or
(ii) 30 days after the payment to Great Bay, Little Bay and BayCorp or its
common shareholders, as the case may be, of the proceeds of the sale of (a)
Great Bay's and Little Bay's interests in the Seabrook Project or (b) BayCorp
shares of capital stock of Great Bay and Little Bay or (c) the outstanding
shares of capital stock of BayCorp by merger, share exchange or otherwise. The
pledged shares have been reflected in the accompanying balance sheet as a
reduction in equity as required by generally accepted accounting principles.
Compensation expense related to the exercise of these stock options is measured
based on the current market price of the Company's common stock and the number
of options exercised.
12
BAYCORP HOLDINGS, LTD.
Unrealized gains (losses) on securities held by the Company in its
decommissioning trust fund and short-term investment accounts are recorded as
Accumulated Other Comprehensive Income in the Company's balance sheet.
Accumulated other comprehensive income and the current period charge are as
follows:
Accumulated Other
Comprehensive Income
--------------------
Beginning Balance $ 223,000
Current Period Charge (701,000)
---------
Ending Balance $(478,000)
==========
NOTE F - NEW ACCOUNTING PRONOUNCEMENTS
SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to Be Disposed Of," requires that long-lived assets held
and used by an entity be reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable. In performing the review of the recoverability, the entity should
estimate the future cash flows expected to result from the use of the asset and
its eventual disposition. If the sum of the expected future cash flows
(undiscounted and without interest charges) is less than the carrying amount of
the asset, an impairment loss is recognized. Otherwise, an impairment loss is
not recognized. This statement requires that long-lived assets and certain
identifiable intangibles to be disposed of be reported at the lower of carrying
amount or fair value less cost to sell. The sales agreement with NU established
a minimum expected value for the Company's investment in the Seabrook plant and
the expected deal with FPL Group established a fair value. The Company estimates
that the current carrying amount for the respective investment is the lower of
the carrying amount or fair value less cost to sell in accordance with SFAS No.
121.
In October 2001, the FASB issued SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-lived Assets," which replaces SFAS No. 121. This
new statement addresses financial accounting and reporting for the impairment or
disposal of long-lived assets. Although SFAS No. 144 supersedes SFAS No. 121, it
retains the fundamental provisions of SFAS No. 121 regarding measurement of
long-lived assets to be disposed of by sale. Under SFAS No. 144, asset
write-downs from discontinuing a business segment will be treated the same as
other assets held for sale. The new statement also broadens the financial
statement presentation of discontinued operations to include the disposal of an
asset group (rather than a segment of a business segment.) SFAS No. 144 was
effective beginning January 1, 2002. The initial adoption of SFAS No. 144 did
not have an impact on the Company's financial position or results of operations.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
Overview
BayCorp derives substantially all of its revenue through its energy
sales activities and its 100% equity interest in Great Bay and Little Bay. Great
Bay and Little Bay are electric generating companies whose principal asset is a
combined 15% joint ownership interest in the Seabrook Project.
The following discussion focuses solely on operating revenues and
operating expenses that are presented in a substantially consistent manner for
all of the periods presented.
Results of Operations: Second Quarter of 2002 Compared to the Second Quarter of
2001
13
BAYCORP HOLDINGS, LTD.
Operating Revenues
BayCorp's operating revenues decreased by approximately $9,344,000, or
48%, to $10,126,000 in the second quarter of 2002 as compared to $19,470,000 in
the second quarter of 2001. The decrease in operating revenues was primarily
attributable to a decrease in the Seabrook capacity factor due to the May 2002
refueling outage. The Seabrook capacity factor for the second quarter of 2002
was 66.7% as compared to 99.3% for the second quarter of 2001. During the second
quarter of 2002, Seabrook conducted a twenty-eight day refueling outage from May
4th to May 31st. The twenty-eight day outage represents the shortest refueling
outage in Seabrook's operating history. There was no refueling outage in the
second quarter of 2001. BayCorp incurs losses as a result of scheduled and
unscheduled outages, including scheduled refueling outages, due to the
combination of loss of revenue and recognition of normal recurring operating and
maintenance costs, depreciation and costs associated with the outage.
During the three months ended June 30, 2002, Great Bay's average
selling price decreased 1.7%, to 3.98 cents per kilowatt hour ("kWh") as
compared to an average selling price of 4.05 cents per kWh for the same period
in 2001. Sales of electricity decreased by approximately 47.1% to 254,671,000
kWhs during the second quarter of 2002 as compared to approximately 481,662,000
kWhs in the second quarter of 2001. The decrease in kWhs sold was primarily
attributable to the loss of Seabrook generation during the scheduled refueling
outage that took place in the second quarter of 2002.
Expenses
Production and transmission expenses increased approximately
$1,340,000, or 23.2%, to $7,123,000 in the second quarter of 2002 as compared
to $5,783,000 in the second quarter of 2001. This increase was primarily
attributable to costs associated with the refueling outage in the second
quarter of 2002. There was no refueling outage in the second quarter of 2001.
Purchased power costs decreased approximately $3,518,000, from $3,589,000 in
the second quarter of 2001 to $71,000 in the second quarter of 2002. During the
second quarter of 2001, Great Bay purchased power for resale pursuant to a
Purchase Power Agreement with Select Energy. There were no significant power
purchases made in the second quarter of 2002. Administrative and general
expenses increased approximately $906,000, or 66.5%, to $2,269,000 in the
second quarter of 2002 as compared to $1,363,000 in the second quarter of 2001.
This increase was attributable in part to higher administrative and general
expenses at Seabrook during the second quarter of 2002 as compared to the
second quarter of 2001. Also in the second quarter of 2002, the Company
recorded $209,000 in non-cash compensation costs for employee stock option
costs relating to options that were repriced in 1998. In addition, during the
second quarter of 2002, the Company recorded $323,000 in non-cash compensation
costs for certain options exercised in 2002. See Note E - Equity. Depreciation
expense decreased approximately $59,000, or 5.9%, and taxes other than income
decreased approximately $12,000, or 1.3%, during the second quarter of 2002 as
compared to the same period in 2001.
In the second quarter of 2001, Great Bay recorded unrealized gains on
firm forward energy sales contracts of $7,006,000. The unrealized gain in the
second quarter of 2001 was due in part to Great Bay committing to sell less
power under firm forward contracts as of June 30, 2001 as compared to December
31, 2000. As of December 31, 2001 all firm energy sales contracts had been
fulfilled. The Company currently has no firm energy sales contracts. Sales for
the quarter ended June 30, 2002 were made on a unit contingent basis as opposed
to firm sales and as such, there was no replacement power risk and no unrealized
gain or loss to be recorded.
Decommissioning cost accretion increased $417,000, or 51.2%, to
$1,232,000 in the second quarter of 2002 as compared to $815,000 in the second
quarter of 2001. This accretion is a non-cash
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BAYCORP HOLDINGS, LTD.
charge that reflects Great Bay's liability related to the closure and
decommissioning of the Seabrook Project in current year dollars over the period
during which the Seabrook Project is licensed to operate. The change in
accretion between periods reflects adjustments to the estimated decommissioning
cost by the NDFC. Other income increased approximately $127,000, to $131,000 in
the second quarter of 2002 as compared to $4,000 in other income in the second
quarter of 2001.
Net Income
As a result of the above factors, during the second quarter of 2002,
the Company recorded a net loss of approximately $1,723,000, or a loss of
approximately $0.20 per share, as compared to net income of approximately
$13,543,000, or income of approximately $1.63 per share, during the second
quarter of 2001.
Results of Operations: First Six Months of 2002 Compared to the First Six Months
of 2001
Operating Revenues
BayCorp's operating revenues decreased by approximately $13,243,000, or
34.2%, to $25,494,000 in the first six months of 2002 as compared to $38,737,000
in the first six months of 2001. The decrease in operating revenues was
primarily attributable to lower sales of electricity in the six months ended
June 30, 2002 as compared to sales of electricity in the six months ended June
30, 2001. Sales of electricity decreased by approximately 27.4% to 632,709,000
kWhs in the first six months of 2002 as compared to approximately 872,431,000
kWhs in the first six months of 2001. The Seabrook capacity factor for the first
six months of 2002 was 83.3% as compared to 75.1% for the first six months of
2001. Though Seabrook generation was lower in the first six months of 2001, due
to unscheduled outages for maintenance and repairs, the Company purchased a
significant amount of power for resale during the first six months of 2001 as
compared to the same period in 2002. For the six months ended June 30, 2002,
purchased power expenses were $263,000 as compared to $17,327,000 for the six
months ended June 30, 2001. During the six months ended June 30, 2002, Great
Bay's average selling price decreased 9.2%, to 4.03 cents per kWh as compared to
an average selling price of 4.44 cents per kWh for the same period in 2001.
Expenses
Production and transmission expenses increased approximately $2,484,000,
or 21.7%, to $13,957,000 in the first six months of 2002 as compared to
$11,473,000 in the first six months of 2001. This increase was primarily
attributable to costs associated with the refueling outage in the first six
months of 2002. Purchased power costs decreased approximately $17,064,000, from
$17,327,000 in the six months ended June 30, 2001 to $263,000 in the six months
ended June 30, 2002. During the six months ended June 30, 2001, Great Bay
purchased power for resale to cover firm sales contracts during unscheduled
outages in addition to purchasing power for resale pursuant to a Purchase Power
Agreement with Select Energy. There were no firm power sales contracts and there
were no significant power purchases made during the six months ended June 30,
2002. Administrative and general expenses increased approximately $1,075,000, or
33.8%, to $4,253,000 in the first six months of 2002 as compared to $3,178,000
in the first six months of 2001. This increase was attributable in part to
higher administrative and general expenses at Seabrook during the first six
months of 2002 as compared to the first six months of 2001. In addition, during
the six months ended June 30, 2002, the Company recorded $240,000 in non-cash
compensation costs for employee stock option costs relating to options that were
repriced in 1998. Also during the six months ended June 30, 2002, the Company
recorded $323,000 in non-cash compensation costs for certain options exercised
during the six month period. See Note E - Equity. Depreciation expense decreased
approximately $115,000, or 5.8%, and taxes other than income
15
BAYCORP HOLDINGS, LTD.
decreased approximately $104,000, or 5.4%, during the first six months of 2002
as compared to the same period in 2001.
In the six months ended June 30, 2001, Great Bay recorded unrealized
gains on firm forward energy sales contracts of $13,320,000. The unrealized gain
in the first six months of 2001 was due in part to Great Bay committing to sell
less power under firm forward sales contracts as of June 30, 2001 as compared to
December 31, 2000. As of December 31, 2001 all firm energy sales contracts had
been fulfilled. The Company currently has no firm energy sales contracts. Sales
for the six months ended June 30, 2002 were made on a unit contingent basis as
opposed to firm sales and as such, there was no replacement power risk and no
unrealized gain or loss to be recorded.
Decommissioning cost accretion increased $833,000, or 51.1%, to
$2,463,000 in the six months ended June 30, 2002 as compared to $1,630,000 in
the six months ended June 30, 2001. This accretion is a non-cash charge that
reflects Great Bay's liability related to the closure and decommissioning of the
Seabrook Project in current year dollars over the period during which the
Seabrook Project is licensed to operate. The change in accretion between periods
reflects adjustments to the estimated decommissioning cost by the NDFC.
BayCorp made no investments in HoustonStreet in the first six months of
2002. BayCorp contributed $450,000 to HoustonStreet in the first six months of
2001 and recorded this contribution as an equity loss in investment.
Net Income
As a result of the above factors, the Company recorded net income of
approximately $1,921,000, or income of approximately $0.23 per share, for the
first six months of 2002 as compared to net income of approximately $15,116,000,
or approximately $1.81 per share, for the first six months of 2001.
Liquidity and Capital Resources
As of June 30, 2002, BayCorp had approximately $20,447,000 in cash
and cash equivalents, restricted cash and short-term investments. Approximately
$14,821,000 of the total cash was in short term investments at June 30, 2002.
BayCorp's cash generation for the six months ended June 30, 2002 was sufficient
to cover the ongoing cash requirements of the Company during that period. The
Company believes that its current cash, together with the anticipated proceeds
from the sale of electricity by Great Bay and Little Bay, will be sufficient to
enable the Company to meet its anticipated cash requirements. However, if the
Seabrook Project operates at a capacity factor significantly below historical
levels, or if expenses associated with the ownership or operation of the
Seabrook Project are materially higher than anticipated, or if the prices at
which Great Bay is able to sell its share of the Seabrook Project electricity
decrease significantly from current levels, BayCorp or Great Bay could be
required to raise additional capital, either through a debt financing or an
equity financing, to meet ongoing cash requirements. There can be no assurance
that BayCorp or Great Bay will be able to raise additional capital on acceptable
terms or at all.
The Company had net income of approximately $1,921,000 during the first
six months ended June 30, 2002. Cash expenditures during the first six months of
2002 included approximately $794,000 for capital additions, $98,000 for nuclear
fuel additions and $697,000 in decommissioning trust fund payments. Additional
cash expenditures included a decrease in accounts payable and accrued expenses
of approximately $1,368,000, primarily attributable to payments made in the
first quarter of 2002 for
16
BAYCORP HOLDINGS, LTD.
purchased power that was included in the December 31, 2001 accounts payable
balance. A decrease of approximately $3,181,000 in miscellaneous and other
liabilities in the first six months of 2002 was primarily attributable to costs
associated with the Seabrook refueling outage that were partially accrued for
and included in other liabilities. In the first six months of 2002, the Company
repurchased 41,329 shares of its stock for approximately $376,000.
Offsetting these cash expenditures were non-cash charges to income of
approximately $1,880,000 for depreciation and amortization, $2,070,000 for
nuclear fuel amortization and $1,657,000 for net decommissioning accretion and
decommissioning trust fund interest and other charges. In addition, there was a
decrease in accounts receivable of approximately $1,645,000 in the first six
months of 2002 due to higher revenues in the month of December 2001 as compared
to revenues in the month of June 2002.
During the first six months of 2002, the Company recorded a non-cash
compensation charge of approximately $240,000 for employee stock option costs
relating to repriced options. Certain employee stock options were repriced in
December 1998 based on the current market value of the stock at that time. In
accordance with generally accepted accounting principles, these options are
accounted for as a variable plan which gives rise to compensation expense for
subsequent increases in the market price of the stock. Also during the first
six months of 2002, the Company recorded a non-cash compensation charge of
approximately $323,000 for certain options exercised during the period as
required by generally accepted accounting principles. See Note E - Equity.
In the first six months of 2002, cash received from stock option
exercise transactions was $153,000.
The Company anticipates that its share of the Seabrook Project's
capital expenditures for the 2002 fiscal year will total approximately $5.8
million for nuclear fuel and various capital projects.
The Seabrook Project from time to time experiences both scheduled and
unscheduled outages. BayCorp incurs losses during outage periods due to the loss
of all revenue from the sale of generation and additional costs associated with
the outages as well as continuing operating and maintenance expenses and
depreciation. Unscheduled outages or operation of the unit at reduced capacity
can occur due to the automatic operation of safety systems following the
detection of a malfunction. In addition, it is possible for the unit to be shut
down or operated at reduced capacity based on the results of scheduled and
unscheduled inspections and routine surveillance by Seabrook Project personnel.
It is not possible for BayCorp to predict the frequency or duration of any
future unscheduled outages; however, it is likely that such unscheduled outages
will occur. Refueling outages are generally scheduled every 18 months depending
upon the Seabrook Project capacity factor and the rate at which the nuclear fuel
is consumed. During the second quarter of 2002, Seabrook conducted a
twenty-eight day refueling outage from May 4th to May 31st. The Company's
portion of refueling outage and maintenance expenses for the 2002 refueling
outage were approximately $5,306,000.
With continued uncertainty about the possibility of additional
terrorist activities in the United States, the Nation's nuclear power plants,
including the Seabrook Project, remain at a high level of security. Immediately
after the attacks in New York and Washington D.C. on September 11, 2001,
management of the Seabrook Project activated enhanced security measures. On
February 25, 2002, the NRC issued an order to all nuclear plant licensees,
requiring them to take certain additional interim compensatory measures to
address the generalized high-level threat environment. These additional
compensatory requirements will provide the NRC with reasonable assurance that
public health and safety and the common defense and security continue to be
adequately protected in the current generalized high-level threat environment.
These requirements will remain in effect pending notification from the NRC
17
BAYCORP HOLDINGS, LTD.
that a significant change in the threat environment occurs, or until the NRC
determines that other changes are needed following a more comprehensive
reevaluation of current safeguards and security programs. Seabrook remains at a
high level of security and the management of Seabrook has assured the joint
owners of Seabrook that it will take actions necessary to comply with the NRC
order setting out the requirements for interim compensatory measures. Compliance
with these requirements will result in additional incremental operating and
capital costs, a proportionate share of which will be paid by Great Bay and
Little Bay. Should additional security measures be required by the NRC,
additional operating or capital costs could be incurred at the Seabrook Project.
Forward - Looking Statements
This Quarterly Report on Form 10-Q contains forward-looking statements.
For this purpose, any statements contained herein that are not statements of
historical fact may be deemed to be forward-looking statements. Without limiting
the foregoing, the words "believes", "expects", "anticipates", "plans",
"intends" and similar expressions are intended to identify forward-looking
statements. Forward looking statements include, without limitation, statements
concerning the closing date of the Seabrook sale and the expected proceeds,
future net working capital and net operating loss carryforwards, forward firm
energy sales contracts, the ability to meet future anticipated cash requirements
and BayCorp's share of Seabrook's 2002 capital expenditures and 2002 refueling
and outage expenses. There are a number of important factors that could cause
the results of BayCorp and/or it subsidiaries to differ materially from those
indicated by such forward-looking statements. Among the important factors that
could cause actual results to differ materially from those indicated by such
forward-looking statements are the factors set forth in the Company's Annual
Report on Form 10-K under the caption Management's Discussion and Analysis of
Financial Condition and Results of Operation - Certain Factors That May Affect
Future Results, which are incorporated by reference herein.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Commodity Price Risk
The price of electricity is subject to fluctuation resulting from
changes in supply and demand. Great Bay sold a portion of its electricity
through forward, fixed-price energy sales contracts in prior years, including in
2001. Until December 31, 2001, Great Bay tracked its market exposure for these
forward energy sales contracts in a mark-to-market model that was updated daily
with current market prices and it was reflected in the company's balance sheet.
The positive, or negative, value of Great Bay's portfolio of firm power
commitments represented an estimation of the gain, or loss, that Great Bay would
have experienced if open firm commitments were covered at then-current market
prices. As of December 31, 2001 and as of June 30, 2002, Great Bay had no firm
forward, fixed price energy sales contracts.
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
The Company held its Annual Meeting of Stockholders on April 24, 2002.
Proxies for the meeting were solicited pursuant to Regulation 14A, and there
were no solicitations in opposition to management's nominees for Directors. All
such nominees were elected. At the Annual Meeting, the following matters were
voted on:
18
BAYCORP HOLDINGS, LTD.
1. Seven members were elected to the Board of Directors to serve
until the next Annual Meeting of Stockholders of the Company
and until their successors are duly elected and qualified. The
following table sets forth the number of votes cast for and
withheld for each nominee for Director.
Name For Withheld
---- --- --------
Alexander Ellis 6,717,295 18,201
Stanley I. Garnett 6,717,295 18,201
Frank W. Getman Jr. 6,703,974 31,522
James S. Gordon 6,724,245 11,251
Michael R. Latina 6,721,145 14,351
Lawrence M. Robbins 6,717,295 18,201
John A. Tillinghast 6,728,395 7,101
2. The stockholders of the Company ratified the adoption of the
Company's 2001 Non-Statutory Stock Option Plan by a vote of
4,919,844 in favor of the Plan, 259,015 voted against the
Plan, and 2,901 abstained.
Item 6. Exhibits and Reports on Form 8-K
(a) See Exhibit Index.
(b) The following report on Form 8-K was filed during the three month
period ended June 30, 2002:
The Company filed a Current Report on Form 8-K on April 13, 2002
that described an agreement among BayCorp, Great Bay and Little
Bay, and other selling owners, to sell their interests, which
amount to approximately 88% of the ownership, in the Seabrook
Nuclear Power Plant to FPL Group, Inc.
The Company filed a Current Report on Form 8-K on July 25, 2002 that
reported the Company's appointment of Deloitte and Touche as its
independent public accountants for the 2002 fiscal year and announced
its dismissal of Arthur Andersen LLP.
19
BAYCORP HOLDINGS, LTD.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
BAYCORP HOLDINGS, LTD.
August 14, 2002 By: /s/ Frank W. Getman Jr.
-------------------------------------
Frank W. Getman Jr.
President and Chief Executive Officer
20
BAYCORP HOLDINGS, LTD.
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
2.1 Purchase and Sale Agreement for the Seabrook Nuclear Power
Station by and among North Atlantic Energy Corporation, The
United Illuminating Company, Great Bay Power Corporation, New
England Power Company, The Connecticut Light and Power
Company, Canal Electric Company, Little Bay Power Corporation
and New Hampshire Electric Cooperative, Inc. as Sellers and
North Atlantic Energy Service Corporation and FPL Energy
Seabrook, LLC as Buyer dated April 13, 2002 is incorporated by
reference to Exhibit 10.1 to the registrant's current report
on Form 10-Q dated March 31, 2002.
10.1 Promissory Note, dated March 7, 2002, by and between John A.
Tillinghast in favor of BayCorp Holdings, Ltd.
99.1 Certain Factors That May Affect Future Results, set out on
pages 19-22 of the Company's Annual Report on Form 10-K for
the period ended December 31, 2001. Such Form 10-K shall not
be deemed to be filed except to the extent that portions
thereof are expressly incorporated by reference herein.
99.2 Certification pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002.
21