SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 25, 1998
EASTERN ENTERPRISES
(Exact name of registrant as specified in its charter)
Massachusetts 1-2297 04-1270730
(State or other (Commission File Number) (IRS Employer
jurisdiction of Identification No.)
incorporation)
9 Riverside Road, Weston, Massachusetts 02193
(Address of principal executive offices)(Zip Code)
Registrant's telephone number, including area code (781) 647-2300
None
(Former name or former address, if changed since last report)
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Item 1 through 4 and Items 6, 7(a) and (b), 8 and 9. Not Applicable.
Item 5. Other Events
Incorporated herewith is one PRESS RELEASE attached hereto as Exhibit
99.1.
Item 7. Financial Statements and Exhibits
(c) Exhibits
99.1 -- PRESS RELEASE
<PAGE>
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 hereunto duly authorized.
EASTERN ENTERPRISES
Date: June 29, 1998 By: /s/ Walter J. Flaherty
Walter J. Flaherty
Senior Vice President and CFO
<PAGE>
EXHIBIT INDEX
Exhibits Page
99.1 -- Press Release 5
<PAGE>
Exhibit 99.1
U.S. SUPREME COURT DECLARES COAL ACT UNCONSITUTIONAL
AS APPLIED TO EASTERN ENTERPRISES
Weston, MA. -- June 25, 1998 -- Eastern Enterprises (NYSE: EFU)
announced today that the U.S. Supreme Court, in a decision announced this
morning, overturned the First Circuit Court of Appeals' decision in Eastern
Enterprises v. Kenneth Apfel, et al., declaring the Coal Industry Retiree Health
Benefit Act of 1992 (the Coal Act) unconstitutional as applied to Eastern.
Eastern had asserted that the Coal Act violated the Due Process and Takings
clauses of the Constitution due, in part, to its unprecedented retroactivity.
The Coal Act required all companies that signed coal miner collective bargaining
agreements back to 1946 to pay premiums for lifetime health benefits for retired
miners and their dependents even though such benefits were not contractually
provided for until 1978.
In writing for the majority opinion, Justice O'Connor stated, "In
enacting the Coal Act, Congress was responding to a serious problem with the
funding of health benefits for retired coal miners. While we do not question
Congress' power to address that problem, the solution it crafted improperly
places a severe, disproportionate, and extremely retroactive burden on Eastern.
Accordingly, we conclude that the Coal Act's allocation of liability to Eastern
violates the Takings Clause, and that [the statute] should be enjoined as
applied to Eastern."
Eastern's Chairman and Chief Executive Officer, J. Atwood Ives,
commented, "We are extremely gratified by the Supreme Court's decision which
recognized the inherent unfairness of the Coal Act. With the removal of the
potential liability imposed on Eastern by the Coal Act, we can focus all of our
energy and financial resources on enhancing shareholder value."
Beginning in 1993, Eastern established reserves totaling $80 million to
fund this liability. As a result of today's Supreme Court decision, Eastern will
reverse that charge, less associated expenses, to its second quarter 1998
earnings, resulting in an extraordinary gain of approximately $75 million,
pre-tax, or $2.35 per share.
Eastern Enterprises owns and operates Boston Gas Company, New England's
largest distributor of natural gas, serving 530,000 residential, commercial and
industrial customers in Boston and 73 other eastern and central Massachusetts
communities, and Midland Enterprises Inc., the leading carrier of coal and a
major carrier of other dry bulk cargoes on the nation's inland waterways, with a
fleet of 2,348 barges and 87 towboats. Headquartered in Cincinnati, Ohio,
Midland provides low-cost marine transportation to many of the country's major
industrial and agricultural regions. ServicEdge Partners, Inc., a new subsidiary
of Eastern, provides HVAC equipment installation and service to customers in
eastern Massachusetts.
This release and other company reports and statements issued or made
from time to time contain certain "forward-looking statements" concerning
projected future financial performance, expected plans or future operations.
Eastern cautions that actual results and developments may differ materially from
such projections or expectations.
Investors should be aware of important factors that could cause actual
results to differ materially from the forward-looking projections or
expectations. These factors include, but are not limited to:
the effect of strategic initiatives on earnings and cash
flow, temperatures above or below normal in Boston Gas
Company's service area, changes in market conditions for
barge transportation, adverse weather and operating
conditions on the inland waterways,
uncertainties regarding the start-up of ServicEdge,
including expense levels and customer acceptance, changes
in economic conditions, including interest rates and the
value of the dollar versus other currencies, regulatory and
court decisions, and developments with respect to Eastern's
previously-disclosed environmental
liabilities.
Most of these factors are difficult to accurately predict and
are generally beyond the control of the Company.
Eastern Enterprises' press releases are available via
fax by calling, toll-free, 1-800-311-4607 or
on the Internet at Eastern's Home Page on the
World Wide Web:
http://www.efu.com
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