Form U-13-60
Mutual and Subsidiary Service Companies
Revised February 7, 1980
ANNUAL REPORT
FOR THE PERIOD
Beginning January 1, 1994 and Ending December 31, 1994
TO THE
U.S. SECURITIES AND EXCHANGE COMMISSION
OF
ENERGY INITIATIVES, INC.
(Exact Name of Reporting Company)
A Subsidiary Service Company
("Mutual" or "Subsidiary")
Date of Incorporation August 31, 1990 If not Incorporated, Date of
Organization
State or Sovereign Power under which Incorporated or Organized Delaware
1 Upper Pond Road
Location of Principal Executive Offices of Reporting Co. Parsippany, NJ 07054
Name, title, and address of officer to whom correspondence concerning this
report should be addressed:
1 Upper Pond Road
B. L. Levy, President and CEO Parsippany, NJ 07054
(Name) (Title) (Address)
Name of Principal Holding Company Whose Subsidiaries are served by Reporting
Company:
GENERAL PUBLIC UTILITIES CORPORATION
<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 9-10
ACCOUNTS RECEIVABLE FROM ASSOCIATE
COMPANIES Schedule V 11
FUEL STOCK EXPENSES UNDISTRIBUTED Schedule VI 12
STORES EXPENSE UNDISTRIBUTED Schedule VII 13
MISCELLANEOUS CURRENT AND ACCRUED ASSETS Schedule VIII 14
MISCELLANEOUS DEFERRED DEBITS Schedule IX 15
RESEARCH, DEVELOPMENT, OR DEMONSTRATION
EXPENDITURES Schedule X 16
PROPRIETARY CAPITAL Schedule XI 17
LONG-TERM DEBT Schedule XII 18
CURRENT AND ACCRUED LIABILITIES Schedule XIII 19
NOTES TO FINANCIAL STATEMENTS Schedule XIV 20
COMPARATIVE INCOME STATEMENT Schedule XV 21
ANALYSIS OF BILLING - ASSOCIATE COMPANIES Account 457 22
ANALYSIS OF BILLING - NONASSOCIATE COMPANIES Account 458 23
ANALYSIS OF CHARGES FOR SERVICE - ASSOCIATE
AND NONASSOCIATE COMPANIES Schedule XVI 24
SCHEDULE OF EXPENSE BY DEPARTMENT OR
SERVICE FUNCTION Schedule XVII 25-26
DEPARTMENTAL ANALYSIS OF SALARIES Account 920 27
OUTSIDE SERVICES EMPLOYED Account 923 28
EMPLOYEE PENSIONS AND BENEFITS Account 926 29
GENERAL ADVERTISING EXPENSES Account 930.1 30
MISCELLANEOUS GENERAL EXPENSES Account 930.2 31
RENTS Account 931 32
TAXES OTHER THAN INCOME TAXES Account 408 33
DONATIONS Account 426.1 34
OTHER DEDUCTIONS Account 426.5 35
NOTES TO STATEMENT OF INCOME Schedule XVIII 36
<PAGE>
3
LISTING OF INSTRUCTIONAL FILING REQUIREMENTS Page
Number
Description of Reports or Statements
ORGANIZATION CHART 37
METHODS OF ALLOCATION 38
ANNUAL STATEMENT OF COMPENSATION FOR USE 39
OF CAPITAL BILLED
VENTURE DISCLOSURES 40
NOTE: Dollar figures in this report are shown in thousands unless otherwise
noted.
This report includes immaterial audit adjustments which were not
included in the General Public Utilities Corporation, SEC Form U5S.
<PAGE>
<TABLE>
4
ANNUAL REPORT OF ENERGY INITIATIVES, INC.
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
CURRENT PRIOR
SERVICE COMPANY PROPERTY
<S> <C> <C> <C>
101 Service company property (Schedule II) $ 816 $ 660
107 Construction work in progress (Schedule II) - -
Total Property 816 660
108 Less accumulated provision for depreciation
and amortization of service company
property (Schedule III) 385 215
Net Service Company Property 431 445
INVESTMENTS
123 Investments in associate companies (Schedule IV) 78 971 19 330
124 Other investments (Schedule IV) 41 824 12 356
Total Investments 120 795 31 686
CURRENT AND ACCRUED ASSETS
131 Cash 772 5 781
134 Special deposits - 2 500
135 Working funds - -
136 Temporary cash investments (Schedule IV) - -
141 Notes receivable - -
143 Accounts receivable 523 720
144 Accumulated provision for uncollectible
accounts - -
146 Accounts receivable from associate
companies (Schedule V) 1 802 1 370
152 Fuel stock expenses undistributed (Schedule VI) - -
154 Materials and supplies - -
163 Stores expense undistributed (Schedule VII) - -
165 Prepayments 81 31
171 Interest Receivable - -
174 Miscellaneous current and accrued
assets (Schedule VIII) 3 000 -
Total Current and Accrued Assets 6 178 10 402
DEFERRED DEBITS
181 Unamortized debt expense - -
184 Clearing accounts - -
186 Miscellaneous deferred debits (Schedule IX) - -
188 Research, development, or demonstration
expenditures (Schedule X) - -
190 Accumulated deferred income taxes 1 835 1 225
Total Deferred Debits 1 835 1 225
TOTAL ASSETS AND OTHER DEBITS $129 239 $43 758<PAGE>
5
ANNUAL REPORT OF ENERGY INITIATIVES, INC.
SCHEDULE I - COMPARATIVE BALANCE SHEET
ACCOUNT LIABILITIES AND PROPRIETARY CAPITAL AS OF DECEMBER 31
CURRENT PRIOR
PROPRIETARY CAPITAL
201 Common stock issued (Schedule XI) $ 100 $ 100
211 Miscellaneous paid-in-capital (Schedule XI) 126 380 51,516
215 Appropriated retained earnings (Schedule XI) 6 641 -
216 Unappropriated retained earnings (Schedule XI) (15 415) (12 482)
Total Proprietary Capital 117 706 39 134
LONG-TERM DEBT
223 Advances from associate companies (Schedule XII) - -
224 Other long-term debt (Schedule XII) 325 -
225 Unamortized premium on long-term debt - -
226 Unamortized discount on long-term debt-debit - -
Total Long-term Debt 325 -
CURRENT AND ACCRUED LIABILITIES
231 Notes payable 300 -
232 Accounts payable 57 43
233 Notes payable to associate
companies (Schedule XIII) - -
234 Accounts payable to associate
companies (Schedule XIII) 142 156
236 Taxes accrued 5 -
237 Interest accrued - -
238 Dividends declared - -
241 Tax collections payable - -
242 Miscellaneous current and accrued
liabilities (Schedule XIII) 2 000 689
Total Current and Accrued Liabilities 2 504 888
DEFERRED CREDITS
253 Other deferred credits 2 850 2 863
255 Accumulated deferred investment tax credits - -
Total Deferred Credits 2 850 2 863
282 ACCUMULATED DEFERRED INCOME TAXES 5 854 873
TOTAL LIABILITIES AND PROPRIETARY
CAPITAL $129 239 $ 43 758<PAGE>
6
ANNUAL REPORT OF ENERGY INITIATIVES, INC.
For the Year Ended December 31, 1994
SCHEDULE II - SERVICE COMPANY PROPERTY
<CAPTION>
BALANCE AT RETIREMENTS OTHER BALANCE AT
BEGINNING ADDITIONS OR CHANGES 1/ CLOSE OF
DESCRIPTION OF YEAR SALES YEAR
SERVICE COMPANY PROPERTY
Account
<S> <C> <C> <C> <C> <C>
301 ORGANIZATION
303 MISCELLANEOUS
INTANGIBLE PLANT
304 LAND AND LAND RIGHT
305 STRUCTURES AND
IMPROVEMENTS
306 LEASEHOLD
IMPROVEMENTS $127 $ 44 $ - $ - $ 171
307 EQUIPMENT 2/
308 OFFICE FURNITURE
AND EQUIPMENT 533 112 - - 645
309 AUTOMOBILES, OTHER
VEHICLES AND
RELATED GARAGE
EQUIPMENT
310 AIRCRAFT AND
AIRPORT EQUIPMENT
311 OTHER SERVICE
COMPANY PROPERTY 3/
SUB-TOTAL 660 156 - - 816
107 CONSTRUCTION WORK
IN PROGRESS 4/
TOTAL $660 $156 $ - $ - $ 816
<FN>
1/ PROVIDE AN EXPLANATION OF THOSE CHANGES CONSIDERED MATERIAL:
<PAGE>
7
ANNUAL REPORT OF ENERGY INITIATIVES, INC.
For the Year Ended December 31, 1994
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:
</FN>
<CAPTION>
BALANCE AT
SUBACCOUNT DESCRIPTION ADDITIONS CLOSE OF
YEAR
<S> <C> <C>
N/A
TOTAL $ - $ -
<FN>
3/ DESCRIBE OTHER SERVICE COMPANY PROPERTY:
N/A
4/ DESCRIBE CONSTRUCTION WORK IN PROGRESS:
N/A
</FN>
<PAGE>
8
ANNUAL REPORT OF ENERGY INITIATIVES, INC.
For the Year Ended December 31, 1994
SCHEDULE III
ACCUMULATED PROVISION FOR DEPRECIATION AND
AMORTIZATION OF SERVICE COMPANY PROPERTY
<CAPTION>
BALANCE AT ADDITIONS BALANCE
BEGINNING CHARGED OTHER CHANGES CLOSE OF
DESCRIPTION OF YEAR TO RETIREMENTS ADD (DEDUCT)1/ YEAR
ACCOUNT 403
Account
<S> <C> <C> <C> <C> <C>
301 ORGANIZATION
303 MISCELLANEOUS
INTANGIBLE PLANT
304 LAND AND LAND RIGHTS
305 STRUCTURES AND
IMPROVEMENTS
306 LEASEHOLD
IMPROVEMENTS $ 19 $ 41 - - $ 60
307 EQUIPMENT
308 OFFICE FURNITURE
AND FIXTURES 196 129 - - 325
309 AUTOMOBILES, OTHER
VEHICLES AND
RELATED GARAGE
EQUIPMENT
310 AIRCRAFT AND
AIRPORT EQUIPMENT
311 OTHER SERVICE
COMPANY PROPERTY
$215 $170 - - $385
<FN>
1/ PROVIDE AN EXPLANATION OF THOSE CHANGES CONSIDERED MATERIAL:
N/A
</FN>
</TABLE>
<PAGE>
9
ANNUAL REPORT OF ENERGY INITIATIVES, INC.
For the Year Ended December 31, 1994
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
D E S C R I P T I O N BEGINNING CLOSE OF
OF YEAR YEAR
ACCOUNT 123 - INVESTMENT IN ASSOCIATE COMPANIES
PRIME ENERGY LIMITED PARTNERSHIP $ 3 878 $ 4 825
OLS POWER LIMITED PARTNERSHIP - -
ONONDAGA COGENERATION LIMITED PARTNERSHIP 15 452 17 851
SELKIRK CORPORATION PARTNERS, L.P. - 20 910
BROOKLYN ENERGY LIMITED PARTNERSHIP - 174
LAKE COGEN LIMITED PARTNERSHIP - 8 055
PROJECT ORANGE ASSOCIATES L.P. - 376
ADA COGEN LIMITED PARTNERSHIP - 3 819
PASCO COGEN LIMITED - 22 961
TOTAL $19 330 $78 971
ACCOUNT 124 - OTHER INVESTMENTS
CO. OWNED LIFE INSURANCE -
CASH SURRENDER VALUE $ 12 $ 12
ACE LIMITED STOCK (510298 SHS.) 2 599 11 928
EXEL LIMITED STOCK (78660 SHS.) 1 180 3 107
SELKIRK COGEN OPTION 5 526 -
POLSKY ENERGY CORP (869 SHS. CLASS D VOTING
& 1731 CLASS C NON VOTING) 2 739 4 767
CARRIED INTEREST - SYRACUSE ORANGE PARTNERS - 2 745
LONG-TERM RECEIVABLES - ASSOCIATE COMPANIES 300 2 632
INTANGIBLE ASSETS - NCP ACQUISITION - 16 633
TOTAL $12 356 $41 824
<PAGE>
10
ANNUAL REPORT OF ENERGY INITIATIVES, INC.
For the Year Ended December 31, 1994
SCHEDULE IV - INVESTMENTS (Continued)
ACCOUNT 136 - TEMPORARY CASH INVESTMENTS
NONE
<PAGE>
11
ANNUAL REPORT OF ENERGY INITIATIVES, INC.
For the Year Ended December 31, 1994
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
D E S C R I P T I O N BEGINNING CLOSE OF
OF YEAR YEAR
ACCOUNT 146 - ACCOUNTS RECEIVABLE FROM ASSOCIATE
COMPANIES $1 370 $1 802
TOTAL $1 370 $1 802
ANALYSIS OF CONVENIENCE OR ACCOMMODATION PAYMENTS: TOTAL
PAYMENTS
N/A
TOTAL PAYMENTS -
<PAGE>
12
ANNUAL REPORT OF ENERGY INITIATIVES, INC.
For the Year Ended December 31, 1994
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.
D E S C R I P T I O N LABOR EXPENSES TOTAL
ACCOUNT 152 - FUEL STOCK EXPENSES UNDISTRIBUTED
N/A
TOTAL - - -
SUMMARY:
<PAGE>
13
ANNUAL REPORT OF ENERGY INITIATIVES, INC.
For the Year Ended December 31, 1994
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.
D E S C R I P T I O N LABOR EXPENSES TOTAL
ACCOUNT 163 - STORES EXPENSE UNDISTRIBUTED
N/A
TOTAL $ - $ - $ -
<PAGE>
14
ANNUAL REPORT OF ENERGY INITIATIVES, INC.
For the Year Ended December 31, 1994
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
D E S C R I P T I O N BEGINNING CLOSE OF
OF YEAR YEAR
ACCOUNT 174 - MISCELLANEOUS CURRENT AND ACCRUED
ASSETS
LIHI OPTION - $3 000
TOTAL - $3 000
<PAGE>
15
ANNUAL REPORT OF ENERGY INITIATIVES, INC.
For the Year Ended December 31, 1994
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
D E S C R I P T I O N BEGINNING CLOSE OF
OF YEAR YEAR
ACCOUNT 186 - MISCELLANEOUS DEFERRED DEBITS
NOT APPLICABLE
<PAGE>
16
ANNUAL REPORT OF ENERGY INITIATIVES, INC.
For the Year Ended December 31, 1994
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.
D E S C R I P T I O N AMOUNT
ACCOUNT 188-RESEARCH, DEVELOPMENT, OR DEMONSTRATION
EXPENDITURES
N/A
NOTE:
<PAGE>
<TABLE>
17
ANNUAL REPORT OF ENERGY INITIATIVES, INC.
For the Year Ended December 31, 1994
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 100 $1,000 100 $100,000
INSTRUCTIONS: Classify amounts in each account with brief explanation, disclosing the general nature of
transactions which gave rise to the reported amounts.
<CAPTION>
D E S C R I P T I O N AMOUNT
<S> <C>
ACCOUNT 211 - MISCELLANEOUS PAID-IN CAPITAL $126,380
ACCOUNT 215 - APPROPRIATED RETAINED EARNINGS 6,641
Unrealized Gain on Marketable Securities, Net of Income Taxes
TOTAL $133,021
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.
<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 (12,482) (2,933) (15,415)
TOTAL (12,482) (2,933) - (15,415)
* In Whole Dollars
<PAGE>
18
ANNUAL REPORT OF ENERGY INITIATIVES, INC.
For the Year Ended December 31, 1994
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>
TERMS OF OBLIG DATE BALANCE AT BALANCE AT
N A M E O F C R E D I T O R 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> <C>
ACCOUNT 223 - ADVANCES FROM ASSOCIATE
COMPANIES:
NONE
ACCOUNT 224 - OTHER LONG-TERM DEBT:
Gas Orange Partners* 1/31/97 N/A $450 $125 $325
<FN>
1/ GIVE AN EXPLANATION OF DEDUCTIONS: Payments per agreements.
</FN>
* Beginning balance was as at 6/13/94 relating to the NCP acquisition.
</TABLE>
<PAGE>
19
ANNUAL REPORT OF ENERGY INITIATIVES, INC.
For the Year Ended December 31, 1994
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
D E S C R I P T I O N BEGINNING CLOSE OF
OF YEAR YEAR
ACCOUNT 233 - NOTES PAYABLE TO ASSOCIATE COMPANIES
NONE
TOTAL - -
ACCOUNT 234 - ACCOUNTS PAYABLE TO ASSOCIATE
COMPANIES
GPU SERVICE CORPORATION $ 156 $ 142
TOTAL $ 156 $ 142
ACCOUNT 242 - MISCELLANEOUS CURRENT AND ACCRUED
LIABILITIES
ACCRUALS - DEVELOPMENT EXPENSE $ 166 $ 745
- EMPLOYEE BENEFITS 42 99
- RESERVE FOR EQUIPMENT DISPOSAL (S/T) 192
- ACCRUED CAPITALIZED COSTS 145
- EMPLOYEE BONUS 161 237
- ADMINISTRATIVE EXPENSES 161 321
- VACATION 159 261
TOTAL $ 689 $ 2 000
<PAGE>
20
ANNUAL REPORT OF ENERGY INITIATIVES, INC.
For the Year Ended December 31, 1994
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.
1. ORGANIZATION AND BUSINESS
Effective May 1, 1994, Energy Initiatives, Inc. (EII or the Company)
merged with its parent company, General Portfolios Corporation, a wholly-
owned subsidiary of General Public Utilities Corporation (GPU), with EII
being the surviving corporation in the merger. Also see Note 4. EII owns
100% of the common stock of the following active corporations: Elmwood
Energy Corporation (EEC), EI Selkirk, Incorporated, Camchino Energy
Corporation (Camchino), Geddes Cogeneration Corporation (Geddes) and NCP
Energy, Incorporated (NCP Energy) formerly North Canadian Power,
Incorporated (NCP). It also owns 100% of Armstrong Energy Corporation,
Hanover Energy Corporation, and EI Fuels, which are inactive
corporations. Each of these subsidiaries was formed to develop, either
directly, or indirectly through limited partnerships, cogeneration or
small power production facilities which are qualifying facilities (QFs)
under the Public Utility Regulatory Policies Act of 1978 (PURPA). Under
PURPA regulations, EII and its subsidiaries may not own more than a 50%
interest in such facilities after commencement of operation.
EII also owns 100% of the stock of the following Canadian corporations:
EII Canada Holding Limited, EII Services Canada Limited, and EII Brooklyn
Power Limited. These corporations were formed to purchase ownership
interests in and to provide operations and management services to Exempt
Wholesale Generators (EWG's), as defined in the Public Utility Holding
Company Act of 1935 (1935 Act) in Canada.
In December 1994, the SEC authorized GPU to contribute additional amounts
of up to $200 million to EII through December 31, 1997. EII intends to
utilize such contributions for investment in proposed QF projects, EWG's
and Foreign Utility Companies (FUCO's), as defined in the 1935 Act,
expenditures for preliminary project development costs, the purchase of
ownership interests in existing QF's, EWG's and FUCO's, and other
corporate purposes.
<PAGE>
20A
ANNUAL REPORT OF ENERGY INITIATIVES, INC.
For the Year Ended December 31, 1994
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.
2. RELATED PARTY TRANSACTIONS
GPU Service Corporation (GPUSC), a subsidiary of GPU, provides accounting,
administrative and other services to EII and charged EII $187,928 and
$116,123 during 1994 and 1993, respectively.
EII leases its corporate facilities from GPU Nuclear Corporation (GPUN), a
subsidiary of GPU. EII paid GPUN $246,474 and $203,309 in 1994 and 1993,
respectively, for rental payments and other costs pursuant to the lease
agreement.
EII receives all of its management fees and construction development fees
from affiliated companies and partnerships for services rendered in
connection with the construction, development, management and/or operation
of its projects.
Camchino has loaned OLS Power Limited Partnership $300,000. The loan is
evidenced by a promissory note maturing in 2007 and bearing interest at
prime (8.5% at December 31, 1994) plus 5%, payable quarterly.
See other related party transactions in Notes 4, 5, 6, 7, 8, 9 and 11.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A summary of the significant accounting policies followed by EII in the
preparation of its financial statements is set forth below.
Consolidation
The consolidated financial statements include the accounts of EII and all
subsidiaries. All significant intercompany accounts and transactions have
been eliminated.
Partnership Accounting
EII's subsidiaries account for their partnership investments using the
equity method of accounting.
<PAGE>
20B
ANNUAL REPORT OF ENERGY INITIATIVES, INC.
For the Year Ended December 31, 1994
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.
Property, Plant and Equipment
Property, plant and equipment is stated at cost. Depreciation is provided
for on a straight-line basis over the estimated useful lives of the
assets.
Goodwill
The Company has recorded goodwill in connection with its purchase of NCP
Energy and its investment in Polsky Energy Corporation representing the
excess of consideration paid for EII's interest over the fair value of net
assets acquired. Goodwill is amortized on a straight-line basis over a
period of 40 years. Goodwill amortization expense amounted to $300,203
and $23,082 in 1994 and 1993, respectively.
The Company periodically reviews undiscounted projections of future cash
flows to assess any potential goodwill impairment. An impairment, if
identified, would be recorded based upon discounted projected cash flows.
Deferred Revenue-Partnership
Profits related to construction development fees received from EII's
investees have been deferred to the extent of EII's interest in each
partnership (Notes 4 and 5). The deferred income is being recognized over
the life of the related facility on a straight-line basis.
Development Fees
Geddes recognized revenue from construction development fees in connection
with the Onondaga project under the percentage of completion method.
Construction development fees recognized as revenue by Geddes in 1993
totaled $1,036,045. See also Note 5.
Income Taxes
EII files a consolidated Federal income tax return with GPU and its other
subsidiaries. All participants in the consolidated return are jointly and
severally liable for the full amount of any tax, including penalties and
interest, which may be assessed against the group. Each subsidiary
receives in current cash payment the benefit in lieu of income taxes of
<PAGE>
20C
ANNUAL REPORT OF ENERGY INITIATIVES, INC.
For the Year Ended December 31, 1994
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.
its own net operating loss, if any, to the extent that the other
subsidiaries can utilize such net operating loss to offset the tax
liability they would otherwise have on a separate return basis. This
method of allocation does not allow any subsidiary to pay more than its
separate return liability.
Effective January 1, 1993, the Company adopted Statement of Financial
Accounting Standard No. 109, "Accounting for Income Taxes," (FAS No.
109),which requires the Company to recognize deferred tax assets and
liabilities for the expected future tax consequences attributable to the
differences between financial statement carrying amounts and their
respective tax bases at enacted tax rates. In addition, FAS No. 109
requires the recognition of future tax benefits to the extent that
realization of such benefits is more likely than not. Prior to 1993,
income taxes had been determined under Accounting Principles Board Opinion
No. 11, whereby the income tax provision is calculated under the deferred
method. The deferred method recognized income taxes on financial statement
income, and the tax effects of differences between financial income and
taxable income are deferred at tax rates in effect during the period. The
impact of adoption of FAS No. 109 was not significant. See also Note 8.
Investments in Securities
On January 1, 1994, the Company adopted the provisions of Statement of
Financial Accounting Standards No. 115, "Accounting for Certain
Investments in Debt and Equity Securities," (FAS No. 115). In accordance
with FAS 115, the Company has classified its investment in equity
securities as available for sale, at fair value and has included the gain
as a separate component of stockholder's equity, net of applicable taxes.
The prior period financial statements have not been restated to reflect
the change in accounting principle. The cumulative effect as of January
1, 1994 of adopting FAS No. 115 was an increase in the opening equity
balance of $9,426,775, net of $6,550,810 in deferred income taxes.
Cash and Temporary Cash Investments
For purposes of the Consolidated Statements of Cash Flows, investments
with an original maturity of three months or less are considered cash
equivalents.
<PAGE>
20D
ANNUAL REPORT OF ENERGY INITIATIVES, INC.
For the Year Ended December 31, 1994
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.
Reclassifications
Certain amounts in the prior year financial statements have been restated
and reclassified to reflect the merger of GPC with EII. Also see Note 4.
4. ACQUISITIONS, INVESTMENTS AND MERGERS
General Portfolios Corporation
Effective May 1, 1994, GPC, formerly a wholly-owned subsidiary of GPU and
100% parent of EII, was merged into EII. The transaction was accounted
for similar to a pooling of interests. The principal assets recorded by
EII for the merger consisted of investments in securities of two non-U.S.
companies. As of December 31, 1994, the securities have a market value of
approximately $15 million.
North Canadian Power, Incorporated
In June 1994, the Company acquired 100% of the stock of NCP, a California
company engaged in the business of developing, owning and managing
cogeneration and other independent power plants in the United States and
Canada. NCP Energy owns 100% of the following corporations: NCP Lake
Power, Incorporated (NCP Lake), NCP Gem, Incorporated (NCP Gem), NCP Dade
Power, Incorporated (NCP Dade), NCP Pasco, Incorporated (NCP Pasco), NCP
Ada Power, Incorporated (NCP Ada), and NCP Power Commerce, Incorporated
(NCP Commerce). NCP was formerly a wholly-owned subsidiary of North
Canadian Resources, Incorporated (NCRI).
NCP Energy also owns 100% of the following inactive corporations:
Umatilla Groves, Incorporated; NCP Brooklyn Power, Incorporated; NCP New
York, Incorporated; NCP Perry, Incorporated, and NCP Houston Power,
Incorporated.
Pursuant to this acquisition, EII acquired partnership interests in four
of the five cogeneration facilities associated with the sale (see Note 5),
along with the tangible and intangible assets of NCP, for approximately
$53 million.
<PAGE>
20E
ANNUAL REPORT OF ENERGY INITIATIVES, INC.
For the Year Ended December 31, 1994
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.
The acquisition of the remaining partnership interest was contingent upon
obtaining the appropriate consents of the parties affiliated with that
project. After obtaining certain consents, EII purchased a 4.9% limited
partnership interest in Syracuse Orange Partners, L.P. (SOP), which, in
turn, owns an 89% interest in Project Orange Associates, L.P. (POA). POA
is a Delaware limited partnership. The principal asset of POA is an 80 MW
gas-fired cogeneration plant located in Syracuse, NY. EII paid NCRI
$372,500 for the 4.9% interest. In addition, EII purchased a 20.01%
carried interest in the future cash flows of SOP from NCRI for
approximately $2.7 million, which is included in Other investments, net on
the consolidated balance sheets. EII also paid NCRI $2.6 million for the
rights to perform management services and receive fees pursuant to POA
management fee contracts. Payment of $5.7 million for this acquisition
was made on December 30, 1994.
The NCP acquisition was accounted for by the purchase method and resulted
in goodwill of approximately $2.5 million and other intangible assets of
approximately $14.3 million. These items are being amortized over a
period of 40 years.
The following summary, prepared on a pro-forma basis, combines the
consolidated results of operations as if NCP had been acquired as of the
beginning of the periods presented, after including the impact of certain
adjustments, such as amortization of intangibles and the related income
tax effects.
(Unaudited)
1994 1993
(dollars in thousands)
Operating revenues $5,683 $6,170
Operating loss ($6,652) ($5,478)
Loss before income taxes ($8,524) ($8,667)
Net loss ($5,449) ($6,216)
The pro-forma results are not necessarily indicative of what would have
occurred if the acquisition had been in effect for the entire periods
presented. In addition, they are not intended to be a projection of
future results from combined operations.
<PAGE>
20F
ANNUAL REPORT OF ENERGY INITIATIVES, INC.
For the Year Ended December 31, 1994
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.
Selkirk Option
Since 1992, EII has held an option to purchase interests in two
cogeneration facilities located in Bethlehem, New York; a 79.9 MW
operating facility and a 270 MW facility that commenced commercial
operation on September 1, 1994.
Through 1993, EII paid approximately $5.5 million for the option, certain
transaction costs and equity contributions to the project. On
September 25, 1994, EII made a $7.6 million equity investment in the two
projects.
The option agreement provided that the option be exercised prior to
January 2, 1995 with an additional payment of $5.5 million plus accrued
interest, subject to adjustment as specified in the agreement. In
November, 1994, the Company exercised its option and paid $7.7 million as
the exercise price.
Polsky Energy Corporation
In September 1993, the Company acquired an interest in Polsky Energy
Corporation (PEC), a Delaware corporation engaged in the development of
independent power production facilities. Pursuant to this acquisition,
the Company purchased common stock representing 4.9% of the voting
shares and, in aggregate, not more than 29% of the total number of
shares of all classes of stock for a total purchase price not to exceed
$8.5 million. The Company also has the right to provide the operations
and maintenance services for several PEC projects under development.
At the acquisition date, the Company paid $2.5 million, which
represented approximately a 12% equity interest in PEC, for the initial
installment of the stock purchase. On July 1, 1994, the Company paid
$2.5 million for the second installment, which increased its equity
interest in PEC to approximately 20%. Payments related to the
obligation for the remaining $3.5 million of the aggregate purchase
price are $2 million and $1.5 million on July 1, 1995 and 1996,
respectively. In addition, EII has posted a $2 million letter of
credit, guaranteed by GPU, in support of its 1995 obligation, as
required by the stock purchase agreement.
<PAGE>
20G
ANNUAL REPORT OF ENERGY INITIATIVES, INC.
For the Year Ended December 31, 1994
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.
The Company has accounted for this acquisition using the purchase method
and, as a result, recorded the aggregate payment of $5 million as goodwill
that will be amortized over a period of 40 years. The Company accounts
for its investment using the equity method. The Company recorded goodwill
amortization on this investment of $101,168 and $23,082 and equity losses
of $380,002 and $15,274 in 1994 and 1993, respectively.
5. PARTNERSHIP INTERESTS
Prime Energy Limited Partnership
EEC has a 1% interest as the sole general partner and a 49% interest as a
limited partner in Prime Energy Limited Partnership (PELP). PELP was
organized to construct, own and operate a 65 MW cogeneration project in
Elmwood Park, NJ (Marcal Project). The Marcal Project was placed in
commercial operation in July 1989 at a total capitalized cost of
approximately $61 million, which was funded with nonrecourse debt
collateralized by PELP's assets. PELP has a Power Purchase Agreement with
an affiliate of EII for the sale of electricity and capacity from the
Marcal Project. At December 31, 1994, EEC had an investment in PELP of
approximately $4.8 million.
O.L.S. Power Limited Partnership
Through Camchino, EII owns a 1% interest as general partner and a 49%
interest as limited partner in O.L.S. Power Limited Partnership (O.L.S.
Power), a Delaware limited partnership. As of December 31, 1993, Camchino
had reduced its investment in O.L.S. Power to zero through the recording
of equity losses.
On August 3, 1989, O.L.S. Power acquired, through O.L.S. Acquisition
Corporation, all of the outstanding capital stock of O.L.S. Energy -
Berkeley (Berkeley), O.L.S. Energy - Chino (Chino) and O.L.S. Energy -
Camarillo (Camarillo) for a total purchase price of approximately $13.4
million. Berkeley, Chino and Camarillo are each lessees, pursuant to
separate sale and leaseback agreements, of operating cogeneration
facilities at the University of California - Berkeley (22.5 MW), the
California State Correctional Facility in Chino (27 MW) and the State
Hospital in Camarillo, California (27 MW), respectively.
<PAGE>
20H
ANNUAL REPORT OF ENERGY INITIATIVES, INC.
For the Year Ended December 31, 1994
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.
Onondaga Cogeneration Limited Partnership
Geddes holds the general partnership interest and a limited partnership
interest in Onondaga Cogeneration Limited Partnership (Onondaga), a New
York partnership.
The project has been financed by a group of lenders through the Onondaga
County Industrial Development Authority (OCIDA). OCIDA provided for a
construction loan of up to $89.5 million, which was converted to a term
loan of $82 million in May 1994, with a maturity of 15 years. Geddes
made its capital contribution of $13.5 million on December 17, 1993. On
December 18, 1993, the project commenced commercial operations. In April
1994, Geddes made an additional capital contribution of $1.4 million to
cover cost overruns relating to the construction of the project. At
December 31, 1994, Geddes had an investment in Onondaga of approximately
$17.9 million.
The Lenders have required Geddes to provide for up to $5 million of
additional funding, in the form of equity letters of credit, to provide
for contingent obligations during the term loan period. Geddes, through
EII, has provided a letter of credit to support other funding requirements
in the amount of $5 million, which has been guaranteed by GPU.
Lake Cogen Ltd.
Through NCP Lake and NCP Gem, NCP Energy has a 1% general partner interest
and a 41.05% limited partner interest in Lake Cogen Ltd. (Lake), a Florida
limited partnership. The Lake project is a 112 MW cogeneration facility
located on the site of Golden Gem, Inc. fruit processing operations. The
project has a 20-year Power Purchase Agreement (PPA) with Florida Power
Corporation (FPC), and a 20-year Cogeneration Services Agreement with
Golden Gem. The project was placed into commercial operation on July 1,
1993, and was financed through a sale-leaseback with the Owner Trustee for
an initial term of 11 years (see Note 12). At December 31, 1994, NCP
Energy had an investment in Lake of approximately $8.1 million.
In connection with the NCP acquisition, the partnership interests in Lake
which EII did not acquire were transferred to Lake Interests Holdings,
Incorporated ("LIHI"), a subsidiary of NCRI. EII paid $3 million to NCRI
for the option to sell 50% of the Lake partnership interests currently
<PAGE>
20I
ANNUAL REPORT OF ENERGY INITIATIVES, INC.
For the Year Ended December 31, 1994
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.
held by LIHI. If the option is exercised, EII must pay LIHI an additional
$7 million. If EII does not obtain a buyer for the LIHI interests by
December 31, 1995, ownership will remain with NCRI. EII has recorded the
$3 million option as a current asset at December 31, 1994.
Pasco Cogen Ltd.
Through NCP Dade and NCP Pasco, NCP Energy has a 1% general partner
interest and a 45.85% limited partner interest in Pasco Cogen Ltd.
(Pasco), a Florida limited partnership. The Pasco project is a 112 MW
cogeneration facility located on the site of Lykes Pasco, Inc. fruit
processing operations. The project has a 20-year PPA with FPC and a 20-
year Steam Production Contract with Lykes Pasco. The project was placed
into commercial operation on July 1, 1993, and was financed with long-term
debt of approximately $93 million. At December 31, 1994, NCP Energy had an
investment in Pasco of approximately $22.9 million.
Ada Cogeneration Limited Partnership
Through NCP Ada, NCP Energy has a 1% general partner interest in Ada
Cogeneration Limited Partnership (Ada), a Michigan limited partnership.
The Ada project is a 29 MW cogeneration facility located on the site of
Amway Corporation's headquarters. The project has a 35-year PPA with
Consumers Power Company and a 35-year Thermal Sales Agreement with Amway.
The project was placed into commercial operation on January 5, 1991. At
December 31, 1994, NCP Energy had an investment in Ada of approximately
$3.8 million.
Pursuant to a sublease agreement with NCP Energy, Ada is obligated to
accrue, in a deferral account, sublease rent payable to NCP Energy.
Sublease rent consists of base rent, which escalates annually according to
the Consumer Price Index, plus contingent rent. Contingent rent is equal
to the product of Ada's annual adjusted gross revenue (as defined in the
sublease agreement) times a factor of 9% escalating 1% at the end of each
five-year period beginning on January 1, 1996. The accumulated sublease
rent payable balance earns interest at 10% per annum compounded monthly.
Payments to NCP Energy will be made in quarterly installments in
accordance with the sublease agreement for quarters commencing on January
1, 1996 at the lesser of 44% of available cash flow (as defined in the
<PAGE>
20J
ANNUAL REPORT OF ENERGY INITIATIVES, INC.
For the Year Ended December 31, 1994
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.
sublease agreement) or the balance in this deferral account. At December
31, 1994, NCP Energy has accrued sublease rent receivables of
approximately $2.3 million, which is reflected in other investments in the
accompanying 1994 consolidated balance sheets.
FPB Cogeneration Partners, L.P.
Through NCP Commerce, NCP Energy has a 30% general partner interest in FPB
Cogeneration Partners, L.P. (FPB), a 26 MW cogeneration facility located
in Commerce, California. Due to the uncertainty of future distributions of
cash flows, no value has been ascribed to the partnership interests in
FPB. Consequently, there is no investment carrying amount as of December
31, 1994.
Brooklyn Energy Limited Partnership
On March 11, 1994, EII entered into an agreement with Polsky Energy
Corporation to invest up to $9.7 million of equity in the Brooklyn Energy
Limited Partnership (Brooklyn). The equity will be used towards the
construction and operation of a 24 MW wood and oil-fired cogeneration
facility, which is located in Brooklyn, Nova Scotia, Canada. The facility
is expected to commence commercial operations in the first quarter of
1996. EII has posted a $9.7 million letter of credit, guaranteed by GPU,
in support of its equity obligation to Brooklyn.
Selkirk Cogen Partners, L.P.
In November 1994, EII exercised its option to invest in Selkirk Cogen
Partners, L.P. (Selkirk), and was admitted as a limited partner. EII's
partnership interest includes a preferred equity participation position as
well as a common equity share. EII has approximately a 13.55% interest in
the preferred equity of the partnership and a 20% interest in the common
equity. At December 31, 1994, EII had an investment in Selkirk of
approximately $20.9 million. Also see Note 4.
Syracuse Orange Partners, L.P.
EII purchased a 4.9% limited partnership interest in SOP for $372,500 on
December 30, 1994. See Note 4.
<PAGE>
20K
ANNUAL REPORT OF ENERGY INITIATIVES, INC.
For the Year Ended December 31, 1994
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.
Partnership Financial Information
Combined partnership financial information for PELP, OLS Power, SOP,
Onondaga, Selkirk, Pasco, FPB, Brooklyn, Lake and Ada for 1994 and 1993 is
as follows:
December 31,
Balance Sheet Data 1994 1993
Current assets $219,115,029 $ 41,818,185
Property, plant & equipment, net 631,864,930 154,434,959
Equipment under capital leases,
net 72,667,735 76,550,386
Construction work in progress, net 15,263,792 -
Other assets 68,450,235 8,605,361
Current liabilities 110,747,407 33,725,986
Long-term notes payable 692,158,930 129,936,838
Capital lease obligation 74,507,333 75,897,744
Other liabilities 28,426,367 6,245,000
Partners' capital 101,521,684 35,603,323
Income Statement Data
Revenues $213,183,950 $ 71,627,222
Operating expenses 165,753,096 55,683,383
Depreciation and amortization 18,394,830 6,246,501
Net interest expense 37,055,827 13,761,584
Other income (expense) (34,884,900) 1,600,000
Income taxes 122,228 283,514
Net loss to partners (43,026,931) (2,747,760)
Other income (expense) and net loss to partners for 1994 includes a write-
off of deferred financing costs relating to the Selkirk project of
approximately $35 million. This write-off occurred prior to EII exercising
its option to invest in Selkirk as described in Note 4.
EII's effective ownership interests in the aforementioned partnerships at
December 31, 1994 is as follows:
<PAGE>
20L
ANNUAL REPORT OF ENERGY INITIATIVES, INC.
For the Year Ended December 31, 1994
SCHEDULE XIV
NOTES TO FINANCIAL STATEMENTS
INSTRUCTIONS: The space below is provided for important notes regarding the
financial statements or any account thereof. Furnish
particulars as to any significant contingent assets or
liabilities existing at the end of the year. Notes relating to
financial statements shown elsewhere in this report may be
indicated here by reference.
Investment at
December 31,
General Limited ($ millions)
Partner Partner 1994 1993
PELP 1% 49% $ 4.8 $ 3.9
OLS Power 1% 49% - -
Onondaga 1% 49% 17.9 15.4
Ada 1% - 3.8 -
Lake 1% 41.05% 8.1 -
Pasco 1% 45.85% 22.9 -
Brooklyn 74% 1% .2 -
Selkirk - 19.23% 20.9 -
FPB 30% - - -
SOP - 4.9% .4 -
$79.0 $19.3
6. CREDIT AGREEMENT
In December 1994, EII entered into a credit agreement with Citibank, N.A.
and Canadian Imperial Bank of Commerce, with Citibank acting as the lead
agent. The credit agreement provides for the following:
- a $30 million credit line which may be drawn in the form of notes or
letters of credit. The aggregate amount of letters of credit
outstanding at one time may not exceed $15 million.
- notes issued under the agreement will bear interest at the higher of
either Citibank's base rate and the Federal funds rate plus 50 basis
points, or LIBOR plus 50 basis points. The agreement has an initial
term of three years, subject to a one-year extension at the sole
discretion of the lenders. Upon termination, outstanding loans are
payable over a two-year period in quarterly installments.
- facility fees are payable quarterly at an annual rate of 3/8 of 1%
on the average daily aggregate amount of each lender's commitment.
- letter of credit fees are payable quarterly at an annual rate of 1/2
of 1%.
<PAGE>
20M
ANNUAL REPORT OF ENERGY INITIATIVES, INC.
For the Year Ended December 31, 1994
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.
- EII shall not sell, transfer, assign, convey, hypothecate, pledge,
encumber or otherwise dispose of their investment in securities.
As of December 31, 1994, no amounts were outstanding under the credit
agreement and facility fees and lender closing fees were not significant.
GPU has represented to the lenders that it will not alter its position as
sole shareholder of EII without prior consent and it shall provide
appropriate oversight of the management of EII to help it meet its
financial obligations.
7. LEASES
EII leases its corporate offices from GPUN, an affiliated company (see
Note 2). In July 1994, the initial lease term of four years ending
September 1, 1996 was extended through August 31, 2006.
In November 1994, EII entered into a one-year lease agreement for its
California office, which expires December 31, 1995. The annual lease
payment for the California office is approximately $35,000. Rental
payments, including operating costs, for 1994 and 1993, were
approximately $360,000 and $203,000, respectively. In addition to the
rental cost, EII is responsible for its proportionate share of certain
operating costs incurred by the lessor, subject to annual adjustments in
accordance with the lease agreement.
Future minimum rental payments on EII leases as of December 31, 1994 are
as follows:
1995 $ 283,789
1996 248,490
1997 248,490
1998 248,490
1999 248,490
Thereafter 1,657,428
Total future minimum rentals $2,935,177
<PAGE>
20N
ANNUAL REPORT OF ENERGY INITIATIVES, INC.
For the Year Ended December 31, 1994
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.
8. INCOME TAXES
Income tax expenses for 1994 and 1993 were different from the amount
computed by applying the statutory Federal income tax rate to book income
(loss) before income taxes, as follows:
1994 1993
Loss before income taxes $(4,448,065) $(1,301,691)
Income tax benefit at
Federal statutory rate of 35% (1,556,823) (455,592)
Amortization 35,409 -
NOL for which tax benefit has not
been provided (a) (116) 634,379
GPC Merger (b) - 53,521
State income taxes, net (5,627) (16,909)
Other 12,344 82,170
Income tax (benefit) expense $(1,514,813) $ 297,569
(a) Represents NOL's of certain EII partnership investments, which are not
consolidated for Federal income tax return purposes.
(b) See Note 4 regarding treatment of GPC.
<PAGE>
20O
ANNUAL REPORT OF ENERGY INITIATIVES, INC.
For the Year Ended December 31, 1994
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.
Income tax expense is comprised of the following:
1994 1993
Provision for income taxes
currently recoverable $(1,623,744) $ (88,378)
Deferred income taxes resulting from:
Deferred revenue - partnerships 39,036 (302,662)
Project costs (450,945) 23,625
Partnership income 388,487 466,218
Depreciation and amortization 160,828 -
Prior period Federal and State
income tax adjustments 66,373 150,520
Deferred state tax, net (67,703) -
Other (27,145) (5,275)
GPC Merger - 53,521
Deferred income taxes, net 108,931 385,947
Income tax (benefit) expense $(1,514,813) $ 297,569
During 1994 and 1993, EII generated net operating losses for tax purposes
on a separate company basis. EII will receive cash payments for its net
operating loss as it will be utilized by other members of the consolidated
group upon filing of federal consolidated income tax returns.
Accordingly, the profitability of the other members of the consolidated
tax group provides a reasonable basis to recognize the tax benefit of this
net operating loss in 1994 and 1993. Tax-related amounts due from GPU and
included in income taxes receivable at December 31, 1994 and 1993 are
$523,010 and $720,275, respectively.
<PAGE>
20P
ANNUAL REPORT OF ENERGY INITIATIVES, INC.
For the Year Ended December 31, 1994
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.
In 1993, the implementation of FAS 109 resulted in a write-off of deferred
tax assets due to a change in applicable tax rates that was not
significant.
A summary of the components of deferred taxes as of December 31, 1994 and
1993 follows:
Deferred Tax Assets 1994 1993
Non-current:
Deferred revenue $ 176,885 $ 34,723
Deferred project costs 450,945 -
Sub Part F income 1,113,425 1,113,425
Deferred stock awards 93,471 77,215
State NOL 1,610,000 1,211,000
3,444,726 2,436,363
Valuation allowance (1,610,000) (1,211,000)
$1,834,726 $1,225,363
Deferred Tax Liabilities
Non-current:
Partnership income $1,238,839 $ 873,358
SFAS 115 adjustments 4,615,200 -
$5,854,039 $ 873,358
At December 31, 1994 and 1993, EII has state income tax loss carryforwards
amounting to approximately $17.9 million and $13.5 million, respectively,
that begin to expire in 1996.
9. POSTEMPLOYMENT BENEFITS
The GPU System maintains defined benefit pension and other postretirement
benefit plans covering substantially all of its employees. EII employees
are covered under the GPUSC defined benefit pension plan. Plan benefits
are based on career average compensation and years of service. GPUSC's
policy is to currently fund net pension costs within the deduction limits
permitted by the Internal Revenue Code.
<PAGE>
20Q
ANNUAL REPORT OF ENERGY INITIATIVES, INC.
For the Year Ended December 31, 1994
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.
A summary of the components of net periodic pension cost follows:
1994 1993
Service cost-benefits earned during the period $ 54,000 $ 39,000
Interest cost on projected benefit obligation 27,000 18,000
Expected return on assets (10,000) (10,000)
Net periodic pension cost $ 71,000 $ 47,000
The funded status of the plans and related assumptions at December 31,
1994 and 1993 were as follows:
1994 1993
Accumulated benefit obligation:
Vested benefits $341,000 $175,000
Nonvested benefits 187,000 135,000
Effect of future compensation levels 157,000 44,000
Projected benefit obligation $685,000 $354,000
Plan assets at fair value (212,000) (122,000)
Unrecognized net gain (loss) (55,000) 115,000
Accrued pension cost $418,000 $347,000
At December 31, 1994 and 1993 EII had an accrued pension liability of
$418,000 and $347,000, respectively, which is included in other long-term
liabilities on the consolidated balance sheets.
1994 1993
Principal Actuarial Assumptions:
Annual long-term rate of return
on plan assets 8.0% 7.5%
Discount rate 8.0% 7.5%
Annual increase in compensation level 6.0% 5.0%
The assets of the plans are held in a Master Trust and generally invested
in common stocks, fixed income securities and real estate equity
investments.
The GPU System also maintains savings plans for substantially all its
employees. These plans provide for employee contributions up to specified
<PAGE>
20R
ANNUAL REPORT OF ENERGY INITIATIVES, INC.
For the Year Ended December 31, 1994
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.
limits. Certain of the GPU System's savings plans provide for various
levels of matching contributions. The Company's matching contributions
for 1994 and 1993 were $63,177 and $41,109, respectively.
In addition to providing the above benefits, EII provides certain retiree
health care and life insurance benefits for substantially all employees
who reach retirement age while working for the Company. The Company has
provided postretirement pension expense of $28,000 and $51,000 and has
recorded $79,000 and $51,000 as other long term liabilities for these
retiree health care and life insurance benefits in 1994 and 1993,
respectively. The Company's accumulated postretirement benefit obligation
as of December 31, 1994 is $204,000 and the market value of the plan
assets is $9,000.
10. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment consists of the following:
December 31,
1994 1993
Furniture and fixtures $114,763 $104,689
Office equipment 529,940 428,218
Leasehold improvements 171,480 127,230
816,183 660,137
Less, accumulated depreciation 385,538 214,983
$430,645 $445,154
Depreciation expense amounted to $170,555 and $136,254 in 1994 and 1993,
respectively.
11. COMMITMENTS AND CONTINGENCIES
GPU has guaranteed payments to General Electric Capital Corporation of
amounts up to $7,026,000 to the extent Lake Cogen, Ltd. fails to pay rent
when due under the terms of the lease or chooses not to renew the lease
after the initial 11-year term.
<PAGE>
20S
ANNUAL REPORT OF ENERGY INITIATIVES, INC.
For the Year Ended December 31, 1994
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.
Onondaga and POA entered into power purchase agreements with Niagara
Mohawk under which the utility agreed to purchase the net electrical
energy and capacity produced by Onondaga and POA up to a maximum for each
such project of 79.9 MW. In August 1992, Niagara Mohawk filed a petition
with the New York Public Service Commission requesting authorization to
curtail purchases from all QFs with which it had signed power purchase
agreements. Both partnerships have opposed Niagara Mohawk's petition and a
decision on the matter has been delayed to a future undetermined date. An
unfavorable ruling could materially affect the operations and cash flows
of Onondaga and POA, as well as the carrying value of EII's investments in
both Onondaga and SOP.
Niagara Mohawk has advised both Onondaga and POA that it believes their
power purchase agreements include provisions that limit the amount of
electricity deliveries for which Niagara Mohawk is required to pay
contract rates. Niagara Mohawk claims that any electricity delivered in
excess of these quantities would be purchased at market rates
substantially below the contract rates. Both Onondaga and POA have
objected to Niagara Mohawk's position and have agreed to initiate
negotiations seeking mutually agreeable amendments to their power purchase
agreements. In exchange for such an agreement, Niagara Mohawk has agreed
to pay contract prices for all electricity delivered during 1993 and 1994,
but indicated that they reserve the right to recover overpayments, which
they estimate to be approximately $1.2 million for Onondaga and $3.6
million for POA, if negotiations are unsuccessful. If Niagara Mohawk were
to withhold the alleged overpayments, Onondaga and POA believe it would be
necessary to institute litigation against Niagara Mohawk.
In February 1995, Niagara Mohawk filed a petition with the FERC to
invalidate power purchase agreements entered into pursuant to Section 66-C
of the New York Public Service Law requiring Niagara Mohawk to purchase
energy and capacity from qualifying facilities at not less than 6 cents per
KWH. It is not clear whether the petition seeks relief with regard to
Onondaga's and POA's power purchase agreements or what the impact on the
partnerships would be if the FERC granted the petition.
FPC has initiated legal proceedings seeking relief on the price it pays
for energy delivered from Lake and Pasco, and the right to curtail
purchases of electricity. In October 1994, FPC filed a petition with the
Florida Public Service Commission for a determination that its plan for
<PAGE>
20T
ANNUAL REPORT OF ENERGY INITIATIVES, INC.
For the Year Ended December 31, 1994
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.
curtailing purchases from QFs is consistent with Florida statutes. Lake
and Pasco are defending their positions in these proceedings.
Since August 1994, FPC has been paying based on the as-available prices
(which were generally less than the formula price under their power
purchase agreement) in a majority of the hours during which energy is
delivered. Lake has written off approximately $1.2 million in receivables
associated with these reduced rate payments. In addition, EII has written
down its investment in Pasco for its pro rata share of approximately $1
million in reduced rate payments.
<PAGE>
21
ANNUAL REPORT OF ENERGY INITIATIVES, INC.
For the Year Ended December 31, 1994
SCHEDULE XV
STATEMENT OF INCOME
ACCOUNT D E S C R I P T I O N CURRENT YEAR PRIOR YEAR
INCOME
457 Services rendered to associate companies $ 4 695 $ 3 281
458 Services rendered to nonassociate companies - -
421 Equity earnings (losses) (601) (914)
421 Interest and dividend income 518 738
421 Gain on sale of asset - 36
Total Income 4 612 3 141
EXPENSE
920 Salaries and wages 2 409 1 516
921 Office supplies and expenses 238 108
922 Administrative expense transferred -
credit - -
923 Outside services employed 2 913 1 515
924 Property insurance 36 14
925 Injuries and damages - -
926 Employee pensions and benefits 509 279
928 Regulatory commission expense - -
930.1 General advertising expenses - -
930.2 Miscellaneous general expenses 1 713 533
931 Rents 360 203
932 Maintenance of structures and equipment - -
403 Depreciation and amortization expense 471 159
408 Taxes other than income taxes 396 111
409 Income taxes (1 316) 281
410 Provision for deferred income taxes - 17
411 Provision for deferred income taxes -
credit (199) -
411.5 Investment tax credit - -
426.1 Donations - -
426.5 Other deductions - -
427 Interest on long-term debt - -
430 Interest on debt to associate
companies - -
431 Other interest expense 15 4
Total Expense 7 545 4 740
Net Income or (Loss) $ (2 933) $ (1 599)
<PAGE>
22
ANNUAL REPORT OF ENERGY INITIATIVES, INC.
For the Year Ended December 31, 1994
ANALYSIS OF BILLING
ASSOCIATE COMPANIES
ACCOUNT 457
COSTS DIRECT INDIRECT COMPENSATION
NAME OF ASSOCIATE COMPANY COSTS FOR USE AMOUNT TOTAL
CHARGED CHARGE OF CAPITAL BILLED
457-1 457-2 457-3
PRIME ENERGY LIMITED PARTNERSHIP $ 1,711 $ - $ - $1,711
OLS POWER LIMITED PARTNERSHIP 544 - - 544
ONONDAGA COGENERATION LIMITED
PARTNERSHIP 1,261 - - 1,261
BROOKLYN ENERGY LIMITED PARTNERSHIP 99 - - 99
LAKE COGEN LIMITED 195 - - 195
PROJECT ORANGE ASSOCIATES 180 - - 180
ADA COGEN LIMITED 606 - - 606
PASCO COGEN LIMITED 99 - - 99
TOTAL $ 4,695 $ - $ - $4,695
<PAGE>
<TABLE>
23
ANNUAL REPORT OF ENERGY INITIATIVES, INC.
For the Year Ended December 31, 1994
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>
NOT APPLICABLE
INSTRUCTION: Provide a brief description of the services rendered to each nonassociated company:<PAGE>
24
ANNUAL REPORT OF ENERGY INITIATIVES, INC.
For the Year Ended December 31, 1994
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>
920 SALARIES AND WAGES
921 OFFICE SUPPLIES AND EXPENSES
922 ADMINISTRATIVE EXPENSE TRANSFERRED-
CREDIT
923 OUTSIDE SERVICES EMPLOYED NOT APPLICABLE
924 PROPERTY INSURANCE
925 INJURIES AND DAMAGES
926 EMPLOYEE PENSIONS AND BENEFITS
928 REGULATORY COMMISSION EXPENSE
930.1 GENERAL ADVERTISING EXPENSES
930.2 MISCELLANEOUS GENERAL EXPENSES
931 RENTS
932 MAINTENANCE OF STRUCTURES AND
EQUIPMENT
403 DEPRECIATION AND AMORTIZATION
EXPENSE
408 TAXES OTHER THAN INCOME TAXES
409 INCOME TAXES
410 PROVISION FOR DEFERRED INCOME TAXES
411 PROVISION FOR DEFERRED INCOME TAXES
- CREDIT
411.5 INVESTMENT TAX CREDIT
426.1 DONATIONS
426.5 OTHER DEDUCTIONS
427 INTEREST ON LONG-TERM DEBT
430 INTEREST ON DEBT TO ASSOCIATE
COMPANIES
431 OTHER INTEREST EXPENSE
INSTRUCTION: Total cost of service will equal
for associate and nonassociate
companies the total amount billed
under their separate analysis of
billing schedules.
TOTAL EXPENSES =
COMPENSATION FOR USE OF EQUITY CAPITAL =
430 INTEREST ON DEBT TO ASSOCIATE
COMPANIES =
TOTAL COST OF SERVICE =
<PAGE>
25
ANNUAL REPORT OF ENERGY INITIATIVES, INC.
For the Year Ended December 31, 1994
SCHEDULE XVII
SCHEDULE OF EXPENSE DISTRIBUTION
BY
DEPARTMENT OR SERVICE FUNCTION
<CAPTION>
D E P A R T M E N T OR S E R V I C E F U N C T I O N
TOTAL OFFICE OF OYSTER THREE MILE THREE MILE
D E S C R I P T I O N O F I T E M S AMOUNT OVERHEAD PRESIDENT CREEK ISLAND I ISLAND II
<S> <C> <C>
920 SALARIES AND WAGES
921 OFFICE SUPPLIES AND EXPENSES
922 ADMINISTRATIVE EXPENSE TRANSFERRED -
CREDIT
923 OUTSIDE SERVICES EMPLOYED
924 PROPERTY INSURANCE
925 INJURIES AND DAMAGES
926 EMPLOYEE PENSIONS AND BENEFITS NOT APPLICABLE
928 REGULATORY COMMISSION EXPENSE
930.1 GENERAL ADVERTISING EXPENSE
930.2 MISCELLANEOUS GENERAL EXPENSES
931 RENTS
932 MAINTENANCE OF STRUCTURES AND
EQUIPMENT
403 DEPRECIATION AND AMORTIZATION
EXPENSE
408 TAXES OTHER THAN INCOME TAXES
409 INCOME TAXES
410 PROVISION FOR DEFERRED INCOME TAXES
411 PROVISION FOR DEFERRED INCOME TAXES
- CREDIT
411.5 INVESTMENT TAX CREDIT
426.1 DONATIONS
426.5 OTHER DEDUCTIONS
427 INTEREST ON LONG-TERM DEBT
430 INTEREST ON DEBT TO ASSOCIATE
COMPANIES
431 OTHER INTEREST EXPENSE
INSTRUCTION: Indicate each department or
service function. (See Instruc-
tion 01-3 General Structure of
Accounting System: Uniform
System Account)
TOTAL EXPENSES =
<PAGE>
26
ANNUAL REPORT OF ENERGY INITIATIVES, INC.
For the Year Ended December 31, 1994
SCHEDULE XVII
SCHEDULE OF EXPENSE DISTRIBUTION
BY
DEPARTMENT OR SERVICE FUNCTION
<CAPTION>
D E P A R T M E N T OR S E R V I C E F U N C T I O N
ACCOUNT TECHNICAL NUCLEAR COMMUN- ADMIN & CORPORATE CORPORATE
NUMBER FUNCTIONS ASSURANCE CATIONS FINANCE SERVICES SECRETARY
<S>
920
921
922
923
924
925
926
928
930.1
930.2
931
932
403
408
409
410
411
411.5
426.1
426.5
427
430
431
TOTAL
<PAGE>
27
ANNUAL REPORT OF ENERGY INITIATIVES, INC.
For the Year Ended December 31, 1994
DEPARTMENTAL ANALYSIS OF SALARIES
ACCOUNT 920
<CAPTION>
DEPARTMENTAL SALARY EXPENSE NUMBER
NAME OF DEPARTMENT INCLUDED IN AMOUNTS BILLED TO PERSONNEL
Indicate each department TOTAL SALARY OTHER NON END OF
or service function. AMOUNT EXPENSE ASSOCIATES ASSOCIATES YEAR
<S> <C> <C> <C> <C> <C>
Energy Initiatives, Inc. $ 2,409 $ 2,409 $ - $ - 40
TOTAL $ 2,409 $ 2,409 $ - $ - 40
<PAGE>
28
ANNUAL REPORT OF ENERGY INITIATIVES, INC.
For the Year Ended December 31, 1994
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 $25,000,
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
FROM WHOM PURCHASED ADDRESS "NA"- NON AMOUNT
ASSOCIATE
<S> <C> <C> <C>
Engineering
CH2M Hill 825 N. E. Multnomah NA $ 45
Portland, OR 97232-2146
Parsons Main, Inc. PO Box 73678 NA 35
Rochester, NY 14673-3678
3 Others (under $25,000) NA 18
Sub-total $ 98
Auditing/Accounting
Coopers & Lybrand 1251 Avenue of the Americas NA $182
New York, NY 10020
General Public Utilities 100 Interpace Parkway NA 155
Service Company Parsippany, NJ 07054
Subtotal $337
Other Professional Services
Raymunda E. Danon Ave San Jeronimo #550-703 NA $109
Jardines Del Pedregal
Mexico, D.F. 01900
Boston Pacific, Co. 1225 I Street, NW, Suite 890 NA 52
Washington, DC 20005
Fischbein, Badillom, Wagner 909 Third Ave. NA 61
New York, NY 10022
Hill & Knowlton, Inc. PO Box 8500-4445 NA 35
Philadelphia, PA 19178
<PAGE>
28A
ANNUAL REPORT OF ENERGY INITIATIVES, INC.
For the Year Ended December 31, 1994
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 $25,000, 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.
RELATIONSHIP
"A"=ASSOCIATE
FROM WHOM PURCHASED ADDRESS "NA"- NON AMOUNT
ASSOCIATE
Other Professional Services (Continued)
International Power Sys. 5106 Sandlewood Court NA 27
Corp. Marietta, GA 30068
Leboeuf International Bus. 125 West 55th Street NA 29
New York, NY 10019-5389
Lovell White Durrant 11th Floor, Peregrine Tower NA 28
Lippo Centre
Queensway, Hong Kong
Overseas Private Investment 1100 New York Ave. N.W. NA 66
Company Washington, DC 20527
Parsons Main, Inc. PO Box 73678 NA 43
Rochester, NY 14673-3678
Robertson, Grosswiler & Co. 1500 SW 1st Avenue NA 61
Suite 1005
Portland, OR 97201
SEF Cogen 1041 Third Avenue, 2nd Floor NA 33
New York, NY 10021
Slater Consulting 3370 Habersham Road NW NA 26
Atlanta, GA 30305
St. Gallen Consulting Group Rosenberstr 32 CH-9001 NA 208
St. Gallen, Switzerland
Tamal Energy, Inc. Point Richmond Tech Center NA 88
1003 W. Cutting, Suite 110
Richmond, CA 94804-2028
Waldron Engineering 32 Depot Square NA 26
Hampton, NH 03842
<PAGE>
28B
ANNUAL REPORT OF ENERGY INITIATIVES, INC.
For the Year Ended December 31, 1994
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 $25,000, 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.
RELATIONSHIP
"A"=ASSOCIATE
FROM WHOM PURCHASED ADDRESS "NA"- NON AMOUNT
ASSOCIATE
Woodward-Clyde Limnos, S.A. Roger Delluria 119 NA 54
08037 Barcelona, Spain
30 Others (under $25,000) 124
Subtotal $1,070
Legal
Berlack, Israels & Liberman 120 West 45th Street NA $ 219
New York, NY 10036
Carregal & Funes DeRioja Alsina 495 NA 111
Buenos Aires, Argentina 1087
Daley, Black & Moreira Suite 400 The TD Centre NA 33
1791 Barrington Street
Halifax, Nova Scotia
Canada B3J 3K9
Dewey Ballantine 1775 Pennsylvania Ave., NW NA 120
Washington, DC 20006
Hatcher, Stubbs, Land 233 12th Street NA 26
Holis & Rothschild The Corporate Center, Suite 500
Columbus, GA 31901
Hicks, Maloof & Campbell Marquis Two Tower NA 89
Suite 2200
285 Peachtree Center Avenue, NE
Atlanta, GA 30303
Hunton & Williams Suite 9000 NA 316
2000 Pennsylvania Avenue, NW
Washington, DC 20006
<PAGE>
28C
ANNUAL REPORT OF ENERGY INITIATIVES, INC.
For the Year Ended December 31, 1994
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 $25,000, 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.
RELATIONSHIP
"A"=ASSOCIATE
FROM WHOM PURCHASED ADDRESS "NA"- NON AMOUNT
ASSOCIATE
Jenkens & Gilchrist 1445 Ross Avenue NA 33
Suite 3200
Dallas, TX 75202-2799
Luis Carlos Neira Mejia Carrera 7 71-52 NA 66
Suite 902, Tower B
Bogota, Colombia
Reid & Priest 40 West 57th Street NA 152
New York, NY 10019-4097
Skadden, Arps, Slate, 1440 New York Avenue, NW NA 51
Meagher & Flom Washington, DFC 20006
Stoel Rives Boley Suite 3600 NA 28
Jones & Gray One Union Square
600 University Street
Seattle, WA 98101-3197
15 Others (under $25,000) 63
Subtotal $1,307
Advertising
Howard Press PO Box 370089 NA $ 25
Boston, MA 02241-0789
10 Others (under $25,000) 43
Subtotal $ 68
Computer
14 Others (under $25,000) $ 33
Total Outside Professional Services $2,913
</TABLE>
<PAGE>
29
ANNUAL REPORT OF ENERGY INITIATIVES, INC.
For the Year Ended December 31, 1994
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.
D E S C R I P T I O N AMOUNT
GROUP LIFE INSURANCE $ 35
HEALTH AND DENTAL INSURANCE 152
PENSION PLANS 71
EMPLOYEE SAVINGS PLAN 63
EDUCATIONAL REIMBURSEMENT 36
VACATION ACCRUAL 117
3 OTHER BENEFITS (Under $25,000) 35
TOTAL $ 509
<PAGE>
30
ANNUAL REPORT OF ENERGY INITIATIVES, INC.
For the Year Ended December 31, 1994
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.
D E S C R I P T I O N NAME OF PAYEE AMOUNT
NONE
TOTAL -
<PAGE>
31
ANNUAL REPORT OF ENERGY INITIATIVES, INC.
For the Year Ended December 31, 1994
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.
D E S C R I P T I O N AMOUNT
Employee Travel Expense $ 451
Employee Recruiting and Relocation Expense 253
Employee Training Expense 30
Business Exploration Costs 813
Other 166
TOTAL $ 1 713
<PAGE>
32
ANNUAL REPORT OF ENERGY INITIATIVES, INC.
For the Year Ended December 31, 1994
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.
T Y P E O F P R O P E R T Y AMOUNT
OFFICE SPACE $ 360
TOTAL $ 360
<PAGE>
33
ANNUAL REPORT OF ENERGY INITIATIVES, INC.
For the Year Ended December 31, 1994
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.
K I N D O F T A X AMOUNT
(1) U.S. GOVERNMENT TAXES
FEDERAL UNEMPLOYMENT COMPENSATION $ 3
FICA 152
Sub Total 155
(2) OTHER THAN U.S. GOVERNMENT TAXES
NEW YORK GROSS RECEIPTS TAXES 216
CALIFORNIA MINIMUM TAXES 2
SUI 23
Sub Total 241
TOTAL $ 396
<PAGE>
34
ANNUAL REPORT OF ENERGY INITIATIVES, INC.
For the Year Ended December 31, 1994
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
NONE
<PAGE>
35
ANNUAL REPORT OF ENERGY INITIATIVES, INC.
For the Year Ended December 31, 1994
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
NONE
<PAGE>
36
ANNUAL REPORT OF ENERGY INITIATIVES, INC.
For the Year Ended December 31, 1994
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 Schedule XIV.
<PAGE>
37
ANNUAL REPORT OF ENERGY INITIATIVES, INC.
For the Year Ended December 31, 1994
ORGANIZATION CHART
________________________________________
| |
| |
| |
| BOARD OF DIRECTORS |
| Chairman |
|________________________________________|
| |
| PRESIDENT & CEO |
|______________________________________|
| DIRECTOR, LEGAL & CORPORATE |
| AFFAIRS AND CORPORATE SECRETARY |
|____________________________________|
| |
| V.P. OF FINANCE AND ACCOUNTING |
| AND TREASURER |
| ___________________________________|
| |
| V.P. BUSINESS OPERATIONS |
|____________________________________|
| |
| V.P. BUSINESS DEVELOPMENT |
|____________________________________|
<PAGE>
38
ANNUAL REPORT OF ENERGY INITIATIVES, INC.
METHODS OF ALLOCATION
Not Applicable
<PAGE>
39
ANNUAL REPORT OF ENERGY INITIATIVES, INC.
ANNUAL STATEMENT OF COMPENSATION FOR USE OF CAPITAL BILLED
NONE
<PAGE>
40
ANNUAL REPORT OF ENERGY INITIATIVES, INC.
VENTURE DISCLOSURES
In accordance with discussions with the staff, financial statements for
projects in which EII owns interests will be included in a Certificate
Pursuant to Rule 24 to be filed under the 1935 Act for the quarter ended
March 31, 1995, pursuant to the order dated September 12, 1994 (HCAR No.
26123; File No. 70-7727).
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ANNUAL REPORT OF ENERGY INITIATIVES, INC.
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.
ENERGY INITIATIVES, INC.
(Name of Reporting Company)
By: /s/ B. L. Levy
(Signature of Signing Officer)
B. L. Levy, President and CEO
(Printed Name and Title of Signing Officer)
Date: 5/1/95
<PAGE>
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<ARTICLE> OPUR2
<MULTIPLIER> 1,000
<CURRENCY> US DOLLARS
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> DEC-31-1994
<EXCHANGE-RATE> 1
<BOOK-VALUE> PER-BOOK
<NET-SERVICE-COMPANY-PROPERTY> 431
<TOTAL-INVESTMENTS> 120,795
<TOTAL-CURRENT-ASSETS> 6,178
<TOTAL-DEFERRED-DEBITS> 1,835
<OTHER-ASSETS-AND-DEBITS> 0
<TOTAL-ASSETS-AND-DEBITS> 129,239
<TOTAL-PROPRIETARY-CAPITAL> 117,706
<TOTAL-LONG-TERM-DEBT> 325
<NOTES-PAYABLE> 300
<NOTES-PAYABLE-ASSOCIATE-COMP> 57
<OTHER-CURR-AND-ACCRUED-LIAB> 2,147
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<TOT-LIABIL-AND-PROPRIET-CAP> 129,239
<SERVICES-ASSOCIATE-COMPANIES> 4,695
<SERVICES-NON-ASSOCIATE-COMP> 0
<MISC-INCOME-OR-LOSS> (83)
<TOTAL-INCOME> 4,612
<SALARIES-AND-WAGES> 2,409
<EMPLOYEE-PENSION-AND-BENEFIT> 509
<OTHER-EXPENSES> 4,627
<TOTAL-EXPENSES> 7,545
<NET-INCOME> (2,933)
<TOTAL-EXPENSES-DIRECT-COST> 0
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<PERSONNEL-END-OF-YEAR> 40
<PAGE>
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