<PAGE>
File No. 70-9167
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 1
TO
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)
John G. Cochrane 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)
<PAGE>
Form U-1 Application/Declaration dated January 28, 1998 (Commission's
File No. 70-9167), as previously amended, is hereby further amended as
follows:
Item 1. Description of Proposed Transactions
- ---------------------------------------------
Item 1 is hereby amended by the addition of the following:
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). At June 1, 1998, NEES
had outstanding 62,893,786 shares. NEES also has 2,075,866 treasury shares,
including 1,897,094 shares which were acquired as part of a share buyback plan
announced in August 1997, and 85,030,348 authorized but unissued shares.
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.
By Order dated March 25, 1998 (HCAR No. 26849), the Commission
authorized NEES to issue, in one or more separate transactions, not exceeding
one million common shares to be used to acquire the stock or assets of one or
more energy related companies. To date, 75,455 shares were issued in
connection with the acquisition of New England Water Heater Company. NEES is
currently evaluating several additional transactions; should these additional
transactions be consummated, NEES will require more than the 924,545
authorized shares remaining. Accordingly, NEES seeks to increase its
authorization hereunder to issue, in one or more separate transactions from
time to time but not later than December 31, 2002, to 2,000,000 common shares
to be used to acquire stock or assets of one or more energy-related companies.
The additional common shares may be newly issued shares, treasury shares, or
shares purchased on the open market.
Item 2, Fees, Commissions and Expenses
- --------------------------------------
The estimated fees and expenses in connection with the proposed issuance
and sale of the second one million shares are as follows:
Filing fee for registration of the additional
common shares under the Securities Act of 1933 $13,000
Services of the New England Power Service
Company (including counsel)* 5,000
Services of Coopers & Lybrand, L.L.C.,
Certified Public Accountants 5,000
Services of transfer agent and registrar 2,000
-------
Total Expenses $25,000
<PAGE>
* These include incidental services in connection herewith to be
performed by New England Power Service Company (a wholly owned
subsidiary of NEES) at the actual cost thereof. The New England
Power Service Company is an affiliated service company operating
pursuant to Section 13 of the Act and the Commission's rules
thereunder.
Item 5. Procedure
- ------------------
It is requested that the Commission take action with respect to this
Amendment without a hearing being held and that this statement become
effective and be granted on or before August 17, 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
- ------------------------------------------
Item 6(a) "Exhibits" is hereby amended by adding the following exhibits:
* C-1 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 second
million additional shares
* F-1 Opinion of Counsel
H-1 Proposed Form of Notice
* To be filed by amendment
Item 6(b) "Financial Statements" is hereby amended by adding the following
statements:
1-A Balance Sheet of NEES (Parent Company only) at March 31,
1998, Actual
** 1-B Statement of Income and Retained Earnings for NEES (Parent
Company only) for twelve months ended March 31, 1998, Actual
2-A Consolidated Balance Sheet of NEES at March 31, 1998, Actual
** 2-B Statement of Consolidated Income for NEES for twelve months
ended March 31, 1998, Actual
27 Financial Data Schedule for NEES
** The proposed transactions will have no material, instant effect on
the statements of income and retained earnings. Pro forma
statements, therefore, are omitted.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Public Utility Holding Company Act
of 1935, the undersigned company has duly caused this Post-Effective Amendment
No. 1 to Form U-1 Application/Declaration (Commission's File No. 70-9167) to
be signed on its behalf, as indicated, by the undersigned officer thereunto
duly authorized by such company.
New England Electric System
s/John G. Cochrane
By
John G. Cochrane
Treasurer
Date: June 18, 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.
<PAGE>
EXHIBIT AND FINANCIAL STATEMENT INDEX
EXHIBIT NO. DESCRIPTION PAGE
- ----------- ----------- ----
C-1 Registration Statement (Form S-3), To be filed by
including all financial statements and Amendment
exhibits thereto, which will be filed
under the Securities Act of 1933 with
reference to the second million
additional shares
F-1 Opinion of Counsel To be filed by
Amendment
H-1 Proposed Form of Notice Filed herewith
FINANCIAL
STATEMENT
NUMBER
- ---------
1-A Balance Sheet of NEES (Parent Company Filed herewith
only) at March 31, 1998, Actual
1-B Statement of Income and Retained Filed herewith
Earnings for NEES (Parent Company
only) for twelve months ended March 31,
1998, Actual
2-A Consolidated Balance Sheet of NEES at Filed herewith
March 31, 1998, Actual
2-B Statement of Consolidated Income for Filed herewith
NEES for twelve months ended March 31,
1998, Actual
27 Financial Data Schedule for NEES Filed herewith
and NEES Consolidated
<PAGE>
Exhibit H-1 - 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 outstanding 62,893,786
shares. NEES also has 2,075,866 treasury shares, including 1,897,094 shares
which were acquired as part of a share buyback plan announced in August 1997,
and 85,030,348 authorized but unissued shares.
By Order dated March 25, 1998 (HCAR No. 26849), the Commission authorized
NEES to issue, in one or more separate transactions, not exceeding one million
common shares to be used to acquire the stock or assets of one or more "energy
related companies" as defined in Rule 58(b) under the Act. To date, 75,455
shares were issued in connection with the first acquisition. NEES is
currently evaluating several additional transactions; should these additional
transactions be consummated, NEES will require more than the 924,545
authorized shares remaining. Accordingly, NEES seeks to increase its
authorization to issue, in one or more separate transactions from time to time
but not later than December 31, 2002, to two million common shares to be used
to acquire stock or assets of one or more "energy-related companies." The
additional common shares may be newly issued shares, treasury shares, or
shares purchased on the open market.
<PAGE>
NEW ENGLAND ELECTRIC SYSTEM
(Parent Company Only)
Balance Sheet
At March 31, 1998
(Unaudited)
ASSETS
------
<TABLE>
<CAPTION>
(In Thousands)
<S> <C>
Investments:
Common stocks of subsidiaries, at equity $1,757,467
Preferred stock of subsidiary 29,280
Notes of subsidiaries 74,018
Other investments 4,700
----------
Total investments 1,865,465
----------
Current assets:
Cash 50
Temporary cash investments - subsidiary company 75
Interest and dividends receivable of subsidiaries 49,954
Other current assets 493
----------
Total current assets 50,572
----------
Deferred federal income taxes 3,574
----------
$1,919,611
==========
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 $695,322,000 of
undistributed subsidiary earnings) 973,521
Treasury stock - 615,877 shares (24,555)
Unrealized gain on securities, net 519
----------
Total common share equity 1,751,021
----------
Current liabilities:
Accounts payable 1,581
Other accrued expenses 1,531
Dividends payable 33,967
Short-term debt 121,150
----------
Total current liabilities 158,229
----------
Other reserves and deferred credits 10,361
----------
$1,919,611
==========
</TABLE>
<PAGE>
NEW ENGLAND ELECTRIC SYSTEM
(Parent Company Only)
Statement of Income
Twelve Months Ended March 31, 1998
(Unaudited)
<TABLE>
<CAPTION>
(In Thousands)
<S> <C>
Equity in earnings of subsidiaries $222,377
Interest income - subsidiaries 979
--------
Total income from subsidiaries 223,356
Other income 164
---------
Total income 223,520
Corporate and fiscal expenses (includes $1,442,000 for cost
of services billed by an affiliated company) 6,388
Federal income taxes (1,133)
---------
Income before interest 218,265
Interest 2,827
---------
Net income $ 215,438
=========
Statement of Retained Earnings
Retained earnings at beginning of period $ 910,842
Net income 215,438
Dividends declared on common shares (152,759)
---------
Retained earnings at end of period $ 973,521
=========
</TABLE>
<PAGE>
<TABLE>
NEW ENGLAND ELECTRIC SYSTEM AND SUBSIDIARIES
Consolidated Balance Sheet
At March 31, 1998
(Unaudited)
<CAPTION>
(In Thousands)
<S> <C>
Utility plant, at original cost $ 5,896,726
Less accumulated provisions for depreciation and amortization2,030,580
-----------
3,866,146
Construction work in progress 42,945
-----------
Net utility plant 3,909,091
-----------
Investments:
Nuclear power companies, at equity 50,638
Other subsidiaries, at equity 37,771
Other investments 124,807
-----------
Total investments 213,216
-----------
Current assets:
Cash 20,648
Accounts receivable, less reserve of $18,692,000 259,863
Unbilled revenues 62,907
Fuel, materials, and supplies, at average cost 78,733
Prepaid and other current assets 67,071
-----------
Total current assets 489,222
-----------
Accrued Yankee nuclear plant costs 285,273
Deferred charges and other assets 375,214
-----------
$ 5,272,016
===========
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 - 64,183,918 shares $ 64,970
Paid-in capital 736,699
Retained earnings 973,521
Treasury stock - 785,734 shares (30,946)
Unrealized gain on securities, net 6,954
-----------
Total common share equity 1,751,198
Minority interests in consolidated subsidiaries 42,676
Cumulative preferred stock of subsidiaries 39,087
Long-term debt 1,367,173
-----------
Total capitalization 3,200,134
-----------
Current liabilities:
Long-term debt due within one year 25,320
Short-term debt 334,325
Accounts payable 167,664
Accrued taxes 59,612
Accrued interest 20,343
Dividends payable 36,215
Other current liabilities 103,534
-----------
Total current liabilities 747,013
-----------
Deferred federal and state income taxes 713,721
Unamortized investment tax credits 89,499
Accrued Yankee nuclear plant costs 285,273
Other reserves and deferred credits 236,376
-----------
$ 5,272,016
===========
</TABLE>
<PAGE>
<TABLE>
NEW ENGLAND ELECTRIC SYSTEM AND SUBSIDIARIES
Statement of Consolidated Income
Twelve Months Ended March 31, 1998
(Unaudited)
<CAPTION>
(In Thousands)
<S> <C>
Operating revenue $2,484,007
----------
Operating expenses:
Fuel for generation 359,019
Purchased electric energy 506,374
Other operation 587,378
Maintenance 150,329
Depreciation and amortization 225,734
Taxes, other than income taxes 146,985
Income taxes 149,144
----------
Total operating expenses 2,124,963
----------
Operating income 359,044
Other income:
Equity in income of generating companies 9,886
Other income (expense), net (14,067)
----------
Operating and other income 354,863
----------
Interest:
Interest on long-term debt 104,822
Other interest 19,096
Allowance for borrowed funds used during construction (1,721)
----------
Total interest 122,197
----------
Income after interest 232,666
Preferred dividends and net gain on
reacquisition of preferred stock 11,057
Minority interests 6,513
----------
Net income $ 215,096
==========
Average common shares - Basic 64,791,620
Average common shares - Diluted 64,851,221
Per share data:
Net income Basic and Diluted $3.32
Dividends declared $2.36
Statement of Consolidated Retained Earnings
-------------------------------------------
Retained earnings at beginning of period $ 910,841
Net income 215,096
Dividends declared on common shares (152,416)
----------
Retained earnings at end of period $ 973,521
==========
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> OPUR1
<LEGEND> 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.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<PERIOD-TYPE> 12-MOS
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 0
<OTHER-PROPERTY-AND-INVEST> 1,865,465
<TOTAL-CURRENT-ASSETS> 50,572
<TOTAL-DEFERRED-CHARGES> 3,574
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 1,919,611
<COMMON> 64,969
<CAPITAL-SURPLUS-PAID-IN> 736,567
<RETAINED-EARNINGS> 973,521
<TOTAL-COMMON-STOCKHOLDERS-EQ> 1,751,021 <F1>
0
0
<LONG-TERM-DEBT-NET> 0
<SHORT-TERM-NOTES> 121,150
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 0
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 47,440
<TOT-CAPITALIZATION-AND-LIAB> 1,919,611
<GROSS-OPERATING-REVENUE> 0
<INCOME-TAX-EXPENSE> (1,133)
<OTHER-OPERATING-EXPENSES> 6,388
<TOTAL-OPERATING-EXPENSES> 5,255
<OPERATING-INCOME-LOSS> (5,255)
<OTHER-INCOME-NET> 223,520
<INCOME-BEFORE-INTEREST-EXPEN> 218,265
<TOTAL-INTEREST-EXPENSE> 2,827
<NET-INCOME> 215,438
0
<EARNINGS-AVAILABLE-FOR-COMM> 215,438
<COMMON-STOCK-DIVIDENDS> 152,759
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> 179,264
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<FN>
<F1> Total common stockholders equity is reflected net of treasury stock at
cost and unrealized gain on securities.
</FN>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> OPUR1
<LEGEND> 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.
</LEGEND>
<SUBSIDIARY>
<NUMBER> 1
<NAME> NEW ENGLAND ELECTRIC SYSTEM - CONSOLIDATED
<MULTIPLIER> 1,000
<S> <C>
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<PERIOD-TYPE> 12-MOS
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 3,909,091
<OTHER-PROPERTY-AND-INVEST> 213,216
<TOTAL-CURRENT-ASSETS> 489,222
<TOTAL-DEFERRED-CHARGES> 660,487 <F1>
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 5,272,016
<COMMON> 64,970
<CAPITAL-SURPLUS-PAID-IN> 736,699
<RETAINED-EARNINGS> 973,521
<TOTAL-COMMON-STOCKHOLDERS-EQ> 1,751,198 <F3>
0
39,087 <F2>
<LONG-TERM-DEBT-NET> 1,367,173
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 334,325
<LONG-TERM-DEBT-CURRENT-PORT> 25,320
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 1,754,913
<TOT-CAPITALIZATION-AND-LIAB> 5,272,016
<GROSS-OPERATING-REVENUE> 2,484,007
<INCOME-TAX-EXPENSE> 149,144
<OTHER-OPERATING-EXPENSES> 1,975,819
<TOTAL-OPERATING-EXPENSES> 2,124,963
<OPERATING-INCOME-LOSS> 359,044
<OTHER-INCOME-NET> (4,181)
<INCOME-BEFORE-INTEREST-EXPEN> 354,863
<TOTAL-INTEREST-EXPENSE> 122,197
<NET-INCOME> 215,096
5,589 <F2>
<EARNINGS-AVAILABLE-FOR-COMM> 215,096
<COMMON-STOCK-DIVIDENDS> 152,416
<TOTAL-INTEREST-ON-BONDS> 104,822
<CASH-FLOW-OPERATIONS> 502,305
<EPS-PRIMARY> $3.32
<EPS-DILUTED> $3.32
<FN>
<F1> Total deferred charges includes other assets.
<F2> Preferred stock reflects preferred stock of subsidiaries. Preferred
stock dividends reflect preferred stock dividends of subsidiaries.
<F3> Total common stockholders equity is reflected net of treasury stock at
cost and unrealized gain on securities.
</FN>
