SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
FORM 10-K/A
AMENDMENT TO APPLICATION OR REPORT
FILED PURSUANT TO SECTION 12, 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
CENTRAL MAINE POWER COMPANY
(Exact name of registrant as specified in charter)
The undersigned registrant hereby amends the following items, financial
statements, exhibits or other portions of its Annual Report Pursuant to Section
13 or 15(d) of the Securities Exchange Act of 1934 on Form 10-K for the fiscal
year ended December 31, 1997, as set forth in the pages attached hereto.
Pursuant to Rule 15d-21 of the Securities Exchange Act of 1934, this
amendment is being made to add the information, financial statements, and
exhibits required by Form 11-K with respect to the Central Maine Power
Company Employee Savings and Investment Plan for Non-union Employees and to
the Central Maine Power Company Employee Savings and Investment Plan for
Union Employees, as Exhibits 99-1 and 99-2, respectively.
Pursuant to the requirements of Section 13 of the Securities Exchange Act of
1934, the Registrant has duly caused this amendment to be signed on its behalf
by the undersigned, thereunto duly authorized.
CENTRAL MAINE POWER COMPANY
By/s/Michael W. Caron
Michael W. Caron, Comptroller
Exhibit 99-1
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 [FEE REQUIRED]
For the fiscal years ended December 31, 1997
[ ] TRANSITION REPORT PURSUANT TO SECTION 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [ NO FEE REQUIRED]
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 NON-UNION EMPLOYEES
B. Name of issuer of the securities held pursuant to the plan and the address
of its principal executive office:
CENTRAL MAINE POWER COMPANY
83 EDISON DRIVE
AUGUSTA, MAINE 04336
<PAGE>
Central Maine Power Company
Form 11-K - Year 1997
Central Maine Power Company
Employee Savings and Investment Plan
For Non-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 Asset Available for Benefits F-2
Statement of Changes in Net Assets Available for Benefits F-3, F-4
Notes to Financial Statements F-5 through F-12
Supplemental Schedules:
I - Item 27a Schedule of Assets Held for Investment S-1 through S-3
Purposes at December 31, 1997
II - Item 27d Schedule of Reportable Transactions for S-4
the Year Ended December 31, 1997
(b) Exhibits
Consent of Independent Public Accountants E-1
Signature E-2
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors of
Central Maine Power Company:
We have audited the accompanying statements of net assets available for benefits
of the Central Maine Power Company Employee Savings and Investment Plan for
Non-union Employees as of December 31, 1997 and 1996, and the related statement
of changes in net assets available for benefits for the year ended December 31,
1997. 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 in accordance with generally accepted auditing
standards. Those standards 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. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Central
Maine Power Company Employee Savings and Investment Plan for Non-Union Employees
as of December 31, 1997 and 1996, and the changes in net assets available for
benefits for the year ended December 31, 1997, in conformity with generally
accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets held
for investment purposes and reportable transactions are presented for purposes
of additional analysis and are not a required part of the basic financial
statements but are 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. The supplemental schedules have been
subjected to the auditing procedures applied in the audit 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.
COOPERS & LYBRAND L.L.P.
Portland, Maine
June 12, 1998
<PAGE>
Central Maine Power Company
Form 11-K - Year 1997
Central Maine Power Company
Employee Savings and Investment Plan
For Non-Union Employees
Statements of Net Assets Available for Benefits
As of December 31,
1997 1996
Assets:
Investments at Fair Value:
Retirement Government Money Market Portfolio $ 3,949,810 $ 2,750,941
Fidelity Balanced Fund ..................... 5,733,860 4,061,299
Fidelity Magellan Fund ..................... 16,826,481 11,798,410
Spartan U.S. Equity Index Fund ............. 20,974,999 12,601,965
Fixed Income Contract Portfolio ............ 4,110,837 7,894,044
Fidelity Intermediate Bond Fund ............ 504,919 335,442
Asset Manager Income Fund .................. 547,520 842,100
Asset Manager Fund ......................... 1,816,880 1,453,144
Asset Manager Growth Fund .................. 4,044,483 2,247,616
Central Maine Power Company Stock Fund ..... 8,779,974 7,749,641
Loans Due from Participants ................ 1,637,343 1,579,071
--------- ---------
Total Investments ....................... 68,927,106 53,313,673
Receivables:
Dividends on Company Stock ................. 120,602 140,405
Accrued Interest ........................... 5,951 -
----- -------
Total Receivables ....................... 126,553 140,405
Total Assets ............................ 69,053,659 53,454,078
---------- ----------
Liabilities:
Accounts payable ........................... (369,423) -
-------- ----------
Total Liabilities ....................... (369,423) -
-------- ----------
Net Assets Available for Benefits $ 68,684,236 $53,454,078
============ ===========
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Central Maine Power Company
Employee Savings and Investment Plan
For Non-Union Employees
Statement of Changes in Net Assets Available for Benefits
For the Year Ended December 31, 1997
Retirement Fixed
Government Fidelity Fidelity Spartan U.S. Income Fidelity
Money Market Balanced Magellan Equity Index Contract Intermediate
Portfolio Fund Fund Fund Portfolio Bond Fund Subtotal
Additions:
Investment Income
Net Appreciation
on Fair Market Value $ - $ 355,365 $ 2,255,650 $ 4,361,420 $ - $ 1,229 $ 6,973,664
Dividend on Company Stock - - - - - - -
Interest and Dividends 466,819 693,451 1,046,594 443,427 417,980 24,346 3,092,617
Interest on Loans 11,859 11,773 43,328 26,505 (684) 1,441 94,222
Contributions
Participants' 232,408 425,434 1,095,669 954,157 - 38,540 2,746,208
Employer's - - - - - -
Other 130,231 58,996 152,603 104,018 7,180 38,146 491,174
-----------------------------------------------------------------------------------------------
Total Additions 841,317 1,545,019 4,593,844 5,889,527 424,476 103,702 13,397,885
Deductions:
Benefits Paid to participants (1,018,793) (139,975) (860,538) (799,018) (712,665) (7,312) (3,538,301)
Loan Repayments 89,633 87,828 268,213 213,601 683 8,335 668,293
Loan Withdrawals (82,614) (97,925) (264,707) (199,796) (61,976) (4,957) (711,975)
Other - - - - (116,030) - (116,030)
-----------------------------------------------------------------------------------------------
Net Increase Prior to Transfer (170,457) 1,394,947 3,736,812 5,104,314 (465,512) 99,768 9,699,872
Interplan Transfers (57,849) 121,241 391,691 331,346 183,125 2,828 972,382
Interfund Transfers 1,427,175 156,373 899,568 2,937,374 (3,500,820) 66,881 1,986,551
-----------------------------------------------------------------------------------------------
Net Increase (Decrease) 1,198,869 1,672,561 5,028,071 8,373,034 (3,783,207) 169,477 12,658,805
Net Assets Available for Benefits:
Beginning of Year 2,750,941 4,061,299 11,798,410 12,601,965 7,894,044 335,442 39,442,101
-----------------------------------------------------------------------------------------------
End of Year $ 3,949,810 $ 5,733,860 $ 16,826,481 $ 20,974,999 $ 4,110,837 $ 504,919 $ 52,100,906
===============================================================================================
(Continued on Page F-4)
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
Central Maine Power Company
Employee Savings and Investment Plan
For Non-Union Employees
Statement of Changes in Net Assets Available for Benefits
For the Year Ended December 31, 1997
Asset Asset Central
Manager Asset Manager Maine Power Loans Due
Income Manager Growth Company from
Fund Fund Fund Stock Fund Participants Other Total
Additions:
Investment Income
Net Appreciation
on Fair Market Value $ 29,807 $ 181,064 $ 323,360 $ 1,340,837 $ - $ - $ 8,848,732
Dividend on Company Stock - - - 499,215 - (19,803) 479,412
Interest and Dividends 37,281 167,555 413,464 - - - 3,710,917
Interest on Loans 1,250 2,660 7,058 6,954 - - 112,144
Contributions
Participants' 43,200 142,264 311,399 93,839 - - 3,336,910
Employer's - - - 1,125,068 - - 1,125,068
Other - - - 9,860 - - 501,034
---------------------------------------------------------------------------------------------
Total Additions 111,538 493,543 1,055,281 3,075,773 - (19,803) 18,114,217
Deductions:
Benefits Paid to participants (53,741) (107,659) (122,674) (328,287) (32,088) - (4,182,750)
Loan Repayments 7,535 15,440 44,596 41,189 (777,053) -
Loan Withdrawals (1,499) (8,303) (18,687) (41,513) 781,977 -
Other - - - - (6,073) - (122,103)
---------------------------------------------------------------------------------------------
Net Increase Prior to Transfer 63,833 393,021 958,516 2,747,162 (33,237) (19,803) 13,809,364
Interplan Transfers (4,542) 5,875 40,213 315,357 91,509 - 1,420,794
Interfund Transfers (353,871) (35,160) 798,138 (2,395,658) - - -
---------------------------------------------------------------------------------------------
Net Increase (Decrease) (294,580) 363,736 1,796,867 666,861 58,272 (19,803) 15,230,158
Net Assets Available for Benefits:
Beginning of Year 842,100 1,453,144 2,247,616 7,749,641 1,579,071 140,405 53,454,078
---------------------------------------------------------------------------------------------
End of Year $ 547,520 $ 1,816,880 $ 4,044,483 $ 8,416,502 $ 1,637,343 $ 120,602 $ 68,684,236
=============================================================================================
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
Central Maine Power Company
Form 11-K - Year 1997
Central Maine Power Company
Employee Savings and Investment Plan
For Non-Union Employees
Notes to Financial Statements
December 31, 1997
1. Description of the Plan
The Central Maine Power Company Employee Savings and Investment Plan for
Non-Union Employees ("the Plan" or "the Non-Union Plan") was adopted by
the Board of Directors of Central Maine Power Company ("the Company") on
February 19, 1981. Certain pertinent features of the Plan, as amended,
are discussed below.
a. Eligibility of Participants
Each employee of the Company, and of The Union Water-Power
Company, MaineCom, Telesmart, CMP International Consultants and
Aroostook Valley Electric Company, its wholly-owned subsidiaries,
who is not 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.
b. Elective Contributions by Participants
Each participant elects a salary reduction percentage to be
contributed by the Company on their behalf. Participants may elect
to have the Company contribute from 2% to 15% (in multiples of 1%)
of their basic compensation to the Plan through a salary reduction
agreement.
c. Matching Contributions by the Company
The Company and its subsidiaries contribute to the Plan an amount
equal to 60% of the first 5% of the salary reduction amount
contributed on behalf of each participant, 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 1997 these provisions limited the
annual employee contribution excluded from taxable income to the
lesser of 25% of total compensation or approximately $9,500.
Employee contributions for employees who are defined as "highly
compensated" by the Internal Revenue Service may be further
limited in order to pass nondiscrimination tests. The Company's
matching contribution is made coincident with each payroll cycle
during the year and shall be paid in full as of the date the
Company files its federal income tax return for that year.
<PAGE>
1. Description of the Plan (continued)
d. Vesting
Participants are 100% vested in their account balances. Each
participant's account consists of their 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 two other savings and
investment plans of the Company and its affiliated companies. At
December 31, 1997, the Plan's interest in investments in the
master trust was approximately 68%. Contributions are invested by
the Trustee, based upon participant election, in one or more of
ten 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 Central Maine Power Company
Stock Fund are commingled with the assets of additional savings
and investment plans of the Company and its affiliated companies.
The earnings related to the Central Maine Power Company Stock
Fund are allocated prorata between the two plans based on market
value. Contributions to all Funds may be invested temporarily in
short-term investments prior to the purchase of the primary Fund
securities.
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 during the
current year. 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. This fund
was closed to new investments effective May 1, 1996 and will cease
to exist as of December 31, 1998.
<PAGE>
1. Description of the Plan (continued)
e. Investment Options (continued)
Fidelity Intermediate Bond Fund - A fund that seeks high current
income by investing in domestic and foreign investment-grade
securities with intermediate maturities and good credit quality.
This fund was eliminated as of February 1, 1998.
Asset Manager Income Fund - A fund emphasizing investment in bonds
and short-term instruments for income and price stability, but
allows some investment in stocks for their potential to grow and
keep pace with inflation. This fund was eliminated as of February
1, 1998.
Asset Manager Fund - A fund allocating its assets among and across
domestic and foreign stocks, bonds and short-term instruments of
U.S. and foreign issuers, including those in emerging markets.
This fund was eliminated as of February 1, 1998.
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 the Company.
The following funds have been added and may receive either
transfers from other funds or new contributions as of January 1,
1998:
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.
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.
Vanguard PRIMECAP - This is an open-end diversified investment
that seeks to provide long-term growth of capital by investing
principally in common stocks.
<PAGE>
1. Description of the Plan (continued)
e. Investment Options (continued)
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 - The investment objective of this fund
is to seek capital appreciation. This fund invests primarily in
common stock of companies with small market capitalizations.
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
may be made at any time.
All Company contributions are initially invested in the Central
Maine Power Company Stock Fund. Dividends, interest and other
distributions received on the assets held in each Fund shall be
reinvested in the respective Fund. Participants may transfer all
or a portion of the Company contributions made on their behalf out
of the CMP Company Stock Fund.
f. Withdrawals and Distributions
A participant may elect to make a regular withdrawal of up to 100%
of the value of their contributions made prior to July 1, 1983,
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.
Withdrawals with respect to contributions made subsequent to July
1, 1983 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% their
account.
<PAGE>
1. Description of the Plan (continued)
f. Withdrawals and Distributions (continued)
Distributions from the Funds occurring as a result of termination
of employment, death, retirement or permanent disability are made
no later than 60 days after the end of the Plan year, unless under
certain circumstances retiring or disabled participants elect
otherwise.
g. Participant 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 14.28%. The maximum term of the loans is generally
five years, 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.
2. 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>
2. 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. The investment
contracts are valued at contract value (Note 3) which approximates
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.
3. Investment Contracts with Insurance Companies
Executive Life
At December 31, 1997, Fidelity held a fixed income contract with
Executive Life Insurance Company ("Executive Life") with a contract value
of approximately $14,000. The Non-Union Plan holds approximately $10,000
of the Executive Life contract.
On April 11, 1991, the State of California insurance regulators placed
Executive Life under conservatorship. Under the terms of the modified
rehabilitation plan, contract holders were given a choice to either
opt-in or opt-out of a 5-year fixed income contract with Aurora National
Life Assurance Company, the successor to Executive Life. After review of
all the relevant facts and the advice of an insurance research and
consulting firm, the Company selected the opt-out approach.
<PAGE>
3. Investment Contracts with Insurance Companies (continued)
Executive Life (continued)
On October 26, 1995 the Plan received a distribution of $1.9 million or
87.5% of the original frozen assets. On May 27, 1996 the Plan received a
second distribution of $110 thousand or 4.8%, bringing the total to
92.3%. A third distribution of 6.9% was received on May 8, 1997 bringing
the total recovery to 99.2% of the original contract. Further
distributions are expected as conditions for liquidating assets improve.
Full recovery of the original investment is expected. It was expected
that along with resolution of the rehabilitation proceedings, this
settlement would result in greater than 100% recovery of the original
Executive Life contract.
Effective July 31, 1997, the terms and conditions of a confidential
agreement between CMP and State Street Bank were met. With the receipt of
$379,501 from State Street Bank on August 20, 1997, participants with
Executive Life holdings have now received 115.1% of the original contract
value.
Requests from Plan participants for payments or transfers of funds from
the Fixed Income Fund will continue to be processed, but the shares
associated with the remaining Executive Life contract continue to be
temporarily frozen.
4. Related Party Transactions
Certain Plan investment options are shares of mutual funds managed by the
Trustee and Company common stock. Therefore, these transactions qualify
as party-in-interest transactions.
5. Investments
The following investments represent 5% or more of the total net assets
available for plan benefits at December 31, 1997:
Description Amount
Retirement Government Money Market Portfolio $ 3,949,810
Fidelity Balanced Fund* ............................. 5,733,860
Fidelity Magellan Fund* ............................. 16,826,481
Spartan U.S. Equity Index Fund* ..................... 20,974,999
Fidelity Short-term Investment Fund* (A) ............ 3,556,016
Asset Manager Growth Fund* .......................... 4,044,483
Central Maine Power Company Stock Fund* ............. 8,779,974
*Represents a party-in-interest to the Plan.
(A) Represents a portion of investment included in Fixed Income Contract
Portfolio.
<PAGE>
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 (IRS) has issued a favorable determination
letter with respect to the Plan's tax-exempt status under Sections 401(a)
and 401(k) of the Internal Revenue Code. Therefore, no income taxes have
been provided for in the accompanying financial statements.
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.
The Internal Revenue Service has 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.
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>
Central Maine Power Company
Form 11-K - Year 1997
Schedule I
Page 1 of 3
Central Maine Power Company
Employee Savings and Investment Plan
For Non-Union Employees (B)
Item 27a - Schedule of Assets Held for Investment Purposes
At December 31, 1997
<TABLE>
<S> <C> <C> <C>
Market/
Name of Issuer Contract
Fund and Title of Issue Units (A) Cost Value
Retirement Government Money Market Fund ................ 5,596,133 $ 5,596,133 $ 5,596,133
Fidelity Balanced Fund* ................................ 552,364 7,601,068 8,434,601
Fidelity Magellan Fund* ................................ 261,680 20,999,553 24,930,263
Spartan U.S. Equity Index Fund* ........................ 842,854 19,322,212 29,483,035
Fidelity Intermediate Bond Fund* ....................... 62,508 632,011 635,706
Asset Manager Income Fund* ............................. 68,997 803,478 840,377
Asset Manager Fund* .................................... 146,263 2,398,000 2,683,924
Asset Manager Growth Fund* ............................. 321,551 5,416,223 5,942,261
Fixed Income
Sun Life Insurance of America (1994 Contracts)
Contract rate 7.50%
Maturity date 12/31/98 ...................... 786,516 786,516 786,516
Executive Life Insurance Company (1989 Contract)
Maturity date 12/31/93
(See Note 3 to Financial Statements) .......... 13,704 13,704 13,704
Fidelity-Short-term Investment Fund (at par
value)*
Contract rate 5.63% ......................... 5,132,619 5,132,619 5,132,619
----------- -----------
Total Fixed Income Fund $ 5,932,839 $ 5,932,839
*Parties in interest to the plan.
</TABLE>
<PAGE>
Central Maine Power Company
Form 11-K - Year 1997
Schedule I
Page 2 of 3
Central Maine Power Company
Employee Savings and Investment Plan
For Non-Union Employees (B)
Item 27a - Schedule of Assets Held for Investment Purposes
At December 31, 1997
<TABLE>
<S> <C> <C> <C>
Market/
Name of Issuer Contract
Fund and Title of Issue Units (A) Cost Value
Central Maine Power Company Stock
Central Maine Power Company Stock
Shares* ............................................................. 864,085 $ 11,371,187 $ 13,178,336
Fidelity U.S. Government Reserve Pool (at par
value)* ............................................................... 927,688 927,688 927,688
------------ ------------
Total CMP Stock Fund ................................................ 12,298,875 14,106,024
Total Investments All Funds Participant Loans (interest rates range
from 7.25% to 14.28%, maturity dates are generally within
5 years.) ........................................................... 2,769,361 2,769,361
------------ ------------
Grand Total ......................................................... $ 83,769,753 $101,354,524
*Parties in interest to the plan.
</TABLE>
<PAGE>
Central Maine Power Company
Form 11-K - Year 1997
Schedule I
Page 3 of 3
Central Maine Power Company
Employee Savings and Investment Plan
For Non-Union Employees
Notes to Schedule I - Investments
(A) "Units," except for shares of Company stock, indicates each Fund's share of
the total units associated with pooled funds, which are accumulations of
investments from numerous entities, including the Plan.
(B) The investments of the Central Maine Power Company Employee Savings and
Investment Plan for Non-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 $3,949,810 $3,949,810
Fidelity Balanced Fund* 5,173,247 5,733,860
Fidelity Magellan Fund* 14,179,003 16,826,481
Spartan U.S. Equity Index Fund* 13,820,999 20,974,999
Fixed Income Contract Portfolio 4,110,837 4,110,837
Fidelity Intermediate Bond Fund* 502,373 504,919
Asset Manager Income Fund* 524,124 547,520
Asset Manager Fund* 1,612,582 1,816,880
Asset Manager Growth Fund* 3,673,759 4,044,483
Central Maine Power Company Stock* 7,077,737 8,779,974
Loans Due from Participants 1,637,343 1,637,343
*Parties in interest to the plan.
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Central Maine Power Company
Employee Savings and Investment Plan
For Non-Union Employees
Items 27d Schedule of Reportable Transactions
For the Year Ended December 31, 1997
No. of No. of Current
Trans. Purchase Trans. Selling Cost of Net
Description of Asset Purchased Price Sold Price Asset Gain/(Loss)
Retirement Government Money
Market Portfolio 239 $34,032,064 209 $32,775,346 $32,775,346 $ -
Fidelity Balanced Fund* 172 2,122,270 96 926,315 844,993 81,322
Fidelity Magellan Fund* 214 4,948,066 119 2,567,335 2,298,562 268,773
Spartan U.S. Equity Index Fund* 235 12,721,321 134 9,041,053 8,358,328 682,725
Fidelity Short-term Investment Fund*
(Schedule I) 25 2,538,914 191 3,958,475 3,958,475 -
Fidelity Intermediate Bond Fund* 105 1,684,287 33 1,518,866 1,522,209 (3,343)
Asset Manager Growth Fund* 171 2,250,408 61 817,114 738,319 78,795
Central Maine Power Company
Stock Fund
CMP Common Stock* 244 12,668,856 233 14,240,053 15,166,569 (926,516)
Fidelity U.S. Government
Reserve Pool* 244 22,267,337 233 21,408,151 21,408,151 -
* Parties in interest to the plan
</TABLE>
<PAGE>
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation of our report, included in this Form 11-K, into the Company's
previously filed Registration Statement on Form S-8 (File No. 33-44754).
COOPERS & LYBRAND L.L.P.
Portland, Maine
June 29, 1998
<PAGE>
Central Maine Power Company
Form 11-K - Year 1997
Central Maine Power Company
Employee Savings and Investment Plan
For Non-Union Employees
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Trustee
(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 Non-Union Employees
(Name of Plan)
/s/D. E. Marsh
D. E. Marsh, Chief Financial Officer,
Member, Employee Savings and Investment Plan
Committee, Central Maine Power Company
Date: June 29, 1998
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 [FEE REQUIRED]
For the fiscal years ended December 31, 1997
[ ] TRANSITION REPORT PURSUANT TO SECTION 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [ NO FEE REQUIRED]
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:
CENTRAL MAINE POWER COMPANY
83 EDISON DRIVE
AUGUSTA, MAINE 04336
<PAGE>
Central Maine Power Company
Form 11-K - Year 1997
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, F-4
Notes to Financial Statements F-5 through F-12
Supplemental Schedules:
I - Item 27a Schedule of Assets Held for Investment S-1 through S-3
Purposes at December 31, 1997
II - Item 27d Schedule of Reportable Transactions for S-4
the Year Ended December 31, 1997
(b) Exhibits
Consent of Independent Public Accountants E-1
Signature E-2
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors of
Central Maine Power Company:
We have audited the accompanying statements of net assets available for benefits
of the Central Maine Power Company Employee Savings and Investment Plan for
Union Employees as of December 31, 1997 and 1996, and the related statement of
changes in net assets available for benefits for the year ended December 31,
1997. 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 in accordance with generally accepted auditing
standards. Those standards 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. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Central
Maine Power Company Employee Savings and Investment Plan for Union Employees as
of December 31, 1997 and 1996, and the changes in net assets available for
benefits for the year ended December 31, 1997, in conformity with generally
accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets held
for investment purposes and reportable transactions are presented for purposes
of additional analysis and are not a required part of the basic financial
statements but are 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. The supplemental schedules have been
subjected to the auditing procedures applied in the audit 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.
COOPERS & LYBRAND L.L.P.
Portland, Maine
June 12, 1998
<PAGE>
Central Maine Power Company
Form 11-K - Year 1997
Central Maine Power Company
Employee Savings and Investment Plan
For Union Employees
Statements of Net Assets Available for Benefits
As of December 31,
1997 1996
Investments at Fair Value:
Retirement Government Money Market Portfolio $ 1,637,718 $ 728,398
Fidelity Balanced Fund 2,698,546 2,202,251
Fidelity Magellan Fund 8,103,782 6,531,521
Spartan U.S. Equity Index Fund 8,505,633 5,753,277
Fixed Income Contract Portfolio 1,818,214 3,342,300
Fidelity Intermediate Bond Fund 122,168 77,595
Asset Manager Income Fund 292,857 236,915
Asset Manager Fund 867,044 565,483
Asset Manager Growth Fund 1,897,778 973,590
Central Maine Power Company Stock Fund 145,770 4,914,792
Loans Due from Participants 1,132,018 1,137,419
----------- -----------
Total Investments 32,401,809 26,463,541
Receivables:
Dividends on Company Stock 74,717 89,045
Accrued Interest 3,610 -
------------ -----------
Total Receivables 78,327 89,045
------------ -------------
Total Assets 32,480,136 26,552,586
---------- ----------
Liabilities:
Accounts Payable (224,097) -
----------- ---------
Total Liabilities (224,097) -
---------- ---------
Net Assets Available for Benefits $32,256,039 $26,552,586
========== ==========
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
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, 1997
Retirement Fixed
Government Fidelity Fidelity Spartan U.S. Income Fidelity
Money Market Balanced Magellan Equity Index Contract Intermediate
Portfolio Fund Fund Fund Portfolio Bond Fund Subtotal
Additions:
Investment Income
Net Appreciation
on Fair Market Value $ - $ 174,092 $ 1,155,177 $ 1,795,101 $ - $ 959 $ 3,125,329
Dividend on Company Stock - - - - - - -
Interest and Dividends 166,469 321,700 515,111 181,276 166,250 6,038 1,356,844
Interest on Loans 7,694 8,706 27,860 19,804 (273) 900 64,691
Contributions
Participants' 139,261 250,101 615,834 540,338 - 24,418 1,569,952
Employer's - - - - - - -
Other 39,943 - - - - - 39,943
-----------------------------------------------------------------------------------------------
Total Additions 353,367 754,599 2,313,982 2,536,519 165,977 32,315 6,156,759
Deductions:
Benefits Paid to participants (396,515) (21,737) (321,134) (292,447) (276,596) (192) (1,308,621)
Loan Repayments 49,818 59,234 210,153 159,019 273 6,349 484,846
Loan Withdrawals (41,145) (66,047) (277,151) (179,438) (26,864) (2,381) (593,026)
Other (13,278) (9,369) (6,348) (45,121) - (74,116)
-----------------------------------------------------------------------------------------------
Net Increase Prior to Transfer (34,475) 712,771 1,916,481 2,217,305 (182,331) 36,091 4,665,842
Interplan Transfers 57,849 (121,241) (391,691) (331,346) (183,125) (2,828) (972,382)
Interfund Transfers 885,946 (95,235) 47,471 866,397 (1,158,630) 11,310 557,259
-----------------------------------------------------------------------------------------------
Net Increase (Decrease) 909,320 496,295 1,572,261 2,752,356 (1,524,086) 44,573 4,250,719
Net Assets Available for Benefits:
Beginning of Year 728,398 2,202,251 6,531,521 5,753,277 3,342,300 77,595 18,635,342
-----------------------------------------------------------------------------------------------
End of Year $ 1,637,718 $ 2,698,546 $ 8,103,782 $ 8,505,633 $ 1,818,214 $ 122,168 $ 22,886,061
===============================================================================================
(Continued on Page F-4)
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
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, 1997
Asset Asset Central
Manager Asset Manager Maine Power Loans Due
Income Manager Growth Company from
Fund Fund Fund Stock Fund Participants Other Total
Additions:
Investment Income
Net Appreciation
on Fair Market Value $ 13,418 $ 79,406 $ 131,831 $ 702,096 $ - $ - $ 4,052,080
Dividend on Company Stock - - - 309,282 - (14,328) 294,954
Interest and Dividends 20,487 75,548 198,590 - - - 1,651,469
Interest on Loans 1,317 1,323 3,177 3,260 - - 73,768
Contributions
Participants' 33,961 67,788 158,425 77,846 - - 1,907,972
Employer's - - - 726,178 - - 726,178
Other - - - - - - 39,943
------------------------------------------------------------------------------------------
Total Additions 69,183 224,065 492,023 1,818,662 - (14,328) 8,746,364
Deductions:
Benefits Paid to participants (9,903) (38,176) (30,150) (133,713) (13,061) - (1,533,624)
Loan Repayments 12,216 13,667 34,009 21,154 (565,892) - -
Loan Withdrawals (9,379) (9,828) (32,450) (28,185) 672,868 - -
Other - - - (6,570) (7,807) - (88,493)
------------------------------------------------------------------------------------------
Net Increase Prior to Transfer 62,117 189,728 463,432 1,671,348 86,108 (14,328) 7,124,247
Interplan Transfers 4,542 (5,875) (40,213) (315,357) (91,509) - (1,420,794)
Interfund Transfers (10,717) 117,708 500,969 (1,165,219) - - -
------------------------------------------------------------------------------------------
Net Increase (Decrease) 55,942 301,561 924,188 190,772 (5,401) (14,328) 5,703,453
Net Assets Available for Benefits:
Beginning of Year 236,915 565,483 973,590 4,914,792 1,137,419 89,045 26,552,586
------------------------------------------------------------------------------------------
End of Year $ 292,857 $ 867,044 $ 1,897,778 $ 5,105,564 $ 1,132,018 $ 74,717 $ 32,256,039
==========================================================================================
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
Central Maine Power Company
Form 11-K - Year 1997
Central Maine Power Company
Employee Savings and Investment Plan
For Union Employees
Notes to Financial Statements
December 31, 1997
1. Description of the Plan
The Central Maine Power Company Employee Savings and Investment Plan for
Union Employees ("the Plan" or "the Union Plan") was adopted by the Board
of Directors of Central Maine Power Company ("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.
b. Elective Contributions by Participants
Each participant elects a salary reduction percentage to be
contributed by the Company on their behalf. Participants may elect to
have the Company contribute from 2% to 15% (in multiples of 1%) of
their basic compensation to the Plan through a salary reduction
agreement.
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 amount contributed on behalf of each
participant through May 31, 1997. Effective June 1, 1997, the Company
match is as follows: 60% of the first 5% plus 50% of the next 2% for a
total match of 4% on a 7% salary reduction amount. 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
1997 these provisions limited the annual employee contribution
excluded from taxable income to the lesser of 25% of total
compensation or $9,500. The Company's matching contribution is made
each week, coincidentally with the payroll cycle, during each year and
shall be 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 their contributions and any rollover
money, the matching Company contribution and any net earnings thereon.
<PAGE>
1. Description of the Plan (continued)
e. Investment Options
All contributions made under the Plan are subject to a master trust
that also contains the assets of two other savings and investment
plans of the Company and its affiliated companies. At December 31,
1997, the Plan's interest in investments in the master trust was
approximately 32%. Contributions are invested by the Trustee, based
upon participant election, in one or more of ten 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 Central
Maine Power Company Stock Fund are commingled with the assets of
additional savings and investment plans of the Company and its
affiliated companies. The earnings related to the Central Maine Power
Company Stock Fund are allocated prorata between the two plans based
on market value. Contributions to all Funds may be invested
temporarily in short-term investments prior to the purchase of the
primary Fund securities.
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 during the current year.
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. This fund was
closed to new investments effective May 1, 1996 and will cease to
exist as of December 31, 1998.
Fidelity Intermediate Bond Fund - A fund that seeks high current
income by investing in domestic and foreign investment-grade
securities with intermediate maturities and good credit quality. This
fund was eliminated as of February 1, 1998.
Asset Manager Income Fund - A fund emphasizing investment in bonds and
short-term instruments for income and price stability, but allows some
investment in stocks for their potential to grow and keep pace with
inflation. This fund was eliminated as of February 1, 1998.
<PAGE>
1. Description of the Plan (continued)
e. Investment Options (continued)
Asset Manager Fund - A fund allocating its assets among and across
domestic and foreign stocks, bonds and short-term instruments of U.S.
and foreign issuers, including those in emerging markets. This fund
was eliminated as of February 1, 1998.
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 may types of domestic and foreign
securities..
Central Maine Power Company Stock Fund - A fund comprised of the
common shares of the Company.
The following funds have been added and may receive either transfers
from other funds or new contributions as of January 1, 1998:
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.
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.
Vanguard PRIMECAP - This is an open-end diversified investment that
seeks to provide long-term growth of capital by investing principally
in common stocks.
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 - The investment objective of this fund is
to seek capital appreciation. This fund invests primarily in common
stock of companies with small market capitalizations.
<PAGE>
1. Description of the Plan (continued)
e. Investment Options (continued)
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.
All Company contributions are initially invested in the Central Maine
Power Company Stock Fund. Dividends, interest and other distributions
received on the assets held in each Fund shall be reinvested in the
respective Fund. Participants may transfer all or a portion of the
Company contributions made on their behalf out of the CMP Company
Stock Fund.
f. Withdrawals and Distributions
A participant may elect to make a regular withdrawal of up to 100% of
the value of their 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.
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% their 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 14.28%. The
maximum term of the loans is generally five years, with borrowed funds
being repaid through payroll deductions.
<PAGE>
1. Description of the Plan (continued)
h. Expenses
All expenses of administration of the Plan, including Trustee's and
record keeper's fees, are paid by Central Maine Power Company.
2. 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.
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. The investment
contracts are valued at contract value (Note 3) which approximates
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.
3. Investment Contracts with Insurance Companies
Executive Life
At December 31, 1997 Fidelity held a fixed income contract with Executive
Life Insurance Company (Executive Life) with a contract value of
approximately $14,000. The Union Plan holds approximately $4,000 of the
Executive Life contract.
On April 11, 1991 the State of California insurance regulators placed
Executive Life under conservatorship. Under the terms of the rehabilitation
plan, contract holders were given a choice to either opt-in or opt-out of a
5-year fixed income contract with Aurora National Life Assurance Company,
the successor to Executive Life. After review of all the relevant facts and
the advice of an insurance research and consulting firm the Company
selected the opt-out approach.
On October 26, 1995 the Plan received a distribution of $1.9 million or
87.5% of the original frozen asset. On May 27, 1996 the Plan received a
second distribution of $110 thousand or 4.8% bringing the total received to
date of 92.3%. A third distribution of 6.9% was received on May 8, 1997
bringing the total recovery to 99.2% of the original contract. Further
distributions are expected as conditions for liquidating assets improve.
Full recovery of the original investment is expected. It was expected that
along with resolution of the rehabilitation proceedings, this settlement
would result in greater than 100% recovery of the original Executive Life
contract.
Effective July 31, 1997, the terms and conditions of a confidential
agreement between CMP and State Street Bank were met. With the receipt of
$379,501 from State Street Bank on August 20, 1997, participants with
Executive Life holdings have now received 115.1% of the original contract
value.
Requests from Plan participants for payments or transfers of funds from the
Fixed Income Fund will continue to be processed but the shares associated
with the remaining Executive Life contract continue to be temporarily
frozen.
4. Related Party Transactions
Certain Plan investment options are shares of mutual funds managed by the
Trustee and Company 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, 1997:
Description Amount
Retirement Government Money Market Portfolio $1,637,718
Fidelity Balanced Fund* 2,698,546
Fidelity Magellan Fund* 8,103,782
Spartan U.S. Equity Index Fund* 8,505,633
Fidelity Short-term Investment Fund* (A) 1,572,817
Asset Manager Growth Fund* 1,897,778
Central Maine Power Company Stock Fund* 5,326,051
*Represents a party-in-interest to the Plan.
(A) Represents a portion of investment included in Fixed Income Contract
Portfolio
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 (IRS) has issued a favorable determination
letter with respect to the Plan's tax-exempt status under Section 401(a)
and 401(k) of the Internal Revenue Code. Therefore, no income taxes have
been provided for in the accompanying financial statements.
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.
The Internal Revenue Service has 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
<PAGE>
7. Federal Income Taxes (continued)
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.
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>
<S> <C> <C> <C>
Central Maine Power Company
Form 11-K - Year 1997
Schedule I
Page 1 of 3
Central Maine Power Company
Employee Savings and Investment Plan
For Union Employees
Item 27a - Schedule of Assets Held for Investment Purposes
At December 31, 1997
Market/
Name of Issuer Contract
Fund and Title of Issue Units (A) Cost Value
Retirement Government Money Market Fund 5,596,133 $ 5,596,133 $ 5,596,133
Fidelity Balanced Fund* 552,364 7,601,068 8,434,601
Fidelity Magellan Fund* 261,680 20,999,553 24,930,263
Spartan U.S. Equity Index Fund* 842,854 19,322,212 29,483,035
Fidelity Intermediate Bond Fund* 62,508 632,011 635,706
Asset Manager Income Fund* 68,997 803,478 840,377
Asset Manager Fund* 146,263 2,398,000 2,683,924
Asset Manager Growth Fund* 321,551 5,416,223 5,942,261
Fixed Income
Sun Life Insurance of America (1994 Contracts)
Contract rate 7.50%
Maturity date 12/31/98 786,516 786,516 786,516
Executive Life Insurance Company (1989 Contract)
Maturity date 12/31/93
(See Note 3 to Financial Statements) 13,704 13,704 13,704
Fidelity-Short-term Investment Fund (at par
value)*
Contract rate 5.63% 5,132,619 5,132,619 5,132,619
---------- ----------
Total Fixed Income Fund $ 5,932,839 $ 5,932,839
*Parties in interest to the plan.
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C>
Central Maine Power Company
Form 11-K - Year 1997
Schedule I
Page 2 of 3
Item 27a - Schedule of Assets Held for Investment Purposes
At December 31, 1997
Market/
Name of Issuer Contract
Fund and Title of Issue Units (A) Cost Value
Central Maine Power Company Stock
Central Maine Power Company Stock
Shares* 864,085 $11,371,187 $ 13,178,336
Fidelity U.S. Government Reserve Pool (at par
value)* 927,688 927,688 927,688
------------ --------------
Total CMP Stock Fund 12,298,875 14,106,024
Total Investments All Funds Participant Loans (interest rates range
from 7.25% to 14.28%, maturity dates are generally within
5 years.) 2,769,361 2,769,361
----------- -------------
Grand Total $83,769,753 $101,354,524
*Parties in interest to the plan.
</TABLE>
<PAGE>
Central Maine Power Company
Form 11-K - Year 1997
Schedule I
Page 3 of 3
Notes to Schedule I - Investments
A) "Units" except for shares of Company stock, indicates each Fund's share of
the total units associated with pooled funds, which are accumulations of
investments from numerous entities, including the Plan.
B) 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 $1,637,718 $1,637,718
Fidelity Balanced Fund* 2,425,817 2,698,546
Fidelity Magellan Fund* 6,820,550 8,103,782
Spartan U.S. Equity Index Fund* 5,500,032 8,505,633
Fixed Income Contract Portfolio 1,818,214 1,818,214
Fidelity Intermediate Bond Fund* 121,093 122,168
Asset Manager Income Fund* 279,354 292,857
Asset Manager Fund* 785,418 867,044
Asset Manager Growth Fund* 1,742,464 1,897,778
Central Maine Power Company Stock* 4,293,451 5,326,051
Loans Due from Participants 1,132,018 1,132,018
*Parties in interest to the plan.
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Central Maine Power Company
Employee Savings and Investment Plan
For Union Employees
Items 27d Schedule of Reportable Transactions
For the Year Ended December 31, 1997
No. of No. of Current
Trans. Purchase Trans. Selling Cost of Net
Description of Asset Purchased Price Sold Price Asset Gain/(Loss)
Retirement Government Money
Market Portfolio 181 $3,105,784 152 $2,254,312 $2,254,312 $ -
Fidelity Balanced Fund* 115 859,422 58 415,979 379,932 36,047
Fidelity Magellan Fund* 173 2,265,251 81 1,456,476 1,285,178 171,298
Spartan U.S. Equity Index Fund* 198 3,033,039 93 1,744,437 1,550,088 194,349
Fidelity Short-term Investment Fund*
(Schedule I) 25 1,122,957 191 1,750,825 1,750,825 -
Asset Manager Growth Fund* 133 1,242,946 39 410,377 393,003 17,374
Central Maine Power Company
Stock Fund
CMP Common Stock* 189 395,961 172 898,435 956,891 (58,456)
Fidelity U.S. Government
Reserve Pool* 189 1,053,784 172 1,350,685 1,350,685 -
* Parties in interest to the plan
</TABLE>
<PAGE>
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation of our
report, included in this Form 11-K, into the Company's previously filed
registration Statement on Form S-8 (Filed No. 33-44754).
COOPERS & LYBRAND L.L.P.
Portland, Maine
June 29, 1998
<PAGE>
Central Maine Power Company
Form 11-K - Year 1997
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)
Date: June 29, 1998
/s/D. E. Marsh
D. E. Marsh, Chief Financial Officer,
Member, Employee Savings and
Investment Plan Committee,
Central Maine Power Company
