SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
March 31, 1999
For the quarterly period ended. . . . . . . . . . . . . . . . . .
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from. . . . . . . . to . . . . . . . . .
1-3103-2
Commission file number. . . . . . . . . . . . . . . . . . . . . .
New York State Electric & Gas Corporation
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Exact name of registrant as specified in its charter)
New York 15-0398550
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
P.O. Box 3287, Ithaca, New York 14852-3287
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Address of principal executive offices) (Zip Code)
607 347-4131
Registrant's telephone number, including area code . . . . . . . .
N/A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Former name, former address and former fiscal year, if changed since
last report.
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days.
Yes [x] No [ ]
The number of shares of common stock (par value $6.66 2/3 per
share) outstanding as of April 30, 1999 was 64,508,477. All shares
are owned by Energy East Corporation.
TABLE OF CONTENTS
PART I
Page
Item 1. Financial Statements. . . . . . . . . 1
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
(a) Results of Operations . . . 7
(b) Liquidity and Capital Resources. 7
PART II
Item 4. Submission of Matters to a Vote of
Security Holders . . . . . . . . . 11
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits. . . . . . . . . . 11
(b) Reports on Form 8-K . . . . 11
Signature. . . . . . . . . . . . . . . . . . . . . 12
Exhibit Index. . . . . . . . . . . . . . . . . . . 13
PART 1 - FINANCIAL INFORMATION
Item 1. Financial Statements
New York State Electric & Gas Corporation
Statements of Income - (Unaudited)
Three Months
Periods Ended March 31 1999 1998
(Thousands)
Operating Revenues
Electric . . . . . . . . . . . . . . . . $415,340 $505,588
Natural Gas. . . . . . . . . . . . . . . 135,394 121,644
---------- ----------
Total Operating Revenues. . . . . . . 550,734 627,232
---------- ----------
Operating Expenses
Fuel used in electricity generation
and electricity purchased. . . . . . . 145,676 205,303
Natural gas purchased. . . . . . . . . . 56,482 57,137
Other operating expenses . . . . . . . . 70,049 73,168
Maintenance. . . . . . . . . . . . . . . 17,495 31,948
Depreciation and amortization. . . . . . 30,957 47,594
Other taxes. . . . . . . . . . . . . . . 47,279 54,940
---------- ----------
Total Operating Expenses. . . . . . . 367,938 470,090
---------- ----------
Operating Income. . . . . . . . . . . . . 182,796 157,142
Interest Charges, Net . . . . . . . . . . 30,227 30,636
Other Income and Deductions . . . . . . . 67 2,722
---------- ----------
Income Before Federal Income Taxes . . . 152,502 123,784
Federal Income Taxes. . . . . . . . . . . 53,217 45,344
---------- ----------
Net Income. . . . . . . . . . . . . . . . 99,285 78,440
Preferred Stock Dividends . . . . . . . . 1,030 2,269
---------- ----------
Balance Available for Common Stock. . . . $98,255 $76,171
========== ==========
The notes on page 6 are an integral part of the financial statements.
Item 1. Financial Statements (Cont'd)
New York State Electric & Gas Corporation
Balance Sheets - (Unaudited)
March 31, Dec. 31,
1999 1998
(Thousands)
Assets
Current Assets
Cash and cash equivalents. . . . . . . . . . . . . . . $7,578 $12,149
Special deposits . . . . . . . . . . . . . . . . . . . 3,731 4,729
Accounts receivable, net . . . . . . . . . . . . . . . 127,444 113,553
Loan receivable, affiliated company. . . . . . . . . . 810,681 134,443
Fuel, at average cost. . . . . . . . . . . . . . . . . 2,840 20,200
Materials and supplies, at average cost. . . . . . . . 8,257 8,292
Prepayments. . . . . . . . . . . . . . . . . . . . . . 127,459 102,691
---------- ----------
Total Current Assets. . . . . . . . . . . . . . . . 1,087,990 396,057
Utility Plant, at Original Cost
Electric . . . . . . . . . . . . . . . . . . . . . . . 3,378,101 3,361,747
Natural gas . . . . . . . . . . . . . . . . . . . . 606,275 602,737
Common . . . . . . . . . . . . . . . . . . . . . . . . 141,419 144,043
---------- ----------
4,125,795 4,108,527
Less accumulated depreciation. . . . . . . . . . . . . 1,389,481 1,362,501
---------- ----------
Net Utility Plant in Service . . . . . . . . . . 2,736,314 2,746,026
Construction work in progress. . . . . . . . . . . . . 11,346 27,741
---------- ----------
Total Utility Plant. . . . . . . . . . . . . . . 2,747,660 2,773,767
Other Property and Investments, Net . . . . . . . . . . 63,171 62,136
Regulatory and Other Assets
Regulatory assets
Deferred income taxes, sale of generation assets. . . 227,474 -
Unfunded future federal income taxes . . . . . . . 137,925 136,404
Unamortized debt expense. . . . . . . . . . . . . . . 70,308 71,530
Demand-side management program costs. . . . . . . . . 61,512 64,466
Environmental remediation costs . . . . . . . . . . . 59,300 60,600
Other . . . . . . . . . . . . . . . . . . . . . . . . 107,386 125,693
---------- ----------
Total regulatory assets . . . . . . . . . . . . . . 663,905 458,693
Other assets . . . . . . . . . . . . . . . . . . . . . 26,772 27,359
---------- ----------
Total Regulatory and Other Assets . . . . . . . . . 690,677 486,052
---------- ----------
Total Assets . . . . . . . . . . . . . . . . . . $4,589,498 $3,718,012
========== ==========
The notes on page 6 are an integral part of the financial statements.
Item 1. Financial Statements (Cont'd)
New York State Electric & Gas Corporation
Balance Sheets - (Unaudited)
March 31, Dec. 31,
1999 1998
Liabilities (Thousands)
Current Liabilities
Current portion of long-term debt. . . . . . . . . . . $1,446 $2,604
Current portion of preferred stock . . . . . . . . . . 19,309 75,000
Commercial paper . . . . . . . . . . . . . . . . . . . 52,000 78,300
Accounts payable and accrued liabilities . . . . . . . 81,807 101,511
Interest accrued . . . . . . . . . . . . . . . . . . . 35,247 19,556
Taxes accrued. . . . . . . . . . . . . . . . . . . . . 325,072 701
Accumulated deferred federal income tax, net. . . . 50,524 44,274
Other . . . . . . . . . . . . . . . . . . . . . . . 55,688 76,302
---------- ----------
Total Current Liabilities . . . . . . . . . . . . . 621,093 398,248
Regulatory and Other Liabilities
Regulatory liabilities
Gain on sale of generation assets . . . . . . . . . . 617,484 -
Deferred income taxes . . . . . . . . . . . . . . . . 91,635 98,038
Deferred income taxes, unfunded future federal
income taxes. . . . . . . . . . . . . . . . . . . . 60,250 60,896
Other . . . . . . . . . . . . . . . . . . . . . . . . 36,691 42,182
---------- ----------
Total regulatory liabilities . . . . . . . . . . . . . 806,060 201,116
Other liabilities
Deferred income taxes . . . . . . . . . . . . . . . . 436,827 432,968
Other postretirement benefits . . . . . . . . . . . . 142,667 137,681
Environmental remediation costs . . . . . . . . . . . 79,300 80,600
Other . . . . . . . . . . . . . . . . . . . . . . . . 85,486 81,540
---------- ----------
Total other liabilities. . . . . . . . . . . . . . . . 744,280 732,789
Long-term debt . . . . . . . . . . . . . . . . . . . . 1,412,131 1,412,157
---------- ----------
Total Liabilities . . . . . . . . . . . . . . . . . 3,583,564 2,744,310
Commitments . . . . . . . . . . . . . . . . . . . . . . - -
Preferred Stock
Preferred stock redeemable solely at the
company's option . . . . . . . . . . . . . . . . . . 10,131 29,440
Preferred stock subject to mandatory
redemption requirements. . . . . . . . . . . . . . . 25,000 25,000
Common Stock Equity
Common stock . . . . . . . . . . . . . . . . . . . . . 430,057 430,057
Capital in excess of par value . . . . . . . . . . . . 430,393 430,329
Retained earnings . . . . . . . . . . . . . . . . . 110,353 58,876
---------- ----------
Total Common Stock Equity . . . . . . . . . . . . . 970,803 919,262
---------- ----------
Total Liabilities and Stockholder's Equity . . . . $4,589,498 $3,718,012
========== ==========
The notes on page 6 are an integral part of the financial statements.
Item 1. Financial Statements (Cont'd)
New York State Electric & Gas Corporation
Statements of Cash Flows - (Unaudited)
Three Months
Periods Ended March 31 1999 1998
(Thousands)
Operating Activities
Net income . . . . . . . . . . . . . . . . . . . . $99,285 $78,440
Adjustments to reconcile net income to net cash
provided by operating activities
Depreciation and amortization. . . . . . . . . . 30,957 47,594
Federal income taxes and investment tax credits
deferred, net. . . . . . . . . . . . . . . . . (223,880) (5,575)
Changes in current operating assets and liabilities
Accounts receivable . . . . . . . . . . . . . . (13,891) 13,592
Inventory. . . . . . . . . . . . . . . . . . . . 17,395 18,430
Prepayments. . . . . . . . . . . . . . . . . . . (24,768) (20,955)
Accounts payable and accrued liabilities . . . . (19,704) (8,980)
Taxes accrued. . . . . . . . . . . . . . . . . . 324,371 47,486
Other, net . . . . . . . . . . . . . . . . . . . . (31,656) 1,155
-------- --------
Net Cash Provided by Operating Activities . . . 158,109 171,187
-------- --------
Investing Activities
Utility plant additions. . . . . . . . . . . . . . (13,572) (38,801)
Other property and investment. . . . . . . . . . . - (249)
-------- --------
Net Cash Used in Investing Activities . . . . . (13,572) (39,050)
-------- --------
Financing Activities
Repurchase of common stock . . . . . . . . . . . . - (114,023)
Repayments of preferred stock and first
mortgage bonds. . . . . . . . . . . . . . . . . . (75,000) (30,000)
Long-term notes, net . . . . . . . . . . . . . . . - (380)
Commercial paper, net. . . . . . . . . . . . . . . (26,300) 47,000
Dividends on common and preferred stock. . . . . . (47,808) (25,897)
-------- --------
Net Cash Used in Financing Activities . . . . . (149,108) (123,300)
-------- --------
Net (Decrease) Increase in Cash and
Cash Equivalents . . . . . . . . . . . . . . . . . (4,571) 8,837
Cash and Cash Equivalents, Beginning of Period. . . 12,149 8,168
-------- --------
Cash and Cash Equivalents, End of Period. . . . . . $7,578 $17,005
======== ========
Supplemental Disclosure of Cash Flows Information
Cash paid during the period
Interest, net of amounts capitalized. . . . . . . $9,265 $11,473
The notes on page 6 are an integral part of the financial statements.
Item 1. Financial Statements (Cont'd)
New York State Electric & Gas Corporat ion
Statements of Retained Earnings - (Unaudited)
Three Months
Periods Ended March 31 1999 1998
(Thousands)
Balance, beginning of period. . . . . . . . . . $58,876 $568,844
Add net income. . . . . . . . . . . . . . . . . 99,285 78,440
-------- --------
. . . . . . . . . . . . . . . . . . . . . . . . 158,161 647,284
Deduct dividends on capital stock
Preferred. . . . . . . . . . . . . . . . . . . 1,030 2,269
Common . . . . . . . . . . . . . . . . . . . . 46,778 23,628
-------- --------
. . . . . . . . . . . . . . . . . . . . . . . . 47,808 25,897
Balance, end of period. . . . . . . . . . . . . $110,353 $621,387
========= =========
The notes on page 6 are an integral part of the financial statements.
Item 1. Financial Statements (Cont'd)
Note 1. Unaudited Financial Statements
The accompanying unaudited financial statements reflect all
adjustments which are necessary, in the opinion of management, for
a fair presentation of New York State Electric & Gas Corporation's
(company) results for the interim periods. All such adjustments
are of a normal recurring nature. The company's 1998 consolidated
financial statements include NGE Generation, Inc. and XENERGY
Enterprises, Inc. to May 1, 1998, the effective date of the
reorganization into a holding company structure, and include
Somerset Railroad Corporation, which was transferred to NGE
Generation effective July 31, 1998. The unaudited financial state-
ments should be read in conjunction with the consolidated financial
statements and notes contained in the company's Form 10-K for the
year ended December 31, 1998. Due to the seasonal nature of the
company's operations, financial results for interim periods are not
necessarily indicative of trends for a 12-month period.
Note 2. Segment Information
Selected financial information for each business segment is
presented in the following table. The company's two business
segments are electric and natural gas. The electric business
segment consists of electricity generation, transmission and
distribution operations. The natural gas business segment consists
of natural gas distribution, transportation and storage operations.
Three Months Ended Electric Natural Gas Total
March 31, 1999
Operating Revenues $415,340 $135,394 $550,734
Net Income $69,685 $29,600 $99,285
March 31, 1998
Operating Revenues $505,588 $121,644 $627,232
Net Income $59,788 $20,226 $80,014 (1)
Identifiable Assets
March 31, 1999 $3,428,028 $478,896 $3,906,924 (2)
December 31, 1998 $2,565,977 $497,750 $3,063,727 (2)
(1) Net Income for March 31, 1998, excludes a net loss from a subsidiary that was
transferred to the company's parent as part of the reorganization into a holding
company structure effective May 1, 1998.
(2) Identifiable Assets exclude corporate assets of $682,574 for March 31, 1999,
and $654,285 for December 31, 1998.
Note 3. Reclassifications
Certain amounts have been reclassified on the financial
statements to conform with the 1999 presentation.
Item 2. Management's discussion and analysis of financial
condition and results of operations
(a) Results of Operations
Earnings
Excluding the effect of 1998 wholesale electricity activity
due to the reorganization into a holding company structure in May
1998, earnings for the first quarter of 1999 improved due to higher
retail electricity and natural gas retail deliveries caused by
milder-than-normal weather last year. The increase was partially
offset by price reductions provided to customers to promote
competition.
Operating Results for the Electric Business
Excluding the effect of 1998 wholesale activity due to the
reorganization into a holding company structure in May 1998,
electric operating revenues for 1999 increased primarily due to
higher retail deliveries caused by milder-than-normal weather last
year, partially offset by a decrease due to lower retail
electricity prices. Electric operating expenses were higher due to
an increase in electricity purchased for retail deliveries,
partially offset by a decrease in other operating costs.
Operating Results for the Natural Gas Business
Natural gas operating revenues increased for the quarter
primarily due to higher retail deliveries caused by milder-than-
normal weather last year. A higher volume of natural gas purchases
was offset by lower purchased gas costs.
(b) Liquidity and Capital Resources
Electric Business
Sale of Affiliate's Coal-fired Generation Assets: In 1998 an
affiliate's seven coal-fired stations and associated assets and
liabilities were placed up for auction. Offers totaling $1.85
billion were accepted from The AES Corporation and Edison Mission
Energy in August 1998 for those generation assets. The affiliate
completed the sale of its interest in the Homer City generation
assets to Mission Energy in March 1999, and the sale of its
remaining coal-fired generation assets to AES in May 1999.
All proceeds, net of taxes and transaction costs, in excess of
the net book value of the generation assets, less funded deferred
taxes, will be used to write down the company's 18% investment in
Nine Mile Point 2. This treatment is in accordance with the
company's restructuring plan approved by the Public Service
Commission of the State of New York in January 1998.
Now that the sale of the affiliate's coal-fired generation
assets has been completed, the company's power requirements will be
satisfied through generation from its nuclear and hydroelectric
stations and by purchases from third parties. The company has
assumed the risk of market prices that are sometimes volatile,
since it has capped the prices it charges customers.
The company uses electricity contracts to manage its exposure
to fluctuations in the cost of electricity. These contracts allow
it to fix margins on the majority of its retail and wholesale sales
of electricity. The cost or benefit of electricity contracts is
included in the cost of electricity purchased when the electricity
is sold.
Nine Mile Point nuclear generating unit No. 2: The company is
actively pursuing the sale of its 18% interest in Nine Mile Point
2. In January Niagara Mohawk Power Corporation, the operator and
41% owner of Nine Mile Point 2, announced its intention to pursue
the sale of its interest in Nine Mile Point 2. Together the
company and Niagara Mohawk are in active discussions concerning the
sale to a third party who completed due diligence at the site
earlier this year. The company will petition for all necessary
regulatory approvals if an agreement is reached to sell Nine Mile
Point 2.
Natural Gas Business
Role of Local Distribution Companies: On November 3, 1998, the PSC
issued a "Policy Statement Concerning the Future of the Natural Gas
Industry in New York State and Order Terminating Capacity
Assignment." The policy statement includes the PSC's vision for
furthering competition in the natural gas industry in New York
State. The PSC believes the most effective way to establish a
competitive gas market is for natural gas utilities to exit the
merchant function over a three to seven year period. The PSC also
established guidelines and began several proceedings related to
implementing its policy statement. The company is participating in
each of the proceedings and continues to believe the competitive
marketplace should decide who will be the suppliers of natural gas.
The PSC's Order requires local distribution companies,
effective April 1, 1999, to cease assigning certain capacity costs
to customers who switch from distribution service to transportation
service. The local distribution companies will be provided a
reasonable opportunity to recover any capacity costs that may be
stranded. The company made a compliance filing with the PSC in
January 1999 to implement this requirement. The filing provided,
among other things, for the full recovery of stranded capacity
costs. In March 1999 the PSC approved the filing, with certain
modifications, allowing for the full recovery of stranded capacity
costs.
Other Matters
Year 2000 Readiness Disclosure
Many of the company's computer systems, which include
mainframe systems and special-purpose systems, refer to years in
terms of their final two digits only. Such systems may interpret
the year 2000 as the year 1900. If not corrected, those systems
could cause the company to, among other things, experience energy
delivery problems, report inaccurate data or issue inaccurate
bills.
The company is working diligently to address this problem by
reviewing all of its mainframe and special-purpose systems;
identifying potentially affected software, hardware, and date-
sensitive components, often referred to as embedded chips, of
various equipment; determining and taking appropriate corrective
action; and, when appropriate, testing its systems.
The company's mainframe systems consist of hardware and
software components of its information technology systems. The
company believes it has identified, taken appropriate corrective
action and tested all of its mainframe systems. The company
believes those systems are now able to process year 2000 and beyond
transactions.
The company's special-purpose systems consist of its non-
information technology systems. The company has identified over
5,000 items in its special-purpose systems that may be affected by
the Year 2000 problem. Items identified include software, hardware
and embedded chips in systems such as those that control the
acquisition and the delivery of electricity and natural gas to
customers and those in its communication systems. The company
believes it has fixed, eliminated, replaced or found no problem
with over 96% of the special-purpose items it has identified,
including those in its electricity and natural gas delivery
systems. The company is determining and taking appropriate
corrective action for the remaining identified items. Additional
items, however, continue to be identified as the company proceeds
with the review of its special-purpose systems. The company expects
to have reviewed, identified and determined and taken the
appropriate corrective action on all of its special-purpose systems
by the end of the second quarter of 1999.
Even though the company believes it will have taken corrective
action with respect to its own Year 2000 issues, the Year 2000
issue could adversely affect it if there are items in its mainframe
or special-purpose systems that may be affected by the Year 2000
problem that it has not identified in its review of those systems.
The Year 2000 issue could also adversely affect the company if
third parties such as suppliers, customers, neighboring or
interconnected utilities and other entities fail to correct any of
their Year 2000 problems. The company has contacted key third
parties to determine the status of their Year 2000 readiness
programs. Many have responded satisfactorily, some have not
responded satisfactorily and some have not responded at all. The
company is developing contingency plans, some of which are
discussed below, for reasonably likely worst case scenarios based
upon an assumption that it and those third parties will not be Year
2000 compliant.
The company's Year 2000 program is progressing on
schedule and the company believes it is taking all necessary steps
to address this issue successfully. Through March 31, 1999, the
company has spent approximately $11.5 million and expects to spend
an additional $0.8 million on Year 2000 readiness. The company
believes this amount is adequate to address its Year 2000 issues.
These amounts are being expensed as incurred and are being financed
entirely with internally generated funds. Addressing
the Year 2000 issue has not caused the company to delay any
significant information system projects.
As part of its normal business practice the company has
plans in place for use during emergencies, some of which could
arise from Year 2000 problems. The company is completing
contingency plans to specifically address reasonably likely worst
case scenarios that could arise as a result of the Year 2000
problem.
The contingency plans will address, among other scenarios, the
interruption or failure of normal business activities or operations
such as a partial electrical and/or natural gas system shutdown.
If the interruption or failure is due to embedded chips in
equipment such as automatic control devices, the company's
contingency plan is to implement its normal system restoration
procedures that it utilizes during emergencies. If the
interruption or failure is due to telecommunications not being
available, the company plans to use alternative communication
devices such as satellite phones. Another scenario is the failure
of its customer information system. Should that occur, the company
plans to rely on customer information previously stored and make
the appropriate adjustment to each customer's next bill after the
system is restored.
The company is dependent on others for its supply of natural
gas. In the event a supplier is not able to meet the company's
needs, it plans to purchase the needed amount of natural gas from
one of its many other suppliers on the same transmission line.
Since the sale of its affiliate's coal-fired generation assets has
been completed, the company will be buying from third parties the
majority of the electricity its customers need. If the electricity
available in its region is not adequate for all of the customers on
its system, the company plans to operate at lower levels of power
as outlined in its established emergency procedures. Should its
mainframe hardware be disabled, it has a backup mainframe system
that is capable of operating all of its business systems. The
company expects to have all of its contingency plans ready and
tested by mid-1999.
The PSC issued an Order on October 30, 1998, adopting a July
1, 1999, deadline for New York utilities to complete their Year
2000 readiness programs for "mission critical" systems and for
contingency plans. Mission critical systems include those systems
that control the acquisition and the delivery of electricity and
natural gas to customers, emergency management systems and certain
electricity generation plants. The company believes that its Year
2000 readiness program for mission critical systems and for
contingency plans will be completed by the PSC's July 1, 1999,
deadline. The PSC requires the filing of status reports with it
regarding certain Year 2000 issues.
Investing Activities
Capital spending for the first three months of 1999 was $14
million, primarily for the extension of service and necessary
improvements to existing facilities. The company's capital
spending for 1999 will be about $92 million, and is expected to be
paid for entirely with internally generated funds.
Financing Activities
On February 1, 1999, the company redeemed, at par, $25 million
of 7.40% preferred stock and $50 million of adjustable rate
preferred stock.
On April 1, 1999, the company purchased, at a discount, shares
of the following series of preferred stock: $7.2 million of 3.75%,
$2.8 million of 4 1/2% (Series 1949), $1.4 million of 4.15%, $4.8
million of 4.40%, and $3.1 million of 4.15% (Series 1954).
Consent to a proposal to increase the amount of unsecured debt
the company may issue - See Part II - Other Information, Item 4
- - Submission of Matters to a Vote of Security Holders.
Forward-looking Statements
This Form 10-Q contains certain forward-looking statements
that are based upon management s current expectations and
information that is currently available. The Private Securities
Litigation Reform Act of 1995 provides a safe harbor for forward-
looking statements in certain circumstances. Whenever used in this
report, the words "estimate," "expect," "believe," or similar
expressions are intended to identify such forward-looking
statements.
In addition to the assumptions and other factors referred to
specifically in connection with such statements, factors that could
cause actual results to differ materially from those contemplated
in any forward-looking statements include, among others, the risk
that more Year 2000 problems may be found as the company continues
the review of its systems; the risk that its progress in addressing
Year 2000 problems may not proceed as it expects; the fact that
despite all of its efforts, there can be no assurances that all of
its Year 2000 issues can or will be remedied; the fact that there
can be no assurances that all Year 2000 issues that could affect
the company can or will be totally eliminated by its suppliers,
customers, neighboring or interconnected utilities and other
entities; and the fact that its assessment of the effects of Year
2000 issues are based, in part, upon information received from its
suppliers, customers, neighboring or interconnected utilities and
other entities, its reasonable reliance upon this information and
the risk that inaccurate or incomplete information may have been
supplied to it.
Some additional factors that could cause actual results to
differ materially from those contemplated in any forward-looking
statements include, among others, the deregulation and unbundling
of energy services; the company's ability to compete in the rapidly
changing and increasingly competitive electricity and natural gas
utility markets; its ability to control nonutility generator and
other costs; changes in fuel supply or cost and the success of its
strategies to satisfy its power requirements now that all of its
affiliate's coal-fired generation assets have been sold; the
ability to obtain adequate and timely rate relief; nuclear or
environmental incidents; legal or administrative proceedings;
changes in the cost or availability of capital; growth in the areas
in which it is doing business; weather variations affecting
customer energy usage; and other considerations that may be
disclosed from time to time in its publicly disseminated documents
and filings. The company undertakes no obligation to publicly
update any forward-looking statements, whether as a result of new
information, future events or otherwise.
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
(a) On April 1, 1999, the company obtained consents from the
holders of a majority of the votes of shares of the company's
serial preferred stock to increase the amount of unsecured debt the
company may issue by up to an additional $1.2 billion.
Votes For: 454,061
Votes Against: 2,959
Votes Abstain: 49,958
(b) On April 23, 1999, Energy East Corporation, the owner of
all of the outstanding shares of the company's common stock, by
written consent in lieu of the annual meeting of stockholders,
amended the company's By-Laws to declassify the company's Board of
Directors to be implemented on a prospective basis, commencing with
the class of directors whose terms expired in 1999; adopted amended
By-Laws of the company; increased the number of directors of the
company from 10 to 12; and elected Alison P. Cassarett, Joseph J.
Castiglia, Michael I. German, Kenneth M. Jasinski and John M.
Keeler directors of the company to hold office until the next
annual meeting of stockholders. Directors whose terms of office as
directors continue are: Richard Aurelio, Lois B. DeFleur, Walter G.
Rich and Wesley W. von Schack whose terms expire at the 2000 Annual
Meeting of stockholders; and James A. Carrigg, Paul L. Gioia and
Ben E. Lynch whose terms expire at the 2001 Annual Meeting of
stockholders.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits - See Exhibit Index.
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter.
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 thereunto duly authorized.
NEW YORK STATE ELECTRIC & GAS CORPORATION
(Registrant)
By /s/ Sherwood J. Rafferty
Sherwood J. Rafferty
Senior Vice President and
Chief Financial Officer
Date: May 14, 1999
EXHIBIT INDEX
(a) The following exhibits are delivered with this report:
Exhibit No.
3-16 - Certificates of the Secretary of the Company concerning
consents dated March 20, 1957, May 9, 1975, and April 1,
1999, of holders of Serial Preferred Stock with respect
to issuance of certain unsecured indebtedness.
3-17 - By-Laws of the Company as amended April 23, 1999.
27 - Financial Data Schedule.