Form 11-K CMP Employee Savings and Investment Plan for Union Employees

 

 



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549
__________

FORM 11-K

(Mark one)

 X  ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

     For the fiscal year ended December 31, 2003

OR

    TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

     For the transition period from             to
             

Commission file number 1-14766


Full title of the plan and the address of the plan, if different from
that of the issuer named below:

Central Maine Power Company
  Employee Savings and Investment Plan for Union Employees
83 Edison Drive
Augusta, Maine 04336


Name of issuer of the securities held pursuant to the plan
and the address of its principal executive office:

Energy East Corporation
P.O. Box 12904
Albany, New York 12212-2904


REQUIRED INFORMATION

The Central Maine Power Company Employee Savings and Investment Plan for Union Employees (Plan) is subject to the Employee Retirement Income Security Act of 1974 (ERISA). Therefore, in lieu of the requirements of Items 1-3 of Form 11-K, the financial statements of the Plan for the two fiscal years ended December 31, 2003 and 2002 and supplemental schedule, which have been prepared in accordance with the financial reporting requirements of ERISA, are attached hereto as Appendix 1 and incorporated herein by reference.

 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Committee to administer the Central Maine Power Company Employee Savings and Investment Plan for Union Employees has duly caused this Annual Report to be signed by the undersigned hereunto duly authorized.

 

Central Maine Power Company Employee Savings
and Investment Plan for Union Employees

 

Date:  June 28, 2004

By    /s/Richard R. Benson                                  
            Richard R. Benson 
            Committee Member


Date:  June 28, 2004

By    /s/Sara J. Burn                                            
            Sara J. Burns 
            Committee Member


Date:  June 28, 2004

By    /s/Robert D. Kump                                      
            Robert D. Kump      
            Committee Member 


 

 

APPENDIX 1

CENTRAL MAINE POWER COMPANY
EMPLOYEE SAVINGS AND INVESTMENT PLAN FOR UNION EMPLOYEES

 

FINANCIAL STATEMENTS AS OF AND
FOR THE YEARS ENDED DECEMBER 31, 2003 and 2002
SUPPLEMENTAL SCHEDULE AS OF DECEMBER 31, 2003
AND REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 


 

 

Central Maine Power Company
Employee Savings and Investment Plan For Union Employees
Index to Financial Statements and Supplemental Schedule

 

Report of Independent Registered Public Accounting Firm

1

   

Financial Statements:

     Statements of Net Assets Available for Benefits -
       December 31, 2003 and 2002




2

   

     Statements of Changes in Net Assets Available for Benefits -
       Years ended December 31, 2003 and 2002


3

   

     Notes to Financial Statements

4

   

Supplemental Schedule*

 
   

     Schedule H, line 4i - Schedule of Assets (Held at End of Year)

8

   

Consent of Independent Registered Public Accounting Firm

Exhibit 23




*Other supplemental schedules required by Section 2520.103-10 of the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974 have been omitted because they are not applicable.


 

Report of Independent Registered Public Accounting Firm

 

To the Participants and Administrative Committee of the
Central Maine Power Company
Employee Savings and Investment Plan for Union Employees

 

In our opinion, the accompanying statements of net assets available for benefits and the related statements of changes in net assets available for benefits present fairly, in all material respects, the net assets available for benefits of Central Maine Power Company Employee Savings and Investment Plan for Union Employees Plan (the "Plan") at December 31, 2003 and 2002, and the changes in net assets available for benefits for the years then ended in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Plan's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedule of assets (held at end of year) is presented for the purpose of additional analysis and is not a required part of the basic financial statements but is supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. This supplemental schedule is the responsibility of the Plan's management. The supplemental schedule has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole.

 

 

/s/PricewaterhouseCoopers LLP

New York, New York
June 24, 2004


Central Maine Power Company
Employee Savings and Investment Plan for Union Employees
Statements of Net Assets Available for Benefits
December 31, 2003 and 2002

 

 

2003   

2002     

Assets:

   

  Investments, at fair value:

   

    Registered Investment Companies

$32,285,533

$26,740,016

    Common/Collective Trust

7,719,066

6,252,374

    Energy East Stock Fund

4,232,187

3,221,364

    Participant loans

1,035,145

965,231

 

45,271,931

37,178,985


  Receivables:

   

    Accrued interest income

-     

24,785

    Due from broker for securities sold

348

-     

 

348

24,785

Net Assets available for benefits

$45,272,279

$37,203,770

 

See notes to financial statements.


Central Maine Power Company
Employee Savings and Investment Plan for Union Employees
Statements of Changes in Net Assets Available for Benefits
Years Ended December 31, 2003 and 2002


 

2003        

2002        

Additions:

   

  Investment income:

   

    Net appreciation (depreciation) in fair value of investments

$6,300,181

$(5,531,671)

    Interest and dividends

545,784

600,139 

 

6,845,965

(4,931,532)


  Contributions:

   

    Participant

2,320,239

2,352,912 

    Employer

811,311

793,648 

    Transfer from other qualified plans

64

58,694 

 

3,131,614

3,205,254 


           Total additions


9,977,579


(1,726,278)


Deductions:

 


  Benefits paid to participants

1,341,167

1,517,859 

  Transfer to other qualified plans

567,903

-   


           Total deductions


1,909,070


1,517,859 


Net increase (decrease)


8,068,509


(3,244,137)


Net assets available for benefits:
  Beginning of year



37,203,770



40,447,907 


  End of year


$45,272,279


$37,203,770 

 

See notes to financial statements.


Central Maine Power Company
Employee Savings and Investment Plan for Union Employees
Notes to Financial Statements
December 31, 2003 and 2002


1.   DESCRIPTION OF THE PLAN

The following description of the Central Maine Power Company (Company) Employee Savings and Investment Plan for Union Employees (Plan) is provided for general information purposes only. Participants should refer to the Plan document for a more complete description of the Plan's provisions.

General

The Plan was established by the Company on November 15, 1984, and became effective January 1, 1985, under the provisions of Section 401(a) of the Internal Revenue Code (Code), and it includes a qualified cash or deferred arrangement as described in Section 401(k) of the Code for the benefit of eligible employees of the Company. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974. The Plan Administrator is the Company and an Administrative Committee has been appointed to serve as manager of the Plan.

The Plan is a defined contribution plan covering union employees of the Company. Energy East Corporation (Energy East), the parent corporation of the Company, through its subsidiaries, delivers electricity and natural gas to retail customers and provides electricity, natural gas, energy management and other services to retail and wholesale customers in the Northeast.

Eligibility

Each employee of the Company or an affiliated employer who is in a unit of employees covered by a collective bargaining agreement is eligible to join the Plan after completing one year of service during which the employee has worked at least 1,000 hours.

Contributions

Each participant elects a salary reduction percentage to be contributed to the Plan. Participants may elect to make contributions in amounts equal to 2% to 50% (in multiples of 1%) of their base compensation to the Plan through salary reduction agreements. As of January 1, 2002, participants age 50 or over by the end of the Plan year can make an additional contribution to the Plan in accordance with and subject to the limitations of Section 414(v) of the Code. The maximum additional contribution in 2003 was $2,000 and increases by $1,000 a year until the additional contribution reaches a maximum of $5,000 in 2006.

As of April 1, 2002, the Plan accepts rollovers from other qualified plans, as well as 403(b) and government 457 plans, traditional Individual Retirement Accounts (IRAs), conduit IRAs (but not Roth IRAs), after-tax distributions from employer retirement plans and spousal death benefit payments.

For employees that were hired prior to May 1, 2000, the Company contributes to the Plan an amount equal to 60% of the first 5% of the salary reduction plus 50% of the next 2% for


Central Maine Power Company
Employee Savings and Investment Plan for Union Employees
Notes to Financial Statements
December 31, 2003 and 2002


1.   DESCRIPTION OF THE PLAN  (Continued)

Contributions (Continued)

a possible total match of 4% on a 7% salary reduction amount, provided, however, that the total contribution that the Company is obligated to make for any year does not exceed the maximum amount deductible from the Company's gross income under applicable provisions of the Code. Effective January 1, 2001, the Company contributes to the Plan on behalf of each participant hired on or after May 1, 2000, a matching contribution in an amount equal to 100% of each participant's contribution up to 4% of compensation. The Company's matching contribution is made simultaneously with the payroll cycle. As of January 1, 2002, the Energy East Stock Fund was converted to an Employee Stock Ownership Plan (ESOP). Dividends from the ESOP may be reinvested or taken in cash.

Benefit Payments

On termination of service a participant may elect either a lump sum amount equal to the value of the interest in the participant's account, or installments over a period permissible under the Code. Distributions made from the funds occur as a result of termination of employment, death, retirement or permanent disability no later than 60 days after the end of the Plan year, unless under certain circumstances participants elect otherwise.

A participant may elect to make a regular withdrawal of up to 100% of the value of the participant's contributions made prior to July 1, 1985, and earnings thereon are treated as pre-tax contributions. Only one regular withdrawal may be made in any year. The minimum withdrawal was increased to $1,000, effective May 1, 2000.

Withdrawals with respect to contributions made subsequent to July 1, 1985, may be made only for reasons of hardship. With the consent of the Company's Savings and Investment Plan Committee for Union Employees, a participant may elect to make a hardship withdrawal, as determined in accordance with the Plan provisions, of up to 100% of the participant's account.

Vesting

Participants are 100% vested in their account balances. Each participant's account consists of the participant's contributions and any rollover money, the matching Company contribution and any net earnings thereon.

Participant Loans

Participants may, in general, borrow in the aggregate not more than 50% of their account balances, subject to a minimum loan of $1,000 and a maximum loan of $50,000. Loan interest rates are set by the Committee in accordance with prevailing rates charged by local banks. The interest rate on loans outstanding at year end was 7.25% for 2003 as well as for 2002. The maximum term of the loans is generally five years, or longer for mortgages, with borrowed funds being repaid through payroll deductions.


Central Maine Power Company
Employee Savings and Investment Plan for Union Employees
Notes to Financial Statements
December 31, 2003 and 2002


1.   DESCRIPTION OF THE PLAN  (Continued)

Participant Loans (Continued)

If a participant's employment terminates for any reason, the loan will become immediately due and payable and must be paid within 90 days from the date of termination.

2.   SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The financial statements are prepared on an accrual basis and in conformity with accounting principles generally accepted in the United States of America, which requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Estimates also affect the reported amounts of additions and deductions during the reporting period. Actual results could differ from those estimates.

Investment Valuation and Income Recognition

The Plan's investments are stated at fair value. Shares of registered investment companies are valued at the net asset value of shares held by the Plan at year end. Units of common/collective trust funds are valued at the net asset value of units held by the Plan at year end. The Energy East Stock Fund, comprised solely of Energy East common stock, is valued at its quoted market price at year end. Participant loans are valued at cost, which approximates fair value.

Purchases and sales of investments are recorded on a trade-date basis. Interest income is accrued when earned. Dividend income is recorded on the ex-dividend date.

Payments of Benefits

Benefits are recorded when paid.

Plan Termination

Although the Company has not expressed any intent to terminate the Plan, it has the right to discontinue contributions at any time and to terminate the Plan subject to the provisions of the Plan document.

Risk and Uncertainties

The Plan provides for various investment options in any combination of stocks, fixed income securities, mutual funds, and other investment securities. Investment securities are exposed to various risks, such as interest rate, market and credit risk. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in risk in the near term could materially affect participants' account balances and the amounts reported in the Statements of Net Assets Available for Benefits and the Statements of Changes in Net Assets Available for Benefits.


Central Maine Power Company
Employee Savings and Investment Plan for Union Employees
Notes to Financial Statements
December 31, 2003 and 2002


3.   INVESTMENTS

The following presents investments that represent 5% or more of the Plan's net assets at December 31, 2003 and 2002:

 

     2003

     2002

Fidelity Magellan Fund

$8,455,550

$6,648,996

Vanguard PRIMECAP Fund

$4,260,017

$2,801,685

Janus Advisor Balanced Fund

$3,369,870

$2,999,341

Putnam S&P 500 Index Fund

$7,719,066

$6,252,374

Putnam Money Market Fund

$7,507,196

$7,879,133

Energy East Corporation Stock

$4,232,187

$3,221,364

Neuberger & Berman Genesis Trust Fund

$2,764,466

-     

Plan investments (including gains and losses on investments bought and sold, as well as held during the year) appreciated (depreciated) in value during 2003 and 2002 as follows:

 

     2003

     2002

Registered Investment Companies

$4,432,019

$(4,116,592)

Common/Collective Trust

1,744,471

(1,756,254)

Energy East Stock Fund

123,691

341,175 

 

$6,300,181

$(5,531,671)

4.   INCOME TAX STATUS

The Internal Revenue Service determined and informed the Company sponsor by letter dated February 21, 2001, that the Plan is qualified and the related trust established under the Plan is tax-exempt, under the applicable sections of the Code. The Plan has been amended since receiving the determination letter. However, the Plan administrator and the Plan's management believe that the Plan is currently designed and being operated in compliance with the applicable requirements of the Code.

5.   RELATED PARTY TRANSACTIONS

Certain Plan investments are shares of registered investment companies managed by Putnam Fiduciary Trust Company (Putnam). Putnam is the trustee as defined by the Plan; therefore, these transactions qualify as party-in-interest transactions and are exempt from the prohibited transaction rules.

6.   ASSET TRANSFERS

Transfers from the Plan of $567,839 in 2003 represent the net rollovers of participant account balances to other qualified defined contribution benefit plans.

Transfers to the Plan of $58,694 in 2002 represent the net rollovers of participant account balances from other qualified defined contribution benefit plans.


Central Maine Power Company
Employee Savings and Investment Plan for Union Employees
Schedule H, line 4i - Schedule of Assets (Held at End of Year)
December 31, 2003


 

         Identity of Issue

     Description of Investment

Current Value

 


Janus Advisor Balanced Fund


Registered Investment Company


$3,369,870

 

Janus Advisor Growth Fund

Registered Investment Company

131,078

 

Domini Social Equity Fund

Registered Investment Company

22,842

 

Pimco Total Return Fund

Registered Investment Company

1,130,355

 

Vanguard PRIMECAP Fund

Registered Investment Company

4,260,017

 

Neuberger & Berman Genesis Trust Fund

Registered Investment Company

2,764,466

*

Putnam Asset Allocation: Growth Fund

Registered Investment Company

2,017,041

*

Putnam Asset Allocation: Balanced Fund

Registered Investment Company

117,248

*

Putnam Asset Allocation: Conservative Fund

Registered Investment Company

236,446

*

Putnam OTC & Emerging Growth Fund

Registered Investment Company

164,781

*

Putnam Fund for Growth & Income

Registered Investment Company

511,319

*

Putnam Voyager Fund

Registered Investment Company

137,999

*

Putnam Vista Fund

Registered Investment Company

147,154

*

Putnam U.S. Government Income Trust

Registered Investment Company

643,678

 

Fidelity Magellan Fund

Registered Investment Company

8,455,550

*

Fidelity Diversified International Fund

Registered Investment Company

668,493

*

Putnam S&P 500 Index Fund

Common/Collective Trust

7,719,066

*

Putnam Money Market Fund

Registered Investment Company

7,507,196

*

Energy East Corporation Stock

Energy East Stock Fund

4,232,187

 

Loan Fund

Participant Loans (7.25%)

1,035,145

 

            Total assets held at end of year

 

$45,271,931


*


Party-in-interest