SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 of the
Securities Exchange Act of 1934
Date of Earliest Event Reported: April 21, 1999
NEW ENGLAND ELECTRIC SYSTEM
(exact name of registrant as specified in charter)
Massachusetts 1-3446 04-1663060
(state or other (Commission (I.R.S. Employer
jurisdiction of File No.) Identification No.)
incorporation)
25 Research Drive, Westborough, Massachusetts 01582
(Address of principal executive offices)
(508) 389-2000
(Registrant's telephone number, including area code)
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Item 5. Other Events
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On April 22, 1999, shareholders of the National Grid Group
plc (National Grid) approved the company's proposed acquisition
of New England Electric System (NEES) at National Grid's
Extraordinary General Meeting with more than 99% of votes in
favor. The $3.2 billion merger was announced on December 14,
1998.
NEES and National Grid were granted early termination of the
Hart-Scott-Rodino waiting period on the proposed merger on April
9, 1999. The merger is subject to a number of additional
regulatory approvals. On April 21, 1999, the New Hampshire
Public Utilities Commission (NHPUC) issued an order finding that
the NEES/National Grid merger filing did not satisfy the
requirements for exemption from the NHPUC's formal review
process. A procedural schedule for the NHPUC's review is
expected to be established on May 4, 1999.
On April 23, 1999, NEES announced earnings for the first
quarter of 1999. The press release announcing earnings is filed
herewith as Exhibit 99.
Item 7. Financial Statements and Exhibits
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(c) Exhibits
99. Press Release of New England Electric System
issued April 23, 1999.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this Current Report on
Form 8-K to be signed on its behalf by the undersigned thereunto
duly authorized.
NEW ENGLAND ELECTRIC SYSTEM
s/Michael E. Jesanis
By
Michael E. Jesanis
Senior Vice President and
Chief Financial Officer
Date: April 26, 1999
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.
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EXHIBIT INDEX
Exhibit No. Description Page
- ----------- ----------- ----
1 Press Release of New Filed
England Electric System herewith
issued April 23, 1999
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FOR IMMEDIATE RELEASE: April 23, 1999
CONTACT: Robert G. Seega 508-389-2178 (days)
(Investors) 508-949-1796 (evenings)
[email protected] (electronic mail)
Susan Stevens 508/389-3568 (days)
(Media) 508/389-4966 (evenings)
[email protected] (electronic mail)
New England Electric
Reports First Quarter Earnings/National Grid Shareholders Approve
Merger
Westborough, Mass . . . New England Electric System (NEES)
today reported first quarter 1999 earnings of $.74 per share on
59.5 million average diluted common shares, compared with $.88
per share on 64.6 million average diluted common shares for the
first quarter of 1998. The decrease in earnings reflects
significant revenue reductions due to the continuing impact of
the restructuring of the utility business and the effect of the
divestiture of NEES' nonnuclear generating business. The decrease
was partially offset by revenues from increased kilowatthour
(kWh) deliveries, improved results from investments in
unregulated ventures and the positive effects of a common share
repurchase program.
Industry restructuring continues to have a negative impact
on earnings. Rate reductions were implemented upon the
commencement of providing customer choice of electric supplier.
These initial rate reductions commenced for all customers in
Rhode Island, Massachusetts and New Hampshire on January 1, March
1, and July 1, 1998, respectively. Further rate reductions were
provided to customers following the sale of NEES' nonnuclear
generating business on September 1, 1998. The combined effect of
these events reduced first quarter revenues and operating
expenses by a net of approximately $.45 per share.
These decreases were partially offset by improved results
from NEES' unregulated businesses. Growth of these businesses
increased first quarter 1999 revenues by $70 million and
eliminated first quarter 1998 losses of approximately $.08 per
share. Earnings in the first quarter of 1999 were also
positively affected by: a) increased kWh deliveries of
approximately 2.8 percent in the first quarter of 1999 compared
with 1998 as a result of a continued strong economy and the
effect of weather (approximately $.03 per share) and b) reduced
interest expense and increased interest income due to the
reinvestment of the proceeds from the sale of the nonnuclear
generating business (approximately $.15 per share). NEES' 1998
common share repurchase program improved earnings in 1999 by
approximately $.04 per share.
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In other news, on Thursday, April 22, 1999, shareholders of
the National Grid Group plc (National Grid) (LSE:NGG) approved
the company's proposed acquisition of NEES at National Grid's
Extraordinary General Meeting with more than 99% of votes in
favor, according to NEES President and Chief Executive Officer
Rick Sergel. The $3.2 billion merger was announced on December
14, 1998.
"This is very encouraging to have such a resounding vote of
approval from National Grid's shareholders. This bodes well for
customers, because the sooner this merger is completed, the
sooner our customers can begin enjoying the benefits," said
Sergel.
NEES and National Grid were granted early termination of the
Hart-Scott-Rodino waiting period on the proposed merger on April
9, 1999. The merger is subject to a number of additional
regulatory approvals. On April 21, 1999, the New Hampshire
Public Utilities Commission (NHPUC) issued an order finding that
the NEES/National Grid merger filing did not satisfy the
requirements for exemption from the NHPUC's formal review
process. A procedural schedule for the NHPUC's review is
expected to be established on May 4, 1999.
NEW ENGLAND ELECTRIC SYSTEM AND SUBSIDIARIES (CONSOLIDATED)
<TABLE>
First Quarter Ended March 31,
1999 1998
<S> <C> <C>
Operating Revenue $ 657,502,000 $ 619,563,000
Net Income $ 44,153,000 $ 56,878,000
Average Common Shares - Basic 59,355,248 64,532,863
Average Common Shares - Diluted 59,502,829 64,616,568
Net Income per Share - Basic $.74 $.88
Net Income per Share - Diluted $.74 $.88
Twelve Months Ended March 31,
1999 1998
Operating Revenue $2,458,472,000 $2,484,007,000
Net Income $ 177,317,000 $ 215,096,000
Average Common Shares - Basic 61,082,450 64,791,620
Average Common Shares - Diluted 61,195,181 64,851,221
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Net Income per Share - Basic $2.90 $3.32
Net Income per Share - Diluted $2.90 $3.32
</TABLE>
New England Electric System (NEES) is a public utility holding company
headquartered in Westborough, Massachusetts. Its regulated subsidiaries are
engaged in the transmission, distribution, and sale of electricity. NEES'
electricity distribution subsidiaries serve 1.4 million customers in
Massachusetts, Rhode Island, and New Hampshire. Unregulated subsidiaries are
engaged in the marketing of energy commodities and services and the
construction and leasing of telecommunications infrastructure.
