Regulatory Guide 9.4

Suggested Format for Cash Flow Statements Submitted as Guarantees of Payment of Retrospective Premiums

ML003740179
Person / Time
Issue date:	09/30/1978
From:	Office of Nuclear Regulatory Research
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RG-9.4
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6mpember 1978 U.S. NUCLEAR REGULATORY COMMISSION

REGULATORY GUIDE

OFFICE OF STANDARDS DEVELOPMENT

REGULATORY GUIDE 9.4 SUGGESTED FORMAT FOR CASH FLOW STATEMENTS

SUBMITTED AS GUARANTEES OF PAYMENT:

OF RETROSPEC1 IVE PREMIUMS

A. INTRODUCTION

statements of changes i n h al position' (sources and~ uses of funds) t ~arc ni~ ally prepared by In December 1975. Congress extended and mod- utilities and other ce as one of a number of ified the Price-Anderson Act. One modification was conventional fina ts.

to establish retrospective premiums as the second layer of financial protection in the three-layered B. SUGO T MAT FOR CASH FLOW

Price-Anderson system. To implement this modifi- STA ITED AS GUARANTEES

cation, the Commission promulgated in August 1977 Y OF RETROSPECTIVE

a regulation (10 CFR § 140.21)_that requires each PREMIUMS.I

licensee to provide evidence that it maintains, any e preparing cash flow statements should one or a combination of six guarantees of payment lb he guidelines presented below. A sample of deferred or retrospective premiums. Such a i sicue sTbe1 guarantee would be in an amount of $10 million stcue sTbeI I

nurally for each licensed operating reactor rate~ ' The statement title should indicate that the

100 MW(e) or more. icensee's cash flow statement refers to a particular Since implementation of § 140.21, th 01 s- plant or plants and is projected over the appropriate sion has found that most licensees prefer t uara year. Licensees should use either the calendar year or payment of retrospective premiu i 'g the corporate fiscal year for which they'have the certified financial statement shiit t c'ash latest projections.

flow can be generated and wou t ea lable for 2. The components or line items of cash flow payment of retrospective premi in three against which licensees should report should be lim months after submission of the state nt. In para- ited to (a) net income after taxes. (b) dividends paid.

graph 140.2I1(e),;cash fw is defined as "cash avail- (c) retained earnings, (d) depreciation and amortiza able to a compan a operating expenses, taxes, tion adjustments, (e) allowance for funds used during interest charges, nds have been paid." construction, and (f) deferred income taxes and in Licensee a e ly owed this definition vestment tax credits. Other categorieb are not neces when sumsttmn. However, the sary and should be included only if documented and irequired n mt submitted in somewhat defined. Negative values should be indicated either in differe 0 S some licensees have included parentheses or by minus signs. If a cash flow line unu , "other sour~es- or "external item is not applicable to a particular utility or plant finan eht appropriate or require further mnot (e.g., allowance for funds used during construction),

clarifica . These non-standardized submissions the licensee should explain why.I

add to the ime required by the NRC staff to analyze 3. If a particular plant has multiple owners. the them. This guide suggests a simplified format that, cash flow of each owner should be included unless if used, should reduce the burden to licensees of the principal licensee states that its cash flow state preparing cash flow statements and to the staff of ment covers all or some other owners. If certain own analyzing them. This simplified format is based oni ers ari providing guarantees in forms other! than cash WSNNC REGUL.ATORY GUIDES oid be am w to SweW'v or "w cm'sua U.Sd shmua~

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flow statements. these should be enclosed with the pleted annual period. Thus, it would be help~ul to guarantee of the principal licensee. Also. the owner's have both years juxtaposed, on the cash flow state total contingent liability for retrospective premiums ment as shown in Table I. Also, any significant de for all licensed nuclear plants in which it has owner viations between the two years in either total cash ship shares should be indicated on one statement. flow or its components should be explained b. the

4. Total cash flow projected for the year should be licensee.

divided by four to indicate that cash how can be gen erated and would be available for payment of retro spective premiums within three months after submis

C. IMPLEMENTATION

sion of the statement. The staff, of course, recognizes that this calculation may not reflect the licensee's Because the format suggested in this guide is a aclual quarterly cash flow position. simplified format based on financial statements nor

5. An important pan of the staff's analyses of cash mally prepared by utilities, it may be used in flow statements is a comparison of projected cash mediately by licensees in developimg annual submit flow with actual cash flow for the most recent com- tals required in 10 CFR § 140.21.

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9.4-2

Table 1 Suggested Format for a Cash Flow Statement

19XX Internal Cash Flow Projection for (Name) Nuclear Power Station (Dollars In Thousands)

Prior Year Projecion Year Actual Total Total Net Income After Taxes SXXXXXX SXXXXXX

Less Dividends Paid (XXX.XXX) (XXX.XXX)

Retained Earnings $ XX.XXX $ XX,XXX

Adjustments:

Depreciation and Amortization $XXXXXX $XXX.XXX

Deferred Income Taxes and Investment Tax Credits XX,XXX XX.XXX

Allowance for Funds Used During Construction (XXXXXX)

Total Adjustments (XXX.XXX)

$XXX,XXX SXXX ,XXX

Internal Cash Flow $XXX.XXX SXXX.XXX

Average Quarterly Cash Flow $ XXXXX

S XXMXXX

Percentage Ownership Unit name XXX.XX%

in All Operating Unit name XX.XX%

Nuclear Units Unit name XX.XX%

Maximum Total Contingent Liability $ XX.XXX

9.4-3 I

UNITED STATES

NUCLEAR REGULATORY COMMISSION

WASHINGTON. D. C. 20555 POSTAGE ANO PECS PAI*O

U.S. NUCLEAR REGULATORY

OFFICIAL BUSINESS COM oISSION

PENALTY FOR PRIVATE USE. $300

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