SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
FORM U5S
ANNUAL REPORT
For the Year ended December 31, 1995
Filed pursuant to the Public Utility Holding Company Act of 1935 by
Eastern Utilities Associates, P.O. Box 2333, Boston, Massachusetts 02107
04-1271872
(I.R.S. Employer Identification No.)
FORM U5S-ANNUAL REPORT
For the Calendar Year 1995
ITEMS
ITEM 1. SYSTEM COMPANIES AND INVESTMENTS THEREIN AS OF DECEMBER 31, 1995
<TABLE>
<CAPTION>
% of
Name of Company Number of Common Voting Issuer Owner's
(add_abbreviation_used_herein)__Shares_Owned__ Power Book_Value Book_Value
<S> <C> <C> <C> <C>
Eastern Utilities Associates Publicly Owned <F5> $375,273,128 $
(EUA or the Association)
EUA Service Corporation 100 100% <F6> 3,857,832 3,857,832
(EUA Service)
Blackstone Valley Electric 184,062 100% <F6> 37,044,875 37,044,875
Company (Blackstone)
Newport Electric Corporation 1,000,000 100% <F6> 21,247,497 21,247,497
(Newport)
Eastern Edison Company 2,891,357 100% <F6> 244,368,214 244,368,214
(Eastern Edison)
Montaup Electric Company 586,000 100% <F7> 184,719,706 184,719,706
(Montaup)
Preferred Stock <F7> 1,500,000 1,500,000
Debenture Bonds (Unsecured) <F7> 135,575,000 135,575,000
Pollution Control
Bonds (Unsecured) - Net <F7> 36,594,730 36,594,730
EUA Cogenex Corporation 1,000 100% <F6> 52,584,275 52,584,275
(EUA Cogenex)
EUA Citizens Conservation
Services, Inc. <F1> 10,000 100% (17,680) (17,680)
Northeast Energy Management, Inc. 10,000 100% <F9> 12,029,394 12,029,384
(NEM)
EUA Highland Corporation <F2> 10,000 100% <F8> 4,505,027 4,505,027
APS Cogenex L.L.C. <F3> 50% 1,000 1,000
EUA Cogenex-Canada 100 100% <F9> 95,931 95,931
(Cogenex Canada)
EUA WestCoast L.P. 50% <F11> 5,339,240 5,339,240
Promissory Note 9,691,256 9,691,256
EUA Energy Capital and
Services I 50% <F10> 3,012,730 3,012,730
Promissory Note 5,431,057 5,431,057
EUA Energy Capital and
Services II 50% <F10> 7,172,062 7,172,062
Promissory Note 12,153,018 12,153,018
ITEM 1. SYSTEM COMPANIES AND INVESTMENTS THEREIN AS OF DECEMBER 31, 1995
(continued)
% of
Name of Company Number of Common Voting Issuer Owner's
(add_abbreviation_used_herein) __Shares_Owned__ Power Book_Value Book_Value
EUA FRC II Energy Partners 50% <F10> 744,309 744,309
Micro Utility Partners of America 50% <F11> (461,205) (461,205)
Promissory Note 1,330,671 1,330,671
EUA Energy Investment Corporation 100 100% <F6> (9,050,832) (9,050,832)
(EUA Energy)
Eastern Unicord Corporation 1,000 100% <F8> (1,840,592) (1,840,592)
(Unicord)
EUA Transcapacity, Inc. 1,000 100% <F8> (1,471,180) (1,471,180)
TransCapacity, L.P. 80% <F11> (2,553,086) (2,553,086)
EUA Bioten, Inc. (4) 100 100% <F6> (207,692) (207,692)
EUA Ocean State Corporation 1 100% <F6> 16,551,807 16,551,807
(EUA Ocean State)
Ocean State Power I 29.9% 29.9% <F10> 30,467,902 30,467,902
Ocean State Power II 29.9% 29.9% <F10> 23,865,800 23,865,800
*Eastern Edison Electric Company 100% <F6> 1,000 1,000
_________
<FN>
<F1> Organized under the Laws of the Commonwealth of Massachusetts on
January 12, 1995 to engage in the business of energy conservation
programs.
<F2> Organized under the Laws of the Commonwealth of Massachusetts on
April 14, 1995 to engage in the business of energy conservation
programs, including but not limited to the creation of
alternate energy sources.
<F3> Organized under the Laws of Delaware on September 29, 1995 to
engage in the business of providing energy conservation services.
<F4> Organized under the Laws of the Commonwealth of Massachusetts on
June 22, 1995 to engage in certain energy related research and
development activities.
<F5> Cumulative Voting.
<F6> Wholly-owned by EUA.
<F7> Wholly-owned by Eastern Edison.
<F8> Wholly-owned by EUA Energy.
<F9> Wholly-owned by EUA Cogenex.
<F10> General Partnership
<F11> Limited Partnership
</FN>
*Inactive
</TABLE>
ITEM 2. ACQUISITIONS OR SALES OF UTILITY ASSETS
Brief Description
Name of Company of Transaction Consideration Exemptions
______(1)______ _______(2)_______ _____(3)_____ ____(4)___
Blackstone Valley Electric Sale of Land $ 3,500.00 44 (b)
Park East Drive
Woonsocket, RI
Blackstone Valley Electric Sale of Land $ 3,000.00 44 (b)
Phoenix Street
Central Falls, RI
Eastern Edison Company Sale of Land $35,000.00 44 (b)
American Legion Highway
Westport, MA
ITEM 3. ISSUE, SALE, PLEDGE, GUARANTEE OR ASSUMPTION OF SYSTEM SECURITIES
Type of Maximum Amount
Name of Issuer Security Outstanding During 1993 Exemption
______(1)_____ ___(2)__ _________(3)___________ ___(4)___
None
The following refers to short-term borrowing by EUA system companies
during 1995:
Balance at Highest Date of Effective
year-end Balance Highest Average
(000) During year Balance Interest Rate
__________ (000)______ For year____
$38,861 $55,209 8/15/95 6.07%
EUA Cogenex is required under certain contracts with various government
entities and utility companies to maintain either a letter of credit or
performance bond to collateralized performance under the contract. These
contingent liabilities will only be drawn by the customer if EUA Cogenex fails
to perform under the construction contract. The highest amount outstanding
during 1995 and the year end balance was approximately $8.0 million and $5.5
million, respectively, for the letters of credit and $3.9 million and $3.7
million, respectively for the performance bonds.
ITEM 4. ACQUISITION, REDEMPTION OR RETIREMENT OF SYSTEM SECURITIES
<TABLE>
<CAPTION>
Name of Company
Acquiring,
Name of Issuer Redeeming Number of Shares or
and or Retiring Principal Amount
Title of Issue Securities Acquired, Redeemed, Consideration Authorization
______(1)______ ______(2)_____ __or_Retired_(3)___ _____(4)_____ _____(5)_____
<S> <C> <C> <C> <C>
Blackstone: Blackstone
First Mortgage Bonds
9 1/2% due 2004 $ 1,500,000 $ 1,500,000 (a)
Eastern Edison: Eastern Edison
First Mortgage
and Collateral Trust Bonds:
8.9% due 1995 10,000,000 10,000,000 (a)
Unsecured Medium Term Notes:
9-9 1/4% due 1995 25,000,000 25,000,000 (a)
Newport: Newport
Preferred Stock,
$100 par value:
9.75% issue 1,000 shs. $ 100,000 (a)
First Mortgage Bonds:
8.95% due 2001 $ 650,000 $ 650,000 (a)
9% due 1999 14,000 14,000 (a)
Small Business
Administration Loan:
6.5% due 2005 $ 83,893 $ 83,893 (a)
EUA Cogenex: EUA Cogenex
Unsecured Notes: 800,000 800,000 (a)
9.6% due 2001
EUA Service: EUA Service
Secured Notes:
10.20% due 2008 $2,200,000 $2,200,000 (a)
EUA Ocean State: EUA Ocean State
Unsecured Notes:
9.59% due 2011 $2,476,660 $2,476,660 (a)
(a) Rule 42
</TABLE>
<TABLE>
ITEM 5. INVESTMENTS IN SECURITIES OF NONSYSTEM COMPANIES
<CAPTION>
% of Number of Shares
Voting or Principal Book
Name of Owner Name of Issuer Security Owned Power Amount Owned Value
____(1)______ ______(2)_____ ______(3)_____ _(4)_ ______(5)_______ (6)_
<S> <C> <C> <C> <C> <C>
Eastern Edison Aggregate member of
investments - six (6) $ 50,405
Montaup Electric Yankee Atomic Capital Stock 4.5 6,903 shares 1,057,275
Electric Co. *
" " Conn. Yankee Capital Stock 4.5 15,750 shares 4,554,202
Atomic Power Co.*
" " Vermont Yankee Capital Stock 2.5 9,801 shares 1,353,213
Nuclear
Power Corp. *
" " Maine Yankee Capital Stock 4.0 20,000 shares 2,947,550
Atomic
Power Co. *
" " NH Hydro Trans. Capital Stock 3.3 130,812 shares 2,005,874
Electric Co. **
" " NH Hydro Capital Stock 3.3 703,115 shares 1,304,320
Trans. Corp. **
</TABLE>
___________
*Regional nuclear generating company.
**Owner of Transmission Facilities.
<TABLE>
Item 6. Officers and Directors
Part I. As of December 31, 1995. ________________ Names_of_System_Companies_with_which_Connected________
<CAPTION>
Blackstone
Eastern EUA Valley Newport Eastern
Utilities Service Electric Electric Edison
Associates Corporation Company___ Corporation Company
<S> <C> <C> <C> <C> <C> <C>
Russell A. Boss One Albion Road TR
Lincoln, RI 02865
J. Thomas Brett 275 Slater St.,Ste 1700
Ottawa, Canada K1P 5H9
Richard M. Burns One Liberty Square CM, AT, AS D, CM, AT, VP, AT, AS VP, AT VP, AT, AC
Boston, MA 02109 AS, AC, VP
John D. Carney P.O. Box 543 EVP D, EVP D, P D, P D, P
W. Bridgewater, MA 02379
Paul J. Choquette, Jr. 7 Jackson Walkway TR
Providence, RI 02940
Peter S. Damon P. O. Box 450 TR
Middletown, RI 02842
James L. Day 7931 Rae Boulevard
Victor, NY 14564
Janice P. DeBarros Boott Mills South
100 Foot of John Street
Lowell, MA 01852
Peter B. Freeman 100 Alumni Drive TR
Providence, RI 02906
David H. Gulvin P.O. Box 543 D, SVP D, SVP D, SVP D, SVP
W. Bridgewater, MA 02379
Barbara A. Hassan P.O. Box 543 VP VP VP VP
W. Bridgewater, MA 02379
Clifford J. Hebert, Jr. One Liberty Square T,S T,S,C T,S T,S T,C
Boston, MA 02109
Michael J. Hirsh P.O. Box 543 VP VP VP VP
W. Bridgewater, MA 02379
Edward J. Kaitz Boott Mills South
100 Foot of John Street
Lowell, MA 01852
Kevin A. Kirby P.O Box 543 D, VP VP VP VP
W. Bridgewater, MA 02379
Arthur P. Lennon 704 Executive Blvd.
Valley Cottage, NY 10989
Larry A. Liebenow 941 Grinnell Street TR
Fall River, MA 02721
</TABLE>
<TABLE>
Item 6. Officers and Directors - Continued ___________Names_of_System_Companies_with_which_Connected________
Part I. As of December 31, 1995. Blackstone
<CAPTION>
Eastern EUA Valley Newport Eastern
Utilities Service Electric Electric Edison
Associates Corporation _Company__ Corporation Company
<S> <C> <C> <C> <C> <C> <C>
Edward T. Liston Boott Mills South D, VP
100 Foot of John Street
Lowell, MA 01852
Jacek Makowski One Bowdoin Square TR
Boston, MA 02114
Wesley W. Marple 413 Hayden Hall TR
Northeastern University
Boston, MA 02115
Stephen Morgan Booth Mills South
100 Foot of John Street
Lowell, MA 01852
Peter Oatman 2970 Wilderness Pl.
Boulder, CO. 80301
William F. O'Connor P.O. Box 543 VP
W. Bridgewater, MA 02379
Basil G. Pallone Booth Mills South
100 Foot of John Street
Lowell, MA 01852
Donald G. Pardus One Liberty Square TR, CH, CEO D, CH D, CH D, CH D, CH
Boston, MA 02109
Robert G. Powderly P.O. Box 543 EVP D, EVP D, EVP D, EVP D, EVP
W. Bridgewater, MA 02379
Leonard Rozek 2970 Wilderness Pl.
Boulder, CO. 80301
William A. Sifflard 200 Thurber Blvd
Smithfield, RI 02917
Margaret M. Stapleton P. O. Box 111 TR
Boston, MA 02117
John R. Stevens One Liberty Square TR, COO, P D, P D, VCH D, VCH D, VCH
Boston, MA 02109
Thomas N. Stoner, Jr. 2970 Wilderness Pl.
Boulder, CO 80301
W. Nicholas Thorndike 150 Dudley Street TR
Brookline, MA 02146
Mark S. White Boott Mills South
100 Foot of John Street
Lowell, MA 01852
</TABLE>
<TABLE>
Item 6. Officers and Directors - Continued
Part I. As of December 31, 1995.
<CAPTION>
______Names_of_System_Companies_with_which_Connected____
Montaup EUA EUA Energy EUA
Electric Cogenex Investment Ocean State
Company_ Corporation Corporation Corporation
<S> <C> <C> <C> <C> <C>
Russell A. Boss One Albion Road
Lincoln, RI 02865
J. Thomas Brett 275 Slater St., Ste 1700
Ottawa, Canada K1P 5H9
Richard M. Burns One Liberty Square, VP, AT, AC D, CM, AT D, VP, AT, AC AT
Boston, MA 02109
John D. Carney P.O. Box 543 D, EVP D, EVP D, EVP EVP
W. Bridgewater, MA 02379
Paul J. Choquette, Jr. 7 Jackson Walkway D
Providence, RI 02940
Peter S. Damon P. O. Box 450
Middletown, RI 02842
James L. Day 7931 Rae Boulevard VP
Victor, NY 14564
Janice P. DeBarros Boott Mills South
100 Foot of John Street
Lowell, MA 01852
Peter B. Freeman 100 Alumni Drive
Providence, RI 02960
David H. Gulvin P.O. Box 543 D, VP
W. Bridgewater, MA 02379
Barbara A. Hassan P.O. Box 543
W. Bridgewater, MA 02379
Clifford J. Hebert, Jr. One Liberty Square T,C T,C T,C T,S
Boston, MA 02109
Michael J. Hirsh P.O. Box 543
W. Bridgewater, MA 02379
Edward J. Kaitz Boott Mills South VP
100 Foot of John Street
Lowell, MA 01852
Kevin A. Kirby P.O Box 543 D, VP D, VP
W. Bridgewater, MA 02379
Arthur P. Lennon 704 Executive Blvd. VP
Valley Cottage, NY 10989
Larry A. Liebenow 941 Grinnell Street
Fall River, MA 02721
</TABLE>
<TABLE>
Item 6. Officers and Directors - Continued
Part I. As of December 31, 1995.
<CAPTION>
________Names_of_System_Companies_with_which_Connected__
Montaup EUA EUA Energy EUA
Electric Cogenex Investment Ocean State
Company_ Corporation Corporation Corporation
<S> <C> <C> <C> <C> <C>
Edward T. Liston Boott Mills South D,P
100 Foot of John Street
Lowell, MA 01852
Jacek Makowski One Bowdoin Square
Boston, MA 02114
Wesley W. Marple 413 Hayden Hall D
Northeastern University
Boston, MA 02115
Stephen Morgan Booth Mills South
100 Foot of John Street
Lowell, MA 01852
Peter Oatman 2970 Wilderness Pl.
Boulder, CO. 80301
William F. O'Connor P.O. Box 543
W. Bridgewater, MA 02379
Basil G. Pallone Boott Mills South EVP
100 Foot of John Street
Lowell, MA 01852
Donald G. Pardus One Liberty Square D, CH D, CH D, CH D, CH
Boston, MA 02109
Robert G. Powderly P.O. Box 543 D, EVP D, EVP D, EVP D, EVP
W. Bridgewater, MA 02379
Leonard Rozek 2970 Wilderness Pl.
Boulder, CO. 80301
William A. Sifflard 200 Thurber Blvd VP
Smithfield, RI 02917
Margaret M. Stapleton P. O. Box 111 D
Boston, MA 02117
John R. Stevens One Liberty Square D, P D, VCH D, P D, P
Boston, MA 02109
Thomas N. Stoner, Jr. 2970 Wilderness Pl.
Boulder, CO 80301
W. Nicholas Thorndike 150 Dudley Street D
Brookline, MA 02146
Mark S. White Boott Mills South VP, ACM, AC
100 Foot of John Street
Lowell, MA 01852
</TABLE>
<TABLE>
Item 6. Officers and Directors
Part I. As of December 31, 1995.
<CAPTION>
________Names_of_System_Companies_with_which_Connected___________________
EUA EUA Northeast EUA Citizens EUA EUA
Cogenex TransCapacity Energy Conservation Highland Bioten
Canada, Inc. Inc._________ Management Inc. Services Corp. Corp. Inc.
<S> <C> <C> <C> <C> <C> <C> <C>
Russell A. Boss One Albion Road
Lincoln, RI 02865
J. Thomas Brett 275 Slater St. Ste 1700 D
Ottawa, Canada K1P5H9
Richard M. Burns One Liberty Square VP, CM,AT D, AT VP,CM CM,AT CM,AT D,AT
Boston, MA 02109
John D. Carney P.O. Box 543 EVP D,EVP
W. Bridgewater, MA 02379
Paul J. Choquette, Jr. 7 Jackson Walkway
Providence, RI 02940
Peter S. Damon P. O. Box 450
Middletown, RI 02842
James L. Day 7931 Rae Boulevard
Victor, NY 14564
Janice P. DeBarros Boott Mills South VP
100 Foot of John Street
Lowell, MA 01852
Peter B. Freeman 100 Alumni Drive
Providence, RI 02906
David H. Gulvin P.O. Box 543
W. Bridgewater, MA 02379
Barbara A. Hassan P.O. Box 543
W. Bridgewater, MA 02379
Clifford J. Hebert, Jr. One Liberty Square T, AS T,C T,C T,C T,C T,C
Boston, MA 02109
Michael J. Hirsh P.O. Box 543
W. Bridgewater, MA 02379
Edward J. Kaitz Boott Mills South
100 Foot of John Street
Lowell, MA 01852
Kevin A. Kirby P.O Box 543
W. Bridgewater, MA 02379
Arthur P. Lennon 704 Executive Blvd. VP
Valley Cottage, NY 10989
Larry A. Liebenow 941 Grinnell Street
Fall River, MA 02721
</TABLE>
<TABLE>
Item 6. Officers and Directors - Continued
Part I. As of December 31, 1995
<CAPTION>
____________Names_of_System_Companies_with_which_Connected________________
EUA EUA Northeast EUA Citizens EUA EUA
Cogenex TransCapacity Energy Conservation Highland Bioten
Canada, Inc. Inc._________ Management Inc. Services Corp. Corp. Inc.
<S> <C> <C> <C> <C> <C> <C> <C>
Edward T. Liston Boott Mills South P D,P D,EVP D,EVP
100 Foot of John Street
Lowell, MA 01852
Jacek Makowski One Bowdoin Square
Boston, MA 02114
Wesley W. Marple 413 Hayden Hall
Northeastern University
Boston, MA 02115
Stephen Morgan Booth Mills South P
100 Foot of John Street
Lowell, MA 01852
Peter Oatman 2970 Wilderness Pl. VP
Boulder, CO. 80301
William F. O'Connor P.O. Box 543
W. Bridgewater, MA 02379
Basil G. Pallone Booth Mills South VP VP EVP EVP
100 Foot of John Street
Lowell, MA 01852
Donald G. Pardus One Liberty Square CH D, CH D, CH D D D,CH
Boston, MA 02109
Robert G. Powderly P.O. Box 543 D, EVP D,EVP
W. Bridgewater, MA 02379
Leonard Rozek 2970 Wilderness Pl. VP
Boulder, CO. 80301
William A. Sifflard 200 Thurber Blvd
Smithfield, RI 02917
Margaret M. Stapleton P. O. Box 111
Boston, MA 02117
John R. Stevens One Liberty Square VCH D, P D, VCH D D D,P
Boston, MA 02109
Thomas N. Stoner, Jr. 2970 Wilderness Pl. P
Boulder, CO 80301
W. Nicholas Thorndike 150 Dudley Street
Brookline, MA 02146
Mark S. White Boott Mills South VP,AT,ACM VP,ACM,AC VP,AMC,
100 Foot of John Street AC
Lowell, MA 01852
</TABLE>
Item 6. OFFICERS AND DIRECTORS - Continued
PART I. As of December 31, 1995.
KEY
CH - Chairman of the Board T - Treasurer
VCH - Vice Chairman of the Board TR - Trustee
P - President CM - Comptroller
EVP - Executive Vice President AT - Assistant Treasurer
SVP - Senior Vice President S - Secretary
VP - Vice President AS - Assistant Secretary
C - Clerk CEO - Chief Executive Officer
AC - Assistant Clerk COO - Chief Operating Officer
D - Director ACM - Assistant Comptroller
Item 6. Officers and Directors (continued)
Part II. As of December 31, 1995.
Position Held
Name of Name and Location of in Financial Applicable
Officer or Director Financial Institution Institution Exemption Rule
________(1)________ _________(2)_________ _____(3)____ _____(4)______
Russell A. Boss Fleet National Bank Trustee Rule 70(1)
Providence, RI
Fleet Bank of MA Trustee Rule 70(1)
Boston, MA
Fleet Bank, N.A. Conn. Trustee Rule 70(1)
Hartford, CT
Paul J. Choquette, Jr. Fleet Financial Group Director Rule 70(1)
Providence, RI
Peter S. Damon Bank of Newport Trustee Rule 70(1)
_____________________
(Note: In the answer to this part II of Item 6, the phrase "financial
connection within the provisions of Section 17(c) of the Act" is
regarded as being limited by the definitions in Paragraph (h) of
Rule 70 under the Act as in effect at December 31, 1995.)
Part III.
(1) Information is set out below as to cash compensation paid by the
Association and its subsidiaries for the years 1995, 1994 and 1993
to each of the five highest paid executive officers of each Company
whose aggregate cash compensation for the year exceeded $100,000.
Item 6. Part III - Officers and Directors (continued)
Long-Term All
Compensation Other
Name and Annual Compensation Restricted Compen-
Principal Fiscal Incentive Stock sation
Position____ Year Salary __Bonus__ Other(1) Awards(2) (3)
EUA Service Corporation
Donald G. Pardus 1995 $400,025 $ 85,000 $13,696 $319,400 $10,000
Chairman 1994 390,025 100,000 13,083 - 9,750
1993 375,025 137,500 8,444 - 8,438
John R. Stevens 1995 $312,025 $ 68,000 $ 7,300 $202,561 $ 7,800
President 1994 300,025 80,000 13,475 - 7,500
1993 275,025 107,500 12,071 - 6,188
Robert G. Powderly 1995 $168,025 $ 32,787 $ 9,790 $ 71,024 $ 4,200
Executive Vice 1994 156,025 40,999 8,350 - 3,900
President 1993 143,025 44,559 8,710 - 3,218
John D. Carney 1995 $155,775 $ 32,787 $ 4,025 $ 72,750 $ 3,894
Executive Vice 1994 140,025 34,207 4,229 - 3,500
President 1993 134,025 38,867 6,618 - 3,015
David H. Gulvin 1995 $140,025 $ 33,925 $ 2,803 $ 54,924 $ 3,500
Senior Vice 1994 134,625 33,925 3,053 - 3,645
President 1993 126,625 37,497 2,978 - 2,848
Blackstone, Eastern Edison and Newport Electric
The Chief Executive Officer and the four other most highly compensated
executive officers of Blackstone, Newport and Eastern Edison hold the same or
similar positions with EUA Service and are not paid directly by either
Blackstone, Newport or Eastern Edison. The information required by this item
is the same as shown above under EUA Service Corporation.
Item 6. Part III - Officers and Directors (continued)
Long-Term All
Compensation Other
Name and Annual Compensation Restricted Compen-
Principal Fiscal Incentive Stock sation
Position Year Salary __Bonus__ Other(1) Awards(4) (3)
EUA Cogenex Corporation
Edward T. Liston 1995 153,640 - 1,890 52,900 3,842
President 1994 131,920 - 3,464 - 3,721
1993 120,525 40,588 2,372 - 3,376
Richard P. Eannarino 1995 99,431 60,000 734 - 2,361
Vice President 1994 156,515 - 941 - 3,750
1993 150,045 - - - 1,543
Basil G. Pallone 1995 122,486 - 2,783 42,504 3,062
Executive 1994 102,525 - 2,783 - 2,562
Vice President
Arthur P. Lennon 1995 101,275 - 1,021 - 2,526
Vice President 1994 121,300 - 1,523 - 3,024
1993 119,400 40,588 1,552 - 3,457
Edward J. Kaitz 1995 102,958 - 2,598 22,540 2,573
Vice President
___________________
(1) Represents amounts reimbursed for tax liability accruing as a result
of personal use of company-owned automobiles.
(2) Aggregate amount and value (including the value reflected in the
table under "Restricted Stock Awards") of shares held under
Association's Restricted Stock Plan to the officers listed above are
as follows: Mr. Pardus, 13,887 shares, $319,400; Mr. Stevens, 8,807
shares, $202,561; Mr. Powderly, 3,088 shares, $71,024; Mr. Carney,
3,163 shares, $72,750; and, Mr. Gulvin, 2,388 shares, $54,924.
Dividends are paid on these shares.
(3) Contributions made under the Association's Employees' Savings Plan.
(4) Aggregate amount and value (including the value reflected in the
table under "Restricted Stock Awards") of shares granted under
Restricted Stock Plans to the officers listed above is as follows:
Mr. Liston, 2,300 shares, $52,900; Mr. Pallone, 1,848 shares,
$42,504; Mr. Kaitz, 980 shares, $22,540.
(B) Securities Interest
Common Shares of the Association
Beneficially_Owned_at_January_6,_1996(a)
Executive
Employees Stock
Jointly Savings Grant
Individual Owned(b) Plan___ Plan__ Total
Russell A. Boss 1,000 - - - 1,000(c)
Richard M. Burns 191 - 386 3,886 4,463
John D. Carney - - 1,070 6,138 7,208
Paul J. Choquette 1,132 - - - 1,132
Peter S. Damon 200 833 - - 1,033
Peter B. Freeman 2,292 - - - 2,292
David H. Gulvin 1,795 1,217 1,028 4,919 8,959
Clifford J. Hebert, Jr. 1,179 - 1,601 3,112 5,892
Edward J. Kaitz 383 - 367 650 1,400
Kevin A. Kirby 94 - 745 1,755 2,594
Larry A. Liebenow - 1,000 - - 1,000
Edward T. Liston 1,627 - 996 2,300 4,924
Wesley W. Marple 1,885 - - - 1,885(d)
Jacek Makowski - 200 - - 200
Basil G. Pallone 430 139 476 3,080 4,125
Donald G. Pardus 2,642 8,079 4,526 24,194 39,441
Robert G. Powderly 1,325 176 1,505 6,357 9,363
Margaret M. Stapleton 1,326 - - - 1,326
John R. Stevens 1,053 4,220 1,602 16,905 23,780
W. Nicholas Thorndike 2,146 - - - 2,146
Trustees and Executive
Officers as a Group 39,904 34,764 22,282 78,969 175,919(e)
(a) Unless otherwise indicated, beneficial ownership is based on sole
investment and voting power. Each individual's ownership represents
less than two-tenths of one percent of the outstanding common shares
of the Association.
(b) Jointly owned with spouse.
(c) In addition, Mr. Boss owns 5 shares of Blackstone Valley Electric
Company's 4.25% Preferred Stock.
(d) In addition, Mr. Marple's spouse owns 197 EUA common shares. Mr.
Marple disclaims any beneficial interest in such shares.
(e) Represents less than one percent of the outstanding common shares of
the Association.
(C) Contracts and Transactions with System Companies
See Section (E) below regarding severance agreements.
(D) Indebtedness to System Companies
None
(E) The Employees' Retirement Plan of Eastern Utilities Associates and its
Affiliated companies (the "Pension Plan") is a tax-qualified defined
benefit plan available to employees who have completed one year of service
and have attained the age of twenty-one. All of the officers referred to
in the Summary Compensation Table above participate in the Pension Plan.
Trustees who are not also employees of the Association and its subsidiaries
(the "EUA System") are not covered by the Pension Plan. The benefits of
participants become fully vested after five years of service. Annual
lifetime benefits are determined under formulas applicable to all
employees, regardless of position, and the amounts depend on length of
credited service and salaries prior to retirement. Benefits are equal to
one and six tenths percent of salaries (averaged over the four years
preceding retirement) for each year of credited service up to thirty-five,
reduced for each year by one and two tenths percent of the participants'
estimated age sixty-five Social Security benefit, plus seventy-five
hundredths percent of salaries for each year of credited service in excess
of thirty-five years up to the Pension Plan maximum of forty years.
Any contributions to provide benefits under the Pension Plan are made by
the EUA System in amounts determined by the Pension Plan's actuaries to meet
the funding standards established by the Employee Retirement Income Security
Act of 1974, as amended. Any contributions are actuarially determined and
cannot appropriately be allocated to individual participants. The annual
benefits shown in the tables below are straight life annuity amounts, without
reduction for primary Social Security benefits as described above. Federal law
limits the annual benefits payable from qualified pension plans in the form of
a life annuity, after reduction for Social Security benefits, to $120,000 (for
1995 and 1996) plus adjustments for increases in the cost of living. The
number of years of service credited at present under the Plan to Messrs.
Pardus, Stevens, Carney, Powderly and Burns are thirty-three, thirty,
twenty-nine, sixteen and twenty, respectively.
Average Annual ____________________Years_of_Service________________________
_____Salary____ ____15________20________25________30________35_________40___
$100,000 $ 24,000 $ 32,000 $ 40,000 $ 48,000 $ 56,000 $ 59,750
200,000 48,000 64,000 80,000 96,000 112,000 119,500
300,000 72,000 96,000 120,000 144,000 168,000 179,250
400,000 96,000 128,000 160,000 192,000 224,000 239,000
500,000 120,000 160,000 200,000 240,000 280,000 298,750
600,000 144,000 192,000 240,000 288,000 336,000 358,500
The Association has a Key Executive Plan for certain officers of the
Association and its subsidiaries. This plan provides for the annual payment
of supplemental retirement benefits equal to 25% of the officer's base salary
when he retires, for a period of fifteen (15) years following the date of
retirement. In addition, in the event of the death of the participant prior
to retirement an amount equal to 200% of the officer's base salary at that
time will be paid to his beneficiary. A grantor trust has been established by
the Association to help ensure the performance of its payment obligations
under the Key Executive Plan. Any amounts not covered by trust payments or
otherwise will be paid from funds available to the EUA System.
The Association maintains a non-qualified, unfunded retirement plans
("The Restoration Plans") to restore benefits under the qualified plans'
formulas which are not covered under the qualified plan trusts due to federal
limitations on either earnings, contributions or benefits. Payments or
contributions which exceed the applicable federal limitations are made outside
the qualified plans in the same manner and under the same conditions as are
applicable to benefits payable from, or contributions payable to, the qualified
plans. A grantor trust has been established by the Association to ensure the
performance of its payment obligations under these plans. Any amounts not
covered by trust payments or otherwise will be paid from funds available to the
EUA System.
Severance agreements with executive officers of the Association and
certain of its affiliates provide that an officer's rate of compensation,
benefits, responsibilities and other conditions of employment will not be
reduced during the term of the agreement, which is thirty-six months commencing
upon the date on which a Change in Control, as defined in the agreements, of
the Association occurs. If within thirty-six months after a Change in Control
the officer's employment is terminated for any reason other than Cause, as
defined in the agreements, the Association will, (i) pay the officer within
five business days a lump-sum cash amount generally equal to the present value
of the additional wages and retirement benefits that the executive would have
received in return for completing and additional three years of service, (ii)
continue or vest certain fringe benefits and common share grants, (iii)
reimburse legal fees and expenses incurred as a result of the termination or to
enforce the provisions of the severance agreement and (iv) reimburse for a
portion of the taxes on certain of the foregoing payments, including any amount
contributing a "parachute payment" under the Internal Revenue Code. If the
officer leaves the employ of the Association or a subsidiary following a
reduction in his position, compensation, responsibilities, authority or other
benefits existing prior to the Change in Control, or suffers a relocation of
regular employment of more than fifty miles, such departure will be deemed to
be a termination for reason other than Cause.
(F) Rights to Indemnity
Article 32 of EUA's Declaration of Trust, as set forth in Exhibit B-1(a),
to Form U5S of EUA for the year ended December 31, 1986 is incorporated herein
by reference.
ITEM 7. CONTRIBUTIONS AND PUBLIC RELATIONS
Accounts Charged
if any, Per Books
Name of Recipient of Disbursing
Name of Company of Beneficiary Purpose Company Amount
______(1)_____ ______(2)_______ _ (3)__ ______(4)_______ _(5)__
Blackstone Edison Electric Lobbying 426.4 $ 6,568
Institute Expenditures
Blackstone Tillinghast, Collins Lobbying 426.4 $17,081
& Graham Expenditures
Blackstone David Correira, Esq. Lobbying 426.4 $19,250
Expenditures
Blackstone United Way Donations 426.1 $24,750
Blackstone Miscellaneous Donations 426.1 $31,930
Donations less
than $10,000
Eastern Edison Edison Electric Lobbying 426.4 $13,261
Institute Expenditures
Eastern Edison Metro South Chamber Civic 426.4 $ 390
of Commerce
Eastern Edison Good Neighbor Donations 426.1 $10,748
Energy Fund
Eastern Edison United Way Donations 426.1 $35,000
Eastern Edison Miscellaneous Donations 426.1 $10,610
Donations less
than $10,000
Newport Electric Edison Electric Lobbying 426.4 $ 2,775
Institute Expenditures
Newport Electric Tillinghast, Collins Lobbying 426.4 $ 3,027
& Graham Expenditures
Newport Electric David Correira, Esq. Lobbying 426.4 $ 8,250
Expenditures
Newport Electric United Way Donations 426.1 $12,835
Newport Electric Miscellaneous Donations 426.1 $19,454
Donations less
than $10,000
ITEM 7. CONTRIBUTIONS AND PUBLIC RELATIONS-(continued)
Accounts Charged
if any, Per Books
Name of Recipient of Disbursing
Name of Company of Beneficiary Purpose Company Amount
______(1)______ _______(2)_______ __(3)__ _______(4)_______ __(5)__
Montaup Electric Various Payments Lobbying 426.4 $ 1,000
Under $1,000 Expenditures
Montaup Electric Seabrook #1 Lobbying 426.4 $ 2,550
Expenditures
Montaup Electric Miscellaneous Donations 426.1 $ 5,591
Donations Less than
$10,000
Montaup Electric United Way Donations 426.1 $ 6,800
ITEM 8. SERVICE, SALES AND CONSTRUCTION CONTRACTS
Part I.
None
Part II.
No
Part III.
No
ITEM 9. WHOLESALE GENERATORS AND FOREIGN UTILITY COMPANIES
None
ITEM 10. FINANCIAL STATEMENTS AND EXHIBITS (*Filed herewith)
The following financial statements and supplemental schedules are filed as a
part of this Annual Report.
FINANCIAL STATEMENTS
1 - Consolidating Balance Sheets - December 31, 1995 of Eastern Utilities
Associates and Subsidiary Companies, Eastern Edison Company and
Subsidiary, EUA Cogenex Corporation and Subsidiaries, and EUA Energy
Investment Corporation and Subsidiaries.
2 - Consolidating Statements of Capitalization - December 31, 1995 of
Eastern Utilities Associates and Subsidiary Companies, Eastern Edison
Company and Subsidiary, EUA Cogenex Corporation and Subsidiaries, and
EUA Energy Investment Corporation and Subsidiaries.
3 - Consolidating Income Statements for the year ended December 31, 1995
of Eastern Utilities Associates and Subsidiary Companies, Eastern
Edison Company and Subsidiary, EUA Cogenex Corporation and
Subsidiaries, and EUA Energy Investment Corporation and Subsidiaries.
4 - Consolidating Statements of Cash Flows for the year ended December
31, 1995 of Eastern Utilities Associates and Subsidiary Companies,
Eastern Edison Company and Subsidiary, EUA Cogenex Corporation and
Subsidiaries, and EUA Energy Investment Corporation and Subsidiaries.
5 - Consolidating Statements of Retained Earnings and Other Paid-In
Capital for the year ended December 31, 1995 of Eastern Utilities
Associates and Subsidiary Companies, Eastern Edison Company and
Subsidiary, EUA Cogenex Corporation and Subsidiaries, and EUA Energy
Investment Corporation and Subsidiaries.
6 - Notes to Financial Statements (page 56).
Exhibits
Exhibit A - (incorporated herein by reference)
A-1 Form 10-K of EUA, Blackstone and Eastern Edison for 1995 (including
Annual Reports to Shareholders and Proxy Statement, portions of
which are incorporated therein by reference; File No. 1-5366, 0-8480,
and 0-2602).
Exhibit B -
B-1 Declaration of Trust of EUA, dated April 2, 1928, as amended
(Exhibit A-3, File No. 70-3188; Exhibit 1 to EUA's 8-K reports for
April in each of the years 1957, 1962, 1966, 1968, 1972, and 1973,
File No. 1-5366; Exhibit A-1 (a), Amendment No. 2 to Form U-1, File
No. 70-5997, Exhibit 4-3, Registration No. 2-72589; Exhibit 1 to
Certificate of Notification, File No. 70-6713; Exhibit 1 to
Certificate of Notification, File No. 70-7084; Exhibit 3-2, Form
10-K of EUA for 1987, File No. 1-5366).
B-2 Charter of Blackstone (formerly Blackstone Valley Gas and Electric
Company), as amended (Exhibit (a)(1) and (a)(2), Form 1-A filed
March, 1957, File No. 24B-970; Exhibit A-2, Form U5S of Eastern
Utilities Associates ("EUA") for the year 1958, File No. 1-5366;
Exhibit (1), Form 8-K for March, 1965 File No. 0-2602; Exhibit A-2,
Form U5S of EUA for the year 1966, File No. 1-5366 and Exhibit (1),
Form 8-K for June 1976, File No. 0-2602; Exhibit (1), Form 10-Q for
quarter ended June 30, 1988, File No. 0-2602); Exhibit 3-3, Form 10-K
of Blackstone for 1989, File No. 0-2602).
B-3 By-laws of Blackstone, (Exhibit A-2, Form U-1 filed October 16,
1990, File No. 70-7769).
B-4 Restated and Amended Articles of Organization of Eastern Edison,
(Exhibit B-4 to Form U5S of EUA for 1993).
B-5 By-laws of Eastern Edison, as amended (Exhibit 3-2, Form 10-K of
Eastern Edison for 1980, File No. 0-8480).
B-6 Charter of Montaup Electric Company ("Montaup"), as amended
(Exhibits A-6(a), A-6(b) and A-6(c) to Post Effective Amendment No.
18 to Form U-1, File No. 70-5388; Exhibit 3, Form 10-K of EUA for
1977, File No. 1-5366; and Exhibit 6 to Form U5S of EUA for 1979).
B-7 By-laws of Montaup, as amended (Exhibit 4, Form 10-K of EUA for
1977, File No. 1-5366).
B-8 Charter of EUA Service Corporation (Exhibit A-1, File No. 37-67).
B-9 By-laws of EUA Service Corporation, as amended (Exhibit 2, Form
10-K of EUA for 1977, File No. 1-5366).
B-10 Charter of EUA Cogenex Corporation, as amended (Exhibit A-1, File
No. 70-7287, Exhibit B-15 to Form U5S of EUA for 1986).
B-11 By-Laws of EUA Cogenex Corporation, as amended (Exhibit A-2, File
No. 70-7287, to Form U5S of EUA for 1986).
B-12 Agreement of Limited Partnership among Onsite Energy and EUA
Cogenex Corporation dated as of November 30, 1988 (Exhibit A-4 to
Post-Effective Amendment No. 3 of Form U-1, File No. 70-7825, dated
October 21, 1991).
B-13 EUA/FRCII Energy Associates Agreement of Limited Partnership dated
as of September 19, 1989 (Exhibit A-5 to Post-Effective Amendment No.
3 of Form U-1, File No. 70-7825, dated October 21, 1991).
B-14 Micro Utility Partners of America, L.P., Agreement of Limited
Partnership dated as of December 20, 1988 (Exhibit A-6 to
Post-Effective Amendment No. 3 of Form U-1, File No. 70-7825, dated
October 21, 1991).
B-15 Energy Capital and Services I, LP, Agreement of Limited Partnership
dated as of April 10, 1990 (Exhibit A-7 to Post-Effective Amendment
No. 3 of Form U-1, File No. 70-7825, dated October 21, 1991).
B-16 EUA/SYCOM General Partnership Agreement dated as of September 20,
1989 (Exhibit A-9 to Post-Effective Amendment No. 3 of Form U-1, File
No. 70-7825, dated October 21, 1991).
B-17 EUA/Highland Energy Partners, Agreement of Limited Partnership
dated as of September 27, 1990 (Exhibit A-10 to Post-Effective
Amendment No. 3 of Form U-1, File No. 70-7825, dated October 21,
1991).
B-18 Articles of Incorporation of EUA Energy Investment Corporation
(Exhibit B-14 to Form U5S of EUA for 1987).
B-19 By-Laws of EUA Energy Investment Corporation (Exhibit B-15 to Form
U5S of EUA for 1987).
B-20 Articles of Incorporation of EUA Ocean State Corporation (Exhibit
B-16 to Form U5S of EUA for 1988).
B-21 By-Laws of EUA Ocean State Corporation (Exhibit B-17 to Form U5S of
EUA for 1988).
B-22 Charter of Newport, as amended (Exhibit B-18 to Form U5S of EUA for
1990).
B-23 By-Laws of Newport (Exhibit B-19 to Form U5S of EUA for 1990).
B-24 Ocean State Power Amended and Restated General Partnership
Agreement among EUA Ocean State, Ocean State Power Company, TCPL
Power Ltd., Narragansett Energy Resources Company and NECO Power,
Inc. (collectively, the "OSP Partners") dated as of December 2, 1988,
as amended March 27, 1989 (Exhibit 10-107, Form 10-K of EUA for 1989,
File No. 1-5366, Exhibits 10-3.12, 10-4.12 and 10-5.12, Form 10K of
EUA for 1994, File No. 1-5366).
B-25 Ocean State Power II Amended and Restated General Partnership
Agreement among EUA Ocean State, JMC Ocean State Corporation,
Makowski Power, Inc., TCPL Power Ltd., Narragansett Energy Resources
Company and Newport Electric Power Corporation (collectively, the
"OSP II Partners") dated as of September 29, 1989 (Exhibit 10-110,
Form 10-K of EUA for 1989, File No. 1-5366).
B-26 Articles of Organization of EUA Transcapacity, Inc. (Exhibit A-1
File No. 70-8283).
B-27 By-Laws of EUA Transcapacity, Inc. (Exhibit A-2 File No. 70-8283).
B-28 Amended and Restated Agreement of Limited Partnership of
TransCapacity Limited Partnership (Exhibit A-2 File No. 70-8283).
B-29 Articles of Incorporation of EUA Cogenex-Canada (Exhibit A-1 File
No. 70-8441).
B-30 By-Law No.1 of EUA Cogenex-Canada (Exhibit A-2 File No. 70-8441).
B-31 Articles of Organization of NEM (Exhibit A-2 File No. 70-8255).
B-32 By-Laws of NEM (Exhibit A-3 File No. 70-8255).
B-33 Articles of Organization of EUA Highland (Exhibit A-2 File No.
70-8523).
B-34 By-Laws of EUA Highland (Exhibit A-3 File No. 70-8523).
B-35 Articles of Organization of EUA Citizens Conservation Service, Inc.
(Exhibit A-1 File No. 70-8473).
B-36 By-Laws of EUA Citizens Conservation Services, Inc. (Exhibit A-2 File
No. 70-8473).
B-37 Articles of Organization of EUA Bioten, Inc. (Exhibit A-1 File No.
70-8617).
B-38 By-laws of EUA Bioten, Inc. (Exhibit A-2 File No. 70-8617).
B-39 Certificate of Formation of APS Cogenex L.L.C. (Exhibit A-1 File No.
70-8663).
B-40 Limited liability company operating agreement for APS Cogenex L.L.C.
(Exhibit B-2 File No. 70-8663).
B-41 1995 Agreement of General Partnership of BIOTEN General Partnership
(Exhibit A-3 File No. 70-8617).
Exhibit C -
(a)
C-1 Form of 8% Debenture Bonds due 2000 of Montaup (Exhibit 4-10,
Registration File No. 2-41488).
C-2 Form of 8-1/4% Debenture Bonds due 2003 of Montaup (Exhibit B-3,
Form U5S of EUA for year 1973).
C-3 Form of 14% Debenture Bonds due 2005 of Montaup (Exhibit 4-11,
Registration No. 2-55990).
C-4 Form of 10% Debenture Bonds due 2008 of Montaup (Exhibit 5-3,
Registration No. 2-65785).
C-5 Form of 16-1/2% Debenture Bonds due 2010 of Montaup (Exhibit 4-11,
Form 10-K of EUA for 1980, File No. 1-5366).
C-6 Form of 12-3/8% Debenture Bonds due 2013 of Montaup (Exhibit 4-13,
Form 10-K of EUA for 1983, File No. 1-5366).
C-7 Form of 9% Debenture Bonds due 2020 of Montaup (Exhibit 4-10, Form
10-K of Eastern Edison for 1990, File No. 0-8480).
C-8 Form of 9-3/8% Debenture Bonds due 2020 of Montaup (Exhibit 4-11,
Form 10-K of Eastern Edison for 1990, File No. 0-8480).
C-9 Indenture of First Mortgage and Deed of Trust dated as of September
1, 1948 of Eastern Edison (Exhibit 4-1, Registration No. 2-77468),
and twenty-six supplements thereto (Exhibit A, File No. 70-3015;
Exhibit A-3, File No. 70-3371; Exhibit C to Certificate of
Notification, File No. 70-3371; Exhibit D to Certificate of
Notification, File No. 3619; Exhibit D to Certificate of
Notification, File No. 70-3798; Exhibit F to Certificate of
Notification, File No. 70-4164; Exhibit D to Certificate of
Notification, File No. 70-4748; Exhibit C to Certificate of
Notification, File No. 70-5195; Exhibit F to Certificate of
Notification, File No. 70-5379; Exhibit C to Certificate of
Notification, File No. 70-5719; Exhibit 5-24 Registration No.
2-65785; Exhibit F to Certificate of Notification, File No. 70-6463;
Exhibit C to Certificate of Notification, File No. 70-6608; Exhibit C
to Certificate of Notification, File No. 70-6737; Exhibit F to
Certificate of Notification, File No. 70-6851; Exhibit 4-31, Form
10-K of EUA for 1984, File No. 1-5366; Exhibit F to Certificate of
Notification, File No. 70-7254; Exhibit C to Certificate of
Notification, File No. 70-7373; Exhibit C to Certificate of
Notification, File No. 70-7373; Exhibit C to Certificate of
Notification, File No. 70-7373; Exhibit F to Certificate of
Notification, File No. 20-7511; Exhibit 4-34, Form 10-K of Eastern
Edison for 1990, File No. 0-8480; Exhibit 4-24, Form 10-K of Eastern
Edison for 1992, File No. 0-8480; Exhibit 4-35, Form 10-K of Eastern
Edison for 1990, File No. 0-8480; Exhibit 4-36, Form 10-K of Eastern
Edison for 1990, File No. 0-8480; Exhibit C-33 to Form U5S of EUA
for 1993; Exhibit C-34 to Form U5S of EUA for 1993; Exhibit 4-29.08,
Form 10-K of Eastern Edison for 1994, File No. 0-8480).
C-10 Form of Eastern Edison Medium Term Note (Exhibit 4-36, Form 10-K of
Eastern Edison for 1990, File No. 0-8480).
C-11 First Mortgage Indenture and Deed of Trust dated as of December 1,
1980 of Blackstone (Exhibit A, Form 8-K of EUA dated January 14,
1981, File No. 1-5366).
C-12 First Supplemental Indenture dated as of August 1, 1989 of
Blackstone (Exhibit 4-33, Form 10-K of EUA for 1989, File 1-5366).
C-13 Second Supplemental Indenture dated as of November 26, 1990 of
Blackstone (Exhibit 4-3, Form 10-K of BVE for 1990, File No. 0-2602).
C-14 Loan Agreement between Rhode Island Industrial Facilities
Corporation and Blackstone dated as of December 1, 1984 (Exhibit
10-72, Form 10-K of EUA for 1984, File No. 1-5366).
C-15 Note Purchase Agreement dated as of January 13, 1988 of Service
(Exhibit 4-38, Form 10-K of EUA for 1987, File No. 1-5366).
C-16 Note Agreement dated as of June 28, 1990 of EUA Cogenex with the
Prudential Insurance Company of America (Exhibit 4-46, Form 10-K of
EUA for 1990, File No. 1-5366).
C-17 Note Agreement dated as of October 29, 1991 between EUA Cogenex and
Prudential Insurance Company of America (Exhibit 4-55, Form 10-K of
EUA for 1991, File No. 1-5366).
C-18 Note Purchase Agreement dated as of September 29, 1992 of EUA
Cogenex and the Prudential Life Insurance Company of America (Exhibit
4-44 to Form 10-K of EUA for 1992, File No. 1-5366).
C-19 Indenture dated September 1, 1993 between EUA Cogenex and the Bank
of New York as Trustee (Exhibit 4-4.10, Form 10-K of EUA for 1993,
File No. 1-5366).
C-20 Guaranty, dated June 28, 1990, made by Eastern Utilities Associates
in favor of The Prudential Insurance Company of America (Exhibit B-2
to Form U-1, File No. 70-7655, dated June 14, 1990).
C-21 Indenture of First Mortgage dated as of June 1, 1954 of Newport, as
supplemented on August 1, 1959, April 1, 1962, October 1, 1964, April
1, 1967, September 1, 1969, September 1, 1970, June 1, 1978, October
1, 1978, May 1, 1986, December 1, 1987 and November 1, 1989 (Exhibit
4-49, Form 10-K of EUA for 1990, File No. 1-5366).
C-22 United States Government Small Business Administration Loan to
Newport entitled, "Base Closing Economic Injury Loan", signed May 30,
1975 and amended on October 6, 1983 (Exhibit 4-50, Form 10-K of EUA
for 1990, File No. 1-5366).
C-23 Indenture of Second Mortgage dated as of September 1, 1982 of
Newport, as supplemented on December 1, 1988 (Exhibit 4-51, Form 10-K
of EUA for 1990, File No. 1-5366).
C-24 Note Purchase Agreement dated as of January 16, 1992 between EUA
Ocean State Corporation and John Hancock Mutual Life Insurance
Company (Exhibit 4-56, Form 10-K of EUA for 1991, File No. 1-5366).
C-25 Guaranty, dated January 16, 1992 made by EUA in favor of John
Hancock Mutual Life Insurance Company (Exhibit 10-125, Form 10-K of
EUA for 1991, File No. 1-5366).
C-26 Trust Agreement dated as of July 1, 1993 between Massachusetts
Industrial Finance Agency and Shawmut Bank, N.A. (filed as
Exhibit 10-1.08 to Eastern Edison's Form 10-K for 1993, File No.
0-8480).
C-27 Loan Agreement dated as of July 1, 1993 between Massachusetts
Industrial Finance Agency and Eastern Edison (filed as Exhibit
10-2.08 to Eastern Edison's Form 10-K for 1993, File No. 0-8480).
C-28 Power Purchase Agreement entered into as of September 20, 1993 by
and between Meridian Middleboro Limited Partnership and Eastern
Edison Company (filed as Exhibit 10-3.08 to Eastern Edison's Form
10-K for 1993, File No. 0-8480).
C-29 Inducement Letter dated July 14, 1993 from Eastern Edison to the
Massachusetts Industrial Finance Agency and Goldman, Sachs & Company
and Citicorp Securities Markets, Inc. (filed as Exhibit 10-4.08 to
Eastern Edison's Form 10-K for 1993, File No. 0-8480).
C-30 Indenture dated September 1, 1993 between EUA Cogenex and the Bank
of New York as Trustee (filed as Exhibit 4-4.10 to EUA's Form 10-K
for 1993, File No. 1-5366).
C-31 Loan Agreement between the Rhode Island Port Authority and Economic
Development Corporation and Newport Electric Corporation dated as of
January 6, 1994 (filed as Exhibit 4-14.14 to EUA's Form 10-K for
1993, File No. 1-5366).
C-32 Trust Indenture between the Rhode Island Authority and Economic
Development Corporation and Newport Electric Corporation dated as of
January 1, 1994 (filed as Exhibit 4-5.14 to EUA's Form 10-K for 1993,
File No. 1-5366).
C-33 Letter of Credit and Reimbursement Agreement among Newport and the
Canadian Imperial Bank of Commerce dated January 6, 1994 (filed as
Exhibit 4-6.14 to EUA's Form 10-K for 1993, File No. 1-5366).
C-34 Memorandum of understanding by and between Canal Electric Company
and Montaup Electric Company dated September 23, 1993 (Exhibit
10-39.05, Eastern Edison 10-K for 1993, File No. 0-8480).
C-35 Ancillary Agreement by and between Algonquin Gas Transmission
Company, Canal Electric Company and Montaup Electric Company dated
October 8, 1993 (Exhibit 10-40.05 of Eastern Edison 10-K for 1993,
File No. 0-8480).
(b) None
*Exhibit D - Tax allocation agreement for 1996 pursuant to Rule 45(c).
Exhibit E - Other documents. None.
Exhibit F - Supporting schedules. None.
*Exhibit G - Financial Data Schedules. Filed Electronically via EDGAR.
Exhibit H - None.
Exhibit I - None.
SIGNATURE
The undersigned system company has duly caused this annual report to be
signed on its behalf by the undersigned thereunto duly authorized, pursuant to
the requirements of the Public Utility Holding Company Act of 1935.
EASTERN UTILITIES ASSOCIATES
and Subsidiaries
By /s/_Clifford J. Hebert, Jr.
Clifford J. Hebert, Jr.
(Treasurer)
May 1, 1996
<TABLE>
EASTERN UTILITIES ASSOCIATES AND SUBSIDIARY COMPANIES
CONSOLIDATING BALANCE SHEETS
DECEMBER 31, 1995
ASSETS
<CAPTION>
Blackstone
Eastern EUA Valley
EUA Utilities Service Electric
Consolidated Eliminations Associates Corporation Company
<S> <C> <C> <C> <C> <C> <C>
Utility plant and other investments:
Utility plant in service $1,037,662,571 $ $ $30,410,487 $135,148,674
Less accumulated provision for depreciation
and amortization 324,146,198 11,551,875 48,023,950
Net utility plant in service 713,516,373 18,858,612 87,124,724
Construction work in progress 7,569,630 1,425,389 1,354,541
Net utility plant 721,086,003 20,284,001 88,479,265
Non-utility property 112,803,790 70,206
Less accumulated provision for depreciation 30,457,293 23,212
Net non-utility property 82,346,497 46,994
Investments in subsidiaries (at equity) 70,210,359 366,647,573 366,647,573
Excess of carrying values of investments
in subsidiaries 17,488 17,488
Other 67,139,467 1,000
Total Utility Plant and Other Investments 940,799,814 366,647,573 366,666,061 20,284,001 88,526,259
Current Assets:
Cash and temporary cash investments 4,060,214 187,960 254,299 753,220
Notes and Leases receivable 18,663,246 16,143,757 16,143,757
Accounts receivable - Net:
Customers 61,095,962 11,254,408
Accrued unbilled revenue 11,311,126 1,338,710
Others 11,968,351 2,791,750 1,155,138 567,345 4,726,405
Accounts receivable - associated companies 0 37,247,653 1,995,073 8,696,602 428,631
Materials and Supplies (at average cost):
Fuel 7,449,734
Plant materials and operating supplies 9,065,987 57,020 939,069
Other current assets 11,804,078 704,578 499,699 392,888
Total Current Assets 135,418,698 56,183,160 20,186,506 10,074,965 19,833,331
Deferred Debits:
Unamortized debt expense 5,348,686 112,118 709,909
Unrecovered regulatory plant costs (Note A) 10,100,000
Other deferred debits 108,605,937 11,716,541 1,839,956 14,908,004
Total Deferred Debits 124,054,623 11,716,541 1,952,074 15,617,913
Total assets $1,200,273,135 $422,830,733 $398,569,108 $32,311,040 $123,977,503
</TABLE>
<TABLE>
EASTERN UTILITIES ASSOCIATES AND SUBSIDIARY COMPANIES
CONSOLIDATING BALANCE SHEETS (continued)
DECEMBER 31, 1995
<CAPTION>
ASSETS
EUA
Newport Eastern EUA Energy EUA
Electric Edison Cogenex Investment Ocean State
Corporation Consolidated Consolidated Consolidated Corporation
<S> <C> <C> <C> <C> <C> <C>
Utility plant and other investments:
Utility plant in service $76,904,158 $795,199,252 $ $ $
Less accumulated provision for depreciation
and amortization 22,897,501 241,672,872
Net utility plant in service 54,006,657 553,526,380
Construction work in progress 1,283,225 3,506,475
Net utility plant 55,289,882 557,032,855
Non-utility property 2,715,349 108,640,560 1,377,675
Less Accumulated provision for depreciation 9,697 30,033,093 391,291
Net non-utility property 2,705,652 78,607,467 986,384
Investments in subsidiaries (at equity) 13,222,435 1,000 2,653,222 54,333,702
Excess of carrying values of investments
in subsidiaries
Other 50,405 66,885,178 177,382 25,502
Total Utility Plant and Other Investments 55,289,882 573,011,347 145,493,645 3,816,988 54,359,204
Current Assets:
Cash and temporary cash investments 214,757 532,988 1,503,436 468,363 145,191
Notes and Leases receivable 17,762,795 900,451
Accounts receivable - Net:
Customers 4,977,527 25,730,121 19,133,906
Accrued Unbilled Revenue 814,829 9,157,587
Others 1,481,769 2,347,648 3,102,864 1,378,932 0
Accounts receivable - associated companies 241,585 25,861,102 24,660 0
Materials and Supplies (at average cost):
Fuel 64,575 7,385,159
Plant materials and operating supplies 787,022 3,936,913 3,345,963
Other current assets 310,556 4,170,083 5,690,165 31,940 4,169
Total Current Assets 8,892,620 79,121,601 50,563,789 2,779,686 149,360
Deferred Debits:
Unamortized debt expense 521,795 2,847,178 710,083 447,603
Unrecovered Regulatory Plant Costs (Note A) 10,100,000
Other deferred debits 3,566,237 74,118,188 2,347,610 109,401
Total Deferred Debits 4,088,032 87,065,366 3,057,693 109,401 447,603
Total assets $68,270,534 $739,198,314 $199,115,127 $6,706,075 $54,956,167
</TABLE>
<TABLE>
EASTERN UTILITIES ASSOCIATES AND SUBSIDIARY COMPANIES
CONSOLIDATING BALANCE SHEETS
DECEMBER 31, 1995
<CAPTION>
LIABILITIES
<S> <C> <C> <C> <C> <C>
Capitalization:
Common equity $375,229,217 $366,647,579 $375,273,128 $3,857,832 $37,044,874
Non-redeemable preferred stock of subsidiaries 6,900,625 0 0 0 6,129,500
Redeemable preferred stock of 0 0 0 0 0
subsidiaries - net 29,701,229 0 0 0 0
Preferred stock redemption cost (3,446,743) 0 0 0 0
Long-term debt - net 434,871,091 0 0 11,200,000 36,500,000
Total Capitalization 843,255,419 366,647,579 375,273,128 15,057,832 79,674,374
Current Liabilities:
Preferred stock sinking fund requirements 50,000 0 0 0 0
Long-term debt due within one year 19,506,229 0 0 1,100,000 1,500,000
Notes payable 39,540,304 16,143,757 18,358,000 0 1,259,000
Accounts payable 35,768,721 0 17,157 1,802,317 281,820
Accounts payable - associated companies 0 35,569,990 3,503,881 178,806 17,370,364
Customer deposits 3,318,287 0 0 0 992,240
Taxes accrued 4,543,808 2,791,743 854,122 10,149 1,777,185
Interest accrued 10,860,802 1,677,662 947,518 635,168 980,594
Dividends accrued 81,590 0 0 0 72,188
Other current liabilities 16,530,843 0 1,111,943 86,442 430,910
Total Current Liabilities 130,200,584 56,183,152 24,792,621 3,812,882 24,664,301
Deferred Credits:
Unamortized investment credit 21,880,523 0 0 0 2,743,072
Other deferred credits 64,196,239 0 137,079 12,024,332 7,979,275
Total Deferred Credits 86,076,762 137,079 12,024,332 10,722,347
Accumulated deferred taxes 140,740,370 2 (1,633,720) 1,415,994 8,916,481
Commitments and contingencies (Note J)
Total Liabilities and Capitalization $1,200,273,135 $422,830,733 $398,569,108 $32,311,040 $123,977,503
( ) Denotes Contra
The accompanying notes are an integral part of the financial statements.
</TABLE>
<TABLE>
EASTERN UTILITIES ASSOCIATES AND SUBSIDIARY COMPANIES
CONSOLIDATING BALANCE SHEETS (continued)
DECEMBER 31, 1995
<CAPTION>
LIABILITIES (continued)
<S> <C> <C> <C> <C> <C>
Capitalization:
Common equity $21,247,497 $244,368,214 $52,584,275 ($9,050,831) $16,551,807
Non-redeemable preferred stock of subsidiaries 771,050 75
Redeemable preferred stock of
subsidiaries - net 36,727 29,664,502
Preferred stock redemption cost (3,446,743)
Long-term debt - net 21,291,122 222,313,093 112,500,000 31,066,876
Total Capitalization 43,346,396 492,899,066 165,084,350 (9,050,831) 47,618,683
Current Liabilities:
Preferred stock sinking fund requirements 50,000
Long-term debt due within one year 729,569 7,000,000 6,700,000 2,476,660
Notes payable 1,344,000 4,158,000 14,366,231 16,198,830
Accounts payable 226,946 27,241,874 6,130,039 68,568 0
Accounts payable - associated companies 9,887,342 3,913,045 644,655 47,855 24,042
Customer deposits 702,366 1,103,531 520,150
Taxes accrued 668,992 3,218,803 122,225 684,075
Interest accrued 466,377 4,998,814 2,564,262 1,677,662 268,069
Dividends accrued 9,402
Other current liabilities 452,059 7,331,785 7,009,094 107,428 1,182
Total Current Liabilities 14,537,053 58,965,852 38,056,656 18,100,343 3,454,028
Deferred Credits:
Unamortized investment credit 1,295,754 17,841,697
Other deferred credits 2,147,959 40,725,734 2,338,529 (1,156,669)
Total Deferred Credits 3,443,713 58,567,431 2,338,529 (1,156,669)
Accumulated deferred taxes 6,943,372 128,765,965 (6,364,408) (1,186,768) 3,883,456
Commitments and contingencies (Note J)
Total Liabilities and Capitalization $68,270,534 $739,198,314 $199,115,127 $6,706,075 $54,956,167
( ) Denotes Contra
The accompanying notes are an integral part of the financial statements.
</TABLE>
<TABLE>
EASTERN UTILITIES ASSOCIATES AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENTS OF CAPITALIZATION
DECEMBER 31, 1995
<CAPTION>
Blackstone
Eastern EUA Valley
EUA Utilities Service Electric
Consolidated Eliminations Associates Corporation Company
<S> <C> <C> <C> <C> <C>
Common Equity:
Common shares, $5 par value of Registrant <F1> $102,183,820 $92,856,906 $102,183,820 $1,000 $9,203,100
Other paid-in capital 220,729,950 133,254,048 220,729,950 3,500,000 17,907,930
Common share expense (3,912,393) (742,214) (3,868,482)
Retained earnings 56,227,840 141,278,839 56,227,840 356,832 9,933,844
Total Common Equity 375,229,217 366,647,579 375,273,128 3,857,832 37,044,874
Non-Redeemable Preferred:
4.25%, $100 par value, 35,000 shares <F2> 3,500,000 3,500,000
5.60%, $100 par value, 25,000 shares <F2> 2,500,000 2,500,000
3.75%, $100 par value, 7,689 shares <F2> 768,900
$.01 par value, 7,500 shares <F3> 75
Premium, net of expense 131,650 129,500
Total Non-Redeemable 6,900,625 0 0 0 6,129,500
Redeemable Preferred:
6.625%, $100 par value, 300,000 shares <F4> 30,000,000
9.75%, $100 par value, 900 shares <F2> 90,000
Expense, net of premium (338,771)
Preferred stock redemption cost (3,446,743)
Sinking Fund Due Within One Year (50,000)
Total Redeemable 26,254,486
Long-Term Debt:
Secured Notes:
10.2% due 2008 12,300,000 12,300,000
Unsecured Notes:
9.59% due 2011 33,543,536
7% due 2000 50,000,000
7.22% due 1997 15,000,000
9.6% due 2001 19,200,000
10.56% due 2005 35,000,000
Variable Rate Bonds:
Demand due 2014 <F5> 6,500,000 6,500,000
Revenue Refunding due 2011 <F5> 7,925,000
First Mortgage and Collateral Trust Bonds:
5.875% due 1998 20,000,000
6.875% due 2003 40,000,000
8% due 2023 40,000,000
6.35% due 2003 8,000,000
4.875% due 1996 7,000,000
7.78% Secured medium-term notes due 2002 35,000,000
5.75% due 1998 40,000,000
Pollution Control Revenue Bonds:
5.875% due 2008 40,000,000
First Mortgage Bonds:
9.5% due 2004 (Series B) 13,500,000 13,500,000
10.35% due 2010 (Series C) 18,000,000 18,000,000
9% due 1999 1,386,000
9.8% due 1999 8,000,000
8.95% due 2001 3,900,000
Second Mortgage Bonds:
6.5% SBA Loan due 2005 809,691
Unamortized (Discount) - Net (686,907)
454,377,320 0 0 12,300,000 38,000,000
Less portion due within one year 19,506,229 1,100,000 1,500,000
Total Long-Term Debt 434,871,091 0 0 11,200,000 36,500,000
Total Capitalization 843,255,419 366,647,579 375,273,128 15,057,832 79,674,374
<FN>
<F1> Authorized 36,000,000 shares, outstanding 20,436,764
<F2> Authorized and Outstanding.
<F3> The Preferred Stock shall be entitled to an annual dividend
per share at a rate equal to 33% of the net income of Citizens
Conservation Services divided by 7,500.
<F4> Authorized 400,000 shares, outstanding 300,000.
<F5> Weighted average interest rate was 3.9% for 1995.
</FN>
The accompanying notes are an integral part of the financial statements.
</TABLE>
<TABLE>
EASTERN UTILITIES ASSOCIATES AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENTS OF CAPITALIZATION (continued)
DECEMBER 31, 1995
<CAPTION>
EUA
Newport Eastern EUA Energy EUA
Electric Edison Cogenex Investment Ocean State
Corporation Consolidated Consolidated Consolidated Corporation
<S> <C> <C> <C> <C> <C>
Common Equity:
Common shares, $5 par value of Registrant <F1> $11,368,779 $72,283,925 $100 $1 $1
Other paid-in capital 9,000,000 47,249,633 45,787,287 999 9,808,199
Common share expense (742,214) (43,911)
Retained earnings 1,620,932 124,878,567 6,796,888 (9,051,831) 6,743,607
Total Common Equity 21,247,497 244,368,214 52,584,275 (9,050,831) 16,551,807
Non-Redeemable Preferred:
4.25%, $100 par value, 35,000 shares <F2>
5.60%, $100 par value, 25,000 shares <F2>
3.75%, $100 par value, 7,689 shares<F2> 768,900
$.01 par value, 7,500 shares<F3> 75
Premium, net of expense 2,150
Total Non-Redeemable 771,050 75
Redeemable Preferred:
6.625%, $100 par value, 300,000 shares<F4> 30,000,000
9.75%, $100 par value, 900 shares<F2> 90,000
Expense, net of premium (3,273) (335,498)
Preferred stock redemption cost (3,446,743)
Sinking Fund Due Within One Year (50,000)
Total Redeemable 36,727 26,217,759
Long-Term Debt:
Secured Notes:
10.2% due 2008
Unsecured Notes:
9.59% due 2011 33,543,536
7% due 2000 50,000,000
7.22% due 1997 15,000,000
9.6% due 2001 19,200,000
10.56% due 2005 35,000,000
Variable Rate Bonds:
Demand due 2014 <F5>
Revenue Refunding due 2011 <F5> 7,925,000
First Mortgage and Collateral Trust Bonds:
5.875% due 1998 20,000,000
6.875% due 2003 40,000,000
8% due 2023 40,000,000
6.35% due 2003 8,000,000
4.875% due 1996 7,000,000
7.78% Secured medium-term notes due 2002 35,000,000
5.75% due 1998 40,000,000
Pollution Control Revenue Bonds:
5.875% due 2008 40,000,000
First Mortgage Bonds:
9.5% due 2004 (Series B)
10.35% due 2010 (Series C)
9% due 1999 1,386,000
9.8% due 1999 8,000,000
8.95% due 2001 3,900,000
Second Mortgage Bonds:
6.5% SBA Loan due 2005 809,691
Unamortized (Discount) - Net (686,907)
22,020,691 229,313,093 119,200,000 0 33,543,536
Less portion due within one year 729,569 7,000,000 6,700,000 2,476,660
Total Long-Term Debt 21,291,122 222,313,093 112,500,000 0 31,066,876
Total Capitalization 43,346,396 492,899,066 165,084,350 (9,050,831) 47,618,683
<FN>
<F1> Authorized 36,000,000 shares, outstanding 20,436,764
<F2> Authorized and Outstanding.
<F3> The Preferred Stock shall be entitled to an annual dividend
per share at a rate equal to 33% of the net income of Citizens
Conservation Services divided by 7,500.
<F4> Authorized 400,000 shares, outstanding 300,000
<F5> Weighted average interest rate was 3.9% for 1995.
</FN>
The accompanying notes are an integral part of the financial statements.
</TABLE>
<TABLE>
EASTERN UTILITIES ASSOCIATES AND SUBSIDIARY COMPANIES
CONSOLIDATING INCOME STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 1995
<CAPTION>
Blackstone
Eastern EUA Valley
EUA Utilities Service Electric
Consolidated Eliminations Associates Corporation Company
<S> <C> <C> <C> <C> <C>
Operating Revenues $563,362,820 $138,191,693 $ $ $140,860,592
Operating Expenses:
Operation 380,411,113 179,217,103 778,426 41,320,310 111,598,984
Maintenance 23,468,360 984,652 1,862 994,123 3,344,124
Voluntary Retirement Incentive 4,504,550 0 21,419 0 911,694
Depreciation and amortization 45,492,481 1,145,871 2,889 1,152,119 5,500,665
Taxes Other than income 20,743,288 5,320,280 9,687 2,354,107 8,820,938
Income Taxes - Current (credit) 11,783,168 48,832 976 7,354 1,147,068
- Deferred (credit) 5,231,375 (1,062,356) (53,080) 94,839 1,200,314
Total Operating Expenses 491,634,335 185,654,382 762,179 45,922,852 132,523,787
Operating Income 71,728,485 (47,462,689) (762,179) (45,922,852) 8,336,805
Other Income and Deductions:
Interest and dividend income 6,659,658 1,174,656 1,171,245 3,447 82,845
Equity in earnings of jointly-
owned companies 12,063,402 30,950,088 30,950,088 0 0
Allowance for other funds used during
construction 537,784 4,445 44 4,446 33,795
Disposal of Cogeneration Operations (18,085,966) 0 0 0 0
Federal and State Taxes on Disposal of
Cogeneration Operations 7,587,980 0 0 0 0
Other (deductions) income - net (4,086,002) 46,777,598 89,886 47,605,294 (120,905)
Total Other Income 4,676,856 78,906,787 32,211,263 47,613,187 (4,265)
Income Before Interest Charges 76,405,341 31,444,098 31,449,084 1,690,335 8,332,540
Interest Charges:
Interest on long-term debt 38,215,697 0 0 1,254,600 3,480,700
Amortization of debt expense and premium 2,752,083 0 0 31,056 115,472
Other interest expense (principally
short-term notes) 3,167,014 2,445,406 760,176 14,960 497,072
Allowance for borrowed funds used during
construction - (credit) (2,676,676) (14,396) (144) (14,396) (59,128)
Total Interest Charges 41,458,118 2,431,010 760,032 1,286,220 4,034,116
Net Income 34,947,223 29,013,088 30,689,052 404,115 4,298,424
Preferred Dividends Requirement 2,321,171 0 0 0 288,750
Earnings available for common shareholders $32,626,052 $29,013,088 $30,689,052 $404,115 $4,009,674
Earnings per EUA Common Share
weighted average shares outstanding 20,238,961
$1.61
( ) Denotes Contra
The accompanying notes are an integral part of the financial statements.
</TABLE>
<TABLE>
EASTERN UTILITIES ASSOCIATES AND SUBSIDIARY COMPANIES
CONSOLIDATING INCOME STATEMENTS (continued)
FOR THE YEAR ENDED DECEMBER 31, 1995
<CAPTION>
EUA
Newport Eastern EUA Energy EUA
Electric Edison Cogenex Investment Ocean State
Corporation Consolidated Consolidated Consolidated Corporation
<S> <C> <C> <C> <C> <C>
Operating Revenues $61,126,000 $420,068,710 $79,499,211 $ $
Operating Expenses:
Operation 46,516,452 298,007,975 56,899,154 4,333,573 173,342
Maintenance 2,153,655 15,491,102 2,463,453 715 3,978
Voluntary Retirement Incentive 956,323 2,413,122 180,106 10,517 11,369
Depreciation and amortization 2,678,596 26,038,677 10,812,549 314,253 138,604
Taxes Other than income 3,864,161 10,233,645 756,057 15,687 9,286
Income Taxes - Current (credit) 886,799 12,891,558 624,359 (2,359,901) (1,366,213)
- Deferred (credit) 381,931 2,761,513 (560,145) 348,598 (4,951)
Total Operating Expenses 57,437,917 367,837,592 71,175,533 2,663,442 (1,034,585)
Operating Income 3,688,083 52,231,118 8,323,678 (2,663,442) 1,034,585
Other Income and Deductions:
Interest and dividend income 121,932 613,703 5,748,855 8,818 83,469
Equity in earnings of jointly-
owned companies 0 1,646,357 0 (301,651) 10,718,696
Allowance for other funds used during
construction 30,370 473,402 129 21 22
Disposal of Cogeneration Operations 0 0 (18,085,966) 0 0
Federal and State Taxes on Disposal of
Cogeneration Operations 0 0 7,587,980 0 0
Other (deductions) income - net 305,413 (206,557) (1,303,351) 136,864 (3,815,048)
Total Other Income 457,715 2,526,905 (6,052,353) (155,948) 6,987,139
Income Before Interest Charges 4,145,798 54,758,023 2,271,325 (2,819,390) 8,021,724
Interest Charges: 0 0 0 0 0
Interest on long-term debt 1,641,300 18,277,727 10,186,204 0 3,375,166
Amortization of debt expense and premium 126,527 2,299,383 151,670 0 27,975
Other interest expense (principally
short-term notes) 307,418 1,241,495 1,928,042 852,741 10,516
Allowance for borrowed funds used during
construction - (credit) (23,806) (503,283) (2,090,174) (69) (72)
Total Interest Charges 2,051,439 21,315,322 10,175,742 852,672 3,413,585
Net Income 2,094,359 33,442,701 (7,904,417) (3,672,062) 4,608,139
Preferred Dividends Requirement 44,921 1,987,500 0 0 0
Earnings available for common shareholders 2,049,438 31,455,201 (7,904,417) (3,672,062) 4,608,139
Earnings per EUA Common Share
weighted average shares outstanding
The accompanying notes are an integral part of the financial statements.
</TABLE>
<TABLE>
EASTERN UTILITIES ASSOCIATES AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 1995
<CAPTION>
Blackstone
Eastern EUA Valley
EUA Utilities Service Electric
Consolidated Eliminations Associates Corporation Company
<S> <C> <C> <C> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES:
Net Income $34,947,223 $29,013,088 $30,689,052 $404,115 $4,298,424
Adjustments to Reconcile Net Income
to Net Cash Provided by Operating Activities:
Depreciation and amortization 52,412,966 890,500 636,969 1,183,193 5,953,287
Amortization of nuclear fuel 3,646,532 0 0 0 0
Deferred taxes (985,013) (924,335) (70,410) 94,839 1,200,314
Non-cash (Gains)/Expenses on Sales of Investment
in Energy Savings Projects (1,263,914) 0 0 0 0
Loss on disposition of cogeneration projects 18,085,996 0 0 0 0
Investment tax credit, net (1,212,041) 0 0 0 (183,653)
Allowance for other funds used during construction (537,785) (4,228) 0 (4,446) (33,795)
Collections and sales of project notes
and leases receivable 17,747,698 0 0 0 0
Other - net 5,128,639 (8,791,625) (13,164,964) 3,150,880 643,479
Changes in Operating Assets and Liabilities:
Accounts receivable 5,728,673 (13,221,258) (503,529) (915,532) (2,323,537)
Materials and supplies (1,279,691) 0 0 5,142 (172,047)
Notes receivable (900,451) 608,000 608,000 0 0
Accounts payable 1,542,523 9,673,857 3,433,332 (553,663) 7,539,905
Accrued taxes (1,920,918) 5,771,752 854,122 5,732 336,695
Other - net (18,178,749) 755,650 (612,947) (378,115) (7,239,169)
Net Cash Provided from (Used in) Operating Activities 112,961,688 23,771,401 21,869,625 2,992,145 10,019,903
CASH FLOW FROM INVESTING ACTIVITIES:
Construction expenditures (77,922,700) 4,228 0 (1,766,888) (5,064,276)
Collections on notes and leases
receivables of EUA Cogenex 3,125,256 0 0 0 0
Proceeds from Disposal of cogeneration Assets 11,500,650 0 0 0 0
Increase/Decrease in other investments (2,300,000) 0 0 0 0
Investments in subsidiaries 0 (5,759,000) (5,759,000) 0 0
Net Cash Used in Investing Activities (65,596,794) (5,754,772) (5,759,000) (1,766,888) (5,064,276)
CASH FLOW FROM FINANCING ACTIVITIES:
Issuances:
Common shares/capital contribution 5,985,444 5,759,000 5,985,444 (1,000,000) 0
Redemptions:
Long-term debt (42,724,553) 0 0 (2,200,000) (1,500,000)
Preferred stock (100,000) 0 0 0 0
Premium on reacquisition and financing expenses (63,150) 0 (62,995) 0 0
EUA common share dividends paid (32,050,296) (23,167,629) (32,050,296) (383,000) (4,145,077)
Subsidiary preferred dividends paid (2,323,608) 0 0 0 (288,750)
Net increase (decrease) in short-term debt 7,862,231 (608,000) 10,156,000 0 1,259,000
Net Cash (Used in) Provided from Financing Activities (63,413,932) (18,016,629) (15,971,847) (3,583,000) (4,674,827)
NET (DECREASE) INCREASE IN CASH (16,049,038) 0 138,778 (2,357,743) 280,800
Cash and temporary cash investments at beginning of year 20,109,252 0 49,182 2,612,042 472,420
Cash and temporary cash investments at end of year 4,060,214 0 187,960 254,299 753,220
Cash paid during the year for:
Interest (net of amount capitalized) 39,306,175 (14,396) 835,157 1,369,658 3,564,950
Income Taxes(Refund) 9,411,704 0 0 (1,431,677) 690,000
Conversion of investments in energy savings projects
to notes and leases receivable 19,324,256 0 0 0 0
( ) Denotes Contra
The accompanying notes are an integral part of the financial statements.
</TABLE>
<TABLE>
EASTERN UTILITIES ASSOCIATES AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
FOR THE YEAR ENDED DECEMBER 31, 1995
<CAPTION>
EUA
Newport Eastern EUA Energy EUA
Electric Edison Cogenex Investment Ocean State
Corporation Consolidated Consolidated Consolidated Corporation
<S> <C> <C> <C> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES:
Net Income $2,094,359 $33,442,701 ($7,904,417) ($3,672,062) $4,608,139
Adjustments to Reconcile Net Income
to Net Cash Provided by Operating Activities:
Depreciation and amortization 3,568,274 29,919,277 11,594,142 285,650 162,674
Amortization of nuclear fuel 0 3,646,532 0 0 0
Deferred taxes 381,931 2,694,288 (6,463,836) 348,598 (95,072)
Non-cash (Gains)/Expenses on Sales of Investment 0 0 0 0 0
in Energy Savings Projects (1,263,914)
Loss on disposition of cogeneration projects 0 0 18,085,996 0 0
Investment tax credit, net (86,160) (942,228) 0 0 0
Allowance for other funds used during construction (30,370) (473,402) 0 0 0
Collections and sales of project notes and
leases receivable 0 0 17,747,698 0 0
Other - net (144,810) 1,152,106 3,477,891 (976,867) 2,199,299
Changes in Operating Assets and Liabilities:
Accounts receivable (127,050) (7,055,113) 2,463,417 (294,394) 1,263,153
Materials and supplies 28,918 (1,678,331) 536,627 0 0
Notes receivable 0 0 0 (900,451) 0
Accounts payable (164,136) 827,288 323,645 (191,366) 1,375
Accrued taxes 166,537 1,807,596 (3,923) 0 684,075
Other - net (596,157) (6,630,345) (2,677,228) 730,291 (19,429)
Net Cash Provided from (Used in) Operating Activities 5,091,336 56,710,369 35,916,098 (4,670,601) 8,804,214
CASH FLOW FROM INVESTING ACTIVITIES:
Construction expenditures (2,977,336) (23,422,997) (44,172,122) (514,853) 0
Collections on Notes and Lease
Receivables of EUA Cogenex 0 0 3,125,256 0 0
Proceeds from Disposal of Cogeneration Assets 0 0 11,500,650 0 0
Increase/Decrease in other investments 0 0 0 (2,300,000) 0
Investments in subsidiaries 0 0 0 0 0
Net Cash Used in Investing Activities (2,977,336) (23,422,997) (29,546,216) (2,814,853) 0
CASH FLOW FROM FINANCING ACTIVITIES:
Issuances:
Common shares/capital contribution 0 0 8,059,000 0 (1,300,000)
Redemptions:
Long-term debt (747,893) (35,000,000) (800,000) 0 (2,476,660)
Preferred stock (100,000) 0 0 0 0
Premium on reacquisition and financing expenses (155) 0 0 0 0
EUA common share dividends paid (2,540,000) (11,189,552) 0 0 (4,910,000)
Subsidiary preferred dividends paid (47,358) (1,987,500) 0 0 0
Net increase (decrease) in short-term debt 1,344,000 4,158,000 (17,113,770) 7,451,001 0
Net Cash (Used in) Provided from Financing Activities (2,091,406) (44,019,052) (9,854,770) 7,451,001 (8,686,660)
NET (DECREASE) INCREASE IN CASH 22,594 (10,731,680) (3,484,888) (34,453) 117,554
Cash and temporary cash investments at beginning of year 192,163 11,264,668 4,988,324 502,816 27,637
Cash and temporary cash investments at end of year 214,757 532,988 1,503,436 468,363 145,191
Cash paid during the year for:
Interest (net of amount capitalized) 1,635,765 18,342,980 9,735,901 405,437 3,401,931
Income Taxes(Refund) 720,353 9,044,141 657,296 (939,062) 670,653
Conversion of investments in energy savings projects
to notes and leases receivable 0 0 19,324,256 0 0
( ) Denotes Contra
The accompanying notes are an integral part of the financial statements.
</TABLE>
<TABLE>
EASTERN UTILITIES ASSOCIATES AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENTS OF RETAINED EARNINGS AND OTHER PAID-IN CAPITAL
DECEMBER 31, 1995
<CAPTION>
Blackstone
Eastern EUA Valley
EUA Utilities Service Electric
Consolidated Eliminations Associates Corporation Company
<S> <C> <C> <C> <C> <C>
Balance of retained earnings at beginning of year $56,617,000 $134,461,298 $56,617,000 $335,717 $10,069,247
Additions:
Net Income (Loss) 34,947,223 29,013,088 30,689,052 404,115 4,298,424
Total 91,564,223 163,474,386 87,306,052 739,832 14,367,671
Deductions:
Dividends:
Preferred - subsidiaries 2,321,172 0 0 0 288,750
Common - subsidiaries 0 23,167,629 0 383,000 4,145,077
Common - registrant - $1.585 per share 32,050,296 0 32,050,296 0 0
Total Dividends 34,371,468 23,167,629 32,050,296 383,000 4,433,827
Other 964,915 (972,085) (972,085) 0 0
Total Deductions 35,336,383 22,195,544 31,078,211 383,000 4,433,827
Balance of retained earnings at end of period 56,227,840 141,278,842 56,227,841 356,832 9,933,844
Other Paid-In Capital at Beginning of Year $212,990,551 $212,990,551
Additions:
Excess of aggregate sales price over par value of 262,115 EUA
Common Shares issued during 1995, in connection with
the EUA Dividend Reinvestment and Common Share
Purchase Plan and Employee Share Ownership Plans at
an average price of $22.84 per Common Share 4,674,868 4,674,868
Highland Energy Group, Inc. acquisition
May (176,258 shs.) 3,318,057 3,318,057
Amortization restricted stock costs 431,013 431,013
Deductions:
Unamortized Restricted stock costs (61,411 shs.) 309,484 309,484
TransCapacity investment 374,744 374,744
Other Paid-In Capital at End of Year $220,730,261 $220,730,261
( ) Denotes Contra
The accompanying notes are an integral part of the financial statements.
</TABLE>
<TABLE>
EASTERN UTILITIES ASSOCIATES AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENTS OF RETAINED EARNINGS AND OTHER PAID-IN CAPITAL (continued)
DECEMBER 31, 1995
<CAPTION>
EUA
Newport Eastern EUA Energy EUA
Electric Edison Cogenex Investment Ocean State
Corporation Consolidated Consolidated Consolidated Corporation
<S> <C> <C> <C> <C> <C>
Balance of retained earnings at beginning of year $2,115,131 $105,574,199 $14,701,305 ($5,379,769) $7,045,468
Additions:
Net Income (Loss) 2,094,359 33,442,701 (7,904,417) (3,672,062) 4,608,139
Total 4,209,490 139,016,900 6,796,888 (9,051,831) 11,653,607
Deductions:
Dividends:
Preferred - subsidiaries 44,922 1,987,500
Common - subsidiaries 2,540,000 11,189,552 4,910,000
Common - registrant - $1.585 per share
Total Dividends 2,584,922 13,177,052 4,910,000
Other 3,634 961,281 0
Total Deductions 2,588,556 14,138,333 0 0 4,910,000
Balance of retained earnings at end of period $1,620,934 $124,878,567 $6,796,888 ($9,051,831) $6,743,607
( ) Denotes Contra
The accompanying notes are an integral part of the financial statements.
</TABLE>
<TABLE>
EASTERN EDISON COMPANY AND SUBSIDIARY
CONSOLIDATING BALANCE SHEETS
DECEMBER 31, 1995
<CAPTION>
Eastern Eastern Montaup
Edison Edison Electric
ASSETS Consolidated Eliminations Company Company
------------ --------------- ------------ ------------
<S> <C> <C> <C> <C>
Utility plant and other investments:
Utility plant in service $795,199,252 $0 $228,167,803 $567,031,449
Less accumulated provision for depreciation
and amortization 241,672,872 0 77,817,437 163,855,435
------------ --------------- ------------ ------------
Net Utility plant in service 553,526,380 0 150,350,366 403,176,014
Construction work in progress 3,506,475 0 675,205 2,831,270
------------ --------------- ------------ ------------
Net utility plant 557,032,855 0 151,025,571 406,007,284
------------ --------------- ------------ ------------
Non-utility property 2,715,349 0 105,735 2,609,614
Less accumulated provision for depreciation 9,697 0 9,697 0
------------ --------------- ------------ ------------
Net non-utility property 2,705,652 0 96,038 2,609,614
Investments in subsidiaries (at equity) 13,222,435 358,389,436 358,389,436 13,222,435
Other 50,405 0 50,405 0
------------ --------------- ------------ ------------
Total Utility Plant and Other Investments 573,011,347 358,389,436 509,561,450 421,839,333
------------ --------------- ------------ ------------
Current Assets:
Cash and temporary cash investments 532,988 0 397,944 135,044
Accounts receivable - Net:
Customers 25,730,121 0 24,293,499 1,436,622
Accrued unbilled revenue 9,157,587 0 9,157,587 0
Others 2,347,648 0 1,694,463 653,185
Accounts receivable - associated companies 25,861,102 42,162,493 5,331,027 62,692,568
Materials and supplies (at average cost): 0 0 0
Fuel 7,385,159 0 0 7,385,159
Plant materials and operating supplies 3,936,913 0 1,868,455 2,068,458
Other current assets 4,170,083 0 561,079 3,609,004
------------ --------------- ------------ ------------
Total Current Assets 79,121,601 42,162,493 43,304,054 77,980,040
------------ --------------- ------------ ------------
Deferred Debits:
Unamortized debt expense 2,847,178 0 2,818,840 28,338
Unrecovered Regulatory Plant Costs (Note A) 10,100,000 0 0 10,100,000
Other deferred debits 74,118,188 0 29,319,798 44,798,390
------------ --------------- ------------ ------------
Total Deferred Debits 87,065,366 0 32,138,638 54,926,728
------------ --------------- ------------ ------------
Total assets $739,198,314 $400,551,929 $585,004,142 $554,746,101
============ =============== ============ ============
( ) Denotes Contra
The accompanying notes are an integral part of the financial statements.
</TABLE>
<TABLE>
EASTERN EDISON COMPANY AND SUBSIDIARY
CONSOLIDATING BALANCE SHEETS
DECEMBER 31, 1995
<CAPTION>
Eastern Eastern Montaup
Edison Edison Electric
LIABILITIES Consolidated Eliminations Company Company
------------ --------------- ------------ ------------
<S> <C> <C> <C> <C>
Capitalization:
Common equity $244,368,214 $184,719,706 $244,368,214 $184,719,706
Redeemable preferred stock $29,664,502 29,664,502 0
Redeemable preferred stock of
subsidiaries - net 0 1,500,000 0 1,500,000
Preferred Stock Redemption Cost (3,446,743) (3,446,743) 0
Long-term debt - net 222,313,093 172,169,730 222,313,093 172,169,730
------------ --------------- ------------ ------------
Total Capitalization 492,899,066 358,389,436 492,899,066 358,389,436
------------ --------------- ------------ ------------
Current Liabilities:
Current portion - Long Term Debt 7,000,000 0 7,000,000 0
Notes payable 4,158,000 0 4,158,000 0
Accounts payable 27,241,874 0 715,619 26,526,255
Accounts payable - associated companies 3,913,045 37,030,994 39,136,593 1,807,446
Customer deposits 1,103,531 0 1,103,531 0
Taxes accrued 3,218,803 0 1,409,110 1,809,693
Interest accrued 4,998,814 5,131,499 4,998,813 5,131,500
Other current liabilities 7,331,785 0 356,097 6,975,688
------------ --------------- ------------ ------------
Total Current Liabilities 58,965,852 42,162,493 58,877,763 42,250,582
------------ --------------- ------------ ------------
Deferred Credits:
Unamortized investment credit 17,841,697 0 4,231,604 13,610,093
Other deferred credits 40,725,734 0 11,068,301 29,657,433
------------ --------------- ------------ ------------
Total Deferred Credits 58,567,431 0 15,299,905 43,267,526
------------ --------------- ------------ ------------
Accumulated deferred taxes 128,765,965 0 17,927,408 110,838,557
------------ --------------- ------------ ------------
Commitments and contingencies (Note J)
Total liabilities and capitalization $739,198,314 $400,551,929 $585,004,142 $554,746,101
============ =============== ============ ============
( ) Denotes Contra
The accompanying notes are an integral part of the financial statements.
</TABLE>
<TABLE>
EASTERN EDISON COMPANY AND SUBSIDIARY
CONSOLIDATING STATEMENTS OF CAPITALIZATION
DECEMBER 31, 1995
<CAPTION>
Eastern Eastern Montaup
Edison Edison Electric
Consolidated Eliminations Company Company
------------ --------------- ------------ ------------
<S> <C> <C> <C> <C>
Common Equity:
Common shares $72,283,925 $58,600,000 $72,283,925 $58,600,000
Other paid-in capital 47,249,633 29,528,000 47,249,633 29,528,000
Common share expense (43,911) 0 (43,911) 0
Retained earnings 124,878,567 96,591,706 124,878,567 96,591,706
------------ --------------- ------------ ------------
Total Common Equity 244,368,214 184,719,706 244,368,214 184,719,706
------------ --------------- ------------ ------------
Redeemable Preferred:
6.625%, $100 par value, 300,000 shares 30,000,000 0 30,000,000 0
Redeemable preferred stock of subsidiaries 0 1,500,000 0 1,500,000
Expense, net of premium (335,498) 0 (335,498) 0
Preferred stock redemption cost (3,446,743) 0 (3,446,743) 0
------------ --------------- ------------ ------------
Total Redeemable 26,217,759 1,500,000 26,217,759 1,500,000
------------ --------------- ------------ ------------
Long-Term Debt:
First Mortgage and Collateral Trust Bonds:
5.875% due 1998 20,000,000 0 20,000,000 0
6.875% due 2003 40,000,000 0 40,000,000 0
8% due 2023 40,000,000 0 40,000,000 0
6.35% due 2003 8,000,000 0 8,000,000 0
4.875% due 1996 7,000,000 0 7,000,000 0
7.78% Secured medium-term notes due 2002 35,000,000 0 35,000,000 0
5.75% due 1998 40,000,000 0 40,000,000 0
Pollution Control Revenue Bonds: 0 0 0 0
5.875% due 2008 40,000,000 0 40,000,000 0
Debenture Bonds: 0 0 0 0
8% due 2000 0 8,500,000 0 8,500,000
8.25% due 2003 0 12,800,000 0 12,800,000
14% due 2005 0 26,000,000 0 26,000,000
10% due 2008 0 9,275,000 0 9,275,000
16.5% due 2010 0 19,000,000 0 19,000,000
12.375% due 2013 0 30,000,000 0 30,000,000
10.125% due 2008 0 36,594,730 0 36,594,730
9% due 2020 0 5,000,000 0 5,000,000
9.375% due 2020 0 25,000,000 0 25,000,000
Unamortized (Discount) - Net (686,907) 0 (686,907) 0
------------ --------------- ------------ ------------
229,313,093 172,169,730 229,313,093 172,169,730
Less portion due within one year 7,000,000 0 7,000,000 0
------------ --------------- ------------ ------------
Total Long-Term Debt 222,313,093 172,169,730 222,313,093 172,169,730
------------ --------------- ------------ ------------
Total Capitalization $492,899,066 $358,389,436 $492,899,066 $358,389,436
============ =============== ============ ============
The accompanying notes are an integral part of the financial statements.
</TABLE>
<TABLE>
EASTERN EDISON COMPANY AND SUBSIDIARY
CONSOLIDATING INCOME STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 1995
<CAPTION>
Eastern Eastern Montaup
Edison Edison Electric
Consolidated Eliminations Company Company
------------ --------------- ------------ ------------
<S> <C> <C> <C> <C>
Operating Revenues $420,068,710 $195,678,623 $269,946,522 $345,800,811
Operating Expenses:
Operation 298,007,975 $195,678,623 $226,630,590 $267,056,008
Maintenance 15,491,102 $5,262,851 $ 10,228,251
Voluntary Retirement Incentive 2,413,122 $1,521,199 $ 891,923
Depreciation and amortization 26,038,677 $9,697,362 $ 16,341,315
Taxes - Other than income 10,233,645 $4,370,034 $ 5,863,611
Income Taxes - Current (credit) 12,891,558 $8,661,245 $ 4,230,313
- Deferred (credit) 2,761,513 ($651,371) $ 3,412,884
------------ --------------- ------------ ------------
Total Operating Expenses 367,837,592 195,678,623 255,491,910 308,024,305
------------ --------------- ------------ ------------
Operating Income 52,231,118 0 14,454,612 37,776,506
------------ --------------- ------------ ------------
Other Income and Deductions:
Interest and dividend income 613,703 19,994,750 20,349,213 259,240
Equity in earnings of jointly-owned companies 1,646,357 19,697,611 19,697,611 1,646,357
Allowance for funds used during construction 473,402 39,508 433,894
Other (deductions) income - net (206,557) (233,411) 26,854
------------ --------------- ------------ ------------
Total Other Income 2,526,905 39,692,361 39,852,921 2,366,345
------------ --------------- ------------ ------------
Income Before Interest Charges 54,758,023 39,692,361 54,307,533 40,142,851
------------ --------------- ------------ ------------
Interest Charges:
Interest on long-term debt 18,277,727 19,994,750 18,277,727 19,994,750
Amortization of debt expense and premium 2,299,383 2,026,577 272,806
Other interest expense (principally 0 0
short-term notes) 1,241,495 644,802 596,693
Allowance for borrowed funds used during 0 0
construction - (credit) (503,283) (84,274) (419,009)
------------ --------------- ------------ ------------
Total Interest Charges 21,315,322 19,994,750 20,864,832 20,445,240
------------ --------------- ------------ ------------
Income After Interest Charges 33,442,701 19,697,611 33,442,701 19,697,611
------------ --------------- ------------ ------------
Preferred Dividends Requirement 1,987,500 0 1,987,500 0
------------ --------------- ------------ ------------
Net Income $31,455,201 $19,697,611 $31,455,201 $19,697,611
============ =============== ============ ============
Eastern Edison Common Share weighted
average shares outstanding 2,891,357
Earnings per share $10.88
============
( ) Denotes Contra
The accompanying notes are an integral part of the financial statements.
</TABLE>
<TABLE>
EASTERN EDISON COMPANY AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 1995
<CAPTION>
Eastern Eastern Montaup
Edison Edison Electric
Consolidated Eliminations Company Company
------------ --------------- ------------ ------------
<S> <C> <C> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES:
Net Income $33,442,701 $19,697,611 $33,442,701 $19,697,611
Adjustments to Reconcile Net Income
to Net Cash Provided by Operating Activities:
Depreciation and Amortization 29,919,277 0 13,130,338 16,788,939
Amortization of nuclear fuel 3,646,532 0 0 3,646,532
Deferred taxes 2,694,288 0 (651,371) 3,345,659
Investment tax credit, net (942,228) 0 (314,076) (628,152)
Allowance for other funds used during construction (473,402) 0 (39,508) (433,894)
Other - Net 1,152,106 (1,541,711) (1,726,006) 1,336,401
Net Changes to Operating Assets and Liabilities:
Accounts receivable (7,055,113) (1,580,340) 430,265 (9,065,718)
Materials and supplies (1,678,331) 0 (591,621) (1,086,710)
Accounts payable 827,288 1,580,340 335,411 2,072,217
Accrued taxes 1,807,596 0 684,063 1,123,533
Other - net (6,630,345) 0 (1,624,765) (5,005,580)
------------ --------------- ------------ ------------
Net Cash Provided from
Operating Activities 56,710,369 18,155,900 43,075,431 31,790,838
------------ --------------- ------------ ------------
CASH FLOW FROM INVESTING ACTIVITIES:
Construction expenditures (23,422,997) 0 (8,760,826) (14,662,171)
------------ --------------- ------------ ------------
Net Cash Used in Investing Activities (23,422,997) 0 (8,760,826) (14,662,171)
------------ --------------- ------------ ------------
CASH FLOW FROM FINANCING ACTIVITIES:
Issuances:
Common shares/capital contribution 0 0 10,000,000 (10,000,000)
Redemptions:
Long-term debt (35,000,000) 0 (35,000,000) 0
Eastern Edison common share dividends paid (11,189,552) (17,767,400) (11,189,552) (17,767,400)
Preferred dividends paid (1,987,500) (388,500) (1,987,500) (388,500)
Net Increase in short-term debt 4,158,000 0 4,158,000 0
------------ --------------- ------------ ------------
Net Cash (Used in) Financing Activities (44,019,052) (18,155,900) (34,019,052) (28,155,900)
------------ --------------- ------------ ------------
NET (DECREASE) INCREASE IN CASH (10,731,680) 0 295,553 (11,027,233)
Cash and temporary cash investments
at beginning of year 11,264,668 0 102,391 11,162,277
Cash and temporary cash investments ------------ --------------- ------------ ------------
at end of year $532,988 $0 $397,944 $135,044
============ =============== ============ ============
Cash paid during the year for:
Interest (Net of Amount Capitalized) $18,342,980 $19,994,750 $18,563,390 $19,774,340
Income Taxes $9,044,141 $7,227,833 $1,816,308
( ) Denotes Contra
The accompanying notes are an integral part of the financial statements.
</TABLE>
<TABLE>
EASTERN EDISON COMPANY AND SUBSIDIARY
CONSOLIDATING STATEMENTS OF RETAINED EARNINGS AND OTHER PAID-IN CAPITAL
DECEMBER 31, 1995
<CAPTION>
Eastern Eastern Montaup
Edison Edison Electric
Consolidated Eliminations Company Company
------------ --------------- ------------ ------------
<S> <C> <C> <C> <C>
Balance of retained earnings at begin. of year $105,574,199 $95,049,995 $105,574,199 $95,049,995
Additions:
Net Income 33,442,701 19,697,611 33,442,701 19,697,611
------------ --------------- ------------ ------------
Total 139,016,900 114,747,606 139,016,900 114,747,606
------------ --------------- ------------ ------------
Deductions:
Dividends:
Preferred 1,987,500 388,500 1,987,500 388,500
Common 11,189,552 17,767,400 11,189,552 17,767,400
------------ --------------- ------------ ------------
Total Dividends 13,177,052 18,155,900 13,177,052 18,155,900
Other 961,281 0 961,281 0
------------ --------------- ------------ ------------
Total Deductions 14,138,333 18,155,900 14,138,333 18,155,900
------------ --------------- ------------ ------------
Balance of retained earnings at end of period $124,878,567 $96,591,706 $124,878,567 $96,591,706
============ =============== ============ ============
( ) Denotes Contra
The accompanying notes are an integral part of the financial statements.
</TABLE>
<TABLE>
EUA COGENEX CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATING BALANCE SHEETS
DECEMBER 31, 1995
<CAPTION>
ASSETS
EUA EUA EUA EUA EUA EUA
Cogenex Cogenex Nova Day NEM Cogenex
Consolidated Eliminations (Division) (Division) (Division) Inc. Canada
<S> <C> <C> <C> <C> <C> <C> <C>
Utility Plant and Other Investments:
Utility plant in service $ $ $ $ $ $ $
Less accumulated provision for depreciation
and amortization 0
Net utility plant in service 0
Construction work in progress 0
Net utility plant 0 0
Non-utility property 108,640,560 54,647,946 1,307,137 1,823,366 8,697,105
Less accumulated provision for depreciation 30,033,093 19,681,378 780,772 721,321 2,441,394
Net non-utility property 78,607,467 34,966,568 526,365 1,102,045 6,255,711 0
Investments in subsidiaries (at equity) 1,000 61,025,800 61,026,800 0 0
Excess of carrying values of investments
in subsidiaries 0
Other 66,885,178 55,992,815 (186,000) 0 308,341 4,112,495
Total Utility Plant and Other Inv. 145,493,645 61,025,800 151,986,183 340,365 1,102,045 6,564,052 4,112,495
Current Assets:
Cash and temporary cash investments 1,503,436 508,568 (215,160) 65,569 993 (37,663)
Notes and Leases receivable 17,762,795 6,445,502 21,283,134 95,766 47,601 225,058
Accounts receivable - Net:
Customers 19,133,906 7,601,621 4,198,754 1,396,728 524,274 13,901
Accrued unbilled revenue 0
Others 3,102,864 697,201 3,577,855 46,723 116,432 (13,475) 101
Accounts receivable - associated companies 24,660 4,002,107 3,485,478 360,276 161,534
Materials and supplies (at average cost):
Fuel 0
Plant materials and operating supplies 3,345,963 84,655 2,592,939 572,230
Other current assets 5,690,165 4,155,006 18,947 28,376 23,570
Total Current Assets 50,563,789 11,144,810 40,696,317 7,098,245 2,388,470 511,792 224,967
Deferred Debits:
Unamortized debt expense 710,083 710,083
Unrecovered regulatory plant costs (Note A) 0
Other deferred debits 2,347,610 933,888 (51,586) 0 1,360,250
Total Deferred Debits 3,057,693 1,643,971 (51,586) 0 1,360,250 0
Total Assets $199,115,127 $72,170,610 $ 7,387,024 $3,490,515 $8,436,094 $4,337,462 $1,642,225
The accompanying notes are an integral part of the financial statements.
</TABLE>
<TABLE>
<CAPTION>
EUA COGENEX CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATING BALANCE SHEETS (continued)
DECEMBER 31, 1995
EUA EUA EUA
ASSETS Citizens Highland MUPA
Corporation Corporation (Partnership)
(Partnership)
<S> <C> <C> <C>
Utility Plant and Other Investments:
Utility plant in service $ $ $
Less accumulated provision for
depreciation and amortization
Net utility plant in service
Construction work in progress
Net utility plant 0 0 0
Non-utility property 1,175,336 1,656,068 0
Less accumulated provision for depreciation 25,462 302,228 0
Net non-utility property 1,149,874 1,353,840 0
Investments in subsidiaries (at equity)
Excess of carrying values of investments
in subsidiaries
Other 67,508 3,761,216 1,175
Total Utility Plant and Other Investments 1,217,382 5,115,058 1,175
Current Assets:
Cash and temporary cash investments (10,281) 150,287 1,000
Notes and Leases receivable 10,954 894,637
Accounts receivable - Net:
Customers 344,360 483,009 303,646
Accrued unbilled revenue
Others 9,869 560 0
Accounts receivable - associated companies 2,814 16,665 0
Materials and supplies (at average cost):
Fuel
Plant materials and operating supplies 96,139 0
Other current assets 229 139,255 0
Total Current Assets 346,991 896,869 1,199,283
Deferred Debits:
Unamortized debt expense
Unrecovered regulatory plant costs (Note A)
Other deferred debits 77,852 27,206 0
Total Deferred Debits 77,852 27,206 0
Total Assets $1,642,225 $6,039,133 $ 1,200,458
The accompanying notes are an integral part of the financial statements.
</TABLE>
<TABLE>
<CAPTION>
EUA COGENEX CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATING BALANCE SHEETS (continued)
DECEMBER 31, 1995
ASSETS
EUA EUA EUA EUA
WestCoast FRC II EC&S I EC&S II
(Partnership) (Partnership) (Partnership) (Partnership)
<S> <C> <C> <C> <C>
Utility Plant and Other Investments:
Utility plant in service $ $ $ $
Less accumulated provision for
depreciation and amortization
Net utility plant in service
Construction work in progress
Net utility plant 0 0 0 0
Non-utility property 14,646,599 77,490 8,651,750 15,957,763
Less accumulated provision for depreciation 1,846,797 66,185 924,514 3,243,042
Net non-utility property 12,799,802 11,305 7,727,236 12,714,721
Investments in subsidiaries (at equity)
Excess of carrying values of investments
in subsidiaries
Other 134,066 0 289,002 2,404,558
Total Utility Plant and Other Investments 12,933,868 11,305 8,016,238 15,119,279
Current Assets:
Cash and temporary cash investments 478,954 14,243 119,347 427,579
Notes and Leases receivable 465,368 0 0 1,185,779
Accounts receivable - Net:
Customers 705,323 1,345,324 366,497 1,850,469
Accrued unbilled revenue
Others 62,000 0 0 0
Accounts receivable - associated companies 0 0 0 0
Materials and supplies (at average cost):
Fuel
Plant materials and operating supplies 0 0 0 0
Other current assets 6,664 0 80,591 1,237,527
Total Current Assets 1,718,309 1,359,567 566,435 4,701,354
Deferred Debits:
Unamortized debt expense
Unrecovered regulatory plant costs (Note A)
Other deferred debits 0 0 0 0
Total Deferred Debits 0 0 0 0
Total Assets $14,652,177 $1,370,872 $8,582,673 $19,820,633
The accompanying notes are an integral part of the financial statements.
</TABLE>
<TABLE>
<CAPTION>
EUA COGENEX CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATING BALANCE SHEETS (continued)
DECEMBER 31, 1995
LIABILITIES
EUA EUA EUA EUA EUA EUA
Cogenex Cogenex Nova Day NEM Cogenex
Consolidated Eliminations Corporation (Division) (Division) Inc. Canada
<S> <C> <C> <C> <C> <C> <C> <C>
Capitalization:
Common equity $52,584,275 $16,612,662 $ 49,633,099 $2,118,076 $ 921,801 $11,940,683 $ 95,931
Non-redeemable preferred stock of subsidiaries 75
Redeemable preferred stock of
subsidiaries - net 0
Preferred stock redemption cost 0
Partnerships' capital 0 14,268,243
Long-term debt - net 112,500,000 23,626,913 112,500,000 0 0
Total Capitalization 165,084,350 54,507,818 162,133,818 2,118,076 921,801 11,940,683 95,931
Current Liabilities:
Preferred stock sinking fund requirements 0
Long-term debt due within one year 6,700,000 6,700,000 0 0
Notes payable 14,366,231 11,134,358 9,564,000 2,431,446 1,867,073 4,177,644
Accounts payable 6,130,039 2,327,380 4,797,367 706,123 327,187
Accounts payable - associated companies 644,655 2,356,083 1,161,985 625,334 120,038 4,741
Customer deposits 520,150 0 0 0 0
Taxes accrued 122,225 14,335 35,764 12,451 63,887
Interest accrued 2,564,262 1,434,023 2,564,262 1,258,513 175,510
Dividends declared 0 212,000 212,000
Other current liabilities 7,009,094 (9,997) 6,637,255 32,179 0
Total Current Liabilities 38,056,656 17,453,847 31,439,204 5,089,359 2,502,259 216,741 4,241,531
Deferred Credits:
Unamortized investment credit 0
Other deferred credits 2,338,529 208,945 1,688,353 179,589 66,455 609,217
Total Deferred Credits 2,338,529 208,945 1,688,353 179,589 66,455 609,217 0
Accumulated deferred taxes (6,364,408) (934,185) 0 0 (4,330,547)
Commitments and contingencies (Note J)
Total Liabilities and Capitalization $199,115,127 $72,170,610 $194,326,471 $7,387,024 $3,490,515 $8,436,094 $4,337,462
( ) Denotes Contra
The accompanying notes are an integral part of the financial statements.
</TABLE>
<TABLE>
<CAPTION>
EUA COGENEX CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATING BALANCE SHEETS (continued)
DECEMBER 31, 1995
LIABILITIES EUA EUA EUA
Citizens Highland MUPA
Corporation Corporation (Partnership)
<S> <C> <C> <C>
Capitalization:
Common equity ($17,680) $4,505,027 $0
Non-redeemable preferred stock of subsidiaries 75
Redeemable preferred stock of
subsidiaries - net 0
Preferred stock redemption cost
Partnerships' capital (461,205)
Long-term debt - net 0 1,118,685
Total Capitalization (17,605) 4,505,027 657,480
Current Liabilities:
Preferred stock sinking fund requirements
Long-term debt due within one year
Notes payable 1,220,763 1,550,807 0
Accounts payable 251,479 47,883 616,229
Accounts payable - associated companies 82,184 1,006,456 0
Customer deposits 0
Taxes accrued 382 (4,594) 0
Interest accrued 0 0
Dividends declared
Other current liabilities 101,162 33,230 (73,251)
Total Current Liabilities 1,655,970 2,633,782 542,978
Deferred Credits:
Unamortized investment credit
Other deferred credits 3,860 0 0
Total Deferred Credits 3,860 0 0
Accumulated deferred taxes (1,099,676) 0
Commitments and contingencies (Note J)
Total Liabilities and Capitalization $1,642,225 $6,039,133 $1,200,458
( ) Denotes Contra
The accompanying notes are an integral part of the financial statements.
</TABLE>
<TABLE>
<CAPTION>
EUA COGENEX CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATING BALANCE SHEETS (continued)
DECEMBER 31, 1995
EUA EUA EUA EUA
LIABILITIES WestCoast FRC II EC&S I EC&S II
(Partnership) (Partnership) (Partnership) (Partnership)
<S> <C> <C> <C> <C>
Capitalization:
Common equity $0 $0 $0 $0
Non-redeemable preferred stock of subsidiaries
Redeemable preferred stock of
subsidiaries - net
Preferred stock redemption cost
Partnerships' capital 3,872,673 661,984 3,017,730 7,177,061
Long-term debt - net 9,854,817 0 3,087,853 9,565,558
Total Capitalization 13,727,490 661,984 6,105,583 16,742,619
Current Liabilities:
Preferred stock sinking fund requirements
Long-term debt due within one year
Notes payable 0 0 2,271,179 2,417,677
Accounts payable 577,286 644,277 152,073 337,515
Accounts payable - associated companies 0 0 0 0
Customer deposits 360,717 159,433
Taxes accrued 0 0 0 0
Interest accrued 0 0 0 0
Dividends declared
Other current liabilities (13,316) 64,611 53,838 163,389
Total Current Liabilities 924,687 708,888 2,477,090 3,078,014
Deferred Credits:
Unamortized investment credit
Other deferred credits 0 0 0 0
Total Deferred Credits 0 0 0 0
Accumulated deferred taxes 0 0 0 0
Commitments and contingencies (Note J)
Total Liabilities and Capitalization $14,652,177 $1,370,872 $8,582,673 $19,820,633
( ) Denotes Contra
The accompanying notes are an integral part of the financial statements.
</TABLE>
<TABLE>
<CAPTION>
EUA COGENEX CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENTS OF CAPITALIZATION
DECEMBER 31, 1995
EUA EUA EUA EUA EUA EUA EUA
Cogenex Cogenex Nova Day NEM Cogenex Citizens
Consolidated Eliminations Corporation (Division) (Division) Inc. Canada Corporation
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Common Equity:
Common Shares, $.01 par value $100 $1,400 $100 $ 1,100 $ 100 $ 100
Other Paid-In Capital 45,787,287 15,866,802 44,689,755 0 1,097,532 11,502,050 0
Retained Earnings 6,796,888 15,012,704 4,943,244 2,118,075 (175,731) 437,533 95,831 (17,780)
Total Common Equity 52,584,275 30,880,906 49,633,099 2,118,075 921,801 11,940,683 95,931 (17,680)
Non-Redeemable Preferred:
$.01 par value, 7,500 shares <F1> 75 75
Total Non-Redeemable 75 0 0 0 0 0 75
Long-Term Debt:
Unsecured Notes:
7.00% due 2000 50,000,000 50,000,000
7.22% due 1997 15,000,000 15,000,000
9.6% due 2001 19,200,000 19,200,000
10.56% due 2005 35,000,000 35,000,000
119,200,000 0 119,200,000 0 0 0 0 0
Less portion due within one year 6,700,000 6,700,000
Total Long-Term Debt 112,500,000 0 112,500,000 0 0 0 0 0
Total Capitalization $165,084,350 $30,880,906 $162,133,099 $2,118,075 $ 921,801 $11,940,683 $95,931 ($17,605)
<FN>
<F1> The Preferred Stock shall be entitled to an annual dividend per share at a
rate equal to 33% of the net income of Citizens Conservation Services
divided by 7,500.
The accompanying notes are an integral part of the financial statements.
</FN>
</TABLE>
<TABLE>
<CAPTION>
EUA COGENEX CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENTS OF CAPITALIZATION (continued)
DECEMBER 31, 1995
EUA EUA EUA EUA EUA EUA
Highland MUPA West Coast FRC II EC&S I EC &S II
Corporation (Partnership) (Partnership) (Partnership) (Partnership) (Partnerships)
<S> <C> <C> <C> <C> <C> <C>
Common Equity:
Common Shares, $.01 par value $100
Other Paid-In Capital 4,364,752 0 0 0 0 0
Retained Earnings 140,176 (461,205) 3,872,674 661,984 3,017,730 7,177,061
Total Common Equity 4,505,028 (461,205) 3,872,674 661,984 3,017,730 7,177,061
Non-Redeemable Preferred:
$.01 par value, 7,500 shares <F1>
Total Non-Redeemable 0 0 0 0 0 0
Long-Term Debt:
Unsecured Notes:
7.00% due 2000
7.22% due 1997
9.6% due 2001
10.56% due 2005
0 0 0 0 0 0
Less portion due within one year
Total Long-Term Debt 0 0 0 0 0 0
Total Capitalization $4,505,028 ($461,205) $3,872,674 $661,984 $3,017,730 $7,177,061
<FN>
<F1> The Preferred Stock shall be entitled to an annual dividend per share at a
rate equal to 33% of the net income of Citizens Conservation Services
divided by 7,500.
</FN>
The accompanying notes are an integral part of the financial statements.
</TABLE>
<TABLE>
<CAPTION>
EUA COGENEX CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATING INCOME STATEMENTS
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1995
EUA EUA EUA EUA EUA EUA
Cogenex Cogenex Nova Day NEM Cogenex
Consolidated Eliminations Corporation (Division) (Division) Inc. Canada
<S> <C> <C> <C> <C> <C> <C> <C>
Operating Revenues $79,499,211 $ 3,644,467 $36,170,531 $14,606,786 $6,364,241 $3,385,557 $
Operating Expenses:
Operation 56,899,154 4,432,753 27,932,486 14,365,228 6,194,035 29,780 1,751
Maintenance 2,463,453 (344) 849,300 16,232 0 2,108
Voluntary Retirement Incentive 180,106 180,106
Depreciation and amortization 10,812,549 114,715 6,096,060 184,067 58,271 696,650
Taxes - Other than income 756,057 1,477 266,564 264,696 195,876 315
Income Taxes - Current (credit) 624,359 (660,799) 0 0 1,095,629 64,174
- Deferred (credit) (560,145) (245,479) 0 0 (314,666)
Total Operating Expenses 71,175,533 4,548,601 34,418,238 14,830,223 6,448,182 1,509,816 65,925
Operating Income 8,323,678 (904,134) 1,752,293 (223,437) (83,941) 1,875,741 (65,925)
Other Income and Deductions:
Interest and dividend income 5,748,855 4,931,178 10,309,121 11,347 0 723 314,786
Equity in earnings of jointly-
owned companies 0 (5,157,958) (5,157,958) 0 0
Allowance for other funds used during
construction 129 129
Disposal of cogeneration operation (18,085,966) (10,035,386)
Federal and State taxes on disposal of
cogeneration operation 7,587,980 7,587,980
Other (deductions) income - net (1,303,351) 959,397 (462,263) 96,368 0 13,449
Total Other Income (6,052,353) 732,617 2,241,623 107,715 0 723 328,235
Income (Loss) Before Interest Charges 2,271,325 (171,517) 3,993,916 (115,722) (83,941) 1,876,464 262,310
Interest Charges:
Interest on long-term debt 10,186,204 3,193,248 10,186,204 0 0
Amortization of debt expense and premium 151,670 151,670 0 0
Other interest expense (principally 0
short-term notes) 1,928,042 707,762 1,742,270 549,593 98,281 166,168
Allowance for borrowed funds used during
construction - (credit) (2,090,174) 1,030,925 (1,029,348) 0 0
Total Interest Charges 10,175,742 4,931,935 11,050,796 549,593 98,281 0 166,168
Net Income (Loss) before
preferred return (7,904,417) (5,103,452) (7,056,880) (665,315) (182,222) 1,876,464 96,142
Preferred Return Requirement 0 1,563,565
Net Income (Loss) ($7,904,417) ($6,667,017) ($ 7,056,880) ($665,315) ($182,222) $1,876,464 $ 96,142
The accompanying notes are an integral part of the financial statements.
</TABLE>
<TABLE>
<CAPTION>
EUA COGENEX CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATING INCOME STATEMENTS (continued)
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1995
EUA EUA EUA EUA EUA EUA EUA
Citizens Highland MUPA WestCoast FRC II EC&S I EC&S II
Corp. Corp. (Partnership) (Partnership) (Partnership) (Partnership) (Partnership)
<S> <C> <C> <C> <C> <C> <C> <C>
Operating Revenues $1,481,881 $2,290,498 $598,019 $3,928,960 $3,914,654 $2,146,963 $8,255,588
Operating Expenses:
Operation 1,461,372 1,791,401 401,619 3,125,038 3,030,384 441,040 2,557,773
Maintenance 1,376 5,104 176,823 291,929 693,722 132,442 294,073
Voluntary Retirement Incentive
Depreciation and amortization 12,474 211,527 136,934 796,583 672,986 393,057 1,668,655
Taxes - Other than income 21,575 8,508 0 0 0 0 0
Income Taxes - Current (credit) (8,869) 134,224 0 0 0 0 0
- Deferred (credit)
Total Operating Expenses 1,487,928 2,150,764 715,376 4,213,550 4,397,092 966,539 4,520,501
Operating Income (6,047) 139,734 (117,357) (284,590) (482,438) 1,180,424 3,735,087
Other Income and Deductions:
Interest and dividend income 205 29,602 0 9,149 0 0 5,100
Equity in earnings of jointly-
owned companies
Allowance for other funds used during
construction
Disposal of cogeneration operation (552,275) (525,175) (6,973,130)
Federal and State taxes on disposal
cogeneration operation
Other (deductions) income - net 6,297 2,195 0 0
Total Other Income 6,502 31,797 (552,275) (516,026) (6,973,130) 0 5,100
Income (Loss) Before Interest Charges 455 171,531 (669,632) (800,616) (7,455,568) 1,180,424 3,740,187
Interest Charges:
Interest on long-term debt 285,775 762,604 817,352 346,011 981,506
Amortization of debt expense and premium
Other interest expense (principally
short-term notes) 26,895 52,597 0 0 0 0 0
Allowance for borrowed funds used during
construction - (credit) (8,660) (21,241) 0 0 0 0 0
Total Interest Charges 18,235 31,356 285,775 762,604 817,352 346,011 981,506
Net Income (Loss) before
preferred return (17,780) 140,175 (955,407) (1,563,220) (8,272,920) 834,413 2,758,681
Preferred Return Requirement 329,529 405,288 828,748
Net Income (Loss) ($17,780) $140,175 ($955,407) ($1,892,749) ($8,272,920) $429,125 $1,929,933
The accompanying notes are an integral part of the financial statements.
</TABLE>
<TABLE>
<CAPTION>
EUA COGENEX CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENTS OF CASH FLOWS
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1995
EUA EUA EUA EUA EUA EUA
Cogenex Cogenex Nova Day NEM Cogenex
Consolidated Eliminations Corporation (Division) (Division) Inc. Canada
<S> <C> <C> <C> <C> <C> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES:
Net Income (Loss) ($7,904,417) ($6,667,017) ($7,056,880) ($665,316) ($182,222) $1,876,464 $ 96,142
Adjustments to Reconcile Net Income (Loss)
to Net Cash Provided by Operating Activities:
Depreciation and amortization 11,594,142 6,696,990 184,067 58,271 780,964
Deferred taxes (6,463,836) (6,283,394) (314,666)
Non-cash (Gains)/Exp. on Sales of Investment
in Energy Savings Projects (1,263,914) (3,471,883)
Loss on disposition of cog. 18,085,996 171,270
Collections and sales of project notes
and leases receivable 17,747,698 17,101,069
Equity earnings 0 5,157,958 5,157,958
Other - net 3,477,891 (536,390) 2,782,898 154,525 (161,414) (326,631) (311)
Net Changes to Working Capital:
Accounts receivable 2,463,417 (1,534,877 155,925 1,118,637 (57,052) 181,667 (13,902)
Materials and supplies 536,627 (72,908) 195,633 450,023 (259,947)
Accounts payable 323,645 (2,768,919) 1,629,966 (465,815) (39,334) 2,100
Accrued taxes (3,923) 0 (30,922) (45,127) 12,451 63,887
Other - net (2,677,228) (910,286) (2,109,408) 504,581 71,404 (23,570)
Net Cash Provided from (Used in)
Operating Activities 35,916,098 (7,332,439) 14,939,222 1,235,575 (557,843) 2,199,898 122,246
CASH FLOW FROM INVESTING ACTIVITIES:
Expenditures for investments in energy
savings projects (44,172,122) (76,837) (25,992,067) (170,254) (33,734) (3,182) (4,950,000)
Collections on notes and leases rec. 3,125,256 1,389,004 4,234 16,395 612,447
Proceeds from sale of cogeneration
operations 11,500,650 11,500,650
Investments in subsidiaries 0 12,187,646 12,187,646
Net Cash Provided from (Used in)
Investing Activities (29,546,216) 12,110,809 (914,767) (166,020) (17,339) (3,182) (4,337,553)
CASH FLOW FROM FINANCING ACTIVITIES:
Issuances:
Common shares/capital contribution 8,059,000 200 8,059,000
Long-term debt 0 2,350,354
Redemptions:
Long-term debt (800,000) (20,209,734) (800,000)
Premium on reacquisition & financing expenses 0
Dividends declared 0 (2,488,000) (2,488,000)
Partner's contribution 0 18,587,648
Net increase (decrease) in short-term debt (17,113,770) (3,018,838) (21,916,000) (1,304,554) 480,000 4,177,644
Net Cash Provided from (Used in) (9,854,770) (4,778,370) (14,657,000) (1,304,554) 480,000 (2,488,000) 4,177,644
NET (DECREASE) INCREASE IN CASH (3,484,888) 0 (632,545) (234,999) (95,182) (291,284) (37,663)
Cash and temp. cash investments
at beginning of year 4,988,324 1 1,141,115 19,839 160,750 292,277 0
Cash and temporary cash
investments at end of year $1,503,436 $1 $508,570 ($215,160) $65,568 $993 ($37,663)
Cash paid during the year for:
Interest (net of amounts capitalized) $9,735,901 $9,684,582 $39,717
Income Taxes $657,296 ($393,217) $1,050,513
Con. of investments in energy savings projects
to notes and leases receivable $19,324,256 $15,724,121
( ) Denotes contra
The accompanying notes are an integral part of the financial statements.
</TABLE>
<TABLE>
<CAPTION>
EUA COGENEX CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENTS OF CASH FLOWS (continued)
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1995
EUA EUA EUA
Citizens Highland MUPA
Corporation Corporation (Partnership)
<S> <C> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES:
Net Income (Loss) ($ 17,780) $140,176 ($955,407)
Adjustments to Reconcile Net Income (Loss)
to Net Cash Provided by Operating Activities
Depreciation and amortization 30,279 169,506 136,934
Deferred taxes 134,224
Non-cash (Gains)/Expenses on Sales of Investments
in Energy Savings Projects (237,414)
Loss on disposition of cogeneration projects 1,465,699
Collections and sales of project notes and leases receivable 22,120
Equity earnings
Other - net 46,189 (49,552)
Net Changes to Working Capital:
Accounts receivable (357,043) (500,234) (55,671)
Materials and supplies (96,139)
Accounts payable 333,663 1,054,338 (501,756)
Accrued taxes 382 (4,594)
Other - net 100,933 26,784 (78,924)
Net Cash Provided from (Used in) Operating Activities 136,623 659,215 10,875
CASH FLOW FROM INVESTING ACTIVITIES:
Expenditures for investments in energy savings projects (1,367,767) (2,059,835) (135,495)
Collections on notes and leases receivable 698,228
Proceeds from sale of cogeneration
Investments in subsidiaries
Net Cash Provided from (Used in) Investing Activities (1,367,767) (2,059,835) 562,733
CASH FLOW FROM FINANCING ACTIVITIES:
Issuances:
Common shares/capital contribution 100 100
Long-term debt
Redemptions:
Long-term debt (2,493,719
Premium on reacquisition and financing expenses
Dividends declared
Partner's contribution 2,353,613
Net increase (decrease) in short-term debt 1,220,763 1,550,807 (484,947)
Net Cash Provided from (Used in) Financing Activities 1,220,863 1,550,907 (625,053)
NET (DECREASE) INCREASE IN CASH (10,281) 150,287 (51,445)
Cash and temporary cash investments at beginning of yr. 52,445
Cash and temporary cash investments at end of year ($10,281) $150,287 $1,000
Cash paid during the year for:
Interest (net of amounts capitalized) $11,602
Income Taxes
Conversion of investments in energy savings
to notes and leases receivable $877,399
( ) Denotes contra
</TABLE>
<TABLE>
<CAPTION>
EUA COGENEX CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENTS OF CASH FLOWS (continued)
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1995
EUA EUA EUA EUA
WestCoast FRC II EC&S I EC&S II
(Partnership) (Partnership) (Partnership) (Partnership)
<S> <C> <C> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES:
Net Income (Loss) ($1,892,749) ($8,272,920) $429,125 $1,929,933
Adjustments to Reconcile Net Income (Loss)
to Net Cash Provided by Operating Activities
Depreciation and amortization 802,376 673,043 393,056 1,668,656
Deferred taxes
Non-cash (Gains)/Expenses on Sales of Investments
in Energy Savings Projects 3,010,274 42,492 (607,383)
Loss on disposition of cogeneration projects 1,442,051 15,006,976
Collections and sales of project notes and leases rec. 204,865 13,308 498 405,838
Equity earnings
Other - net 495,797
Net Changes to Working Capital:
Accounts receivable 371,156 (214,895) 131,277 168,675
Materials and supplies 174,149
Accounts payable (1,908,072) (2,236,701) 37,520 (351,183)
Accrued taxes
Other - net (980,397) 61,064 1,289 (1,161,270)
Net Cash Provided from (Used in) Operating Activities 1,545,301 5,204,024 1,035,257 2,053,266
CASH FLOW FROM INVESTING ACTIVITIES:
Expenditures for investments in energy savings project (4,213,717) (1,159,191) (785,683) (3,378,034)
Collections on notes and leases receivable 245,448 159,500
Proceeds from sale of cogeneration
Investments in subsidiaries
Net Cash Provided from (Used in) Investing Activities (3,968,269) (999,691) (785,683) (3,378,034)
CASH FLOW FROM FINANCING ACTIVITIES:
Issuances:
Common shares/capital contribution
Long-term debt 2,350,354
Redemptions:
Long-term debt (4,307,072) (13,202,737) (206,206)
Premium on reacquisition and financing expenses
Dividends declared
Partner's contribution 5,310,927 9,712,317 104,214 1,106,577
Net increase (decrease) in short-term debt (816,348) (177,408) (2,862,565)
Net Cash Provided from (Used in) Financing Activities 1,003,855 (4,306,768 (279,400) 594,366
NET (DECREASE) INCREASE IN CASH (1,419,113) (102,435) (29,826) (730,402)
Cash and temporary cash investments at beginning of yr. 1,898,067 116,678 149,173 1,157,981
Cash and temporary cash investments at end of year $478,954 $14,243 $119,347 $427,579
Cash paid during the year for:
Interest (net of amounts capitalized)
Income Taxes
Conversion of investments in energy savings
to notes and leases receivable $142,027 $2,580,709
( ) Denotes contra
</TABLE>
<TABLE>
<CAPTION>
EUA COGENEX CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENTS OF RETAINED EARNINGS AND OTHER PAID-IN CAPITAL
DECEMBER 31, 1995
EUA EUA EUA EUA EUA EUA
Cogenex Cogenex Nova Day NEM Cogenex
Consolidated Elimination Corp. (Division) (Division) Inc. Canada
<S> <C> <C> <C> <C> <C> <C> <C>
Balance of retained earnings at beginning of yr. $14,701,305 $4,558,613 $12,000,124 $2,783,391 $ 6,491 $1,261,069
Additions:
Net Income (Loss) (7,904,417) (6,667,017) (7,056,880) (665,316) (182,222) 1,876,464 96,142
Partners Capital contribution 0 31,303,354
Other additions 0 0
Total (12,463,030) 29,194,950 (7,056,880) (665,316) (182,222) 1,876,464 96,142
Deductions:
Dividends: 0
Common - subsidiaries 0 2,700,000 2,700,000
Partners withdrawals 0 11,481,935
Other deductions 0 311 311
Total 0 14,182,246 0 0 0 2,700,000 311
Balance of retained earnings at end of period 6,796,888 15,012,704 4,943,244 2,118,075 (175,731) 437,533 95,831
Other Paid-In Capital at beginning of year 33,528,598 15,866,802 32,431,066 1,097,532 11,502,050 0
Additions:
Capital Contribution - EUA 8,058,689 8,058,689
Highland Acquisition 4,200,000 4,200,000
Total (3,608,113) 15,866,802 12,258,689 0 0 0 0
Deductions: 0
Total 0
Other Paid-In Capital at end of period $45,787,287 $15,866,802 $44,689,755 $ 0 $1,097,532 $11,502,050 $ 0
( ) Denotes Contra
The accompanying notes are an integral part of the financial statements.
</TABLE>
<TABLE>
<CAPTION>
EUA COGENEX CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENTS OF RETAINED EARNINGS AND OTHER PAID-IN CAPITAL (continued)
DECEMBER 31, 1995
EUA EUA EUA EUA
Citizens Highland MUPA West Coast
Corp. Corp. (Partnership) (Partnership)
<S> <C> <C> <C> <C>
Balance of retained earnings at beginning of yr. $ 0 $ 0 ($1,859,411) ($ 779,276)
Additions:
Net Income (Loss) (17,780) 140,176 (955,407) (1,892,749)
Partners Capital contribution 3,108,644 10,021,108
Other additions
Total (17,780) 140,176 2,153,237 8,128,359
Deductions:
Dividends:
Common - subsidiaries
Partners withdrawals 755,031 3,476,409
Other deductions
Total 0 0 755,031 3,476,409
Balance of retained earnings at end of period (17,780) 140,176 (461,205) 3,872,674
Other Paid-In Capital at beginning of yr. 4,364,752
Additions:
Capital Contribution - EUA
Highland Acquisition
Total 0 0 0 0
Deductions:
Total
Other Paid-In Capital at end of period $0 $4,364,752 $0 $0
( ) Denotes Contra
The accompanying notes are an integral part of the financial statements.
</TABLE>
<TABLE>
<CAPTION>
EUA COGENEX CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENTS OF RETAINED EARNINGS AND OTHER PAID-IN CAPITAL (continued)
DECEMBER 31, 1995
EUA EUA EUA
FRC II EC&S I EC &S II
(Partnership) (Partnership) (Partnerships)
<S> <C> <C> <C>
Balance of retained earnings at beginning of yr ($777,412) $2,484,391 $4,140,551
Additions:
Net Income (Loss) (8,272,920) 429,125 1,929,933
Partners Capital contribution 16,562,811 104,214 1,506,577
Other additions
Total 8,289,891 533,339 3,436,510
Deductions:
Dividends:
Common - subsidiaries
Partners withdrawals 6,850,495 400,000
Other deductions
Total 6,850,495 0 400,000
Balance of retained earnings at end of period 661,984 3,017,730 7,177,061
Other Paid-In Capital at beginning of yr.
Additions:
Capital Contribution - EUA
Highland Acquisition
Total 0 0 0
Deductions:
Total
Other Paid-In Capital at end of period $0 $0 $0
( ) Denotes Contra
The accompanying notes are an integral part of the financial statements.
</TABLE>
<TABLE>
EUA ENERGY INVESTMENT AND SUBSIDIARY
CONSOLIDATING BALANCE SHEETS
DECEMBER 31, 1995
<CAPTION>
EUA EUA Eastern
Energy Energy EUA Unicord EUA
ASSETS Consolidated Eliminations Corporation Transcapacity Corporation Bioten
------------ --------------- ------------ --------------- ------------ ---------
<S> <C> <C> <C> <C> <C> <C>
Non-utility plant and other investments:
Non-utility property $1,377,675 $0 $0 $1,377,675 $0 $0
Less accumulated provision for depreciation 391,291 0 0 391,291 0 0
------------ --------------- ------------ --------------- ------------ ---------
Net non-utility property 986,384 0 0 986,384 0 0
Investments in subsidiaries (at equity) 2,653,222 (3,519,463) (3,182,129) 0 317,539 1,998,349
Other investments & notes receivable 177,382 0 0 16,367 0 161,015
------------ --------------- ------------ --------------- ------------ ---------
Total Utility Plant and Other Investments 3,816,988 (3,519,463) (3,182,129) 1,002,751 317,539 2,159,364
------------ --------------- ------------ --------------- ------------ ---------
Current Assets:
Cash and temporary cash investments 468,363 0 5,822 462,541 0 0
Notes receivable 900,451 9,989,735 9,989,735 0 0 900,451
Accounts receivable - Net 1,378,932 0 89,207 1,177,429 456 111,840
Accounts receivable - associated companies 0 274,894 273,708 0 1,186 0
Other current assets 31,940 0 4,162 27,778 0 0
------------ --------------- ------------ --------------- ------------ ---------
Total Current Assets 2,779,686 10,264,629 10,362,634 1,667,748 1,642 1,012,291
------------ --------------- ------------ --------------- ------------ ---------
Deferred Debits:
Other deferred debits 109,401 0 96,486 12,915 0 0
------------ --------------- ------------ --------------- ------------ ---------
Total Deferred Debits 109,401 0 96,486 12,915 0 0
------------ --------------- ------------ --------------- ------------ ---------
Total assets $6,706,075 $6,745,166 $7,276,991 $2,683,414 $319,181 $3,171,655
============ =============== ============ =============== ============ =========
( ) Denotes Contra
The accompanying notes are an integral part of the financial statements.
</TABLE>
<TABLE>
EUA ENERGY INVESTMENT AND SUBSIDIARY
CONSOLIDATING BALANCE SHEETS
DECEMBER 31, 1995
<CAPTION>
EUA EUA Eastern
Energy Energy EUA Unicord EUA
LIABILITIES Consolidated Eliminations Corporation Transcapacity Corporation Bioten
------------ --------------- ------------ --------------- ------------ ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Capitalization:
Common equity ($9,050,831) ($3,519,464) ($9,050,831) ($1,471,180) ($1,840,592) ($207,692
------------ --------------- ------------ --------------- ------------ ---------
Total Capitalization (9,050,831) (3,519,464) (9,050,831) (1,471,180) (1,840,592) (207,692)
------------ --------------- ------------ --------------- ------------ ---------
Current Liabilities:
Notes Payable 16,198,830 9,989,735 16,143,756 4,599,262 2,245,096 3,200,451
Accounts payable 68,568 0 6,221 62,347 0 0
Accounts payable - associated companies 47,855 201,799 44,508 24,130 2,120 178,896
Taxes accrued 0 0 0 0 0 0
Interest accrued 1,677,662 73,096 1,677,663 52,405 20,690 0
Other current liabilities 107,428 0 0 107,428 0 0
------------ --------------- ------------ --------------- ------------ ---------
Total Current Liabilities 18,100,343 10,264,630 17,872,148 4,845,572 2,267,906 3,379,347
------------ --------------- ------------ --------------- ------------ ---------
Deferred Credits:
Minority Interest (Loss) (1,156,669) 0 0 (1,156,669) 0 0
------------ --------------- ------------ --------------- ------------ ---------
Total Deferred Credits (1,156,669) 0 0 (1,156,669) 0 0
------------ --------------- ------------ --------------- ------------ ---------
Accumulated deferred taxes (1,186,768) 0 (1,544,326) 465,691 (108,133) 0
------------ --------------- ------------ --------------- ------------ ---------
Commitments and contingencies (Note J)
Total liabilities and capitalization $6,706,075 $6,745,166 $7,276,991 $2,683,414 $319,181 $3,171,655
============ =============== ============ =============== ============ =========
( ) Denotes Contra
</TABLE>
<TABLE>
EUA ENERGY INVESTMENT AND SUBSIDIARY
CONSOLIDATING STATEMENTS OF CAPITALIZATION
DECEMBER 31, 1995
<CAPTION>
EUA EUA Eastern
Energy Energy EUA Unicord EUA
Consolidated Eliminations Corporation Transcapacity Corporation Bioten
------------ --------------- ------------ --------------- ------------ ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Common Equity:
Common shares $1 $21 $1 $10 $10 $1
Other paid-in capital 999 1,001,089 999 1,000,090 990 9
Retained earnings (9,051,831) (4,520,574) (9,051,831) (2,471,280) (1,841,592) (207,702)
------------ --------------- ------------ --------------- ------------ ---------
Total Common Equity (9,050,831) (3,519,464) (9,050,831) (1,471,180) (1,840,592) (207,692)
------------ --------------- ------------ --------------- ------------ ---------
Total Capitalization ($9,050,831) ($3,519,464) ($9,050,831) ($1,471,180) ($1,840,592) ($207,692
============ =============== ============ =============== ============ =========
The accompanying notes are an integral part of the financial statements.
</TABLE>
<TABLE>
EUA ENERGY INVESTMENT AND SUBSIDIARY
CONSOLIDATING INCOME STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 1995
<CAPTION>
EUA EUA Eastern
Energy Energy EUA Unicord EUA
Consolidated Eliminations Corporation Transcapacity Corporation Bioten
------------ --------------- ------------ --------------- ------------ ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Operating Expenses:
Operation $4,333,573 $0 $1,293,109 $3,040,464 $0 $0
Maintenance 715 0 715 0 0 0
Voluntary Retirement Incentive 10,517 0 10,517 0 0 0
Depreciation and amortization 314,253 0 5,101 291,262 0 17,890
Taxes - Other than income 15,687 0 15,687 0 0 0
Income Taxes - Current (credit) (2,359,901) 0 (543,085) (1,816,816) 0 0
- Deferred (credit) 348,598 0 (117,093) 465,691 0 0
------------ --------------- ------------ --------------- ------------ ---------
Total Operating Expenses 2,663,442 0 664,951 1,980,601 0 17,890
------------ --------------- ------------ --------------- ------------ ---------
Operating Income (2,663,442) 0 (664,951) (1,980,601) 0 (17,890)
------------ --------------- ------------ --------------- ------------ ---------
Other Income and Deductions:
Interest and dividend income 8,818 422,331 422,338 8,811 0 0
Equity in earnings of
jointly-owned companies (301,651) (2,625,683) (2,625,683) 0 0 (301,651)
Allowance for other funds used
during construction 21 21 0 0 0
Other income (deductions) - net 136,864 (425) 25,746 (296) 111,839
------------ --------------- ------------ --------------- ------------ ---------
Total Other Income (155,948) (2,203,352) (2,203,749) 34,557 (296) (189,812)
------------ --------------- ------------ --------------- ------------ ---------
Income Before Interest Charges (2,819,390) (2,203,352) (2,868,700) (1,946,044) (296) (207,702)
------------ --------------- ------------ --------------- ------------ ---------
Interest Charges:
Other interest expense (principally
short-term notes) 852,741 422,331 803,431 471,641 0 0
Allowance for borrowed funds during
construction (69) (69) 0 0 0
------------ --------------- ------------ --------------- ------------ ---------
Total Interest Charges 852,672 422,331 803,362 471,641 0 0
------------ --------------- ------------ --------------- ------------ ---------
Net Income (Loss) (3,672,062) (2,625,683) (3,672,062) (2,417,685) (296) (207,702)
------------ --------------- ------------ --------------- ------------ ---------
Earnings (Loss) Available for Common
Shareholders ($3,672,062) ($2,625,683) ($3,672,062) ($2,417,685) ($296) ($207,702
============ =============== ============ =============== ============ =========
EUA Energy Common Shares outstanding 100
Earnings per share ($36,720.62)
============
( ) Denotes Contra
The accompanying notes are an integral part of the financial statements.
</TABLE>
<TABLE>
EUA ENERGY INVESTMENT AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 1995
<CAPTION>
EUA EUA Eastern
Energy Energy EUA Unicord EUA
Consolidated Eliminations Corporation Transcapacity Corporation Bioten
------------ --------------- ------------ --------------- ------------ ---------
<S> <C> <C> <C> <C> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES:
Net Income (Loss) ($3,672,062) ($2,625,683) ($3,672,062) ($2,417,685) ($296) ($207,702
Adjustments to Reconcile Net Income (Loss)
to Net Cash Provided by Operating Activities:
Depreciation and Amortization 285,650 0 0 285,650 0 0
Deferred Taxes 348,598 0 (117,093) 465,691 0 0
Other - Net (976,867) 2,625,683 1,760,973 (413,808) 0 301,651
Changes in Operating Assets and Liabilities:
Accounts receivable (294,394) (149,885) 341,652 (674,091) 0 (111,840)
Notes receivable (900,451) (6,494,639) (6,494,639) 0 0 (900,451)
Accounts payable (191,366) 133,059 (75,567) (161,932) 296 178,896
Accrued taxes 0 0 0 0 0 0
Other - net 730,291 16,826 797,907 (50,790) 0 0
------------ --------------- ------------ --------------- ------------ ---------
Net Cash (Used in) Provided from
Operating Activities (4,670,601) (6,494,639) (7,458,829) (2,966,965) 0 (739,446)
------------ --------------- ------------ --------------- ------------ ---------
CASH FLOW FROM INVESTING ACTIVITIES:
Construction expenditures (514,853) 0 0 (353,838) 0 (161,015)
Increase/Decrease in Other Investments (2,300,000) (10) (10) 0 0 *********
------------ --------------- ------------ --------------- ------------ ---------
Net Cash Used in Investing Activities (2,814,853) (10) (10) (353,838) 0 *********
------------ --------------- ------------ --------------- ------------ ---------
CASH FLOW FROM FINANCING ACTIVITIES:
Issuances:
Common shares 0 10 0 0 0 10
Net increase in short-term debt 7,451,001 6,494,639 7,451,000 3,294,189 0 3,200,451
------------ --------------- ------------ --------------- ------------ ---------
Net Cash Provided From
Financing Activities 7,451,001 6,494,649 7,451,000 3,294,189 0 3,200,461
------------ --------------- ------------ --------------- ------------ ---------
NET (DECREASE) INCREASE IN CASH (34,453) 0 (7,839) (26,614) 0 0
Cash and temporary cash investments
at beginning of year 502,816 0 13,661 489,155 0 0
Cash and temporary cash investments ------------ --------------- ------------ --------------- ------------ ---------
at end of year $468,363 $0 $5,822 $462,541 $0 $0
============ =============== ============ =============== ============ =========
Cash paid during the year for:
Interest (Net of Amounts
Capitalized) $405,437 $0 ($69) $405,506 $0 $0
Income Taxes (Refund) ($939,062) $0 ($270,636) ($668,722) $296 $0
( ) Denotes Contra
The accompanying notes are an integral part of the financial statements.
</TABLE>
<TABLE>
EUA ENERGY INVESTMENT AND SUBSIDIARY
CONSOLIDATING STATEMENTS OF RETAINED EARNINGS AND OTHER PAID-IN CAPITAL
DECEMBER 31, 1995
<CAPTION>
EUA EUA Eastern
Energy Energy EUA Unicord EUA
Consolidated Eliminations Corporation Transcapacity Corporation Bioten
------------ --------------- ------------ --------------- ------------ ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance of retained earnings at begin. of year ($5,379,769) ($1,894,891) ($5,379,769) ($53,595) ($1,841,296) $0
Additions:
Net Income (Loss) (3,672,062) ($2,625,683) (3,672,062) (2,417,685) (296) (207,702)
------------ --------------- ------------ --------------- ------------ ---------
Balance of retained earnings at end of period ($9,051,831) ($4,520,574) ($9,051,831) ($2,471,280) ($1,841,592) ($207,702
============ =============== ============ =============== ============ =========
( ) Denotes Contra
The accompanying notes are an integral part of the financial statements.
</TABLE>
Notes To Consolidated Financial Statements December 31, 1995
(A) Summary Of Significant Accounting Policies:
General: Eastern Utilities Associates (EUA) is a diversified energy services
holding company. Its subsidiaries are principally engaged in the generation,
transmission, distribution and sale of electricity; energy related services
such as energy management; and promoting the conservation and efficient use of
energy.
Estimates: The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Basis of Consolidation: The consolidated financial statements include the
accounts of EUA and all subsidiaries. All material intercompany transactions
between the consolidated subsidiaries have been eliminated.
System of Accounts: The accounts of EUA and its consolidated subsidiaries are
maintained in accordance with the uniform system of accounts prescribed by the
regulatory bodies having jurisdiction.
Jointly Owned Companies: Montaup Electric Company (Montaup) follows the equity
method of accounting for its stock ownership investments in jointly owned
companies including four regional nuclear generating companies. Montaup's
investments in these nuclear generating companies range from 2.25% to 4.50%.
Montaup is entitled to electricity produced from these facilities based on its
ownership interests and is billed for its entitlement pursuant to contractual
agreements which are approved by the Federal Energy Regulatory Commission
(FERC).
One of the four facilities is being decommissioned, but Montaup is required to
pay, and has received FERC authorization to recover, its proportionate share of
any unrecovered costs and costs incurred after the plant's retirement.
Montaup's share of all unrecovered assets and the total estimated costs to
decommission the unit aggregated approximately $10.1 million at December 31,
1995 and is included with Other Liabilities on the Consolidated Balance Sheet.
Also, due to recoverability, a regulatory asset has been recorded for the same
amount and is included with Other Assets.
Montaup also has a stock ownership investment of 3.27% in each of two companies
which own and operate certain transmission facilities between the Hydro Quebec
electric system and New England.
EUA Ocean State Corporation (EUA Ocean State) follows the equity method of
accounting for its 29.9% partnership interest in the Ocean State Power Project
(OSP). EUA Ocean State's investment in OSP and Montaup's stock ownership
investments are included in "Investments in Jointly Owned Companies" on the
Consolidated Balance Sheet.
Plant and Depreciation: Utility plant is stated at original cost. The cost of
additions to utility plant includes contracted work, direct labor and material,
allocable overhead, allowance for funds used during construction and indirect
charges for engineering and supervision. For financial statement purposes,
depreciation is computed on the straight-line method based on estimated useful
lives of the various classes of property. On a consolidated basis, provisions
for depreciation on utility plant were equivalent to a composite rate of
approximately 3.3% in 1995 based on the average depreciable property balances
at the beginning and end of each year. Non-utility property and equipment of
EUA Cogenex Corporation (EUA Cogenex) is stated at original cost. For
financial statement purposes, depreciation on office furniture and equipment,
computer equipment and real property is computed on the straight-line method
based on estimated useful lives ranging from five to forty years. Project
equipment is depreciated over the term of the applicable contracts or based on
the estimated useful lives, whichever is shorter, ranging from five to fifteen
years.
Other Assets: The components of Other Assets at December 31, 1995 are detailed
as follows:
(In Thousands) 1995
Regulatory Assets:
Unamortized losses on reacquired debt $ 15,894
Unrecovered plant and
decommissioning costs 10,100
Deferred FAS 109 costs (Note B) 48,196
Deferred FAS 106 costs 4,583
Mendon Road judgment (Note J) 6,591
Other regulatory assets 5,650
Total regulatory assets 91,014
Other deferred charges and assets:
Unamortized debt expenses 5,349
Goodwill 7,054
Other 20,637
Total Other Assets $ 124,054
Regulatory Accounting: EUA's Core Electric companies are subject to certain
accounting rules that are not applicable to other industries. These accounting
rules allow regulated companies, in appropriate circumstances, to establish
regulatory assets and liabilities which defer the current financial impact of
certain costs that are expected to be recovered in future rates. EUA believes
that its Core Electric operations continue to meet the criteria established in
these accounting standards. Effects of legislation and/or regulatory
initiatives or EUA's own initiatives such as "Choice and Competition" could
ultimately cause the Core Electric companies to no longer follow these
accounting rules. In such an event, a non-cash write-off of regulatory assets
and liabilities could be required at that time.
Allowance for Funds Used During Construction (AFUDC) and Capitalized Interest:
AFUDC represents the estimated cost of borrowed and equity funds used to
finance the EUA System's construction program. In accordance with regulatory
accounting, AFUDC is capitalized as a cost of utility plant in the same manner
as certain general and administrative costs. AFUDC is not an item of current
cash income but is recovered over the service life of utility plant in the form
of increased revenues collected as a result of higher depreciation expense.
The combined rate used in calculating AFUDC was 9.2% in 1995. The caption
"Allowance for Borrowed Funds Used During Construction" also includes interest
capitalized for non-regulated entities in accordance with Financial Accounting
Standards Board (FASB) Statement No. 34.
Operating Revenues: Utility revenues are based on billing rates authorized by
applicable federal and state regulatory commissions. Eastern Edison Company
(Eastern Edison), Blackstone Valley Electric Company (Blackstone) and Newport
Electric Corporation (Newport) (collectively, the Retail Subsidiaries) accrue
the estimated amount of unbilled base rate revenues at the end of each month to
match costs and revenues more closely. In addition they also record the
difference between fuel costs incurred and fuel costs billed. Montaup
recognizes revenues when billed. Montaup, Blackstone, and Newport also record
revenues related to rate adjustment mechanisms.
EUA Cogenex's revenues are recognized based on financial arrangements
established by each individual contract. Under paid-from-savings contracts,
revenues are recognized as energy savings are realized by customers. Revenue
from the sale of energy savings projects and sales-type leases are recognized
when the sales are complete. Interest on the financing portion of the
contracts is recognized as earned at rates established at the outset of the
financing arrangement. All construction and installation costs are recognized
as contract expenses when the contract revenues are recorded. In circumstances
in which material uncertainties exist as to contract profitability, cost
recovery accounting is followed and revenues received under such contracts are
first accounted for as recovery of costs to the extent incurred.
Federal Income Taxes: EUA and its subsidiaries generally reflect in income the
estimated amount of taxes currently payable, and provide for deferred taxes on
certain items subject to temporary timing differences to the extent permitted
by the various regulatory agencies. EUA's rate-regulated subsidiaries defer
recognition of annual investment tax credits (ITC) and amortize these credits
over the productive lives of the related assets.
Cash and Temporary Cash Investments: EUA considers all highly liquid
investments and temporary cash investments with a maturity of three months or
less when acquired to be cash equivalents.
New Accounting Standard: In March 1995, the FASB issued Statement of Financial
Accounting Standard No. 121, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed Of" (FAS 121), effective for
fiscal year 1996. FAS 121 requires all regulatory assets, assets which were
established as a result of high probability of recovery in a regulated
environment, to continue to meet that high probability of recovery at each
balance sheet date. Based on the current regulatory framework, management does
not expect that adoption of this standard will have a material effect on EUA's
financial position or results of operation. However, this assumption may
change in the future as changes are made in the current regulatory framework or
as competitive factors influence wholesale and retail pricing in the electric
utility industry.
(B) Income Taxes:
EUA adopted FASB statement No. 109, "Accounting for Income Taxes" (FAS 109)
which required recognition of deferred income taxes for temporary differences
that are reported in different years for financial reporting and tax purposes
using the liability method. Under the liability method, deferred tax
liabilities or assets are computed using the tax rates that will be in effect
when temporary differences reverse. Generally, for regulated companies, the
change in tax rates may not be immediately recognized in operating results
because of rate-making treatment and provisions in the Tax Reform Act of 1986.
At December 31, 1995, no valuation allowance was deemed necessary for total
deferred tax assets. Total deferred tax assets and liabilities for 1995 are
comprised as follows:
Deferred Tax Deferred Tax
($ in thousands) Assets ($ in thousands) Liabilities
1995 1995
Plant Related Plant Related
Differences $21,028 Differences $170,562
Alternative Refinancing
Minimum Tax 9,302 Costs 1,919
Litigation 41 Pensions 1,496
Bad Debts 125
Pensions 3,392
Acquisitions 4,281
Other 7,143 Other 11,684
Total $45,312 Total $185,661
As of December 31, 1995, EUA has recorded on its Consolidated Balance Sheet a
regulatory liability to ratepayers of approximately $27.2 million. This amount
primarily represents excess deferred income taxes resulting from the reduction
in the federal income tax rate and also include deferred taxes provided on
investment tax credits. Also at December 31, 1995, a regulatory asset of
approximately $48.2 million has been recorded, representing the cumulative
amount of federal income taxes on temporary depreciation differences which were
previously flowed through to ratepayers.
EUA has $9.3 million of alternative minimum tax credits which have no
expiration and can be utilized to reduce the consolidated regular tax
liability.
Components of income tax expense for 1995 are as follows:
<TABLE>
<CAPTION>
NOTE B - INCOME AND TAXES:
Components of income and deferred tax expense for the year 1995 are as follows:
Blackstone
Eastern EUA Valley Newport
EUA Utilities Service Electric Electric
Consolidated Eliminations Associates Corporation Company Company
<S> <C> <C> <C> <C> <C> <C>
Federal:
Current $10,334,458 48,832 $976 ($951) $1,329,141 $ 890,120
Deferred 6,456,349 (1,062,357) (53,080) 35,590 1,132,684 381,931
Investment tax credit, Net (1,129,841) (183,653) (3,960)
15,660,966 (1,013,525) (52,104) 34,639 2,278,172 1,268,091
State:
Current 2,578,551 8,305 1,580 639
Deferred (1,224,973) 59,249 67,630
1,353,578 0 67,554 69,210 639
Charged to Operations
-Federal & State 17,014,544 (1,013,525) (52,104) 102,193 2,347,382 1,268,730
Charged to Other Income
Current 4,352,657 2,769 36,990
Deferred (6,216,389) (17,330)
Investment Tax Credit, Net (82,199) (82,199)
Total 15,068,613 ($1,013,525) ($69,434) $102,193 $2,350,151 $1,223,521
Tax Computed at Statutory Rates 17,505,541 (1,032,684) ($115,665) $177,207 $2,327,001 $1,161,258
(Decrease) Increase in Tax From:
Equity Component of AFUDC (186,670) (11,491) (10,455)
Depreciation of Equity AFUDC 118,027 4,204 261,848 116,229
Amortization and Utilization (1,212,047) (183,659) (86,160)
Cost of Removal (35,980) (66,823) (26,881)
State Tax, Net of Federal Inc (44,070) 43,910 44,987 415
Other (1,076,188) 19,159 46,231 (123,126) (21,712) 69,115
Total $15,068,613 (1,013,525) ($69,434) $102,193 $2,350,151 $1,223,521
</TABLE>
<TABLE>
<CAPTION>
Eastern EUA EUA
Edison Cogenex Energy EUA
Company Corporation Investment Ocean State
Consolidated Consolidated Consolidated Corporation
<S> <C> <C> <C> <C>
Federal: $11,387,070 $503,090 ($2,359,901) ($1,366,255)
Current 3,679,173 (125,953) 348,598 (4,951)
Deferred (942,228)
Investment tax credit, Net 14,124,015 377,137 (2,011,303) (1,371,206)
State: 2,446,716 121,269 42
Current (917,660) (434,192)
Deferred 1,529,056 (312,923) 0 42
Charged to Operations
-Federal & State 15,653,071 64,214 (2,011,303) (1,371,164)
Charged to Other Income
Current 521,796 (3,397) (110,633) 3,905,132
Deferred (67,226) (6,041,712) (90,121)
Investment Tax Credit, Net
Total $16,107,641 ($5,980,895) ($2,121,936) $2,443,847
Federal income tax expense was different that the amounts computed by applying the statutory rates
to book income subject to tax for the following reasons:
Tax Computed at Statutory Rates $17,342,619 (4,859,859) ($2,027,899) $2,468,195
(Decrease) Increase in Tax From:
Equity Component of AFUDC (164,724)
Depreciation of Equity AFUDC (264,254)
Amortization and Utilization (942,228)
Cost of Removal 57,724
State Tax, Net of Federal In 1,069,595 (1,204,953) 889 1,087
Other (991,091) 83,917 (94,926) (25,435)
Total $16,107,641 (5,980,896) ($2,121,936) $2,443,847
</TABLE>
NOTE B - INCOME TAXES (continued):
Components of income and deferred tax expense for the year 1995 are as follows:
<TABLE>
<CAPTION>
Eastern Eastern Montaup
Edison Edison Electric
Consolidated Eliminations Company Company
<S> <C> <C> <C> <C>
Federal:
Current $11,387,070 $7,487,033 $3,900,037
Deferred 3,679,173 (429,321) 4,108,494
Investment tax credit, Net (942,228) (314,076) (628,152)
14,124,015 6,743,636 7,380,379
State:
Current 2,446,716 1,488,288 958,428
Deferred (917,660) (222,050) (695,610)
1,529,056 1,266,238 262,818
Charged to Operations (Federal & State) 15,653,071 8,009,874 7,643,197
Charged to Other Income
Current 521,796 99,471 422,325
Deferred (67,226) (67,226)
Investment Tax Credit, Net 0
Total $16,107,641 $8,109,345 $7,998,296
Federal income tax expense was different than the amounts computed by applying the statutory
rates to book income subject to tax for the following reasons:
Tax Computed at Statutory Rates $17,342,619 $7,649,052 $9,693,567
(Decrease) Increase in Tax From:
Equity Component of AFUDC (164,724) (13,233) (151,491)
Depreciation of Equity AFUDC (264,254) (89,371) (174,883)
Amortization and Utilization of (942,228) (314,076) (628,152)
Cost of Removal 57,724 57,724
State Tax, Net of Federal Income 1,069,595 833,772 235,823
Other (991,091) (14,523) (976,568)
Total $16,107,641 $8,109,345 $7,998,296
</TABLE>
NOTE B - INCOME TAXES (continued):
Components of income and deferred tax expense for the year 1995 are as follows:
<TABLE>
<CAPTION>
EUA EUA
Cogenex EUA Northeast Citizens EUA EUA
Corporation Cogenex Energy Conservation Highland Cogenex
Consolidated Eliminations Corporation Mgmt.Inc. Service, Inc. Corporation Canada
<S> <C> <C> <C> <C> <C> <C> <C>
Federal:
Current $ 503,090 ($746,662) $1,075,921 ($6,822) $116,479 $64,174
Deferred (125,953) 41,536 (167,489)
Investment tax credit, Net 0
377,137 (705,126) 908,432 (6,822) 116,479 64,174
State:
Current 121,269 85,863 19,708 (2,047) 17,745
Deferred (434,192) (287,015) (147,177)
(312,923) (201,152) (127,469) (2,047) 17,745 0
Charged to Operations (Federal & 64,214 ($906,278) $ 780,963 ($8,869) $134,224 $64,174
Charged to Other Income
Current (3,397) (3,397)
Deferred (6,041,712) (6,041,712)
Investment Tax Credit, Net 0
Total ($5,980,895) ($6,951,387) $ 780,963 ($8,869) $134,224 $64,174
Federal income tax expense was different than the amounts computed by applying the statutory rates to book income
subject to tax for the following reasons:
Tax Computed at Statutory Rates ($4,859,859) ($5,940,845) $ 930,100 ($9,328) $ 96,040 $64,174
(Decrease) Increase in Tax From:
Equity Component of AFUDC 0
Depreciation of Equity AFUDC 0
Amortization and Utilization of 0
Cost of Removal 0
State Tax, Net of Federal Income (1,204,953) (1,132,301) (82,855) (1,331) 11,534
Other 83,917 121,759 (66,282) 1,790 26,650
Total ($5,980,895) ($6,951,387) 780,963 ($8,869) $134,224 $64,174
</TABLE>
NOTE B - INCOME TAXES (continued):
Components of income and deferred tax expense for the year 1995 are as follows:
<TABLE>
<CAPTION>
EUA Energy EUA EUA
Investment Energy EUA Unicord EUA
Consolidated Eliminations Corporation Transcapacity Corporation Bioten
<S> <C> <C> <C> <C> <C> <C>
Federal:
Current ($2,359,901) ($543,085) ($1,816,816)
Deferred 348,598 (117,093) 465,691
Investment tax credit, Net 0
(2,011,303) (660,178) ($1,351,125) 0 0
State:
Current 0
Deferred 0
Charged to Operations (Federal & State) (2,011,303) ($660,178) ($1,351,125)
Charged to Other Income
Current (110,633) 751 456 (111,840)
Deferred 0
Investment Tax Credit, Net 0
0
Total ($2,121,936) ($659,427) ($1,350,669) $0 ($111,840)
Federal income tax expense was different than the amounts computed by applying the statutory rates to
book income subject to tax for the following reasons:
Tax Computed at Statutory Rates ($2,027,899) ($597,136) ($1,318,923) ($111,840)
(Decrease) Increase in Tax From:
Equity Component of AFUDC 0
Depreciation of Equity AFUDC 0
Amortization and Utilization of 0
State Tax, Net of Federal Income 889 593 296
Other (94,926) (62,884) (32,042)
Total ($2,121,936) ($659,427) ($1,350,669) $0 ($111,840)
</TABLE>
C) Capital Stock:
The changes in the number of common shares outstanding and related increases in
Other Paid-In Capital during the year ended December 31, 1995 were as follows:
Number of Common Shares Issued
Dividend Highland Common Other
Reinvestment Energy Shares Paid-In
and Employee Group At Par Capital
Savings Plans Acquisition (000) (000)
1995 323,526 176,258 $ 2,499 $ 7,683
The preferred stock provisions of the Retail Subsidiaries place certain
restrictions upon the payment of dividends on common stock by each company. At
December 31, 1995 each company was in excess of the minimum requirements which
would make these restrictions effective.
In the event of involuntary liquidation, the holders of non-redeemable
preferred stock of the Retail Subsidiaries are entitled to $100 per share plus
accrued dividends. In the event of voluntary liquidation, or if redeemed at
the option of these companies, each share of the non-redeemable preferred stock
is entitled to accrued dividends plus the following:
Company Issue Amount
Blackstone: 4.25% issue $104.40
5.60% issue 103.82
Newport: 3.75% issue 103.50
(D) Redeemable Preferred Stock:
Eastern Edison's 6 5/8% Preferred Stock issue is entitled to an annual
mandatory sinking fund sufficient to redeem 15,000 shares commencing September
1, 2003. The redemption price is $100 per share plus accrued dividends. All
outstanding shares of the 6 5/8% issue are subject to mandatory redemption on
September 1, 2008, at a price of $100 per share plus accrued dividends.
In the event of liquidation, the holders of Eastern Edison's 6 5/8% Preferred
Stock are entitled to $100 per share plus accrued dividends.
Newport's 9.75% Preferred Stock issue is entitled to a mandatory sinking fund
sufficient to redeem 500 shares during each twelve-month period until the year
1999. The balance of any shares outstanding must be redeemed by the year
2000. The redemption price is $100 per share plus accrued dividends. In the
event of involuntary liquidation, the holders of Newport's redeemable preferred
stock are entitled to $100 per share plus accrued dividends. In the event of
voluntary liquidation, or if redeemed at the option of Newport, the holders of
the 9.75% issue are entitled to $102.44 per share plus accrued dividends prior
to October 1, 1998; thereafter no premium is payable upon such redemption.
The aggregate amount of redeemable preferred stock sinking fund requirements
for each of the five years following 1995 are $50,000 for 1996, $40,000 for
1997 and zero for 1998, 1999 and 2000.
(E) Long-Term Debt:
The various mortgage bond issues of Blackstone, Eastern Edison, and Newport are
collateralized by substantially all of their utility plant. In addition,
Eastern Edison's bonds are collateralized by securities of Montaup, which are
wholly-owned by Eastern Edison, in the principal amount of approximately $236
million.
Blackstone's Variable Rate Demand Bonds are collateralized by an irrevocable
letter of credit which expires on January 21, 1997. The letter of credit
permits an extension of one year upon mutual agreement of the bank and
Blackstone.
Newport's Variable Rate Electric Energy Facilities Revenue Refunding Bonds are
collateralized by an irrevocable Letter of Credit which expires on January 6,
1997, and permits an extension of one year upon mutual agreement of the Bank
and Newport. EUA Service Corporation's (EUA Service) 10.2% Secured Notes due
2008 are collateralized by certain real estate and property of the company.
In December, Eastern Edison used available cash to redeem $25 million of 9-9
1/4% Unsecured Medium Term Notes at maturity, and $10 million of 8.90% First
Mortgage and Collateral Trust Bonds at maturity.
The EUA System's aggregate amount of current cash sinking fund requirements and
maturities of long-term debt, (excluding amounts that may be satisfied by
available property additions) for each of the five years following 1995 are:
$19.5 million in 1996, $27.5 million in 1997, $72.5 million in 1998, $21.9
million in 1999, and $62.5 million in 2000.
(F) Fair Value Of Financial Instruments:
The following methods and assumptions were used to estimate the fair value of
each class of financial instruments for which it is practicable to estimate:
Cash and Temporary Cash Investments: The carrying amount approximates fair
value because of the short-term maturity of these instruments.
Long Term Notes Receivable and Net Investment in Sales-Type Leases: The
carrying amounts approximate fair value due to the nature of the asset.
Preferred Stock and Long-Term Debt of Subsidiaries: The fair value of the
System's redeemable preferred stock and long-term debt were based on quoted
market prices for such securities at December 31, 1995.
Carrying Fair
Amount ($000) Value ($000)
EUA
Cash and Temporary Cash Investments $ 188 $ 188
Redeemable Preferred Stock - -
Long-Term Debt - -
EUA Service
Cash and Temporary Cash Investments 254 254
Redeemable Preferred Stock - -
Long-Term Debt 12,300 13,884
Blackstone
Cash and Temporary Cash Investments 753 753
Redeemable Preferred Stock - -
Long-Term Debt 38,000 39,366
Newport
Cash and Temporary Cash Investments 215 215
Redeemable Preferred Stock 90 90
Long-Term Debt 22,021 23,194
Eastern Edison-Consolidated
Cash and Temporary Cash Investments 533 533
Redeemable Preferred Stock 30,000 31,800
Long-Term Debt 230,000 233,292
EUA Cogenex- Consolidated
Cash and Temporary Cash Investments 1,503 1,503
Redeemable Preferred Stock - -
Long-Term Notes Receivable 38,635 38,635
Net Investment in Sales-Type Leases 9,565 9,565
Long-Term Debt 119,200 128,301
(F) Fair Value of Financial Instruments - (continued)
Carrying Fair
Amount Value
EUA Energy
Cash and Temporary Cash Investments 468 468
Redeemable Preferred Stock - -
Long-Term Debt - -
EUA Ocean State
Cash and Temporary Cash Investments 145 145
Redeemable Preferred Stock - -
Long-Term Debt 33,544 41,205
(G) Lines Of Credit:
EUA System companies maintain short-term lines of credit with various banks
aggregating approximately $150 million. At December 31, 1995, unused
short-term lines of credit were approximately $111 million. In accordance with
informal agreements with the various banks, commitment fees are required to
maintain certain lines of credit. During 1995, the weighted average interest
rate for short-term borrowings was 6.2%.
(H) Jointly Owned Facilities:
At December 31, 1995, in addition to the stock ownership interests discussed in
Note A, Nature of Operations and Summary of Significant Accounting Policies
Jointly Owned Companies, Montaup and Newport had direct ownership interests in
the following electric generating facilities:
Accumulated
Provision For Net Construc-
Utility Depreciation Utility tion
Percent Plant in and Plant in Work in
($ in thousands) Owned Service Amortization Service Progress
Montaup:
Canal Unit 2 50.00% $ 71,715 $42,657 $ 29,058 $2,085
Wyman Unit 4 1.96% 4,050 2,020 2,030
Seabrook Unit 1 2.90% 194,735 23,993 170,742 454
Millstone Unit 3 4.01% 178,231 40,482 137,749 42
Newport:
Wyman Unit 4 0.67% 1,314 684 630
The foregoing amounts represent Montaup's and Newport's interest in each
facility, including nuclear fuel where appropriate, and are included on the
like-captioned lines on the Consolidated Balance Sheet. At December 31, 1995,
Montaup's total net investment in nuclear fuel of the Seabrook and Millstone
Units amounted to $3.0 million and $2.2 million, respectively.
Montaup's and Newport's shares of related operating and maintenance expenses
with respect to units reflected in the table above are included in the
corresponding operating expenses.
(I) Financial Information By Business Segments:
The Core Electric Business includes results of the electric utility operations
of Blackstone, Eastern Edison, Newport and Montaup.
Energy Related Business includes results of our diversified energy related
subsidiaries, EUA Cogenex, EUA Ocean State and EUA Energy Investment
Corporation (EUA Energy).
Corporate results include the operations of EUA Service and EUA Parent.
<TABLE>
<CAPTION>
Pre-Tax Depreciation Cash Equity in
Operating Operating Income and Construction Subsidiary
($ in thousands) Revenues Income Taxes Amortization Expenditures Earnings
<S> <C> <C> <C> <C> <C> <C>
Year Ended
December 31, 1995
Core Electric $ 483,864 $ 86,505 $ 20,312 $ 34,218 $ 31,466 $ 1,646
Energy Related 79,499 3,377 (3,318) 11,265 44,684 10,417
Corporate (1,139) 21 9 1,773
Total $ 563,363 $ 88,743 $ 17,015 $ 45,492 $ 77,923 $12,063
</TABLE>
December 31,
($ in thousands) 1995
Total Plant and Other Investments
Core Electric $ 716,828
Energy Related 203,670
Corporate 20,302
Total Plant and Other Investments 940,800
Other Assets
Core Electric 188,087
Energy Related 57,083
Corporate 14,303
Total Other Assets 259,473
Total Assets $1,200,273
(J) Commitments And Contingencies:
Nuclear Fuel Disposal and Nuclear Plant Decommissioning Costs:
The owners (or lead participants) of the nuclear units in which Montaup has an
interest have made, or expect to make, various arrangements for the acquisition
of uranium concentrate, the conversion, enrichment, fabrication and utilization
of nuclear fuel and the disposition of that fuel after use. The owners (or
lead participants) of United States nuclear units have entered into contracts
with the Department of Energy (DOE) for disposal of spent nuclear fuel in
accordance with the Nuclear Waste Policy Act of 1982 (NWPA). The NWPA requires
(subject to various contingencies) that the federal government design, license,
construct and operate a permanent repository for high level radioactive wastes
and spent nuclear fuel and establish a prescribed fee for the disposal of such
wastes and nuclear fuel. The NWPA specifies that the DOE provide for the
disposal of such waste and spent nuclear fuel starting in 1998. Objections on
environmental and other grounds have been asserted against proposals for
storage as well as disposal of spent nuclear fuel. The DOE now estimates that
a permanent disposal site for spent fuel will not be ready to accept fuel for
storage or disposal until as late as the year 2010. Montaup owns a 4.01%
interest in Millstone Unit 3 and a 2.9% interest in Seabrook Unit 1. Northeast
Utilities, the operator of the units, indicates that Millstone Unit 3 has
sufficient on-site storage facilities which, with rack additions, can
accommodate its spent fuel for the projected life of the unit. At the Seabrook
Project, there is on-site storage capacity which, with rack additions, will be
sufficient to at least the year 2011.
The Energy Policy Act requires that a fund be created for the decommissioning
and decontamination of the DOE uranium enrichment facilities. The fund will be
financed in part by special assessments on nuclear power plants in which
Montaup has an interest. These assessments are calculated based on the
utilities' prior use of the government facilities and have been levied by the
DOE, starting in September 1993, and will continue over 15 years. This cost is
passed on to the joint owners or power buyers as an additional fuel charge on a
monthly basis and is currently being recovered by Montaup through rates.
Also, Montaup is recovering through rates its share of estimated
decommissioning costs for Millstone Unit 3 and Seabrook Unit 1. Montaup's
share of the current estimate of total costs to decommission Millstone Unit 3
is $19.2 million in 1995 dollars, and Seabrook Unit 1 is $12.5 million in 1995
dollars. These figures are based on studies performed for the lead owners of
the plants. Montaup also pays into decommissioning reserves pursuant to
contractual arrangements with other nuclear generating facilities in which it
has an equity ownership interest or life of the unit entitlement. Such
expenses are currently recoverable through rates.
Pensions: EUA maintains a non-contributory defined benefit pension plan
covering substantially all employees of the EUA System (Retirement Plan).
Retirement Plan benefits are based on years of service and average compensation
over the four years prior to retirement. It is the EUA System's policy to fund
the Retirement Plan on a current basis in amounts determined to meet the
funding standards established by the Employee Retirement Income Security Act of
1974.
Net pension expense for the Retirement Plan, including amounts related to the
1995 voluntary retirement incentive offer, for 1995, included the following
components:
($ in thousands) 1995
Service cost-benefits earned
during the period $ 2,776
Interest cost on projected
benefit obligations 9,391
Actual loss (return) on assets (36,220)
Net amortization and deferrals 24,392
Net periodic pension expense 339
Voluntary Retirement Incentive 1,653
Total periodic pension expense $ 1,992
Assumptions used to determine pension costs:
Discount Rate 8.25%
Compensation
Increase Rate 4.75%
Long-Term
Return on Assets 9.50%
The following table sets forth the actuarial present value of benefit
obligations and funded status at December 31, 1995:
($ in thousands) 1995
Accumulated benefit obligations
Vested $ (117,060)
Non-vested (271)
Total (117,331)
Projected benefit obligations (135,415)
Plan assets at fair value,
primarily stocks and bonds 152,308
Less: Unrecognized net gain
on assets (21,769)
Unamortized net
assets at January 1 4,939
Net pension assets $ 63
The discount rate and compensation increase rate used to determine post-pension
costs were changed effective January 1, 1996 to 7.25% and 4.25% respectively,
and were used to calculate the plan's funded status at December 31, 1995.
The one-time voluntary retirement incentive also resulted in $1.6 million of
non-qualified pension benefits which were expensed in 1995. At December 31,
1995, approximately $1.5 million was included in other liabilities for these
unfunded benefits.
EUA also maintains non-qualified supplemental retirement plans for certain
officers of the EUA System (Supplemental Plans). Benefits provided under the
Supplemental Plans are based primarily on compensation at retirement date. EUA
maintains life insurance on certain participants of the Supplemental Plans to
fund in whole, or in part, its future liabilities under the Supplemental Plans.
As of December 31, 1995, approximately $3.4 million was included in accrued
expenses and other liabilities for these plans. For the years ended December
31, 1995, expenses related to the Supplemental Plans were $1.5 million.
Post-Retirement Benefits: Retired employees are entitled to participate in
health care and life insurance benefit plans. Health care benefits are subject
to deductibles and other limitations. Health care and life insurance benefits
are partially funded by EUA System companies for all qualified employees.
The EUA System adopted Statement of Financial Accounting Standard No. 106,
"Accounting for Post-Retirement Benefits Other Than Pensions," (FAS 106) as of
January 1, 1993. This standard establishes accounting and reporting standards
for such post-retirement benefits as health care and life insurance. Under FAS
106 the present value of future benefits is recorded as a periodic expense over
employee service periods through the date they become fully eligible for
benefits. With respect to periods prior to adopting FAS 106, EUA elected to
recognize accrued costs (the Transition Obligation) over a period of 20 years,
as permitted by FAS 106. The resultant annual expense, including amortization
of the Transition Obligation and net of capitalized and deferred amounts, was
approximately $6.3 million in 1995.
The total cost of post-retirement benefits other than pensions for 1995
includes the following components:
($ in thousands) 1995
Service cost $ 996
Interest cost 4,822
Actual return on plan assets (671)
Amortization of transition obligation 3,312
Other amortizations & deferrals - net (970)
Net periodic post-retirement benefit cost 7,489
Voluntary Retirement Incentive 832
Total periodic post-retirement
benefit costs $ 8,321
Assumptions used to determine post-retirement benefit costs:
Discount rate 8.25%
Health care cost trend rate
- near-term 11.00%
- long-term 5.00%
Salary increase rate 4.75%
Rate of return on plan assets
- union 8.50%
- non-union 5.50%
Reconciliation of funded status:
($ in thousands) 1995
Accumulated post-retirement benefit
obligation (APBO):
Retirees $(40,817)
Active employees fully eligible
for benefits (9,760)
Other active employees (20,115)
Total $(70,692)
Fair value of assets, primarily notes
and bonds 12,614
Unrecognized transition obligation 56,314
Unrecognized net loss (gain) (7,575)
(Accrued)/prepaid post-retirement
benefit cost $ (9,339)
The discount rate and compensation increase rate used to determine
post-retirement benefit costs were changed effective January 1, 1996 to 7.25%
and 4.25%, respectively, and were used to calculate the funded status of
post-retirement benefits at December 31, 1995.
Increasing the assumed health care cost trend rate by 1% each year would
increase the total post-retirement benefit cost for 1995 by $0.8 million and
increase the total accumulated post-retirement benefit obligation by $8.1
million.
The EUA System has also established separate irrevocable external Voluntary
Employees' Beneficiary Association Trust Funds for union and non-union
retirees. Contributions to the funds commenced in March 1993 and totaled
approximately $7.1 million during 1995, $6.7 million in 1994 and $6.0 million
in 1993.
Long-Term Purchased Power Contracts: The EUA System is committed under
long-term purchased power contracts, expiring on various dates through
September 2021, to pay demand charges whether or not energy is received. Under
terms in effect at December 31, 1995, the aggregate annual minimum commitments
for such contracts are approximately $129 million in 1996 and 1997, $12 million
in 1998, $127 million in 1999, $123 million in 2000 and will aggregate $1.4
billion for the ensuing years. In addition, the EUA System is required to pay
additional amounts depending on the actual amount of energy received under such
contracts. The demand costs associated with these contracts are reflected as
Purchased Power-Demand on the Consolidated Statement of Income. Such costs are
currently recoverable through rates.
Environmental Matters: The Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended by the Superfund Amendments and
Reauthorization Act of 1986, and certain similar state statutes authorize
various governmental authorities to seek court orders compelling responsible
parties to take cleanup action at disposal sites which have been determined by
such governmental authorities to present an imminent and substantial danger to
the public and to the environment because of an actual or threatened release of
hazardous substances. Because of the nature of the EUA System's business,
various by-products and substances are produced or handled which are classified
as hazardous under the rules and regulations promulgated by the United States
Environmental Protection Agency (EPA) as well as state and local authorities.
The EUA System generally provides for the disposal of such substances through
licensed contractors, but these statutory provisions generally impose potential
joint and several responsibility on the generators of the wastes for cleanup
costs. Subsidiaries of EUA have been notified with respect to a number of
sites where they may be responsible for such costs, including sites where they
may have joint and several liability with other responsible parties. It is the
policy of the EUA System companies to notify liability insurers and to initiate
claims. EUA is unable to predict whether liability, if any, will be assumed
by, or can be enforced against, the insurance carrier in these matters.
On December 13, 1994, the United States District Court for the District of
Massachusetts (District Court) issued a judgment against Blackstone, finding
Blackstone liable to the Commonwealth of Massachusetts (Commonwealth) for the
full amount of response costs incurred by the Commonwealth in the cleanup of a
by-product of manufactured gas at a site at Mendon Road in Attleboro,
Massachusetts. The judgment also found Blackstone liable for interest and
litigation expenses calculated to the date of judgment. The total liability is
approximately $5.9 million, including approximately $3.6 million in interest
which has accumulated since 1985. Due to the uncertainty of the ultimate
outcome of this proceeding and anticipated recoverability, Blackstone recorded
the $5.9 million District Court judgment as a deferred debit. This amount is
included with Other Assets at December 31, 1995 and 1994.
Blackstone filed a Notice of Appeal of the District Court's judgment and
filed its brief with the United States Court of Appeals for the First Circuit
(First Circuit) on February 24, 1995. On October 6, 1995 the First Circuit
vacated the District Court's judgment and ordered the District Court to refer
the matter to the EPA to determine whether the chemical substance, ferric
ferrocyanide (FFC), contained within the by-product is a hazardous substance.
On January 20, 1995, Blackstone entered into an escrow agreement with the
Commonwealth whereby Blackstone deposited $5.9 million with an escrow agent who
transferred the funds into an interest bearing money market account. The
distribution of the proceeds of the escrow account will be determined upon the
final resolution of the judgment. No additional interest expense will accrue
on the judgment amount.
On January 28, 1994, Blackstone filed a complaint in the District Court,
seeking, among other relief, contribution and reimbursement from Stone &
Webster Inc., of New York City and several of its affiliated companies (Stone &
Webster), and Valley Gas Company of Cumberland, Rhode Island (Valley) for any
damages incurred by Blackstone regarding the Mendon Road site. On November 7,
1994, the court denied motions to dismiss the complaint which were filed by
Stone & Webster and Valley. This proceeding was stayed in December 1995
pending final EPA determination as to whether FFC is hazardous.
In addition, Blackstone has notified certain liability insurers and has
filed claims with respect to the Mendon Road site, as well as other sites.
Blackstone reached settlement with one carrier for reimbursement of legal costs
related to the Mendon Road case. In January 1996, Blackstone received $1.2
million in connection with this settlement.
As of December 31, 1995, the EUA System had incurred costs of approximately
$4.6 million (excluding the $5.9 million Mendon Road judgment) in connection
with these sites, substantially all of which relate to Blackstone. These
amounts have been financed primarily by internally generated cash. Blackstone
is currently amortizing all of its incurred costs over a five-year period
consistent with prior regulatory recovery periods and is recovering certain of
those costs in rates.
EUA estimates that additional costs of up to $3.0 million (excluding the
$5.9 million Mendon Road judgment) may be incurred at these sites through 1997
by its subsidiaries and the other responsible parties. Of this amount,
approximately $2.5 million relates to sites at which Blackstone is a
potentially responsible party. Estimates beyond 1997 cannot be made since site
studies, which are the basis of these estimates, have not been completed.
As a result of the recoverability of cleanup costs in rates and the
uncertainty regarding both its estimated liability, as well as its potential
contributions from insurance carriers and other responsible parties, EUA does
not believe that the ultimate impact of the environmental costs will be
material to the financial position of the EUA System or to any individual
subsidiary and thus no loss provision is required at this time.
The Clean Air Act created new regulatory programs and generally updated and
strengthened air pollution control laws. These amendments will expand the
regulatory role of the EPA regarding emissions from electric generating
facilities and a host of other sources. EUA System generating facilities were
first affected in 1995, when EPA regulations took effect for facilities owned
by the EUA System. Montaup's coal-fired Somerset Unit #6 is utilizing lower
sulfur content coal to meet the 1995 air standards. EUA does not anticipate
the impact from the Amendments to be material to the financial position of the
EUA System.
In April 1992, the Northeast States for Coordinated Air Use Management
(NESCAUM), an environmental advisory group for eight northeast states including
Massachusetts and Rhode Island, issued recommendations for nitrogen oxide (Nox)
controls for existing utility boilers required to meet the ozone non-attainment
requirements of the Clean Air Act. The NESCAUM recommendations are more
restrictive than the Clean Air Act requirements. The Massachusetts Department
of Environmental Management has amended its regulations to require that
Reasonably Available Control Technology (RACT) be implemented at all stationary
sources potentially emitting 50 tons or more per year of NOx. Similar
regulations have been issued in Rhode Island. Montaup has initiated
compliance, through, among other things, selective noncatalytic reduction
processes.
A number of scientific studies in the past several years have examined the
possibility of health effects from electric and magnetic fields (EMF) that are
found everywhere there is electricity. While some of the studies have
indicated there may be some association between exposure to EMF and health
effects, other studies have indicated no direct association. In addition, the
research to date has not conclusively established a direct causal relationship
between EMF exposure and human health. Additional studies, which are intended
to provide a better understanding of the subject, are continuing.
Some states have enacted regulations to limit the strength of magnetic
fields at the edge of transmission line rights-of-way. Rhode Island has
enacted a statute which authorizes and directs the Energy Facility Siting Board
to establish rules and regulations governing construction of high voltage
transmission lines of 69kv or more. There is a bill pending in the
Massachusetts Legislature that would authorize the Massachusetts Department of
Public Utilities to examine the potential health effects of EMF. Management
cannot predict the ultimate outcome of the EMF issue.
Guarantee of Financial Obligations: EUA has guaranteed or entered into equity
maintenance agreements in connection with certain obligations of its
subsidiaries. EUA has guaranteed the repayment of EUA Cogenex's $35 million,
10.56% unsecured long-term notes due 2005 and EUA Ocean State's $33.5 million,
9.59% unsecured long-term notes due 2011. In addition, EUA has entered into
equity maintenance agreements in connection with the issuance of EUA Service's
10.2% Secured Notes and EUA Cogenex's 7.22% and 9.6% Unsecured Notes.
Under the December 1992 settlement agreement with EUA Power, EUA reaffirmed
its guarantee of up to $10 million of EUA Power's share of the decommissioning
costs of Seabrook Unit 1 and any costs of cancellation of Unit 1 or Unit 2. EUA
guaranteed this obligation in 1990 in order to secure the release to EUA Power
of a $10 million fund established by EUA Power at the time EUA Power acquired
its Seabrook interest. EUA has not provided a reserve for this guarantee
because management believes it unlikely that EUA will ever be required to honor
the guarantee.
Montaup is a 3.27% equity participant in two companies which own and
operate transmission facilities interconnecting New England and the Hydro
Quebec system in Canada. Montaup has guaranteed approximately $5.2 million of
the outstanding debt of these two companies. In addition, Montaup and Newport
have minimum rental commitments which total approximately $13.5 million and
$1.7 million, respectively under a noncancelable transmission facilities
support agreement for years subsequent to 1995.
Other: In December 1992, Montaup commenced a declaratory judgment action in
which it sought to have the Massachusetts Superior Court determine its rights
under the Power Purchase Agreement between it and Aquidneck Power Limited
Partnership. In April 1995 Montaup filed a motion for summary judgement and in
June 1995 the court granted Montaup's motion. In July, Aquidneck filed for
appeal of the court's decision.
Montaup, EUA and EUA Service intend to vigorously contest the appeal and
continue to believe that Aquidneck's claims have no basis in law.
EUA Cogenex, through its EUA WestCoast (WestCoast) L.P., had under
development a cogeneration facility of approximately 1.5 MW. The cogeneration
facility experienced numerous start-up delays and cost overruns. The host of
the facility has taken the position that the energy services agreement between
WestCoast and itself is terminated due to, among other things, failure to
complete the project. WestCoast disagrees with the host's right to terminate,
but has decided not to contest the host's purported termination.
In June 1993, WestCoast filed a lawsuit against the contractors responsible
for the design and construction of the facility, as well as the surety which
issued a performance bond guaranteeing construction. Certain defendants in
that action have filed cross-complaints against WestCoast and EUA Cogenex,
seeking, among other things, approximately $300,000 for payments withheld by
WestCoast due to the contractor's deficient performance, contribution and
indemnity. A contractor has also filed a cross-complaint against the host.
Additionally, the host has filed a cross-complaint against Cogenex and the
other parties in the litigation, seeking approximately $7 million in damages
arising principally from lost economic advantage. EUA WestCoast filed its own
cross complaint against the host, affirmatively seeking damages. EUA WestCoast
has secured defense from insurance carriers for the claims made by the host.
EUA Cogenex intends to vigorously prosecute its claims against the
contractors, surety and host, and defend itself against any cross-complaints.
EUA Cogenex cannot predict the ultimate resolution of this matter. As a result
of EUA Cogenex's decision to discontinue cogeneration operations effective as
of July 1, 1995, EUA Cogenex has recorded a reserve for its total investment in
this project which is included in the one-time after-tax charge to earnings of
approximately $10.5 million.
Exhibit D
EASTERN UTILITIES ASSOCIATES AND
AFFILIATED CORPORATIONS
Federal Income Tax Allocation Agreement
Pursuant to Rule 45(c). Public Utility Holding
Company Act of 1935 and I.R.C. Regulation Section
1.1552-1(A) (1) and Section 1.1502-33(d) (2) (ii)
This agreement made as of April 30, 1996, among Eastern
Utilities Associates (the designation of the trustees for
the time being under a Declaration of Trust dated April 2,
1928, as amended) (EUA); Eastern Edison Company, a
Massachusetts corporation (Eastern); Blackstone Valley
Electric Company, a Rhode Island corporation (Blackstone);
Newport Electric Corporation, a Rhode Island corporation
(Newport); Montaup Electric Company, a Massachusetts
corporation (Montaup); EUA Service Corporation, a
Massachusetts corporation (EUA Service); EUA Cogenex
Corporation, a Massachusetts corporation (Cogenex); EUA
Energy Investment Corporation, a Massachusetts corporation
(EUA Energy); EUA Ocean State Corporation, a Rhode Island
corporation (Ocean State); Eastern Unicord Corporation, a
Massachusetts corporation (Unicord); Northeast Energy
Management, Inc., a Massachusetts corporation (NEM); EUA
Transcapacity, Inc., a Massachusetts corporation
(Transcapacity); and EUA Cogenex-Canada, Inc., a Canadian
corporation (Cogenex-Canada); EUA Bioten, Inc., a Massachusetts
corporation (Bioten); EUA Highland Corporation, a Massachusetts
corporation (Highland); EUA Citizens Conservation Services, Inc.,
a Massachusetts Corporation (CCS); EUA Energy Services, Inc., a
Massachusetts Corporation (EUA ESI).
W I T N E S S E T H T H A T :
WHEREAS, the term "AFFILIATES" as used herein shall be
deemed to refer to Eastern, Blackstone, Newport, Montaup,
EUA Service, Cogenex, EUA Energy, Ocean State, Unicord, NEM,
Transcapacity, EUA Cogenex-Canada, Bioten, Highland, CCS, and EUA
ESI, the AFFILIATES together with EUA, and the CONSOLIDATED
AFFILIATES as a collective taxpaying unit is sometimes
referred to as the "GROUP" and
WHEREAS, EUA owns directly or indirectly at least 80
percent of the issued and outstanding shares of each class
of voting common stock of each of the AFFILIATES; each of
the CONSOLIDATED AFFILIATES is a member of an affiliated
group within the meaning of Section 1504 of the Internal
Revenue Code of 1954, as mended (the "Code"), of which EUA
is the common parent; and the GROUP presently participates
in the filing of a consolidated income tax return.
Definitions
A. Corporate Tax Benefit - The amount by which the
consolidated tax is reduced by including a net corporate tax
loss or other net tax benefit in the consolidated return.
The value of the benefit of the operating loss shall be
determined by applying the then current corporate income tax
rate to the amount of the loss. The value of a credit is
the actual tax savings (100%). The value of capital losses
used to offset capital gains shall be computed at the then
current tax rate applicable to capital gains for
corporations. The value of any corporate tax benefit to be
reimbursed to a member shall be reduced by the amount of any
alternate minimum tax attributable to such member.
B. Separate Return Tax - The tax on the corporate
taxable income of an associate company computed as though
such company were not a member of the consolidated group.
C. Excess Tax Credits - The investment tax credit,
alternate minimum tax credit, research and development
credit, energy tax credit or other similar credit that would
be allowable in the consolidation (were it not for a
limitation provided by law) in excess of the amount of such
credits which could be utilized on a separate return basis
with regard to such limitations.
EUA and the AFFILIATES agree as follows:
Allocation Procedures in Accordance with I.R.C Regulation
Sections 1.1552-1(A) (I) and 1.1502-33(d) (2) (ii)
A. General Rule
Step 1 - The consolidated tax liability shall be
apportioned among the companies in the ratio that each
member's separate taxable income bears to the sum of the
separate taxable incomes of all members having taxable
income.
Step 2 - An additional amount will be allocated to the
members at 100% of the excess of the member's separate tax
liability over the consolidated tax liability allocated to
the member under Step 1. Under no circumstances shall the
tax allocated to a member exceed its separate tax liability.
Step 3 - The total of the amounts allocated under Step
2 is credited to those members who had "corporate tax
benefits" as follows:
(a) Those members having a negative allocation under
Step 2;
(b) If the total of the "corporate tax benefits" is
greater than the total reduction in the consolidated tax,
then the benefits arising from the inclusion of negative
taxable incomes in the consolidated return shall be
recognized and paid prior to the benefits arising from
excess tax credits.
(c) If the total benefits attributable to the negative
taxable incomes of the members are not absorbed in the
consolidated return, the benefit allocated to each company
shall be in proportion to their respective negative taxable
incomes.
(d) If the total benefits attributable to the excess
tax credits are not applied in the consolidated return, the
benefit allocated to each company shall be in proportion to
their respective excess tax credits.
Step 4 - If the total consolidated tax liability shall
result in an "Alternative Minimum Tax" liability position
then an additional amount will be added to Steps 1 and 2.
This additional amount will be allocated to the members
based upon their proportionate amounts of alternate minimum
taxable income until such time as the proposed amendments to
the income tax regulations under Sections 53 to 59, 1502 and
1552 of the Internal Revenue Code become effective.
Subsequent to the effective date of the new regulations, the
alternate minimum tax liability will be allocated in
accordance with the approved regulations provided that such
regulations prohibit the use of the net positive alternate
minimum taxable income allocation method.
Step 5 - Reimbursement - Benefiting members will
reimburse the others no later than 90 days after the filing
of the consolidated tax return.
B. Unused Corporate Tax Benefits
A member that is entitled to payment for a tax benefit,
but does not receive such payment because of the rules in
Step 3 shall retain such right for the future to the extent
that such benefit can be applied against the consolidated
tax liability. Uncompensated corporate tax benefits arising
from negative taxable income shall have priority over the
benefits attributable to excess tax credits.
C. Tax Adjustments
In the event of any adjustments to the tax returns of
any of the CONSOLIDATED AFFILIATES filed (by reason of an
amended return, a claim for refund or an audit by the
Internal Revenue Service), the liability, if any, of each of
the AFFILIATES under Section A shall be redetermined to give
effect to any such adjustment as if it had been made as part
of the original computation of tax liability, and payments
between EUA and the appropriate AFFILIATES shall be made
within 120 days after any such payments are made or refunds
are received, or, in the case of contested proceedings,
within 120 days after a final determination of the contest.
Interest and penalties, if any, attributable to such an
adjustment shall be paid by each AFFILIATE to EUA in
proportion to the increase in such AFFILIATE's separate
return tax liability computed under Section A of this
Agreement that is required to be paid to EUA. In any
situation in which the Group's tax liability is adjusted by
a revenue agent's report or a court settlement and an item-by-item
modification is not made, the Group shall consult its accountants
for assistance in determining a fair allocation of the adjusted
liability.
D. Subsidiaries of Affiliates
If at any time, any of the AFFILIATES acquires or
creates one or more subsidiary corporations that are
includible corporations of the Group, they shall be subject
to this Agreement and all references to the AFFILIATES
herein shall be interpreted to include such subsidiaries as
a group.
E. Successors
This Agreement shall be binding on and insure to the
benefit of any successor, by merger, acquisition of assets
or otherwise, to any of the parties hereto (including but
not limited to any successor of EUA or any of the AFFILIATES
succeeding to the tax attributes of such corporation under
Section 381 of the Code) to the same extent as if such
successor had been an original party to this agreement.
F. Special Rule
In making the tax allocations provided for in this
agreement, notwithstanding any of the foregoing, no
corporate tax benefits shall be allocated to EUA. Although
the separate corporate taxable income or taxable loss of EUA
and any tax credits attributable to EUA will be included in
the consolidated return, only the tax savings attributable
to such items shall be allocated to the other AFFILIATES as
if EUA were not a member of the Group. In making this
allocation, the tax savings of EUA shall be allocated only
to members of the Group having taxable income.
Also, in making the tax allocations, only those tax
consequences attributable to non-affiliated transactions
shall be allocated to EUA Service Corporation in accordance
with Section A of this Agreement. All others will be
allocated to the other AFFILIATES.
G. Termination Clause
This Agreement shall apply to the taxable year ending
December 31, 1996, unless all of the members of the Group
agree in writing to terminate the Agreement prior to the end
of the taxable year. The Agreement shall be renewable on a
year to year basis for subsequent taxable years, provided
all of the members of the Group agree in writing, prior to
the end of the immediately preceding taxable year, to extend
the Agreement one additional year. Notwithstanding any
termination, this Agreement shall continue in effect with
respect to any payment or refunds due for all taxable
periods prior to termination.
IN WITNESS WHEREOF, the duly authorized representatives
of the parties have set their hands this 30th day of April,
1996.
EASTERN UTILITIES ASSOCIATES
By /s/ Donald G. Pardus
Title: Chairman of the Board
EASTERN EDISON COMPANY EUA COGENEX CORPORATION
By /s/ John D. Carney By /s/ Edward T. Liston
Title: President Title: President
BLACKSTONE VALLEY ELECTRIC EUA ENERGY INVESTMENT
COMPANY CORPORATION
By /s/ John D. Carney By /s/ Clifford J. Hebert, Jr.
Title: President Title: Treasurer
MONTAUP ELECTRIC COMPANY EUA OCEAN STATE CORPORATION
By /s/ Kevin A. Kirby By /s/ Clifford J. Hebert, Jr.
Title: Vice President Title: Treasurer
EUA SERVICE CORPORATION EUA UNICORD CORPORATION
By /s/ John R. Stevens By /s/ Clifford J. Hebert, Jr.
Title: President Title: Clerk
NEWPORT ELECTRIC COMPANY NORTHEAST ENERGY MANAGEMENT, INC.
By /s/ John D. Carney By /s/ Basil G. Pallone
Title: President Title: Vice President
EUA COGENEX-CANADA, INC. EUA BIOTEN, INC.
By /s/ Mark S. White By /s/ Clifford J. Hebert, Jr.
Title: Asst. Treasurer Title: Treasurer
EUA TRANSCAPACITY, INC. EUA HIGHLAND CORPORATION
By /s/ Robert G. Powderly By /s/ Mark S. White
Title: Ex. Vice President Title: Vice President
EUA ENERGY SERVICES, INC. EUA CITIZENS CONSERVATION
By /s/ Kevin A. Kirby SERVICES, INC.
Title: Vice President By /s/ Stephen Morgan
Title: President
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> UT
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 721,086
<OTHER-PROPERTY-AND-INVEST> 219,714
<TOTAL-CURRENT-ASSETS> 135,419
<TOTAL-DEFERRED-CHARGES> 124,054
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 1,200,273
<COMMON> 102,184
<CAPITAL-SURPLUS-PAID-IN> 216,817
<RETAINED-EARNINGS> 56,228
<TOTAL-COMMON-STOCKHOLDERS-EQ> 375,229
26,218
6,937
<LONG-TERM-DEBT-NET> 434,871
<SHORT-TERM-NOTES> 39,540
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 19,506
50
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 297,922
<TOT-CAPITALIZATION-AND-LIAB> 1,200,273
<GROSS-OPERATING-REVENUE> 563,363
<INCOME-TAX-EXPENSE> 17,015
<OTHER-OPERATING-EXPENSES> 474,620
<TOTAL-OPERATING-EXPENSES> 491,635
<OPERATING-INCOME-LOSS> 71,728
<OTHER-INCOME-NET> 4,677
<INCOME-BEFORE-INTEREST-EXPEN> 76,405
<TOTAL-INTEREST-EXPENSE> 41,458
<NET-INCOME> 34,947
2,321
<EARNINGS-AVAILABLE-FOR-COMM> 32,626
<COMMON-STOCK-DIVIDENDS> 32,050
<TOTAL-INTEREST-ON-BONDS> 38,216
<CASH-FLOW-OPERATIONS> 112,962
<EPS-PRIMARY> 1.61
<EPS-DILUTED> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> UT
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 88,480
<OTHER-PROPERTY-AND-INVEST> 47
<TOTAL-CURRENT-ASSETS> 19,833
<TOTAL-DEFERRED-CHARGES> 15,618
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 123,978
<COMMON> 9,203
<CAPITAL-SURPLUS-PAID-IN> 17,908
<RETAINED-EARNINGS> 9,934
<TOTAL-COMMON-STOCKHOLDERS-EQ> 37,045
0
6,130
<LONG-TERM-DEBT-NET> 36,500
<SHORT-TERM-NOTES> 1,259
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 1,500
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 41,544
<TOT-CAPITALIZATION-AND-LIAB> 123,978
<GROSS-OPERATING-REVENUE> 140,861
<INCOME-TAX-EXPENSE> 2,347
<OTHER-OPERATING-EXPENSES> 130,177
<TOTAL-OPERATING-EXPENSES> 132,524
<OPERATING-INCOME-LOSS> 8,337
<OTHER-INCOME-NET> (5)
<INCOME-BEFORE-INTEREST-EXPEN> 8,332
<TOTAL-INTEREST-EXPENSE> 4,034
<NET-INCOME> 4,298
289
<EARNINGS-AVAILABLE-FOR-COMM> 4,009
<COMMON-STOCK-DIVIDENDS> 4,144
<TOTAL-INTEREST-ON-BONDS> 3,481
<CASH-FLOW-OPERATIONS> 10,020
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> UT
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 557,033
<OTHER-PROPERTY-AND-INVEST> 15,978
<TOTAL-CURRENT-ASSETS> 79,122
<TOTAL-DEFERRED-CHARGES> 87,065
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 739,198
<COMMON> 72,284
<CAPITAL-SURPLUS-PAID-IN> 47,206
<RETAINED-EARNINGS> 124,878
<TOTAL-COMMON-STOCKHOLDERS-EQ> 244,368
26,218
0
<LONG-TERM-DEBT-NET> 222,313
<SHORT-TERM-NOTES> 4,158
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 7,000
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 235,141
<TOT-CAPITALIZATION-AND-LIAB> 739,198
<GROSS-OPERATING-REVENUE> 420,069
<INCOME-TAX-EXPENSE> 15,653
<OTHER-OPERATING-EXPENSES> 352,184
<TOTAL-OPERATING-EXPENSES> 367,837
<OPERATING-INCOME-LOSS> 52,232
<OTHER-INCOME-NET> 2,526
<INCOME-BEFORE-INTEREST-EXPEN> 54,758
<TOTAL-INTEREST-EXPENSE> 21,315
<NET-INCOME> 33,443
1,988
<EARNINGS-AVAILABLE-FOR-COMM> 31,455
<COMMON-STOCK-DIVIDENDS> 11,190
<TOTAL-INTEREST-ON-BONDS> 18,277
<CASH-FLOW-OPERATIONS> 56,711
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> UT
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 55,290
<OTHER-PROPERTY-AND-INVEST> 0
<TOTAL-CURRENT-ASSETS> 8,893
<TOTAL-DEFERRED-CHARGES> 4,088
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 68,271
<COMMON> 11,368
<CAPITAL-SURPLUS-PAID-IN> 8,258
<RETAINED-EARNINGS> 1,621
<TOTAL-COMMON-STOCKHOLDERS-EQ> 21,247
0
808
<LONG-TERM-DEBT-NET> 21,291
<SHORT-TERM-NOTES> 1,344
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 730
50
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 22,801
<TOT-CAPITALIZATION-AND-LIAB> 68,271
<GROSS-OPERATING-REVENUE> 61,126
<INCOME-TAX-EXPENSE> 1,269
<OTHER-OPERATING-EXPENSES> 56,169
<TOTAL-OPERATING-EXPENSES> 57,438
<OPERATING-INCOME-LOSS> 3,688
<OTHER-INCOME-NET> 457
<INCOME-BEFORE-INTEREST-EXPEN> 4,145
<TOTAL-INTEREST-EXPENSE> 2,051
<NET-INCOME> 2,094
45
<EARNINGS-AVAILABLE-FOR-COMM> 2,049
<COMMON-STOCK-DIVIDENDS> 2,540
<TOTAL-INTEREST-ON-BONDS> 1,641
<CASH-FLOW-OPERATIONS> 5,091
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
