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
GPU SERVICE, INC.
(Exact Name of Reporting Company)
A Subsidiary Service Company
----------------------------------------------
("Mutual" or "Subsidiary")
Date of Incorporation April 30, 1970
--------------
If not Incorporated, Date of Organization____________
State or Sovereign Power under which Incorporated or Organized Pennsylvania
------------
Location of Principal Executive Offices of Reporting Company:
300 Madison Avenue, Morristown, NJ 07962
----------------------------------------
Name, title, and address of officer to whom correspondence concerning this
report should be addressed:
310 Madison Avenue
P. R. Chatman Assistant Comptroller Morristown, NJ 07962
- --------------------------------------------------------------------------------
(Name) (Title) (Address)
Name of Principal Holding Company Whose Subsidiaries are served by Reporting
Company:
GPU, INC.
- --------------------------------------------------------------------------------
<PAGE>
1
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 become 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 (S210.3-01(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, S210.3-01(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.
<PAGE>
2
- --------------------------------------------------------------------------------
LISTING OF SCHEDULES AND ANALYSIS OF ACCOUNTS Page
Number
- --------------------------------------------------------------------------------
Description of Schedules and Accounts Schedule or Account
Number
- --------------------------------------------------------------------------------
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 EXPENSES 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 --NONASSOCIATE COMPANIES Account 458 22
ANALYSIS OF CHARGES FOR SERVICE - ASSOCIATE
AND NONASSOCIATE COMPANIES Schedule XVI 23
SCHEDULE OF EXPENSE BY DEPARTMENT OR
SERVICE FUNCTION Schedule XVII 24-25A
DEPARTMENTAL ANALYSIS OF SALARIES Account 920 26
OUTSIDE SERVICES EMPLOYED Account 923 27
EMPLOYEE PENSIONS AND BENEFITS Account 926 28
GENERAL ADVERTISING EXPENSES Account 930.1 29
MISCELLANEOUS GENERAL EXPENSES Account 930.2 30
RENTS Account 931 31
TAXES OTHER THAN INCOME TAXES Account 408 32
DONATIONS Account 426.1 33
OTHER DEDUCTIONS Account 426.5 34
NOTES TO STATEMENT OF INCOME Schedule XVIII 35
<PAGE>
3
- --------------------------------------------------------------------------------
LISTING OF INSTRUCTIONAL FILING REQUIREMENTS Page
Number
- --------------------------------------------------------------------------------
Description of Reports or Statements
- --------------------------------------------------------------------------------
ORGANIZATION CHART 36
------------------
METHODS OF ALLOCATION 37
---------------------
ANNUAL STATEMENT OF COMPENSATION FOR USE 38
----------------------------------------
OF CAPITAL BILLED
-----------------
VENTURE DISCLOSURES 39
-------------------
FINANCIAL DATA SCHEDULE - FILED VIA EDGAR
-----------------------
NOTE: Dollar figures in this report are shown in thousands unless otherwise
noted.
<PAGE>
4
ANNUAL REPORT OF GPU SERVICE, INC.
- --------------------------------------------------------------------------------
SCHEDULE I - COMPARATIVE BALANCE SHEET
Give balance sheet of the Company as of December 31 of the current and prior
year.
- --------------------------------------------------------------------------------
ACCOUNT ASSETS AND OTHER DEBITS As of December 31
- ------------------------------------------ --------------------
CURRENT PRIOR
SERVICE COMPANY PROPERTY
101 Service Company property (Schedule II) ........... $70,922 $85,346
107 Construction work in progress (Schedule II) ...... -- --
------- -------
108 Total Property ................................... 70,922 85,346
108 Less accumulated provision for depreciation
and amortization of service company
property (Schedule III) .......................... 26,721 28,455
------- -------
Net Service Company Property ..................... 44,201 56,891
------- -------
INVESTMENTS
123 Investments in associate companies (Schedule IV) .... -- --
124 Other investments (Schedule IV) ..................... 19,138 17,568
------ ------
Total Investments ................................... 19,138 17,568
------ ------
CURRENT AND ACCRUED ASSETS
131 Cash 24 9
134 Special deposits 70 79
135 Working funds -- --
136 Temporary cash investments (Schedule IV) -- --
141 Notes receivable -- --
143 Accounts receivable 6,789 17,795
144 Accumulated provision for uncollectible accounts -- --
146 Accounts receivable from associate
companies (Schedule V) 17,073 8,219
152 Fuel stock expenses undistributed (Schedule VI) -- --
154 Materials and supplies -- --
163 Stores expense undistributed (Schedule VII) -- --
165 Prepayments 1,219 894
171 Interest Receivable -- --
174 Miscellaneous current and accrued
assets (Schedule VIII) -- --
------ ------
Total Current and Accrued Assets 25,175 26,996
------ ------
DEFERRED DEBITS
181 Unamortized debt expense 36 42
184 Clearing accounts -- --
186 Miscellaneous deferred debits (Schedule IX) 2,691 1,949
188 Research, development, or demonstration
expenditures (Schedule X) -- --
190 Accumulated deferred income taxes 17,411 10,504
-------- --------
Total Deferred Debits 20,138 12,495
-------- --------
TOTAL ASSETS AND OTHER DEBITS 108,652 $113,950
======== ========
<PAGE>
5
ANNUAL REPORT OF GPU SERVICE, INC.
- --------------------------------------------------------------------------------
SCHEDULE I - COMPARATIVE BALANCE SHEET
- --------------------------------------------------------------------------------
ACCOUNT ASSETS AND OTHER DEBITS As of December 31
- ------------------------------------------ --------------------
CURRENT PRIOR
PROPRIETARY CAPITAL
201 Common stock issued (Schedule XI) $ 50 $ 50
211 Miscellaneous paid-in-capital (Schedule XI) -- --
215 Retained earnings / Accumulated other
comprehensive income /(loss) (Schedule XI) (3,112) (1,856)
216 Unappropriated retained earnings (Schedule XI) -- --
------- -------
217 Total Proprietary Capital (3,062) (1,806)
------- -------
LONG-TERM DEBT
223 Advances from associate companies (Schedule XII) -- --
224 Other long-term debt (Schedule XII) 22,001 36,181
225 Unamortized premium on long-term debt -- --
226 Unamortized discount on long-term debt-debit -- --
------ ------
Total Long-term Debt 22,001 36,181
------ ------
CURRENT AND ACCRUED LIABILITIES
231 Notes payable -- --
232 Accounts payable 12,919 23,523
233 Notes payable to associate
companies (Schedule XIII) -- --
234 Accounts payable to associate
companies (Schedule XIII) 23,498 11,642
236 Taxes accrued 3,535 593
237 Interest accrued 274 418
238 Dividends declared -- --
241 Tax collections payable 8 57
242 Miscellaneous current and accrued
liabilities (Schedule XIII) 19,350 24,537
------ ------
Total Current and Accrued Liabilities 59,584 60,770
------ ------
DEFERRED CREDITS
253 Other deferred credits 17,827 10,184
255 Accumulated deferred investment tax credits -- --
------ ------
Total Deferred Credits 17,827 10,184
------ ------
282 ACCUMULATED DEFERRED INCOME TAXES 12,302 8,621
--------------------------------- ------- -------
TOTAL LIABILITIES AND PROPRIETARY $108,652 $113,950
======= =======
CAPITAL
<PAGE>
6
ANNUAL REPORT OF GPU SERVICE, INC.
For the Year Ended December 31, 1997
- --------------------------------------------------------------------------------
SCHEDULE II - SERVICE COMPANY PROPERTY
- --------------------------------------------------------------------------------
BALANCE AT RETIREMENTS OTHER BALANCE AT
BEGINNING ADDITIONS OR CHANGES 1/ CLOSE OF
DESCRIPTION OF YEAR SALES YEAR
- --------------------------------------------------------------------------------
SERVICE COMPANY PROPERTY
- ------------------------
Account
- -------
301 ORGANIZATION $ 49 $ - $ - $ - $ 49
303 MISCELLANEOUS
INTANGIBLE PLANT
304 LAND & LAND RIGHT 2,824 - 2,504 - 320
305 STRUCTURES AND
IMPROVEMENTS 51,181 308 13,209 - 38,280
306 LEASEHOLD
IMPROVEMENTS - - - - -
307 EQUIPMENT 2/ 23,836 3,896 1,815 - 25,917
-
308 OFFICE FURNITURE
AND EQUIPMENT 4,970 261 - - 5,231
309 AUTOMOBILES, OTHER
VEHICLES AND
RELATED GARAGE
EQUIPMENT
310 AIRCRAFT AND
AIRPORT EQUIPMENT
311 OTHER SERVICE
COMPANY PROPERTY 3/ 2,486 231 1,592 - 1,125
- ------------------------------------------------------
SUB-TOTAL 85,346 4,696 19,120 - 70,922
------------------------------------------------------
107 CONSTRUCTION WORK
IN PROGRESS 4/ - - - - -
TOTAL $85,346 $ 4,696 $19,120 $ - $70,922
=======================================================
- --------------------------------------------------------------------------------
1/ PROVIDE AN EXPLANATION OF THOSE CHANGES CONSIDERED MATERIAL:
N/A
- --------------------------------------------------------------------------------
<PAGE>
7
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:
- --------------------------------------------------------------------------------
BALANCE AT
SUBACCOUNT DESCRIPTION ADDITIONS CLOSE OF
YEAR
- --------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT (MICROWAVE & TELEPHONE) $ 427 $ 2,025
DATA PROCESSING EQUIPMENT 3,270 19,674
DISPATCHING EQUIPMENT (179) 811
LOAD RESEARCH EQUIPMENT -- 119
MISCELLANEOUS EQUIPMENT 9 327
PERSONAL COMPUTER 369 2,961
TOTAL $ 3,896 $25,917
======= =======
- --------------------------------------------------------------------------------
3/ DESCRIBE OTHER SERVICE COMPANY PROPERTY:
Photographic, Mailing Equipment, HVA System, Security System
- --------------------------------------------------------------------------------
4/ DESCRIBE CONSTRUCTION WORK IN PROGRESS:
N/A
<PAGE>
8
<TABLE>
ANNUAL REPORT OF GPU SERVICE, INC.
For the Year Ended December 31, 1997
- --------------------------------------------------------------------------------
SCHEDULE III
ACCUMULATED PROVISION FOR DEPRECIATION AND
AMORTIZATION OF SERVICE COMPANY PROPERTY
- --------------------------------------------------------------------------------
<CAPTION>
BALANCE AT ADDITIONS BALANCE AT
BEGINNING CHARGED OTHER CHANGES CLOSE OF
DESCRIPTION OF YEAR TO RETIREMENTS ADD (DEDUCT)1/ YEAR
ACCOUNT 403
Account
<S> <C> <C> <C> <C> <C> <C>
301 ORGANIZATION
303 MISCELLANEOUS
INTANGIBLE PLANT
304 LAND & LAND
RIGHTS
305 STRUCTURES AND
IMPROVEMENTS $15,976 $ 898 $5,731 $ - $11,143
306 LEASEHOLD
IMPROVEMENTS - - - - -
307 EQUIPMENT 8,518 2,926 - - 11,444
308 OFFICE FURNITURE
AND FIXTURES 3,202 501 - - 3,703
309 AUTOMOBILES, OTHER
VEHICLES AND
RELATED GARAGE
EQUIPMENT
310 AIRCRAFT AND
AIRPORT EQUIPMENT
311 OTHER SERVICE
COMPANY PROPERTY 759 41 369 - 431
$28,455 $4,366 $6,100 $ - $26,721
====== ===== ===== ==== ======
<FN>
- --------------------------------------------------------------------------------
1/ PROVIDE AN EXPLANATION OF THOSE CHANGES CONSIDERED MATERIAL:
N/A
</FN>
</TABLE>
<PAGE>
9
ANNUAL REPORT OF GPU SERVICE, INC.
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.
- --------------------------------------------------------------------------------
BALANCE AT BALANCE AT
DESCRIPTION BEGINNING CLOSE OF
OF YEAR YEAR
- --------------------------------------------------------------------------------
ACCOUNT 123-INVESTMENT IN ASSOCIATE COMPANIES
NONE
ACCOUNT 124 - OTHER INVESTMENTS
COMPANY OWNED LIFE INSURANCE -
CASH SURRENDER VALUE $ 9,601 $ 10,859
RABBI TRUST 7,801 8,107
HEALTH CARE RESERVE 166 172
ACCOUNT 136 - TEMPORARY CASH INVESTMENTS
NONE
TOTAL $ 17,568 $ 19,138
====== ======
<PAGE>
10
ANNUAL REPORT OF GPU SERVICE, INC.
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.
BALANCE AT BALANCE AT
DESCRIPTION BEGINNING CLOSE OF
OF YEAR YEAR
ACCOUNT 146 - ACCOUNTS RECEIVABLE FROM ASSOCIATE
COMPANIES
GPU INTERNATIONAL, INC. $ 232 $ 570
GPU POWER, INC. 58 18
GPU ELECTRIC, INC. 48 124
GPU, INC. 436 -
GPU GENERATION, INC. 5,745 2,803
GPU NUCLEAR, INC. 19 2,541
GPU ADVANCED RESOURCES, INC. - 234
JERSEY CENTRAL POWER & LIGHT COMPANY - 10,783
METROPOLITAN EDISON COMPANY 1,333 -
PENNSYLVANIA ELECTRIC COMPANY 348 -
TOTAL $ 8,219 $ 17,073
===== ======
- --------------------------------------------------------------------------------
ANALYSIS OF CONVENIENCE OR ACCOMMODATION PAYMENTS: TOTAL
PAYMENTS
INTERCHANGE TRANSACTIONS
------------------------
JERSEY CENTRAL POWER & LIGHT COMPANY $ 73,560
METROPOLITAN EDISON COMPANY 48,146
PENNSYLVANIA ELECTRIC COMPANY 4,800
-----
TOTAL PAYMENTS $126,506
========
<PAGE>
11
ANNUAL REPORT OF GPU SERVICE, INC.
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.
DESCRIPTION LABOR EXPENSES TOTAL
ACCOUNT 152 -FUEL STOCK EXPENSES UNDISTRIBUTED
NONE
TOTAL - - -
===== ===== ===
SUMMARY:
<PAGE>
12
ANNUAL REPORT OF GPU SERVICE, INC.
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.
- --------------------------------------------------------------------------------
DESCRIPTION LABOR EXPENSES TOTAL
- --------------------------------------------------------------------------------
ACCOUNT 163 - STORES EXPENSE UNDISTRIBUTED $ 1,827 $ 305 $ 2,132
BILLED TO:
JERSEY CENTRAL POWER & LIGHT COMPANY (533) (88) (621)
METROPOLITAN EDISON COMPANY (737) (83) (820)
PENNSYLVANIA ELECTRIC COMPANY (320) (71) (391)
GPU NUCLEAR, INC (17) (1) (18)
GPU GENERATION, INC (220) (62) (282)
NOTE: Stores expenses are billed back to the associated companies in the
month incurred.
TOTAL $ -- $ -- $ --
======= ======= =======
<PAGE>
13
ANNUAL REPORT OF GPU SERVICE, INC.
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.
- --------------------------------------------------------------------------------
BALANCE AT BALANCE AT
DESCRIPTION BEGINNING CLOSE OF
OF YEAR YEAR
- --------------------------------------------------------------------------------
ACCOUNT 174 - MISCELLANEOUS CURRENT AND ACCRUED
ASSETS
NONE
------ ----
TOTAL - -
====== ====
<PAGE>
14
ANNUAL REPORT OF GPU SERVICE, INC.
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.
- --------------------------------------------------------------------------------
BALANCE AT BALANCE AT
DESCRIPTION BEGINNING CLOSE OF
OF YEAR YEAR
- --------------------------------------------------------------------------------
ACCOUNT 186 - MISCELLANEOUS DEFERRED DEBITS
Air Shuttle $ 138 $ 106
Stock Plan 1,855 2,522
Procurement Cards 17 26
Unclassified Charges by Associates 73 448
Fringe Benefits (33) -
Misc. Billing Adjustments (101) (411)
TOTAL $1,949 $ 2,691
===== ======
<PAGE>
15
ANNUAL REPORT OF GPU SERVICE, INC.
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.
- --------------------------------------------------------------------------------
DESCRIPTION AMOUNT
- --------------------------------------------------------------------------------
ACCOUNT 188 - RESEARCH, DEVELOPMENT, OR DEMONSTRATION
EXPENDITURES
NONE
---
TOTAL $ -
===
<PAGE>
16
<TABLE>
ANNUAL REPORT OF GPU SERVICE, INC.
For the Year Ended December 31, 1997
- --------------------------------------------------------------------------------
SCHEDULE XI - PROPRIETARY CAPITAL
- --------------------------------------------------------------------------------
<CAPTION>
NUMBER OF PAR OR STATED
ACCOUNT NUMBER CLASS OF STOCK SHARES VALUE OUTSTANDING CLOSE OF PERIOD
-----------------------------
AUTHORIZED PER SHARE NO. OF SHARES TOTAL AMOUNT
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
201 COMMON STOCK ISSUED 5,000 $10 * 5,000 $450,000*
- --------------------------------------------------------------------------------------------------------
<FN>
INSTRUCTIONS: Classify amounts in each account with brief explanation,
disclosing the general nature of transactions which gave
rise to the reported amounts.
</FN>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
DESCRIPTION AMOUNT
- --------------------------------------------------------------------------------------------------------
<S> <C>
ACCOUNT 211 - MISCELLANEOUS PAID-IN CAPITAL NONE
ACCOUNT 215 - RETAINED EARNINGS /ACCUMULATED OTHER COMPREHENSIVE INCOME/(LOSS):
GPUS Excess Pension Plan Minimum Liability Recognition $(3,112)
-------
TOTAL $(3,112)
=======
- --------------------------------------------------------------------------------------------------------
<FN>
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 nonassociates 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.
</FN>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
BALANCE AT NET INCOME BALANCE AT
D E S C R I P T I O N BEGINNING OR DIVIDENDS CLOSE OF
OF YEAR (LOSS) PAID YEAR
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ACCOUNT 216 - UNAPPROPRIATED RETAINED EARNINGS
NONE
TOTAL $ - $ - $ - $ -
===== ===== ===== ===
<FN>
- In whole dollars.
</FN>
</TABLE>
<PAGE>
17
<TABLE>
ANNUAL REPORT OF GPU SERVICE, INC.
For the Year Ended December 31, 1997
SCHEDULE XII- LONG-TERM DEBT
- --------------------------------------------------------------------------------
<FN>
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.
- -------------------------------------------------------------------------------------------------------------------------------
</FN>
<CAPTION>
TERMS OF OBLIG DATE BALANCE AT BALANCE AT
NAME OF CREDITOR CLASS & SERIES OF INTEREST AMOUNT BEGINNING 1/ CLOSE
-
OF OBLIGATION MATURITY RATE AUTHORIZED OF YEAR ADDITIONS DEDUCTIONS OF YEAR
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ACCOUNT 223 - ADVANCES FROM ASSOCIATE
COMPANIES:
NONE
ACCOUNT 224 - OTHER LONG-TERM DEBT:
First National Bank of Chicago 4/1/01 Variable $35,000 $ - $13,000(a) $22,000
Obligations under Capital Leases Various Various 1,181 - 1,180(b) 1
------ ------ ------ ------
Total $36,181 $ - $14,180 $22,001
====== ====== ====== ======
<FN>
- ------------------------------------------------------------------------------------------------------------------------------
1/ GIVE AN EXPLANATION OF DEDUCTIONS:(a)First National Bank of Chicago-Term loan
covering mortgaged property was partially paid down with proceeds from the sale
of the Parsippany Headquarters building. (b)Obligations under Capital
Leases-Payments per agreements.
- ------------------------------------------------------------------------------------------------------------------------------
</FN>
</TABLE>
<PAGE>
18
ANNUAL REPORT OF GPU SERVICE, INC.
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.
BALANCE AT BALANCE AT
DESCRIPTION BEGINNING CLOSE OF
OF YEAR YEAR
ACCOUNT 233 - NOTES PAYABLE TO ASSOCIATE COMPANIES
NONE
TOTAL - --
= ==
ACCOUNT 234 - ACCOUNTS PAYABLE TO ASSOCIATE
COMPANIES
JERSEY CENTRAL POWER & LIGHT COMPANY $ 11,642 $ --
METROPOLITAN EDISON COMPANY -- 8,956
PENNSYLVANIA ELECTRIC COMPANY -- 9,482
GPU, INC -- 5,060
-------- --------
TOTAL $ 11,642 $ 23,498
======== ========
ACCOUNT 242 -MISCELLANEOUS CURRENT AND ACCRUED
LIABILITIES
ACCRUALS
- DENTAL $ 349 $ 351
- CAFETERIA SUPPLEMENT 18 18
- INTERCHANGE POWER (71) (350)
- INCENTIVE COMPENSATION 6,004 4,689
- HOSPITALIZATION 2,317 2,448
- OFFICERS' DEFERRED COMPENSATION 6,050 3,425
- PENSION COSTS 2,322 2,252
- SEVERANCE PAY 423 592
- WORKMEN'S COMPENSATION 14 21
- VACATION 5,289 4,715
- OBLIGATIONS UNDER CAPITAL LEASES 1,822 1,189
(Short-Term Portion)
TOTAL $ 24,537 $ 19,350
======== ========
<PAGE>
19
ANNUAL REPORT OF GPU SERVICE, INC.
For the Year Ended December 31, 1997
- --------------------------------------------------------------------------------
SCHEDULE XIV
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
INSTRUCTIONS: The space below is provided for important notes regarding
the financial statements or any account thereof. Furnish
particulars as to any significant contingent assets or
liabilities existing at the end of the year. Notes
relating to financial statements shown elsewhere in this
report may be indicated here by reference.
- --------------------------------------------------------------------------------
NONE
<PAGE>
20
ANNUAL REPORT OF GPU SERVICE, INC.
For the Year Ended December 31, 1997
- --------------------------------------------------------------------------------
SCHEDULE XV
STATEMENT OF INCOME
- --------------------------------------------------------------------------------
ACCOUNT DESCRIPTION CURRENT YEAR PRIOR YEAR
- --------------------------------------------------------------------------------
INCOME
457 Services rendered to associate companies $111,758 $134,156
458 Services rendered to nonassociate
companies 162 172
421 Miscellaneous income or loss 3,037 16
-------- --------
Total Income 114,957 134,344
-------- --------
EXPENSE
920 Salaries and wages 53,516 61,335
921 Office supplies and expenses 11,361 12,891
922 Administrative expense transferred -
credit - -
923 Outside services employed 6,383 6,702
924 Property insurance 23 171
925 Injuries and damages (673) 320
926 Employee pensions and benefits 16,839 26,823
928 Regulatory commission expense - -
930.1 General advertising expenses 23 37
930.2 Miscellaneous general expenses 848 531
931 Rents 6,228 8,310
932 Maintenance of structures and equipment 4,835 4,410
403 Depreciation and amortization expense 4,558 4,021
408 Taxes other than income taxes 6,301 6,363
409 Income taxes 8,008 (4,227)
410 Provision for deferred income taxes (345) 10,941
411 Provision for deferred income taxes -
credit (5,246) (7,533)
411.5 Investment tax credit - -
426.1 Donations 217 230
426.5 Other deductions (535) (406)
427 Interest on long-term debt 2,091 2,807
430 Interest on debt to associate
companies - -
431 Other interest expense 525 618
------- -------
Total Expense 114,957 134,344
------- -------
Net Income or (Loss) $ - $ -
======= =======
<PAGE>
21
ANNUAL REPORT OF GPU SERVICE, INC.
For the Year Ended December 31, 1997
ANALYSIS OF BILLING
ASSOCIATE COMPANIES
ACCOUNT 457
- --------------------------------------------------------------------------------
DIRECT INDIRECT COMPENSATION TOTAL
COSTS COSTS FOR USE AMOUNT
NAME OF ASSOCIATE COMPANY CHARGED CHARGED OF CAPITAL BILLED
457-1 457-2 457-3
- --------------------------------------------------------------------------------
GPU, INC $ 2,851 $ 555 $-- $ 3,406
JERSEY CENTRAL POWER
& LIGHT COMPANY 23,939 7,009 -- 30,948
PENNSYLVANIA ELECTRIC
COMPANY 14,900 4,658 -- 19,558
METROPOLITAN EDISON
COMPANY 22,812 8,249 -- 31,061
GPU NUCLEAR, INC 12,625 4,339 -- 16,964
GPU INTERNATIONAL, INC 636 154 -- 790
GPU POWER, INC 103 20 -- 123
GPU ELECTRIC, INC 296 65 -- 361
GPU GENERATION, INC 6,441 2,106 -- 8,547
-------- -------- ----- --------
TOTAL $ 84,603 $ 27,155 $-- $111,758
======== ======== ===== ========
<PAGE>
22
<TABLE>
ANNUAL REPORT OF GPU SERVICE, INC.
For the Year Ended December 31, 1997
- --------------------------------------------------------------------------------
ANALYSIS OF BILLING
NONASSOCIATE COMPANIES
ACCOUNT 458
- --------------------------------------------------------------------------------
<CAPTION>
DIRECT INDIRECT COMPENSATION EXCESS
COSTS COSTS FOR USE TOTAL OR TOTAL
NAME OF NONASSOCIATE COMPANY CHARGED CHARGED OF CAPITAL COST DEFICIENCY AMOUNT
------- -------- ------------- ----------
458-1 458-2 458-3 458-4 BILLED
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
* Consumers Water Companies (A) $ 47 $ 12 $ - $ 59 $(15) $ 44
New York State Electric & Gas (B) 4 - - 4 - 4
Utilities Employees Credit Union (C) 36 78 - 114 - 114
TOTAL $ 87 $ 90 $ - $177 $(15) $162
=== === === === == ===
- --------------------------------------------------------------------------------
<FN>
INSTRUCTION: Provide a brief description of the services rendered to each nonassociated company:
(A) Billing Services
(B) Tie Line Services
(C) Computer Services
- --------------------------------------------------------------------------------
See Descriptions of Activities on page 39.
</FN>
</TABLE>
<PAGE>
23
<TABLE>
ANNUAL REPORT OF GPU SERVICE, INC.
For the Year Ended December 31, 1997
- --------------------------------------------------------------------------------
SCHEDULE XVI
ANALYSIS OF CHARGES FOR SERVICE
ASSOCIATE AND NONASSOCIATE COMPANIES
- --------------------------------------------------------------------------------
<CAPTION>
ASSOCIATE COMPANY CHARGES NONASSOCIATE COMPANY CHARGES TOTAL CHARGES FOR SERVICE
----------------------------- ---------------------------- -----------------------------
DIRECT INDIRECT DIRECT INDIRECT DIRECT INDIRECT
DESCRIPTION OF ITEMS COST COST TOTAL COST COST TOTAL COST COST TOTAL
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
920 SALARIES AND WAGES $ 46,434 $ 7,065 $ 53,499 $17 $ 17 $ 46,434 $ 7,082 $ 53,516
921 OFFICE SUPPLIES & EXPENSES 7,112 4,140 11,252 $36 73 109 7,148 4,213 11,361
922 ADMINISTRATIVE EXPENSE
TRANSFERRED-CREDIT
923 OUTSIDE SERVICES EMPLOYED 5,763 620 6,383 5,763 620 6,383
924 PROPERTY INSURANCE 23 23 23 23
925 INJURIES AND DAMAGES 45 (718) (673) 45 (718) (673)
926 EMPLOYEE PENSIONS & BENEFITS 15,131 1,708 16,839 15,131 1,708 16,839
928 REG. COMMISSION EXPENSE
930.1 GENERAL ADVERTISING EXPENSES (12) 35 23 (12) 35 23
930.2 MISC. GENERAL EXPENSES 733 111 844 4 4 737 111 848
931 RENTS 5,020 1,192 6,212 16 16 5,036 1,192 6,228
932 MAINTENANCE OF STRUCTURES
AND EQUIPMENT 3,114 1,690 4,804 31 31 3,145 1,690 4,835
403 DEPRECIATION & AMORTIZATION
EXPENSE 63 4,495 4,558 63 4,495 4,558
408 TAXES OTHER THAN INCOME TAXES 5,017 1,284 6,301 5,017 1,284 6,301
409 INCOME TAXES 890 7,118 8,008 890 7,118 8,008
410 PROVISION FOR DEFERRED
INCOME TAXES 4 (349) (345) 4 (349) (345)
411 PROVISION FOR DEFERRED
INCOME TAXES - CREDIT (1,570) (3,676) (5,246) (1,570) (3,676) (5,246)
411.5 INVESTMENT TAX CREDIT
426.1 DONATIONS 217 217 217 217
426.5 OTHER DEDUCTIONS (535) (535) (535) (535)
427 INTEREST ON LONG-TERM DEBT 2,091 2,091 2,091 2,091
431 OTHER INTEREST EXPENSE 51 474 525 51 474 525
- -----------------------------------------------------------------------------------------------------------------------------------
<FN>
INSTRUCTION: Total cost of service will equal for associate and nonassociate
companies the total amount billed under their separate analysis
of billing schedules.
</FN>
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
TOTAL EXPENSES = 87,477 27,303 114,780 87 90 177 87,564 27,393 114,957
------ ------ ------- -- -- --- ------- ------ -------
COMPENSATION FOR USE OF EQUITY
CAPITAL = _______ ______ _______ __ __ ___ _______ ______ _______
430 INTEREST ON DEBT TO ASSOC.
COMPANIES = _______ ______ _______ __ __ ___ _______ ______ _______
TOTAL COST OF SERVICE =$87,477 $27,303 $114,780 $87 $90 $177 $87,564 $27,393 $114,957
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
24
<TABLE>
ANNUAL REPORT OF GPU SERVICE, INC.
For the Year Ended December 31, 1997
- --------------------------------------------------------------------------------
SCHEDULE XVII
SCHEDULE OF EXPENSE DISTRIBUTION
BY
DEPARTMENT OR SERVICE FUNCTION
- --------------------------------------------------------------------------------
<CAPTION>
BUDGETS AND
TOTAL FIN PLAN & CORPORATE HUMAN
DESCRIPTION OF ITEMS AMOUNT OVERHEAD ACCOUNTING TAXES ANALYSIS SECRETARY LEGAL RESOURCES
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
920 SALARIES AND WAGES $ 53,516 $ 7,082 $5,781 $ 731 $686 $458 $2,407 $1,954
921 OFFICE SUPPLIES & EXPENSES 11,361 4,213 303 76 22 53 255 316
922 ADMINISTRATIVE EXPENSE
TRANSFERRED - CREDIT
923 OUTSIDE SERVICES EMPLOYED 6,383 620 660 1,321 21 2 748 306
924 PROPERTY INSURANCE 23 23
925 INJURIES AND DAMAGES (673) (718) 13 2 6 4
926 EMPLOYEE PENSIONS & BENEFITS 16,839 1,708 1,657 226 179 116 716 577
928 REG. COMMISSION EXPENSE
930.1 GENERAL ADVERTISING EXPENSE 23 35
930.2 MISC. GENERAL EXPENSES 848 111 6 4 92
931 RENTS 6,228 1,192 297 (212) 12 2 10 23
932 MAINTENANCE OF STRUCTURES
& EQUIPMENT 4,835 1,690 32 25 46
403 DEPRECIATION & AMORTIZATION
EXPENSE 4,558 4,495
408 TAXES OTHER THAN INCOME TAXES 6,301 1,284 469 54 43 28 172 121
409 INCOME TAXES 8,008 7,118
410 PROVISION FOR DEFERRED
INCOME TAXES (345) (349)
411 PROVISION FOR DEFERRED
INCOME TAXES - CREDIT (5,246) (3,676)
411.5 INVESTMENT TAX CREDIT
426.1 DONATIONS 217
426.5 OTHER DEDUCTIONS (535)
427 INTEREST ON LONG-TERM DEBT 2,091 2,091
430 INTEREST ON DEBT TO ASSOCIATE
COMPANIES
431 OTHER INTEREST EXPENSE 525 474
<FN>
INSTRUCTION: Indicate each department or
service function. (See Instruc-
tion 01-3 General Structure of
Accounting System: Uniform
System Account)
</FN>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
TOTAL EXPENSES $114,957 $27,393 $9,212 $2,198 $969 $659 $4,343 $3,439
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
25
ANNUAL REPORT OF GPU SERVICE, INC.
For the Year Ended December 31, 1997
- --------------------------------------------------------------------------------
SCHEDULE XVII
SCHEDULE OF EXPENSE DISTRIBUTION
BY
DEPARTMENT OR SERVICE FUNCTION
- --------------------------------------------------------------------------------
DEPARTMENT OR SERVICE FUNCTION
------------------------------
MATERIAL INFORMATION
ACCOUNT & INTERNAL TECHNOLOGY POWER
NUMBER SERVICE EXECUTIVE AUDIT SERVICES SUPPLY
- --------------------------------------------------------------------------------
920 $ 407 $ 3,752 $2,518 $18,78 737
921 268 203 248 1,988 40
922
923 (4) 22 79 62 14
924
925 1 3 6 (7)
926 92 451 779 8,263 73
928
930.1
930.2 (1,469) 357
931 11 9 18 2,513 61
932 2 15 2 1,729 128
403
408 22 108 187 3,302 17
409 890
410 4
411 (1,570)
411.5
426.1 50 12
426.5 6
427
430
431 51
- --------------------------------------------------------------------------------
TOTAL $ 799 $ 4,613 $ 3,837 $ 34,559 $ 1,427
- --------------------------------------------------------------------------------
<PAGE>
25A
ANNUAL REPORT OF GPU SERVICE, INC.
For the Year Ended December 31, 1997
SCHEDULE XVII
SCHEDULE OF EXPENSE DISTRIBUTION
BY
DEPARTMENT OR SERVICE FUNCTION
DEPARTMENT OR SERVICE FUNCTION
ACCOUNT SYSTEM PROCESS GOVERNMENT CORPORATE
NUMBER PLANNING SERVICES COMMUNICATIONS AFFAIRS TREASURY GENERAL
920 $ 2,000 $ 2,403 $ 361 $ 463 $ 2,991
921 113 266 428 164 362 $ 2,043
922
923 283 206 114 151 144 1,634
924
925 3 5 1 1 7
926 412 590 78 123 854 (55)
928
930.1 2 5 (2) 3 (20)
930.2 219 33 1,495
931 41 108 3 131 75 1,934
932 5 101 7 102 951
403 63
408 99 142 19 29 205
409
410
411
411.5
426.1 155
426.5 (541)
427
430
431
- --------------------------------------------------------------------------------
TOTAL $ 2,956 $ 3,823 $ 1,383 $ 1,100 $ 4,743 $ 7,504
- --------------------------------------------------------------------------------
<PAGE>
26
ANNUAL REPORT OF GPU SERVICE, INC.
For the Year Ended December 31, 1997
- --------------------------------------------------------------------------------
DEPARTMENTAL ANALYSIS OF SALARIES
ACCOUNT 920
- --------------------------------------------------------------------------------
DEPARTMENTAL SALARY EXPENSE NUMBER
NAME OF DEPARTMENT INCLUDED IN AMOUNTS BILLED TO PERSONNEL
- ------------------ ----------------------------------- ---------
Indicate each department TOTAL PARENT OTHER NON END OF
or service function. AMOUNT COMPANY ASSOCIATES ASSOCIATES YEAR
- --------------------------------------------------------------------------------
Accounting $ 6,619 $ 29 $ 6,590 $ - 113
Taxes 831 - 831 - 12
Budgets and Financial
Planning & Analysis 804 - 804 - 7
Corporate Secretary 957 98 859 - 8
Legal 3,129 1 3,128 - 47
Human Resources 2,289 - 2,289 - 22
Materials and Services 692 79 613 - 34
Executive 4,924 2,085 2,839 - 8
Internal Auditing 2,725 - 2,725 - 39
Information Technology Services 20,330 - 20,313 17 327
Power Supply 717 - 717 - -
System Operations 80 - 80 - -
System Planning 2,163 - 2,163 - -
Process Services 2,695 - 2,695 - 42
Communications 833 27 806 - 5
Government Affairs 494 - 494 - 5
Treasury 3,234 53 3,181 - 60
------ ----- ------ -- ----
TOTAL $53,516 $2,372 $51,127 $17 729
====== ===== ====== == ====
<PAGE>
27
<TABLE>
ANNUAL REPORT OF GPU SERVICE,INC.
For the Year Ended December 31, 1997
- --------------------------------------------------------------------------------
OUTSIDE SERVICES EMPLOYED
ACCOUNT 923
- --------------------------------------------------------------------------------
<FN>
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.
</FN>
- --------------------------------------------------------------------------------
<CAPTION>
RELATIONSHIP
"A"= ASSOCIATE
FROM WHOM PURCHASED TYPE OF SERVICE/LARGEST INVOICE "NA"= NON AMOUNT
ASSOCIATE
- --------------------------------------------------------------------------------
Legal
- -----
<S> <C> <C> <C>
Berlack, Israels & Liberman Issues arising under the Public NA $ 274
Utility Holding Company Act of 1935
Swidler & Berlin 1996 Telecom Act NA 177
40 Others (under $100,000) 312
-----
Sub-Total 763
Engineering
- -----------
5 Firms (under $100,000) NA 39
----
Sub-Total 39
Data Processing/Information Services
- ------------------------------------
Nemeth/Martin Personnel Temporary IS personnel NA 236
Optimum Consulting Group, LTD Temporary IS personnel NA 130
Peoplesoft, Inc. EDS consulting NA 161
Powerplan Consultants, Inc. Consulting related to Tax NA 237
software implementation
Princeton Consultants Consulting related to new NA 330
customer system
UTA/AN H.L. Yoh Company LAN/Network services support NA 127
13 Others (under $100,000) 1,150
-----
Sub-Total $2,371
-----
<PAGE>
</TABLE>
27A
<TABLE>
ANNUAL REPORT OF GPU SERVICE, INC.
For the Year Ended December 31, 1997
- --------------------------------------------------------------------------------
OUTSIDE SERVICES EMPLOYED
ACCOUNT 923
- --------------------------------------------------------------------------------
<FN>
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.
- --------------------------------------------------------------------------------
</FN>
<CAPTION>
RELATIONSHIP
"A"= ASSOCIATE
FROM WHOM PURCHASED TYPE OF SERVICE/LARGEST INVOICE "NA"= NON AMOUNT
ASSOCIATE
- --------------------------------------------------------------------------------
Legal
- -----
<S> <C> <C> <C>
Other Professional Services
AON Consulting Consulting in conjunction with NA $ 283
the retirement plan & health
communication project
Coopers & Lybrand, L.L.P Accounting/Audit services NA 414
Deloitte & Touche Consulting related to client NA 751
server feasability study and
other related services
Jersey Central Power & Light Co. Personnel services A 630
Manchester Partners Intl Employee career workshops NA 119
Metropolitan Edison Company Personnel services A 141
Pennsylvania State University Executive Institute NA 232
Putnam, Hayes, & Bartlett, Inc. Consulting related to NA 109
strategic planning
271 Others (under $100,000) 531
-----
Sub-total 3,210
-----
Grand Total $6,383
======
</TABLE>
<PAGE>
28
ANNUAL REPORT OF GPU SERVICE, INC.
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.
- --------------------------------------------------------------------------------
DESCRIPTION AMOUNT
- --------------------------------------------------------------------------------
CAFETERIA SUPPLEMENT $ 33
EMPLOYEE SAVINGS PLAN 1,802
GROUP LIFE INSURANCE 45
HOSPITAL, SURGICAL, MEDICAL & DENTAL INSURANCE 3,540
LONG TERM DISABILITY 756
OPEB HEALTH INSURANCE 2,799
OPEB LIFE INSURANCE 541
PENSION PLANS 4,248
VACATION 3,023
OTHER BENEFITS (Under $25,000) 52
------
TOTAL $16,839
=======
<PAGE>
29
ANNUAL REPORT OF GPU SERVICE, INC.
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.
- --------------------------------------------------------------------------------
DESCRIPTION NAME OF PAYEE AMOUNT
- -------------------------------------------------------------------------------
Newspaper, Magazine, Miller Advertising Agency $ 8
& Pamphlet
Pomerantz Promotions 7
Next Step Enterprises 3
Other (1) 1
---
Sub-Total 19
Investor Information Standard & Poor's 4
Sub-Total 4
---
TOTAL $ 23
===
<PAGE>
30
ANNUAL REPORT OF GPU SERVICE, INC.
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 Section 321 (b) (2) of the Federal Election Campaign
Act, as amended by Public Law 94-283 in 1976 (2 U.S.C.S.
441 (b) (2) shall be separately classified.
- --------------------------------------------------------------------------------
DESCRIPTION AMOUNT
- --------------------------------------------------------------------------------
Dues & Memberships $516
Company Sponsored Community Activities 332
----
TOTAL $848
====
<PAGE>
31
ANNUAL REPORT OF GPU SERVICE, INC.
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.
- --------------------------------------------------------------------------------
TYPE OF PROPERTY AMOUNT
- --------------------------------------------------------------------------------
BUILDINGS $ 642
DATA PROCESSING EQUIPMENT 3,045
DUPLICATING EQUIPMENT 32
LICENSES & PC SOFTWARE 1,837
MAILING EQUIPMENT 4
OTHER OFFICE EQUIPMENT 14
PERSONAL COMPUTERS 310
TELECOMMUNICATIONS SYSTEM 320
MISCELLANEOUS 24
------
TOTAL $6,228
======
<PAGE>
32
ANNUAL REPORT OF GPU SERVICE, INC.
For the Year Ended December 31, 1997
- --------------------------------------------------------------------------------
TAXES OTHER THAN INCOME TAXES
ACCOUNT 408
- --------------------------------------------------------------------------------
INSTRUCTION: 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.
- --------------------------------------------------------------------------------
T Y P E O F T A X AMOUNT
- --------------------------------------------------------------------------------
(1) OTHER THAN U.S. GOVERNMENT TAXES
--------------------------------
Local Real Estate
- New Jersey $ 547
- Pennsylvania 482
Unemployment Insurance
- New Jersey 130
- Pennsylvania 100
Sales & Use
- New Jersey 567
- Pennsylvania 668
-----
Sub Total 2,494
-----
(2) TAXES - U.S. GOVERNMENT
-----------------------
Federal Unemployment Insurance 56
FICA 3,751
-----
Sub Total 3,807
-----
TOTAL $6,301
======
<PAGE>
33
ANNUAL REPORT OF GPU SERVICE, INC.
For the Year Ended December 31, 1997
DONATIONS
ACCOUNT 426.1
- --------------------------------------------------------------------------------
INSTRUCTION: 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.
- --------------------------------------------------------------------------------
NAME OF RECIPIENT PURPOSE OF DONATION AMOUNT
- --------------------------------------------------------------------------------
United Way of Morris County Community Charities $ 13
Cancer Care Health Services/Hospitals 10
Chilton Memorial Hospital Health Services/Hospitals 8
Alzheimers Disease &
Related Disorders Assoc. Health Services/Hospitals 5
St. Clare's/Riverside Medical Ctr. Health Services/Hospitals 5
Hemophilia Association of N.J. Health Services/Hospitals 3
3 Organizations (Under $3,000) Health Services/Hospitals 5
Harvard University Education 50
New Jersey Institute of Technology Education 11
Shepherds of Youth Education 4
The Progress & Freedom Foundation Education 5
Nazareth College of Rochester Education 5
Foundation for Student Comm., Inc. Education 3
County College of Morris Education 3
72 Organizations (Under $3,000) Education 24
Morris County Urban League Community Services 8
Operation Medication Awareness Community Services 3
Mrs. Wilson's Capital Campaign Community Services 6
16 Organizations (Under $3,000) Community Services 14
N.J. Shakespeare Festival Cultural Development 17
Waterloo Foundation for the Arts Cultural Development 8
Colonial Symphony Cultural Development 5
2 Organizations (Under $3,000) Cultural Development 2
----
TOTAL $217
====
<PAGE>
34
ANNUAL REPORT OF GPU SERVICE, INC.
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.
- --------------------------------------------------------------------------------
D E S C R I P T I O N NAME OF PAYEE AMOUNT
- --------------------------------------------------------------------------------
Company Owned Life Insurance Premiums Massachusetts Mutual $(541)
Life Insurance Co.
Miscellaneous Tax Filing Fees State of New Jersey 6
-----
TOTAL $(535)
=====
<PAGE>
35
ANNUAL REPORT OF GPU SERVICE, INC.
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.
- --------------------------------------------------------------------------------
NONE
<PAGE>
36
ANNUAL REPORT OF GPU SERVICE, INC.
For the Year Ended December 31, 1997
ORGANIZATION CHART
- -------------------------------------------------------------------------------
| BOARD OF DIRECTORS |
--------------------------------------------------------
| Chairman, President & CEO |
------------------------------------------------------|
| Executive Vice President & |
| General Counsel |
|---------------------------------------------|
| | Corporate Secretary |
| |----------------------------------------|
| | Corporate Legal Services |
| |----------------------------------------|
| | Government Affairs |
| |----------------------------------------|
| | Internal Auditing |
| ----------------------------------------|
| Executive Vice President & |
| Chief Financial Officer |
|---------------------------------------------|
| | Accounting, Taxes and Budgets & |
| | Financial Analysis |
| |----------------------------------------|
| | Treasury |
| ----------------------------------------|
| Senior Vice President-Corporate Affairs |
|---------------------------------------------|
| | Communications |
| |----------------------------------------|
| | Corporate Compensation & Benefits |
| ----------------------------------------|
| Vice President-Corporate Restructuring |
|---------------------------------------------|
| Information Technology Services* |
|---------------------------------------------|
| Process Services* |
|---------------------------------------------|
| Materials and Supplies* |
---------------------------------------------
* These organizations report to GPU Energy.
<PAGE>
37
ANNUAL REPORT OF GPU SERVICE, INC.
For the Year Ended December 31, 1997
METHODS OF ALLOCATION
- --------------------------------------------------------------------------------
1. Multiple Factor:
The average of the following three factors:
A. Gross Distribution Plant at Year-End
B. Energy Sales (MWH) to Ultimate Customers
C. O & M Expense, Excluding Purchased Power
2. Size Factor:
Forecasted capacity responsibility for the planning period, June - May.
3. Conventional Steam Capacity:
Installed capacity at year-end (MW)
4. Nuclear Steam Capacity:
Installed capacity at year-end (MW)
5. Combustion Turbine Capacity:
Installed capacity at year-end (MW)
6. Three (3) Factor:
Multiple Factor billed to Jersey Central Power & Light Company,
Pennsylvania Electric Company, and Metropolitan Edison Company.
Each Division/Function is assigned one of the above factors for allocating
indirect costs to groups of associated companies. The allocation factor is
based upon each Division/Function's type of work and is reviewed annually.
<PAGE>
38
ANNUAL REPORT OF GPU SERVICE, INC.
For the Year Ended December 31, 1997
ANNUAL STATEMENT OF COMPENSATION FOR USE OF CAPITAL BILLED
- --------------------------------------------------------------------------------
NONE
<PAGE>
39
ANNUAL REPORT OF GPU SERVICE, INC.
For the Year Ended December 31, 1997
- --------------------------------------------------------------------------------
VENTURE DISCLOSURES
- --------------------------------------------------------------------------------
LICENSING OF COMPUTER PROGRAMS TO NON-ASSOCIATE COMPANIES
---------------------------------------------------------
Pursuant to the provisions contained in the Securities and Exchange
Commission (SEC) Order dated August 29, 1990 for SEC File No. 70-7675, GPU
Service, Inc. did not enter into any transactions or recognize any revenues
during the calendar year 1997 for activities related to the licensing of
computer programs to non-associated companies.
LEASING OF RESERVE COMPUTER CAPACITY
------------------------------------
Pursuant to the provisions contained in the Securities and Exchange
Commission (SEC) Order dated November 27, 1991 for SEC File No. 70-7841, GPU
Service, Inc. received revenues during 1997 from New York State Electric and Gas
and Consumers Water Company, non-associated companies, for reserve computer
capacity. These revenues are shown separately on page 22 of this report.
LICENSING OF AUTOMATED MATERIALS MANAGEMENT SYSTEM (AMMS)
---------------------------------------------------------
COMPUTER PROGRAMS TO NON-ASSOCIATE COMPANIES
--------------------------------------------
Pursuant to the provisions contained in the Securities and Exchange
Commission (SEC) Order dated December 3, 1991 for SEC File No. 70-7871, GPU
Service, Inc. did not receive AMMS licensing revenues during 1997.
FIBER OPTIC LEASE AGREEMENT
---------------------------
Pursuant to the provisions contained in the Securities and Exchange
Commission (SEC) Order dated August 2, 1994 for SEC File No. 70-7850, GPU
Service, Inc. incurred no revenues or expenses during the year for this
agreement. All revenues and expenses incurred by Jersey Central Power & Light
Company and Metropolitan Edison Company are reported on GPU's 1997 Form U5S.
SERVICES TO NON-AFFILIATED UTILITIES AND RESERVING JURISDICTION
---------------------------------------------------------------
Pursuant to the provisions contained in the Securities and Exchange
Commission (SEC) Order dated November 5, 1996 for SEC File No. 70-8805, GPU
Service, Inc. did not enter into any transactions or recognize any revenues
during the calendar year 1997 for activities related to the services to
non-affiliated utilities and reserving jurisdiction.
ENTRY INTO NON-UTILITY BUSINESS AND RESERVATION OF JURISDICTION
---------------------------------------------------------------
Pursuant to the provisions contained in the Securities and Exchange
Commission (SEC) Order dated August 16, 1996 for SEC File No. 70-8817, GPU
Service, Inc. did not enter into any transactions or recognize any revenues
during the calendar year 1997 for activities related to the entry into
non-utility business and reservation of jurisdiction.
<PAGE>
ANNUAL REPORT OF GPU SERVICE, INC.
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.
GPU SERVICE, INC.
------------------------------------
(Name of Reporting Company)
By: /s/ P. R. Chatman
--------------------------------
(Signature of Signing Officer)
P. R. Chatman, Assistant Comptroller
------------------------------------
(Printed Name and Title of Signing Officer)
Date: April 20, 1998
<TABLE> <S> <C>
<ARTICLE> OPUR2
<CIK> 0000042853
<NAME> GPU SERVICE, INC.
<MULTIPLIER> 1,000
<CURRENCY> US DOLLARS
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<EXCHANGE-RATE> 1
<BOOK-VALUE> PER-BOOK
<NET-SERVICE-COMPANY-PROPERTY> 44,201
<TOTAL-INVESTMENTS> 19,138
<TOTAL-CURRENT-ASSETS> 25,175
<TOTAL-DEFERRED-DEBITS> 20,138
<OTHER-ASSETS-AND-DEBITS> 0
<TOTAL-ASSETS-AND-DEBITS> 108,652
<TOTAL-PROPRIETARY-CAPITAL> (3,062)
<TOTAL-LONG-TERM-DEBT> 22,001
<NOTES-PAYABLE> 0
<NOTES-PAYABLE-ASSOCIATE-COMP> 0
<OTHER-CURR-AND-ACCRUED-LIAB> 59,584
<TOTAL-DEFERRED-CREDITS> 17,827
<DEFERRED-INCOME-TAX> 12,302
<TOT-LIABIL-AND-PROPRIET-CAP> 108,652
<SERVICES-ASSOCIATE-COMPANIES> 111,758
<SERVICES-NON-ASSOCIATE-COMP> 162
<MISC-INCOME-OR-LOSS> 3,037
<TOTAL-INCOME> 114,957
<SALARIES-AND-WAGES> 53,516
<EMPLOYEE-PENSION-AND-BENEFIT> 16,839
<OTHER-EXPENSES> 44,602
<TOTAL-EXPENSES> 114,957
<NET-INCOME> 0
<TOTAL-EXPENSES-DIRECT-COST> 87,564
<TOTAL-EXPENSES-INDIRECT-COST> 27,393
<TOT-EXP-DIRECT-AND-INDIRECT> 114,957
<PERSONNEL-END-OF-YEAR> 729
<FN>
</FN>
</TABLE>
