File No. 69-409
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
FORM U-3A-2/A
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.
<PAGE>
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 Corporation.
<PAGE>
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.
<PAGE>
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.
<PAGE>
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
A Financial Data Schedule is attached hereto as Exhibit B.
EXHIBIT C
Not applicable.
<PAGE>
The above-named Claimant has caused this statement to be duly executed
on its behalf by its authorized officer on this 7th day of May, 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
- ---------------------------
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
<PAGE>
<TABLE>
<CAPTION>
Exhibit A
EASTERN SYSTEMS CORPORATION
CONSOLIDATING INCOME STATEMENTS
For the Twelve Months Ended December 31, 1996
Unaudited
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Eastern Mountaineer Mountaineer Eastern
Systems Gas Gas Services Consolidating Systems Corp.
Corporation Company Inc. Entries Consolidated
----------- ------------- -------------- ------------- -------------
Revenues:
Utility customer sales - $ 171,923,145 $ 7,837,691 - $ 179,760,836
Utility transportation - 6,441,058 112,169 - 6,553,227
Oil and gas sales - - 3,964,133 - 3,964,133
----------- ------------- ------------- ------------- -------------
- 178,364,203 11,913,993 - 190,278,196
----------- ------------- ------------- ------------- -------------
Operating expenses:
Utility gas purchases - 108,403,720 7,682,496 - 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
----------- ------------- ------------- ------------- -------------
- 152,837,783 9,825,789 991,175 163,654,747
----------- ------------- ------------- ------------- -------------
Income (Loss) from operations - 25,526,420 2,088,204 (991,175) 26,623,449
General and administrative (1,572,643) (15,140,203) (486,372) 618,766 (16,580,452)
expenses
Other income (expense), net 3,147 (277,102) 33,648 (2,642) (242,949)
Equity in earnings/Dividend
income from subsidiary 7,400,000 982,266 - (8,382,266) -
----------- ------------- ------------- ------------- -------------
Income (Loss) before interest
expense 5,830,504 11,091,381 1,635,480 (8,757,317) 9,800,048
Interest expense 3,907,455 5,861,554 - (151,272) 9,617,737
----------- ------------- ------------- ------------- -------------
Income (Loss) before income taxes 1,923,049 5,229,827 1,635,480 (8,606,045) 182,311
Provision (Benefit) for income
taxes (2,190,780) 1,124,902 653,214 (89,511) (502,175)
----------- ------------- ------------- ------------- -------------
Net income (loss) $ 4,113,829 $ 4,104,925 $ 982,266 ($ 8,516,534) $ 684,486
=========== ============= ============= ============= =============
<PAGE>
EASTERN SYSTEMS CORPORATION
CONSOLIDATING BALANCE SHEETS
As of December 31, 1996
Unaudited
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Eastern Mountaineer Mountaineer Eastern
Systems Gas Gas Services Consolidating Systems Corp.
Corporation Company Inc. Entries Consolidated
----------- ------------- ------------ ------------- -------------
ASSETS
Current assets:
Cash $ 35,477 ($ 180,905) $ 157,733 $180,905 $ 193,210
Accounts receivable - customers - 24,231,551 1,071,014 - 25,302,565
Accounts receivable - affiliates 4,183,545 792,638 980,333 - 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 suppliers - 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 - 22,159 19,400 - 41,559
----------- ------------- ------------ ------------- -------------
Total current assets 4,483,022 67,043,240 2,228,480 5,386,066 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 - (104,573,586) (2,423,163) 96,953,499 (10,043,250)
----------- ------------- ------------ ------------- -------------
Property, plant & equipment,
net - 124,810,147 9,575,267 18,034,267 152,419,681
----------- ------------- ------------ ------------- -------------
Deferred charges and other:
Investment in subsidiary 64,091,184 9,525,863 - (73,617,047) -
Other 581,055 22,100,573 400,000 (2,766,168) 20,315,460
----------- ------------- ------------ ------------- -------------
Total other assets 64,672,239 31,626,436 400,000 (76,383,215) 20,315,460
----------- ------------- ------------ ------------- -------------
Total assets $69,156,261 $ 223,479,823 $12,203,747 ($ 52,962,882) $251,875,949
----------- ------------- ------------ ------------- -------------
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current liabilities:
Short-term borrowings - $43,205,100 - - $43,205,100
Accounts payable 22,935 14,465,668 634,430 180,905 15,303,938
Accounts payable - affiliates - 2,399,704 792,638 - 3,192,342
Overrecovered gas costs - 10,755,562 - - 10,755,562
Accrued taxes (41,328) (2,357,660) 663,054 5,394,329 3,658,395
Deferred income taxes - 73,951 (48,620) - 25,331
Other 1,594,653 7,036,629 265,247 - 8,896,529
----------- ------------- ------------ ------------- -------------
Total current liabilities 1,576,260 75,578,954 2,306,749 5,575,234 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 - 6,878,682 371,135 5,388,214 12,638,031
----------- ------------- ------------ ------------- -------------
Total long-term and other
liabilities 35,000,000 86,075,534 371,135 8,236,810 129,683,479
----------- ------------- ------------ ------------- -------------
Stockholders' equity:
Preferred stock 35,000,000 - - - 35,000,000
Common stock 1,000 29,617,560 100 (29,617,660) 1,000
Additional paid-in capital - - 7,372,861 (7,372,861) -
Retained earnings (2,421,999) 32,207,775 2,152,902 (29,784,405) 2,154,273
----------- ------------- ------------ ------------- -------------
Total stockholders' equity 32,579,001 61,825,335 9,525,863 (66,774,926) 37,155,273
----------- ------------- ------------ ------------- -------------
Total liabilities and
stockholders' equity $69,155,261 $223,479,823 $12,203,747 ($52,962,882) $251,875,949
----------- ------------- ------------ ------------- -------------
</TABLE>
<PAGE>
Exhibit B
[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>
