-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, IS5KAn8jMnKn1MYU+4jawXEkfgrLKE6eGZh5iKk23X6u+72GtTwKuPv64qta5AqW joYwMAnXWohTOS2sso0hOw== 0000071297-98-000002.txt : 19980129 0000071297-98-000002.hdr.sgml : 19980129 ACCESSION NUMBER: 0000071297-98-000002 CONFORMED SUBMISSION TYPE: U-1 PUBLIC DOCUMENT COUNT: 9 FILED AS OF DATE: 19980128 SROS: BSE SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: NEW ENGLAND ELECTRIC SYSTEM CENTRAL INDEX KEY: 0000071297 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 041663060 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: U-1 SEC ACT: SEC FILE NUMBER: 070-09167 FILM NUMBER: 98515611 BUSINESS ADDRESS: STREET 1: 25 RESEARCH DR CITY: WESTBOROUGH STATE: MA ZIP: 01581 BUSINESS PHONE: 5083669011 U-1 1 File No. 70- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM U-1 APPLICATION/DECLARATION UNDER THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935 NEW ENGLAND ELECTRIC SYSTEM (Name of company filing this statement) 25 Research Drive Westborough, Massachusetts 01582 (Address of principal executive offices) NEW ENGLAND ELECTRIC SYSTEM (Name of top registered holding company parent of applicant) Michael E. Jesanis Kirk L. Ramsauer Treasurer Associate General Counsel 25 Research Drive 25 Research Drive Westborough, Massachusetts 01582 Westborough, Massachusetts 01582 (Names and addresses of agents for service) Item 1. Description of Proposed Transactions - --------------------------------------------- New England Electric System (NEES) was created under the laws of The Commonwealth of Massachusetts by an Agreement and Declaration of Trust dated January 1, 1926, as amended, and is registered as a holding company under the Public Utility Holding Company Act of 1935 (the Act). As a result of the changes in the nature of the electric utility industry through the spread of wholesale and retail competition and the passage of legislation at the state level, the subsidiaries of NEES have contracted to sell their non-nuclear generating business. After completion of these transactions, the NEES Companies will consist primarily of transmission and distribution assets. In order to permit the System to grow and prosper by building on existing skills, the companies are exploring possible investments in "energy related companies" as defined in Rule 58(b) under the Act. In order to allow for "tax-deferred" or "tax-free" transactions for the current owners of the acquired companies, NEES is willing to consider the use of common shares in lieu of cash to make such investments. NEES, accordingly, seeks authorization hereunder to issue, in one or more separate transactions, from time to time, but not later than December 31, 2002, not exceeding 1,000,000 common shares to be used to acquire stock or assets of one or more energy-related companies (the Additional Common Shares). The acquisitions may be made either directly by NEES or indirectly through a direct or indirect non-utility subsidiary (the Acquiring Subsidiary). If the latter course is adopted for a particular acquisition, the shares will be contributed by NEES to the Acquiring Subsidiary and then used to acquire the stock or assets of the energy related company. NEES currently has issued and outstanding 64,537,777 shares. NEES also has 431,875 treasury shares, including 283,000 shares which were acquired as part of a share buyback plan announced in August 1997, and 85,030,348 authorized but unissued shares. The Additional Common Shares may be treasury shares or shares purchased on the open market. It is anticipated that contracts with the parties selling their stock or assets will provide for registration of the Additional Common Shares under the Securities Act of 1933. In the event that the total amount of authority requested in this Application/Declaration is invested in connection with the acquisition of "energy-related companies," NEES" and its subsidiaries' aggregate investment in energy-related companies would not exceed the greater of (i) $50 million, or (ii) 15% of NEES' "consolidated capitalization" (as defined in Rule 58(a)(1)(ii)) in compliance with the provisions set forth in Rule 58. NEES and its affiliates will fully comply with the requirements of Rule 58 in connection with acquisitions of energy-related companies. Neither NEES nor any subsidiary thereof has any ownership interest in an exempt wholesale generator (EWG) or a foreign utility company (FUCO) as defined in Sections 32 and 33 of the 1935 Act. Additionally, neither NEES nor any subsidiary thereof is a party to, nor has any rights under, a service, sales, or construction agreement with an EWG or FUCO. NEES and its subsidiaries shall comply with the requirements of Rule 53 of the Act in connection with EWG and FUCO acquisitions and financings. Item 2. Fees, Commissions and Expenses - --------------------------------------- The estimated fees and expenses in connection with the proposed issuance and sale will be set out in an exhibit to the Registration Statement. These include incidental services in connection herewith to be performed by New England Power Service Company (a wholly owned subsidiary of NEES) (the Service Company) at the actual cost thereof. The Service Company is an affiliated service company operating pursuant to Section 13 of the Act and the Commission's rules thereunder. Item 3. Applicable Statutory Provisions - ---------------------------------------- The proposed additional issuance and sale of the shares is subject to Sections 6(a) and 7 of the Act. Any contribution of the shares by NEES or its subsidiary to the Acquiring Subsidiary is exempted by Rule 45(b)(4) of the Act. The acquisition of the securities of the energy related company is exempted from the requirements of Section 9(a) of the Act by Rule 58. For the purposes of Rule 54, NEES satisfies the requirements of Rule 53(a) and Rule 53(b). Therefore, Rule 53(c) is not applicable. Item 4. Regulatory Approval - ---------------------------- No action by any state commission or Federal commission (other than the Securities and Exchange Commission) is necessary to carry out the proposed transaction. Item 5. Procedure - ------------------ It is requested that the Commission take action with respect to this Application/Declaration without a hearing being held and that this statement become effective and be granted on or before March 23, 1998, or as soon thereafter as possible. The Company (1) does not request a recommended decision by a hearing officer, (2) does not request a recommended decision by any other responsible officer of the Commission, (3) hereby specifies that the Division of Corporate Regulation may assist in the preparation of the Commission's decision, and (4) hereby requests that there be no 30-day waiting period between the date of issuance of the Commission's order and the date on which it is to become effective. Item 6. Exhibits and Financial Statements - ------------------------------------------ (a) Exhibits A Agreement and Declaration of Trust dated January 2, 1926, as amended through April 23, 1992, incorporated herein by reference to Exhibit 3 to the 1996 Form 10-K filed on March 28, 1997. * C Registration Statement (Form S-3), including all financial statements and exhibits thereto, which will be filed under the Securities Act of 1933 with reference to the additional shares * F Opinion of Counsel H Proposed Form of Notice * To be filed by amendment (b) Financial Statements 1-A Balance Sheet of NEES (Parent Company only) at September 30, 1997, Actual ** 1-B Statement of Income and Retained Earnings for NEES (Parent Company only) for twelve months ended September 30, 1997, Actual 2-A Consolidated Balance Sheet of NEES at September 30, 1997, Actual ** 2-B Statement of Consolidated Income for NEES for twelve months ended September 30, 1997, Actual 27 Financial Data Schedule for NEES and NEES Consolidated **The proposed transactions will have no material, instant effect on the statements of income and retained earnings. Pro forma statements, therefore, are omitted. ITEM 7. INFORMATION AS TO ENVIRONMENTAL EFFECTS - ------------------------------------------------- The proposed transactions do not involve a major Federal action significantly affecting the quality of the human environment. SIGNATURE --------- Pursuant to the requirements of the Public Utility Holding Company Act of 1935, the undersigned company has duly caused this Application/ Declaration on Form U-1 to be signed on its behalf, as indicated by the undersigned officer thereunto duly authorized. NEW ENGLAND ELECTRIC SYSTEM s/Michael E. Jesanis By Michael E. Jesanis, Treasurer Date: January 28, 1998 The name "New England Electric System" means the trustee or trustees for the time being (as trustee or trustees but not personally) under an agreement and declaration of trust dated January 2, 1926, as amended, which is hereby referred to, and a copy of which as amended has been filed with the Secretary of The Commonwealth of Massachusetts. Any agreement, obligation or liability made, entered into or incurred by or on behalf of New England Electric System binds only its trust estate, and no shareholder, director, trustee, officer or agent thereof assumes or shall be held to any liability therefor. EX-99 2 EXHIBIT INDEX EXHIBIT INDEX Exhibit No. Description Page - ----------- ------------ ------ A Agreement and Declaration of Trust Incorporated dated January 2, 1926, as amended by reference through April 23, 1992, incorporated herein by reference to Exhibit 3 to the 1996 Form 10-K filed on March 28, 1997. *C Registration Statement (Form S-3), To be filed including all financial statements by amendment and exhibits thereto, which will be filed under the Securities Act of 1933 with reference to the additional shares *F Opinion of Counsel To be filed by amendment H Proposed Form of Notice Filed herewith *To be filed by amendment Financial Statements -------------------- 1-A Balance Sheet of NEES (Parent Company Filed herewith only) at September 30, 1997, Actual 1-B Statement of Income and Retained Filed herewith Earnings for NEES (Parent Company only) for twelve months ended September 30, 1997, Actual 2-A Consolidated Balance Sheet of NEES Filed herewith at September 30, 1997, Actual 2-B Statement of Consolidated Income for Filed herewith NEES for twelve months ended September 30, 1997, Actual 27 Financial Data Schedule for NEES and Filed herewith NEES Consolidated EX-99 3 EXHIBIT H EXHIBIT H Proposed Form of Notice ----------------------- Notice of Proposal to Issue Additional Common Shares - ---------------------------------------------------- New England Electric System (NEES), a registered holding company, has filed an Application/Declaration under Sections 6(a) and 7 of the 1935 Act and Rules 25, 45, 53, and 58 thereunder. NEES currently has issued and outstanding 64,537,777 shares. NEES also has 431,875 treasury shares, including 283,000 shares which were acquired as part of a share buyback plan announced in August 1997, and 85,030,348 authorized but unissued shares. NEES seeks authority hereunder to issue, in one or more separate transactions, from time to time, but not later than December 31, 2002, not exceeding 1,000,000 common shares to be used to acquire stock or assets of one or more "energy-related companies" as defined in Rule 58(b) under the Act. The Additional Common Shares may be treasury shares or shares purchased on the open market. EX-99 4 FINANCIAL STATEMENT 1-A NEW ENGLAND ELECTRIC SYSTEM (Parent Company Only) Balance Sheet At September 30, 1997 (Unaudited)
ASSETS ------ (In Thousands) Investments: Common stocks of subsidiaries, at equity $1,673,459 Notes of subsidiaries 48,129 Other investments 4,234 ---------- Total investments 1,725,822 ---------- Current assets: Cash 517 Temporary cash investments - subsidiary company 6,600 Accounts receivable from subsidiaries 11 Interest and dividends receivable of subsidiaries 42,125 Other current assets 87 ---------- Total current assets 49,340 ---------- Deferred federal income taxes 2,838 ---------- $1,778,000 ========== CAPITALIZATION AND LIABILITIES ------------------------------ Common share equity: Common shares, par value $1 per share: Authorized - 150,000,000 shares Issued - 64,969,652 shares $ 64,969 Paid-in capital 736,567 Retained earnings (including $669,538,000 of undistributed subsidiary earnings) 934,357 Treasury stock - 92,602 shares (3,556) Unrealized gain on securities, net 281 ---------- Total common share equity 1,732,618 ---------- Current liabilities: Accounts payable 2,268 Other accrued expenses 1,357 Dividends payable 34,284 ---------- Total current liabilities 37,909 ---------- Other reserves and deferred credits 7,473 ---------- $1,778,000 ==========
EX-99 5 FINANCIAL STATEMENT 1-B NEW ENGLAND ELECTRIC SYSTEM (Parent Company Only) Statement of Income Twelve Months Ended September 30, 1997 (Unaudited)
(In Thousands) Equity in earnings of subsidiaries $215,972 Interest income - subsidiaries 863 -------- Total income from subsidiaries 216,835 Other income 133 --------- Total income 216,968 Corporate and fiscal expenses (includes $1,766,000 for cost of services billed by an affiliated company) 7,061 Federal income taxes (546) --------- Income before interest 210,453 Interest 312 --------- Net income $ 210,141 ========= Statement of Retained Earnings Retained earnings at beginning of period $ 877,515 Net income 210,141 Dividends declared on common shares (153,299) --------- Retained earnings at end of period $ 934,357 =========
EX-99 6 FINANCIAL STATEMENT 2-A NEW ENGLAND ELECTRIC SYSTEM AND SUBSIDIARIES Consolidated Balance Sheet (Unaudited)
September 30, ASSETS 1997 ------ ---- (In Thousands) Utility plant, at original cost $5,821,619 Less accumulated provisions for depreciation and amortization 1,956,522 ---------- 3,865,097 Construction work in progress 50,979 ---------- Net utility plant 3,916,076 ---------- Oil and gas properties, at full cost 1,296,337 Less accumulated provision for amortization 1,129,948 ---------- Net oil and gas properties 166,389 ---------- Investments: Nuclear power companies, at equity 50,370 Other subsidiaries, at equity 43,875 Other investments 109,191 ---------- Total investments 203,436 ---------- Current assets: Cash 6,542 Accounts receivable, less reserves of $20,395,000 219,411 Unbilled revenues 61,828 Fuel, materials and supplies, at average cost 72,907 Prepaid and other current assets 71,423 ---------- Total current assets 432,111 ---------- Deferred charges and other assets 572,052 ---------- $5,290,064 ========== CAPITALIZATION AND LIABILITIES ------------------------------ Capitalization: Common share equity: Common shares, par value $1 per share: Authorized - 150,000,000 shares Issued - 64,969,652 shares Outstanding - 64,735,089 shares $ 64,970 Paid-in capital 736,773 Retained earnings 934,357 Treasury stock - 234,563 shares (8,707) Unrealized gain on securities, net 3,770 ---------- Total common share equity 1,731,163 Minority interests in consolidated subsidiaries 46,259 Cumulative preferred stock of subsidiaries 126,166 Long-term debt 1,481,878 ---------- Total capitalization 3,385,466 ---------- Current liabilities: Long-term debt due within one year 82,910 Short-term debt 139,700 Accounts payable 132,950 Accrued taxes 25,139 Accrued interest 21,487 Dividends payable 37,046 Other current liabilities 135,272 ---------- Total current liabilities 574,504 ---------- Deferred federal and state income taxes 723,576 Unamortized investment tax credits 90,122 Other reserves and deferred credits 516,396 ---------- $5,290,064 ==========
EX-99 7 FINANCIAL STATEMENT 2-B NEW ENGLAND ELECTRIC SYSTEM AND SUBSIDIARIES Statement of Consolidated Income Twelve Months Ended September 30, 1997 (Unaudited)
(In Thousands) Operating revenue $2,440,888 ---------- Operating expenses: Fuel for generation 366,559 Purchased electric energy 539,043 Other operation 526,289 Maintenance 132,833 Depreciation and amortization 239,160 Taxes, other than income taxes 145,831 Income taxes 138,458 ---------- Total operating expenses 2,088,173 ---------- Operating income 352,715 Other income: Equity in income of generating companies 9,897 Other income (expense), net (16,768) ---------- Operating and other income 345,844 ---------- Interest: Interest on long-term debt 108,242 Other interest 17,329 Allowance for borrowed funds used during construction (2,195) ---------- Total interest 123,376 ---------- Income after interest 222,468 Preferred dividends and net gain on reacquisiton of preferred stock 5,964 Minority interests 6,642 ---------- Net income $ 209,862 ========== Average common shares 64,952,560 Net income per average common share $3.23 Dividends declared per share $2.36 Statement of Consolidated Retained Earnings Retained earnings at beginning of period $ 877,065 Net income 209,862 Dividends declared on common shares (153,020) Premium on redemption of preferred stock 450 --------- Retained earnings at end of period $ 934,357 =========
EX-27 8 FINANCIAL DATA SCHEDULE
OPUR1 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE SHEET AND RELATED STATEMENTS OF INCOME, AND RETAINED EARNINGS OF THE NEW ENGLAND ELECTRIC SYSTEM (PARENT COMPANY), AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 0000071297 NEW ENGLAND ELECTRIC SYSTEM (PARENT COMPANY) 1,000 DEC-31-1997 SEP-30-1997 12-MOS PER-BOOK 0 1,725,822 49,340 2,838 0 1,778,000 64,969 736,567 934,357 1,732,618 0 0 0 0 0 0 0 0 0 0 45,382 1,778,000 0 (546) 7,061 6,515 (6,515) 216,968 210,453 312 210,141 0 210,141 153,299 0 176,083 0 0 Total common stockholders equity is reflected net of treasury stock at cost and unrealized gain on securities. EX-27 9 FINANCIAL DATA SCHEDULE
OPUR1 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED BALANCE SHEET AND RELATED CONSOLIDATED STATEMENTS OF INCOME, RETAINED EARNINGS AND CASH FLOWS OF NEW ENGLAND ELECTRIC SYSTEM, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 0000071297 NEW ENGLAND ELECTRIC SYSTEM - CONSOLIDATED 1 NEES CONSOLIDATED 1,000 DEC-31-1997 SEP-30-1997 12-MOS PER-BOOK 3,916,076 369,825 432,111 572,052 0 5,290,064 64,970 736,773 934,357 1,731,163 0 126,166 1,481,878 0 0 139,700 82,910 0 0 0 1,728,247 5,290,064 2,440,888 138,458 1,949,715 2,088,173 352,715 (6,871) 345,844 123,376 222,468 7,332 215,136 153,020 108,242 546,857 $3.23 $3.23 Total deferred charges includes other assets. Preferred stock reflects preferred stock of subsidiaries. Preferred stock dividends reflect preferred stock dividends of subsidiaries. Total common stockholders equity is reflected net of treasury stock at cost and unrealized gain on securities. -----END PRIVACY-ENHANCED MESSAGE-----