Exhibit 99-2
FORM 11-K
FOR ANNUAL REPORTS OF EMPLOYEE STOCK PURCHASE, SAVINGS
AND SIMILAR PLANS PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal years ended December 31, 1999
-------------------------------------------------
[ ] TRANSITION REPORT PURSUANT TO SECTION 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
-------------------------------------------
Commission file number
----------------------------------------------------
A. 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
B. Name of issuer of the securities held pursuant to the plan and the address
of its principal executive office:
CMP GROUP, INC.
83 EDISON DRIVE
AUGUSTA, MAINE 04336
<PAGE>
Central Maine Power Company
Form 11-K - Year 1999
Central Maine Power Company
Employee Savings and Investment Plan
For Union Employees
REQUIRED INFORMATION
The following financial statements shall be furnished for the plan:
Page No.
(a) Financial Statements
Report of Independent Public Accountants F-1
Statements of Net Assets Available for Benefits F-2
Statement of Changes in Net Assets Available for Benefits F-3
Notes to Financial Statements F-4 through F-11
Supplemental Schedules:
I - Schedule of Assets Held for Investment S-1 through S-2
Purposes at December 31, 1999
(b) Exhibits
Consent of Independent Public Accountants E-1
Signature E-2
Certain supplemental schedules required by the regulations of the Employee
Retirement Income Security Act of 1974 have been omitted because they are not
required or are not applicable.
<PAGE>
Report of Independent Accountants
To the Participants and Administrator of 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 (the "Plan") at December 31, 1999 and 1998, and the changes in net
assets available for benefits for the year ended December 31, 1999 in conformity
with accounting principles generally accepted in the United States. 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
auditing principles generally accepted in the United States which require that
we plan and perform the audit 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 the opinion expressed above.
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
for investment purposes 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, is fairly
stated in all material respects in relation to the basic financial statements
taken as a whole.
PricewaterhouseCoopers LLP
June 23, 2000
<PAGE>
Central Maine Power Company
Form 11-K - Year 1999
Central Maine Power Company
Employee Savings and Investment Plan
For Union Employees
Statements of Net Assets Available for Benefits
As of December 31,
1999 1998
---- ----
Assets:
Investments at Fair Value:
Participant Directed Funds $33,325,121 $34,613,482
Central Maine Power Company Stock Fund 7,788,736 6,341,558
Loans Due from Participants 984,528 1,064,342
---------- ----------
Total Investments 42,098,385 42,019,382
Receivables:
Dividends on Company Stock 65,964 69,184
Accrued Interest 1,201 846
---------- ----------
Total Receivables 67,165 70,030
---------- ----------
Total Assets 42,165,550 42,089,412
---------- ----------
Liabilities:
Accounts Payable (151,283) (300,843)
---------- ----------
Total Liabilities (151,283) (300,843)
---------- ----------
Net Assets Available for Benefits $42,014,267 $41,788,569
========== ==========
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
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Central Maine Power Company
Form 11-K - Year 1999
Central Maine Power Company
Employee Savings and Investment Plan
For Union Employees
Statement of Changes in Net Assets Available for Benefits
For the Year Ended December 31, 1999
Central Maine
Participant Power Loans Due
Directed Company from
Funds Stock Fund Participants Total
----------- ------------- ------------ -----
Additions:
Investment Income
Net Appreciation
on Fair Market Value $ 3,476,091 $2,152,333 $ - $ 5,628,424
Dividend on Company Stock - 254,676 - 254,676
Interest and Dividends 2,203,167 - - 2,203,167
Interest on Loans 63,282 3,143 - 66,425
Contributions
Participants' 1,847,989 69,219 - 1,917,208
Employer's - 734,212 - 734,212
---------- --------- -------- ----------
Total Additions 7,590,529 3,213,583 - 10,804,112
Deductions:
Benefits Paid to participants (Note 1) (1,159,136) (108,870) (33,234) (1,301,240)
Loan Repayments 396,543 22,435 (418,978) -
Loan Withdrawals (557,520) (63,586) 621,106 -
Net Transfers (Note 1) (7,418,072) (902,038) (248,708) (8,568,818)
---------- --------- -------- ----------
Net Increase Prior to Transfer (1,147,656) 2,161,524 (79,814) 934,054
Interplan Transfers (616,774) (91,582) - (708,356)
Interfund Transfers 476,069 (476,069) - -
---------- --------- --------- ----------
Net Increase (Decrease) (1,288,361) 1,593,873 (79,814) 225,698
Net Assets Available for Benefits:
Beginning of Year 34,613,482 6,110,745 1,064,342 41,788,569
---------- --------- --------- ----------
End of Year $33,325,121 $7,704,618 $ 984,528 $42,014,267
========== ========= ========= ==========
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
Central Maine Power Company
Form 11-K - Year 1999
Central Maine Power Company
Employee Savings and Investment Plan
For Union Employees
Notes to Financial Statements
December 31, 1999
1. Plan Developments
-----------------
CMP Group is a holding company organized effective September 1, 1998 which
owns all of the common stock of Central Maine Power Company (the "Company")
and the former non-utility subsidiaries of the Company. As part of the
reorganization, all of the shares of the Company's common stock were
converted into an equal number of shares of CMP Group. Shares of the
Central Maine Power Company Stock Fund ("CMP Co. Stock Fund"), an
investment option of the Central Maine Power Company Employee Savings and
Investment Plan for Union Employees ("the Plan" or "the Union Plan"), were
converted to an equal number of CMP Group shares as a result of the above.
On April 7, 1999, the Company sold most of its generating assets to
Florida-based FPL Group. Concurrent with the sale, some Union employees
became employees of FPL Group and most transferred their savings and
investment accounts out of the Plan. Transfers into the FPL Group plan by
employees, totaling 130, who acquired similar employment within FPL Group
amounted to $8,314,970 and are reflected in the net transfers line of the
statement of changes in net assets available for benefits. Furthermore,
certain employees, who transferred to FPL Group, but did not acquire
similar employment within FPL Group, received lump sum distributions. These
distributions are reflected in the benefits paid line of the statement of
changes in net assets available for benefits.
On June 14, 1999, CMP Group entered into a merger agreement with Energy
East Corporation. The merger has received approval from shareholders, the
Maine Public Utilities Commission, the U.S. Department of Justice, the
Federal Trade Commission, Federal Communications Commission, the Nuclear
Regulatory Commission, and the Connecticut DPUC. SEC approval is pending.
When the merger becomes effective, all outstanding shares of CMP stock will
be purchased at $29.50 a share. Proceeds from the sale of stock within the
CMP Stock Fund will be placed in the money market fund until participants
redirect their monies to other investment options within the plan.
2. Description of the Plan
-----------------------
The Union Plan was adopted by the Board of Directors of the Company on
November 15, 1984 and became effective January 1, 1985. Certain pertinent
features of the Plan, as amended, are discussed below.
a. Eligibility of Participants
Each employee of the Company 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.
<PAGE>
2. Description of the Plan (continued)
-----------------------
b. Elective Contributions by Participants
Each participant elects a salary reduction percentage to be
contributed by the Company on his/her behalf. Participants may elect
to have the Company contribute from 2% to 16% (in multiples of 1%) of
their base compensation to the Plan through a salary reduction
agreement. Effective May 2000, the maximum contribution was increased
to 18%.
c. Matching Contributions by the Company
The Company contributed to the Plan an amount equal to 60% of the
first 5% of the salary reduction plus 50% of the next 2% for a 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 Internal Revenue Code.
In 1999 these provisions limited the annual employee contribution
excluded from taxable income to the lesser of 25% of total
compensation or $10,000. The Company's matching contribution is made
each week, coincidentally with the payroll cycle, during each year and
is paid in full as of the date the Company files its federal income
tax return for that year.
d. Vesting
Participants are 100% vested in their account balances. Each
participant's account consists of his/her contributions and any
rollover money, the matching Company contribution and any net earnings
thereon.
e. Investment Options
All contributions made under the Plan are subject to a master trust
that also contains the assets of one other savings and investment plan
of the Company and its affiliated companies. At December 31, 1999, the
Plan's interest in investments in the master trust was approximately
29%. Effective January 1, 1998, six new funds were added and three
funds were eliminated, bringing the total number of investment options
to thirteen. Contributions are invested by the Trustee, Fidelity
Management Trust Company, based upon participant election, in one or
more of thirteen funds. Those assets which consist of shares of a
registered investment entity are invested directly into a participant
account, which is credited periodically to reflect the earnings
thereon. Those assets invested in the CMP Co. Stock Fund are
commingled with the assets of one additional savings and investment
plan of the Company. The earnings related to the CMP Co. Stock Fund
are allocated prorata between the two plans based on market value of
CMP
<PAGE>
2. Description of the Plan (continued)
-----------------------
e. Investment Options (continued)
Group common shares held by each plan. Contributions to all Funds may
be invested temporarily in short-term investments prior to the
purchase of the primary Fund securities.
All Company matching contributions are initially invested in the CMP
Co. Stock Fund. Dividends, interest and other distributions received
on the assets held in each Fund are reinvested in the respective Fund.
Participants may transfer all or a portion of the Company
contributions made on their behalf out of the CMP Co. Stock Fund.
Upon enrollment, participants elect the Fund or Funds in which to
invest their contributions. The percentage of such contributions
invested in a particular Fund must be a multiple of 1%. Participants
may change the investment of their future contributions (in multiples
of 1% of such contributions) or transfer a portion from one Fund to
another. Changes and transfers can be made at any time.
The Funds consist of:
Retirement Government Money Market Portfolio - An income fund
comprised of short-term, high-quality debt obligations issued or
guaranteed by the U.S. Government, its agencies or instrumentalities.
Fidelity Balanced Fund - A diversified fund comprised of high-yielding
securities, including common stocks and bonds.
Fidelity Magellan Fund - A fund comprised primarily of common stock
and securities convertible into common stock seeking capital
appreciation.
Spartan U.S. Equity Index Fund - A fund comprised of common stock,
which attempts to duplicate the composition of the Standard & Poor's
Daily Stock Price Index of 500 Common Stocks. The fund presents a
passive approach for investing in a diversified portfolio of common
stocks.
Fixed Income Contract Portfolio - A fixed-income fund comprised of
investments yielding a fixed rate of return, as selected by the
Trustee, issued mainly by insurance companies and banks. Certain fixed
income contracts were previously placed under conservatorship and as a
result, this fund was closed to new investments effective May 1, 1996.
Final distributions from these contracts were received in 1998 and
1999 and this fund ceased to exist as of January 1, 1999.
<PAGE>
2. Description of the Plan (continued)
-----------------------
e. Investment Options (continued)
Asset Manager Growth Fund - This fund seeks to maximize a total return
over the long term; the Fund allocates its assets among three
principal asset classes: stocks, bonds and short-term instruments.
However, it may invest in many types of domestic and foreign
securities.
Central Maine Power Company Stock Fund - A fund comprised of the
common shares of CMP Group, the parent company of Central Maine Power
Company.
PIMCO Total Return Bond Fund - This fund is an open-end management
investment company consisting of twenty-four separate investment
portfolios. Each fund has its own investment objectives and policies.
MAS Value Fund - This is a no-load mutual fund consisting of
twenty-six portfolios. This fund also offers Institutional Class
Shares and Investment Class Shares.
Neuberger & Berman Genesis Trust - The investment objective of this
fund is to seek capital appreciation. This fund invests primarily in
common stock of companies with small market capitalizations.
Vanguard PRIMECAP - This is an open-end diversified investment that
seeks to provide long-term growth of capital by investing principally
in common stocks.
Invesco Total Return - This fund seeks to achieve a high total return
on investment through capital appreciation and current income by
investing in a combination of equity securities (consisting of common
stocks and, to a lesser degree, securities convertible into common
stock) and fixed income securities.
Fidelity Diversified International - This fund invests primarily in
stocks of companies located outside the U.S. that are included in the
Morgan Stanley EAFA Index. Seeks stocks that are undervalued compared
to industry norms in their countries.
f. Withdrawals and Distributions
A participant may elect to make a regular withdrawal of up to 100% of
the value of his/her contributions made prior to July 1, 1985, and
earnings thereon (but not less than $500 unless the value of such
participant's contributions and earnings thereon total less than $500,
in which case such total may be withdrawn), after approval by the
Employee Savings and Investment Plan Committee. Only one regular
withdrawal may be made in any year. The minimum withdrawal was
increased to $1,000 effective May 1, 2000.
<PAGE>
2. Description of the Plan (continued)
-----------------------
f. Withdrawals and Distributions (continued)
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 Employee Savings and Investment Plan Committee, a
participant may elect to make a hardship withdrawal, as determined in
accordance with the Plan provisions, of up to 100% his/her account.
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 retiring or disabled participants elect otherwise.
g. Participants Loans
Participants may, in general, borrow in the aggregate not more than
50% of their account balances, subject to a maximum loan of $50,000.
Loans bear interest at a rate equal to the current rate of interest
being charged by the Central Maine Power Company Employees Federal
Credit Union for loans secured by share account balances. Interest
rates on loans outstanding at year end range from 7.25% to 8.00%. The
maximum term of the loans is generally five years, or longer for
mortgages, with borrowed funds being repaid through payroll
deductions.
h. Expenses
All expenses of administration of the Plan, including Trustee's and
record keeper's fees, are paid by Central Maine Power Company.
3. Summary of Significant Accounting Policies
------------------------------------------
a. Basis of Accounting
The financial statements of the Plan are prepared under the accrual
method of accounting.
b. Use of Estimates
The preparation of the Plan's financial statements in conformity with
generally accepted accounting principles requires the plan
administrator to make significant estimates and assumptions that
affect the reported amounts of net assets available for benefits at
the date of the financial statements and the changes in net assets
available for benefits during the reporting period and, when
applicable, disclosure of contingent assets and liabilities at the
date of the financial statements. Actual results could differ from
those estimates.
<PAGE>
3. Summary of Significant Accounting Policies (continued)
------------------------------------------
c. Risks 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 risks. Due to the level of risk
associated with certain investment securities, it is at least
reasonably possible that changes in values of investment securities
will occur in the near term and that such changes could materially
affect participants' account balances and the amounts reported in the
statement of net assets available for benefits and the statement of
changes in net assets available for benefits.
d. Investment Valuation and Income Recognition
The Plan's investments are stated at fair value. Shares of registered
investment companies are valued at quoted market prices which
represent the net asset value of shares held by the Plan at year end.
Participant loans are valued at cost, which approximates fair value.
Purchases and sales of securities are recorded on a trade-date basis.
Interest income is recorded on the accrual basis. Dividends are
recorded on the ex-dividend date.
e. New Accounting Standard
During September 1999, the American Institute of Certified Public
Accountants' (AICPA) Accounting Standards Executive Committee issued
Statement of Position (SOP) 99-3, "Accounting for and Reporting of
Certain Defined Contribution Plan Investments and Other Disclosure
Matters." This SOP eliminates the requirement to present in columnar
format separate investment fund information and amends the AICPA Audit
and Accounting Guide. It is effective for plan years after December
15, 1999, with earlier adoption encouraged. The Plan has adopted the
SOP for the plan year ended December 31, 1999. The prior year
financial statements have also been restated to conform to the new
presentation.
4. Related Party Transactions
--------------------------
Certain Plan investment options are shares of mutual funds managed by the
Trustee and CMP Group common stock. Therefore, these transactions qualify
as party-in-interest transactions.
<PAGE>
5. Investments
-----------
The following investments represent 5% or more of the total net assets
available for plan benefits at December 31, 1999:
Description Amount
----------- ------
Retirement Government Money Market Portfolio $3,028,731
Fidelity Balanced Fund* $2,809,460
Fidelity Magellan Fund* $10,549,805
Spartan U.S. Equity Index Fund* $10,903,566
Asset Manager Growth Fund* $2,398,054
Central Maine Power Company Stock Fund*/** $7,788,736
*Represents a party-in-interest to the Plan.
**Nonparticipant-directed.
During 1999, the Plan's investments appreciated in value by $5,628,424,
which included gains and losses on investments bought and sold, as well as
unrealized appreciation/depreciation on investments held at year end.
Appreciation is as follows:
Mutual funds $3,476,091
Common Stock 2,152,333
---------
$5,628,424
=========
6. Plan Termination
----------------
Although it has not expressed any intent to do so, the Company has the
right under the Plan to discontinue its contributions at any time and to
terminate the Plan subject to the provisions of ERISA.
7. Federal Income Taxes
--------------------
The Internal Revenue Service determined and informed the Company sponsor by
letter dated February 10, 1995, that the Plan is qualified and the related
trust established under the Plan is tax-exempt, under the applicable
sections of the Internal Revenue Code. The Plan has been amended since
receiving the determination letter. However, the Plan administrator and the
Plan's tax counsel believe that the Plan is currently designed and being
operated in compliance with the applicable requirements of the Code.
Therefore, they believe that the Plan was qualified and the related trust
was tax-exempt as of the financial statement date.
<PAGE>
7. Federal Income Taxes (continued)
--------------------
Elective contributions to the Plan made by the Company on behalf of
employees are not subject to federal income taxes currently, as long as
these contributions are below the maximum level derived in accordance with
Section 401(k) regulations. Contributions and earnings thereon will, in
general, be taxable upon distribution, although rules providing for
additional deferral may apply with respect to certain distributions of
Company stock.
8. Differences with Form 5500
--------------------------
Differences between the information contained in the financial statements
and Form 5500 are primarily related to differences in classification. The
Form 5500 does not provide the detailed information of balances or earnings
related to assets held in the master trust.
<PAGE>
<TABLE>
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Central Maine Power Company
Form 11-K - Year 1999
Schedule I
Page 1 of 2
Central Maine Power Company
Employee Savings and Investment Plan
For Union Employees (A)
Schedule of Assets Held for Investment Purposes
At December 31, 1999
Name of Issuer Market
Fund and Title of Issue Cost Value
---- ------------------ ---- ------
Retirement Government Money Market Fund $ 12,106,385
Fidelity Balanced Fund* 9,029,098
Fidelity Magellan Fund* 36,577,241
Spartan U.S. Equity Index Fund* 37,140,977
Asset Manager Growth Fund* 8,140,266
PIMCO Total Return Bond Fund 1,618,599
MAS Value Fund 621,697
Neuberger & Berman Genesis Trust 1,661,211
Vanguard PRIMECAP 7,806,938
Invesco Total Return 828,616
Fidelity Diversified International* 3,362,839
Central Maine Power Company Stock Fund**
CMP Group Shares* $15,837,197 22,610,959
Fidelity U.S. Government Reserve Pool (at par value)* 1,189,384 1,189,384
---------- -----------
Total CMP Stock Fund $17,026,581 23,800,343
---------- -----------
Total Investments All Funds 142,694,210
Participant Loans (interest rates range from 7.25% to 8.00%,
maturity dates are generally within 5 years.) 2,475,107
-----------
Total $145,169,317
===========
*Parties in interest to the plan.
**Nonparticipant-directed.
</TABLE>
<PAGE>
Central Maine Power Company
Form 11-K - Year 1999
Schedule I
Page 2 of 2
Central Maine Power Company
Employee Savings and Investment Plan
For Union Employees
Notes to Schedule I - Investments
(A) The investments of the Central Maine Power Company Employee Savings and
Investment Plan for Union Employees are commingled in a master trust with
the investments of one other employee savings and investment plan
maintained by the Company and its affiliates. Schedule I presents the
consolidated investments of both plans. This Plan's share of the pooled
investments is as follows:
Market/Contract
Cost Value
---- ---------------
Retirement Government Money Market Portfolio $ 3,028,731
Fidelity Balanced Fund* 2,809,460
Fidelity Magellan Fund* 10,549,805
Spartan U.S. Equity Index Fund* 10,903,566
Asset Manager Growth Fund* 2,398,054
PIMCO Total Return Fund 281,486
MAS Value Fund 155,784
Neuberger & Berman Genesis 368,946
Vanguard PRIMECAP 2,082,202
Invesco Total Return 217,973
Fidelity Diversified International* 529,114
Central Maine Power Company Stock Fund*/** $5,182,772 7,788,736
Loans Due from Participants 984,528
----------
Total $42,098,385
==========
*Parties in interest to the plan.
**Nonparticipant-directed.
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (No. 33-44754) of Central Maine Power Company of our
report dated June 23, 2000 relating to the financial statements of the Central
Maine Power Company Employee Savings and Investment Plan for Union Employees,
which appears in this Form 11-K.
PricewaterhouseCoopers LLP
Portland, ME
June 28, 2000
<PAGE>
Central Maine Power Company
Form 11-K - Year 1999
Central Maine Power Company
Employee Savings and Investment Plan
For Union Employees
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the employee benefit plan) have duly
caused this annual report to be signed on its behalf by the undersigned hereunto
duly authorized.
Central Maine Power Company Employee Savings
and Investment Plan for Union Employees
--------------------------------------------
(Name of Plan)
/s/Michael W. Caron
Michael W. Caron, Comptroller
(Chief Accounting Officer and Duly Authorized
Officer)
CMP Group, Inc
/s/Arthur W. Adelberg
Arthur W. Adelberg, Executive Vice President
and Chief Financial Officer
(Principal Financial Officer and Duly Authorized
Officer)
Date: June 30, 2000
