Form U-13-60
Mutual and Subsidiary Service Companies
Revised February 7, 1980
ANNUAL REPORT
FOR THE PERIOD
Beginning January 1, 1997 and Ending December 31, 1997
TO THE
U.S. SECURITIES AND EXCHANGE COMMISSION
OF
EUA Service Corporation
(Exact Name of Reporting Company)
A Subsidiary SERVICE COMPANY
("Mutual" or "Subsidiary")
Date of Incorporation January 1, 1971.
If not Incorporated, Date of Organization _______________.
State or Sovereign Power under which Incorporated or Organized Massachusetts
Location of Principal Executive Offices of Reporting Company:
1 Liberty Square, Boston, Massachusetts 02107
Name, title, and address of officer to whom correspondence concerning this
report should be addressed:
Richard M. Burns_ Vice President & Comptroller 1 Liberty Sq. Boston MA 02107
(Name) (Title) (Address)
Name of Principal Holding Company Whose Subsidiaries are served by Reporting
Company:
Eastern Utilities Associates
Total Number of Pages __41__
SEC 19216 (6-82)
*NEW PAGE*
INSTRUCTIONS FOR USE OF FORM U-13-60
1. Time of Filing -- Rule 94 provides that on or before the first day
of May in each calendar year, each mutual service company and each subsidiary
service company as to which the Commission shall have made a favorable finding
pursuant to Rule 88, and every service company whose application for approval
or declaration pursuant to Rule 88 is pending shall file with the Commission
an annual report on Form U-13-60 and in accordance with the Instructions for
that form.
2. Number of Copies -- Each annual report shall be filed in
duplicate. The company should prepare and retain at least one extra copy for
itself in case correspondence with reference to the report becomes necessary.
3. Period Covered by Report -- The first report filed by any company
shall cover the period from the date the Uniform System of Accounts was
required to be made effective as to that company under Rules 82 and 93 to the
end of that calendar year. Subsequent reports should cover a calendar year.
4. Report Format -- Reports shall be submitted on the forms prepared
by the Commission. If the space provided on any sheet of such form is
inadequate, additional sheets may be inserted of the same size as a sheet of
the form or folded to such size.
5. Money Amounts Displayed -- All money amounts required to be shown
in financial statements may be expressed in whole dollars, in thousands of
dollars or in hundred thousands of dollars, as appropriate and subject to
provisions of Regulation S-X >210.3-01(b).
6. Deficits Displayed -- Deficits and other like entries shall be
indicated by the use of either brackets or a parenthesis with corresponding
reference in footnotes. Regulation S-X, >210.3(c).
7. Major Amendments or Corrections -- Any company desiring to amend or
correct a major omission or error in a report after it has been filed with the
Commission shall submit an amended report including only those pages,
schedules, and entries that are to be amended or corrected. A cover letter
shall be submitted requesting the Commission to incorporate the amended report
changes and shall be signed by a duly authorized officer of the company.
8. Definitions -- Definitions contained in Instruction 01-8 to the
Uniform System of Accounts for Mutual Service Companies and Subsidiary Service
Companies, Public Utility Holding Company Act of 1935, as amended February 2,
1979 shall be applicable to words or terms used specifically within this Form
U-13-60.
9. Organization Chart -- The service company shall submit with each
annual report a copy of its current organization chart.
10. Methods of Allocation -- The service company shall submit with each
annual report a listing of the currently effective methods of allocation being
used by the service company and on file with the Securities and Exchange
Commission pursuant to the Public Utility Holding Company Act of 1935.
11. Annual Statement of Compensation for Use of Capital Billed -- The
service company shall submit with each annual report a copy of the annual
statement supplied to each associate company in support of the amount of
compensation for use of capital billed during the calendar year.
LISTING OF SCHEDULES AND ANALYSIS OF ACCOUNTS
Schedule or Page
Description of Schedules and Accounts Acct. No. No.
COMPARATIVE BALANCE SHEET Schedule I 4-5
SERVICE COMPANY PROPERTY Schedule II 6-7
ACCUMULATED PROVISION FOR DEPRECIATION AND
AMORTIZATION OF SERVICE COMPANY PROPERTY Schedule III 8
INVESTMENTS Schedule IV 9
ACCOUNTS RECEIVABLE FROM ASSOCIATE COMPANIES Schedule V 10
FUEL STOCK EXPENSE UNDISTRIBUTED Schedule VI 11
STORES EXPENSE UNDISTRIBUTED Schedule VII 12
MISCELLANEOUS CURRENT AND ACCRUED ASSETS Schedule VIII 13
MISCELLANEOUS DEFERRED DEBITS Schedule IX 14
RESEARCH, DEVELOPMENT, OR DEMONSTRATION
EXPENDITURES Schedule X 15
PROPRIETARY CAPITAL Schedule XI 16
LONG-TERM DEBT Schedule XII 17
CURRENT AND ACCRUED LIABILITIES Schedule XIII 18
NOTES TO FINANCIAL STATEMENTS Schedule XIV 19
COMPARATIVE INCOME STATEMENT Schedule XV 20
ANALYSIS OF BILLING - ASSOCIATE COMPANIES Account 457 21
ANALYSIS OF BILLING - NON-ASSOCIATE COMPANIES Account 458 22
ANALYSIS OF CHARGES FOR SERVICE - ASSOCIATE AND
NON-ASSOCIATE COMPANIES Schedule XVI 23
SCHEDULE OF EXPENSE BY DEPARTMENT OR SERVICE
FUNCTION Schedule XVII 24-27
DEPARTMENTAL ANALYSIS OF SALARIES Account 920 28
OUTSIDE SERVICES EMPLOYED Account 923 29
EMPLOYEE PENSIONS AND BENEFITS Account 926 30
GENERAL ADVERTISING EXPENSES Account 930.1 31
MISCELLANEOUS GENERAL EXPENSES Account 930.2 32
RENTS Account 931 33
TAXES OTHER THAN INCOME Account 408 34
DONATIONS Account 426.1 35
OTHER DEDUCTIONS Account 426.5 36
NOTES TO STATEMENT OF INCOME Schedule XVIII 37
LISTING OF INSTRUCTIONAL FILING REQUIREMENTS
Page
Description of Reports or Statements No.
ORGANIZATION CHART 38
METHODS OF ALLOCATION 39
ANNUAL STATEMENT OF COMPENSATION FOR
USE OF CAPITAL BILLED 40
SIGNATURE CLAUSE 41
<TABLE>
ANNUAL REPORT OF EUA SERVICE CORPORATION
SCHEDULE I - COMPARATIVE BALANCE SHEET
Give balance sheet of the Company as of December 31 of the current and
prior year.
<CAPTION>
ACCOUNT ASSETS AND OTHER DEBITS AS OF DECEMBER 31, 1997
CURRENT PRIOR
SERVICE COMPANY PROPERTY
<S> <C> <C> <C> <C>
101 Service company property (Schedule II) 33,360,786 32,924,212
101.1 Property under capital leases - Net 1,570,121 2,049,104
[Page 19C Footnote D]
107 Construction work in progress (Schedule II) 1,987,924 133,826
Total Property 36,918,831 35,107,142
111 & Less accumulated provision for depreciation
108 and amortization of service company
property (Schedule III) 13,975,450 12,719,559
Net Service Company Property 22,943,381 22,387,583
INVESTMENTS
123 Investments in associate companies
(Schedule IV)
124 Other Investments (Schedule IV)
Total Investments
CURRENT AND ACCRUED ASSETS
131 Cash 1,769 1,769
134 Special deposits 40,925 40,925
135 Working funds 15,825 19,826
136 Temporary cash investments (Schedule IV) 1,050,000 4,025,000
141 Notes receivable
143 Accounts receivable 357,557 699,882
144 Accumulated provision of uncollectible accounts
146 Accounts receivable from associate
companies (Schedule V) 10,818,690 4,738,260
152 Fuel stock expenses undistributed (Schedule VI)
154 Materials and supplies 56,752 50,823
163 Stores expense undistributed (Schedule VII) 2,478 1,678
165 Prepayments 389,376 585,853
171 Interest Receivable 601
174 Misc Current and Accrued Assets (Schedule VIII)
Total Current and Accrued Assets 12,733,372 10,164,617
DEFERRED DEBITS
181 Unamortized debt expense 60,013 84,396
182.3 Other regulatory assets 177,850 180,699
184 Clearing accounts
186 Miscellaneous deferred debits (Schedule IX) 472,388 818,291
188 Research, development, or demonstration
expenditures (Schedule X)
190 Accumulated deferred income taxes 75,793 208,286
Total Deferred Debits 786,044 1,291,672
TOTAL ASSETS AND OTHER DEBITS 36,462,797 33,843,872
</TABLE>
<TABLE>
ANNUAL REPORT OF EUA SERVICE CORPORATION
SCHEDULE I - COMPARATIVE BALANCE SHEET
<CAPTION>
ACCOUNT LIABILITIES AND PROPRIETARY CAPITAL AS OF DECEMBER 31, 1997
CURRENT PRIOR
PROPRIETARY CAPITAL
<S> <C> <C> <C> <C>
201 Common stock issued (Schedule XI) 1,000 1,000
211 Miscellaneous paid-in-capital (Schedule XI) 2,300,000 2,500,000
215 Appropriated retained earnings (Schedule XI)
216 Unappropriated retained earnings (Schedule XI) 594,346 719,835
Total Proprietary Capital 2,895,346 3,220,835
LONG-TERM DEBT
223 Advances from associate companies (Schedule XII)
2240.1 Other long-term debt (Schedule XII) 6,800,000 9,000,000
225 Unamortized premium on long-term debt
226 Unamortized discount on long-term debt-debit
Total Long-Term Debt 6,800,000 9,000,000
227 Obligations under capital leases - non current 849,838 1,188,957
CURRENT AND ACCRUED LIABILITIES
2240.2 Current Maturities - Long-Term Debt 1,100,000 1,100,000
231 Notes payable
232 Accounts payable 971,635 883,757
233 Notes payable to associate companies
(Schedule XIII)
234 Accounts payable to associate companies
(Schedule XIII) 140,448 529,267
236 Taxes accrued 13,088 5,687
237 Interest accrued 402,900 522,968
238 Dividends declared
241 Tax collections payable 8,092 1,659
242 Miscellaneous current and accrued
liabilities (Schedule XIII) 1,372,472 68,708
243 Obligations under capital leases - current 720,282 860,147
Total Current and Accrued Liabilities 4,728,917 3,972,193
DEFERRED CREDITS
253 Other deferred credits 19,698,641 14,746,052
254 Regulatory liabilities 2,622 13,128
255 Accumulated deferred investment tax credits
Total Deferred Credits 19,701,263 14,759,180
282 & 283 ACCUMULATED DEFERRED INCOME TAXES 1,487,433 1,702,707
TOTAL LIABILITIES & PROPRIETARY CAPITAL 36,462,797 33,843,872
</TABLE>
<TABLE>
ANNUAL REPORT OF EUA SERVICE CORPORATION
For the Year Ended December 31, 1997
SCHEDULE II - SERVICE COMPANY PROPERTY
<CAPTION>
BALANCE AT RETIREMENTS BALANCE
BEGINNING OR OTHER (1)/ AT CLOSE
DESCRIPTION OF YEAR ADDITIONS SALES CHANGES OF YEAR
<S> <C> <C> <C> <C> <C> <C>
SERVICE COMPANY PROPERTY
Account
301 ORGANIZATION 9,040 9,040
303 MISCELLANEOUS
INTANGIBLE PLANT 1,699,223 1,699,223
304 LAND & LAND RIGHTS 717,080 717,080
305 STRUCTURES AND
IMPROVEMENTS 18,030,037 112,583 18,142,620
306 LEASEHOLD 542,449 542,449
IMPROVEMENTS
307 EQUIPMENT (2)/ 7,857,063 320,509 15,954 8,161,618
308 OFFICE FURNITURE
AND EQUIPMENT 4,069,320 19,436 4,088,756
309 AUTOMOBILES,
OTHER VEHICLES
AND RELATED
GARAGE EQUIPMENT
310 AIRCRAFT & AIRPORT
EQUIPMENT
311 OTHER SERVICE
COMPANY
PROPERTY (3)/
SUB-TOTAL 32,924,212 452,528 15,954 33,360,786
107 CONSTRUCTION
WORK IN
PROGRESS (4)/ 133,826 1,854,098 1,987,924
TOTAL 33,058,038 452,528 15,954 1,854,098 35,348,710
(1)/ PROVIDE AN EXPLANATION OF THOSE CHANGES CONSIDERED MATERIAL:
</TABLE>
<TABLE>
SCHEDULE II - CONTINUED
(2)/ SUBACCOUNTS ARE REQUIRED FOR EACH CLASS OF EQUIPMENT OWNED. THE SERVICE
COMPANY SHALL PROVIDE A LISTING BY SUBACCOUNT OF EQUIPMENT ADDITIONS
DURING THE YEAR AND THE BALANCE AT THE CLOSE OF THE YEAR:
<CAPTION>
BALANCE
NET AT CLOSE
SUBACCOUNT DESCRIPTION ADDITIONS OF YEAR
<S> <C> <C> <C>
110 Cellular Phone Equipment 2,731
131 Word Processing Equipment 16,572
133 Data Processing Equipment (15,954) 1,351,994
120 Consumer Service Equipment 5,522
215 Human Resources Equipment 960 960
230 Occupational Health & Safety Equipment 40,403 40,403
240 Office Services Equipment 450
310 Employee Communication/Visual Aids Equipment 71,013
325 Community Relations Equipment 2,441
364 Purchasing/Material Management Equipment 111,199
372 Energy Management Equipment 26,201
417 Treasury Department Equipment 20,117
422 Rate and Revenue Research Equipment 49,554
427 Accounting Systems Equipment 1,736
441 Customer & Consumer Service Equipment 218,761
452 West Bridgewater Building Equipment 57,011
565 Meter Testing Equipment 2,625 86,113
572 Electrical Systems Equipment 53,809
573 Distribution Engineering Equipment 10,934 10,934
574 Engineering Equipment 179,218
587 Vegetation Management Equipment 5,170 5,170
581/5 Substation/Communication Equipment 226,211 812,721
583 Radio/Microwave Equipment 17,171 34,232
610 Transmission & Distribution Equipment 798
617 OPS Training Facility Equipment 7,701 7,701
620 Line Equipment 2,048 2,048
650 URD Line Equipment 7,286 12,286
000 Microwave Equipment 4,979,923
TOTAL 304,555 8,161,618
(3)/ DESCRIBE OTHER SERVICE COMPANY PROPERTY:
NONE
(4)/ DESCRIBE CONSTRUCTION WORK IN PROGRESS:
CSS Regulation Upgrade 1,961,987
Overhead Line Training Facility
Office Furniture & Equipment 25,938
-----------
TOTAL 1,987,925
===========
</TABLE>
<TABLE>
ANNUAL REPORT OF EUA Service Corporation
For the Year Ended December 31, 1997
SCHEDULE III
ACCUMULATED PROVISION FOR DEPRECIATION AND
AMORTIZATION OF SERVICE COMPANY PROPERTY
<CAPTION>
ADDITIONS OTHER
BALANCE AT CHARGED TO CHANGES BALANCE
BEGINNING ACCOUNTS ADD AT CLOSE
DESCRIPTION OF YEAR 403 & 405 RETIREMENTS (DEDUCT) 1/ OF YEAR
<S> <C> <C> <C> <C> <C> <C>
Account
301 ORGANIZATION
303 MISCELLANEOUS
INTANGIBLE PLANT 1,380,774 181,487 1,562,261
304 LAND AND LAND RIGHTS
305 STRUCTURES AND
IMPROVEMENTS 3,563,055 452,158 4,015,213
306 LEASEHOLD
IMPROVEMENTS 542,448 542,448
307 EQUIPMENT 5,079,187 514,828 15,954 5,578,061
308 OFFICE FURNITURE
AND FIXTURES 2,154,095 123,372 2,277,467
309 AUTOMOBILES, OTHER
VEHICLES AND RELATED
GARAGE EQUIPMENT
310 AIRCRAFT AND AIRPORT
EQUIPMENT
311 OTHER SERVICE
COMPANY PROPERTY
12,719,559 1,271,845 15,954 13,975,450
(1)/ PROVIDE AN EXPLANATION OF THOSE CHANGES CONSIDERED MATERIAL:
</TABLE>
<TABLE>
ANNUAL REPORT OF EUA Service Corporation
For the Year Ended December 31, 1997
SCHEDULE IV - INVESTMENTS
INSTRUCTIONS: Complete the following schedule concerning investments.
Under Account 124 "Other Investments", state each investment
separately, with description, including, the name of issuing
company, number of shares or principal amount, etc.
Under Account 136, "Temporary Cash Investments", list each
investment separately.
<CAPTION>
BALANCE AT BALANCE
BEGINNING AT CLOSE
D E S C R I P T I O N OF YEAR OF YEAR
<S> <C> <C> <C>
ACCOUNT 123 - INVESTMENT IN ASSOCIATE COMPANIES
NONE
ACCOUNT 124 - OTHER INVESTMENTS
NONE
ACCOUNT 136 - TEMPORARY CASH INVESTMENTS
Shawmut Bank, N.A. 4,025,000 1,050,000
TOTAL 4,025,000 1,050,000
</TABLE>
<TABLE>
ANNUAL REPORT OF EUA Service Corporation
For the Year Ended December 31, 1997
SCHEDULE V - ACCOUNTS RECEIVABLE FROM ASSOCIATE COMPANIES
INSTRUCTIONS: Complete the following schedule listing accounts receivable
from each associate company. Where the service company has provided
accommodation or convenience payments for associate companies, a separate
listing of total payments for each associate company by subaccount should be
provided.
<CAPTION>
BALANCE AT BALANCE
BEGINNING AT CLOSE
D E S C R I P T I O N OF YEAR OF YEAR
<S> <C> <C> <C>
ACCOUNT 146 - ACCOUNTS RECEIVABLE FROM
ASSOCIATE COMPANIES
Blackstone Valley Electric Co. 747,369 1,592,656
Eastern Utilities Associates 34,094 36,855
Montaup Electric Company 828,490 2,572,673
Eastern Edison Company 2,469,220 3,921,563
EUA Cogenex Corporation (Including Divisions) 171,120 422,597
EUA Energy Investment Corporation 22,683 21,855
EUA Ocean State Corporation 19,346 25,277
Newport Electric Corporation 427,375 2,163,802
EUA Transcapacity 8,554 15,644
EUA Bioten 9,879 27,807
EUA Energy Services 130 5,579
EUA Compression Services 312
EUA Telecommunication 12,070
TOTAL ACCOUNTS RECEIVABLE 4,738,260 10,818,690
ANALYSIS OF CONVENIENCE OR ACCOMMODATION PAYMENTS:
TOTAL
Analysis by Company: PAYMENTS
Blackstone Valley Electric Co. 1,936,561
Eastern Utilities Associates 90,908
Montaup Electric Company 1,329,440
Eastern Edison Company 4,746,001
EUA Cogenex Corporation (Including Divisions) 274,102
EUA Energy Investment Corporation 5,313
EUA Ocean State Corporation 3,401
Newport Electric Corporation 774,928
EUA Transcapacity (306)
EUA Energy Services 3,517
EUA Telecommunication 90
TOTAL PAYMENTS 9,163,955
</TABLE>
Convenience payments paid by the Service Corporation on behalf of associated
companies were primarily for equipment leasing, postage, commitment fees,
advertising, outside services and insurance plans.
<TABLE>
ANNUAL REPORT OF EUA Service Corporation
For the Year Ended December 31, 1997
SCHEDULE VI - FUEL STOCK EXPENSES UNDISTRIBUTED
INSTRUCTIONS: Report the amount of labor and expenses incurred with respect
to fuel stock expenses during the year and indicate amount attributable to
each associate company. Under the section headed "Summary" listed below,
give an overall report of the fuel functions performed by the service company.
<CAPTION>
D E S C R I P T I O N LABOR EXPENSES TOTAL
<S> <C> <C> <C> <C>
ACCOUNT 152 - FUEL STOCK EXPENSES
UNDISTRIBUTED
NONE
TOTAL
SUMMARY:
</TABLE>
<TABLE>
ANNUAL REPORT OF EUA Service Corporation
For the Year Ended December 31, 1997
SCHEDULE VII - STORES EXPENSE UNDISTRIBUTED
INSTRUCTIONS: Report the amount of labor and expenses incurred with respect
to stores expense during the year and indicate amount attributable to each
associate company.
<CAPTION>
D E S C R I P T I O N LABOR EXPENSES TOTAL
<S> <C> <C> <C> <C>
ACCOUNT 163 - STORES EXPENSE UNDISTRIBUTED
Stores expense incurred during year
distributed as follows: 18,079 18,079
Blackstone Valley Electric (2,911) (2,911)
Montaup Electric Company (4,254) (4,254)
Eastern Edison Company (6,066) (6,066)
Newport Electric Corporation (2,370) (2,370)
TOTAL 2,478 2,478
</TABLE>
<TABLE>
ANNUAL REPORT OF EUA Service Corporation
For the Year Ended December 31, 1997
SCHEDULE VIII
MISCELLANEOUS CURRENT AND ACCRUED ASSETS
INSTRUCTIONS: Provide detail of items in this account. Items less than
$10,000 may be grouped, showing the number of items in each group.
<CAPTION>
BALANCE AT BALANCE
BEGINNING AT CLOSE
D E S C R I P T I O N OF YEAR OF YEAR
<S> <C> <C> <C>
ACCOUNT 174 - MISCELLANEOUS CURRENT AND
ACCRUED ASSETS
NONE
TOTAL
</TABLE>
<TABLE>
ANNUAL REPORT OF EUA Service Corporation
For the Year Ended December 31, 1997
SCHEDULE IX - MISCELLANEOUS DEFERRED DEBITS
INSTRUCTIONS: Provide detail of items in this account. Items less than
$10,000 may be grouped by class showing the number of items in each class.
<CAPTION>
BALANCE AT BALANCE
BEGINNING AT CLOSE
D E S C R I P T I O N OF YEAR OF YEAR
<S> <C> <C> <C>
ACCOUNT 186 - MISCELLANEOUS DEFERRED DEBITS
Computer Graphics System 12,557
MFT Assessment 590,128
Post -Retirement Benefits Other Than Pensions 208,362 459,624
Miscellaneous Deferred Debits (3) 7,243 12,764
TOTAL 818,290 472,388
</TABLE>
<TABLE>
ANNUAL REPORT OF EUA Service Corporation
For the Year Ended December 31, 1997
SCHEDULE X
RESEARCH, DEVELOPMENT OR DEMONSTRATION EXPENDITURES
INSTRUCTIONS: Provide a description of each material research, development,
or demonstration project which incurred costs by the service corporation
during the year.
<CAPTION>
D E S C R I P T I O N AMOUNT
<S> <C> <C>
ACCOUNT 188 - RESEARCH, DEVELOPMENT, OR DEMONSTRATION
EXPENDITURES
NONE
TOTAL
</TABLE>
<TABLE>
ANNUAL REPORT OF EUA Service Corporation
For the Year Ended December 31, 1997
SCHEDULE XI - PROPRIETARY CAPITAL
<CAPTION>
NUMBER OF PAR OR STATED OUTSTANDING CLOSE OF PERIOD
ACCOUNT SHARES VALUE NO. OF TOTAL
NUMBER CLASS OF STOCK AUTHORIZED PER SHARE SHARES AMOUNT
<S> <C> <C> <C> <C> <C>
COMMON
201 STOCK ISSUED 5,000 $10.00 100 $1,000
INSTRUCTIONS: Classify amounts in each account with brief explanation,
disclosing the general nature of transactions which give rise to the
reported amounts.
</TABLE>
<TABLE>
<CAPTION>
DESCRIPTION AMOUNT
<S> <C> <C> <C> <C> <C>
ACCOUNT 211 - MISCELLANEOUS PAID-IN CAPITAL $2,300,000
ACCOUNT 215 - APPROPRIATED RETAINED EARNINGS
(1) See Schedule XIV Notes to Financial Statements, Page 19C.
TOTAL $2,300,000
INSTRUCTIONS: Give particulars concerning net income or (loss) during the
year, distinguishing between compensation for the use of capital owed or
net loss remaining from servicing non-associates per the General Instructions
of the Uniform System of Accounts. For dividends paid during the year in cash
or otherwise, provide rate percentage, amount of dividend, date declared and
date paid.
</TABLE>
<TABLE>
<CAPTION>
BALANCE
BALANCE AT NET INCOME AT
BEGINNING OR DIVIDENDS CLOSE
DESCRIPTION OF YEAR (LOSS) PAID OF YEAR
<S> <C> <C> <C> <C> <C>
ACCOUNT 216 - UNAPPROPRIATED
RETAINED EARNINGS 719,835 274,511 400,000 594,346
TOTAL 719,835 274,511 400,000 594,346
</TABLE>
<TABLE>
ANNUAL REPORT OF EUA Service Corporation
For the Year Ended December 31, 1997
SCHEDULE XII - LONG-TERM DEBT
INSTRUCTIONS: Advances from associate companies should be reported separately
for advances on notes and advances on open account. Names of associate
companies from which advances were received shall be shown under the class
and series of obligation column. For Account 224 -Other Long-Term Debt,
provide the name of creditor company or organization, terms of the obligation,
date of maturity, interest rate, and the amount authorized and outstanding.
<CAPTION>
DATE BALANCE AT BALANCE AT
CLASS & SERIES OF INTEREST AMOUNT BEGINNING 1/ CLOSE
NAME OF CREDITOR OF OBLIGATION MATURITY RATE AUTHORIZED OF YEAR ADDITIONS DEDUCTIONS OF YEAR
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ACCOUNT 223 -
ADVANCES
FROM
ASSOCIATE
COMPANIES
ACCOUNT 224 -
OTHER LONG- Senior
TERM DEBT Secured Note 2,008 10.20% 20,000,000 9,000,000 2,200,000 6,800,000
TOTAL 2,008 10.20% 20,000,000 9,000,000 2,200,000 6,800,000
1/ GIVE AN EXPLANATION OF DEDUCTIONS:
(1) Current maturities - Long-term debt due within one year $1,100,000 and
Optional Sinking fund payment $1,100,000.
</TABLE>
<TABLE>
ANNUAL REPORT OF EUA Service Corporation
For the Year Ended December 31, 1997
SCHEDULE XIII - CURRENT AND ACCRUED LIABILITIES
INSTRUCTIONS: Provide balance of notes and accounts payable to each associate
company. Give description and amount of miscellaneous current and accrued
liabilities. Items less than $10,000 may be grouped, showing the number of
items in each group.
<CAPTION>
BALANCE AT BALANCE
BEGINNING AT CLOSE
D E S C R I P T I O N OF YEAR OF YEAR
<S> <C> <C> <C>
ACCOUNT 233 - NOTES PAYABLE TO ASSOCIATE COMPANIES
NONE
TOTAL
ACCOUNT 234 - ACCOUNTS PAYABLE TO ASSOCIATE COMPANIES
Blackstone Valley Electric Co. 63,535 68,042
Montaup Electric Co. 1,102 1,182
Eastern Edison Company 381,749 67,478
Eastern Utilities Associates 959 737
Cogenex 76,220
Newport Electric Corporation 5,702 3,009
TOTAL 529,267 140,448
ACCOUNT 242 - MISCELLANEOUS CURRENT AND
ACCRUED LIABILITIES
Insurance Reserve 39,305 54,643
Commitment Fees Accrued 2,103 (68)
Flexible Spending 27,300 32,228
Teaming up for Performance 1,285,669
TOTAL 68,708 1,372,472
</TABLE>
EUA SERVICE CORPORATION
NOTES TO FINANCIAL STATEMENTS
A. Nature of Operations and Summary of Significant Accounting Policies
General
EUA Service Corporation (the "Company") is a wholly-owned subsidiary of
Eastern Utilities Associates (EUA) and is subject to the jurisdiction of the
Securities and Exchange Commission (SEC) under the Public Utility Holding
Company Act of 1935 (the "Act"); its accounts are maintained under the system
of accounts prescribed by the Act. The Company provides administrative, data
processing, engineering, financial and certain other services, at cost, to the
associated companies in the EUA System.
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.
Income and Expenses
The costs of the services are determined on a direct-charge basis to the extent
practicable. Indirect costs are prorated based upon departmental allocation
factors developed and reviewed by the Company's department supervisors and by
associated companies' management. Operating revenues in the accompanying
statements of income include the Company's billings to non-affiliated companies
and to its affiliates for its operating costs. In accordance with an order of
the SEC, the Company is permitted to bill a return on its total equity
capitalization, calculated on the basis of a formula prescribed by the SEC.
The company allocates to its affiliated companies the profits generated from
performance of services to non-affiliated companies and other miscellaneous
revenues. These profits are allocated as a reduction in the level of equity
return billed to affiliated companies, in accordance with the SEC Uniform
System of Accounts general instruction. For 1997 and 1996, there were no non-
affiliated profits, thus the equity return billed to affiliated companies was
not adjusted.
Voluntary Retirement Incentive
In June of 1997, an early retirement offer was accepted by a group of nine
employees who were eligible for but not offered a Voluntary Retirement
Incentive Offer completed in 1995. This incentive program resulted in a one-
time $1.6 million pre-tax charge to second quarter 1997 expenses of the
Company. The Company billed out this one-time charge to its affiliates as part
of its operating costs resulting in no financial impact on the Company's
results of operations.
EUA SERVICE CORPORATION
NOTES TO FINANCIAL STATEMENTS, Continued
Utility Plant and Depreciation
Real property and equipment are reported at its original cost. Depreciation is
computed using the straight line method based on estimated useful lives of
various classes of equipment. Provisions for depreciation were equivalent to a
composite rate of approximately 4.0% in 1997 and 1996 based on the average
depreciable property balances at the beginning and end of each year. Equipment
and vehicles leased under capital leases are amortized over the lives of the
respective leases.
Depreciation expense related to real property and equipment totaled $l,271,846
and $1,217,240 for 1997 and 1996 respectively. Amortization expense for
equipment and vehicles under capital leases totaled $914,425 and $844,031 for
1997 and 1996 respectively.
Deferred Debits
The components of deferred debits at December 31, 1997 and 1996 are detailed as
follows (in thousands):
1997 1996
Regulatory Assets:
Deferred SFAS 109 costs (Note B) $ 177 $ 181
Other deferred charges and assets:
MFT Assessment (Note L) 590
Unamortized debt expense 60 84
SFAS 106 460 208
Other 13 20
Total other deferred charges and assets 533 902
$ 710 $1,083
Capitalized Interest
Capitalized equity and debt interest components represent the estimated cost of
borrowed and equity funds used to finance the Company's addition to its existing
office facility. There were no equity and debt interest components recorded
during 1997. The equity portion for 1996 of $877 is included in Other income
and was allocated to affiliated companies. The interest portion for 1996 of
$2,569 was allocated to affiliated companies as a reduction in interest expense.
Cash and Temporary Cash Investments
The Company considers all highly liquid or temporary cash investments purchased
with a maturity of three months or less when acquired to be cash equivalents.
EUA SERVICE CORPORATION
NOTES TO FINANCIAL STATEMENTS, Continued
New Accounting Standard
In June 1997, the FASB issued Statement No. 130, " Reporting Comprehensive
Income," which establishes standards for reporting comprehensive income and
its components (revenues, expenses, gains, and losses) in a set of general-
purpose financial statements. This Statement requires that all items that are
required to be recognized under accounting standards as components of
comprehensive income be reported in a financial statement that is displayed
with the same prominence as other financial statements. This Statement is
effective for fiscal years beginning after December 15, 1997, and the Company
will adopt Statement 130 in the first quarter of 1998.
Income Taxes
In accordance with the EUA System's tax allocation agreement, the general
policy of the Company with respect to accounting for federal and state income
taxes is to reflect in income the estimated amount of taxes currently payable,
as determined from the consolidated tax return on an allocated basis and to
provide for deferred taxes on certain items subject to temporary differences.
EUA SERVICE CORPORATION
NOTES TO FINANCIAL STATEMENTS, Continued
B. Income Taxes:
Components of income tax expense (credit) for the years 1997 and 1996
are as follows:
(in thousands)
1997 1996
Federal:
Current $382 $220
Deferred (201) 37
181 257
State:
Current 20 11
Deferred 110 59
Total income tax expense $311 $327
Total income tax expense was different from the amounts computed by applying
federal income tax statutory rates to book income subject to tax, for the
following reasons:
(in thousands)
1997 1996
Federal income tax computed at statutory rates $205 $242
Increases (decreases) in tax from:
Prior period tax adjustments 2
Depreciation differences 4
State taxes, net of federal income
tax benefit 126 70
Other (22) 11
Total income tax expense $311 $327
EUA SERVICE CORPORATION
NOTES TO FINANCIAL STATEMENTS, CONTINUED
The Company adopted FASB Statement No. 109, "Accounting for Income Taxes"
(FAS109) effective as of January 1, 1993, which requires 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.
At December 31, 1997 and 1996 no valuation allowance was deemed necessary for
total deferred tax assets. Total deferred tax assets and liabilities for 1997
and 1996 are comprised as follows:
(in thousands)
Deferred Tax Deferred Tax
Assets Liabilities
1997 1996 1997 1996
Plant related differences $1,460 $1,522
State net operating loss
carry forward $ 76 $186
Other 24 28 182
Total $ 76 $210 $1,488 $1,704
The Company has approximately $798,000 in state net operating loss carry
forwards which it expects to utilize within the five year period according to
state regulations.
C. Long-Term Debt:
The Company's 10.2% Senior Secured Notes due 2008 are collateralized primarily
by a mortgage on the Company's operations building located in West
Bridgewater, Massachusetts.
Under the agreement securing the Notes, the Company is required at all times,
to maintain its common equity balance at $1,500,000 or greater.
The aggregate amount of the Company's cash sinking fund requirement for long-
term debt for five years following 1997 is $1,100,000 for each of the years
1998 through 2002.
EUA has entered into equity maintenance agreements in connection with the
issuance of the Company's notes.
EUA SERVICE CORPORATION
NOTES TO FINANCIAL STATEMENTS, Continued
D. Capital Leases:
The Company conducts the major portion of its operations as a service
corporation in the electric utility industry using certain leased data
processing equipment, office equipment and vehicles.
The following is an analysis of the leased property under capital leases as of
December 31,
(in thousands)
1997 1996
Equipment $2,939 $3,764
Less accumulated amortization (1,369) (1,715)
Net leased equipment $1,570 $2,049
The following is a schedule of approximate future minimum lease payment
commitments for capital and noncancelable leases as of December 31, 1997:
(in thousands)
Capital Operating
Years ending December 31: Leases Leases
1998 $ 813 $1,520
1999 530 1,304
2000 348 592
2001 30 162
2002 4 14
After 2002 9
Total future minimum lease payments $1,725 $3,601
Less interest 155
Present value of net minimum lease
payments $1,570
Total rent expense for operating leases (in thousands) was $1,546 and $1,625
for 1997 and 1996, respectively.
EUA SERVICE CORPORATION
NOTES TO FINANCIAL STATEMENTS, Continued
E. Capital Stock:
There were no changes in the number of authorized shares during the years
ended December 31, 1997 and 1996. During 1997 the Company paid $200,000
to its parent company, EUA, as a return of capital.
F. Related-Party Transactions:
The Company generates a majority of its revenues from the billing of services
rendered to its affiliates within the EUA System. An analysis of services
billed to affiliated companies for the years ended December 31, 1997 and 1996
is as follows:
(in thousands)
1997 1996
Eastern Edison Company $24,601 $23,031
Blackstone Valley Electric Company 12,609 11,923
Montaup Electric Company 7,589 7,855
Newport Electric Corporation 6,635 6,195
EUA Cogenex Corporation 1,003 1,146
Eastern Utilities Associates 206 243
EUA Ocean State Corporation 181 182
EUA Energy Investment Corporation 216 355
EUA Energy Services Incorporated 237 6
EUA Transcapacity 21 5
EUA Bioten 32 10
EUA Telecommunications 37
$53,367 $50,951
G. Pensions:
The Company participates with other EUA System companies in a non-contributory
defined benefit pension plan covering substantially all of their employees.
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.
EUA SERVICE CORPORATION
NOTES TO FINANCIAL STATEMENTS, Continued
The Company's total pension expense, excluding $1,339,000 of non-qualified
described below, amounted to $2,279,689 for 1997 and $2,209,531 for 1996
including the following components:
(in thousands)
1997 1996
Service cost - benefits earned during
the period $1,663 $1,626
Plus (less):
Interest cost on projected
benefit obligation 4,003 3,644
Actual (return) on assets (7,574) (4,142)
Net amortization and deferrals 4,188 1,082
Total pension expense $2,280 $2,210
The discount rate and rate of increase in future compensation levels used to
determine pension obligations, were 7.5% in 1997 and 7.25% in 1996 and 4.25%
in 1997 and in 1996, respectively. The expected long-term rate of return on
plan assets in 1997 and 1996 was 9.50%.
The discount rate used to determine pension obligations, effective January 1,
1998 was changed to 7.25% and was used to calculate the plan's funded status
at December 31, 1997. The funded status of the plan cannot be presented
separately for the Company as it participates in the plan with other
subsidiaries of EUA.
The voluntary retirement incentive also resulted in approximately $1,339,000
of non-qualified pension benefits which were expensed and billed to affiliates
in 1997. The balance, which is included in other liabilities for these
unfunded benefits, amounted to approximately $1,736,000 and $518,000 for 1997
and 1996 respectively.
EUA SERVICE CORPORATION
NOTES TO FINANCIAL STATEMENTS, Continued
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, 1997, approximately $5.2 million is included as
a liability in other deferred credits for these plans. For the years ending
December 31, 1997 and 1996 the Company's portion of expenses related to the
supplemental plan were approximately $1.4 million and $1.1 million
respectively. The company bills out these costs to its affiliates as part of
its operating costs and therefore the Supplemental Plans do not have a
significant impact on the company's results of operations.
The Company also provides a defined contribution 401(k) savings plan for
substantially all employees. The Company's matching percentage of employees'
voluntary contribution to the plan, amounted to $677,506 and $666,905 in 1997
and 1996 respectively. The company bills out these costs to its affiliates
and therefore the savings plan does not have a significant impact on the
company's result of operations.
H. 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 the company for all qualified employees.
The Company adopted FAS106, "Accounting for Post-Retirement Benefits Other
Than Pensions," as of January 1, 1993. This standard established accounting
and reporting standards for such post-retirement benefits as health care and
life insurance. FAS106 further requires the accrual of the cost of such
benefits during an employee's years of service and the recognition of the
actuarially determined total post-retirement benefit obligations (Transition
Obligation) earned by existing employees and retirees. The Company elected to
recognize the Transition Obligation over a period of 20 years, as permitted by
FAS106. The resultant annual obligation, net of capitalized amounts, was
approximately $1.8 million and $1.7 million in 1997 and 1996 respectively.
EUA SERVICE CORPORATION
NOTES TO FINANCIAL STATEMENTS, Continued
The total cost of post-retirement benefits other than pensions (including
amounts related to the 1997 voluntary retirement incentive offer) for 1997 and
1996 includes the following components:
(in thousands)
1997 1996
Service cost $ 498 $ 513
Interest cost 1,243 1,163
Actual return on plan assets (647) 3
Amortization of transition obligation 540 540
Other amortization and deferrals-net (133) (544)
Voluntary retirement incentives 172
Total post-retirement benefit cost $1,673 $1,675
Assumptions:
Discount rate 7.50% 7.25%
Health care cost trend rate-near-term 7.00% 9.00%
Health care cost trend rate-long-term 5.00% 5.00%
Compensation increase rate 4.25% 4.25%
Long-term return on assets - non union 7.75% 7.50%
(in thousands)
Reconciliation of funded status: 1997 1996
Accumulated post retirement benefit obligation
(APBO):
Retirees $ (6,077) $ (5,360)
Active employees fully eligible for benefits (2,907) (2,003)
Other active employees (9,593) (9,079)
Total $(18,577) $(16,442)
Plan assets at fair value,
primarily notes & bonds 9,531 7,004
Unrecognized transition obligation 8,096 8,635
Unrecognized net loss (gain) 1,626 1,058
Prepaid (accrued) post
retirement benefit cost $ 676 $ 255
The discount rate used to determine post retirement benefit obligations
effective January 1, 1998 was changed to 7.25% and was used to calculate
the funded status of post-retirement benefits at December 31, 1997.
EUA SERVICE CORPORATION
NOTES TO FINANCIAL STATEMENTS, Continued
Increasing the assumed health care cost trend rate by 1% each year would
increase the total post-retirement benefit cost for 1997 by approximately $0.3
million and increase the total accumulated post-retirement benefit obligation
by approximately $2.5 million.
The Company has also established an irrevocable external Voluntary Employees'
Beneficiary Association Trust Fund for non-union retirees. Contributions to
the fund commenced in March 1993 and totaled $1,576,198 and $2,038,670 during
1997 and 1996 respectively.
I. Lines of Credit:
The EUA System companies, which includes the Company, maintain short-term
lines of credit with various banks aggregating approximately $120 million. As
of December 31, 1997, various financial institutions have committed up to $75
million under the revolving credit facility. The company had no short-term
borrowing outstanding at year end.
J. 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 those instruments.
Long-term Debt: The fair value of the Company's long-term debt were based on
quoted market prices for securities of similar investment grade and general
character.
The estimated fair value of the company's financial instruments at December
31, 1997 are as follows (in thousands):
Carrying Fair
Amount Value
Cash and Temporary Cash Investments $1,109 $1,109
Long-Term Debt $7,900 $8,298
EUA SERVICE CORPORATION
NOTES TO FINANCIAL STATEMENTS, Continued
K. Commitments and Contingencies:
The Company was assessed by the Massachusetts Department of Revenue (DOR)
approximately $750,000 in additional taxes and interest in connection
with an audit of the Company's state tax returns for the years 1985 and 1986.
The Company paid the assessment and interest in March 1989. The assessment
was attributable to a computation of income by the DOR on services rendered to
affiliated companies over and above what it actually charged the companies for
the services. The Company disagrees with the DOR's position and has filed
for an abatement of the full amount of the assessment. Accordingly, these
amounts have not been charged to expense.
In February of 1994, the Company was notified by the DOR that the addition of
imputed income by the DOR was incorrect with respect to taxable year 1984, and
the Company received an abatement of the additional tax assessed for that
year. In the same notification, the DOR took the position that the
Applications for Abatement related to taxable years 1985 and 1986 were not
timely filed and therefore the issue of incorrectly imputed income cannot be
considered. The Company disagreed with the DOR's position and filed an appeal
with the Appellate Tax Board on May 5, 1993. On June 7, 1996 a motion to
dismiss filed by the Massachusetts Commissioner of Revenue was denied.
In March 1997 the Company and the Commissioner reached a settlement agreement
whereby the Commissioner abated the assessments for the years 1985 and 1986 in
full and refunded to the Company $l,704,613 including interest of $1,113,127.
In exchange the company withdrew its appeal of the Commissioner's refusal to
abate the assessments on file with the Appellate Tax Board.
<TABLE>
ANNUAL REPORT OF EUA Service Corporation
For the Year Ended December 31, 1997
SCHEDULE XV
STATEMENT OF INCOME
<CAPTION>
CURRENT PRIOR
ACCOUNT D E S C R I P T I O N YEAR YEAR
INCOME
<S> <C> <C> <C>
457 Services rendered to associate companies 53,367,835 50,951,471
458 Services rendered to nonassociate companies 920,161 881,739
421.1 Miscellaneous income 4,200
Total Income 54,287,996 51,837,410
EXPENSE
920 Salaries and wages 31,425,749 29,921,364
921 Office supplies and expenses 2,252,258 2,219,557
922 Administrative expense transferred - credit
923 Outside services employed 1,956,038 1,478,097
924 Property insurance 37,347 40,434
925 Injuries and damages 281,178 235,044
926 Employee pension and benefits 10,621,459 8,814,519
930.1 General advertising expenses 1,232 508
930.2 Miscellaneous general expenses 737,243 573,251
931 Rents 1,777,380 1,839,726
935 Maintenance of structure and equipment 1,228,201 1,030,344
403 Depreciation and amortization expense 1,271,846 1,217,240
408 Taxes other than income taxes 2,717,707 2,542,812
409 Income taxes 402,119 230,954
410 Provision for deferred income taxes (90,438) 96,054
419.0 Other interest income (1,119,921) (11,155)
419.1 AFUDC - Equity (876)
421.0 Misc. non-operating income billed (324,025) (3,203)
426.1 Donations 1,600 1,000
426.3 Penalties 165 347
426.5 Other deductions 783 178,074
427 Interest on long-term debt 805,800 1,030,175
428 Amort. debt discount and expense 24,383 27,697
431 Other interest expense 5,381 15,012
432 AFUDC- Debt (2,568)
Total Expenses Billed 54,013,485 51,474,407
Total Expenses 54,013,485 51,474,407
Net Income 274,511 363,003
</TABLE>
<TABLE>
ANNUAL REPORT OF EUA Service Corporation
For the Year Ended December 31, 1997
ANALYSIS OF BILLING
ASSOCIATE COMPANIES
ACCOUNT 457
<CAPTION>
DIRECT INDIRECT COMPENSATION TOTAL
COSTS COSTS FOR USE AMOUNT
NAME OF ASSOCIATE COMPANY CHARGED CHARGED OF CAPITAL BILLED
457-1 457-2 457-3
<S> <C> <C> <C> <C>
Blackstone Valley Electric Co. 11,537,172 993,615 77,659 12,608,446
Eastern Utilities Associates 185,552 20,019 687 206,258
Montaup Electric Company 7,058,615 484,551 46,095 7,589,261
Eastern Edison Company 22,471,839 1,976,607 152,272 24,600,718
EUA Cogenex Corporation
(Includes Divisions) 913,119 84,980 5,103 1,003,202
EUA Energy Investment Corp. 204,248 10,214 1,331 215,793
EUA Ocean State Corporation 165,531 15,117 768 181,416
Newport Electric Corporation 6,105,215 488,228 41,697 6,635,140
EUA Energy Services Incorporated 224,392 12,256 236,648
EUA Transcapacity Corporation 21,287 21,287
EUA Bioten Corporation 32,407 32,407
EUA Telecommunication 36,947 36,947
EUA Compression Services 312 312
Total 48,956,636 4,085,587 325,612 53,367,835
</TABLE>
<TABLE>
ANNUAL REPORT OF EUA Service Corporation
For the Year Ended December 31, 1997
ANALYSIS OF BILLING
NON-ASSOCIATE COMPANIES
ACCOUNT 458
<CAPTION>
DIRECT INDIRECT COMPENSATION EXCESS TOTAL
NAME OF COST COST FOR USE TOTAL OR AMOUNT
NON-ASSOCIATE COMPANY CHARGED CHARGED OF CAPITAL COST DEFICIENCY BILLED
458-1 458-2 458-3 458-4
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Transcapacity 3,661 316 3,977 3,977
Bioten Partnership - Construction 10,900 382 11,282 11,282
Tank Farm #4 - Bid Proposal 13 13 (13)
Tank Farm #4 - Design & Engineering
Portsmouth Boat - Design & Engineering
Bioten Partnership - Marketing 218,029 8,210 226,239 226,239
Bioten Partnership - General Support 268,503 10,395 278,898 278,898
Cumberland School - Bid Proposal 46 46 (46)
Cumberland School - Construction 339 339 (339)
Anchorage Housing Navy - Construction 3,961 228 4,189 2,753 6,942
MCI Bridgewater - Construction 4,283 4,283 (4,283)
Communications Tower Rentals 32,195 2,112 34,307 (32,307) 2,000
Browning - Ferris Scada Services 6,198 6 6,204 2,391 8,595
Pascoag C&LM Services 4,878 409 5,287 21,713 27,000
Infrared Scanning 526 57 583 1,177 1,760
Radio Interference 168 43 211 164 375
West Center Street Realty - Land 18,344 18,344 14,416 32,760
Taunton Municipal Lighting - Data Link 4,704 5 4,709 752 5,461
Ocean State Power - NEPOOL Activities 16,109 1,498 17,607 17,607
Ocean State Power - Data Link 28,693 28,693 7,502 36,195
Middleboro - SCADA Software 3,887 3,887 863 4,750
Pascoag - SCADA Services 3,597 3,597 970 4,567
Duke Louis Dreyfus 240,119 11,634 251,753 251,753
General Non-Affiliated Activity 66,814 66,814 (66,814)
TOTAL 935,967 35,295 971,262 (51,101) 920,161
</TABLE>
<TABLE>
ANNUAL REPORT OF EUA Service Corporation
For the Year Ended December 31, 1997
SCHEDULE XVI
ANALYSIS OF CHARGES FOR SERVICE
ASSOCIATE AND NON-ASSOCIATION COMPANIES
<CAPTION>
ASSOCIATE COMPANY CHARGES
DIRECT INDIRECT
DESCRIPTION OF ITEMS COST COST TOTAL
<S> <C> <C> <C> <C>
920 SALARIES AND WAGES 29,887,971 1,034,421 30,922,392
921 OFFICE SUPPLIES AND EXPENSES 1,466,870 644,918 2,111,788
922 ADMINISTRATIVE EXPENSE TRANSFERRED-CREDIT
923 OUTSIDE SERVICES EMPLOYED 1,608,392 305,130 1,913,522
924 PROPERTY INSURANCE 37,347 37,347
925 INJURIES AND DAMAGES 280,709 306 281,015
926 EMPLOYEE PENSIONS AND BENEFITS 10,227,821 267,962 10,495,783
928 REGULATORY COMMISSION EXPENSE
930.1 GENERAL ADVERTISING EXPENSE 1,232 1,232
930.2 MISC. GENERAL EXPENSE 730,393 2,567 732,960
931 RENTS 1,081,104 692,554 1,773,658
935 MAINTENANCE 1,032,852 194,574 1,227,426
403 DEPRECIATION 1,259,949 1,259,949
405 AMORTIZATION
408 TAXES OTHER THAN INCOME TAXES 2,601,945 73,422 2,675,367
409 INCOME TAXES 423,062 423,062
410 PROVISION FOR DEFERRED INCOME TAXES (178,195) (178,195)
411 PROVISION FOR DEFERRED INCOME TAXES-CREDIT
411.5 INVESTMENT TAX CREDIT
419.0 OTHER INTEREST INCOME (1,119,921) (1,119,921)
421.0 MISC. NON-OPERATING INCOME BILLED (324,025) (324,025)
426.1 DONATIONS-DEDUCTIBLE 1,600 1,600
426.3 PENALTIES 165 165
426.5 OTHER DEDUCTIONS 100 100
427 INTEREST ON LONG-TERM DEBT 777,962 777,962
428 AMORT. OF DEBT DISCOUNT AND EXPENSE 23,753 23,753
431 OTHER INTEREST EXPENSE 5,282 5,282
432 CAPITALIZED INTEREST
419.1 AFUDC
INSTRUCTION: Total cost of service will equal
for associate and non-associate companies the
total amount billed under their separate
analysis of billing schedules.
TOTAL EXPENSES = 50,216,585 2,825,637 53,042,222
COMPENSATION FOR USE OF EQUITY CAPITAL= 476,563 476,563
430 INTEREST ON DEBT TO ASSOCIATE COMPANIES=
TOTAL COST OF SERVICE= 50,216,585 3,302,200 53,518,785
</TABLE>
<TABLE>
ANNUAL REPORT OF EUA Service Corporation
For the Year Ended December 31, 1997
SCHEDULE XVI
ANALYSIS OF CHARGES FOR SERVICE
ASSOCIATE AND NON-ASSOCIATION COMPANIES
<CAPTION>
NON-ASSOCIATE CO. CHARGES
DIRECT INDIRECT
DESCRIPTION OF ITEMS COST COST TOTAL
<S> <C> <C> <C> <C>
920 SALARIES AND WAGES 503,357 503,357
921 OFFICE SUPPLIES AND EXPENSES 132,879 7,591 140,470
922 ADMINISTRATIVE EXPENSE TRANSFERRED-CREDIT
923 OUTSIDE SERVICES EMPLOYED 42,222 294 42,516
924 PROPERTY INSURANCE
925 INJURIES AND DAMAGES 163 163
926 EMPLOYEE PENSIONS AND BENEFITS 125,676 125,676
928 REGULATORY COMMISSION EXPENSE
930.1 GENERAL ADVERTISING EXPENSE
930.2 MISC. GENERAL EXPENSE 4,283 4,283
931 RENTS 67 3,655 3,722
935 MAINTENANCE 775 775
403 DEPRECIATION 11,897 11,897
405 AMORTIZATION
408 TAXES OTHER THAN INCOME TAXES 42,200 140 42,340
409 INCOME TAXES (20,943) (20,943)
410 PROVISION FOR DEFERRED INCOME TAXES 87,757 87,757
411 PROVISION FOR DEFERRED INCOME TAXES-CREDIT
411.5 INVESTMENT TAX CREDIT
419.0 OTHER INTEREST INCOME
421.0 MISC. NON-OPERATING INCOME BILLED
426.1 DONATIONS-DEDUCTIBLE
426.3 PENALTIES
426.5 OTHER DEDUCTIONS 683 683
427 INTEREST ON LONG-TERM DEBT 17,494 10,344 27,838
428 AMORT. OF DEBT DISCOUNT AND EXPENSE 129 501 630
431 OTHER INTEREST EXPENSE 99 99
432 CAPITALIZED INTEREST
419.1 AFUDC
INSTRUCTION: Total cost of service will equal
for associate and non-associate companies the
total amount billed under their separate
analysis of billing schedules.
TOTAL EXPENSES = 935,967 35,296 971,263
COMPENSATION FOR USE OF EQUITY CAPITAL=
430 INTEREST ON DEBT TO ASSOCIATE COMPANIES=
TOTAL COST OF SERVICE= 935,967 35,296 971,263
</TABLE>
<TABLE>
ANNUAL REPORT OF EUA Service Corporation
For the Year Ended December 31, 1997
SCHEDULE XVI
ANALYSIS OF CHARGES FOR SERVICE
ASSOCIATE AND NON-ASSOCIATION COMPANIES
<CAPTION>
TOTAL CHARGES FOR SERVICES
DIRECT INDIRECT
DESCRIPTION OF ITEMS COST COST TOTAL
<S> <C> <C> <C> <C>
920 SALARIES AND WAGES 30,391,328 1,034,421 31,425,749
921 OFFICE SUPPLIES AND EXPENSES 1,599,749 652,509 2,252,258
922 ADMINISTRATIVE EXPENSE TRANSFERRED-CREDIT
923 OUTSIDE SERVICES EMPLOYED 1,650,614 305,424 1,956,038
924 PROPERTY INSURANCE 37,347 37,347
925 INJURIES AND DAMAGES 280,872 306 281,178
926 EMPLOYEE PENSIONS AND BENEFITS 10,353,497 267,962 10,621,459
928 REGULATORY COMMISSION EXPENSE
930.1 GENERAL ADVERTISING EXPENSE 1,232 1,232
930.2 MISC. GENERAL EXPENSE 734,676 2,567 737,243
931 RENTS 1,081,171 696,209 1,777,380
935 MAINTENANCE 1,032,852 195,349 1,228,201
403 DEPRECIATION 1,259,949 11,897 1,271,846
405 AMORTIZATION
408 TAXES OTHER THAN INCOME TAXES 2,644,145 73,562 2,717,707
409 INCOME TAXES (20,943) 423,062 402,119
410 PROVISION FOR DEFERRED INCOME TAXES 87,757 (178,195) (90,438)
411 PROVISION FOR DEFERRED INCOME TAXES-CREDIT
411.5 INVESTMENT TAX CREDIT
419.0 OTHER INTEREST INCOME (1,119,921) (1,119,921)
421.0 MISC. NON-OPERATING INCOME BILLED (324,025) (324,025)
426.1 DONATIONS-DEDUCTIBLE 1,600 1,600
426.3 PENALTIES 165 165
426.5 OTHER DEDUCTIONS 683 100 783
427 INTEREST ON LONG-TERM DEBT 17,494 788,306 805,800
428 AMORT. OF DEBT DISCOUNT AND EXPENSE 129 24,254 24,383
431 OTHER INTEREST EXPENSE 5,381 5,381
432 CAPITALIZED INTEREST
419.1 AFUDC
INSTRUCTION: Total cost of service will equal
for associate and non-associate companies the
total amount billed under their separate
analysis of billing schedules.
TOTAL EXPENSES = 51,152,552 2,860,933 54,013,485
COMPENSATION FOR USE OF EQUITY CAPITAL= 476,563 476,563
430 INTEREST ON DEBT TO ASSOCIATE COMPANIES=
TOTAL COST OF SERVICE= 51,152,552 3,337,496 54,490,048
</TABLE>
<TABLE>
ANNUAL REPORT OF EUA Service Corporation
For the Year Ended December 31, 1997
SCHEDULE XVI
SCHEDULE OF EXPENSE DISTRIBUTION
BY
DEPARTMENT OR SERVICE FUNCTION
<CAPTION>
TOTAL DEPARTMENT OR SERVICE FUNCTION
DESCRIPTION OF ITEMS AMOUNT OVERHEAD 105 110-111 115 120'S
<S> <C> <C> <C> <C> <C> <C> <C>
920 Salaries and Wages 31,425,749 186,281 888,484 237,726 925,926
921 Office Supplies and Expenses 2,252,258 8,682 32,223 9,320 41,817
922 Administrative Expense Transfer
923 Outside Services Employed 1,956,038 10 450 20,067
924 Property Insurance 37,347
925 Injuries and Damages 281,178
926 Employee Pension and Benefits 10,621,459
928 Regulatory Commission Expense 0
930.1 General Advertising Expense 1,232
930.2 Misc. General Expense 737,243 4,285 853
931 Rents 1,777,380 3,270 2,714 10,996 11,033
935 Maintenance 1,228,201 1,298 3,266 222 1,298
403 Depreciation 1,271,846 2,214 3,969 9,115 30,011
405 Amortization 0
408 Taxes Other Than Income Taxes 2,717,707 9,063 40,748 17,979 79,504
409 Income Taxes 402,119
410 Provision for Def. Income Taxes (90,438)
411 Prov. for Def. Income Taxes-Credit
419.0 Other Interest Income (1,119,921)
419.1 AFUDC - Equity Funds
421.0 Misc Non-Operating Income (324,025) (21,394)
426.1 Donations 1,600
426.3 Penalties 165
426.5 Other Deductions 783
427 Interest on Long-Term Debt 805,800 1,727 7,464 27,651
428 Amort. of Debt Discount and Exp 24,383 51 246 816
431 Other Interest Expense 5,381 14 41 61 191
432 AFUDC- Debt
INSTRUCTION: Indicate each department or
service function. (See instruction 01-3 General
Structure of Accounting System: Uniform System
of Accounts.)
TOTAL EXPENSES = 54,013,485 210,832 973,223 276,470 1,139,167
</TABLE>
<TABLE>
ANNUAL REPORT OF EUA Service Corporation
For the Year Ended December 31, 1997
SCHEDULE XVI
SCHEDULE OF EXPENSE DISTRIBUTION
BY
DEPARTMENT OR SERVICE FUNCTION
<CAPTION>
DEPARTMENT OR SERVICE FUNCTION
DESCRIPTION OF ITEMS 130'S 210 215-220 230, 235 240 260'S
<S> <C> <C> <C> <C> <C> <C> <C>
920 Salaries and Wages 2,346,910 187,677 798,328 431,873 52,469 2,110,615
921 Office Supplies and Expenses 163,716 5,268 38,571 28,916 18,841 77,311
922 Administrative Expense Transfer
923 Outside Services Employed 68,511 30,718 363,105 5,341 492 55,417
924 Property Insurance 37,347
925 Injuries and Damages (2,956) 284,713
926 Employee Pension and Benefits (153,104) 41,751 10,722,312
928 Regulatory Commission Expense
930.1 General Advertising Expense
930.2 Misc. General Expense 16,928 243,295 5,867 2,567 9,947
931 Rents 688,295 1,585 11,384 10,184 295,781 14,475
935 Maintenance 686,242 3,894 50,220
403 Depreciation 117,285 1,852 31,321 37,745 1,755 49,584
405 Amortization
408 Taxes Other Than Income Taxes 211,097 15,747 61,021 33,443 4,361 155,010
409 Income Taxes
410 Provision for Def. Income Taxes
411 Prov. for Def. Income Taxes-Credit
419.0 Other Interest Income
419.1 AFUDC - Equity Funds
421.0 Misc Non-Operating Income (269,109)
426.1 Donations
426.3 Penalties
426.5 Other Deductions
427 Interest on Long-Term Debt 83,218 28,184 12,644 48,230
428 Amort. of Debt Discount and Exp 2,641 858 399 1,389
431 Other Interest Expense 682 14 227 102 24 463
432 AFUDC - Debt
INSTRUCTION: Indicate each department or
service function. (See instruction 01-3 General
Structure of Accounting System: Uniform System
of Accounts.)
TOTAL EXPENSES = 4,229,465 284,612 12,029,497 892,468 376,290 2,572,661
</TABLE>
<TABLE>
ANNUAL REPORT OF EUA Service Corporation
For the Year Ended December 31, 1997
SCHEDULE XVI
SCHEDULE OF EXPENSE DISTRIBUTION
BY
DEPARTMENT OR SERVICE FUNCTION
<CAPTION>
DEPARTMENT OR SERVICE FUNCTION
DESCRIPTION OF ITEMS 270'S 280 305,310 315-325 360'S 372
<S> <C> <C> <C> <C> <C> <C> <C>
920 Salaries and Wages 902,451 539,937 179,269 342,957 783,163 1,444,515
921 Office Supplies and Expenses 81,798 125,924 21,563 13,594 27,108 18,698
922 Administrative Expense Transfer
923 Outside Services Employed 32,096 91,071 75 2,091 9,987
924 Property Insurance
925 Injuries and Damages (151)
926 Employee Pension and Benefits (6,481) 7,247
928 Regulatory Commission Expense
930.1 General Advertising Expense 1,232
930.2 Misc. General Expense 33,143 9 200 2,400 2,114 6,500
931 Rents 44,978 2,835 9,997 1,430 9,790 792
935 Maintenance 9,030 1,441 40
403 Depreciation 22,241 14,033 7,851 13,719 32,856 20,358
405 Amortization
408 Taxes Other Than Income Taxes 70,648 36,755 19,661 28,491 65,002 115,204
409 Income Taxes
410 Provision for Deferred Income Taxes
411 Provision for Def. Income Taxes-Credit
419.0 Other Interest Income
419.1 AFUDC - Equity Funds
421.0 Misc Non-Operating Income
426.1 Donations 300 150
426.3 Penalties
426.5 Other Deductions
427 Interest on Long-Term Debt 25,240 12,226 6,017 12,087 27,428
428 Amort. of Debt Discount and Exp 760 396 197 357 890
431 Other Interest Expense 211 98 50 97 226 319
432 AFUDC-Debt
INSTRUCTION: Indicate each department or
service function. (See instruction 01-3 General
Structure of Accounting System: Uniform System
of Accounts.)
TOTAL EXPENSES = 1,208,466 741,243 335,876 423,895 950,708 1,616,523
</TABLE>
<TABLE>
ANNUAL REPORT OF EUA Service Corporation
For the Year Ended December 31, 1997
SCHEDULE XVI
SCHEDULE OF EXPENSE DISTRIBUTION
BY
DEPARTMENT OR SERVICE FUNCTION
<CAPTION>
DEPARTMENT OR SERVICE FUNCTION
DESCRIPTION OF ITEMS 410-418 420-424 426-433 440'S 450'S 525
<S> <C> <C> <C> <C> <C> <C> <C>
920 Salaries and Wages 1,324,190 1,413,181 2,524,001 3,411,333 1,250,539 129,859
921 Office Supplies and Expenses 81,512 61,840 74,396 33,099 640,696 1,627
922 Administrative Expense Transfer
923 Outside Services Employed 713,609 1,368 187,905 237 305,469
924 Property Insurance
925 Injuries and Damages (425)
926 Employee Pension and Benefits (24,104) 33,956
928 Regulatory Commission Expense
930.1 General Advertising Expense
930.2 Misc. General Expense 342,608 11,784 7,403 3,816
931 Rents 9,141 29,884 246,303 50,636 183,852 1,357
935 Maintenance 40,179 98,514 195,871 1,298
403 Depreciation 13,238 39,176 88,578 139,138 47,923 5,289
405 Amortization
408 Taxes Other Than Income Taxes 77,731 105,995 206,845 278,248 375,027 9,468
409 Income Taxes 402,119
410 Provision for Deferred Income Taxes (90,438)
411 Provision for Def. Income Taxes-Credit
419.0 Other Interest Income (1,119,921)
419.1 AFUDC - Equity Funds
421.0 Misc Non-Operating Income (33,522)
426.1 Donations 1,000
426.3 Penalties 165
426.5 Other Deductions
427 Interest on Long-Term Debt 36,092 78,960 157,151 46,769
428 Amort. of Debt Discount and Exp 1,069 2,385 4,450 1,378
431 Other Interest Expense 207 289 (1,656) 1,271 371 10
432 AFUDC-Debt
INSTRUCTION: Indicate each department or
service function. (See instruction 01-3 General
Structure of Accounting System: Uniform System
of Accounts.)
TOTAL EXPENSES = 2,603,415 1,799,192 2,573,523 4,054,850 3,081,851 148,908
</TABLE>
<TABLE>
ANNUAL REPORT OF EUA Service Corporation
For the Year Ended December 31, 1997
SCHEDULE XVI
SCHEDULE OF EXPENSE DISTRIBUTION
BY
DEPARTMENT OR SERVICE FUNCTION
<CAPTION>
DESCRIPTION OF ITEMS 560 565 570'S 581-585 586, 587
<S> <C> <C> <C> <C> <C> <C>
920 Salaries and Wages 325,357 96,670 3,744,570 1,493,900 775,338
921 Office Supplies and Expenses 11,473 21,487 133,591 64,014 54,756
922 Administrative Expense Transfer
923 Outside Services Employed 955 116 1,141 276 62,502
924 Property Insurance
925 Injuries and Damages (3)
926 Employee Pension and Benefits (118)
928 Regulatory Commission Expense
930.1 General Advertising Expense
930.2 Misc. General Expense 520 1,500 18,238 8,993 6,599
931 Rents 928 1,261 40,515 42,111 6,461
935 Maintenance 44,985 63,855 3,894
403 Depreciation 6,546 1,755 137,516 318,779 23,153
405 Amortization
408 Taxes Other Than Income Taxes 18,595 8,037 307,834 119,603 57,092
409 Income Taxes
410 Provision for Deferred Inc Taxes
411 Provision for Def Inc Taxes-Credit
419.0 Other Interest Income
419.1 AFUDC - Equity Funds
421.0 Misc Non-Operating Income
426.1 Donations
426.3 Penalties
426.5 Other Deductions 683
427 Interest on Long-Term Debt 116,790 21,419
428 Amort. of Debt Discount and Exp 3,691 655
431 Other Interest Expense 42 28 949 357 173
432 AFUDC-Debt
INSTRUCTION: Indicate each department or
service function. (See instruction 01-3 General
Structure of Accounting System: Uniform System
of Accounts.)
TOTAL EXPENSES = 364,416 130,854 4,550,503 2,111,767 1,012,042
</TABLE>
<TABLE>
ANNUAL REPORT OF EUA Service Corporation
For the Year Ended December 31, 1997
SCHEDULE XVI
SCHEDULE OF EXPENSE DISTRIBUTION
BY
DEPARTMENT OR SERVICE FUNCTION
<CAPTION>
DESCRIPTION OF ITEMS 588 600'S
<S> <C> <C> <C>
920 Salaries and Wages 108,488 2,469,742
921 Office Supplies and Expenses 271,008 89,409
922 Administrative Expense Transfer
923 Outside Services Employed 3,029
924 Property Insurance
925 Injuries and Damages
926 Employee Pension and Benefits
928 Regulatory Commission Expense
930.1 General Advertising Expense
930.2 Misc. General Expense 7,674
931 Rents 3,923 41,469
935 Maintenance 11 22,643
403 Depreciation 3,699 51,147
405 Amortization
408 Taxes Other Than Income Taxes 8,052 181,446
409 Income Taxes
410 Provision for Deferred Income Taxes
411 Provision for Def. Income Taxes-Credit
419.0 Other Interest Income
419.1 AFUDC - Equity Funds
421.0 Misc Non-Operating Income
426.1 Donations 150
426.3 Penalties
426.5 Other Deductions 100
427 Interest on Long-Term Debt 3,453 53,050
428 Amort. of Debt Discount and Exp 102 1,653
431 Other Interest Expense 27 493
432 AFUDC-Debt
INSTRUCTION: Indicate each department or
service function. (See instruction 01-3 General
Structure of Accounting System: Uniform System
of Accounts.)
TOTAL EXPENSES = 401,792 2,918,976
</TABLE>
<TABLE>
ANNUAL REPORT OF EUA Service Corporation
For the Year Ended December 31, 1996
DEPARTMENTAL ANALYSIS OF SALARIES
ACCOUNT 920
<CAPTION>
DEPARTMENTAL SALARY EXPENSE NUMBER
NAME OF DEPARTMENT INCLUDED IN AMOUNTS BILLED TO PERSONNEL
Indicate each department or TOTAL PARENT OTHER NON END OF
service function AMOUNT COMPANY ASSOCIATES ASSOCIATES YEAR
<S> <C> <C> <C> <C> <C> <C>
105 Executive Admin. &
Support 132,217 9,560 81,772 40,885 1
110-111 Executive Admin. &
Support 636,607 636,607 3
115 Internal Audit 238,911 1,584 237,327 5
120's Consumer Service 891,646 891,646 15
130's Information Systems 2,822,223 6,940 2,810,892 4,391 53
210 Admin. Support -
Corporate 126,175 1,163 125,012 1
215-220 Human Resources/
Emp. Benefits 831,245 3,692 827,336 217 17
230 .2 Safety and
Occupational
Health 408,837 3,728 405,109 8
240 Office Services -
Boston 59,360 59,360 2
260's Corporate Planning
/C&LM/PWR Mgmt. 1,770,534 1,730,338 40,196 29
270's Marketing Services 866,405 843,735 22,670 16
280 Strategic Studies 558,069 345,130 212,939 8
305, 31 Executive Admin &
Support/Corp.
Comm. 214,247 2,012 212,235 4
315-325 Corporate
Communications 304,193 274 303,919 7
360's Matls. Mgmt/Stores/
Purchasing 874,255 874,255 18
372 System Operations 1,241,363 1,241,363 21
410-418 Financial/Treasury
Services 1,043,988 9,161 1,033,604 1,223 15
420-424 Rate Admin/Load
Research 1,336,554 1,336,554 22
426-433 Comptroller/Acctng. 2,461,756 28,016 2,431,743 1,997 50
440's Customer Service 3,277,833 4 3,277,829 87
450's Bldg & Facilities-WB 1,099,279 2,119 1,091,567 5,593 27
525 Transmission Lines 63,757 63,757 1
560 Eng. & Oper Admin
& Support 174,835 174,835 3
565 Central Meter Test 92,410 92,410 2
570's Engineering 3,933,024 3,917,250 15,774 74
581-585 S & C / Substation /
Radio/ Microwave
Stds. 1,213,086 1,213,086 23
586-587 Environmental Eng. 718,866 718,573 293 13
588 Telecommunications 140,537 72 140,465 2
600's Admin. & Support 2,389,152 2,389,152 41
TOTAL 29,921,364 68,325 29,506,861 346,178 568
</TABLE>
<TABLE>
ANNUAL REPORT OF EUA Service Corporation
For the Year Ended December 31, 1997
OUTSIDE SERVICES EMPLOYED
ACCOUNT 923
INSTRUCTIONS: Provide a breakdown by subaccount of outside services employed.
If the aggregate amounts paid to any one payee and included within one
subaccount is less than $100,000, only the aggregate number and amount of all
such payments included within the subaccount need be shown. Provide a
subtotal for each type of service.
<CAPTION>
RELATIONSHIP
"A"-ASSOCIATE
"NA"-NON
FROM WHOM PURCHASED DESCRIPTION ASSOCIATE
<S> <S> <S> <C>
Outside Services - Legal
McDermott, Will and Emery Legal Services NA 359,773
Various (10) NA 82,677
---------
442,450
---------
Outside Services - Accounting
Various (3) NA 68,988
---------
Outside Services - E.D.P.
Various (12) NA 112,431
---------
Outside Services - Building
and Maintenance
First Security Services Security Services NA 124,975
Various (31) NA 162,203
---------
287,178
---------
Outside Services - Engineering
Various (2) NA 768
---------
Outside Services - Other
Eastern Edison Company Arborist Svcs/Tech. Trainers A 351,846
Salomon Brothers Inc. Investment Services NA 107,986
Media Concepts Printing Services NA 114,897
Various (62) NA 469,494
---------
1,044,223
---------
Total Outside Services Employed 1,956,038
=========
</TABLE>
<TABLE>
ANNUAL REPORT OF EUA Service Corporation
For the Year Ended December 31, 1997
EMPLOYEE PENSIONS AND BENEFITS
ACCOUNT 926
INSTRUCTIONS: Provide a listing of each pension plan and benefit program
provided by the service company. Such listing should be limited to
$25,000.
<CAPTION>
D E S C R I P T I O N AMOUNT
<S> <C>
Dental Plan (9260-02) 204,034
Employee Education Reimbursement (9260-03) 69,555
Employee Publications (9260-04) 7,247
Long Term Disability (9260-08) 144,379
Life Insurance (9260-12 to 9260-19) 425,693
Group Health including FAS 106 (9260-10/9260-22 TO 9260-39) 3,735,027
Company Match/Employee Savings Plan (9260-40 to 9260-43) 680,876
Pension Plan (9260-51 to 9260-58) 5,165,807
Miscellaneous (Service Recognition, Employee Exams 188,841
and Employee related programs)
TOTAL 10,621,459
</TABLE>
<TABLE>
ANNUAL REPORT OF EUA Service Corporation
For the Year Ended December 31, 1997
GENERAL ADVERTISING EXPENSES
ACCOUNT 930.1
INSTRUCTIONS: Provide a listing of the amount included in Account 930.1,
"General Advertising Expenses", classifying the items according to the
nature of the advertising and as defined in the account definition.
If a particular class includes an amount in excess of $3,000 applicable
to a single payee, show separately the name of the payee and the aggregate
amount applicable thereto.
<CAPTION>
D E S C R I P T I O N NAME OF PAYEE AMOUNT
<S> <C> <C>
ACCOUNT 930.1 - GENERAL ADVERTISING EXPENSE
Miscellaneous 1,232
TOTAL 1,232
</TABLE>
<TABLE>
ANNUAL REPORT OF EUA Service Corporation
For the Year Ended December 31, 1997
MISCELLANEOUS GENERAL EXPENSES
ACCOUNT 930.2
INSTRUCTIONS: Provide a listing of the amount included in Account 930.2,
"Miscellaneous General Expenses", classifying such expenses according to
their nature. Payments and expenses permitted by Sections 321(b)(2) of
the Federal Election Campaign Act, as amended by Public Law 94-283 in 1976
[2 U.S.C. P441 (b)(2)] shall be separately classified.
<CAPTION>
D E S C R I P T I O N AMOUNT
<S> <C>
Industry Association Dues 27,731
Corporate and Fiscal Expenses Including Investor Relation 114,193
Transfer Agent Fees and Expenses 144,801
Employee Training and Seminars 355,326
Printing and Distribution of Quarterly and Annual Reports 55,167
Miscellaneous 40,025
TOTAL 737,243
</TABLE>
<TABLE>
ANNUAL REPORT OF EUA Service Corporation
For the Year Ended December 31, 1997
RENTS
ACCOUNT 931
INSTRUCTIONS: Provide a listing of the amount included in Account 931,
"Rents", classifying such expenses by major groupings of property, as defined
in the account definition of the Uniform System of Accounts.
<CAPTION>
T Y P E O F P R O P E R T Y AMOUNT
<S> <C>
Building Rents:
Boston MA, Office Facility 281,468
Brockton MA, Office Facility 8,143
Lincoln RI, Office Facility 216,563
Total Building Rents 506,174
Data Processing and Other Equipment Rents 1,271,206
TOTAL 1,777,380
</TABLE>
<TABLE>
ANNUAL REPORT OF EUA Service Corporation
For the Year Ended December 31, 1997
TAXES OTHER THAN INCOME TAXES
ACCOUNT 408
INSTRUCTIONS: Provide an analysis of Account 408, "Taxes Other than Income
Taxes". Separate the analysis into two groups: (1) other than U.S.
Government taxes, and (2) U.S. Government taxes. Specify each of the
various kinds of taxes and show the amounts thereof. Provide a subtotal
for each class of tax.
<CAPTION>
K I N D O F T A X AMOUNT
<S> <C>
Other Than U.S. Government Tax:
Massachusetts Unemployment Tax 177,516
Rhode Island Unemployment Tax 23,570
Job Development Tax (Rhode Island) 1,644
Property Tax 279,747
Health Insurance Tax - Massachusetts 8,578
Miscellaneous 25,896
516,951
U.S. Government Tax:
FICA 2,168,109
Federal Unemployment Tax 32,647
2,200,756
2,717,707
</TABLE>
<TABLE>
ANNUAL REPORT OF EUA Service Corporation
For the Year Ended December 31, 1997
DONATIONS
ACCOUNT 426.1
INSTRUCTIONS: Provide a listing of the amount included in account 426.1,
"Donations", classifying such expenses by its purpose. The aggregate number
and amount of all items of less than $3,000 may be shown in lieu of details.
<CAPTION>
NAME OF RECIPIENT PURPOSE OF DONATION AMOUNT
<S> <C> <C>
ACCOUNT 426.1 - DONATIONS
Various (5) 1,600
1,600
</TABLE>
<TABLE>
ANNUAL REPORT OF EUA Service Corporation
For the Year Ended December 31, 1997
OTHER DEDUCTIONS
ACCOUNT 426.5
INSTRUCTIONS: Provide a listing of the amount included in account 426.5,
"Other Deductions", classifying such expenses according to their nature.
<CAPTION>
DESCRIPTION NAME OF PAYEE AMOUNT
<S> <C> <C>
ACCOUNT 426.5 - Other Deductions
Public Affairs Caring for Kids 100
Non-Affiliate
Construction Buildings Anchorage Housing 683
TOTAL 783
</TABLE>
ANNUAL REPORT OF EUA Service Corporation
For the Year Ended December 31, 1997
SCHEDULE XVIII
NOTES TO STATEMENT OF INCOME
INSTRUCTIONS: The space below is provided for important notes regarding the
statement of income or any account thereof. Furnish particulars as to any
significant increase in services rendered or expenses incurred during the
year. Notes relating to financial statements shown elsewhere in this report
may be indicated here by reference.
See Notes to Financial Statements on page 19.
<TABLE>
<CAPTION>
ANNUAL REPORT OF EUA SERVICE CORPORATION
ORGANIZATION CHART
<S> <C><C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
<C>
Chief Executive Officer
|
|
|________________________________________________________________________
| |
| _______|_____
Chief Operating Officer | | |
| | | |
| | | |
| | V.P. |
____________________________________|__________________________________________________________ | Finance |
| | | | | | | |
| | | | | | | |
| | | | | | | |
Executive V.P. Executive V.P | | | Special |Internal
Administration Operations/ | | | Projects| Audit
| Pres. Retail | | | |
| _______|__________ V.P. | Assistant Treasury
| | | Power Supply | Comptroller Financial
| | V.P. | | | Serv.
| | Field | Assistant | Modeling
| | Operations | Comptroller | Invest.
| | | | | Relations
| | | | Accounting
| Engineering Trans. & Transmission Reporting
| Facilities Mgt. Distribution Services Budget
| Fleet & Power Supply
_______ |______________________________________________ Garage Somerset Sta.
| | | | | Material Mgt. Support Services
V.P. V.P. Director-Info. Director- V.P. System Operations
Technical Rates Services Customer Human Substation &
Services | Director- Services Resources Communications
| | | | |
| Rate Design Information | |
| Load Research Services Customer Risk Mgmt.
| Rev. Req. & Admin Small Systems Informa- Corporate Benefits
| Tech. Support tion Employee Services
Consv. & Load Mgmt. Services Customer H. R. Services
Consumer Services Purchasing Services
Marketing Services
</TABLE>
ANNUAL REPORT OF EUA Service Corporation
For the Year Ended December 31, 1997
METHODS OF ALLOCATION
- --------- ---------
All costs which are not directly charged to associated companies are
allocated based on departmental allocation factors. Below is a description of
the basis used in billing indirect costs to each associated company. These
allocation bases are reviewed annually.
Average Number of Employees
Total Costs Billed 12 Months Ended
Number of Customers
Revenues - Net of Inter-Company
Gross Utility Plant Including CWIP
Total Assets
Number of Vehicles
Gross Utility Plant Excluding CWIP
Power Generated
KWH Sales
Number of Rate Schedules
Gross Revenues
Purchase Orders Processed
M & S Inventory Balance and System Transactions
Transmission & Distribution Lines
KWH Sales Net of Inter-Company
Gross Revenues Less Fuel & Purchased Power
Meters Tested
Substations Maintained
SCADA Utilization
Gross Transmission Plant
Number of Radios
Construction Work in Progress
System Support Labor Efforts
Direct Costs
Number of Telephone Calls
<TABLE>
ANNUAL REPORT OF EUA Service Corporation
For the Year Ended December 31, 1997
ANNUAL STATEMENT OF COMPENSATION FOR USE OF CAPITAL BILLED
On April 1, 1987, Eastern Utilities Associates was authorized to make
a $5,000,000 Capital Contribution to EUA Service Corporation in accordance
with Post-Effective Amendment No. 5 to U-13-1 under the Public Utility Holding
Company Act of 1935.
Amendment No. 5 permits EUA Service Corporation to bill on a monthly basis a
return on the Service Company's Total Equity Capitalization. EUA Service
Corporation is allowed to bill compensation for use of capital based on the
weighted average return on common equity granted to the operating subsidiaries
of Eastern Utilities Associates by the Massachusetts Department of
Telecommunications and Energy, the Federal Energy Regulatory Commission and
the Department of Public Utilities and Carriers Public Utilities Commission of
Rhode Island.
The following is a summary of the Compensation For Use of Capital billed
effective January 1, 1997:
<S> <C> <C>
Blackstone Valley Electric Company $113,661
Montaup Electric Company 67,464
EUA Energy Investment Corporation 1,948
Eastern Edison Company 222,864
Eastern Utilities Associates 1,005
EUA Cogenex Corporation 7,468
EUA Ocean State Corporation 1,125
Newport Electric Corporation 61,028
TOTAL $476,563
</TABLE>
ANNUAL REPORT OF EUA Service Corporation
For the Year Ended December 31, 1997
SIGNATURE CLAUSE
Pursuant to the requirements of the Public Utility Holding Company Act
of 1935 and the rules and regulations of the Securities and Exchange
Commission issued thereunder, the undersigned company has duly caused this
report to be signed on its behalf by the undersigned officer thereunto duly
authorized.
EUA Service Corporation
(Name of Reporting Company)
By: /s/Augustine Camara
(Signature of Signing Officer)
Augustine Camara, Assistant Comptroller
(Printed Name and Title of Signing Officer)
Date: April 6, 1998
<TABLE> <S> <C>
<ARTICLE> OPUR2
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<BOOK-VALUE> PER-BOOK
<NET-SERVICE-COMPANY-PROPERTY> 22944
<TOTAL-INVESTMENTS> 0
<TOTAL-CURRENT-ASSETS> 12733
<TOTAL-DEFERRED-DEBITS> 786
<OTHER-ASSETS-AND-DEBITS> 0
<TOTAL-ASSETS-AND-DEBITS> 36463
<TOTAL-PROPRIETARY-CAPITAL> 2895
<TOTAL-LONG-TERM-DEBT> 7650
<NOTES-PAYABLE> 0
<NOTES-PAYABLE-ASSOCIATE-COMP> 0
<OTHER-CURR-AND-ACCRUED-LIAB> 4729
<TOTAL-DEFERRED-CREDITS> 19701
<DEFERRED-INCOME-TAX> 1488
<TOT-LIABIL-AND-PROPRIET-CAP> 36463
<SERVICES-ASSOCIATE-COMPANIES> 53368
<SERVICES-NON-ASSOCIATE-COMP> 920
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</TABLE>
