SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 11-K
ANNUAL REPORT
Pursuant to Section 15(d) of the
Securities Exchange Act of 1934
For the Fiscal Year End December 31, 1993
Citizens Utilities 401(k) Savings Plan
(Full title of the Plan)
Citizens Utilities Company
High Ridge Park, Stamford Connecticut 06905
(Name of issuer of the securities held pursuant to the Plan
and address of its principal executive office)
Commission File Number 0-1291
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Plan Administrator has caused this Annual Report to be signed by the duly
authorized undersigned there unto duly authorized.
Date: March 31, 1994 By: Citizens Utilities Company,
Plan Administrator of the
Citizens Utilities 401(k)
Savings Plan
By: Livingston E. Ross
-----------------------------
Livingston E. Ross
Vice President and Controller
<PAGE>
Citizens Utilities 401(k) Savings Plan
Index to Financial Statements and Schedules
Page
----
Independent Auditors' Report 3
Financial Statements:
Statements of Plan Equity as of
December 31, 1993 and 1992 4
Statements of Income and Changes in Plan
Equity for the Years Ended
December 31, 1993, 1992 and 1991 5
Notes to Financial Statements 6-9
Schedules:
I - Investments as of December 31, 1993 10
II - Allocation of Plan Equity to Investment
Options as of December 31, 1993 and 1992 11-12
III - Allocations of Plan Income and Changes in
Plan Equity to Investment Options for the
Years Ended December 31, 1993, 1992 and 1991 13-15
Independent Auditors' Consent Exhibit 1
<PAGE>
Independent Auditors' Report
----------------------------
The Board of Directors
Citizens Utilities Company:
We have audited the financial statements of the Citizens Utilities 401(k)
Savings Plan as listed in the accompanying index. In connection with our
audits of the financial statements, we have also audited the supporting
schedules as listed in the accompanying index. These financial statements and
supporting schedules are the responsibility of the Plan Administrator. Our
responsibility is to express an opinion on these financial statements and
supporting schedules 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 the Plan Administrator, 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 Plan equity of the Citizens Utilities 401(k)
Savings Plan at December 31, 1993 and 1992, and the income and changes in Plan
equity for each of the years in the three-year period ended December 1993 in
conformity with generally accepted accounting principles. Also in our
opinion, the related supporting schedules, when considered in relation to the
basic financial statements taken as a whole, present fairly, in all material
respects, the information set forth therein.
KPMG PEAT MARWICK
New York, New York
March 28, 1994
<PAGE>
Citizens Utilities 401(k) Savings Plan
Statements of Plan Equity
<TABLE>
<CAPTION>
December 31,
Assets 1993 1992
- ------ ---- ----
<S> <C> <C>
Investments at market value:
Stock Fund - Citizens Utilities
Company Series B Common Stock
at market value (Cost $1,296,264 in
1993 and $765,991 in 1992) $ 1,897,308 $ 1,025,348
Guaranteed Income Funds at contract value:
Principal Mutual Life Insurance
Company 165,800 0
Pacific Mutual Life Insurance
Company 409,660 245,784
General American Life Insurance
Company 660,785 647,890
---------- ----------
Total Guaranteed Income Funds 1,236,245 893,674
Equity Fund - Capital Initiatives Equity
Total Return Account Contract at
market value (Cost $102,782 in 1993
and $53,479 in 1992) 113,092 57,261
Bond Fund - Vanguard GNMA Fund
at market value (Cost $49,825 in 1993
and $30,046 in 1992) 49,726 30,302
Cash 19,945 15,049
Contributions receivable 212,746 0
Loans receivable 64,961 0
Other receivable 13,440 6,247
---------- ----------
Total Assets $3,607,463 $2,027,881
========== ==========
Liabilities and Plan Equity
- ---------------------------
Accounts Payable 120,998 31,043
Distributions payable to participants 13,002 2,117
---------- ----------
Total Liabilities 134,000 33,160
---------- ----------
Plan Equity $3,473,463 $1,994,721
========== ==========
See accompanying notes to financial statements
</TABLE>
Citizens Utilities 401(k) Savings Plan
Statements of Income and Changes in Plan Equity
<TABLE>
<CAPTION>
Year Ended December 31,
----------------------------------------
1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
Investment income:
Dividends $ 0 $ 745 $ 4,428
Interest 83,963 52,277 14,005
---------- ---------- --------
Total Investment income 83,963 53,022 18,433
Realized appreciation (depreciation):
Stock Fund 29,334 1,302 (4)
Equity Fund 1,546 (1,829) 304
Bond Fund 14 0 0
---------- ---------- --------
Total realized appreciation
(depreciation) 30,894 (527) 300
Unrealized appreciation (depreciation):
Stock Fund 341,686 164,972 94,385
Equity Fund 6,527 5,611 (1,829)
Bond Fund (355) 256 0
---------- ---------- --------
Total unrealized appreciation: 347,858 170,839 92,556
Employee contributions 1,053,460 978,241 831,090
Distributions (27,524) (68,416) (58,340)
Participants' contributions used for
life insurance policy payments (9,909) (10,598) (11,879)
---------- ---------- --------
Change in Plan Equity 1,478,742 1,122,561 872,160
Plan Equity, beginning of year 1,994,721 872,160 0
---------- ---------- --------
Plan Equity, end of year $3,473,463 $1,994,721 $872,160
========== ========== ========
</TABLE>
See accompanying notes to financial statements
<PAGE>
Citizens Utilities 401(k) Savings Plan
Notes to Financial Statements
Years Ended December 31, 1993, 1992 and 1991
(1) Summary of Significant Accounting Policies
------------------------------------------
(a) Basis of Presentation
---------------------
The Citizens Utilities 401(k) Savings Plan ("The Plan") provides
Participants with five investment options: a Stock Fund which
invests in Citizens Utilities Company ("the Company") Series B
Common Stock, a Guaranteed Income Fund, an Equity Fund, a Bond
Fund, and Life Insurance which may cover the Participant, his/her
spouse and dependent children.
(b) Stock Fund
----------
Stock dividends on the Series B shares are received in additional
full and fractional Series B shares. Stock dividends are not
reported as dividend income on the Statements of Income and
Changes in Plan Equity and Allocation of Plan Equity to
Investment Options Schedules. The stock dividends positively
affect the unrealized appreciation. Shares received from stock
dividends in 1993, 1992 and 1991 were 2,966, 1,166 and 464,
respectively.
(c) Guaranteed Income Fund
----------------------
<TABLE>
<CAPTION>
<C> <C> <C> <C>
Annual
Compounded
Guaranteed Income Contribution Maturity Rate of
Contract Issuer Period Date Return
----------------- ------------------ -------- ---------
Principal Mutual Life Ins., Co. 7/1/93 to 6/30/94 6/30/99 5.60%
Pacific Mutual Life Ins., Co. 7/1/92 to 6/30/93 6/30/97 7.30%
General American Life Ins., Co. 7/1/91 to 6/30/92 6/30/96 8.30%
</TABLE>
(d) Equity Fund
-----------
Contributions are invested with Capital Initiatives Equity Total
Return Account Contract ("Equity TRAC"). The return on the
Equity Fund is linked to the performance of the Standard and
Poor's 500 Index. The dividends earned on the Equity Fund are
reinvested in Equity TRAC units.
<PAGE>
(e) Bond Fund
---------
Contributions are invested in the GNMA Bond Fund managed by the
Vanguard Group. The fund is comprised primarily of securities
backed by the "full faith and credit of the U.S. Government".
The dividends earned are received in cash and reinvested in
additional Bond Fund shares.
(f) Life Insurance
--------------
After January 1, 1992 the life insurance option is no longer
offered to existing and newly eligible participants. Prior to
1992 insurance was provided by Inter-American Life Insurance
Company ("Inter-American"). Participants who maintained life
insurance policies before January 1, 1992 had their coverage
remain intact. Participants may have up to 25% of their
contributions used to pay premiums on a selected amount of life
insurance coverage. Insurance certificates are issued to all
Participants selecting this option and insurance policies are
issued to Participants upon their retirement or termination.
On December 23, 1991, the Circuit Court of Cook County, Illinois
entered an Order of Liquidation with a Finding of Insolvency
against Inter-American. The Order of Liquidation will have no
effect on plan assets as the Participants' contributions used to
purchase life insurance policies are not assets of the plan.
Certain of the policies have been assumed by other insurance
companies and the Company is presently negotiating to have the
remainder of the policies continued by those or other insurance
companies.
(g) Loans
-----
Participants in the Plan for two years or more may request to
borrow up to the lesser of 50% of their vested account balance or
$50,000, in both cases limited to their salary deferral account
balance on the Valuation Date preceding the date on which the
loans are made. The loans are allocated to a Loan Fund. The
interest rate on the loans is equal to the prime interest rate in
effect at the beginning of the month in which loans are approved
and remains fixed at that rate. Loan repayments are credited to
Participants' accounts as they are made over the term of the
loans by payroll deductions. Upon termination of employment, a
Participant's loan note is generally cancelled and the
Participant's distribution is reduced by the amount of his/her
outstanding loan balance.
<PAGE>
(2) Administration of the Plan
--------------------------
Plan contributions are deposited with PNC Bank, the Plan Trustee. Plan
administration costs are paid by the Company.
(3) Eligibility
-----------
The plan is sponsored by the Company. Employees of Citizens or its
subsidiaries whose terms and conditions of employment are determined
under collective bargaining agreements will be entitled to participate
in the Plan. Enrollment dates are on January 1 and July 1 of each
year. At December 31, 1993 there were 599 employees eligible to
participate in the Plan and 482 participants in the Plan.
(4) Contributions
-------------
Eligible employees may contribute up to 16% of their annual
compensation through payroll deductions subject to certain maximum
contribution restrictions. Participants who maintained life insurance
coverage after January 1, 1992 may continue to elect to make specific
dollar allocations to purchase life insurance coverage. The balance of
their contribution (or their entire contribution if they do not elect
life insurance) may be apportioned in 5% increments to any combination
of the other four investment options. At December 31, 1993 the number
of accounts in each investment option was as follows:
Number of
Accounts
---------
Stock fund 335
Guaranteed income fund 260
Equity fund 75
Bond Fund 39
Life Insurance 28
Loan Fund 25
The Company is not obligated and has not contributed to the Plan to
date.
(5) Vesting
-------
Participants are at all times fully vested in their Plan accounts.
(6) Distribution of Benefits
------------------------
Upon termination of employment, a Participant may elect to receive
payment in full of the vested portion of his/her account. The
terminating Participant's vested account will be valued as of the end
of the calendar quarter during which employment is terminated and paid
promptly thereafter. If the value of the terminating Participant's
account exceeds $3,500, the Participant may elect to defer
distribution. The distribution must begin on or before April 1st of
the calendar year following the year the Participant attains age 70.5.
(7) Federal Income Tax
------------------
The Plan is considered to be a qualified plan as described in Sections
401(a) and 401(k) of the Internal Revenue Code, as amended and, as
such, the Trust established thereunder is exempt from payment of
federal income taxes under provisions of Section 501(a) of the Internal
Revenue Code. A determination letter will be requested from the
Internal Revenue service confirming such status.
<PAGE>
Schedule I
Citizens Utilities 401(k) Savings Plan
Investments
December 31, 1993
<TABLE>
<CAPTION>
Cost or Market or
Number Contract Contract
of Shares Value Value
--------- -------- ---------
Stock Fund
- ----------
<S> <C> <C> <C>
Citizens Utilities Company
Series B Common Stock 105,406 $1,296,264 $1,897,308
======= ========== ==========
Guaranteed Income Funds
- -----------------------
Group Annuity Contract #GA48409
Principal Mutual Life Insurance
Company 165,800 165,800
Group Annuity Contract #GA25930-01
Pacific Mutual Life Insurance
Company 409,660 409,660
Group Annuity Contract #GA998373-02
General American Life Insurance
Company 660,785 660,785
---------- ----------
Total Guaranteed Income Fund $1,236,245 $1,236,245
========== ==========
Equity Fund
- -----------
Equity TRAC, Capital Initiatives 199 $ 102,782 $ 113,092
======= ========== ==========
Bond Fund
- ----------
Vanguard GNMA Fund 4,795 $ 49,825 $ 49,726
======= ========== ==========
</TABLE>
Schedule II
Citizens Utilities 401(k) Savings Plan
Allocation of Plan Equity to Investment Options
December 31, 1993
<TABLE>
<CAPTION>
Insurance or
Guaranteed Disbursement Loan
Stock Fund Income Funds Equity Fund Bond Fund Fund Fund
---------- ------------ ----------- --------- ------------ -------
<S> <C> <C> <C> <C> <C> <C>
Assets:
Investment in Citizens
Utilities Company
Series B Common
Stock at market
value $1,897,308 $ -- $ -- $ -- $ -- $ --
Investment in Group
Annuity Contract at
contract value -- 1,236,245 -- -- -- --
Investment in Equity
TRAC, Capital
Initiatives Equity
Fund at market value -- -- 113,092 -- -- --
Investment in Vanguard
GNMA Fund at
market value -- -- -- 49,726 -- --
Cash -- -- -- -- 5,035 14,910
Contribution
Receivable 97,557 -- 7,887 2,182 105,120 --
Loan Receivable -- -- -- -- -- 64,961
Interest receivable 1,351 9,412 80 268 30 2,299
---------- ---------- -------- ------- -------- -------
Total Assets 1,996,216 1,245,657 121,059 52,176 110,185 82,170
---------- ---------- -------- ------- -------- -------
Liabilities:
Accounts payable 11,992 82,322 -- 234 9,254 17,196
Distributions payable
to participants 4,098 8,112 654 138 -- --
---------- ---------- -------- ------- -------- -------
Total Liabilities 16,090 90,434 654 372 9,254 17,196
---------- ---------- -------- ------- -------- -------
Plan Equity $1,980,126 $1,155,223 $120,405 $51,804 $100,931 $64,974
========== ========== ======== ======= ======== =======
<PAGE>
</TABLE>
Schedule II
Citizens Utilities 401(k) Savings Plan
Allocation of Plan Equity to Investment Options
December 31, 1992
<TABLE>
<CAPTION>
Guaranteed Insurance
Stock Fund Income Funds Equity Fund Bond Fund Fund
---------- ------------ ----------- --------- ------------
Assets:
<S> <C> <C> <C> <C> <C>
Investment in Citizens
Utilities Company
Series B Common Stock
at market value $1,025,348 $ -- $ -- $ -- $ --
Investment in Group Annuity
Contract at contract
value -- 893,674 -- -- --
Investment in Equity
TRAC, Capital
Initiatives Equity
Fund at market value -- -- 57,261 -- --
Investment in Vanguard
GNMA Fund at
market value -- -- -- 30,302 --
Cash 54 142 14,853 -- --
Interest receivable -- 5,772 40 168 267
---------- -------- ------- ------- --------
Total Assets 1,025,402 899,588 72,154 30,470 267
---------- -------- ------- ------- --------
Liabilities:
Accounts payable 19,734 106,887 8,717 679 (104,974)
Distributions payable
to participants 1,068 1,049 -- -- --
---------- -------- ------- ------- --------
Total Liabilities 20,802 107,936 8,717 679 (104,974)
---------- -------- ------- ------- --------
Plan Equity $1,004,600 $791,652 $63,437 $29,791 $105,241
========== ======== ======= ======= ========
Schedule III
</TABLE>
<TABLE>
<CAPTION>
Citizens Utilities 401(k) Savings Plan
Allocation of Plan Income and Changes in Plan Equity to Investment Options
December 31, 1993
Guaranteed Insurance
Stock Fund Income Funds Equity Fund Bond Fund Fund Loan Fund
---------- ------------ ----------- --------- ------------ ---------
<S> <C> <C> <C> <C> <C> <C>
Investment Income:
Dividends $ -- $ -- $ -- $ -- $ -- $ --
Interest -- 79,392 175 2,348 69 1,979
Realized appreciation 29,334 -- 1,546 14 -- --
Unrealized appreciation
(depreciation) 341,686 -- 6,527 (355) -- --
Employee contributions 550,024 410,270 65,244 22,392 5,530 --
Net Transfers -
Others 79,077 (64,278) (12,474) (2,325) -- --
Net Transfers -
Loans (18,569) (42,445) (2,058) 77 -- 62,995
Distributions (6,026) (19,368) (1,992) (138) -- --
Participants'
contributions used
for Life Insurance
policy payments -- -- -- -- (9,909) --
---------- ---------- -------- ------- -------- --------
Change in Plan Equity 975,526 363,571 56,968 22,013 (4,310) 64,974
---------- ---------- -------- ------- -------- --------
Plan Equity,beginning
of year 1,004,600 791,652 63,437 29,791 105,241 --
---------- ---------- -------- ------- -------- --------
Plan Equity, end
of year $1,980,126 $1,155,223 $120,405 $51,804 $100,931 $ 64,974
========== ========== ======== ======= ======== ========<PAGE>
</TABLE>
Schedule III-1
<TABLE>
<CAPTION>
Citizens Utilities 401(k) Savings Plan
Allocation of Plan Income and Changes in Plan Equity to Investment Options
December 31, 1992
Guaranteed Insurance
Stock Fund Income Funds Equity Fund Bond Fund Fund
---------- ------------ ----------- --------- -----------
<S> <C> <C> <C> <C> <C>
Investment Income:
Dividends $ -- $ -- $ 745 $ -- $ --
Interest -- 50,889 -- 1,353 35
Realized appreciation 1,302 -- (1,829) -- --
(depreciation)
Unrealized appreciation 164,972 -- 5,611 256 --
Employee contributions 413,861 415,021 53,078 18,361 77,920
Net Transfers - Others 35,631 327 (45,779) 9,821 --
Distributions (25,665) (42,719) (32) -- --
Participants'
contributions used
for Life Insurance
policy payments -- -- -- -- (10,598)
---------- -------- ------- ------- --------
Change in Plan Equity 590,101 423,518 11,794 29,791 67,357
---------- -------- ------- ------- --------
Plan Equity,beginning
of year 414,499 368,134 51,643 -- 37,884
---------- -------- ------- ------- --------
Plan Equity, end
of year $1,004,600 $791,652 $63,437 $29,791 $105,241
========== ======== ======= ======= ========
</TABLE>
<PAGE>
Schedule III-2
Citizens Utilities 401(k) Savings Plan
Allocation of Plan Income and Changes in Plan Equity
To Investment Options
Year Ended December 31, 1991
<TABLE>
<CAPTION>
Guaranteed Insurance
Stock Fund Income Funds Equity Fund Fund
---------- ------------ ----------- ------------
<S> <C> <C> <C> <C>
Investment income:
Dividends $ -- $ -- $ 4,428 $ --
Interest -- 14,003 -- 2
Realized appreciation
(depreciation) (4) 304 -- --
Unrealized appreciation
(depreciation) 94,385 -- (1,829) --
Employee contributions 332,063 399,759 49,507 49,761
Net Transfers - Other 3,662 (4,000) 338 --
Distributions (15,607) (41,932) (801) --
Participants'
contributions used
for Life Insurance
policy payments -- -- -- (11,879)
-------- -------- ------- -------
Change in Plan Equity 414,499 368,134 51,643 37,884
-------- -------- ------- -------
Plan Equity, end
of year $414,499 $368,134 $51,643 $37,884
======== ======== ======= =======
</TABLE>
<PAGE>
Exhibit 1
Independent Auditors' Consent
-----------------------------
The Board of Directors
Citizens Utilities Company
We consent to incorporation by reference in the registration statement (No.
33-37602) on Form S-8 of Citizens Utilities Company of our report dated March
28, 1994, relating to the statements of plan equity of the Citizens Utilities
401(k) Savings Plan as of December 31, 1993 and 1992, and the related
statements of income and changes in plan equity and related schedules for
each of the years in the three-year period ended December 31, 1993, which
report appears in the December 31, 1993 annual report on Form 11-K of
Citizens Utilities 401(k) Savings Plan.
KPMG PEAT MARWICK
New York, New York
March 29, 1994
