File No. 70-8283
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 4
TO
FORM U-1
APPLICATION-DECLARATION WITH RESPECT TO
PARTICIPATION BY
EUA ENERGY INVESTMENT CORPORATION
IN A JOINT VENTURE TO COMMERCIALIZE
AN ENERGY RELATED COMPUTER SOFTWARE AND HARDWARE SYSTEM
UNDER
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
EUA ENERGY INVESTMENT CORPORATION
P.O. Box 2333, Boston, Massachusetts 02107
(Name of companies filing this statement
and address of principal executive office)
EASTERN UTILITIES ASSOCIATES
(Name of top registered holding company
parent of applicant or declarant)
CLIFFORD J. HEBERT, JR., TREASURER
EASTERN UTILITIES ASSOCIATES
P.O. Box 2333, Boston, Massachusetts 02107
(Name and address of agent for service)
The Commission is requested to mail signed copies
of all orders, notices and communications to:
ARTHUR I. ANDERSON, ESQ.
McDermott, Will & Emery
75 State Street
Boston, MA 02109
This Amendment No. 4 hereby amends Items 1 and 6 of the Application-
Declaration on Form U-1 of EUA Energy Investment Corporation, as previously
amended by Amendments No. 1, 2 and 3 thereto, as follows:
ITEM 1. DESCRIPTION OF THE PROPOSED TRANSACTIONS.
Part III of Item 1 is hereby amended and restated in its entirety as
follows:
III. Analysis.
A. Energy Industry. EEIC's proposed investment in the Joint Venture is
a logical extension of the EEIC authorized activities per the Commission's
Order of December 4, 1987. In said Order, EEIC was authorized to "conduct
certain energy or energy conservation research and to invest, directly or
indirectly, up to $2,000,000 in the aggregate on such activities." The
research and development of the Computer System is "energy research" as
authorized under the prior Order. Moreover, the business plan of TransCapacity
L.P. seeks to exploit the changes in the natural gas industry which were
effected by Federal Energy Regulatory Commission Order Number 636. In effect,
Order 636 deregulated the interstate pipeline transmission of natural gas so as
to enable producers and consumers free access to the interstate gas pipeline
transmission system. The FERC Order Number 636 Series (636, 636-A and 636-B)
manifests the federal government's intention to "deregulate" the sale of
natural gas, primarily by putting the regulated pipelines into the status of
common carriers, while maintaining jurisdiction over gas transportation. The
636 Series has created a "commodity" known as a "capacity right". A capacity
right is the ability to move a fixed amount of natural gas from Point A to
Point B utilizing the interstate gas pipeline transmission system. Order 636
makes this right transferable. It is the newly granted transferability which
makes capacity rights commodities. The 636 Series also requires pipelines to
establish electronic bulletin boards ("EBB") for the trading and brokering of
contracts for firm transportation and storage capacity rights. Information
regarding capacity rights is of vital economic importance to all energy
industry participants and to a new group of natural gas shippers, all of which
will receive information regarding capacity and capacity rights via the
Registry, which has been formed and is establishing a national, central
database of information concerning capacity rights. Cross-industry Working
Groups include significant representation by electric utilities as well as by
natural gas utilities, and are working (i) to develop an industry-wide system
for standardizing, presenting and managing information flow and (ii) to provide
uniform access to such information in order to ensure a viable secondary
market. Edison Electric Institute has participated in such activities from the
start and, in fact, chairs "Working Group Number 4", which is responsible for
developing recommendations with respect to standardized communications
protocols. The Computer System will provide products and/or services that
distribute information from the Registry Database on gas pipeline capacity
rights to third parties, and to Applicant's affiliates, via electronic or
digital means or media. In this regard, TransCapacity L.P. will provide
information and related services of value in establishing a market for capacity
rights, but will not take positions in nor will it speculate in any manner in
such market. The actual use, trading and brokering of available capacity in
natural gas pipelines will be achieved by the end users themselves, without
need for middleman intervention by EEIC.
Capacity Release and Electric Generation
Capacity management will be especially important in the Northeast, where
gas is an important part of the fuel mix for future generation projects and
where many of these generation projects will provide dual fuel flexibility. In
the northeast, local gas distribution companies ("LDCs") have a peak day
delivery in the winter which is 8 times the average day in August. Electric
generators have the ability to make economically advantageous fuel switches
using alternate fuels in the winter months when gas residential use is at its
peak and switching to gas in the summer when both demand and prices for gas are
lower. In much the same way electric generators can also make economically
advantageous use of capacity rights. Even though it may only be needed for a
percentage of the year, those who own the capacity right pay the pipeline for
it 12 months a year. If the capacity right owned by an electric generator is
not being used, the pipeline company can resell the capacity to a third party
with no benefit from this transaction going to the electric generator. There
is therefore, a definite economic incentive for electric generators to enter
the capacity release market. As capacity release becomes a tradeable
commodity, electric generators will be entering the market as both buyers and
sellers.
Capacity Release and Pipeline EBBs
In dealing with a new and more competitive environment, competition by its
very nature will require market participants to react quickly. In order to
effectively utilize capacity release an electric generator must have (a) a
complete and working understanding of the pipeline's capacity release rules,
(b) a complete and working understanding of the pipeline electronic bulletin
board ("EBB") and (c) constant monitoring of the EBB. Dealing with pipeline
EBBs will be a major issue for electric generators interested in reacting
quickly to changes in the market. Problems with pipeline EBBs include the
following:
1) Dealing with multiple pipeline EBBs creates multiple procedures for
the same transaction.
2) Pipeline bulletin boards and tariffs for the various pipelines are
all slightly different and most are not user friendly.
3) Monitoring multiple EBBs requires significant time, effort and
manpower.
Need for a Computer System to Access Database of Capacity Rights
FERC Order 636 requires that all interstate pipelines must maintain
electronic bulletin boards and that they provide non-discriminatory and timely
access to information about pipeline capacity availability and services. EBBs
are an essential part of the process in providing the information necessary for
the competitive processes within the marketplace to work. In order for FERC
Order 636 to work, all market participants must have unconstrained access to
the information necessary to compete fairly and effectively for gas supplies
and capacity rights.
The Computer System is designed to help companies manage capacity
internally and identify alternatives for acquisition or trading externally by
allowing access to a unified data base of capacity rights through user friendly
software. The Computer System helps insure open access to a central repository
of capacity ownership information, i.e. who owns a particular firm capacity
right at any point in time and will help provide potential shippers and
capacity releasers with data regarding all capacity rights both transportation
and storage on all open access pipelines in both a user friendly manner and on
a cost-effective basis.
B. Impact On New England and NEPOOL. One of the key objectives in
FERC's Order 636 is to ensure that interstate natural gas services support
expanded use of natural gas for electric generators to obtain firm gas supply
for gas fired generation. The ability of TransCapacity L.P. to facilitate
implementation of FERC's Order 636 will directly benefit New England, the EUA
System and the other members of NEPOOL. The current NEPOOL forecast estimates
that the amount of gas fired generation as a percentage of total generation
fuel mix will increase from 4% in 1992 to 15% by 2002. This corresponds with
national figures supplied by the North American Reliability Council that 70% of
the 67.1 gigawatts of capacity that electric utilities plan to build between
now and 2002 will be gas fired. More specifically, 29% of the EUA System
generation fuel mix currently is gas fired. (See Exhibit G attached hereto for
projected usage.) This includes generating units that it owns or with which it
has contractual commitments, such as Ocean State Power. In addition to these
sources, Canal Unit #2, a 584 MW oil fired unit in which Montaup has a 50%
ownership interest, is in the process of converting to gas which will
incrementally increase the gas component in the EUA System fuel mix by 14%.
Finally, Montaup is evaluating the feasibility of converting its Somerset
Station units from coal to gas fired generation in order to meet environmental
compliance requirements. The ability of EUA to secure natural gas at
competitive prices is an integral part of EUA's planned future generation
supply mix.
C. Importance of National Market. The business of TransCapacity L.P.
can only be effective, and can only benefit NEPOOL and the EUA System, if the
information contained in the Registry Database is national in scope. The Act
imposes no restrictions on sources of a registered holding company system's raw
resources. The critical issues with respect to the procurement of fuel are not
geographic in origin, except as they relate to fluctuations in local supply and
transportation costs. It is more critical that end users of fuel, including
registered holding company systems, maintain flexibility and maximized options
for the purchase, storage and delivery of fuel supplies. Assuming that the
Registry Database must collect data national in scope in order to service
customers in New England, the incremental costs of extending use of the
Registry Database to customers outside of New England would be negligible.
D. Impact on Electric Public Utility Holding Company Systems. EEIC
anticipates the need for the EUA System to be able to plan for its system
companies' fuel needs. Changes in the natural gas market affect EUA system
companies' ability to control costs, secure sufficient fuel supply, and use
increased flexibility in taking advantage of fuel-switchable capacities within
the EUA System. Such concerns have long been acknowledged by the Commission,
as evidenced by Arkansas Power and Light, Release No. 35-17400 (December 17,
1971), discussed in detail in Paragraph E below. in Central and South West
Corporation, Release No. 35-14555 (December 28, 1961) (also discussed in
Paragraph E below), the Commission acknowledged that circumstances affecting a
non-electric utility corporation engaged in the purchase, transmission and sale
of natural gas to an electric utility to supply such electric utility's steam
electric generating plants with boiler fuel on a long term basis could
adversely affect the supply of low cost fuel available to the electric utility.
Therefore, the Commission authorized the electric utility company to invest in
the common stock of the non-electric utility company in order to stabilize the
non-electric utility company and prevent such adverse results.
E. Additional Precedents. The Commission has previously authorized
subsidiaries of registered public utility holding company systems to invest in
energy-related computer software development and commercialization. The
software and computer systems described in various SEC releases discussed below
encompass many purposes including: communications, load management, energy use
optimization, and non-energy related applications. The nexus between the
purposes of the computer software and systems and the efficient supply of
electric energy satisfy the Act's functional relationship requirements of
Section 11.
(1) In a release concerning the Southern Company (HCAR-23440 (1984)), the
Commission approved the acquisition of approximately 28 percent of the common
stock of a computer software and hardware company. The subject company,
Integrated Communication Systems, Inc., developed a system of two-way
communications over local telephone lines to provide a wide range of
energy-related services targeting the residential and small commercial customer
markets. Similarly, in American Electric Power Company, Inc. (HCAR-24295
(1987)), that registered holding company was authorized to purchase a portion
of the common stock of the same Integrated Communications Systems, Inc.
(2) The Commission authorized CNG Energy Company, a subsidiary of
Consolidated Natural Gas Company, to purchase the exclusive marketing rights in
the United States and Canada for a computer-aided, radio-dispatched system from
a non-associate company. This dispatch ("CARD") Computer System is energy-
related by virtue of the fact that it facilitates the dispatching of customer
service orders and messages by replacing voice communication with digital
communication. (HCAR-23963 (1985)).
(3) Applicable precedent can also be found in a series of Commission
Orders relating to electric generation fuel transportation and supply issues.
In the Arkansas Power and Light Company Order (HCAR-17400 (1971)), the
Commission authorized the predecessor of Entergy Corporation, Middle South
Utilities, to form a subsidiary, System Fuels, Inc., to procure fuel supplies
for Entergy System generation. The subject subsidiary engages in natural gas
exploration, production and delivery as a supplement to system purchases of
natural gas from non-affiliates, and was authorized to develop and implement
delivery programs to assure adequate fuel both in terms of quantity and price,
and to enable advance planning by the joint owner-utility operating companies.
The Commission authorized System Fuels to sell natural gas fuel by-products
(which are not functionally related to the business of an electric utility
company) and surpluses to non-affiliated companies, without geographic
restriction.
(4) A similar fact pattern and Commission approval can be found in the
application of Central & Southwest Corporation (C&SW) to acquire the Transok
Pipeline Company (HCAR-14555 (1961). In that Order, the Commission authorized
the acquisition of Transok, a company engaged in the purchase, transmission and
sale of natural gas. In 1991, Transok was authorized to acquire an additional
pipeline company, TEX-CON Oil and Gas Company, which included an additional
pipeline network and gas processing plants. This acquisition nearly doubled
Transok's assets throughput and gas-marketing capabilities. Transok, in 1992,
also purchased eleven additional gas-gathering systems from Reliance Pipeline
Company, which further expanded Transok's transmission and gathering lines.
Also in 1992, Transok formed a natural gas drilling partnership with Apache
Corporation, which further expanded C&SW's presence in the natural gas
industry. Given that Energy and Central & Southwest are primarily electric
registered holding companies, the preceding Orders establish that such
primarily electric registered holding companies can engage in activities which
are natural gas related provided that the overall System is benefitted. Both
Entergy and Central & Southwest received authorization without geographic
restriction to sell surplus gas to non-affiliates and to provide natural gas-
related services to non-affiliates. The primary rationale is that the
continued supply of low-cost natural gas fuel to their systems clearly passes
functional relationship tests of the Act. In the same way, EEIC's
participation in TransCapacity L.P. addresses the functional relationship test
in that TransCapacity L.P. will facilitate the continued availability to NEPOOL
of firm gas supply through a more efficient market.
(5) There is also a growing body of precedents by the Commission for the
provision of consulting services by a registered holding company subsidiary to
non-associated companies at market prices. See, e.g., Entergy Corporation,
Release No. 35-25848 (July 8, 1993); Jersey Central Power & Light Co., Release
No. 35-24348 (March 18, 1987) (see footnote 24 for string cite of "consulting
company" cases). Descriptions contained in the aforementioned releases of
permitted ongoing consulting, investment and development activities include
preliminary development of alternative energy and energy efficiency programs,
and consulting with respect to marketing, management, operations, technology,
training and other expertise developed by such utility holding company systems.
In the case of Entergy Enterprises, Inc. (formerly Electec Corp.), a subsidiary
of Entergy Corp., permitted consulting activities specifically included
expertise in the areas of fuel procurement, delivery and storage. Furthermore,
in the cases of businesses which evolved originally in connection with a
system's utility business needs, the Commission has permitted investments even
where the functional relationship is somewhat attenuated, provided that the
investment is relatively small in relation to the total assets of the system
and the investment is likely to bring potential benefits to consumers and/or
investors. See, e.g., Jersey Central Power & Light Company, Release No. 35-
24348 (March 18, 1987), (citing American Electric Power Company, Release No.
35-24295 (January 8, 1987) and Southern Company Releases No. 35-23888 (October
31, 1985) and 35-23440 (October 1, 1984)).
(6) An analogous fact pattern to transactions contemplated by this
Application-Declaration can also be found in the application of GPU Nuclear
Corporation ("GPU Nuclear") to license to non-affiliates a data base to be used
to process transient nuclear workers for access to nuclear worksites (HCAR -
25401 (1991)). The Commission's order on that application placed no
geographical limitations on the scope of the data base licensing activity
undertaken by GPU Nuclear.
(7) Based on the foregoing Commission precedents, the Applicant
respectfully asserts that the provision of services to affiliates and non-
affiliates within New England which enable said affiliates and non-affiliates
to optimize the supply and cost of natural gas for electric generation is
functionally related to the activities of the Applicant's System. This is
especially important to New England in that natural gas appears to be the fuel
of choice for new electric generation capacity, re-powerings of existing
generating stations and the lessening of environmental impacts associated with
the burning of oil and coal. TransCapacity L.P. will timely supply services to
affiliates and non-affiliates in New England that will be in the public
interest and satisfy both Section 11(b)(1)'s functional relationship
requirement and Section 10(c)(2)'s integration requirements. Furthermore, the
Applicant, on behalf of EUA, believes that its proposed participation in the
TransCapacity Limited Partnership fits within both the letter and the spirit of
consulting services and systems-related activities such as those previously
authorized by the Commission. The database to be established by the
TransCapacity Limited Partnership will require only a limited investment by EUA
(with respect to EUA's total assets) and will enable the development of a
methodology for information management useful both to EUA directly and
industry-wide. When the database is operational, the service provided to end
users will be informational only, which comports with consulting activities as
defined in the Commission's precedent orders. As discussed in Paragraph C
above, to benefit the NEPOOL utilities, the information maintained by the
Registry Database must be national in scope. For reasons similar to those
underlying the Arkansas Power and Light Company Order (HCAR-17400 (1971))
discussed in Paragraph E.(3) above, and because the incremental costs of
extending the use of the Registry Database without geographic limitation to
non-affiliated customers is marginal, the Applicant believes that the services
provided by TransCapacity L.P. should not be limited by geographic
restrictions. Furthermore, the EUA System is likely to recoup its costs and
investment in the TransCapacity Limited Partnership database through increases
in its flexibility and advance planning capability for the EUA System's fuel
needs, leading ultimately to benefits for the EUA System consumers.
E. Requests For Authority for Financing The Joint Venture. The
Applicants requests Commission authorization through December 31, 1996 for EEIC
to contribute the Computer System to TransCapacity L.P. in consideration for
the receipt of the general partnership interest in TransCapacity L.P. described
above. In addition, the Applicants request approval through December 31, 1996
to make additional capital contributions of up to $1,000,000 in TransCapacity
L.P. The Applicants further request authorization to make open account
advances or loans to TransCapacity L.P. in an aggregate amount not to exceed $2
million. Each such open account advance or loan will be due and payable no
later than five years after the Conversion Date (defined above) and will bear
interest at a rate of Prime plus six percent (6%) if made prior to the
Conversion Date and at a rate of Prime plus two percent (2%) if made on or
after the Conversion Date. The Applicants will request further authorization
to make any such open account advances or loans after the second anniversary of
the Conversion Date.
F. Services Provided By System Companies. TransCapacity L.P. will have
its own employees, including Lander and Loewen, and others as necessary. The
Applicants do not intend to supply any employees of the Applicants' System to
TransCapacity L.P. in the near future. Any activities that EEIC needs to
perform under the TLP Partnership Agreement would be accomplished by employees
of EUA Service. In accordance with the provisions of the TLP Partnership
Agreement, TransCapacity L.P. will reimburse EEIC for its costs and expenses of
performing its duties as Managing General Partner under the TLP Partnership
Agreement. Limited services will be performed by EUA Service employees to
allow EEIC to perform its duties as managing general partner including
attending TransCapacity partnership meetings, approving an annual budget and
business plan, and in general monitoring the financial results of the
partnership. Accounting services performed by EUA Service employees would be
limited to accounting for EEIC's partnership income and responsibilities
associated with being the Tax matters partner. Financial services would
include SEC and other government agency filings. EUA Service employees would
also expend a minimum amount of time and effort on records management primarily
for internal monitoring purposes. In accordance with Rules 86, 87, 90 and 91
promulgated under the Act, TransCapacity L.P. will reimburse EUA Service at
cost for all services performed on behalf of TransCapacity L.P. by EUA Service.
No employees of the Applicants' retail electric utilities will be assigned to
any activities involving TransCapacity L.P. The Applicants do not anticipate
the need to hire any additional personnel in connection with EEIC's
participation in TransCapacity L.P.
G. Use of the TransCapacity L.P. Database and Registry Services by EUA
System Companies. Reimbursement to TransCapacity L.P. for all uses of its
Database and Registry services by EUA and EUA's affiliates and associated
companies shall be limited to TransCapacity L.P.'s cost, as adjusted by
subtracting TransCapacity L.P.'s additional cost of borrowing with respect to
funds borrowed from EEIC at greater than EEIC's own cost of borrowed funds.
H. Quarterly Reports to be filed with the Commission. EEIC will file
quarterly reports with the Commission within sixty (60) days of the end of each
calendar quarter. These reports will include the following information:
(1) A description of TransCapacity L.P. activities;
(2) A statement of the amount of funds invested and open account advances
made by EEIC in and to TransCapacity L.P. during the quarter and cumulative to
date;
(3) A description of the services provided by EUA Service, if any, during
the quarter and the type and number of personnel assigned by EUA Service to
achieve the reported activities;
(4) Financial statements including a balance sheet of TransCapacity L.P.
as of the quarterly reporting date, an income statement for the quarter
reporting, and a statement of cash flow;
(5) Listing of total number transactions processed by TransCapacity L.P.
during the quarter and the number of those transactions processed for customers
located in New England; and
(6) Listing of total number of customers of TransCapacity L.P. as of the
end of the quarter and the number of those customers located in New England.
ITEM 3. APPLICABLE STATUTORY PROVISIONS.
Item 3 is hereby amended and restated in its entirety to read as follows:
The sections of the Act and rules or exemptions thereunder that the
Applicant considers applicable to the transactions for the basis for exemption
therefrom are set forth below:
Purchase of general partnership Sections 9(a) and 10.
interest in TransCapacity L.P.
Issuance of Notes by Sections 6 and 7.
TransCapacity L.P. to EEIC to
evidence repayment of obligations.
Capital contributions and loans Section 12(b); Rule 45(a).
or open account advances by EEIC
to TransCapacity L.P.
Provision of services and goods by Section 13(b); Rules 86,
EEIC and EUA Service to TransCapacity 87, 90, and 91.
L.P. and by TransCapacity L.P.
to the EUA System companies.
ITEM 6. EXHIBITS AND FINANCIAL STATEMENTS
Item 6 paragraph (b) is hereby amended and restated in its entirety as
follows:
(b) Financial Statements
* Denotes Filed herewith
Financial Statements of EEIC as of 9/30/93 - see
Certificate of Notification Pursuant to Rule 24 dated
November 18, 1993, (File No. 70-7426)
* Supplemental Notes to 9/30/93 Financial Statements
* Financial Statements of TransCapacity L.P. as of
9/30/93
SIGNATURE
Pursuant to the requirements of the Public Utility Holding Company Act of
1935, the undersigned Applicant has duly caused this statement to be signed on
its behalf by the undersigned duly authorized individual.
EASTERN UTILITIES ASSOCIATES
BY: /s/ Clifford J. Hebert, Jr.
___________________________
Clifford J. Hebert, Jr.
Treasurer
EUA ENERGY INVESTMENT CORPORATION
/s/ Clifford J. Hebert, Jr.
By: ___________________________
Clifford J. Hebert, Jr.
Treasurer
Date: January 19, 1994
Exhibit (b)
Notes to EUA Energy Investment Corporation Financial Statements
Note 1: EEIC's TransCapacity Related Expenses
All charges associated with EEIC's obligation under the R&D Agreement
executed with TransCapacity L.P. were expensed in 1993. Beginning in
April 1993, $740,393 in R&D costs were expensed through September
1993. An accrued expense of $1,300,000 was booked in September 1993
to account for the remaining R&D costs to be paid by year end 1993.
The accrual is represented on the balance sheet as a miscellaneous
current liability.
<TABLE>
<CAPTION>
A. TransCapacity Charges Through September 1993
<S> <C>
EUA Service Corporation Labor & Overhead $ 42,990
Legal Expenses 147,403
TransCapacity R&D Costs 550,000
__________
Subtotal $ 740,393
Accrued TransCapacity R&D Costs 1,300,000
__________
Total TransCapacity Charges $2,040,393
==========
</TABLE>
<TABLE>
<CAPTION>
Exhibit (b)
B. Change in EEIC Operating Expenses Fiscal YTD
September 30, 1993 vs. September 30, 1992
<S> <C>
Fiscal YTD EEIC Operating Expenses 9/30/93 $2,078,872
Fiscal YTD EEIC Operating Expenses 9/30/92 28,135
__________
Difference $2,050,737
==========
</TABLE>
<TABLE>
<CAPTION>
Exhibit (b)
TRANS CAPACITY LIMITED PARTNERSHIP
CONDENSED INCOME STATEMENT
For Fiscal Year to Date September 30, 1993
(Unaudited)
(In Thousands of Dollars)
<S> <C>
Operating Income $44
Operating Expenses:
Operating Expenses 181
Depreciation and Amortization 3
Taxes-Other 117
Total Operating Expenses 301
Operating Income (257)
Interest Charges 1
Net Income After Interest Charges (259)
Net Income (259)
</TABLE>
<TABLE>
<CAPTION>
Exhibit (b)
TRANS CAPACITY LIMITED PARTNERSHIP
CONDENSED BALANCE SHEET
September 30, 1993
(Unaudited)
(In Thousands of Dollars)
<CAPTION>
ASSETS
<S> <C>
Property and Other Equipment $73
Current Assets:
Cash and Temporary Cash Investments 158
Accounts Receivable 111
Prepayments and Other Assets 5
Unamt Development & Organization Costs 31
Total Current Assets 305
TOTAL ASSETS $377
<CAPTION>
LIABILITIES
<S> <C>
Partnership Equity Accounts $493
Current Earnings (259)
Total Equity 234
Long Term Liabilities 67
Total Capitalization 302
Current Liabilities:
Accounts Payable 37
Interest Accrued 1
Other Accrued Expenses 30
Misc Current Liabilities 8
Total Current Liabilities 76
TOTAL LIABILITIES AND CAPITALIZATION $377
</TABLE>
