File No. 69-409
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 ("ECA"), a West Virginia corporation. 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 4,000 mile distribution system, principally in
Charleston, Beckley, Huntington and Wheeling, West Virginia. Mountaineer is a
regulated 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.
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.
On December 20, 1999 the Claimant's parent company, ECA, entered into a
Stock Purchase and Sale Agreement with Allegheny Energy, Inc., wherein ECA
agreed to sell all of the stock of its wholly owned subsidiary Mountaineer and
its subsidiaries for $323 million, which includes the assumption of
approximately $100 million of debt, $223 million net to ECA. The sale is
subjected to the regulatory approval by the Securities and Exchange Commission
pursuant to the Public Utility Holding Company Act of 1935, the West Virginia
Public Service Commission and the Federal Trade Commission. Subject to the
approvals being received, ECA expects that the transaction will close in the
fourth quarter of the current fiscal year. In ECA's most recently filed Form
10-Q, the financial statements have been reclassified to exclude the operating
results of Mountaineer from continuing operations, effective December 31, 1999,
and for accounting purposes to classify such results as discontinued operations.
For presentation purposes of this filing, the results of Mountaineer are
included and made part of the attached Exhibits.
<PAGE>
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 primarily 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
delivered directly into either Mountaineer's distribution system or its city
gate via interstate pipelines, including Columbia Gas Transmission Corporation,
Tennessee Gas Pipeline or other sources.
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.
22,556,792 Mcf $151,011,315
(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
<PAGE>
(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.
None
Effective November 1, 1998, Mountaineer entered into a Gas Supply
Management Agreement. As a result of this and other gas supply agreements,
Mountaineer purchased 100% of its gas supply at its city gate or directly into
its distribution system, which is located solely within the State of West
Virginia.
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.
<PAGE>
(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.
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 by duly executed on
its behalf by its authorized officer on this 29th day of February, 2000.
EASTERN SYSTEMS CORPORATION
-----------------------------
(Name of claimant)
By: /S/ Michael S. Fletcher
-----------------------------
Name: Michael S. Fletcher
Title: President
CORPORATE SEAL
Attest:
By: /S/ DONALD C. SUPCOE
-------------------------------
Name: Donald C. Supcoe
Title: Secretary
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
<PAGE>
EXHIBIT A
PAGE 1 OF 2
<TABLE>
<CAPTION>
EASTERN SYSTEMS CORPORATION
CONSOLIDATING BALANCE SHEETS
AS OF DECEMBER 31, 1999
UNAUDITED
<S> <C> <C> <C> <C> <C>
EASTERN MOUNTAINEER MOUNTAINEER MAPCOM
SYSTEMS GAS GAS SERVICES SYSTEMS, CONSOLIDATING
CORPORATION COMPANY INC. INC. ENTRIES
------------ ------------- ------------- --------- --------------
ASSETS
CURRENT ASSETS
Cash . . . . . . . . . . . . . . . . . . . . . . . . 50,835 (852,676) 1,342,040 101,698 852,676
Accounts receivable
Utility gas and transportation. . . . . . . . . . 0 28,720,146 0 0 0
Gas marketing & pipeline. . . . . . . . . . . . . 0 0 0 0 0
Oil and gas . . . . . . . . . . . . . . . . . . . 0 0 539,534 0 0
Other . . . . . . . . . . . . . . . . . . . . . . 0 0 0 144,643 0
Allowance for doubtful accounts. . . . . . . . 0 (701,479) 0 0 0
Due from (to) affiliates . . . . . . . . . . . . . . 4,183,545 1,142,830 410,336 0 0
Inventory. . . . . . . . . . . . . . . . . . . . . . 0 0 0 0 0
Income tax receivable. . . . . . . . . . . . . . . . 0 0 0 0 0
Deferred income tax. . . . . . . . . . . . . . . . . 0 3,370,943 0 (32,135) 33,249
Prepaid and other. . . . . . . . . . . . . . . . . . 0 27,180,209 84,872 18,063 2,346,513
------------ ------------- ------------- --------- --------------
Total current assets. . . . . . . . . . . . . . . 4,234,380 58,859,973 2,376,782 232,269 3,232,438
------------ ------------- ------------- --------- --------------
PROPERTY, PLANT AND EQUIPMENT
Oil and gas property . . . . . . . . . . . . . . . . 0 0 9,195,704 0 (138,395)
Utility and transmission plants. . . . . . . . . . . 0 272,901,525 4,827,066 0 (78,780,837)
Other property . . . . . . . . . . . . . . . . . . . 0 0 353,563 279,189 0
Pipeline . . . . . . . . . . . . . . . . . . . . . . 0 0 0 0 0
------------ ------------- ------------- --------- --------------
0 272,901,525 14,376,333 279,189 (78,919,232)
Accumulated depreciation, depletion and amortization 0 (129,300,212) (4,317,791) (123,340) 93,850,094
------------ ------------- ------------- --------- --------------
Property, plant & equipment, net. . . . . . . . . 0 143,601,313 10,058,542 155,849 14,930,862
------------ ------------- ------------- --------- --------------
OTHER ASSETS
Investment in affiliate. . . . . . . . . . . . . . . 64,091,184 10,689,384 0 0 (74,780,568)
Deferred financing costs . . . . . . . . . . . . . . 0 2,607,101 0 0 0
Notes receivable . . . . . . . . . . . . . . . . . . 0 0 0 0 0
Notes receivable-related party . . . . . . . . . . . 0 111,727 0 0 0
Deferred utility charges . . . . . . . . . . . . . . 0 0 0 0 0
Deferred income taxes. . . . . . . . . . . . . . . . 0 0 0 0 0
Other long-term assets . . . . . . . . . . . . . . . 0 18,958,148 10,115 0 (1,409,995)
------------ ------------- ------------- --------- --------------
Total other assets. . . . . . . . . . . . . . . . 64,091,184 32,366,360 10,115 0 (76,190,563)
------------ ------------- ------------- --------- --------------
TOTAL ASSETS. . . . . . . . . . . . . . . . . . . 68,325,564 234,827,646 12,445,439 388,118 (58,027,263)
============ ============= ============= ========= ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable . . . . . . . . . . . . . . . . . . 301,906 8,260,461 1,283,732 86,388 852,676
Current maturities of long-term debt . . . . . . . . 0 15,000 0 0 0
Short-term borrowings. . . . . . . . . . . . . . . . 0 26,826,600 0 0 0
Funds held for future distribution . . . . . . . . . 0 0 0 0 0
Income tax payable . . . . . . . . . . . . . . . . . (713,526) 3,107,314 664,763 (63,196) 170,263
Accrued taxes payable. . . . . . . . . . . . . . . . 0 2,858,257 278,997 0 0
Overrecovered gas costs. . . . . . . . . . . . . . . 0 0 0 0 2,346,513
Other current liabilities. . . . . . . . . . . . . . 0 10,974,738 (106,511) 0 33,249
------------ ------------- ------------- --------- --------------
Total current liabilities . . . . . . . . . . . . (411,620) 52,042,370 2,120,981 23,192 3,402,701
------------ ------------- ------------- --------- --------------
LONG-TERM AND OTHER LIABILITIES
Long-term debt . . . . . . . . . . . . . . . . . . . 0 100,123,750 0 0 0
Gas dev obl & def trust revenue. . . . . . . . . . . 0 0 0 0 0
Deferred income taxes. . . . . . . . . . . . . . . . 0 19,883,925 0 0 2,542,080
Other long-term liabilities. . . . . . . . . . . . . 0 6,667,987 0 0 4,454,565
------------ ------------- ------------- --------- --------------
Total long-term liabilities . . . . . . . . . . . 0 126,675,662 0 0 6,996,645
------------ ------------- ------------- --------- --------------
Minority Interest. . . . . . . . . . . . . . . . . . . 0 0 0 0 0
Stockholders' Equity . . . . . . . . . . . . . . . . . 68,737,184 56,109,614 10,324,458 364,926 (68,426,609)
------------ ------------- ------------- --------- --------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY . . . . . . 68,325,564 234,827,646 12,445,439 388,118 (58,027,263)
============ ============= ============= ========= ==============
<S> <C>
EASTERN
SYSTEMS CORP.
CONSOLIDATED
--------------
ASSETS
CURRENT ASSETS
Cash . . . . . . . . . . . . . . . . . . . . . . . . 1,494,573
Accounts receivable
Utility gas and transportation. . . . . . . . . . 28,720,146
Gas marketing & pipeline. . . . . . . . . . . . . 0
Oil and gas . . . . . . . . . . . . . . . . . . . 539,534
Other . . . . . . . . . . . . . . . . . . . . . . 144,643
Allowance for doubtful accounts. . . . . . . . (701,479)
Due from (to) affiliates . . . . . . . . . . . . . . 5,736,711
Inventory. . . . . . . . . . . . . . . . . . . . . . 0
Income tax receivable. . . . . . . . . . . . . . . . 0
Deferred income tax. . . . . . . . . . . . . . . . . 3,372,057
Prepaid and other. . . . . . . . . . . . . . . . . . 29,629,657
--------------
Total current assets. . . . . . . . . . . . . . . 68,935,842
--------------
PROPERTY, PLANT AND EQUIPMENT
Oil and gas property . . . . . . . . . . . . . . . . 9,057,309
Utility and transmission plants. . . . . . . . . . . 198,947,754
Other property . . . . . . . . . . . . . . . . . . . 632,752
Pipeline . . . . . . . . . . . . . . . . . . . . . . 0
--------------
208,637,815
Accumulated depreciation, depletion and amortization (39,891,249)
--------------
Property, plant & equipment, net. . . . . . . . . 168,746,566
--------------
OTHER ASSETS
Investment in affiliate. . . . . . . . . . . . . . . 0
Deferred financing costs . . . . . . . . . . . . . . 2,607,101
Notes receivable . . . . . . . . . . . . . . . . . . 0
Notes receivable-related party . . . . . . . . . . . 111,727
Deferred utility charges . . . . . . . . . . . . . . 0
Deferred income taxes. . . . . . . . . . . . . . . . 0
Other long-term assets . . . . . . . . . . . . . . . 17,558,268
--------------
Total other assets. . . . . . . . . . . . . . . . 20,277,096
--------------
TOTAL ASSETS. . . . . . . . . . . . . . . . . . . 257,959,504
==============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable . . . . . . . . . . . . . . . . . . 10,785,163
Current maturities of long-term debt . . . . . . . . 15,000
Short-term borrowings. . . . . . . . . . . . . . . . 26,826,600
Funds held for future distribution . . . . . . . . . 0
Income tax payable . . . . . . . . . . . . . . . . . 3,165,618
Accrued taxes payable. . . . . . . . . . . . . . . . 3,137,254
Overrecovered gas costs. . . . . . . . . . . . . . . 2,346,513
Other current liabilities. . . . . . . . . . . . . . 10,901,476
--------------
Total current liabilities . . . . . . . . . . . . 57,177,624
--------------
LONG-TERM AND OTHER LIABILITIES
Long-term debt . . . . . . . . . . . . . . . . . . . 100,123,750
Gas dev obl & def trust revenue. . . . . . . . . . . 0
Deferred income taxes. . . . . . . . . . . . . . . . 22,426,005
Other long-term liabilities. . . . . . . . . . . . . 11,122,552
--------------
Total long-term liabilities . . . . . . . . . . . 133,672,307
--------------
Minority Interest. . . . . . . . . . . . . . . . . . . 0
Stockholders' Equity . . . . . . . . . . . . . . . . . 67,109,573
--------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY . . . . . . 257,959,504
==============
</TABLE>
<PAGE>
EXHIBIT A
PAGE 2 OF 2
<TABLE>
<CAPTION>
EASTERN SYSTEMS CORPORATION
CONSOLIDATING INCOME STATEMENTS
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1999
UNAUDITED
<S> <C> <C> <C> <C> <C> <C>
EASTERN MOUNTAINEER MOUNTAINEER MAPCOM EASTERN
SYSTEMS GAS GAS SERVICES SYSTEMS, CONSOLIDATING SYSTEMS CORP.
CORPORATION COMPANY INC. INC. ENTRIES CONSOLIDATED
------------ ------------ ------------- ---------- -------------- --------------
REVENUES
Utility gas sales and transportation. 0 162,238,578 0 0 0 162,238,578
Gas marketing & pipeline. . . . . . . 0 0 7,629,490 0 0 7,629,490
Oil and gas sales . . . . . . . . . . 0 0 3,514,321 0 0 3,514,321
Well & service operations . . . . . . 0 0 0 0 0 0
Other revenues. . . . . . . . . . . . 0 0 0 988,600 0 988,600
------------ ------------ ------------- ---------- -------------- --------------
Total revenues . . . . . . . . . . 0 162,238,578 11,143,811 988,600 0 174,370,989
------------ ------------ ------------- ---------- -------------- --------------
COSTS AND EXPENSES
Utility gas purchased . . . . . . . . 0 74,488,074 0 0 0 74,488,074
Gas marketing & pipeline cost . . . . 0 0 7,296,723 0 0 7,296,723
Field & lease operating . . . . . . . 0 0 1,207,591 0 0 1,207,591
Utility operations & maintenance. . . 0 22,829,931 0 0 0 22,829,931
General & administrative. . . . . . . 63,002 14,278,410 918,505 1,087,696 (630,810) 15,716,803
Taxes, other than income. . . . . . . 0 13,542,706 462,919 0 0 14,005,625
Depletion, deprec., amortiz.-O&G. . . 0 0 507,409 0 0 507,409
Depletion, deprec., amortiz.-other. . 0 9,590,509 210,579 56,662 1,043,094 10,900,844
Impairment & exploratory costs. . . . 0 0 0 0 0 0
------------ ------------ ------------- ---------- -------------- --------------
Total operating expenses . . . . . 63,002 134,729,630 10,603,726 1,144,358 412,284 146,953,000
------------ ------------ ------------- ---------- -------------- --------------
OPERATING INCOME. . . . . . . . . . . . (63,002) 27,508,948 540,085 (155,758) (412,284) 27,417,989
OTHER (INCOME) EXPENSE
Interest. . . . . . . . . . . . . . . 0 7,217,248 0 0 (151,272) 7,065,976
Gain on sale of properties. . . . . . 0 0 0 0 0 0
Other (income) & expense. . . . . . . (3,070) (195,550) (51,456) 0 0 (250,076)
------------ ------------ ------------- ---------- -------------- --------------
INCOME BEFORE INCOME TAXES. . . . . . (59,932) 20,487,250 591,541 (155,758) (261,012) 20,602,089
Income tax expense (benefit) . . . . (77,204) 8,109,290 236,259 (58,314) (104,394) 8,105,637
------------ ------------ ------------- ---------- -------------- --------------
INCOME BEFORE MINORITY INTEREST . . . 17,272 12,377,960 355,282 (97,444) (156,618) 12,496,452
Minority interest . . . . . . . . . . 0 0 0 0 0 0
------------ ------------ ------------- ---------- -------------- --------------
NET INCOME (LOSS) . . . . . . . . . . 17,272 12,377,960 355,282 (97,444) (156,618) 12,496,452
============ ============ ============= ========== ============== ==============
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
[/LEGEND]
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-2000
<PERIOD-START> JAN-01-1999
<PERIOD-ED> DEC-31-1999
<BOOK-VALUE> PER-BOOK
<TOTAL-ASSETS> 257,959,504
<TOTAL-OPERATING-REVENUES> 174,370,989
<NET-INCOME> 12,496,452
</TABLE>
