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File No. 69-420
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
FORM U-3A-2
STATEMENT BY HOLDING COMPANY CLAIMING EXEMPTION UNDER RULE
U-3A-2 FROM THE PROVISIONS OF THE PUBLIC UTILITY HOLDING
COMPANY ACT OF 1935
To Be Filed Annually Prior to March 1
EASTERN SYSTEMS CORPORATION
- - --------------------------------------------------------------------------------
(Name of Company)
hereby files with the Securities and Exchange Commission, pursuant to Rule 2,
its statement claiming exemption as a holding company from the provisions of the
Public Utility Holding Company Act of 1935, and submits the following
information:
1. Name, State of organization, location and nature of business of
claimant and every subsidiary thereof, other than any exempt wholesale generator
("EWG") or foreign utility company in which claimant directly or indirectly
holds an interest.
Claimant:
Eastern Systems Corporation
414 Summers Street
Charleston, West Virginia 25301
The Claimant is a West Virginia corporation and a wholly owned
subsidiary of Energy Corporation of America, a West Virginia
corporation ("ECA"). It was incorporated to be a holding company
for Mountaineer Gas Company.
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Subsidiaries of the Claimant:
A. Mountaineer Gas Company
414 Summers Street
Charleston, West Virginia 25301
Mountaineer Gas Company ("Mountaineer") is a West Virginia
corporation, wholly owned by Claimant, engaged in the distribution of
natural gas in the State of West Virginia through a 3,600 mile
distribution system, principally in Charleston, Beckley, Huntington and
Wheeling, West Virginia. Mountaineer is a public gas utility.
i. Mountaineer Gas Services, Inc.
414 Summers Street
Charleston, West Virginia 25301
Mountaineer Gas Services, Inc. is a West
Virginia corporation, wholly owned by Mountaineer,
engaged primarily in producing and marketing
natural gas to Mountaineer.
2. A brief description of the properties of claimant and each of
its subsidiary public utility companies used for the generation, transmission,
and distribution of electric energy for sale, or for the production,
transmission, and distribution of natural or manufactured gas, indicating the
location of principal generating plants, transmission lines, producing fields,
gas manufacturing plants, and electric and gas distribution facilities,
including all such properties which are outside the state in which claimant and
its subsidiaries are organized and all transmission or pipelines which deliver
or receive electric energy or gas at the borders of such state.
Oil and gas producing facilities at Mountaineer Gas
Services, Inc. are located in Kanawha, Cabell and Jackson
Counties, West Virginia. These facilities include well head
equipment, gas gathering lines and associated equipment and
compression equipment.
The gas distribution facilities of Mountaineer cover
the main population centers of the State of West Virginia and
include pipelines, regulators, meters and other equipment
needed for distribution. Gas purchased from suppliers is
received from interstate pipelines, including Columbia Gas
Transmission Corporation and Tennessee Gas Pipeline, and other
sources at points within the State of West Virginia. Suppliers
include Equitable Resources Marketing Company, Coastal Gas
Marketing, Texaco Gas Marketing, Cabot Oil & Gas Corporation,
Noble Gas Marketing, Valero Gas Marketing, Eastern Marketing
Corporation and Eastern American Energy
2
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Corporation.
3. The following information for the last calendar
year with respect to claimant and each of its subsidiary
public utility companies:
(a) Number of kwh. of electric energy sold (at
retail or wholesale), and Mcf. of natural and
manufactured gas distributed at retail.
64,078,174 Mcf. of natural gas.
(b) Number of kwh. of electric energy and Mcf. of
natural or manufactured gas distributed at retail
outside the State in which each such company is
organized.
None
(c) Number of kwh. of electric energy and Mcf. of
natural or manufactured gas sold at wholesale outside
the State in which each such company is organized, or
at the State line.
None
(d) Number of kwh. of electric energy and Mcf. of
natural or manufactured gas purchased outside the State
in which each such company is organized or at the State
line.
25,850,642 Mcf. of natural gas.
4. The following information for the reporting period with
respect to claimant and each interest it holds directly or indirectly in an EWG
or a foreign utility company, stating monetary amounts in United States dollars:
(a) Name, location, business address and description of
the facilities used by the EWG or foreign utility company for the
generation, transmission and distribution of electric energy for sale
or for the distribution at retail of natural or manufactured gas.
Not applicable.
(b) Name of each system company that holds an interest in
such EWG or foreign utility company; and description of the interest
held.
3
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Not applicable.
(c) Type and amount of capital invested, directly or
indirectly, by the holding company claiming exemption; any direct or
indirect guarantee of the security of the EWG or foreign utility
company by the holding company claiming exemption; and any debt or
other financial obligation for which there is recourse, directly or
indirectly, to the holding company claiming exemption or another system
company, other than the EWG or foreign utility company.
Not applicable.
(d) Capitalization and earnings of the EWG or foreign utility
company during the reporting period.
Not applicable.
(e) Identify any service, sales or construction contract(s)
between the EWG or foreign utility company and a system company, and
describe the services to be rendered or goods sold and fees or revenues
under such agreement(s).
Not applicable.
4
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EXHIBIT A
A consolidating statement of income and surplus of the Claimant and its
subsidiary companies for the last calendar year, together with a consolidating
balance sheet of Claimant and its subsidiary companies as of the close of such
calendar year is attached hereto as Exhibit A.
EXHIBIT B
Financial Data Schedule is attached hereto as Exhibit B.
EXHIBIT C
Not applicable.
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The above-named Claimant has caused this statement to be duly executed
on its behalf by its authorized officer on this 24th day of February, 1997.
EASTERN SYSTEMS CORPORATION
(Name of claimant)
By: /s/ Richard L. Grant
----------------------------
Name: Richard L. Grant
Title: President
CORPORATE SEAL
Attest:
/s/ Michael S. Fletcher
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Name: Michael S. Fletcher
Title: Secretary
Name, title and address of officer to whom notices and correspondence concerning
this statement should be addressed:
John Mork
Eastern Systems Corporation
4643 South Ulster Street, Suite 1100
Denver, Colorado 80237
6
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EASTERN SYSTEMS CORPORATION
CONSOLIDATING INCOME STATEMENTS
For the Twelve Months Ended December 31, 1996
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<TABLE>
<CAPTION>
Unaudited
Eastern Mountaineer Eastern
Systems Gas Co. Consolidating Systems Corp.
Corporation Consolidated Entries Consolidated
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenues:
Utility customer sales -- $ 179,760,836 -- $ 179,760,836
Utility transportation -- 6,553,227 -- 6,553,227
Oil and gas sales -- 3,964,133 -- 3,964,133
------------- ------------- ------------- -------------
-- 190,278,196 -- 190,278,196
------------- ------------- ------------- -------------
Operating expenses:
Utility gas purchases -- 116,086,216 -- 116,086,216
Operations & maintenance -- 23,506,616 -- 23,506,616
Lease operating -- 1,119,642 -- 1,119,642
Taxes other than income taxes -- 14,944,818 -- 14,944,818
Production taxes -- 413,797 -- 413,797
Utility depreciation -- 5,982,629 844,008 6,826,637
Depletion and depreciation -- 609,854 147,167 757,021
------------- ------------- ------------- -------------
-- 162,663,572 991,175 163,654,747
------------- ------------- ------------- -------------
Income (Loss) From Operations -- 27,614,624 (991,175) 26,623,449
General and Administrative Expenses (1,572,643) (15,626,575) 618,766 (16,580,452)
Other income (Expense), Net 3,147 (243,454) (2,642) (242,949)
Dividend Income From Subsidiary 7,400,000 -- (7,400,000) --
------------- ------------- ------------- -------------
Income (Loss) Before Interest 5,830,504 11,744,595 (7,775,051) 9,800,048
Expense
Interest Expense 3,907,455 5,861,554 (151,272) 9,617,737
------------- ------------- ------------- -------------
Income (Loss) Before Income Taxes 1.923,049 5,883,041 (7,623,779) 182,311
Provision (Benefit) For Income Taxes (2,190,780) 1,778,116 (89,511) (502,175)
------------- ------------- ------------- -------------
Net Income (Loss) $ 4,113,829 $ 4,104,925 ($ 7,534,268) $ 684,486
============= ============= ============= =============
</TABLE>
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EASTERN SYSTEMS CORPORATION
CONSOLIDATING BALANCE SHEETS - ASSETS
As of December 31, 1996
Unaudited
<TABLE>
<CAPTION>
===================================================================================================================================
Eastern Mountaineer Eastern
Systems Gas Co. Consolidating Systems Corp.
Corporation Consolidated Entries Consolidated
----------- ------------ ------------- -------------
ASSETS
<S> <C> <C> <C> <C>
Current Assets:
Cash $35,477 $157,733 -- $193,210
Accounts receivable - customers -- 25,302,565 -- 25,302,565
Accounts receivable - affiliates 4,183,545 1,772,971 -- 5,956,516
Accrued utility revenues -- 10,021,000 -- 10,021,000
Gas in storage, at average cost -- 16,863,619 -- 16,863,619
Materials and supplies -- 1,722,628 -- 1,722,628
Prepayments -- 8,114,938 -- 8,114,938
Income tax receivable -- 5,205,161 -- 5,205,161
Deferred income taxes 264,000 5,455,612 -- 5,719,612
Other -- 41,559 -- 41,559
----------- ------------ ------------ ------------
Total current assets 4,483,022 74,657,786 -- 79,140,808
----------- ------------ ------------ ------------
Property, plant and equipment:
Utility plant -- 229,383,733 (75,946,387) 153,437,346
Oil and gas properties -- 6,585,401 (138,395) 6,447,006
Transmission plant -- 5,413,029 (2,834,450) 2,578,579
Accumulated depreciation,
depletion and amortization -- (106,996,749) 96,953,499 (10,043,250)
----------- ------------ ------------ ------------
Property, plant & equipment, net -- 134,385,414 18,034,267 152,419,681
----------- ------------ ------------ ------------
Deferred charges and other:
Investment in subsidiary 64,091,184 -- (64,091,184) --
Other 581,055 22,500,573 (2,766,168) 20,315,460
----------- ------------ ------------ ------------
Total other assets 64,672,239 22,500,573 (66,857,352) 20,315,460
----------- ------------ ------------ ------------
Total assets $69,155,261 $231,543,773 ($48,823,085) $251,875,949
=========== ============ ============ ============
</TABLE>
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EASTERN SYSTEMS CORPORATION
CONSOLIDATING BALANCE SHEETS - LIABILITIES AND STOCKHOLDERS' EQUITY
As of December 31, 1996
Unaudited
<TABLE>
<CAPTION>
===================================================================================================================================
Eastern Mountaineer Eastern
Systems Gas Co. Consolidating Systems Corp.
Corporation Consolidated Entries Consolidated
----------- ------------ ------------- ------------
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C> <C> <C> <C>
Current Liabilities:
Short-term borrowings -- $43,205,100 -- $43,205,100
Accounts payable 22,935 15,281,003 -- 15,303,938
Accounts payable - affiliates -- 3,192,342 -- 3,192,342
Overrecovered gas costs -- 10,755,562 -- 10,755,562
Accrued taxes (41,328) 3,510,555 189,168 3,658,395
Deferred income taxes -- 25,331 -- 25,331
Other 1,594,653 7,301,876 -- 8,896,529
----------- ------------ ------------ ------------
Total current liabilities 1,576,260 83,271,769 189,168 85,037,197
----------- ------------ ------------ ------------
Long-term and other liabilities:
Long-term debt 35,000,000 60,000,000 -- 95,000,000
Deferred income taxes -- 19,196,852 2,848,596 22,045,448
Other -- 7,249,817 5,388,214 12,638,031
----------- ------------ ------------ ------------
Total long-term and other
liabilities 35,000,000 86,446,669 8,236,810 129,683,479
----------- ------------ ------------ ------------
Stockholders' equity:
Preferred stock 35,000,000 -- -- 35,000,000
Common stock 1,000 29,617,560 (29,617,560) 1,000
Retained earnings (2,421,999) 32,207,775 (27,631,503) 2,154,273
----------- ------------ ------------ ------------
Total stockholders' equity 32,579,001 61,825,335 (57,249,063) 37,155,273
----------- ------------ ------------ ------------
Total liabilities and stockholders'
equity $69,155,261 $231,543,773 ($48,823,085) $251,875,949
=========== ============ ============ ============
</TABLE>
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[ARTICLE] OPUR3
<TABLE>
<S> <C>
[PERIOD-TYPE] YEAR
[FISCAL-YEAR-END] JUN-30-1997
[PERIOD-START] JAN-01-1996
[PERIOD-END] DEC-30-1996
[BOOK-VALUE] PER-BOOK
[TOTAL-ASSETS] 251,875,949
[TOTAL-OPERATING-REVENUES] 190,278,196
[NET-INCOME] 684,486
</TABLE>
