FORM U-13-60
Mutual and Subsidiary service companies
Revised February 7, 1980
ANNUAL REPORT
FOR THE PERIOD
Beginning January 1, 1996 and Ending December 31, 1996
TO THE
U.S. SECURITIES AND EXCHANGE COMMISSION
OF
EUA COGENEX CORPORATION
(Exact Name of Reporting Company)
A Subsidiary SERVICE COMPANY
("Mutual" or "Subsidiary")
Date of Incorporation September 26, 1983.
If not Incorporated, Date of Organization.
State or Sovereign Power under which Incorporated or Organized Massachusetts.
Location of Principal Executive Offices of Reporting Company:
Boott Mills South, 100 Foot of John Street, Lowell, Massachusetts 01852
Name, title and address of officer to whom correspondence concerning this
report should be addressed:
Richard M. Burns, Comptroller & Asst. Treas., 1 Liberty Sq., Boston MA 02109
(Name) (Title) (Address)
Name of Principal Holding Company Whose Subsidiaries are served by Reporting
company:
Eastern Utilities Associates
SEC 1926 (6-82) TOTAL NUMBER OF PAGES 84
INSTRUCTIONS FOR USE OF MODIFIED FORM U-13-60
1. Time of Filing - Annual Report essentially in the form of U-13-60 shall
be filed appended to Form U5S, Annual Report of the Parent and
Associate Companies Pursuant to the Public Utility Holding Company Act
of 1935. Form U5S is required to be filed by May 1.
2. Number of Copies - Each annual report shall be filed in duplicate. The
company should prepare and retain at least one extra copy for itself in
case correspondence with reference to the report becomes necessary.
3. 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.
4. Organization Structure - The Company shall submit with each annual
report a copy of its current organizational chart.
LISTING OF SCHEDULES AND ANALYSIS OF ACCOUNTS
SCHEDULE OR PAGE
ACCT. NO. NO.
Description of Schedules and Accounts
COMPARATIVE BALANCE SHEET Schedule I 5-8
COMPANY PROPERTY Schedule II 9-10
ACCUMULATED PROVISION FOR DEPRECIATION AND
AMORTIZATION OF COMPANY PROPERTY Schedule III 11-12
INVESTMENTS Schedule IV 13-18
ACCOUNTS RECEIVABLE FROM ASSOCIATE COMPANIES Schedule V 19
ACCOUNTS RECEIVABLE AGING Schedule VI 20-21
ACCUMULATED PROVISION FOR UNCOLLECTIBLE Schedule VII 22
ACCOUNTS
MISCELLANEOUS CURRENT AND ACCRUED ASSETS Schedule VIII 23
MISCELLANEOUS DEFERRED DEBITS Schedule IX 24-25
PROPRIETARY CAPITAL Schedule XI 26
LONG-TERM DEBT Schedule XII 27
CURRENT AND ACCRUED LIABILITIES Schedule XIII 28-30
NOTES TO FINANCIAL STATEMENTS Schedule XIV 31-50
COMPARATIVE INCOME STATEMENT Schedule XV 51-52
ANALYSIS OF BILLING - SALES & PROJECT REVENUES Accounts 514/417 53
ANALYSIS OF MISCELLANEOUS INCOME Accounts 419/421/
450 54-56
SCHEDULE OF EXPENSE DISTRIBUTION Schedule XVII 57
DEPARTMENTAL ANALYSIS OF SALARIES Account 920 58
OUTSIDE SERVICES EMPLOYED Account 923 59-61
GENERAL ADVERTISING EXPENSES Account 930.1 62
MISCELLANEOUS GENERAL EXPENSES Account 930.2 63
LISTING OF SCHEDULES AND ANALYSIS OF ACCOUNTS
SCHEDULE OR PAGE
ACCT. NO. NO.
Description of Schedules and Accounts
RENTS Account 931 64
TAXES OTHER THAN INCOME Account 408 65-67
DONATIONS Account 426.1 68
OTHER DEDUCTIONS Account 426.5 69
NOTES TO STATEMENT OF INCOME Schedule XVIII 70
SCHEDULE OF TERMINATED CONTRACTS 71
SCHEDULE OF PROJECT VALUES 72
SCHEDULE OF ESTIMATED KILOWATTS SAVED 73
LISTING OF INSTRUCTIONAL FILING REQUIREMENTS
Description of Reports or Statements
PROJECT INCOME STATEMENT 74-78
ORGANIZATIONAL STRUCTURE 79-83
SIGNATURE CLAUSE 84
ANNUAL REPORT OF EUA COGENEX CORPORATION AND SUBSIDIARY COMPANIES
SCHEDULE I - CONSOLIDATING BALANCE SHEETS
Give balance sheet of the companies as of December 31
<TABLE>
CURRENT YEAR - 1996
ACCOUNT ASSETS AND OTHER DEBITS
<CAPTION>
COMPANY PROPERTY EUA EUA EUA
Cogenex Cogenex Nova
Consol Elimin Corporation (Division)
<S> <C> <C> <C> <C>
COMPANY PROPERTY
121 Company Property (Schedule II) 77,212,472 57,502,131 1,269,576
107 Construc. work in progress (Schedule II) 7,651,781 7,446,274
Total Property 84,864,253 64,948,405 1,269,576
108 Less accumulated provision for deprec.
& amort. co. property (Schedule III) (32,763,307)
Net Company Property 52,100,946 38,160,866 254,829
INVESTMENTS
123 Inv. in associated companies (Schedule IV) 35,465,734 16,546,068 52,011,802
124 Other Investments (Schedule IV) 49,528,866 40,792,218
Total Investments 84,994,600 16,546,068 92,804,020
CURRENT AND ACCRUED ASSETS
131 Cash 2,226,911 1,448,920 139,363
134 Special Deposits 682,378 84,292 200
135 Working Funds 19,650 10,000 1,565
136 Temporary cash investments (Schedule IV) 0
141 Notes Receivable and Lease Receivable 19,889,703 12,583,829 31,024,526 72,958
143 Accounts Receivable (Schedule VI) 22,458,486 12,010,724 1,771,693
144 Acc. prov. for uncol. accts (Sched. VII) (649,003) (439,386) (209,617)
146 Accts rec. from ass. cos. (Sched. V & VII) 76,220 7,309,234 6,847,107 305,247
152 Fuel stock expenses undistributed 0
154 Materials and Supplies 2,025,772 63,569 1,339,641
163 Store expense undistributed 0
165 Prepayments 134,296 100,632 6,759
171 Interest Receivable 475,042 456,274 18,768
174 Miscellaneous current and accrued assets 116,662 93,165
Total Current and Accrued Assets 47,456,117 19,893,063 51,699,823 3,446,577
DEFERRED DEBITS
181 Unamortized debt expense 558,402 558,402
184 Clearing Accounts
186 Misc. deferred debits (Schedule IX) 8,441,266 6,877,267
188 Research, development, or demonstration
expenditures (Schedule X)
Total Deferred Debits 8,999,668 7,435,669
190 ACCUMULATED DEFERRED INCOME TAX BENEFIT 9,031,031 4,302,038
TOTAL ASSETS AND OTHER DEBITS 202,582,362 36,439,131 194,402,416 3,701,406
</TABLE>
ANNUAL REPORT OF EUA COGENEX CORPORATION AND SUBSIDIARY COMPANIES
SCHEDULE I - CONSOLIDATING BALANCE SHEETS (Continued)
Give balance sheet of the companies as of December 31
<TABLE>
CURRENT YEAR - 1996
ACCOUNT ASSETS AND OTHER DEBITS
<CAPTION>
COMPANY PROPERTY EUA EUA EUA EUA EUA
Day NEM Cogenex Citizens Highland
(Division) Inc Canada Corporation Corporation
<S> <C> <C> <C> <C> <C>
COMPANY PROPERTY
121 Company Property (Schedule II) 2,113,094 9,196,665 2,964,006 4,167,000
107 Construc. work in progress (Schedule II) 10,202 195,305
Total Property 2,113,094 9,196,665 0 2,974,208 4,362,305
108 Less accumulated provision for deprec.
& amort. co. property (Schedule III) (801,711) (1,317,954) (163,421) (677,935)
Net Company Property 1,311,383 5,878,711 0 2,810,787 3,684,370
INVESTMENTS
123 Inv. in associated companies (Schedule IV)
124 Other Investments (Schedule IV) 5,897,908 2,838,740
Total Investments 5,897,908 2,838,740
CURRENT AND ACCRUED ASSETS
131 Cash 36,182 568,629 50,242 44,720 (61,145)
134 Special Deposits 255,915 115,011 226,960
135 Working Funds 1,442 3,000 3,643
136 Temporary cash investments (Schedule IV)
141 Notes Receivable and Lease Receivable 32,548 891,568 451,932
143 Accounts Receivable (Schedule VI) 1,576,339 403,635 21,940 953,797 5,720,358
144 Acc. prov. for uncol. accts (Sched. VII)
146 Accts rec. from ass. cos. (Sched. V & VII 89,659 55,164 88,277
152 Fuel stock expenses undistributed
154 Materials and Supplies 582,772 39,790
163 Store expense undistributed
165 Prepayments 7,390 11,632 7,883
171 Interest Receivable
174 Miscellaneous current and accrued assets 23,497
Total Current and Accrued Assets 2,605,744 972,264 975,382 1,171,692 6,477,698
DEFERRED DEBITS
181 Unamortized debt expense
184 Clearing Accounts
186 Misc. deferred debits (Schedule IX) 1,205 1,260,128 246,156 50,598 5,912
188 Research, development, or demonstration
expenditures (Schedule X)
Total Deferred Debits 1,205 1,260,128 246,156 50,598 5,912
190 ACCUMULATED DEFERRED INCOME TAX BENEFIT 4,038,647 690,346
TOTAL ASSETS AND OTHER DEBITS 3,918,332 12,149,750 7,119,446 4,033,077 13,697,066
</TABLE>
ANNUAL REPORT OF EUA COGENEX CORPORATION AND SUBSIDIARY COMPANIES
SCHEDULE I - CONSOLIDATING BALANCE SHEETS (Continued)
Give balance sheet of the companies as of December 31
<TABLE>
CURRENT YEAR - 1996
ACCOUNT LIABILITIES AND PROPRIETARY CAPITAL
<CAPTION>
EUA EUA EUA
Cogenex Cogenex Nova
Consol Elimin Corporation (Division)
PROPRIETARY CAPITAL
<S> <C> <C> <C> <C>
201 Common Stock Issued (Schedule XI) 100 1,400 100
204 Redeemable pref. stock of subs. (Schedule XI) 75
211 Misc. paid-in-capital (Schedule XI) 47,273,467 15,802,669 46,175,934
215 Appropriated retained earnings (Schedule XI)
216 Unappropriated ret. (Schedule XI) 275,146 741,999 305,556 108,889
Total Proprietary Capital 47,548,788 16,546,068 46,481,590 108,889
LONG-TERM DEBT
223 Advances from ass. cos. (Schedule XII)
224 Other long-term debt (Schedule XII) 90,800,000 90,800,000
225 Unamortized premium on long-term debt
226 Unamortized discount of long-term debt
Total Long-Term Debt 90,800,000 90,800,000
CURRENT AND ACCRUED LIABILITIES
224 Cur. Mats. of LT debt (Schedule XII) 21,700,000 21,700,000
231 Notes payable 22,464,685 17,923,000
232 Accounts payable 4,682,330 3,171,218 219,954
233 Notes payable to ass. cos. (Schedule XIII) 12,583,829 755,650
234 Accounts payable - ass. cos. (Schedule XIII) 221,684 5,516,432 666,693 732,305
236 Taxes accrued 450,570 14,208 55,316
237 Interest accrued 2,482,523 1,632,802 2,482,523 1,351,623
238 Dividends declared 160,000
241 Tax collections payable (Refund)
242 Misc. current and acc. liab. (Schedule XIII) 2,702,610 2,575,538 31,728
Total Current and Accrued Liabilities 54,704,402 19,893,063 48,533,180 3,146,576
DEFERRED CREDITS
253 Other deferred credits 5,023,528 4,125,450 445,941
255 Accumulated deferred inv. tax credits
Total Deferred Credits 5,023,528 4,125,450 445,941
282/283 ACCUMULATED DEFERRED INCOME TAXES 4,505,644 4,462,196
TOTAL LIABILITIES AND PROPRIETARY CAPITAL 202,582,362 36,439,131 194,402,416 3,701,406
</TABLE>
ANNUAL REPORT OF EUA COGENEX CORPORATION AND SUBSIDIARY COMPANIES
SCHEDULE I - CONSOLIDATING BALANCE SHEETS (Continued)
Give balance sheet of the companies as of December 31
<TABLE>
CURRENT YEAR - 1996
ACCOUNT LIABILITIES AND PROPRIETARY CAPITAL (CONTINUED)
<CAPTION>
EUA EUA EUA EUA EUA
Day NEM Cogenex Citizens Highland
(Division) Inc Canada Corp. Corp.
PROPRIETARY CAPITAL
<S> <C> <C> <C> <C> <C>
201 Common Stock Issued (Schedule XI) 1,100 100 100 100
204 Redeemable pref. stock of subs. (Schedule XI) 75
211 Misc. paid-in-capital (Schedule XI) 1,097,532 11,502,050 (64,132) 4,364,752
215 Appropriated retained earnings (Schedule XI)
216 Unappropriated ret. (Schedule XI) (50,598) (229,430) 485,327 27,251 370,150
Total Proprietary Capital 1,046,934 11,273,720 421,295 27,426 4,735,002
LONG-TERM DEBT
223 Advances from ass. cos. (Schedule XII)
224 Other long-term debt (Schedule XII)
225 Unamortized premium on long-term debt
226 Unamortized discount of long-term debt
Total Long-Term Debt
CURRENT AND ACCRUED LIABILITIES
224 Cur. Mats. of LT debt (Schedule XII)
231 Notes payable 3,648,300 873,782 19,603
232 Accounts payable 532,191 107,667 118,773 532,527
233 Notes payable to ass. cos. (Schedule XIII) 1,767,073 340,000 2,587,500 7,133,606
234 Accounts payable - ass. cos. (Schedule XIII) 200,027 8,363 2,591,231 339,890 1,199,607
236 Taxes accrued 9,775 336,360 3,351 31,560
237 Interest accrued 281,179
238 Dividends declared 160,000
241 Tax collections payable (Refund)
242 Misc. current and acc. liab. (Schedule XIII) 1,351 63,828 30,165
Total Current and Accrued Liabilities 2,791,596 508,363 6,683,558 3,987,124 8,947,068
DEFERRED CREDITS
253 Other deferred credits 79,802 366,900 14,593 2,870 (12,028)
255 Accumulated deferred inv. tax credits
Total Deferred Credits 79,802 366,900 14,593 2,870 (12,028)
282/283 ACCUMULATED DEFERRED INCOME TAXES 767 15,657 27,024
TOTAL LIABILITIES AND PROPRIETARY CAPITAL 3,918,332 12,149,750 7,119,446 4,033,077 13,697,066
</TABLE>
<TABLE>
<CAPTION>
ANNUAL REPORT OF EUA COGENEX CORPORATION AND SUBSIDIARY COMPANIES
SCHEDULE I - CONSOLIDATING BALANCE SHEETS
Give balance sheet of the companies as of December 31
PRIOR YEAR - 1995
ACCOUNT ASSETS AND OTHER DEBITS
COMPANY PROPERTY EUA EUA EUA
Cogenex Cogenex Nova
Consolidated Eliminations Corporation (Division)
<S> <C> <C> <C> <C>
COMPANY PROPERTY
121 Company Property (Schedule II) 71,392,964 55,234,904 1,307,137
107 Construction work in progress (Schedule II) 17,842,313 15,920,855 0
Total Property 89,235,277 0 71,155,759 1,307,137
122 Less accumulated provision for depreciation
and amortization company property (Schedule III) (28,075,830) (23,333,540) (966,772)
Net Company Property 61,159,447 0 47,822,219 340,365
INVESTMENTS
123 Investments in associated companies (Schedule IV) 44,414,138 16,612,662 61,026,800
124 Other Investments (Schedule IV) 48,251,335 43,137,166
Total Investments 92,665,473 16,612,662 104,163,966 0
CURRENT AND ACCRUED ASSETS
131 Cash (4,591) 412,320 (217,414)
134 Special Deposits 448,119 86,249 200
135 Working Funds 18,785 10,000 2,054
136 Temporary cash investments (Schedule IV) 0
141 Notes Receivable and Lease Receivable 17,678,994 6,445,502 23,612,308 95,766
143 Accounts Receivable (Schedule VI) 18,716,747 11,497,630 4,313,233
144 Accumulated provision for uncollectible
accounts (Schedule VII) (416,036) (318,155) (67,756)
146 Accounts receivable from associate companies
(Schedule V and VI) 24,661 4,002,106 3,485,478 360,276
152 Fuel stock expenses undistributed 0
154 Materials and Supplies 3,345,963 84,655 2,592,939
163 Store expense undistributed 0
165 Prepayments 1,116,442 1,068,888 12,429
171 Interest Receivable 682,477 675,959 6,518
174 Miscellaneous current and accrued assets (Schedule X) 104,479 80,982
Total Current and Accrued Assets 41,716,040 10,447,608 40,696,314 7,098,245
DEFERRED DEBITS
181 Unamortized debt expense 710,082 710,082
184 Clearing Accounts 0
186 Miscellaneous deferred debits (Schedule IX) 2,347,611 933,889 (51,586)
188 Research, development, or demonstration expenditures
(Schedule X) 0
Total Deferred Debits 3,057,693 0 1,643,971 (51,586)
190 ACCUMULATED DEFERRED INCOME TAX BENEFIT 6,413,338 983,115
TOTAL ASSETS AND OTHER DEBITS 205,011,991 27,060,270 195,309,585 7,387,024
</TABLE>
<TABLE>
<CAPTION>
ANNUAL REPORT OF EUA COGENEX CORPORATION AND SUBSIDIARY COMPANIES
SCHEDULE I - CONSOLIDATING BALANCE SHEETS
Give balance sheet of the companies as of December 31
PRIOR YEAR - 1995
ACCOUNT ASSETS AND OTHER DEBITS (CONTINUED)
COMPANY PROPERTY EUA EUA EUA EUA EUA
Day NEM Cogenex Citizens Highland
(Division) Inc Canada Corp. Corporation
<S> <C> <C> <C> <C> <C>
COMPANY PROPERTY
121 Company Property (Schedule II) 1,589,098 9,197,105 481,996 3,582,724
107 Construction work in progress (Schedule II) 234,268 0 765,665 921,525
Total Property 1,823,366 9,197,105 1,247,661 4,504,249
122 Less accumulated provision for depreciation
and amortization company property (Schedule III) (721,321) (2,663,053) (30,279) (390,865)
Net Company Property 1,102,045 6,564,052 1,217,382 4,113,384
INVESTMENTS
123 Investments in associated companies (Schedule IV)
124 Other Investments (Schedule IV) 4,112,495 1,001,674
Total Investments 0 0 4,112,495 0 1,001,674
CURRENT AND ACCRUED ASSETS
131 Cash (87,408) 993 (37,663) (24,198) (51,221)
134 Special Deposits 150,753 10,917 200,000
135 Working Funds 2,223 3,000 1,508
136 Temporary cash investments (Schedule IV)
141 Notes Receivable and Lease Receivable 47,601 225,058 143,763
143 Accounts Receivable (Schedule VI) 1,543,285 510,799 14,002 354,229 483,569
144 Accumulated provision for uncollectible accounts
(Schedule VII) (30,125)
146 Accounts receivable from associate companies
(Schedule V and VI) 161,534 2,814 16,665
152 Fuel stock expenses undistributed
154 Materials and Supplies 572,230 96,139
163 Store expense undistributed
165 Prepayments 4,880 23,570 229 6,446
171 Interest Receivable
174 Miscellaneous current and accrued assets 23,497
Total Current and Accrued Assets 2,388,470 511,792 224,967 346,991 896,869
DEFERRED DEBITS
181 Unamortized debt expense
184 Clearing Accounts
186 Miscellaneous deferred debits (Schedule IX) 1,360,250 77,852 27,206
188 Research, development, or demonstration
expenditures (Schedule X)
Total Deferred Debits 0 1,360,250 0 77,852 27,206
190 ACCUMULATED DEFERRED INCOME TAX BENEFIT 4,330,547 1,099,676
TOTAL ASSETS AND OTHER DEBITS 3,490,515 12,766,641 4,337,462 1,642,225 7,138,809
</TABLE>
<TABLE>
<CAPTION>
ANNUAL REPORT OF EUA COGENEX CORPORATION AND SUBSIDIARY COMPANIES
SCHEDULE I - CONSOLIDATING BALANCE SHEETS
Give balance sheet of the companies as of December 31
PRIOR YEAR - 1995
ACCOUNT LIABILITIES AND PROPRIETARY CAPITAL
EUA EUA EUA
Cogenex Cogenex Nova
Consolidated Elimination Corporation (Division)
PROPRIETARY CAPITAL
<S> <C> <C> <C> <C>
201 Common Stock Issued (Schedule XI) 100 1,400 100
204 Redeemable preferred stock of subsidiaries 75
211 Miscellaneous paid-in-capital (Schedule XI) 45,787,286 15,866,491 44,689,755
215 Appropriated retained earnings (Schedule XI) 0
216 Unappropriated retained earnings (Schedule XI) 6,796,889 744,771 4,943,244 2,118,076
Total Proprietary Capital 52,584,350 16,612,662 49,633,099 2,118,076
LONG-TERM DEBT
223 Advances from associate companies (Schedule XII) 0
224 Other long-term debt (Schedule XII) 112,500,000 112,500,000
225 Unamortized premium on long-term debt 0
226 Unamortized discount of long-term debt 0
Total Long-Term Debt 112,500,000 0 112,500,000 0
CURRENT AND ACCRUED LIABILITIES
224 Current Maturities of Long-term debt (Schedule XII) 6,700,000 6,700,000
231 Notes payable 14,366,231 9,564,000
232 Accounts payable 6,130,039 4,797,367 706,123
233 Notes payable to associate companies (Schedule XIII) 0 6,445,502 2,431,446
234 Accounts payable - associated companies (Schedule XIII) 644,654 2,356,083 1,161,985 625,333
236 Taxes accrued 122,224 14,334 35,764
237 Interest accrued 2,564,263 1,434,023 2,564,263 1,258,513
238 Dividends declared 0 212,000
241 Tax collections payable (Refund) 0
242 Miscellaneous current and accrued liabilities
(Schedule XIII) 6,803,826 6,637,254 32,180
Total Current and Accrued Liabilities 37,331,237 10,447,608 31,439,203 5,089,359
DEFERRED CREDITS
253 Other deferred credits 2,547,474 1,688,353 179,589
255 Accumulated deferred investment tax credits 0
Total Deferred Credits 2,547,474 0 1,688,353 179,589
282/283 ACCUMULATED DEFERRED INCOME TAXES 48,930 0 48,930 0
TOTAL LIABILITIES AND PROPRIETARY CAPITAL 205,011,991 27,060,270 195,309,585 7,387,024
</TABLE>
<TABLE>
<CAPTION>
ANNUAL REPORT OF EUA COGENEX CORPORATION AND SUBSIDIARY COMPANIES
SCHEDULE I - CONSOLIDATING BALANCE SHEETS
Give balance sheet of the companies as of December 31
PRIOR YEAR - 1995
ACCOUNT LIABILITIES AND PROPRIETARY CAPITAL (CONTINUED)
EUA EUA EUA EUA EUA
Day NEM Cogenex Citizens Highland
(Division) Inc Canada Corporation Corporation
PROPRIETARY CAPITAL
<S> <C> <C> <C> <C> <C>
201 Common Stock Issued (Schedule XI) 1,100 100 100 100
204 Redeemable preferred stock of subsidiaries 75
211 Miscellaneous paid-in-capital (Schedule XI) 1,097,532 11,502,050 (311) 4,364,751
215 Appropriated retained earnings (Schedule XI)
216 Unappropriated retained earnings (Schedule XI) (175,731) 437,533 96,142 (17,780) 140,176
Total Proprietary Capital 921,801 11,940,683 95,931 (17,605) 4,505,027
LONG-TERM DEBT
223 Advances from associate companies (Schedule XII)
224 Other long-term debt (Schedule XII)
225 Unamortized premium on long-term debt
226 Unamortized discount of long-term debt
Total Long-Term Debt 0 0 0 0 0
CURRENT AND ACCRUED LIABILITIES
224 Current Maturities of Long-term debt (Schedule XII)
231 Notes payable 4,177,644 560,763 63,824
232 Accounts payable 327,187 251,479 47,883
233 Notes payable to associate companies (Schedule XIII) 1,867,073 660,000 1,486,983
234 Accounts payable - associated companies
(Schedule XIII) 120,038 4,741 82,184 1,006,456
236 Taxes accrued 12,451 63,887 382 (4,594)
237 Interest accrued 175,510
238 Dividends declared 212,000
241 Tax collections payable (Refund)
242 Miscellaneous current and accrued liabilities
(Schedule XIII) 101,162 33,230
Total Current and Accrued Liabilities 2,502,259 216,741 4,241,531 1,655,970 2,633,782
DEFERRED CREDITS
253 Other deferred credits 66,455 609,217 0 3,860 0
255 Accumulated deferred investment tax credits
Total Deferred Credits 66,455 609,217 0 3,860 0
282/283 ACCUMULATED DEFERRED INCOME TAXES 0 0 0 0 0
TOTAL LIABILITIES AND PROPRIETARY CAPITAL 3,490,515 12,766,641 4,337,462 1,642,225 7,138,809
</TABLE>
<TABLE>
ANNUAL REPORT OF EUA COGENEX AND SUBSIDIARY COMPANIES
For the Year Ending December 31, 1996
<CAPTION>
SCHEDULE II
COMPANY PROPERTY
DESCRIPTION BALANCE AT RETIREMENTS OTHER BALANCE
BEGINNING ADDITIONS OR SALES CHANGES AT CLOSE
OF YEAR OF YEAR
<S> <C> <C> <C> <C> <C>
COMPANY PROPERTY
ACCOUNT
121 LEASEHOLD IMPROVEMENTS:
EUA COGENEX 57,531 57,531
EUA NOVA 72,829 72,829
EUA CITIZENS 3,490 3,490
EUA HIGHLAND 41,214 41,214
121 BUILDINGS:
EUA DAY 833,717 2,150 835,867
121 EQUIPMENT:
EUA COGENEX 36,160,997 2,332,816 (2,408,967) (83,726) <F1> 36,001,120
EUA NOVA 431,570 4,144 435,714
EUA NEMI 8,663,633 8,663,633
EUA CITIZENS 374,305 1,107,351 1,481,656
EUA HIGHLAND 409,627 694,389 (309,123) 794,893
121 COMPUTER EQUIPMENT:
EUA COGENEX 936,899 102,730 (7,867) 1,031,762
EUA NOVA 17,228 74,219 (1,283) 90,164
EUA DAY 2,426 2,426
EUA NEMI 4,906 4,906
EUA CITIZENS 21,674 235 21,909
EUA HIGHLAND 240,887 14,522 (30,970) 224,439
121 OFFICE FURNITURE AND
EQUIPMENT:
EUA COGENEX 204,439 15,464 (105) 219,798
EUA NOVA 569,360 26,684 596,044
EUA DAY 575,092 57,734 (4,947) 627,879
EUA NEMI 28,566 (440) 28,126
EUA CITIZENS 10,202 10,202
EUA HIGHLAND 42,814 6,211 49,025
121 AUTOMOBILES, OTHER VEHICLES
AND RELATED GARAGE
EQUIPMENT:
EUA COGENEX 413,820 (413,820) 0
EUA NOVA 216,150 15,002 (156,328) 74,824
EUA DAY 177,863 7,980 185,843
301 ORGANIZATION
EUA COGENEX 554,034 554,034
EUA CITIZENS 0 72,250 72,250
EUA HIGHLAND 7,622 7,622
302/303 MISCELLANEOUS PLANT AND
INTANGIBLE PLANT:
EUA COGENEX 16,907,184 100,526 (17,815) 16,989,895
EUA DAY 0 196,620 196,620
EUA NEMI 500,000 500,000
EUA CITIZENS 72,325 (72,325) <F1> 0
EUA HIGHLAND 2,840,560 209,249 3,049,809
SUB-TOTAL 71,392,964 5,040,276 (3,351,665) (156,051) 72,925,524
107 CONSTRUCTION WORK IN
PROGRESS:
EUA COGENEX 15,920,855 52,395,543 (58,222,134) 10,094,264
EUA DAY 234,268 30,191 264,459
EUA CITIZENS 765,665 3,446,919 (2,827,884) 1,384,700
EUA HIGHLAND 921,525 10,525,744 (11,251,964) 195,305
TOTAL 89,235,277 71,438,673 (75,653,647) (156,051) 84,864,252
<FN>
<F1> ASSET WRITE-OFFS
<F2> RECLASS TO ORGANIZATION
</FN>
</TABLE>
1/ PROVIDE AN EXPLANATION OF THOSE CHANGES CONSIDERED MATERIAL:
2/ SUB-ACCOUNTS ARE REQUIRED FOR EACH CLASS OF EQUIPMENT OWNED. THE
SERVICE COMPANY SHALL PROVIDE A LISTING BY SUB-ACCOUNT OF EQUIPMENT
ADDITIONS DURING THE YEAR AND THE BALANCE AT THE CLOSE OF THE YEAR:
SUB-ACCOUNT DESCRIPTION NET CHANGE BALANCE AT CLOSE
OF YEAR
(1) Utility Load Reduction Programs (123,104) 30,367,994
(2) Energy Management Programs 1,455,844 16,573,308
(3) Energy Management Equipment 4,144 435,714
TOTAL 1,336,884 47,377,016
3/ DESCRIBE OTHER COMPANY PROPERTY:
NONE
4/ DESCRIBE CONSTRUCTION WORK IN PROGRESS:
FOR A DESCRIPTION OF CONSTRUCTION WORK IN PROGRESS,
SEE "NOTES TO FINANCIAL STATEMENTS" ON PAGE 29
<TABLE>
ANNUAL REPORT OF EUA COGENEX AND SUBSIDIARY COMPANIES
For the Year Ending December 31, 1996
SCHEDULE III
ACCUMULATED PROVISION FOR DEPRECIATION AND
AMORTIZATION OF COMPANY PROPERTY
<CAPTION>
BALANCE AT RETIREMENTS OTHER BALANCE AT
DESCRIPTION BEGINNING ADDITIONS OR SALES CHANGES CLOSE OF YEAR
OF YEAR
<S> <C> <C> <C> <C> <C>
ACCOUNT
111 ORGANIZATION:
EUA COGENEX 54,754 111,028 165,782
EUA CITIZENS 0 19,819 19,819
EUA HIGHLAND 6,850 772 7,622
111 MISCELLANEOUS IN-
TANGIBLE PLANT:
EUA COGENEX 3,597,407 971,876 (14,026) 4,555,257
EUA NOVA 186,000 186,000
EUA NEMI 191,659 108,329 299,988
EUA CITIZENS 4,817 5,343 (10,160) 0
EUA HIGHLAND 81,787 194,722 276,509
122 LEASEHOLD
IMPROVEMENTS:
EUA COGENEX 37,208 10,004 47,212
EUA NOVA 54,448 12,435 66,883
EUA CITIZENS 407 698 1,105
EUA HIGHLAND 17,494 7,544 (310) 24,728
122 OFFICE FURNITURE AND
FIXTURES:
EUA COGENEX 130,863 57,907 188,770
EUA NOVA 368,719 66,824 (2,133) 433,410
EUA DAY 454,066 51,171 505,237
EUA NEMI 19,316 8,810 (440) 27,686
EUA CITIZENS 1,484 2,041 3,525
EUA HIGHLAND 8,540 8,743 17,283
122 COMPUTER EQUIPMENT:
EUA COGENEX 580,488 349,186 929,674
EUA NOVA 0 42,389 (36,023) 6,366
EUA DAY 404 486 890
EUA NEMI 1,182 1,501 2,683
EUA CITIZENS 2,067 4,370 6,437
EUA HIGHLAND 122,883 34,485 (28,768) 128,600
122 EQUIPMENT:
EUA COGENEX 18,627,358 3,636,716 (1,279,504) (83,726) (A) 20,900,844
EUA NOVA 215,397 37,266 252,663
EUA NEMI 2,420,896 566,702 2,987,598
EUA CITIZENS 21,503 111,032 132,535
EUA HIGHLAND 153,312 156,327 (86,445) 223,194
</TABLE>
<TABLE>
ANNUAL REPORT OF EUA COGENEX AND SUBSIDIARY COMPANIES
For the Year Ending December 31, 1996
SCHEDULE III
ACCUMULATED PROVISION FOR DEPRECIATION AND
AMORTIZATION OF COMPANY PROPERTY (Continued)
<CAPTION>
BALANCE AT RETIREMENTS OTHER BALANCE AT
DESCRIPTION BEGINNING ADDITIONS OR SALES CHANGES CLOSE
OF YEAR OF YEAR
<S> <C> <C> <C> <C> <C>
122 AUTOMOBILES, OTHER
VEHICLES & RELATED
GARAGE EQUIPMENT
EUA COGENEX 305,462 269,730 (575,192) 0
EUA NOVA 142,208 45,578 (118,361) 69,425
EUA DAY 163,643 4,585 168,228
122 STRUCTURES AND
IMPROVEMENTS
EUA DAY 103,208 24,148 127,356
TOTALS 28,075,830 6,922,567 (2,151,362) (83,726) 32,763,309
(A) ASSET WRITE-OFFS
</TABLE>
ANNUAL REPORT OF EUA COGENEX AND SUBSIDIARY COMPANIES
For the Year Ending December 31, 1996
SCHEDULE IV
INVESTMENTS
FILED UNDER CONFIDENTIAL TREATMENT REQUEST
<TABLE>
ANNUAL REPORT OF EUA COGENEX AND SUBSIDIARY COMPANIES
For the Year Ending December 31, 1996
SCHEDULE V
ACCOUNTS RECEIVABLE FROM ASSOCIATE COMPANIES
<CAPTION>
INSTRUCTIONS: Complete the following schedule listing accounts receivable.
DESCRIPTION BALANCE AT BALANCE
BEGINNING AT CLOSE
OF YEAR OF YEAR
<S> <C> <C>
ACCOUNT 146 - ACCOUNTS RECEIVABLE
EUA Cogenex:
EUA Service Corporation 24,441 76,220
EUA Northeast Energy Management 220 0
24,661 76,220
TOTAL 24,661 76,220
</TABLE>
<TABLE>
ANNUAL REPORT OF EUA COGENEX AND SUBSIDIARY COMPANIES
For the Year Ending December 31, 1996
SCHEDULE VI
ACCOUNTS RECEIVABLE AGING
INSTRUCTIONS: Complete the following schedule concerning the aging of
accounts receivable for Account 143 - Accounts Receivable and
Account 146 - Accounts Receivable from Associated companies
<CAPTION>
DESCRIPTION BALANCE AT BALANCE AT
BEGINNING OF END OF YEAR
YEAR
<S> <C> <C>
ACCOUNT 143 - ACCOUNTS RECEIVABLE
EUA Cogenex Corporation
0 - 30 Days 6,139,469 2,953,499
31 - 60 Days 198,259 875,774
62 - 90 Days 472,432 994,400
91 - Over 4,633,470 7,187,051
11,497,630 12,010,724
EUA Nova Corporation
0 - 30 Days 1,014,725 139,385
31 - 60 Days 1,113,618 353,997
62 - 90 Days 825,730 541,520
91 - Over 1,359,160 736,791
4,313,233 1,771,693
EUA Day Corporation
0 - 30 Days 478,288 510,972
31 - 60 Days 153,895 243,513
62 - 90 Days 800,244 106,537
91 - Over 110,858 715,319
1,543,285 1,576,341
EUA NEMI Corporation
0 - 30 Days 252,744 403,635
31 - 60 Days 258,055 0
62 - 90 Days 0 0
91 - Over 0 0
510,799 403,635
EUA Citizens Corporation
0 - 30 Days 308,454 260,342
31 - 60 Days 20,775 117,204
62 - 90 Days 25,000 156,272
91 - Over 0 419,980
354,229 953,798
EUA Highland Corporation
0 - 30 Days 302,904 1,863,768
31 - 60 Days 70,200 1,251,035
62 - 90 Days 64,908 488,949
91 - Over 45,557 2,116,607
483,569 5,720,359
EUA Canada Corporation
0 - 30 Days 14,002 21,940
TOTAL ACCOUNT 143 - ACCOUNTS RECEIVABLE 18,716,747 22,458,490
</TABLE>
<TABLE>
ANNUAL REPORT OF EUA COGENEX AND SUBSIDIARY COMPANIES
For the Year Ending December 31, 1996
SCHEDULE VI
ACCOUNTS RECEIVABLE AGING (Continued)
<CAPTION>
DESCRIPTION
BALANCE AT BALANCE AT
BEGINNING OF END OF YEAR
YEAR
<S> <C> <C>
ACCOUNT 143 - ACCOUNTS RECEIVABLE
from associated companies
EUA Cogenex
0 - 30 Days 24,661 76,220
Total 24,661 76,220
</TABLE>
<TABLE>
ANNUAL REPORT OF EUA COGENEX AND SUBSIDIARY COMPANIES
For the Year Ending December 31, 1996
SCHEDULE VII
ACCUMULATED PROVISION FOR UNCOLLECTIBLE ACCOUNTS
INSTRUCTIONS: Complete the following analysis of accumulated provision for
uncollectible accounts receivable.
<CAPTION>
CURRENT YEAR
DESCRIPTION BALANCE AT BALANCE AT
BEGINNING OF CLOSE OF
YEAR PROVISIONS WRITE-OFF YEAR
<S> <C> <C> <C> <C>
ACCOUNT 144 -PROVISION FOR UNCOLLECTIBLE
ACCOUNTS:
EUA Cogenex Corporation 318,155 390,000 (268,769) 439,386
EUA Nova 67,756 276,570 (134,709) 209,617
EUA Day 30,125 30,000 (60,125) 0
TOTAL 416,036 696,570 (463,603) 649,003
</TABLE>
<TABLE>
ANNUAL REPORT OF EUA COGENEX AND SUBSIDIARY COMPANIES
For the Year Ending December 31, 1996
SCHEDULE VIII
MISCELLANEOUS CURRENT AND ACCRUED ASSETS
<CAPTION>
INSTRUCTIONS: Provide detail of items in this account. Items less than
$10,000 may be grouped, showing the number of items in each
group.
DESCRIPTION BALANCE AT BALANCE AT
BEGINNING CLOSE
OF YEAR OF YEAR
<S> <C> <C>
ACCOUNT 174 -MISCELLANEOUS CURRENT
AND ACCRUED ASSETS
EUA Cogenex Corporation:
Executive Life Insurance 80,982 93,166
EUA Day Corporation:
Executive Life Insurance 23,497 23,496
TOTAL 104,479 116,662
</TABLE>
<TABLE>
ANNUAL REPORT OF EUA COGENEX AND SUBSIDIARY COMPANIES
For the Year Ending December 31, 1996
SCHEDULE IX
MISCELLANEOUS DEFERRED DEBITS
<CAPTION>
INSTRUCTIONS: Provide a detail of items in this account. Items less than
$10,000 may be grouped by class showing the number of items in
each class.
DESCRIPTION BALANCE AT BALANCE AT
BEGINNING OF YEAR CLOSE OF YEAR
ACCOUNT 186 - MISCELLANEOUS
DEFERRED DEBITS
<S> <C> <C>
EUA Cogenex:
Leased Equipment 0 45,273
50/50 SEC Ruling 73,255 36,631
CWIP Reclasses 0 460,472
Measuring & Monitoring Advance 39,403 0
EUA Day - Interco ADJ (DEC 96) 7,102 38,482
EUA Nova - Interco ADJ (OCT 96) 0 (21,629)
EUASC Bill - Sales Tax 0 22,119
Net Income ADJ 0 (101,237)
Columbia University 169,044 511,716
Pajaro Valley 0 (68,075)
Open Work Authorizations 582,089 5,966,057
Sanwa 25,092 18,288
Miscellaneous (11) 25,672 3,570
Bankers Leasing 12,232 49,578
Revised Loss on Sale 0 (49,578)
Cash Receipts 0 (38,849)
MWE - Legal 0 4,449
Sub Total 933,889 6,877,267
EUA Nova:
Misc. Reconciling Adjustments (51,586) 0
EUA Day:
Miscellaneous (1) 0 1,205
EUA NEMI:
Deferred Royalties 1,360,250 1,260,128
EUA Citizens Corporation
Open Work Authorizations 77,852 77,063
Interco Note ADJ 0 (25,000)
Miscellaneous (3) 0 (1,464)
Sub Total 77,852 50,599
</TABLE>
<TABLE>
ANNUAL REPORT OF EUA COGENEX AND SUBSIDIARY COMPANIES
For the Year Ending December 31, 1996
SCHEDULE IX
MISCELLANEOUS DEFERRED DEBITS
<CAPTION>
INSTRUCTIONS: Provide a detail of items in this account. Items less than
$10,000 may be grouped by class showing the number of items in
each class.
DESCRIPTION BALANCE AT BALANCE AT
BEGINNING OF YEAR CLOSE OF YEAR
<S> <C> <C>
EUA Highland Corporation:
Miscellaneous (2) 6,319 5,912
EUA Cogenex - Canada
Development Costs 0 246,156
TOTAL 2,347,611 8,441,267
</TABLE>
<TABLE>
ANNUAL REPORT OF EUA COGENEX AND SUBSIDIARY COMPANIES
For the Year Ending December 31, 1996
SCHEDULE XI
PROPRIETARY CAPITAL
<CAPTION>
ACCOUNT
NUMBER CLASS OF STOCK NUMBER OF PAR OR STATED OUTSTANDING CLOSE OF PERIOD
SHARES VALUE PER
AUTHORIZED SHARE NO. OF SHARES TOTAL AMOUNT
<S> <C> <C> <C> <C> <C>
201 COMMON STOCK ISSUED 1,000 $0.10 1,000 $100.00
</TABLE>
INSTRUCTIONS: Classify amounts in each account with brief explanation,
disclosing the general nature of transactions which give rise
to the reported amounts.
DESCRIPTION AMOUNT
ACCOUNT 211 - MISCELLANEOUS PAID-IN CAPITAL 47,273,466
ACCOUNT 215 - APPROPRIATED RETAINED EARNINGS
(1) See Schedule XIV Notes to Financial Statements, Page 29
TOTAL 47,273,466
INSTRUCTIONS: Give particulars concerning net income or (loss) during the
year, distinguishing between compensation for the use of
capital owed or net loss remaining from servicing non-associate
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.
DESCRIPTION BALANCE AT NET INCOME BALANCE AT
BEGINNING OR DIVIDENDS CLOSE
OF YEAR (LOSS) PAID OF YEAR
ACCOUNT 216 - UNAPPROPRIATED
RETAINED EARNINGS 6,796,886 (6,521,740) (A) 275,146
TOTAL 6,796,886 (6,521,740) 275,146
(A) Loss from Continuing Operations
<TABLE>
ANNUAL REPORT OF EUA COGENEX AND SUBSIDIARY COMPANIES
For the Year Ending December 31, 1996
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 obligation, date of maturity,
interest rate, and the amount authorized and outstanding.
<CAPTION>
NAME OF CREDITOR TERMS OF OBLIG DATE INT. AMOUNT BALANCE AT ADDITION 1/DEDUC-TIONS BALANCE AT
OF OBLIGATION OF RATE AMORTIZED BEGINNING CLOSE OF YEAR
CLASS & SERIES MATURITY OF YEAR
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ACCOUNT 223 -
ADVANCES
FROM
PARENT AND
ASSOCIATE
COMPANIES
ACCOUNT 224 - Unsecured Notes
OTHER LONG - to Prudential
TERM DEBT: Ins. Co. of
America & PRUCO
Life Ins. Co. 09/03/97 7.22% 15,000,000 15,000,000 15,000,000 0
Unsecured Notes
to Prudential
Ins. Co. of
America & PRUCO
Life Ins. Co. 10/30/01 9.6% 20,000,000 16,000,000 3,200,000 12,800,000
Unsecured Notes
to Prudential
Ins. Co. of
America 06/30/05 10.56% 35,000,000 31,500,000 3,500,000 28,000,000
Unsecured Notes
to qualified
institutional buyers
under Rule 144A
of the 1993 Act 09/15/00 7.0% 50,000,000 50,000,000 50,000,000
TOTAL 120,000,000 112,500,000 21,700,000 90,800,000
1/ GIVE AN EXPLANATION OF DEDUCTIONS
Sinking Fund Payments
</TABLE>
<TABLE>
ANNUAL REPORT OF EUA COGENEX AND SUBSIDIARY COMPANIES
For the Year Ending December 31, 1996
SCHEDULE XIII
CURRENT AND ACCRUED LIABILITIES
<CAPTION>
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.
DESCRIPTION BALANCE AT BALANCE AT
BEGINNING CLOSE
OF YEAR OF YEAR
<S> <C> <C>
ACCOUNT 233 - NOTES PAYABLE TO ASSOCIATE
COMPANIES
ACCOUNT 234 - ACCOUNTS PAYABLE TO ASSOCIATE
COMPANIES:
EUA Cogenex Corporation
Eastern Utilities Associates 195,000 50,564
EUA Service Corporation 425,697 160,669
620,697 211,233
EUA Nova
EUA Service Corporation 16,338 2,555
EUA Day
EUA Service Corporation 4,576 2,620
NEMI
EUA Service Corporation 86 (1,682)
EUA Citizens
EUA Service Corporation 1,045 3,853
EUA Highland
EUA Service Corporation 1,912 3,105
TOTAL 644,654 221,684
</TABLE>
<TABLE>
ANNUAL REPORT OF EUA COGENEX AND SUBSIDIARY COMPANIES
For the Year Ending December 31, 1996
SCHEDULE XIII
CURRENT AND ACCRUED LIABILITIES (Continued)
<CAPTION>
DESCRIPTION
BALANCE AT BALANCE AT
BEGINNING CLOSE
ACCOUNT 242 - MISCELLANEOUS CURRENT AND
ACCRUED LIABILITIES
<S> <C> <C>
EUA Cogenex Corporation
Miscellaneous (16) (13,230) (16,976)
Commitment Fee 18,277 16,301
Retainage Liability 356,890 141,643
Reserve for Cogen Disp. 5,787,892 2,170,245
Accrued Liability (HTI PRJS) 84,454 81,116
Accrued Liability (VA Hospital) 22,657 22,657
Accrued Liability (BECO PRJS) 380,314 0
Energy Matrix, Inc. 0 108,177
Reorganization 0 365,906
Tru-Brite/Walgreens 0 45,961
Conserv Alliance/Enertech 0 (348,480)
Systems Corp/Gillem & McPherson 0 (11,012)
6,637,254 2,575,538
EUA Day
Miscellaneous (1) 0 1,351
0 1,351
EUA Nova
Federal Income Tax Withheld 0 18,897
Trade Financing 11,403 0
Incentive Strategies 21,045 0
Miscellaneous (10) (268) 12,831
32,180 31,728
EUA Highland
Accrued Vacations 26,251 27,582
Miscellaneous (4) 6,709 2,583
33,230 30,165
EUA Citizens
Retainer Construction Contracts 38,252 0
Accrued Maintenance Fees 62,819 52,918
Miscellaneous (2) 91 10,910
101,162 63,828
TOTAL 6,803,826 2,702,610
</TABLE>
<TABLE>
ANNUAL REPORT OF EUA COGENEX AND SUBSIDIARY COMPANIES
For the Year Ending December 31, 1996
SCHEDULE XIII
CURRENT AND ACCRUED LIABILITIES (Continued)
<CAPTION>
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.
DESCRIPTION
BALANCE AT BALANCE AT
BEGINNING CLOSE
OF YEAR OF YEAR
<S> <C> <C>
ACCOUNT 224 -CURRENT MATURITIES OF LT DEBT
Prudential Ins. Co. Due 9/30/97 @ 7.22% 0 15,000,000
Prudential Ins. Co. Due 10/30/01 @ 9.6% 3,200,000 3,200,000
Prudential Ins. Co. Due 6/30/05 @ 10.56% 3,500,000 3,500,000
TOTAL 6,700,000 21,700,000
</TABLE>
EUA Cogenex Corporation
Notes To Financial Statements
For The Years December 31, 1996 and 1995
A. General
EUA Cogenex Corporation (the Company) is a wholly-owned subsidiary of Eastern
Utilities Associates (EUA), a registered public utility holding company. In
addition to its investment in the Company, EUA has interests in retail and
wholesale utility companies operating in the New England region, a service
corporation and three other non-utility companies. As a subsidiary of EUA, the
accounting policies and practices of the Company are subject to review by the
Securities and Exchange Commission (SEC) under the Public Utility Holding
Company Act of 1935. The Company is regulated by the SEC in matters related to
its own debt financings and asset acquisitions. There are no current
geographic restrictions on the Company's operations.
The Company is an energy services company that employs energy efficient
technology and equipment intended to reduce the energy consumption and costs of
its customers. Such technology and equipment include building automation
systems, lighting modifications, boiler and chiller replacements and other
mechanical measures such as motors and drives. The Company may design,
install, own, operate, maintain, and finance specific energy efficient
applications for its customers.
The Company is compensated for its services primarily through energy services
agreements in which the Company and the customer who occupies or owns a
facility agree upon a prescribed base year and a set of savings calculations.
The Company then receives payments based on a portion of the savings that
result from the installation and maintenance of the energy efficient equipment
in the facility. Some of the Company's revenues under these agreements are
dependent upon the actual achievement of energy savings; therefore, the
Company assesses the financial and technical risk of each customer and project.
In addition, the Company participates in demand side management (DSM) programs
sponsored by electric utilities as a means to decrease both base load and peak
demand on the utilities' systems. In utility DSM programs, the Company
contracts with the utility and its commercial and industrial customers in
order to decrease the overall demand on the utility system or to reduce peak
demand, curtailing the need for costly capacity additions. The Company is paid
by the utility based on the reduction i n the demand on the utility's system
and may also receive a portion of the customers' savings by entering into
energy services agreements of the type described above with those customers.
The Company contracts for utility DSM programs through a bidding process or
participates in the utility's "Standard Offer Program". The Company also may,
from time to time, acquire existing DSM contracts or energy services
agreements, or the benefits from those contracts from other energy services
companies.
The Company also operates a lighting services division, EUA Nova, and a
controls division, EUA Day. The Company restructured it Nova Division in 1996
because of changing market conditions. EUA Nova provides lighting products
designed to achieve an efficiency gain through the integration of various lamp,
ballast, and light reflector products. EUA Day, is primarily engaged in the
business of customization, installation and servicing of building temperature
control systems, monitoring and verification systems and process control
systems for the purpose of energy conservation. These systems are primarily
designed for regulating lighting, heating, ventilation, and air conditioning
but can also simultaneously be used for security surveillance of building entry
and exit, equipment monitoring, and air quality monitoring.
On July 25, 1996, the Company received an order from the SEC authorizing the
Company to expand its services it currently provides to include services
relating to furnishing and conserving water for the types of customers to whom
it has historically furnished energy related services. The water conservation
services that the Company anticipates providing may range from domestic
applications such as toilet replacements and retrofits, shower head
replacements and aerators, to commercial and industrial water treatment
applications such as water reclamation, purification and reuse, heating,
cooling and refrigeration, and waste water filtration systems.
The Company also provides consulting services to its customers in the form of
training in the proper use and maintenance of the energy equipment. This
service includes instruction in the use of existing equipment as well as newly
installed equipment so that further energy savings can be realized. In
addition, the Company monitors installed projects on a 24-hour basis and
dispatches third party contractors to make repairs and/or adjustments.
The Company's principal markets include institutional, commercial, industrial
and government entities, and through its EUA Citizens Services subsidiary
public and private multi-family housing.
The Company's competition is comprised primarily of manufacturers and
distributors of energy efficiency equipment, other utility owned energy
services companies, engineering consulting firms, and financial institutions
who provide capital to finance energy efficiency projects.
The rates charged by the Company to customers through its Energy Service
Agreements are not subject to the jurisdiction of any regulatory agency.
At December 31, 1996, the Company employed 213 persons in its operations.
B. Summary of Significant Accounting Policies
Equity Investment
The financial statements reflect the Company's investment in five partnership
entities under the equity method of accounting. These amounts are shown on the
Company's balance sheet at December 31, 1996 and 1995 as investments in
associated companies . The Company is the managing general partner in all of
the partnerships. The Company has provided virtually all of the capital to the
partnerships and is entitled to a return of, and on, this capital. All
partnerships and their customers are subject to the same selection and
screening process to establish acceptable credit quality.
Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets a nd liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Transactions with Affiliates
Transactions between the Company and other EUA affiliated companies include the
following: for accounting and other administrative services rendered by EUA
Service Corporation, the Company incurred costs of approximately $1,146,000 in
1996 and $1,265,000 in 1995 and paid office rental expense of approximately
$16,200 in 1995 to Eastern Edison Company.
Revenues
Revenues and contract expenses are based on the financial arrangements
established by each individual contract. Revenue recognition is determined as
follows:
Paid from Savings Contracts
Under paid from savings contracts, the Company receives payments from
customers as energy savings are calculated and verified on a regular
basis over a fixed contract term. Revenue is recognized as such
savings are realized by customers. Construction and installation
costs are capitalized and then amortized as contract expenses on a
straight line basis over the applicable contract term. Losses on
contracts are fully recognized in the period that they become
estimable.
Energy Savings Project Sales and Sales-Type Leases
Revenue from the sale of energy savings projects and sales-type leases
are recognized when the sales are complete. Interest on the financing
portion of the contracts is recognized as earned at rates established
at the outset of the financing arrangement. All construction and
installation costs are recognized as contract expenses when the
contract revenues are recorded.
Installation and Fabrication of Energy Savings Equipment
Revenue from the installation and fabrication of energy savings
equipment is recognized when the sale and/or installation is complete.
All installation and fabrication costs are recognized as the projects
are completed and/or sold.
Interest Income
Interest income from notes and leases receivable are recorded on the accrual
basis over the term of the agreements.
Inventories
Inventories represent finished goods and raw materials utilized in the
fabrication of lighting retrofit kits by EUA NOVA and purchased computerized
building heating and air conditioning automation controls of EUA Day, both are
divisions of the Company. Inventories are stated at lower of cost (first-in,
first-out) or market.
Property, Plant and Equipment
Property, plant and equipment and projects in progress, which are stated at
cost, are comprised of project energy management, demand reduction equipment,
office furniture and equipment, computer equipment, and real property.
The components of project equipment cost include contracted work, direct labor
and material, direct and indirect overheads and interest capitalized during
construction.
For financial statement purposes, depreciation on office furniture and
equipment, fabrication equipment and a building is computed on the straight-
line method based on estimated useful lives of five, ten, and forty years,
respectively, and is include d as part of G&A expenses on the income statement.
Project equipment is depreciated on the straight line method over the term of
the applicable contracts, or based on the estimated useful lives, whichever is
shorter. The depreciation terms range from five to fifteen years. Total
depreciation expense amounted to $7.8 million and $8.1 million in 1996 and
1995, respectively, and is included in contract expense on the income
statement.
Energy savings projects in progress represents the cost of such projects, as
well as, in some cases, advances to contractors that can be satisfied by the
contractor delivering to the Company the energy savings agreement
collateralized by the equipment and the right to the revenues generated
therefrom. Ultimately the projects are either capitalized as property, plant
and equipment or charged to cost of sales depending on the terms of the
arrangement with the customer.
Income Taxes
The general policy of the Company with respect to accounting for income taxes
is to reflect in income the estimated amount of taxes currently payable, as
determined from the consolidated tax return on an allocated basis, and to
provide for deferred taxes on certain items subject to temporary differences.
The Company files a consolidated federal tax return with EUA, as a result
payments or refunds are allocated to the Company in accordance with EUA's
Federal Tax Sharing Agreement. However, the Company files its state tax
returns on an individual company basis.
Cash and Cash Equivalents
The Company considers all highly liquid investments with a maturity of three
months or less, when acquired, to be cash equivalents.
New Accounting Standards
In June 1996, the Financial Accounting Standards Board (FASB) issued Statement
of Financial Accounting Standard No. 125 "Accounting for Transfers and Serving
of Financial Assets and Extinguishment of Liabilities" (FAS 125) effective for
transactions occurring after December 31, 1996. FAS 125 provides consistent
standards for distinguishing transfers of financial assets that are sales from
transfers that are secured borrowings. In addition, it also requires that
liabilities and derivatives incurred or obtained by transfers as part of a
transfer of financial assets be initially measured at fair value, if
practicable. Management is currently evaluating the impact that the adoption
of this standard will have on the Company's operations.
In March 1995, FASB issued Statement of Financial Accounting Standard No. 121
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets
to be Disposed of" (FAS 121), effective for fiscal year 1996. FAS 121 requires
an entity to review long-lived assets and certain identifiable intangibles to
be held and used for impairment whenever events or changes in circumstances
indicate that the carrying amount of an asset may not be recoverable. The
Company reviews certain long-live d assets on an annual basis to insure that
estimated future cash inflows are sufficient to meet the asset's carrying
value. The adoption of this standard did not have a material effect on the
Company's financial position or results of operations.
C. Discontinued Operations
In September 1995, the Company announced that it was discontinuing its
cogeneration operations because, overall, the cogeneration portfolio had not
performed up to expectations. The Company's total net investment in its
cogeneration portfolio was $2 9.6 million and substantially all of the net
operating assets were sold on October 1, 1995 for approximately $11.5 million.
The decision to discontinue its cogeneration operations resulted in an
estimated after-tax charge of approximately $10.5 million for 1995.
Revenues from discontinued operations were $5.5 million for the six months
ended June 30, 1995. The remaining components of net assets of discontinued
operations at December 31, 1996 and 1995 are immaterial.
D. Acquisitions
On March 1, 1995, the Company acquired certain energy services assets of
Citizens Conservation Corporation of Boston, Massachusetts in exchange for
preferred stock (see Note L "Preferred Stock") of a newly formed subsidiary of
the Company, EUA Citizens. The largest assets the Company obtained with the
Citizens Conservation acquisition are contracts with various public and private
housing authorities.
The Company also acquired on May 1, 1995, Highland Energy Group, an energy
services company in Boulder, Colorado in exchange for $4.2 million of EUA
common shares (176,258 shares). Highland provides energy conservation services
in Colorado, Texas, Ohio, North Carolina and certain other midwestern states.
Both the Citizens and Highland acquisitions were accounted for using the
purchase method of accounting. Also, the Highland acquisition resulted in the
recognition of goodwill of approximately $2.8 million and is being amortized
over 15 years.
In addition, the Company has recognized approximately $6.6 million of goodwill
as a result of its acquisitions of EUA Nova and EUA Day. These acquisitions
were accounted for using the purchase method and is being amortized over 15
years.
E. Income Taxes
The Company utilizes FASB Statement No. 109, "Accounting for Income Taxes" (FAS
109) which requires recognition of deferred income taxes for temporary
differences that are reported in different years for financial reporting and
tax purposes using the liability method. Under the liability method, deferred
tax liabilities or assets are computed using the tax rates that will be in
effect when temporary differences reverse.
At December 31, 1996 and 1995, total deferred tax assets, for which a valuation
allowance of approximately $1.0 million in 1996 was deemed necessary, were $8.7
million and $8.6 million, respectively, and total deferred tax liabilities were
$4.2 million and $2.2 million, respectively. Total deferred tax assets and
liabilities are comprised as follows (in thousands):
Deferred Tax Deferred Tax
Assets Liabilities
1996 1995 1996 1995
Provision for Step Plant Related
Up Tax Basis - NEM $ 3,965 $ 4,281 Differences $ 3,848 $ 2,072
Net operating loss carry- Post-Retirement
forward, (net of $1,034 Benefits 145 70
valuation allowance) 1,469 1,400 Other 177 92
Reserve for
cogeneration losses 901 1,615
Reserve for unrecovered
costs 866
Alternative
Minimum Tax 4 177
Bad Debts 260 53
Pension 994 735
Other 236 337
Total $ 8,695 $ 8,598 $ 4,170 $ 2,234
The Company's share of the consolidated group's alternative minimum tax credits
is approximately $4,000 which can be used to reduce future tax liability and
has no expiration. The Company also has approximately $20 million of state net
operating loss carryforwards which expire between the years 2000 and 2011.
Components of income tax expense from continuing operations for the years 1996
and 1995 are as follows:
In Thousands 1996 1995
US Federal:
Current (benefit) $ (5,646) $ 1,710
Deferred 1,579 (126)
(4,067) 1,584
Foreign:
Current 361 64
State:
Current 194 555
Deferred (benefit) (152) (434)
42 121
Provision for income taxes (benefit) $ (3,664) $ 1,769
Total income tax expense (benefit) from continuing operations was different
than the amounts computed by applying federal income tax statutory rates to
book income subject to tax for the following reasons:
In Thousands 1996 1995
Federal income tax (benefit)
computed at statutory rates $ (3,565) $ 1,606
Increases (decreases) in tax from:
State taxes, net of federal
income tax benefit 27 79
Other (126) 84
(Benefit) provision for income taxes
on continuing operations $ (3,664) $ 1,769
F. Notes Receivable
The Company has two types of notes receivable. The first type results from the
construction and sale of energy savings projects to its customers. Upon
completion of the construction, a sale is recovered and reflected a note
receivable on the Company's financial statements.
The second type results from arrangements with contractors and/or other energy
services firms to finance the installation of energy savings project equipment
at their customer's premises. This type is also recorded on the Company's
financial statements as notes receivable.
Interest income is accrued on these contracts based on the stated or implicit
interest rate within each contract ranging from 7.0% to 18.0%. The term of the
contracts range in maturity from one to ten years.
The components of notes receivable are as follows (in thousands):
1996 1995
Notes from Project Sales $ 29,866 $ 27,021
Notes from Project Financing 24,404 23,512
Total $ 54,270 $ 50,533
G. Net Investment in Sales-Type Leases
The Company leases equipment to customers under sales-type leases. As sales-
type leases, the lease payments to be received over the term of the lease are
recorded as a receivable at the inception of the lease. Finance income
attributable to the lease contracts is recognized as income under the interest
method over the term of the lease.
The components of the net investment in sales-type leases are as follows (in
thousands):
1996 1995
Minimum lease payments receivable $ 24,884 $ 23,679
Less: Unearned interest (7,744) (9,230)
Current portion (1,992) (1,641)
Net investment in sales-type leases $ 15,148 $ 12,808
Future minimum lease payments due under sales-type leases at December 31, 1996
are as follows (in thousands):
1997 $ 3,326
1998 3,263
1999 2,867
2000 2,642
2001 and thereafter 12,786
H. Contract Rights
Contract rights represent the cost of the Company's acquisition of a
collateralized financial interest in certain customer contracts which
provide the Company with energy savings payments. The cost of the contract
rights are being amortized on a straight line basis over the lives of the
various contracts which range from 5 years to 15 years.
I. Long-Term Debt (in thousands)
1996 1995
Unsecured Notes Payable:
10.56% series due June 30, 2005 $ 31,500 $ 35,000
Interest only payable through
June 30, 1996. A 10% sinking
fund replacement is due annually
beginning June 30, 1996.
This debt is unconditionally
guaranteed by EUA.
9.60% series due October 31, 2001 16,000 19,200
Interest only payable through
October 31, 1995. A sinking
fund replacement of $800 per
quarter is due beginning on
October 31, 1995 and thereafter
until the debt is paid in full.
7.22% series due September 30, 1997 15,000 15,000
Interest only payable through
September 30, 1997 with a final
payment of the entire note due
at that time.
7.0% series due September 15, 2000 50,000 50,000
Interest only payable through
September 15, 2000 with a final
payment of the entire note due
at that time.
Total 112,500 119,200
Less Current Maturities 21,700 6,700
$ 90,800 $ 112,500
Scheduled maturities of long-term debt for the five years following
1996 are as follow (in thousands):
1997 $ 21,700
1998 6,700
1999 6,700
2000 56,700
2001 6,700
The Company is subject to certain covenants within the agreements relating to
its long term notes. The most restrictive of these covenants require the
Company to maintain a ratio of income before taxes plus fixed charges to fixed
charges of at least 1.10 to 1 and a common equity to capitalization ratio (as
defined in the agreements) of at least 20% through June 30, 1995 and not less
than 30% for any two successive quarters thereafter. The Company was in
compliance with the common equity to capitalization ratio at December 31,
1996. However, in the second quarter as a result of lower than anticipated
sales, the Company was not in compliance with the interest coverage covenant
contained in certain of its unsecured note agreements. The Company has
reached agreement with lenders to modify the interest coverage covenant
contained in these agreements through January 1, 1998 and to waive the default
created by the June 1996 charges. As of December 31, 1996, the Company was in
compliance with the modified interest coverage covenant contained in these
agreements.
In addition, in connection with the Company's 7.22% and 9.6% unsecured notes,
EUA is required to maintain an equity to total debt ratio of at least 20%
through June 30, 1995 and 30% thereafter. EUA was in compliance with this
provision at December 31, 1996.
J. Notes Payable - Lines of Credit
The EUA System companies, which includes the Company, maintain short-term lines
of credit with various banks aggregating approximately $140 million of which
$120 million is available to the Company. At December 31, 1996, unused short-
term lines of credit amounted to $89 million. These credit lines are
available to other EUA System companies under joint credit line arrangements.
In accordance with informal agreements with the various banks, commitment fees
are required to maintain the certain lines of credit. At December 31, 1996 and
1995, the Company had approximately $21.6 million and $13.8 million,
respectively, in borrowings outstanding under these arrangements at weighted
average interest rates of 5.5% and 6.2%, respectively. In addition, the
Company has short term debt outstanding of approximately $0.9 million and $0.6
million at December 31, 1996 and 1995, respectively, under the Company's own
financing arrangements.
K. Fair Value of Financial Instruments
The following methods were used to estimate the fair value of each class of
financial instruments for which it is practicable to estimate.
Cash and Cash Equivalents: The carrying amount approximates fair value because
of the short-term maturity of those instruments.
Net Investment In Sales-Type Leases and Long-Term Notes Receivable: The fair
value of the Company's net investment in sales-type leases and long-term notes
receivables was based on market rates of similar receivables.
Long-Term Debt: The fair value of the Company's long-term debt was based on
quoted market prices for similar securities.
The estimated fair value of the Company's financial instruments at December 31,
1996 and 1995 are as follows (dollars in thousands):
Carrying Fair
Amount Value
1996 1995 1996 1995
Cash and Cash Equivalents $ 5,317 $ 462 $ 5,317 $ 462
Notes Receivable and Net Investment
in Sales-Type Leases $ 69,418 $ 63,341 $ 71,874 $ 65,126
Long-Term Debt
(including current maturities) $112,500 $119,200 $118,040 $ 128,301
L. Preferred Stock
In connection with the acquisition of Citizens, (See Note D "Acquisitions"),
the Company issued 7,500 shares of Citizens' Non-Participating Preferred Stock,
par value of $0.01. The Preferred Stock is non-redeemable until January 1,
2002 or upon the seventh anniversary of the execution of the definitive
agreement. After such date, the Preferred Stock may be redeemed at the
Company's sole discretion at a redemption price of $100 per share plus accrued
dividends. Dividends are non-cumulative and are contingent upon Citizens'
results of operations. The annual dividend rate is equal to 33% of the
adjusted net income of Citizens (as defined in such agreements) divided by
7,500 shares. As of December 31, 1996, no dividends were accrued as a result
of the level of adjusted net income of Citizens.
M. Joint Ventures
In 1996, the Company announced the formation of a joint venture with Monenco-
Agra of Canada to provide energy services in Canada. This alliance is designed
to provide the Company with a significant presence in Canada. This proposal is
currently awaiting regulatory approval.
N. Commitments and Contingencies
Pension
The Company participates with other EUA System companies in non-contributory
defined benefit pension plans covering substantially all of their employees.
Retirement plan benefits are based on years of service and average compensation
over the four years prior to retirement. It is the EUA System's policy to fund
the retirement plan on a current basis in amounts determined to meet the
funding standards established by the Employee Retirement Income Security Act of
1974.
Total pension expense for the retirement plan in 1996 and in 1995 included the
following components (in thousands):
1996 1995
Service cost-benefits earned
during the period $ 299 $ 272
Interest cost on projected
benefit obligation 192 170
Actual return on assets (99) (213)
Net amortization and deferrals 29 170
Total periodic pension
expense $ 421 $ 399
The funded status of the plan cannot be presented separately for the Company as
it participates in the plan with other subsidiaries of EUA.
The weighted average discount rate and rate of increase in future compensation
levels used in determining the actual present value of accumulated benefit
obligations in 1996 and 1995 were 7.25% and 8.25% and 4.25 % and 4.75%,
respectively. The expected long-term rate of return on plan assets was 9.50%
for 1996 and 1995.
The discount rate used to determine pension costs was changed effective January
1, 1997, to 7.50% and was used to calculate the plan's funded status at
December 31, 1996.
The EUA System also maintains non-qualified supplemental retirement plans for
certain officers. EUA maintains life insurance on certain participants of the
supplemental plans to fund in whole, or in part, its future liabilities under
the supplemental plans. For the years ended December 31, 1996 and 1995
expenses related to the supplemental plan were approximately $26,000 and
$106,000, respectively.
The Company also provides a defined contribution 401 (K) savings plan for
substantially all employees. The Company's matching percentage of employees'
voluntary contribution to the plan, amounted to $150,000 and $163,000 for 1996
and 1995, respectively.
Post Retirement Benefits Other than Pension
Certain retired employees are entitled to participate in health care and life
insurance benefit plans. Health care benefits are subject to deductibles and
other limitations. Health care and life insurance benefits are partially
funded by the Company for all qualified employees.
FAS 106 "Accounting for Post-Retirement Benefits Other Than Pensions",
establishes accounting and reporting standards for such post-retirement
benefits as health care and life insurance. FAS 106 further requires the
accrual of the cost of such benefits during an employee's years of service and
the recognition of the actuarially determined total post-retirement benefit
obligations (Transition Obligation) earned by existing employees and retirees.
The Company has elected to recognize the Transit ion Obligation over a period
of twenty years. The resultant annual expense, including amortization of the
Transition Obligation and net of capitalized amounts was approximately $102,000
in 1996 and $75,000 in 1995.
The total cost of post-retirement benefits other than pension for 1996 and 1995
includes the following components (in thousands):
1996 1995
Service cost $ 109 $ 99
Interest cost 70 65
Actual return of plan assets (3) (28)
Amortization of transition obligation 34 38
Other amortizations and deferrals-net (39)
Total post-retirement benefit cost $ 171 $174
Assumptions:
Discount rate 7.25% 8.25%
Health care cost trend rate - near-term 9.0% 11.0%
- long-term 5.0% 5.0%
Salary increase rate 4.25% 4.75%
Rate of return on plan assets - non-union 7.50% 5.50%
Reconciliation of funded status:
Accumulated post-retirement benefit obligation (APBO):
Retirees $ (126) $ (151)
Active employees fully eligible for benefits
Other active employees (508) (488)
Total (634) (639)
Fair value of assets, primarily notes and bonds 577 346
Unrecognized transition obligation 377 401
Unrecognized net loss (gain) (409) (296)
(Accrued) post-retirement benefit cost $ (89) $ (188)
The discount rate used to determine post-retirement benefit obligations changed
effective January 1, 1997 to 7.5%, and was used to calculate the funded status
of post-retirement benefits at December 31, 1996.
Increasing the assumed health care cost trend rate by 1% each year would
increase the total post-retirement benefit cost for 1996 by approximately
$35,000 and increase the total accumulated post-retirement benefit obligation
by approximately $130,000.
The Company has also established an irrevocable external Voluntary Employee
Benefit Association Trust Fund. Contributions to the fund commenced in March
1993 and totaled approximately $237,000 and $75,000 during 1996 and 1995,
respectively.
Curtailment
The trustees of EUA approved an amendment to the Pension Plan which resulted in
the freezing of all future benefits under the plan as of April 1, 1997 for all
current EUA Cogenex and Nova employees. In addition, the EUA trustees voted to
discontinue post-retirement medical and life insurance benefits to all future
EUA Cogenex retirees effective April 1, 1997. To offset the impact of the
curtailment of the benefit plans the Company will increase its matching
percentage of Employees' Voluntary Contributions to the 401 (K) Savings Plan.
Operating Leases
The Company conducts its operations in leased facilities under certain non-
cancelable operating lease arrangements which expire through 2002. In
addition, the Company maintains a master operating lease for certain office
equipment and automobiles. Future minimum payments under these leases are as
follows (in thousands):
1997 $ 1,083
1998 901
1999 607
2000 370
2001 and thereafter 263
$ 3,224
Total rent expense under the operating leases was $1,126,000 and $852,000 in
1996 and 1995, respectively.
Letters of Credit and Performance Bonds
The Company is required under certain contracts with various government
entities and utility companies to maintain either a letter of credit or a
performance bond to collateralize performance under the contract. These
contingent obligations will only be drawn by the customer if the Company fails
to perform under the construction contract. Upon performance, the customer
would be obligated to pay the Company the full amount under the respective
energy savings agreement. The total amount of outstanding letters of credit
and performance bonds as of December 31, 1996 was approximately $4.3 million
and $4.1 million, respectively, and as of December 31, 1995 were approximately
$5.5 million and $3.7 million, respectively.
As of December 31, 1996, management is not aware of any potential drawings
under the letters of credit or claims made to the surety under the performance
bonds.
Sale of Receivables
The Company sold, without recourse, notes receivable under agreements with
several financial institutions, the net cumulative proceeds of which amounted
to approximately $11.9 million during 1995.
These agreements contain a provision that the Company may be required to
repurchase the contract if the payments under the contract are not made as a
result of non-realization of expected savings. In management's opinion, the
likelihood of such an e vent is remote.
Litigation
In September 1995, EUA FRCII Energy Associates, Micro Utility Partners of
America, L.P., and EUA WestCoast, L.P., each of which is a partnership of which
the Company is the managing partner (the Partnerships) and The Company entered
into an assignment agreement with Ridgewood/Mass. Corp. (f/k/a Ridgewood Cogen
Corporation) (Ridgewood) whereby Ridgewood acquired the benefits and
obligations to certain cogeneration projects from the Company and the
Partnerships. In 1996, the Partnerships and the Company filed suit in the
United States district Court for the district of Massachusetts against
Ridgewood and others seeking payment of approximately $518,000, resulting from
Ridgewood's failure and refusal to pay for services provided on their behalf
under a certain Transition Period Agreement between and among the parties.
On December 2, 1996, Ridgewood filed a demand for arbitration in Boston,
Massachusetts with regard to such claim and with regard to an alleged breach of
representations and warranties by the Company and the Partnerships under the
assignment agreement. Ridgewood seeks a total of approximately $4.3 million.
The federal court action has been dismissed without prejudice pending the
arbitration. In the arbitration, the Company and the Partnerships have filed a
counterclaim in which they also seek a determination that certain provisions of
the assignment agreement are binding and enforceable according to their terms.
The amount in controversy with respect to the counterclaims has not yet been
determined. Management cannot determine at this time the ultimate outcome of
these proceedings.
The Company, through its EUA WestCoast (WestCoast) L.P., had under development
a cogeneration facility. The host of this facility had terminated the Energy
Services Agreement between WestCoast and itself due to failure to complete the
project. West Coast disagreed with the host and as a result filed suit against
the contractor responsible for the construction of the facility, as well as the
surety which issued a performance bond on the project.
In 1996, the Company settled this lawsuit with all parties and was awarded
approximately $2.8 million. As a result of the Company's decision in 1995 to
discontinue its cogeneration operations, the Company had previously recorded a
reserve for an estimated loss net of these anticipated proceeds. Therefore,
this settlement and the write-off of associated costs did not have an impact on
the results of operation for 1996.
The Company has been notified of a lawsuit brought on by a host customer
against the Company and its insurance carriers. The basis of the lawsuit
originated from a previous suit brought on by an employee of a subcontractor
who worked at the host's facility against the Company and several other
parties. The individual sued for personal injuries sustained as a result of a
work related injury. The Company has forwarded this complaint to its insurance
carriers. In the opinion of management, it is not likely that the Company will
incur a loss resulting from this lawsuit.
Other
Under the terms of the Plan of Reorganization and Agreement of Merger between
the Company and the shareholders of Highland Energy Group, the seller has the
opportunity to receive additional EUA Common Shares based upon Highland's
financial performance over a three year period from the initial closing. The
contingent earn-out amount, if any, is based upon an agreed-to formula between
the Company and the seller. The maximum additional earn-out shall not exceed
$3.8 million over the three year period ending April 30, 1998 and will be
accounted for as an addition to the purchase price.
<TABLE>
ANNUAL REPORT OF EUA COGENEX CORPORATION AND SUBSIDIARY COMPANIES
SCHEDULE XV - STATEMENT OF INCOME
CURRENT YEAR - 1996
<CAPTION>
ACCOUNT DESCRIPTION EUA EUA EUA
Cogenex Cogenex Nova
Consol Elimin Corporation (Division)
INCOME
<S> <C> <C> <C> <C> <C>
415 Sales Revenue 13,404,033 6,687,190
417 Project Revenues 17,864,123 12,713,531
417 Consulting Revenues 1,536,807
418 Equity in Earnings 20,142 2,557,227 2,577,369
419 Interest Income 9,485,089 486,800 8,807,558 12,319
417 Energy Savings Project Sales 8,742,772 6,140,878
417 Turnkey Project Sales 10,367,268 3,743,712
421/450 Miscellaneous Income (117,579) (217,854) 94,107
Total Income 61,302,655 3,044,027 33,765,194 6,793,616
EXPENSE
904 Uncollectible accounts 695,000 390,000 275,000
910 Misc. Cust Serv & Info expense 0
912 Demonstrating and selling expense 2,273,325 2,150,127 27,197
913 Advertising expense-merchandising 240,755 230,912
920 Salaries and wages 6,022,787 2,930,508 1,407,752
921 Office supplies and expenses 1,658,150 629,987 323,828
922 Adm. expense transferred-(credit) (469,441) (312,045)
923 Outside services employed 946,929 529,508 271,725
924 Property insurance 265,652 152,820 56,505
925 Injuries and damages (13,480) (75,252) 60,899
926 Employee pensions and benefits 1,242,246 788,069 272,347
927 Franchise Requirements 800 800
928 Regulatory commission expense 0
930.1 General advertising expenses 3,425
930.2 Miscellaneous general expenses (180,135) (115,162) 91,356
931 Rents 1,082,466 706,092 242,771
935 Maintenance of structures and equipment 120,117 78,987 35,739
403/405 Depreciation and amortization expense 1,745,874 1,089,906 160,688
408.1 Taxes other than income taxes 700,089 261,299 185,329
409.1 Income taxes (5,883,523) (7,182,906)
410.1 Prov. for deferred income taxes-(credit) (393,103) (393,103)
410.2 Provision for deferred income taxes 1,819,645 1,484,297
416.0 Cost of Goods Sold 9,671,934 5,088,230
417.1 Expenses non-utility operations 34,956,771 24,093,721
421.1 Gain-disposition of property (46,986) (24,461) (20,635)
421.2 Loss-disposition of property 186,539 186,539
426.1 Donations 2,065 2,065
426.3 Penalties 3,978 3,736
426.5 Other Deductions 376,405 361,329
427 Interest on long-term debt 9,777,404 9,777,404
428 Amortization of debt disc. and expenses 151,680 151,680
430 Interest on debt to associated companies 1,511 486,800 1,511 93,110
431 Int. exp. on short-term debt and other 1,572,607 1,257,451 49
432 Capitalized Interest (credit) (707,091) (522,026)
Total Expense 67,824,395 486,800 38,402,881 8,802,802
NET (LOSS) INCOME (6,521,740) 2,557,227 (4,637,687) (2,009,186)
</TABLE>
<TABLE>
ANNUAL REPORT OF EUA COGENEX CORPORATION AND SUBSIDIARY COMPANIES
SCHEDULE XV - STATEMENT OF INCOME (Continued)
CURRENT YEAR - 1996
<CAPTION>
ACCOUNT DESCRIPTION EUA EUA EUA EUA EUA
Day NEM Cogenex Citizens Highland
(Division) Inc Canada Corporation Corporation
INCOME
<S> <C>
415 Sales Revenue 6,716,843
417 Project Revenues 3,718,917 371,660 1,060,015
417 Consulting Revenues 1,536,807
418 Equity in Earnings
419 Interest Income 985,573 4,245 162,194
417 Energy Savings Project Sales 2,601,894
417 Turnkey Project Sales 6,623,556
421/450 Miscellaneous Income 6,168
Total Income 6,716,843 3,718,917 991,741 1,912,712 10,447,659
EXPENSE
904 Uncollectible accounts 30,000
910 Misc. Cust Serv & Info expense
912 Demonstrating and selling expense 71,550 24,451
913 Advertising expense-merchandising 9,843
920 Salaries and wages 920,817 35,880 168,976 558,854
921 Office supplies and expenses 538,254 (15,546) 31,626 150,001
922 Adm. expense transferred-(credit) (48,559) (108,837)
923 Outside services employed 110,739 18,848 1,852 14,257
924 Property insurance 43,470 5,164 7,693
925 Injuries and damages 555 (5,787) 6,105
926 Employee pensions and benefits 103,851 9,162 16,117 52,700
927 Franchise Requirements
928 Regulatory commission expense
930.1 General advertising expenses 3,425
930.2 Miscellaneous general expenses (164,711) 2,093 2,584 3,705
931 Rents 31,624 8,095 8,315 85,569
935 Maintenance of structures and equipment 35 2,254 3,102
403/405 Depreciation and amortization expense 80,390 118,639 20,924 22,110 253,217
408.1 Taxes other than income taxes 194,635 400 11,205 47,221
409.1 Income taxes 679,943 360,932 18,895 239,613
410.1 Prov. for deferred income taxes-(credit)
410.2 Provision for deferred income taxes 292,667 15,657 27,024
416.0 Cost of Goods Sold 4,583,704
417.1 Expenses non-utility operations 675,174 1,742 1,463,325 8,722,809
421.1 Gain-disposition of property (65) (1,825)
421.2 Loss-disposition of property
426.1 Donations
426.3 Penalties 242
426.5 Other Deductions 76 15,000
427 Interest on long-term debt
428 Amortization of debt disc. and expenses
430 Interest on debt to associated companies 105,669 73,314 214,707
431 Int. exp. on short-term debt and other 6,622 218,958 87,382 2,145
432 Capitalized Interest (credit) (6,622) (78,617) (99,826)
Total Expense 6,591,710 1,825,880 602,556 1,867,681 10,217,685
NET (LOSS) INCOME 125,133 1,893,037 389,185 45,031 229,974
</TABLE>
<TABLE>
<CAPTION>
ANNUAL REPORT OF EUA COGENEX CORPORATION AND SUBSIDIARY COMPANIES (CONTINUED)
PRIOR YEAR - 1995
ACCOUNT DESCRIPTION EUA EUA EUA EUA EUA
Cogenex Cogenex Nova Day NEM
Consolidated Elimin. Corporation (Division) (Division) Inc
<S> <C> <C> <C> <C> <C> <C>
INCOME
415 Sales Revenue 20,971,027 14,606,786 6,364,241
417 Project Revenues 41,841,062 36,102,574 3,385,557
417 Consulting Revenues 1,419,448
418 Equity in Earnings (7,252,959) 2,095,001 (5,157,958)
419 Interest Income and Finance Fees 9,958,084 707,762 10,309,183 11,347
723
421/450 Miscellaneous Income 632,625 525,902 79,533
Total Income 67,569,287 2,802,763 41,779,701 14,697,666 6,364,241 3,386,280
EXPENSE
904 Uncollectible accounts 397,719 211,599 170,000 16,120
910 Miscellaneous Cust Serv & Info expense 0
912 Demonstrating and selling expense 193,103 123,099 39,307 25,423
913 Advertising expense-merchandising 130,477 96,042 34,435
920 Salaries and wages 6,151,643 2,770,331 2,042,956 876,234 6,392
921 Office supplies and expenses 1,708,974 753,021 416,740 489,589 (13,342)
922 Administrative expense transferred-(credit) (441,508) (422,676)
923 Outside services employed 886,679 573,308 195,545 81,265 21,268
924 Property insurance 324,414 201,348 53,411 63,071
925 Injuries and damages 131,957 49,963 73,975 555
926 Employee pensions and benefits 888,203 381,441 366,626 104,351 2,834
927 Franchise Requirements 85 85
928 Regulatory commission expense 0
930.1 General advertising expenses 2,229 (367) 436
930.2 Miscellaneous general expenses 238,799 218,353 6,105 11,312 86
931 Rents 841,618 494,198 243,016 38,632 11,988
935 Maintenance of structures and equipment 97,895 78,574 16,232 109
403/405 Depreciation and amortization expense 1,448,205 943,210 184,067 58,271 110,418
408.1 Taxes other than income taxes 757,535 266,564 264,697 195,876 315
409.1 Income taxes 624,359 (660,799) 1,095,629
410.1 Provision for deferred income taxes-(credit) (560,145) (245,479) (314,666)
410.2 Provision for deferred income taxes-(credit) (6,041,712) (6,041,712)
416.0 Cost of Goods Sold 15,115,039 10,661,872 4,453,167
417.1 Expenses non-utility operations 31,973,794 28,682,096 588,230
421.1 Gain-disposition of property (62,605) (44,851) (17,754)
421.2 Loss-disposition of property 9,388,490 9,387,672 818
426.1 Donations 5,455 5,355 100
426.3 Penalties 14,938 9,688
426.5 Other Deductions 51,397 51,397
427 Interest on long-term debt 10,186,204 10,186,204
428 Amortization of debt disc. and expenses 151,670 151,670
430 Interest on debt to associated companies 374,346 707,762 374,346 549,207 95,481
431 Interest expense on short-term debt and other 1,553,696 1,367,924 386 2,800
432 Capitalized Interest (credit) (1,059,249) (1,029,348)
Total Expense 75,473,704 707,762 48,836,581 15,362,981 6,546,463 1,509,816
NET (LOSS) INCOME (7,904,417) 2,095,001 (7,056,880) (665,315) (182,222) 1,876,464
</TABLE>
<TABLE>
<CAPTION>
ANNUAL REPORT OF EUA COGENEX CORPORATION AND SUBSIDIARY -Continued
PRIOR YEAR - 1995
ACCOUNT DESCRIPTION EUA EUA EUA
INCOME Cogenex Citizens Highland
Canada Corporation Corporation
<S> <C> <C> <C>
415 Sales Revenue
417 Project Revenues 62,433 2,290,498
417 Consulting Revenues 1,419,448
418 Equity in Earnings
419 Interest Income 314,786 205 29,602
421/450 Miscellaneous Income 13,449 11,406 2,335
Total Income 328,235 1,493,492 2,322,435
EXPENSE
904 Uncollectible accounts
910 Miscellaneous Cust Serv & Info expense
912 Demonstrating and selling expense 3,309 1,965
913 Advertising expense-merchandising
920 Salaries and wages 215,833 239,897
921 Office supplies and expenses 32,495 30,471
922 Administrative expense transferred-(credit) (18,832)
923 Outside services employed 7,148 8,145
924 Property insurance 375 6,209
925 Injuries and damages 5,743 1,721
926 Employee pensions and benefits 10,922 22,029
927 Franchise Requirements
928 Regulatory commission expense
930.1 General advertising expenses 2,160
930.2 Miscellaneous general expenses 2,114 829
931 Rents 31,232 22,552
935 Maintenance of structures and equipment 1,376 1,604
403/405 Depreciation and amortization expense 8,776 143,463
408.1 Taxes other than income taxes 21,575 8,508
409.1 Income taxes 64,174 (8,869) 134,224
410.1 Provision for deferred income taxes-(credit)
410.2 Provision for deferred income taxes-(credit)
416.0 Cost of Goods Sold
417.1 Expenses non-utility operations 1,751 1,172,570 1,529,147
421.1 Gain-disposition of property
421.2 Loss-disposition of property
426.1 Donations
426.3 Penalties 5,110 140
426.5 Other Deductions
427 Interest on long-term debt
428 Amortization of debt disc. and expenses
430 Interest on debt to associated companies 13,455 49,619
431 Interest expense on short-term debt and other 166,168 13,440 2,978
432 Capitalized Interest (credit) (8,660) (21,241)
Total Expense 232,093 1,511,272 2,182,260
NET (LOSS) INCOME 96,142 (17,780) 140,175
</TABLE>
<TABLE>
ANNUAL REPORT OF EUA COGENEX AND SUBSIDIARY COMPANIES
For the Year Ending December 31, 1996
ANALYSIS OF BILLINGS
SALES & PROJECT REVENUES
ACCOUNTS 415/417
<CAPTION>
DESCRIPTION TOTAL COST EXCESS TOTAL
OR AMOUNT
DEFICIENCY
<S> <C> <C> <C>
1. Utility Load Reduction Programs 21,114,411
2. Energy Management Programs 15,859,752
3. Packaged Cogeneration 0
4. Installation & Fabrication of Energy
Services Equipment 13,404,033
5. Consulting Fees 1,536,807
TOTAL 51,915,003
</TABLE>
INSTRUCTION: Provide a brief description of the sales and services rendered by
each category in accordance with sales and service contracts and
list amounts applicable per category:
(A) The following is a Summary of Consolidated Billings by Geographical
Area:
New England and New York $ 32,869,632
Outside New England and New York 27,380,143
$ 60,249,775
(A) Includes Northeast Energy Management Inc., EUA Highland Corp.,
EUA Citizens, and partnership revenues of $ 3,718,917,
$ 10,285,465, $ 1,908,467, and $ 8,334,772 respectively.
ANNUAL REPORT OF EUA COGENEX AND SUBSIDIARY COMPANIES
For the Year Ending December 31, 1996
ANALYSIS OF MISCELLANEOUS INCOME
INTEREST INCOME AND OTHER INCOME
ACCOUNTS 419/421/450
DESCRIPTION OF ITEMS AMOUNTS
ACCOUNT 419.0 INTEREST INCOME AND OTHER INCOME
Interest Income
Energy Savings Project Sales - Notes Receivable
EUA Cogenex $7,521,167
EUA Highland 53,359
EUA Nova 12,319
TOTAL 7,586,845
Energy Savings Project Sales - Lease Receivable
EUA Cogenex 750,669
EUA Highland 108,835
TOTAL 859,504
Energy Related Financing Transactions
EUA Citizens 2,853
EUA Canada 985,573
TOTAL 988,426
Other Interest Income
EUA Citizens 1,392
TOTAL 1,392
Finance Fees
EUA Cogenex 48,922
TOTAL 48,922
TOTAL INTEREST INCOME AND OTHER INCOME 9,485,089
ANNUAL REPORT OF EUA COGENEX AND SUBSIDIARY COMPANIES
For the Year Ending December 31, 1996
ANALYSIS OF MISCELLANEOUS INCOME
INTEREST INCOME AND OTHER INCOME
ACCOUNTS 419/421/450
DESCRIPTION OF ITEMS AMOUNTS
421.0 MISCELLANEOUS NON-OPERATING INCOME:
EUA Cogenex Corp:
City of Philadelphia 46,500
Quincy Hospital 25,000
Federal Income Tax Current (792,624)
EC&S I - Management and Accounting 90,000
EC&S II - Management and Accounting 90,000
Late Payment Interest Revenue 59,028
University of California 12,856
Sigma Circuits, Inc. 9,607
EUA Highland Energy Corporation 8,435
Energy Matrix 70,866
Enersave RG&E Buyout 157,353
Tru-Brite/Walgreen's 12,376
Partnership N/I Accrual True-up (101,237)
K-Mart 9,983
Conservation Alliance 9,039
Scallop Thermal Management-LOC 27,602
Miscellaneous (5,000) 47,362
TOTAL (217,854)
EUA Canada:
Rose Technology Finance Fee 6,168
TOTAL 6,168
EUA Nova:
Customer Service Chg. 99,449
Miscellaneous (5,342)
TOTAL 94,107
ANNUAL REPORT OF EUA COGENEX AND SUBSIDIARY COMPANIES
For the Year Ending December 31, 1996
ANALYSIS OF MISCELLANEOUS INCOME
INTEREST INCOME AND OTHER INCOME (Continued)
ACCOUNTS 419/421
DESCRIPTION OF ITEMS AMOUNTS
421.1 GAIN - DISPOSITION OF PROPERTY:
EUA Cogenex:
Borough of Freehold 21,036
Sale of Computer Equipment 3,425
Total 24,461
EUA NEMI:
Sale of Furniture 65
Total 65
EUA/Highland:
Sale of Computer Equipment 1,825
Total 1,825
EUA Nova:
Sale of Automobiles 20,635
Total 20,635
GRAND TOTAL 49,986
ANNUAL REPORT OF EUA COGENEX AND SUBSIDIARY COMPANIES
For the Year Ending December 31, 1996
SCHEDULE XVII
SCHEDULE OF EXPENSE DISTRIBUTION
BY
DEPARTMENT OR SERVICE FUNCTION
INSTRUCTIONS: Indicate each department or service function. (See Instruction
01-3 General Structure of Accounting System: Uniform System of
Accounts.)
DEPARTMENT
DESCRIPTION OF ITEMS TOTAL OR SERVICE
AMOUNT OVERHEAD FUNCTION
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
928 REGULATORY COMMISSION EXPENSE
930.1 GENERAL ADVERTISING EXPENSE
930.2 MISC. GENERAL EXPENSE
931 RENTS
932 MAINTENANCE OF STRUCTURES AND EQUIPMENT NOT
403 DEPRECIATION AND AMORTIZATION EXPENSE APPLICABLE
408 TAXES OTHER THAN INCOME TAXES
409 INCOME TAXES
410 PROVISION FOR DEFERRED INCOME TAXES
411 PROVISION FOR DEFERRED INCOME TAXES
- CREDIT
419.1 AFUDC - EQUITY
426.1 DONATIONS
426.5 OTHER DEDUCTIONS
427 INTEREST ON LONG-TERM DEBT
430 INTEREST ON DEBT TO ASSOCIATE COMPANIES
431 OTHER INTEREST EXPENSE
432 AFUDC - BORROWED FUNDS
TOTAL EXPENSES
ANNUAL REPORT OF EUA COGENEX AND SUBSIDIARY COMPANIES
For the Year Ending December 31, 1996
DEPARTMENTAL ANALYSIS OF SALARIES
ACCOUNT 920
INSTRUCTIONS: Indicate each department or service function. (See Instruction
01-3 General Structure of Accounting System: Uniform System of
Accounts.)
NAME OF DEPARTMENT DEPARTMENTAL SALARY EXPENSE NUMBER
INCLUDED IN AMOUNTS BILLED TO PERSONNEL
TOTAL PARENT OTHER NON END OF
AMOUNT COMPANY ASSOCIATES ASSOCIATES YEAR
NOT APPLICABLE
TOTAL
<TABLE>
ANNUAL REPORT OF EUA COGENEX AND SUBSIDIARY COMPANIES
For the Year Ending December 31, 1996
OUTSIDE SERVICES EMPLOYED
ACCOUNT 923
<CAPTION>
INSTRUCTIONS: Provide a breakdown by sub-account of outside services
employed. If the aggregate amounts paid to any one payee and
included within one sub-account is less than $25,000, only the
aggregate number and amount of all such payments included
within the sub-account need be shown. Provide a subtotal for
each type of service.
RELATIONSHIP
FROM WHOM PURCHASED ADDRESS A = ASSOCIATE AMOUNT
NA = NON
ASSOC.
<S> <C> <C> <C>
EUA COGENEX CORPORATION
OUTSIDE SERVICES-LEGAL:
Martha Smith Shasta Dr, Londonderry, NH NA 37,167
McDermott, Will and Emery State Street, Boston, MA NA 184,787
Amortization of previously deferred legal
charges NA 36,662
Allocation of EUA Service Company Fees W. Bridgewater, MA A 37,759
Various (22) NA 29,640
OUTSIDE SERVICES-ACCOUNTING:
Coopers and Lybrand Box 3026, Boston, MA NA 35,133
Allocation of EUA Service Company Fees W. Bridgewater, MA A 7,889
OUTSIDE SERVICES-E.D.P.:
Allocation of EUA Service Company Fees W. Bridgewater, MA A 4,285
OUTSIDE SERVICES-OTHER:
Measuring and Monitoring Services, Inc. Shrewsbury Ave, Tinton Falls, NJ NA 21,908
Allocation of EUA Service Company Fees W. Bridgewater, MA A 19,758
Dun and Bradstreet Box 5096, Westborough, MA NA 33,798
The Madison Group Hayden Ave., Lexington, MA NA 63,300
Various (83) NA 17,422
TOTAL EUA COGENEX 529,508
</TABLE>
<TABLE>
ANNUAL REPORT OF EUA COGENEX AND SUBSIDIARY COMPANIES
For the Year Ending December 31, 1996
OUTSIDE SERVICES EMPLOYED - (Continued)
ACCOUNT 923
<CAPTION>
FROM WHOM PURCHASED ADDRESS RELATIONSHIP
A = ASSOCIATE AMOUNT
NA = NON
ASSOC.
<S> <C> <C> <C>
EUA DAY
OUTSIDE SERVICES-LEGAL:
Various (3) NA 6,137
OUTSIDE SERVICES-BLDG & MAINT:
JP Services Martz Rd, Farmington, NY NA 5,278
AT&T Box 371430, Pittsburgh, PA NA 6,608
Various (11) 9,774
OUTSIDE SERVICES-OTHER:
Various (5) NA 82,982
TOTAL EUA DAY 110,739
EUA CITIZENS
OUTSIDE SERVICES-LEGAL:
Various (2) NA 1,016
OUTSIDE SERVICES-OTHER:
Various (5) NA 836
TOTAL EUA CITIZENS 1,852
EUA HIGHLAND
OUTSIDE SERVICES-MANAGEMENT:
Various (1) NA (94)
OUTSIDE SERVICES-LEGAL:
Various (3) NA 7,263
OUTSIDE SERVICES-ACCOUNTING:
Various (3) NA 1,297
OUTSIDE SERVICES-OTHER:
Various (21) NA 5,791
TOTAL EUA HIGHLAND 14,257
</TABLE>
<TABLE>
ANNUAL REPORT OF EUA COGENEX AND SUBSIDIARY COMPANIES
For the Year Ending December 31, 1996
OUTSIDE SERVICES EMPLOYED - (Continued)
ACCOUNT 923
<CAPTION>
FROM WHOM PURCHASED ADDRESS RELATIONSHIP
A = ASSOCIATE AMOUNT
NA = NON
ASSOC.
<S> <C> <C> <C>
EUA NOVA
OUTSIDE SERVICES-LEGAL:
Diepenbrock, Wulff & Hannegan Capital Mall, Sacramento, CA NA 15,672
Tillinghast, Collins & Graham Weybosset St., Providence, RI NA 12,294
Various (8) NA 19,995
OUTSIDE SERVICES-OTHER:
The Madison Group Hayden Ave., Lexington, MA NA 29,400
Firebrand Allens Ave., Providence, RI NA 40,761
Evie Kreisler & Associates, Inc. S. Figueroa St., Los Angeles, CA NA 10,000
Various (6) NA 123,513
OUTSIDE SERVICES-COMMISSIONS:
Various (5) NA 20,090
TOTAL EUA NOVA 271,725
EUA NEMI
OUTSIDE SERVICES-OTHER:
Various (3) NA 18,848
TOTAL EUA NEMI 18,848
TOTAL OUTSIDE SERVICES
EMPLOYED 946,929
</TABLE>
ANNUAL REPORT OF EUA COGENEX AND SUBSIDIARY COMPANIES
For the Year Ending December 31, 1996
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
EUA Cogenex
Miscellaneous Various 150
EUA Day
Miscellaneous Various 3,425
TOTAL 3,575
ANNUAL REPORT OF EUA COGENEX AND SUBSIDIARY COMPANIES
For the Year Ending December 31, 1996
MISCELLANEOUS GENERAL EXPENSES
ACCOUNT 930.2
INSTRUCTIONS: Provide a listing of the amount included in Account 930.2,
"Miscellaneous General Expenses", classifying such expenses
according to their nature. Payments and expenses permitted by
Sections 321(b)(2) of the Federal Election Campaign Act, as
amended by Public Law 94-283 in 1976 (2 U.S.C. >441 (b) (2)
shall be separately classified.
DESCRIPTION AMOUNT
EUA Cogenex Corporation
EUA Service Corporation Allocated Expenses 75,405
Capitalization of EUA Service Corporation Allocated Expenses
(253,869)
Conference Employee Training, Seminar and Conference Fees 9,753
Petty Cash Expense, Letter of Credit & Bank Charges 45,901
Filing Fees 4,507
Miscellaneous 51,745
Billing of Management Fees (83,202)
Director's Fees 27,644
Administration of Sanwa Loss 6,804
(115,312)
EUA Nova
December Adjusting Entries 58,541
Miscellaneous 16,786
75,327
EUA Day
Capitalization of R&D (190,620)
Miscellaneous 25,909
(164,711)
EUA NEMI
Miscellaneous 2,093
EUA Citizens Corporation
Miscellaneous 2,584
EUA Highland Corporation
Miscellaneous 3,705
TOTAL (196,314)
ANNUAL REPORT OF EUA COGENEX AND SUBSIDIARY COMPANIES
For the Year Ending December 31, 1996
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 A M O U N T
EUA Cogenex Corporation
Building Rents 249,107
Automobile Leasing 2,979
Data Processing and Other Equipment Rents 454,006
706,092
EUA Nova
Building Rents 228,061
Automobile Leasing 8,794
Data Processing and Other Equipment Rents 5,916
242,771
EUA Day
Building Rents 19,992
Automobile Leasing 11,632
31,624
EUA NEMI
Building Rents 8,017
Data Processing & Other Equipment Rents 78
8,095
EUA Citizens Corporation
Building Rents 1,920
Data Processing and Other Equipment Rents 6,395
8,315
EUA Highland Corporation
Building Rents 66,377
Data Processing and Other Equipment Rents 19,192
85,569
TOTAL 1,082,466
ANNUAL REPORT OF EUA COGENEX AND SUBSIDIARY COMPANIES
For the Year Ending December 31, 1996
TAXES OTHER THAN INCOME TAXES
ACCOUNT 408.1
INSTRUCTIONS: Provide an analysis of Account 408.1, "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 A M O U N T
EUA Cogenex Corporation:
Other Than U.S. Government Taxes:
State of MA Unemployment Compensation 22,132
State of NY Unemployment Compensation 12,684
MA Health Insurance 964
State of Pennsylvania Unemployment 1,252
State of New Jersey Unemployment 417
State of New Jersey Disability 187
State of California Unemployment and Training 756
Property Taxes 1,732
State of Maryland Unemployment 77
State of Maine Unemployment 196
State of Colorado Unemployment 290
State of Washington Unemployment 4,732
State of New York Sales and Use 3,742
Payroll Taxes 46,705
Miscellaneous Taxes 47,793
Total 143,659
U.S. Government Taxes:
Federal Unemployment Compensation 6,334
F.I.C.A. (Net of A & G Credit) 111,306
Total 117,640
TOTAL 261,299
ANNUAL REPORT OF EUA COGENEX AND SUBSIDIARY COMPANIES
For the Year Ending December 31, 1996
TAXES OTHER THAN INCOME TAXES - (Continued)
ACCOUNT 408.1
K I N D O F T A X A M O U N T
EUA Nova:
Other Than U.S. Government Taxes:
State of MA Unemployment Compensation 756
State of RI Unemployment Compensation 24,881
MA Health Insurance 34
State of New Jersey Unemployment 194
State of New Jersey Disability 73
State of California Unemployment and Training 2,167
Property Taxes 34,292
State of Florida Unemployment 189
State of Rhode Island Job Development 922
State of Texas Employment 252
State of Illinois Unemployment 279
Miscellaneous Taxes 162
64,201
U.S. Government Taxes:
Federal Unemployment Compensation 2,962
F.I.C.A. (Net of A & G Credit) 118,166
121,128
TOTAL 185,329
EUA Day:
Other Than U.S. Government Taxes:
Property Taxes 17,721
State of New York Unemployment 19,856
State of New York Sales & Use 14,560
Miscellaneous Taxes 166
52,303
U.S. Government Taxes:
Federal Unemployment Compensation 3,053
F.I.C.A. (Net of A & G Credit) 139,279
142,332
TOTAL 194,635
ANNUAL REPORT OF EUA COGENEX AND SUBSIDIARY COMPANIES
For the Year Ending December 31, 1996
TAXES OTHER THAN INCOME TAXES
ACCOUNT 408.1
K I N D O F T A X A M O U N T
EUA NEMI:
Other Than U.S. Government Taxes:
Property Taxes 262
Miscellaneous Taxes 138
TOTAL 400
EUA Citizens:
Other Than U.S. Government Taxes:
State of MA Unemployment Compensation 3,564
Property Taxes 4,192
State of California Unemployment and Training 798
State of North Carolina Unemployment 139
Miscellaneous Taxes 821
9,514
U.S. Government Taxes:
Federal Unemployment Compensation 784
F.I.C.A. (Net of A & G Credit) 907
1,691
TOTAL 11,205
EUA Highland Corporation:
Other Than U.S. Government Taxes:
Property Taxes 1,836
State of Colorado Unemployment 1,685
Miscellaneous Taxes 564
4,085
U.S. Government Taxes:
Federal Unemployment Compensation 2,773
F.I.C.A. (Net of A & G Credit) 40,363
43,136
TOTAL 47,221
ANNUAL REPORT OF EUA COGENEX AND SUBSIDIARY COMPANIES
For the Year Ending December 31, 1996
DONATIONS
ACCOUNT 426.1
INSTRUCTIONS: Provide a listing of the amount included in Account 426.1,
"Donations", classifying such expenses by its purpose. The
aggregate number and amount of all items of less than $3,000
may be shown in lieu of details.
NAME OF RECIPIENT PURPOSE OF DONATION AMOUNT
EUA Cogenex:
Miscellaneous (9) 2,065
TOTAL 2,065
ANNUAL REPORT OF EUA COGENEX AND SUBSIDIARY COMPANIES
For the Year Ending December 31, 1996
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.
DESCRIPTION NAME OF PAYEE AMOUNT
EUA Cogenex Corporation:
Development Costs APS 207,900
CWIP 9000 Amortization 142,037
Miscellaneous (11) 11,392
361,329
EUA Citizens Corporation Miscellaneous (1) 75
EUA Highland Corporation PSCo 15,000
TOTAL 376,404
ANNUAL REPORT OF EUA COGENEX AND SUBSIDIARY COMPANIES
For the Year Ending December 31, 1996
SCHEDULE XVIII
NOTES TO STATEMENT OF INCOME
INSTRUCTIONS: The space below is provided for important notes regarding the
statement of income or any account thereof. Furnish
particulars as to any significant increase in services rendered
or expenses incurred during the year. Notes relating to
financial statements shown elsewhere in this report may be
indicated here by reference.
See "Notes to Financial Statements" on page 31.
ANNUAL REPORT OF EUA COGENEX AND SUBSIDIARY COMPANIES
For the Year Ending December 31, 1996
SCHEDULE OF TERMINATED CONTRACTS
FILED UNDER CONFIDENTIAL TREATMENT REQUEST
ANNUAL REPORT OF EUA COGENEX AND SUBSIDIARY COMPANIES
For the Year Ending December 31, 1996
SCHEDULE OF PROJECT VALUES
FILED UNDER CONFIDENTIAL TREATMENT REQUEST
ANNUAL REPORT OF EUA COGENEX AND SUBSIDIARY COMPANIES
For the Year Ending December 31, 1996
SCHEDULE OF ESTIMATED KILOWATTS SAVED
INSTRUCTIONS: Provide a statement of estimated kilowatts saved during the
past year and cumulatively, both within and outside of New
England through demand side management projects.
ESTIMATED
UTILITY SPONSOR ESTIMATED CURRENT CUMULATIVE
YEAR KILOWATTS SAVED KILOWATTS SAVED
Commonwealth Electric Co. (1) -0- 5,291
Public Service Electric & Gas Co. (3) 3,253 16,493
Orange and Rockland Utilities Inc. (2) -0- 2,670
Central Maine Power Company (1) -0- 10,558
Rochester Gas and Electric Corp. (2) 1,185 7,152
Rockland Electric Company (3) -0- 381
Massachusetts Electric (1) -0- 88
Boston Edison (1) -0- 21,230
Consolidated Edison (2) -0- 5,643
Jersey Central Power and Light (3) 1,116 3,856
TOTAL 5,554 73,362
(1) New England
(2) New York
(3) Outside New England and New York
ANNUAL REPORT OF EUA COGENEX AND SUBSIDIARY COMPANIES
For the Year Ending December 31, 1996
PROJECT INCOME STATEMENT
FILED UNDER CONFIDENTIAL TREATMENT REQUEST
ANNUAL REPORT OF EUA COGENEX AND SUBSIDIARY COMPANIES
For the Year Ending December 31, 1996
ORGANIZATIONAL STRUCTURE
EUA COGENEX CORPORATION
President
Vice President
Assistant Comptroller
Manager of Personnel
Director of Operations
Manager of Commercial Finance
Director of Project Development
Vice President of Business Development
Marketing Manager
Director of Sales - Region 1
Director of Sales - Region 2
Director of Sales - Region 3
Manager Engineering and Construction - Team 1
Manager Engineering and Construction - Team 2
Manager Engineering and Construction - Team 3
ANNUAL REPORT OF EUA COGENEX AND SUBSIDIARY COMPANIES
For the Year Ending December 31, 1996
ORGANIZATIONAL STRUCTURE
EUA NOVA
Vice President/General Manager
Manager Administration and Accounting
Manager of Purchasing
Regional General Manager
Manager of Engineering & Manufacturing
ANNUAL REPORT OF EUA COGENEX AND SUBSIDIARY COMPANIES
For the Year Ending December 31, 1996
ORGANIZATIONAL STRUCTURE
EUA DAY
General Manager
Business Manager
Operations Manager
ANNUAL REPORT OF EUA COGENEX AND SUBSIDIARY COMPANIES
For the Year Ending December 31, 1996
ORGANIZATIONAL STRUCTURE
EUA CITIZENS CORPORATION
President
Vice President
Project Manager - Housing Operations
Project Manager - Utility Program
Senior Construction Manager
Senior Financial Analyst
ANNUAL REPORT OF EUA COGENEX AND SUBSIDIARY COMPANIES
For the Year Ending December 31, 1996
ORGANIZATIONAL STRUCTURE
EUA HIGHLAND
President
Vice President of Engineering and Construction
Vice President - Lighting
Vice President - Mechanical
ANNUAL REPORT OF EUA COGENEX AND SUBSIDIARY COMPANIES
For the Year Ending December 31, 1996
SIGNATURE CLAUSE
Pursuant to the requirements of the Public Utility Holding Company Act of
1935 and the rules and regulations of the Securities and Exchange Commission
issued thereunder, the undersigned company has duly caused this report to be
signed on its behalf by the undersigned officer thereunto duly authorized.
EUA Cogenex Corporation
(Name of Reporting Company)
By: /s/ Richard M. Burns
(Signature of Signing Officer)
Richard M. Burns, Comptroller
(Printed Name and Title of Signing Officer)
Date: April 30, 1997
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