Form U-13-60
Mutual and Subsidiary Service Companies
Revised February 7, 1980
ANNUAL REPORT
FOR THE PERIOD
Beginning January 1, 1998 and Ending December 31, 1998
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:
Augustine Camara Assistant Comptroller 750 West Center Street,
West Bridgewater, Ma. 02379
(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, 1998
CURRENT PRIOR
SERVICE COMPANY PROPERTY
<S> <C> <C> <C> <C>
101 Service company property (Schedule II) 33,690,659 33,360,786
101.1 Property under capital leases - Net 949,444 1,570,121
[Page 19C Footnote D]
107 Construction work in progress (Schedule II) 0 1,987,924
Total Property 34,640,103 36,918,831
111 & Less accumulated provision for depreciation
108 and amortization of service company
property (Schedule III) 14,735,782 13,975,450
Net Service Company Property 19,904,321 22,943,381
INVESTMENTS
123 Investments in associate companies
(Schedule IV)
124 Other Investments (Schedule IV)
Total Investments 0 0
CURRENT AND ACCRUED ASSETS
131 Cash (634,623) 1,769
134 Special deposits 40,925 40,925
135 Working funds 15,825 15,825
136 Temporary cash investments (Schedule IV) 3,000,000 1,050,000
141 Notes receivable 0 0
143 Accounts receivable 804,898 357,557
144 Accumulated provision of uncollectible accounts 0 0
146 Accounts receivable from associate
companies (Schedule V) 12,427,469 10,818,690
152 Fuel stock expenses undistributed (Schedule VI) 0 0
154 Materials and supplies 52,180 56,752
163 Stores expense undistributed (Schedule VII) 3,624 2,478
165 Prepayments 167,458 389,376
171 Interest Receivable 0 0
174 Misc Current and Accrued Assets (Schedule VIII) 0 0
Total Current and Accrued Assets 15,877,756 12,733,372
DEFERRED DEBITS
181 Unamortized debt expense 42,395 60,013
182.3 Other regulatory assets 24,055 177,850
184 Clearing accounts 0 0
186 Miscellaneous deferred debits (Schedule IX) 416,156 472,388
188 Research, development, or demonstration
expenditures (Schedule X) 0 0
190 Accumulated deferred income taxes 5,892 75,793
Total Deferred Debits 488,498 786,044
TOTAL ASSETS AND OTHER DEBITS 36,270,575 36,462,797
</TABLE>
<TABLE>
ANNUAL REPORT OF EUA SERVICE CORPORATION
SCHEDULE I - COMPARATIVE BALANCE SHEET
<CAPTION>
ACCOUNT LIABILITIES AND PROPRIETARY CAPITAL AS OF DECEMBER 31, 1998
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) 2,100,000 2,300,000
215 Appropriated retained earnings (Schedule XI)
216 Unappropriated retained earnings (Schedule XI) 456,189 594,346
Total Proprietary Capital 2,557,189 2,895,346
LONG-TERM DEBT
223 Advances from associate companies (Schedule XII)
2240.1 Other long-term debt (Schedule XII) 5,100,000 6,800,000
225 Unamortized premium on long-term debt
226 Unamortized discount on long-term debt-debit
Total Long-Term Debt 5,100,000 6,800,000
227 Obligations under capital leases - non current 398,645 849,838
CURRENT AND ACCRUED LIABILITIES
2240.2 Current Maturities - Long-Term Debt 1,100,000 1,100,000
231 Notes payable
232 Accounts payable 438,383 971,635
233 Notes payable to associate companies
(Schedule XIII)
234 Accounts payable to associate companies
(Schedule XIII) 336,545 140,448
236 Taxes accrued 7,254 13,088
237 Interest accrued 316,200 402,900
238 Dividends declared
241 Tax collections payable 7,500 8,092
242 Miscellaneous current and accrued
liabilities (Schedule XIII) 1,566,480 1,372,472
243 Obligations under capital leases - current 550,799 720,282
Total Current and Accrued Liabilities 4,323,161 4,728,917
DEFERRED CREDITS
253 Other deferred credits 22,599,657 19,698,641
254 Regulatory liabilities 3,812 2,622
255 Accumulated deferred investment tax credits
Total Deferred Credits 22,603,469 19,701,263
282 & 283 ACCUMULATED DEFERRED INCOME TAXES 1,288,111 1,487,433
TOTAL LIABILITIES & PROPRIETARY CAPITAL 36,270,575 36,462,797
</TABLE>
<TABLE>
ANNUAL REPORT OF EUA SERVICE CORPORATION
For the Year Ended December 31, 1998
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 0 0 0 9,040
303 MISCELLANEOUS
INTANGIBLE PLANT 1,699,223 0 0 0 1,699,223
304 LAND & LAND RIGHTS 717,080 0 0 0 717,080
305 STRUCTURES AND
IMPROVEMENTS 18,142,620 40,869 200 0 18,183,289
306 LEASEHOLD 542,449 0 0 0 542,449
IMPROVEMENTS
307 EQUIPMENT (2)/ 8,161,618 805,687 522,800 0 8,444,505
308 OFFICE FURNITURE
AND EQUIPMENT 4,088,756 6,317 0 0 4,095,073
309 AUTOMOBILES,
OTHER VEHICLES
AND RELATED
GARAGE EQUIPMENT 0 0 0 0 0
310 AIRCRAFT & AIRPORT
EQUIPMENT 0 0 0 0 0
311 OTHER SERVICE
COMPANY
PROPERTY (3)/ 0 0 0 0 0
SUB-TOTAL 33,360,786 852,873 523,000 0 33,690,659
107 CONSTRUCTION
WORK IN
PROGRESS (4)/ 1,987,924 0 0 (1,987,924) 0
TOTAL 35,348,710 852,873 523,000 (1,987,924) 33,690,659
(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 0 2,731
131 Word Processing Equipment 0 16,572
133 Data Processing Equipment 0 1,351,994
120 Consumer Service Equipment 0 5,522
215 Human Resources Equipment 0 960
230 Occupational Health & Safety Equipment 0 40,403
240 Office Services Equipment 523 973
310 Employee Communication/Visual Aids Equipment 0 71,013
325 Community Relations Equipment 0 2,441
364 Purchasing/Material Management Equipment 0 111,199
372 Energy Management Equipment 0 26,201
417 Treasury Department Equipment 0 20,117
422 Rate and Revenue Research Equipment 0 49,554
427 Accounting Systems Equipment 0 1,736
441 Customer & Consumer Service Equipment 0 218,761
452 West Bridgewater Building Equipment 3,351 60,362
525 Transmission 12,813 12,813
565 Meter Testing Equipment 13,450 99,563
572 Electrical Systems Equipment 29,474 83,283
573 Distribution Engineering Equipment 0 10,934
574 Engineering Equipment 0 179,218
582 Substation 4,956 4,956
584 Electronics 1,276 1,276
587 Vegetation Management Equipment 2,519 7,689
581/5 Substation/Communication Equipment 0 812,721
583 Radio/Microwave Equipment 17,217 51,449
610 Transmission & Distribution Equipment 0 798
617 OPS Training Facility Equipment 0 7,701
620 Line Equipment 0 2,048
650 URD Line Equipment 0 12,286
000 Telephone System Upgrade 714,908 714,908
000 Microwave Equipment (A) (517,600) 4,462,323
TOTAL 282,887 8,444,505
(3)/ DESCRIBE OTHER SERVICE COMPANY PROPERTY:
NONE
-----------
(4)/ DESCRIBE CONSTRUCTION WORK IN PROGRESS: 0
===========
(A) Retirement of Microwave Towers - Lincoln and Brockton
</TABLE>
<TABLE>
ANNUAL REPORT OF EUA Service Corporation
For the Year Ended December 31, 1998
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 0 0 0 0
303 MISCELLANEOUS
INTANGIBLE PLANT 1,562,261 70,531 0 0 1,632,792
304 LAND AND LAND RIGHTS 0 0 0 0
305 STRUCTURES AND
IMPROVEMENTS 4,015,213 454,074 200 (387) 4,468,700
306 LEASEHOLD
IMPROVEMENTS 542,448 0 0 0 542,448
307 EQUIPMENT 5,578,061 505,272 522,800 0 5,560,533
308 OFFICE FURNITURE
AND FIXTURES 2,277,467 253,842 0 0 2,531,309
309 AUTOMOBILES, OTHER
VEHICLES AND RELATED
GARAGE EQUIPMENT 0 0 0 0 0
310 AIRCRAFT AND AIRPORT
EQUIPMENT 0 0 0 0 0
311 OTHER SERVICE
COMPANY PROPERTY 0 0 0 0 0
13,975,450 1,283,719 523,000 (387) 14,735,782
(1)/ PROVIDE AN EXPLANATION OF THOSE CHANGES CONSIDERED MATERIAL:
</TABLE>
<TABLE>
ANNUAL REPORT OF EUA Service Corporation
For the Year Ended December 31, 1998
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. 1,050,000 3,000,000
TOTAL 1,050,000 3,000,000
</TABLE>
<TABLE>
ANNUAL REPORT OF EUA Service Corporation
For the Year Ended December 31, 1998
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. 1,592,656 1,287,170
Eastern Utilities Associates 36,855 94,753
Montaup Electric Company 2,572,673 1,714,836
Eastern Edison Company 3,921,563 6,881,856
EUA Cogenex Corporation (Inc. Division) 422,597 175,112
EUA Energy Investment Corporation 21,855 74,350
EUA Ocean State Corporation 25,277 15,054
Newport Electric Corporation 2,163,802 1,970,000
EUA Transcapacity 15,644 12,529
EUA Bioten 27,807 179,824
EUA Energy Services 5,579 2,923
EUA Compression Services 312 2,996
EUA Telecommunication 12,070 554
RENOVA 15,512
TOTAL ACCOUNTS RECEIVABLE 10,818,690 12,427,469
ANALYSIS OF CONVENIENCE OR ACCOMMODATION PAYMENTS:
TOTAL
Analysis by Company: PAYMENTS
Blackstone Valley Electric Co. 2,062,445
Eastern Utilities Associates 23,369
Montaup Electric Company 1,137,089
Eastern Edison Company 5,470,850
EUA Cogenex Corporation (Including Divisions) 2,431,284
EUA Energy Investment Corporation 5,253
EUA Ocean State Corporation (532)
Newport Electric Corporation 757,099
EUA Transcapacity (1,369)
EUA Energy Services 0
EUA Telecommunication 2,183
EUA Bioten 13,862
TOTAL PAYMENTS 11,901,533
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>
<TABLE>
ANNUAL REPORT OF EUA Service Corporation
For the Year Ended December 31, 1998
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 0 0 0
NONE
TOTAL 0 0 0
SUMMARY:
</TABLE>
<TABLE>
ANNUAL REPORT OF EUA Service Corporation
For the Year Ended December 31, 1998
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: 0 23,237 23,237
Blackstone Valley Electric 0 (3,248) (3,248)
Montaup Electric Company 0 (5,433) (5,433)
Eastern Edison Company 0 (8,300) (8,300)
Newport Electric Corporation 0 (2,632) (2,632)
TOTAL 0 3,624 3,624
</TABLE>
<TABLE>
ANNUAL REPORT OF EUA Service Corporation
For the Year Ended December 31, 1998
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 0 0
NONE
TOTAL 0 0
</TABLE>
<TABLE>
ANNUAL REPORT OF EUA Service Corporation
For the Year Ended December 31, 1998
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 0 0
MFT Assessment 0 0
Post -Retirement Benefits Other Than Pensions Pre-Funding 459,624 385,796
Miscellaneous Deferred Debits (3) 12,764 9,435
Lawson General Ledger System-Pending Reimbursement/Bankers Leasing 0 20,925
TOTAL 472,388 416,156
</TABLE>
<TABLE>
ANNUAL REPORT OF EUA Service Corporation
For the Year Ended December 31, 1998
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 0
NONE
TOTAL 0
</TABLE>
<TABLE>
ANNUAL REPORT OF EUA Service Corporation
For the Year Ended December 31, 1998
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 $2,100,000
ACCOUNT 215 - APPROPRIATED RETAINED EARNINGS
(1) See Schedule XIV Notes to Financial Statements, Page 19C.
TOTAL $2,100,000
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 594,346 261,843 400,000 456,189
TOTAL 594,346 261,843 400,000 456,189
</TABLE>
<TABLE>
ANNUAL REPORT OF EUA Service Corporation
For the Year Ended December 31, 1998
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 0 0 0 0 0 0 0
ACCOUNT 224 -
OTHER LONG- Senior
TERM DEBT Secured Note 2,008 10.20% 20,000,000 6,800,000 0 1,700,000 5,100,000
TOTAL 2,008 10.20% 20,000,000 6,800,000 0 1,700,000 5,100,000
1/ GIVE AN EXPLANATION OF DEDUCTIONS:
(1) Current maturities - Long-term debt due within one year $1,100,000 and Optional Sinking fund payment $600,000
</TABLE>
<TABLE>
ANNUAL REPORT OF EUA Service Corporation
For the Year Ended December 31, 1998
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 0 0
ACCOUNT 234 - ACCOUNTS PAYABLE TO ASSOCIATE COMPANIES
Blackstone Valley Electric Co. 68,042 69,553
Montaup Electric Co. 1,182 623
Eastern Edison Company 67,478 66,727
Eastern Utilities Associates 737 197,682
Cogenex 0 0
Newport Electric Corporation 3,009 1,960
TOTAL 140,448 336,545
ACCOUNT 242 - MISCELLANEOUS CURRENT AND
ACCRUED LIABILITIES
Insurance Reserve 54,643 62,101
Commitment Fees Accrued (68) (1,360)
Flexible Spending 32,228 35,347
Teaming up for Performance 1,285,669 1,470,392
TOTAL 1,372,472 1,566,480
</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 plus a
prescribed return allowed by the SEC, 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 borrowed capital, 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 1998 and 1997, there
were no non-affiliated profits, thus the equity return billed to affiliated
companies was not adjusted.
Proposed Merger Agreement
On February 1, 1999, the Company's Parent, EUA and New England
Electric System (NEES) announced a merger agreement under which NEES will
acquire all outstanding shares of EUA for $31 per share in cash. The merger
agreement, which is subject to the approval of EUA shareholders and various
regulatory agencies, values the equity of EUA at approximately $634 million,
which represents a 23% premium above the price of EUA shares on December 4,
1998, the last trading day before other regional merger announcements affected
EUA's share price. EUA shareholders will continue to receive dividends at the
current level as declared by the Board of Trustees, until closing of the
merger, which is expected by early 2000.
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 pre-tax charge of approximately $1.6 million to 1997 expenses. 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.
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 3.9% in 1998 and 3.9% in 1997
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,283,718 and $1,271,846 for 1998 and 1997 respectively. Amortization
expense for equipment and vehicles under capital leases totaled $763,462 and
$914,425 for 1998 and 1997 respectively.
Other Assets
The components of deferred debits at December 31, 1998 and 1997 are
detailed as follows (in thousands):
1998 1997
Regulatory Assets:
Deferred SFAS 109 costs (Note B) $ 24 $ 177
Other deferred charges and assets:
Unamortized debt expense 42 60
SFAS 106 (Note H) 386 460
Other 31 13
Total other deferred charges and assets 459 533
$ 483 $ 710
Cash and Temporary Cash Investments
The Company considers all highly liquid or temporary cash investments
with a maturity of three months or less when purchased to be cash equivalents.
New Accounting Standards
In March 1998, The Accounting Standards Executive Committee of the
American Institute of Certified Public Accountants (AICPA) issued Statement of
Position 98-1, Accounting for the Costs of Computer Software Developed or
Obtained for Internal Use (SOP 98-1), effective in 1999. SOP 98-1 provides
specific guidance on whether to capitalize or expense costs within its scope.
The Company does not expect SOP 98-1 to have a material impact on its financial
position or result of operations.
In April 1998, the AICPA issued SOP 98-5, "Reporting on the Costs of
Start-up Activities". EUA is required to adopt the SOP for 1999. SOP 98-5
defines start-up activities as one-time activities an entity undertakes when it
opens a new facility, introduces a new product line or service, conducts
business in a new territory or with a new class of customer or beneficiary,
initiates a new process in an existing facility or commences some new
operation. The statement covers the accounting for organization costs and
decrees that any such costs should be expensed as incurred in the same manner
as the other start-up costs. The statement requires entities to expense
previously capitalized costs in the year of adopting SOP 98-5. Although EUA
cannot currently quantify the impact of adoption as of January 1, 1999,
Management estimates the application of SOP 98-5 will not have a material
impact on the financial statements.
In June 1998, the Financial Accounting Standards Board issued SFAS
133, "Accounting for Derivative Instruments and Hedging Activities," which is
effective in 2000. This statement requires the recognition of all derivative
instruments as either assets or liabilities in the statement of financial
position and the measurement of those instruments at fair value. The Company
is currently evaluating the impact SFAS 133 will have on its financial position
or results of operation.
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.
B. Income Taxes:
Components of income tax expense (benefit) for the years 1998 and 1997
are as follows:
(in thousands)
1998 1997
Federal:
Current $214 $382
Deferred (44) (201)
170 181
State:
Current 11 20
Deferred 70 110
Total income tax expense $251 $311
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)
1998 1997
Federal income tax computed at statutory rates $179 $205
Increases (decreases) in tax from:
Prior period tax adjustments (2) 2
Depreciation differences 4
State taxes, net of federal income
tax benefit 52 126
Other 18 (22)
Total income tax expense $251 $311
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.
Total deferred tax assets and liabilities for 1998 and 1997 are comprised
as follows:
(in thousands)
Deferred Tax Deferred Tax
Assets Liabilities
1998 1997 1998 1997
Plant related differences $ 4 $1,252 $1,460
State net operating loss
carry forward 6 $ 76
Other 40 28
Total $10 $ 76 $1,292 $1,488
The Company has approximately $62,000 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 1998 is $1,100,000 for each of the
years 1999 through 2003.
EUA has entered into equity maintenance agreements in connection with
the issuance of the Company's notes.
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)
1998 1997
Equipment $2,530 $2,939
Less accumulated amortization (1,580) (1,369)
Net leased equipment $ 950 $1,570
The following is a schedule of approximate future minimum lease
payment commitments for capital and noncancelable operating leases as of
December 31, 1998:
(in thousands)
Capital Operating
Years ending December 31: Leases Leases
1999 $ 602 $1,344
2000 382 580
2001 30 139
2002 4 19
2003 16
After 2003 9
Total future minimum lease payments $1,018 $2,107
Less interest (68)
Present value of net minimum lease
payments $ 950
Total rent expense for operating leases (in thousands) was $1,754 and
$1,546 for 1998 and 1997, respectively.
E. Capital Stock:
There were no changes in the number of authorized shares during the
years ended December 31, 1998 and 1997. During 1998 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, 1998
and 1997 is as follows:
(in thousands)
1998 1997
Eastern Edison Company $25,654 $24,601
Blackstone Valley Electric Company 13,253 12,609
Montaup Electric Company 7,632 7,589
Newport Electric Corporation 6,766 6,635
EUA Cogenex Corporation 677 1,003
Eastern Utilities Associates 240 206
EUA Ocean State Corporation 156 181
EUA Energy Investment Corporation 335 216
EUA Energy Services Incorporated 26 237
EUA Transcapacity 18 21
EUA Bioten 138 32
EUA Telecommunications 60 37
EUA Compression Services Incorporated 3
$54,958 $53,367
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.
The Company's total pension expense amounted to $2,238,316 for 1998
and $2,279,689 for 1997, excluding $1,339,000 of non-qualified, as illustrated
in the table below:
(in thousands)
1998 1997
Service cost - benefits earned during
the period $1,748 $1,663
Plus (less):
Interest cost on projected
benefit obligation 4,299 4,003
Expected (return) on assets (3,817) (3,482)
Net amortization and deferrals 8 96
Total pension expense $2,238 $2,280
The discount rate and rate of increase in future compensation levels
used to determine pension obligations, were 7.25% in 1998 and 7.5% in 1997 and
4.25% in 1998 and in 1997, respectively. The expected long-term rate of return
on plan assets in 1998 and 1997 was 9.50%.
The discount rate used to determine pension obligations, effective
January 1, 1999 was changed from 7.25% to 6.75% and was used to calculate the
plan's funded status at December 31, 1998. 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 $1,855,501 and $1,736,000
for 1998 and 1997 respectively.
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, 1998, approximately $5.7 million is
included as a liability in other deferred credits for these plans. For the
years ending December 31, 1998 and 1997 the Company's portion of expenses
related to the supplemental plan were approximately $0.8 million and $1.4
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 $737,491 and
$677,506 in 1998 and 1997 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 total cost of post-retirement benefits other than pensions
(including amounts related to the 1997 voluntary retirement incentive offer)
for 1998 and 1997 includes the following components:
(in thousands)
1998 1997
Service cost $ 523 $ 498
Interest cost 1,336 1,243
Expected return on plan assets (715) (550)
Amortization of transition obligation 540 443
Other amortization and deferrals-net (225) (133)
Voluntary retirement incentives 172
Total post-retirement benefit cost $1,459 $1,673
Assumptions:
Discount rate 7.25% 7.50%
Health care cost trend rate-near-term 6.00% 7.00%
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 7.50% 7.75%
(in thousands)
Reconciliation of Accumulated Post-Retirement 1998 1997
Benefit Obligation
Beginning of Year Benefit Obligation (January 1) $18,577 $16,442
Service Cost 522 498
Interest Cost 1,336 1,243
Participant Contributions 53 44
Actuarial Loss (Gain) 903 1,064
Disbursements (623) (374)
Settlements or Curtailments (340)
End of Year Benefit Obligation (December 31) $20,768 $18,577
(in thousands)
Reconciliation of Fair Value Assets 1998 1997
Beginning of Year Fair Value of Assets (January 1) $ 9,531 $ 7,581
Actual return on plan assets 1,411 647
Company contributions 1,328 1,633
Participant contributions 53 44
Disbursements (623) (374)
End of Year Fair Value of Assets (December 31) $11,700 $ 9,531
(in thousands)
Reconciliation of funded status: 1998 1997
Accumulated post retirement benefit obligation
(APBO):
Retirees $ (6,859) $ (6,077)
Active employees fully eligible for benefits (3,214) (2,907)
Other active employees (10,695) (9,593)
Total (20,768) (18,577)
Plan assets at fair value,
primarily notes & bonds 11,700 9,531
Unrecognized transition obligation 7,556 8,096
Unrecognized net loss (gain) 2,057 1,626
Prepaid (accrued) post retirement benefit cost $ 545 $ 676
Effect of 1% change in Assumed Health Care Cost Trend Rate
One Percentage Point
(in thousands) Increase Decrease
Effect on 1998 service and interest
cost components of net-periodic cost 298 (235)
Effect on 1998 accumulated post-retirement
benefit obligation 2,559 (2,087)
The discount rate used to determine post retirement benefit obligations
effective January 1, 1999 was changed from 7.25% to 6.75% and was used to
calculate the funded status of post-retirement benefits at December 31, 1998.
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 $1,328,336 and
$1,576,198 during 1998 and 1997 respectively.
I. Lines of Credit:
EUA System companies, which includes the Company, maintain short-term
lines of credit with various banks totaling $90 million for an aggregate amount
available of $165 million. As of December 31, 1998, 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, 1998 are as follows (in thousands):
Carrying Fair
Amount Value
Cash and Temporary Cash Investments $2,422 $2,422
Long-Term Debt $6,200 $6,515
K. Commitments and Contingencies:
DOR Assessment 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, 1998
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 54,958,053 53,367,835
458 Services rendered to nonassociate companies 458,720 920,161
421.1 Miscellaneous income 0 0
Total Income 55,416,773 54,287,996
EXPENSE
920 Salaries and wages 32,050,458 31,425,749
921 Office supplies and expenses 2,411,054 2,252,258
922 Administrative expense transferred - credit 0 0
923 Outside services employed 2,155,926 1,956,038
924 Property insurance 29,568 37,347
925 Injuries and damages 245,188 281,178
926 Employee pension and benefits 9,578,559 10,621,459
930.1 General advertising expenses 9,736 1,232
930.2 Miscellaneous general expenses 910,056 737,243
931 Rents 1,795,896 1,777,380
935 Maintenance of structure and equipment 1,181,433 1,228,201
403 Depreciation and amortization expense 1,283,718 1,271,846
408 Taxes other than income taxes 2,677,837 2,717,707
409 Income taxes 225,232 402,119
410 Provision for deferred income taxes 25,564 (90,438)
419.0 Other interest income (3,220) (1,119,921)
419.1 AFUDC - Equity 0 0
421.0 Misc. non-operating income billed (77,421) (324,025)
426.1 Donations 1,575 1,600
426.3 Penalties 0 165
426.5 Other deductions 0 783
427 Interest on long-term debt 632,400 805,800
428 Amort. debt discount and expense 17,618 24,383
431 Other interest expense 3,753 5,381
432 AFUDC- Debt 0 0
Total Expenses Billed 55,154,930 54,013,485
Total Expenses 55,154,930 54,013,485
Net Income 261,843 274,511
</TABLE>
<TABLE>
ANNUAL REPORT OF EUA Service Corporation
For the Year Ended December 31, 1998
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. 11,859,889 1,321,866 71,791 13,253,546
Eastern Utilities Associates 211,977 27,140 611 239,728
Montaup Electric Company 7,020,402 575,257 36,792 7,632,451
Eastern Edison Company 22,883,773 2,627,235 143,378 25,654,386
EUA Cogenex Corp. (Inc. Division) 592,732 80,887 3,237 676,856
EUA Energy Investment Corp. 296,732 36,719 1,117 334,568
EUA Ocean State Corporation 136,462 18,625 677 155,764
Newport Electric Corporation 6,095,970 631,133 38,603 6,765,706
EUA Energy Services Inc. 21,759 2,128 1,737 25,624
EUA Transcapacity Corporation 18,351 0 0 18,351
EUA Bioten Corporation 138,155 0 0 138,155
EUA Telecommunication 59,702 532 0 60,234
EUA Compression Services 2,684 0 0 2,684
Total 49,338,588 5,321,522 297,943 54,958,053
</TABLE>
<TABLE>
ANNUAL REPORT OF EUA Service Corporation
For the Year Ended December 31, 1998
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 3,619 541 4,160 0 4,160
Bioten Partnership - Construction 4,572 0 4,572 0 4,572
Central Maine Ice Storm 9,331 427 9,758 3,034 12,792
Reliability & Tracking 26,580 1,755 28,335 12,291 40,626
Braintree Scada Service 854 0 854 (148) 706
Bioten Partnership - Marketing 34,613 1,261 35,874 0 35,874
Bioten Partnership - General Support 245,744 7,709 253,453 0 253,453
Cumberland School - Bid Proposal 0 0 0 0 0
Cumberland School - Construction 0 0 0 0 0
Anchorage Housing Navy - Construction 0 0 0 0 0
MCI Bridgewater - Construction 0 0 0 0 0
Communications Tower Rentals 1,870 238 2,108 (2,108) 0
Browning - Ferris Scada Services 6,166 0 6,166 2,886 9,052
Pascoag C&LM Services 731 53 784 (784) 0
Infrared Scanning 0 0 0 0 0
Radio Interference 68 11 79 71 150
West Center Street Realty - Land 18,344 0 18,344 14,416 32,760
Taunton Municipal Lighting - Data Link 4,671 0 4,671 1,336 6,007
Ocean State Power - NEPOOL Activities 6,043 736 6,779 0 6,779
Ocean State Power - Data Link 28,693 0 28,693 12,449 41,142
Middleboro - SCADA Software 3,887 0 3,887 1,714 5,601
Pascoag - SCADA Services 3,598 0 3,598 1,448 5,046
Duke Louis Dreyfus 0 0 0 0 0
General Non-Affiliated Activity 82,705 0 82,705 (82,705) 0
TOTAL 482,089 12,731 494,820 (36,100) 458,720
</TABLE>
<TABLE>
ANNUAL REPORT OF EUA Service Corporation
For the Year Ended December 31, 1998
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 30,830,320 1,043,759 31,874,079
921 OFFICE SUPPLIES AND EXPENSES 1,728,441 583,169 2,311,610
922 ADMINISTRATIVE EXPENSE TRANSFERRED-CREDIT 0 0 0
923 OUTSIDE SERVICES EMPLOYED 1,692,581 413,548 2,106,129
924 PROPERTY INSURANCE 29,568 0 29,568
925 INJURIES AND DAMAGES 244,832 299 245,131
926 EMPLOYEE PENSIONS AND BENEFITS 9,239,574 294,036 9,533,610
928 REGULATORY COMMISSION EXPENSE 0 0 0
930.1 GENERAL ADVERTISING EXPENSE 9,736 0 9,736
930.2 MISC. GENERAL EXPENSE 907,412 2,644 910,056
931 RENTS 1,076,263 718,887 1,795,150
935 MAINTENANCE 990,354 190,972 1,181,326
403 DEPRECIATION 0 1,279,545 1,279,545
405 AMORTIZATION 0 0 0
408 TAXES OTHER THAN INCOME TAXES 2,589,507 72,594 2,662,101
409 INCOME TAXES 0 212,278 212,278
410 PROVISION FOR DEFERRED INCOME TAXES 0 (44,337) (44,337)
411 PROVISION FOR DEFERRED INCOME TAXES-CREDIT 0 0 0
411.5 INVESTMENT TAX CREDIT 0 0 0
419.0 OTHER INTEREST INCOME 0 (3,220) (3,220)
421.0 MISC. NON-OPERATING INCOME BILLED 0 (77,271) (77,271)
426.1 DONATIONS-DEDUCTIBLE 0 1,575 1,575
426.3 PENALTIES 0 0 0
426.5 OTHER DEDUCTIONS 0 0 0
427 INTEREST ON LONG-TERM DEBT 0 611,960 611,960
428 AMORT. OF DEBT DISCOUNT AND EXPENSE 0 17,345 17,345
431 OTHER INTEREST EXPENSE 0 3,739 3,739
432 CAPITALIZED INTEREST 0 0 0
419.1 AFUDC 0 0 0
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 = 49,338,588 5,321,522 54,660,110
COMPENSATION FOR USE OF EQUITY CAPITAL= 297,943 297,943
430 INTEREST ON DEBT TO ASSOCIATE COMPANIES=
TOTAL COST OF SERVICE= 49,338,588 5,619,465 54,958,053
</TABLE>
<TABLE>
ANNUAL REPORT OF EUA Service Corporation
For the Year Ended December 31, 1998
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 176,379 0 176,379
921 OFFICE SUPPLIES AND EXPENSES 95,178 4,266 99,444
922 ADMINISTRATIVE EXPENSE TRANSFERRED-CREDIT 0 0 0
923 OUTSIDE SERVICES EMPLOYED 49,508 289 49,797
924 PROPERTY INSURANCE 0 0 0
925 INJURIES AND DAMAGES 57 0 57
926 EMPLOYEE PENSIONS AND BENEFITS 44,949 0 44,949
928 REGULATORY COMMISSION EXPENSE 0 0 0
930.1 GENERAL ADVERTISING EXPENSE 0 0 0
930.2 MISC. GENERAL EXPENSE 0 0 0
931 RENTS 0 746 746
935 MAINTENANCE 0 107 107
403 DEPRECIATION 0 4,173 4,173
405 AMORTIZATION 0 0 0
408 TAXES OTHER THAN INCOME TAXES 15,690 46 15,736
409 INCOME TAXES 12,954 0 12,954
410 PROVISION FOR DEFERRED INCOME TAXES 69,751 0 69,751
411 PROVISION FOR DEFERRED INCOME TAXES-CREDIT 0 0 0
411.5 INVESTMENT TAX CREDIT 0 0 0
419.0 OTHER INTEREST INCOME 0 0 0
421.0 MISC. NON-OPERATING INCOME BILLED 0 0 0
426.1 DONATIONS-DEDUCTIBLE 0 0 0
426.3 PENALTIES 0 0 0
426.5 OTHER DEDUCTIONS 0 0 0
427 INTEREST ON LONG-TERM DEBT 17,494 2,946 20,440
428 AMORT. OF DEBT DISCOUNT AND EXPENSE 129 144 273
431 OTHER INTEREST EXPENSE 0 14 14
432 CAPITALIZED INTEREST 0 0 0
419.1 AFUDC 0 0 0
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 = 482,089 12,731 494,820
COMPENSATION FOR USE OF EQUITY CAPITAL=
430 INTEREST ON DEBT TO ASSOCIATE COMPANIES=
TOTAL COST OF SERVICE= 482,089 12,731 494,820
</TABLE>
<TABLE>
ANNUAL REPORT OF EUA Service Corporation
For the Year Ended December 31, 1998
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 31,006,699 1,043,759 32,050,458
921 OFFICE SUPPLIES AND EXPENSES 1,823,619 587,435 2,411,054
922 ADMINISTRATIVE EXPENSE TRANSFERRED-CREDIT 0 0 0
923 OUTSIDE SERVICES EMPLOYED 1,742,089 413,837 2,155,926
924 PROPERTY INSURANCE 29,568 0 29,568
925 INJURIES AND DAMAGES 244,889 299 245,188
926 EMPLOYEE PENSIONS AND BENEFITS 9,284,523 294,036 9,578,559
928 REGULATORY COMMISSION EXPENSE 0 0 0
930.1 GENERAL ADVERTISING EXPENSE 9,736 0 9,736
930.2 MISC. GENERAL EXPENSE 907,412 2,644 910,056
931 RENTS 1,076,263 719,633 1,795,896
935 MAINTENANCE 990,354 191,079 1,181,433
403 DEPRECIATION 0 1,283,718 1,283,718
405 AMORTIZATION 0 0 0
408 TAXES OTHER THAN INCOME TAXES 2,605,197 72,640 2,677,837
409 INCOME TAXES 12,954 212,278 225,232
410 PROVISION FOR DEFERRED INCOME TAXES 69,751 (44,337) 25,414
411 PROVISION FOR DEFERRED INCOME TAXES-CREDIT 0 0 0
411.5 INVESTMENT TAX CREDIT 0 0 0
419.0 OTHER INTEREST INCOME 0 (3,220) (3,220)
421.0 MISC. NON-OPERATING INCOME BILLED 0 (77,271) (77,271)
426.1 DONATIONS-DEDUCTIBLE 0 1,575 1,575
426.3 PENALTIES 0 0 0
426.5 OTHER DEDUCTIONS 0 0 0
427 INTEREST ON LONG-TERM DEBT 17,494 614,906 632,400
428 AMORT. OF DEBT DISCOUNT AND EXPENSE 129 17,489 17,618
431 OTHER INTEREST EXPENSE 0 3,753 3,753
432 CAPITALIZED INTEREST 0 0 0
419.1 AFUDC 0 0 0
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 = 49,820,677 5,334,253 55,154,930
COMPENSATION FOR USE OF EQUITY CAPITAL= 297,943 297,943
430 INTEREST ON DEBT TO ASSOCIATE COMPANIES= 0 0
TOTAL COST OF SERVICE= 49,820,677 5,632,196 55,452,873
</TABLE>
<TABLE>
ANNUAL REPORT OF EUA Service Corporation
For the Year Ended December 31, 1998
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 32,050,458 208,210 927,604 173,058 1,293,298
921 Office Supplies and Expenses 2,411,054 7,370 27,759 10,224 73,706
922 Administrative Expense Transfer 0 0 0 0 0
923 Outside Services Employed 2,155,926 0 0 21,973 0
924 Property Insurance 29,568 0 0 0 0
925 Injuries and Damages 245,188 0 0 0 0
926 Employee Pension and Benefits 9,578,559 0 0 0 0
928 Regulatory Commission Expense 0 0 0 0 0
930.1 General Advertising Expense 9,736 0 0 0 0
930.2 Misc. General Expense 910,056 135 54 4,692 9,415
931 Rents 1,795,896 3,202 3,097 10,563 14,136
935 Maintenance 1,181,433 1,151 3,087 450 2,302
403 Depreciation 1,283,718 2,191 3,745 7,428 39,958
405 Amortization 0 0 0 0 0
408 Taxes Other Than Income Taxes 2,677,837 10,957 41,236 13,200 108,898
409 Income Taxes 225,232 0 0 0 0
410 Provision for Deferred Inc. Taxes 25,564 0 0 0 0
411 Provision for Deferred Inc. Taxes 0 0 0 0 0
419.0 Other Interest Income (3,220) 0 0 0 0
419.1 AFUDC - Equity Funds 0 0 0 0 0
421.0 Misc Non-Operating Income (77,421) 0 0 (15,521) 0
426.1 Donations 1,575 0 0 0 0
426.3 Penalties 0 0 0 0 0
426.5 Other Deductions 0 0 0 0 0
427 Interest on Long-Term Debt 632,400 191 2,122 3,937 37,048
428 Amort. of Debt Discount and Exp 17,618 0 41 141 1,082
431 Other Interest Expense 3,753 7 18 18 165
432 AFUDC- Debt 0 0 0 0 0
INSTRUCTION: Indicate each department or
service function. (See instruction 01-3 General
Structure of Accounting System: Uniform System
of Accounts.)
TOTAL EXPENSES = 55,154,930 233,414 1,008,763 230,163 1,580,008
</TABLE>
<TABLE>
ANNUAL REPORT OF EUA Service Corporation
For the Year Ended December 31, 1998
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 2,810,936 174,419 924,499 361,279 39,256 2,285,580
921 Office Supplies and Expenses 316,198 4,696 36,604 27,147 25,136 82,299
922 Administrative Expense Transfer 0 0 0 0 0 0
923 Outside Services Employed 248,596 375 289,988 20,198 3,700 41,779
924 Property Insurance 0 0 0 29,568 0 0
925 Injuries and Damages (513) 0 0 245,830 0 0
926 Employee Pension and Benefits (67,332) 2,622 9,601,140 0 0 58
928 Regulatory Commission Expense 0 0 0 0 0 0
930.1 General Advertising Expense 0 0 0 0 0 0
930.2 Misc. General Expense 34,062 1,521 379,467 4,752 2,644 20,717
931 Rents 609,659 0 11,153 6,524 336,448 16,504
935 Maintenance 613,405 0 0 2,347 1,698 34,901
403 Depreciation 97,928 2,187 42,699 104,607 779 52,091
405 Amortization 0 0 0 0 0 0
408 Taxes Other Than Income Taxes 204,394 8,335 68,151 26,503 3,184 163,920
409 Income Taxes 0 0 0 0 0 0
410 Provision for Deferred Income Taxes 0 0 0 0 0 0
411 Provision for Deferred Income Taxes 0 0 0 0 0 0
419.0 Other Interest Income 0 0 0 0 0 0
419.1 AFUDC - Equity Funds 0 0 0 0 0 0
421.0 Misc Non-Operating Income 0 0 0 0 0 (1,455)
426.1 Donations 0 0 0 0 0 0
426.3 Penalties 0 0 0 0 0 0
426.5 Other Deductions 0 0 0 0 0 0
427 Interest on Long-Term Debt 63,200 192 22,792 8,111 192 38,392
428 Amort. of Debt Discount and Exp 1,688 0 641 227 0 1,059
431 Other Interest Expense 280 6 101 36 6 202
432 AFUDC - Debt 0 0 0 0 0 0
INSTRUCTION: Indicate each department or
service function. (See instruction 01-3 General
Structure of Accounting System: Uniform System
of Accounts.)
TOTAL EXPENSES = 4,932,501 194,353 11,377,235 837,129 413,043 2,736,047
</TABLE>
<TABLE>
ANNUAL REPORT OF EUA Service Corporation
For the Year Ended December 31, 1998
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 825,516 484,361 123,051 97,204 697,310 1,442,776
921 Office Supplies and Expenses 54,503 100,065 7,279 2,236 30,942 20,790
922 Administrative Expense Transfer 0 0 0 0 0 0
923 Outside Services Employed 38,630 0 33,693 0 480 13,966
924 Property Insurance 0 0 0 0 0 0
925 Injuries and Damages (16) 0 0 0 0 0
926 Employee Pension and Benefits (2,295) 0 52 2,011 0 0
928 Regulatory Commission Expense 0 0 0 0 0 0
930.1 General Advertising Expense 9,736 0 0 0 0 0
930.2 Misc. General Expense 22,715 672 100 0 3,441 1,770
931 Rents 26,840 1,655 7,682 0 5,769 475
935 Maintenance 0 10,113 0 0 0 1,361
403 Depreciation 25,705 12,127 3,511 3,511 23,437 18,095
405 Amortization 0 0 0 0 0 0
408 Taxes Other Than Income Taxes 62,241 34,287 9,645 7,844 55,305 117,429
409 Income Taxes 0 0 0 0 0 0
410 Provision for Deferred Income Taxes 0 0 0 0 0 0
411 Provision for Deferred Income Taxes 0 0 0 0 0 0
419.0 Other Interest Income 0 0 0 0 0 0
419.1 AFUDC - Equity Funds 0 0 0 0 0 0
421.0 Misc Non-Operating Income (1,761) 0 0 0 0 0
426.1 Donations 0 0 0 0 0 0
426.3 Penalties 0 0 0 0 0 0
426.5 Other Deductions 0 0 0 0 0 0
427 Interest on Long-Term Debt 18,929 8,459 2,395 2,045 18,736 4,428
428 Amort. of Debt Discount and Exp 529 258 133 11 528 16
431 Other Interest Expense 84 38 11 8 83 137
432 AFUDC-Debt 0 0 0 0 0 0
INSTRUCTION: Indicate each department or
service function. (See instruction 01-3 General
Structure of Accounting System: Uniform System
of Accounts.)
TOTAL EXPENSES = 1,081,356 652,035 187,552 114,870 836,031 1,621,243
</TABLE>
<TABLE>
ANNUAL REPORT OF EUA Service Corporation
For the Year Ended December 31, 1998
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 1,430,164 1,431,745 2,369,660 3,224,236 1,273,964 590,582
921 Office Supplies and Expenses 75,133 41,974 90,152 37,621 584,631 13,634
922 Administrative Expense Transfer 0 0 0 0 0 0
923 Outside Services Employed 724,267 0 245,585 17,833 410,227 0
924 Property Insurance 0 0 0 0 0 0
925 Injuries and Damages 0 0 0 (104) (5) 0
926 Employee Pension and Benefits 0 0 (363) (13,223) 58,552 0
928 Regulatory Commission Expense 0 0 0 0 0 0
930.1 General Advertising Expense 0 0 0 0 0 0
930.2 Misc. General Expense 333,799 20,195 8,904 5,500 335 2,281
931 Rents 10,152 57,140 240,846 102,431 173,655 2,305
935 Maintenance 42,522 125,786 0 0 190,425 1,150
403 Depreciation 10,996 37,515 77,726 135,561 53,146 7,879
405 Amortization 0 0 0 0 0 0
408 Taxes Other Than Income Taxes 79,898 109,454 186,840 259,273 379,656 46,949
409 Income Taxes 0 0 225,232 0 0 0
410 Provision for Deferred Income Taxes 0 0 25,564 0 0 0
411 Provision for Deferred Income Taxes 0 0 0 0 0 0
419.0 Other Interest Income 0 0 (3,220) 0 0 0
419.1 AFUDC - Equity Funds 0 0 0 0 0 0
421.0 Misc Non-Operating Income 0 (500) (58,184) 0 0 0
426.1 Donations 1,000 0 0 0 0 0
426.3 Penalties 0 0 0 0 0 0
426.5 Other Deductions 0 0 0 0 0 0
427 Interest on Long-Term Debt 2,696 27,736 57,229 119,987 38,476 1,926
428 Amort. of Debt Discount and Exp 10 790 1,599 3,360 1,091 7
431 Other Interest Expense 82 123 426 532 171 62
432 AFUDC-Debt 0 0 0 0 0 0
INSTRUCTION: Indicate each department or
service function. (See instruction 01-3 General
Structure of Accounting System: Uniform System
of Accounts.)
TOTAL EXPENSES = 2,710,719 1,851,958 3,467,996 3,893,007 3,164,324 666,775
</TABLE>
<TABLE>
ANNUAL REPORT OF EUA Service Corporation
For the Year Ended December 31, 1998
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 276,263 80,995 3,645,984 1,565,305 681,734
921 Office Supplies and Expenses 9,748 22,799 128,565 56,250 129,276
922 Administrative Expense Transfer 0 0 0 0 0
923 Outside Services Employed 0 6,357 0 0 29,552
924 Property Insurance 0 0 0 0 0
925 Injuries and Damages 0 0 0 26 0
926 Employee Pension and Benefits 0 0 0 (779) 0
928 Regulatory Commission Expense 0 0 0 0 0
930.1 General Advertising Expense 0 0 0 0 0
930.2 Misc. General Expense 0 271 15,221 10,166 3,102
931 Rents 1,941 1,180 45,472 51,956 8,485
935 Maintenance 466 0 40,738 86,341 5,768
403 Depreciation 6,558 1,558 117,002 323,639 21,105
405 Amortization 0 0 0 0 0
408 Taxes Other Than Income Taxes 13,589 6,926 285,835 129,325 52,062
409 Income Taxes 0 0 0 0 0
410 Provision for Deferred Income Taxes 0 0 0 0 0
411 Provision for Deferred Income Taxes 0 0 0 0 0
419.0 Other Interest Income 0 0 0 0 0
419.1 AFUDC - Equity Funds 0 0 0 0 0
421.0 Misc Non-Operating Income 0 0 0 0 0
426.1 Donations 0 0 0 0 0
426.3 Penalties 0 0 0 0 0
426.5 Other Deductions 0 0 0 0 0
427 Interest on Long-Term Debt 385 385 89,313 5,005 14,988
428 Amort. of Debt Discount and Exp 0 0 2,436 19 445
431 Other Interest Expense 14 9 696 163 66
432 AFUDC-Debt 0 0 0 0 0
INSTRUCTION: Indicate each department or
service function. (See instruction 01-3 General
Structure of Accounting System: Uniform System
of Accounts.)
TOTAL EXPENSES = 308,964 120,480 4,371,262 2,227,416 946,583
</TABLE>
<TABLE>
ANNUAL REPORT OF EUA Service Corporation
For the Year Ended December 31, 1998
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 118,597 2,492,872
921 Office Supplies and Expenses 274,811 119,506
922 Administrative Expense Transfer 0 0
923 Outside Services Employed 3,584 5,143
924 Property Insurance 0 0
925 Injuries and Damages (30) 0
926 Employee Pension and Benefits (1,884) 0
928 Regulatory Commission Expense 0 0
930.1 General Advertising Expense 0 0
930.2 Misc. General Expense 0 24,125
931 Rents 4,308 42,318
935 Maintenance 653 16,769
403 Depreciation 1,558 49,476
405 Amortization 0 0
408 Taxes Other Than Income Taxes 8,987 183,514
409 Income Taxes 0 0
410 Provision for Deferred Income Taxes 0 0
411 Provision for Deferred Income Taxes 0 0
419.0 Other Interest Income 0 0
419.1 AFUDC - Equity Funds 0 0
421.0 Misc Non-Operating Income 0 0
426.1 Donations 0 575
426.3 Penalties 0 0
426.5 Other Deductions 0 0
427 Interest on Long-Term Debt 3,361 39,744
428 Amort. of Debt Discount and Exp 80 1,427
431 Other Interest Expense 15 194
432 AFUDC-Debt 0 0
INSTRUCTION: Indicate each department or
service function. (See instruction 01-3 General
Structure of Accounting System: Uniform System
of Accounts.)
TOTAL EXPENSES = 414,040 2,975,663
</TABLE>
<TABLE>
ANNUAL REPORT OF EUA Service Corporation
For the Year Ended December 31, 1998
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 208,210 208,210 0 1
110-111 Executive Admin. & 0 0 0
Support 927,604 12,567 915,037 0 3
115 Internal Audit 173,058 1,071 171,987 0 3
120's Consumer Service 1,293,298 0 1,293,298 0 25
130's Information Systems 2,810,936 2,902 2,808,034 0 47
210 Admin. Support - 0 0 0 0 0
Corporate 174,419 1,270 173,149 0 1
215-220 Human Resources/ 0 0 0 0 0
Emp. Benefits 924,499 3,324 921,175 0 16
230 .2 Safety and 0 0 0 0 0
Occupational 0 0 0 0 0
Health 361,279 1,053 360,226 0 6
240 Office Services - 0 0 0 0 0
Boston 39,256 0 39,256 0 1
260's Corporate Planning 0 0 0 0 0
/C&LM/PWR Mgmt. 2,285,580 0 2,280,997 4,583 32
270's Marketing Services 825,516 0 825,119 397 14
280 Strategic Studies 484,361 0 324,056 160,305 6
305, 31 Executive Admin & 0 0 0 0 0
Support/Corp. 0 0 0 0 0
Comm. 123,051 1,115 121,936 0 1
315-325 Corporate 0 0 0 0 0
Communications 97,204 206 96,998 0 4
360's Matls. Mgmt/Stores/ 0 0 0 0 0
Purchasing 697,310 104 697,206 0 13
372 System Operations 1,442,776 0 1,442,776 0 23
410-418 Financial/Treasury 0 0 0 0 0
Services 1,430,164 5,689 1,424,475 0 14
420-424 Rate Admin/Load 0 0 0 0 0
Research 1,431,745 0 1,431,745 0 20
426-433 Comptroller/Acctng. 2,369,660 47,149 2,319,803 2,708 45
440's Customer Service 3,224,236 4 3,224,232 0 89
450's Bldg & Facilities-WB 1,273,964 2,875 1,269,697 1,392 27
525 Transmission Lines 590,582 0 590,582 0 10
560 Eng. & Oper Admin 0 0 0 0 0
& Support 276,263 1,209 275,054 0 2
565 Central Meter Test 80,995 0 80,995 0 2
570's Engineering 3,645,984 0 3,645,984 0 67
581-585 S & C / Substation / 0 0 0 0 0
Radio/ Microwave 0 0 0 0 0
Stds. 1,565,305 118 1,565,136 51 26
586-587 Environmental Eng. 681,734 0 679,309 2,425 11
588 Telecommunications 118,597 0 118,597 0 3
600's Admin. & Support 2,492,872 2,247 2,486,107 4,518 39
TOTAL 32,050,458 82,903 31,791,176 176,379 551
</TABLE>
<TABLE>
ANNUAL REPORT OF EUA Service Corporation
For the Year Ended December 31, 1998
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 346,098
Various (9) NA 41,257
---------
387,355
---------
Outside Services - Accounting
---------
Various (5) NA 159,642
---------
Outside Services - Y2K Consulting
McDermott Will & Emery Legal Services NA 203,572
Various (2) NA 47,827
---------
251,399
---------
Outside Services - Info. Systems
---------
Various (13) NA 128,298
---------
Outside Services - Building
and Maintenance
First Security Services Security Services NA 140,464
Various (38) NA 166,546
---------
307,010
---------
Outside Services - Other
Eastern Edison Company Arborist/Tech.Trainers/Prop.Mai A 288,067
Media Concepts Printing Services NA 112,941
Various (58) NA 521,214
---------
922,222
---------
Total Outside Services Employed 2,155,926
=========
</TABLE>
<TABLE>
ANNUAL REPORT OF EUA Service Corporation
For the Year Ended December 31, 1998
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) 226,486
Employee Education Reimbursement (9260-03) 52,901
Employee Publications (9260-04) 1,795
Long Term Disability (9260-08) 738,533
Life Insurance (9260-12 to 9260-19) 330,378
Group Health including FAS 106 (9260-10/9260-22 TO 9260-39) 3,552,881
Company Match/Employee Savings Plan (9260-40 to 9260-43) 738,228
Pension Plan (9260-51 to 9260-58) 3,643,116
Miscellaneous (Service Recognition, Employee Exams 294,241
and Employee related programs)
TOTAL 9,578,559
</TABLE>
<TABLE>
ANNUAL REPORT OF EUA Service Corporation
For the Year Ended December 31, 1998
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 9,736
TOTAL 9,736
</TABLE>
<TABLE>
ANNUAL REPORT OF EUA Service Corporation
For the Year Ended December 31, 1998
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 28,331
Corporate and Fiscal Expenses Including Investor Relations 153,716
Transfer Agent Fees and Expenses 144,058
Employee Training and Seminars 542,806
Miscellaneous 41,145
TOTAL 910,056
</TABLE>
<TABLE>
ANNUAL REPORT OF EUA Service Corporation
For the Year Ended December 31, 1998
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 327,928
Brockton MA, Office Facility 10,056
Lincoln RI, Office Facility 210,176
Total Building Rents 548,160
Data Processing and Other Equipment Rents 1,247,736
TOTAL 1,795,896
</TABLE>
<TABLE>
ANNUAL REPORT OF EUA Service Corporation
For the Year Ended December 31, 1998
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 101,753
Rhode Island Unemployment Tax 21,577
Job Development Tax (Rhode Island) 1,850
Property Tax 280,926
Health Insurance Tax - Massachusetts 8,310
Miscellaneous 34,543
448,959
U.S. Government Tax:
FICA 2,196,973
Federal Unemployment Tax 31,905
2,228,878
2,677,837
</TABLE>
<TABLE>
ANNUAL REPORT OF EUA Service Corporation
For the Year Ended December 31, 1998
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 (3) 1,575
1,575
</TABLE>
<TABLE>
ANNUAL REPORT OF EUA Service Corporation
For the Year Ended December 31, 1998
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 0
TOTAL 0
</TABLE>
ANNUAL REPORT OF EUA Service Corporation
For the Year Ended December 31, 1998
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>
ANNUAL REPORT OF EUA SERVICE CORPORATION
<CAPTION>
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 Safety/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 Media Relations
Marketing Services Tech. Operations Employee Communications
Business Services
</TABLE>
ANNUAL REPORT OF EUA Service Corporation
For the Year Ended December 31, 1998
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, 1998
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, 1998:
<S> <C> <C>
Blackstone Valley Electric Company $71,791
Montaup Electric Company 36,792
EUA Energy Investment Corporation 1,117
Eastern Edison Company 143,378
Eastern Utilities Associates 611
EUA Cogenex Corporation 3,237
EUA Ocean State Corporation 677
Newport Electric Corporation 38,603
EUA Energy Services Incorporated 1,737
TOTAL $297,943
</TABLE>
ANNUAL REPORT OF EUA Service Corporation
For the Year Ended December 31, 1998
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 23, 1999
<TABLE> <S> <C>
<ARTICLE> OPUR2
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> DEC-31-1998
<BOOK-VALUE> PER-BOOK
<NET-SERVICE-COMPANY-PROPERTY> 19904
<TOTAL-INVESTMENTS> 0
<TOTAL-CURRENT-ASSETS> 15878
<TOTAL-DEFERRED-DEBITS> 489
<OTHER-ASSETS-AND-DEBITS> 0
<TOTAL-ASSETS-AND-DEBITS> 36271
<TOTAL-PROPRIETARY-CAPITAL> 2557
<TOTAL-LONG-TERM-DEBT> 5499
<NOTES-PAYABLE> 0
<NOTES-PAYABLE-ASSOCIATE-COMP> 0
<OTHER-CURR-AND-ACCRUED-LIAB> 4324
<TOTAL-DEFERRED-CREDITS> 22603
<DEFERRED-INCOME-TAX> 1288
<TOT-LIABIL-AND-PROPRIET-CAP> 36271
<SERVICES-ASSOCIATE-COMPANIES> 54958
<SERVICES-NON-ASSOCIATE-COMP> 459
<MISC-INCOME-OR-LOSS> 0
<TOTAL-INCOME> 55417
<SALARIES-AND-WAGES> 32050
<EMPLOYEE-PENSION-AND-BENEFIT> 9579
<OTHER-EXPENSES> 13526
<TOTAL-EXPENSES> 55155
<NET-INCOME> 262
<TOTAL-EXPENSES-DIRECT-COST> 49821
<TOTAL-EXPENSES-INDIRECT-COST> 5334
<TOT-EXP-DIRECT-AND-INDIRECT> 55155
<PERSONNEL-END-OF-YEAR> 551
</TABLE>
