File No. 69-409
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
FORM U-3A-2 (Amended)
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:
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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. It was
incorporated to be a holding company for Mountaineer Gas Company.
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Subsidiaries of the Claimant:
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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 3,900 mile distribution system, principally in
Charleston, Beckley, Huntington and Wheeling, West Virginia. Mountaineer is a
public gas utility. Effective as of July 1, 1999, Mountaineer acquired
substantially all of Shenandoah Gas Company's ("Shenandoah") West Virginia
utility assets, including the Martinsburg Operations Center, all transmission
and distribution plants, pipelines, rights of way, general plant, equipment,
fixtures, vehicles, meters, regulators and other personal property located in
West Virginia used in connection with Shenandoah's West Virginia utility
operations, plus all franchises, permits, certificates of convenience and
necessity and other assets related to Shenandoah's West Virginia utility
operations. Mountaineer, in summary, acquired approximately 105 miles of
additional pipeline and approximately 3,600 residential, commercial and
industrial customers mainly situate in Martinsburg and surrounding areas in
Berkeley County, West Virginia. The purchase price for the assets was
approximately $11 million.
This transaction was approved by the Public Service Commission of West
Virginia pursuant to an order dated June 1, 1999 and the Federal Energy
Regulatory Commission granted abandonment authorization to Shenandoah by order
dated June 11, 1999.
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.
II. Mapcom Systems, Inc.
7345 Whitepine Road
Richmond, Virginia 23237
Mapcom Systems, Inc. is a Virginia corporation, wholly owned by
Mountaineer, engaged in automated mapping facilities management and geographical
information systems software development and services.
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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 of Mountaineer Gas Services, Inc. are
located in Kanawha, Cabell and Jackson Counties, West Virginia. These
facilities include wellhead 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 Engage Energy, L.P., Equitable
Resources Marketing Company, Texaco Gas Marketing, Noble Gas Marketing, Valero
Gas Marketing, Eastern Marketing Corporation, Eastern American Energy
Corporation and Coral Energy, L.P.
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. and related revenues of electric energy sold (at
retail or wholesale), and Mcf. and related revenues of natural and manufactured
gas distributed at retail.
21,364,033 Mcf $141,857,740
(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
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(d) Number of kwh. and related cost of electric energy and Mcf. and
related cost of natural or manufactured gas purchased outside the State in which
each such company is organized or at the State line.
17,669,885 Mcf $40,021,953
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.
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.
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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
A Financial Data Schedule is attached hereto as Exhibit B.
EXHIBIT C
Not applicable.
The above-named Claimant has caused this statement to by duly executed on
its behalf by its authorized officer on this 1st day of July, 1999.
EASTERN SYSTEMS CORPORATION
-----------------------------
(Name of claimant)
By: /s/ Michael S. Fletcher
------------------------------
Its: President
CORPORATE SEAL
Attest:
/s/ Donald C. Supcoe
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Name: Donald C. Supcoe
Title: Secretary
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Name, title and address of officer to whom notices and correspondence concerning
this statement should be addressed:
Bradford C. Witmer
Controller
Eastern Systems Corporation
414 Summers Street
Charleston, West Virginia 25301
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EXHIBIT A
<TABLE>
<CAPTION>
EASTERN SYSTEMS CORPORATION
CONSOLIDATING INCOME STATEMENTS
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1998
UNAUDITED
EASTERN MOUNTAINEER MOUNTAINEER MAPCOM EASTERN
SYSTEMS GAS GAS SERVICES SYSTEMS, CONSOLIDATING SYSTEMS CORP.
CORPORATION COMPANY INC. INC. ENTRIES CONSOLIDATED
------------ ------------ ------------- ---------- -------------- --------------
REVENUES
<S> <C> <C> <C> <C> <C> <C>
Utility gas sales and transportation. 0 151,744,270 0 0 0 151,744,270
Gas marketing & pipeline. . . . . . . 0 0 9,439,435 0 0 9,439,435
Oil and gas sales . . . . . . . . . . 0 0 3,984,884 0 0 3,984,884
Well & service operations . . . . . . 0 0 0 0 0 0
Other revenues. . . . . . . . . . . . 0 0 0 1,536,359 0 1,536,359
------------ ------------ ------------- ---------- -------------- --------------
Total revenues . . . . . . . . . . 0 151,744,270 13,424,319 1,536,359 0 166,704,948
------------ ------------ ------------- ---------- -------------- --------------
COSTS AND EXPENSES
Utility gas purchased . . . . . . . . 0 77,421,132 0 0 0 77,421,132
Gas marketing & pipeline cost . . . . 0 0 8,940,087 0 0 8,940,087
Field & lease operating . . . . . . . 0 0 1,161,130 0 0 1,161,130
Utility operations & maintenance. . . 0 22,474,565 0 0 0 22,474,565
General & administrative. . . . . . . 525,773 12,288,099 918,624 1,460,670 (577,440) 14,615,726
Taxes, other than income. . . . . . . 0 13,195,594 177,622 0 0 13,373,216
Depletion, deprec., amortiz.-O&G. . . 0 0 460,478 0 0 460,478
Depletion, deprec., amortiz.-other. . 0 8,589,474 206,606 131,498 1,038,734 9,966,312
Impairment & exploratory costs. . . . 0 0 0 0 0 0
------------ ------------ ------------- ---------- -------------- --------------
Total operating expenses . . . . . 525,773 133,968,864 11,864,547 1,592,168 461,294 148,412,646
------------ ------------ ------------- ---------- -------------- --------------
OPERATING INCOME. . . . . . . . . . . . (525,773) 17,775,406 1,559,772 (55,809) (461,294) 18,292,302
OTHER (INCOME) EXPENSE
Interest. . . . . . . . . . . . . . . (7,875) 6,560,974 0 (611) (151,272) 6,401,216
Gain on sale of properties. . . . . . 0 0 0 0 0 0
Other (income) & expense. . . . . . . (1,867) (57,595) (49,657) (2,630) 0 (111,749)
------------ ------------ ------------- ---------- -------------- --------------
INCOME BEFORE INCOME TAXES. . . . . . (516,031) 11,272,027 1,609,429 (52,568) (310,022) 12,002,835
Income tax expense (benefit) . . . . (206,413) 4,668,374 642,804 (19,218) (124,008) 4,961,539
------------ ------------ ------------- ---------- -------------- --------------
INCOME BEFORE MINORITY INTEREST . . . (309,618) 6,603,653 966,625 (33,350) (186,014) 7,041,296
Minority interest . . . . . . . . . . 0 0 0 0 0 0
------------ ------------ ------------- ---------- -------------- --------------
NET INCOME (LOSS) . . . . . . . . . . (309,618) 6,603,653 966,625 (33,350) (186,014) 7,041,296
============ ============ ============= ========== ============== ==============
EBITDAX . . . . . . . . . . . . . . . . (525,773) 26,364,880 2,226,856 75,689 577,440 28,719,092
</TABLE>
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<TABLE>
<CAPTION>
EASTERN SYSTEMS CORPORATION
CONSOLIDATING BALANCE SHEETS
AS OF DECEMBER 31, 1998
UNAUDITED
EASTERN MOUNTAINEER MOUNTAINEER MAPCOM EASTERN
SYSTEMS GAS GAS SERVICES SYSTEMS, CONSOLIDATING SYSTEMS CORP.
CORPORATION COMPANY INC. INC. ENTRIES CONSOLIDATED
------------ ------------- ------------- --------- -------------- --------------
ASSETS
<S> <C> <C> <C> <C> <C> <C>
CURRENT ASSETS
Cash. . . . . . . . . . . . . . . . . 37,806 (720,519) 995,970 118,641 720,519 1,152,417
Accounts receivable . . . . . . . . . 0 0 0 0 0 0
Utility gas and transportation . . 0 28,472,180 0 0 0 28,472,180
Gas marketing & pipeline . . . . . 0 0 0 0 0 0
Oil and gas. . . . . . . . . . . . 0 0 1,504,093 0 0 1,504,093
Other. . . . . . . . . . . . . . . 0 0 0 283,707 0 283,707
Allowance for doubtful accounts 0 0 0 0 0 0
Due from (to) affiliates. . . . . . . 4,183,545 1,054,520 525,899 0 0 5,763,964
Inventory . . . . . . . . . . . . . . 0 0 0 0 0 0
Income tax receivable . . . . . . . . 0 0 0 0 4,164,596 4,164,596
Deferred income tax . . . . . . . . . 335,984 3,656,946 0 4,866 (290,901) 3,706,895
Prepaid and other . . . . . . . . . . 0 16,616,339 325,796 10,400 4,999,535 21,952,070
------------ ------------- ------------- --------- --------------
Total current assets . . . . . . . 4,557,335 49,079,466 3,351,758 417,614 9,593,749 66,999,922
------------ ------------- ------------- --------- -------------- --------------
PROPERTY, PLANT AND EQUIPMENT
Oil and gas property. . . . . . . . . 0 0 9,015,856 0 (138,395) 8,877,461
Utility and transmission plants . . . 0 250,851,963 5,156,060 273,441 (78,780,837) 177,500,627
Other property. . . . . . . . . . . . 0 0 0 0 0 0
Pipeline. . . . . . . . . . . . . . . 0 0 0 0 0 0
0 250,851,963 14,171,916 273,441 (78,919,232) 186,378,088
Accumulated depreciation, depletion
and amortization . . . . . . . . . . 0 (119,333,756) (3,599,803) (66,677) 94,893,188 (28,107,048)
------------ ------------- ------------- --------- --------------
Property, plant & equipment, net . 0 131,518,207 10,572,113 206,764 15,973,956 158,271,040
------------ ------------- ------------- --------- -------------- --------------
OTHER ASSETS
Investment in affiliate . . . . . . . 64,091,184 10,431,542 0 0 (74,522,726) 0
Deferred financing costs. . . . . . . 0 2,625,387 0 0 0 2,625,387
Notes receivable. . . . . . . . . . . 0 150,000 0 0 0 150,000
Notes receivable-related party. . . . 0 0 0 0 0 0
Deferred utility charges. . . . . . . 0 0 0 0 0 0
Deferred income taxes . . . . . . . . 0 0 0 0 0 0
Other long-term assets. . . . . . . . 0 16,196,745 0 0 (377,646) 15,819,099
------------ ------------- ------------- --------- -------------- --------------
Total other assets . . . . . . . . 64,091,184 29,403,674 0 0 (74,900,372) 18,594,486
------------ ------------- ------------- --------- -------------- --------------
TOTAL ASSETS . . . . . . . . . . . 68,648,519 210,001,347 13,923,871 624,378 (49,332,667) 243,865,448
============ ============= ============= ========= ============== ==============
LIABILITIES AND STOCKHOLDERS'
EQUITY
CURRENT LIABILITIES
Accounts payable. . . . . . . . . . . 503,946 8,723,215 2,436,736 99,814 720,519 12,484,230
Current maturities of long-term debt. 0 0 0 0 0 0
Short-term borrowings . . . . . . . . 0 48,576,800 0 0 0 48,576,800
Funds held for future distribution. . 0 0 0 0 0 0
Income tax payable. . . . . . . . . . 0 0 0 0 0 0
Accrued taxes payable . . . . . . . . (375,339) (1,137,201) 1,486,331 47,954 4,333,637 4,355,382
Overrecovered gas costs . . . . . . . 0 0 0 0 4,999,535 4,999,535
Other current liabilities . . . . . . 639,960 6,841,202 31,630 14,242 (290,901) 7,236,133
------------ ------------- ------------- --------- --------------
Total current liabilities. . . . . 768,567 63,004,016 3,954,697 162,010 9,762,790 77,652,080
------------ ------------- ------------- --------- -------------- --------------
LONG-TERM AND OTHER LIABILITIES
Long-term debt. . . . . . . . . . . . 0 60,000,000 0 0 0 60,000,000
Gas dev obl & def trust revenue . . . 0 0 0 0 0 0
Deferred income taxes . . . . . . . . 0 20,568,137 0 0 2,647,696 23,215,833
Other long-term liabilities . . . . . 0 5,465,418 0 0 6,268,996 11,734,414
------------ ------------- ------------- --------- --------------
Total long-term liabilities. . . . 0 86,033,555 0 0 8,916,692 94,950,247
------------ ------------- ------------- --------- -------------- --------------
Minority Interest . . . . . . . . . . . 0 0 0 0 0 0
Stockholders' Equity. . . . . . . . . . 67,879,952 60,963,776 9,969,174 462,368 (68,012,149) 71,263,121
------------ ------------- ------------- --------- -------------- --------------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY . . . . . . . . . . . . . . . . 68,648,519 210,001,347 13,923,871 624,378 (49,332,667) 243,865,448
============ ============= ============= ========= ============== ==============
</TABLE>
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<CAPTION>
EXHIBIT B
FINANCIAL DATA SCHEDULE
<S> <C> <C>
PERIOD-TYPE. . . . . . . YEAR
FISCAL-YEAR-END. . . . . JUN-30-1999
PERIOD-START JAN-01-1998
PERIOD-END DEC-31-1998
BOOK-VALUE PER-BOOK
TOTAL-ASSETS 243,865,448
TOTAL-OPERATING-REVENUES 166,704,948
NET-INCOME 7,041,296
</TABLE>
