SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 11-K/A
ANNUAL REPORT
Pursuant to Section 15(d) of the
Securities Exchange Act of 1934
For the Fiscal Year End December 31, 1993
CUC 401(k) Employee Benefit 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 on its behalf
by the duly undersigned there unto duly authorized.
Date: May 4, 1994 By: Citizens Utilities Company,
Plan Administrator of the
CUC 401(k) Employee Benefit Plan
By: Livingston E. Ross
-------------------------------
Livingston E. Ross
Vice President and Controller
<PAGE>
CUC 401(k) Employee Benefit 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 5-6
Notes to Financial Statements 7-11
Schedules:
I - Investments as of December 31, 1993 12
II - Allocation of Plan Equity to Investment
Options as of December 31, 1993 and 1992 13-14
III - Allocations of Plan Income and Changes in
Plan Equity to Investment Options for the
Years Ended December 31, 1993, 1992 and 1991 15-17
Independent Auditors' Consent Exhibit 1
<PAGE>
Independent Auditors' Report
----------------------------
The Board of Directors
Citizens Utilities Company:
We have audited the financial statements of the CUC 401(k) Employee Benefit
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 CUC 401(k) Employee Benefit 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 31, 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>
<TABLE>
<CAPTION>
CUC 401(k) Employee Benefit Plan
Statements of Plan Equity
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 of $26,416,986
in 1993 and $21,182,088 in 1992) $86,441,328 $58,205,071
Guaranteed Income Funds at contract value:
Principal Mutual Life Insurance Company 2,359,178 0
Pacific Mutual Life Insurance 3,460,178 2,410,538
General American Life Insurance
Company 3,678,346 4,017,251
Life Insurance Company
of Virginia 1,486,187 1,601,477
Provident National Assurance
Company 0 1,897,833
----------- ----------
Total Guaranteed Income Funds 10,983,889 9,927,099
Equity Fund - Capital Initiatives
Equity Total Return Account Contract
at market value (Cost $1,948,560
in 1993 and $1,436,155 in 1992) 2,217,105 1,532,895
Bond Fund - Vanguard GNMA Fund at
market value (Cost $643,260 in 1993 and
$496,596 in 1992) 648,694 498,882
Cash 419,715 8,645
Contributions receivable 1,353,207 32,344
Loans receivable 2,077,656 1,005,626
Other receivables 120,242 188,493
Interest receivable 136,084 0
----------- ----------
Total Assets 104,397,920 71,399,055
----------- ----------
Liabilities and Plan Equity
- - ---------------------------
Accounts payable 623,914 499,773
Distributions payable to participants 2,106,261 4,037,875
----------- ----------
Total Liabilities 2,730,175 4,537,648
----------- ----------
Plan Equity $101,667,745 $66,861,407
=========== ==========
See accompanying notes to financial statements
</TABLE>
<PAGE>
CUC 401(k) Employee Benefit 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 $ 65 $ 130,371
Interest 966,115 803,327 592,093
----------- ---------- ----------
Total Investment income 966,115 803,392 722,464
Realized appreciation:
Stock Fund 10,705,195 280,835 0
Equity Fund 11,785 0 0
Bond Fund 86 0 0
----------- ---------- ----------
Total realized appreciation 10,717,066 280,835 0
Unrealized appreciation:
Stock Fund 4,234,695 4,317,012 3,185,317
Equity Fund 171,805 96,740 112,191
Bond Fund 3,148 2,286 0
----------- ---------- ----------
Total unrealized appreciation 4,409,648 4,416,038 3,297,508
Transfer of shares of Citizens
Utilities Company Series B Common
Stock from the LGS Employees'
Savings and Investment Plan 2,388,736 44,169,944 0
Transfer of shares of Citizens
Utilities Company Series B
Common Stock from TRASOP 21,758,402 0 0
Contributions:
Employee 5,761,845 4,234,168 2,596,616
Employer 1,553,532 1,427,190 835,647
----------- ---------- ----------
Total contributions 7,315,377 5,661,358 3,432,263
Distributions (12,694,188) (5,599,982) (1,851,492)
Cancellation of loan notes of former
participants (27,454) (7,316) (75,229)
Participants' contributions used for
life insurance policy payments (27,364) (30,223) (41,570)
----------- ---------- ----------
Changes in Plan Equity 34,806,338 49,694,046 5,483,944
Plan Equity, beginning of year 66,861,407 17,167,361 11,683,417
----------- ---------- ----------
Plan Equity, end of year $101,667,745 $66,861,407 $17,167,361
=========== ========== ==========
See accompanying notes to financial statements
</TABLE>
<PAGE>
CUC 401(k) Employee Benefit Plan
Notes to Financial Statements
Years Ended December 31, 1993, 1992 and 1991
(1) Summary of Significant Accounting Policies
------------------------------------------
(a) Basis of Presentation
---------------------
The CUC 401(k) Employee Benefit 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.
Effective January 1, 1992, Participants in the LGS Employees'
Savings and Investment Plan became participants in the Plan.
Assets in the LGS Employees' Savings and Investment Plan ("the
LGS Plan") consisted entirely of CUC Series B Common Stock. On
June 7, 1993 and August 5, 1993 all unallocated shares of
Citizens Utilities Series B Common Stock (66,342 shares) of the
LGS Plan were transferred to the Plan. Total market value and
total cost of the shares, at the dates of transfer, were
$2,388,736 and $1,464,171, respectively. On November 3, 1992,
all allocated shares of Citizens Utilities Series B Common Stock
(1,577,498 shares) of the LGS Plan were transferred to the Plan.
Market value and cost of the shares, at the date of transfer,
were $44,169,944 and $13,637,594, respectively.
Effective December 1, 1993 the Citizens Tax Reduction Act Stock
Ownership Plan ("TRASOP") was merged into the Plan. Assets in
the TRASOP consisted entirely of Citizens Utilities Series B
Common Stock. On December 13, 1993 all allocated shares of
Citizens Utilities Series B Common Stock (1,117,853 shares) of
the TRASOP were transferred to the Plan. Market-value and cost
of the shares, at the date of transfer, were $21,758,402 and
$3,916,302, respectively.
(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 140,146, 34,679 and 17,917
respectively.
<PAGE>
(c) Guaranteed Income Fund
----------------------
<TABLE>
<CAPTION>
<S> <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%
Life Insurance Company of VA 7/1/90 to 6/30/91 6/30/94 9.00%
Provident National Asssurance Co. 7/1/89 to 6/30/90 6/30/93 8.94%
</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. Dividends earned on the Equity Fund are
reinvested in Equity TRAC units.
(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".
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. Those 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.
The face values of 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. Assumption of the cash
surrender value liability is currently being negotiated by
representatives of the Circuit Court of Cook County, Illinois.
(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.
(2) Administration of the Plan
--------------------------
As of January 1, 1993, PNC Bank became the Plan Trustee. Plan
administration costs are paid by the Company.
(3) Eligibility
-----------
The plan is a voluntary defined contribution plan sponsored by the
Company. Under the terms of the Plan, non-bargaining unit employees
who are at least 21 years old are eligible to participate in the Plan
after 30 days of service. Enrollment dates are on January 1 and July
1 of each year. At December 31, 1993 there were 1,936 employees
eligible to participate in the Plan and 1,840 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 elect to continue 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:
<PAGE>
Number of
Accounts
----------
Stock fund 1,746
Guaranteed Income fund 789
Equity fund 439
Bond fund 205
Life Insurance 68
Loan fund 324
The Company contribution is determined for each Plan Year by the Board
of Directors of the Company.
The Company contribution for the 1993, 1992 and 1991 Plan Years
amounted to 50% of the first 6% of each Participant's annual
compensation (as defined in the Plan) contributed to the Plan. Prior
to July 1, 1993 Company contributions were invested in the same ratio
among fund options that the Participant elected except that the amount
the Participant had directed to be used for life insurance premium
payments was not considered in such investment ratio. Effective July
1, 1993 the company contributions are invested entirely in the stock
fund.
(5) Vesting
-------
Participants are at all times fully vested in their own contributions
and the allocated earnings thereon. Participants become 100% vested in
the Company's contribution along with allocated income to their
account upon disability, death, attainment of their normal retirement
age or after five years of service. For any other termination of
employment, the vesting schedule is as follows:
Years of Service Vested Percentage
---------------- -----------------
Less than 2 years 0%
2 years but less than 3 years 40%
3 years but less than 4 years 60%
4 years but less than 5 years 80%
5 years or more 100%
Non-vested forfeited employer contributions which had been allocated to
the Guaranteed Income Fund, Equity Fund, Bond Fund and Stock Fund are
used to reduce subsequent Company contributions. Prior to 1993 Non-
vested forfeited employer contributions to the Stock Fund were
allocated among the Participants remaining at the end of each Plan
Year. Guaranteed Income Fund, Equity Fund, Bond Fund and Stock Fund
forfeitures amounted to $6,714, $3,809, $994 and $7,916, respectively,
in 1993, $20,616, $2,243, $587 and $16,830, respectively, in 1992 and
$31,407, $2,740, $0 and $13,548, respectively, in 1991.
(6) Termination of Plan
-------------------
The Board of Directors has the right under the terms of the Plan to
discontinue its contribution at any time and to terminate the Plan
subject to the terms of the Employee's Retirement Income Securities Act
("ERISA").
(7) 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.
(8) Federal Income Tax
------------------
The Plan has been determined 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 favorable determination letter has been
received from the Internal Revenue Service which confirms such status.
<PAGE>
<TABLE>
<CAPTION>
Schedule I
CUC 401(k) Employee Benefit Plan
Investments
December 31, 1993
Cost or Market or
Number Contract Contract
of Shares Value Value
--------- -------- ---------
Stock Fund
- - ----------
<S> <C> <C> <C>
Citizens Utilities Company
Series B Common Stock 4,802,296 $26,416,986 $86,441,328
========= =========== ===========
Guaranteed Income Funds
- - -----------------------
Group Annuity Contract #484409
Principal Mutual Life Insurance
Company 2,359,178 2,359,178
Group Annuity Contract #G-25921-01
Pacific Mutual Life Insurance
Company 3,460,178 3,460,178
Group Annuity Contract #998373-01
General American Life Insurance
Company 3,678,346 3,678,346
Group Annuity Contract #GS2423
Life Insurance Company
of Virginia 1,486,187 1,486,187
----------- -----------
Total Guaranteed Income Funds $10,983,889 $10,983,889
=========== ===========
Equity Fund
- - -----------
Equity TRAC, Capital Initiatives 3,902 $1,948,560 $2,217,105
===== ========== ==========
Bond Fund
- - ---------
Vanguard GNMA Fund 62,555 $643,260 $648,694
====== ======== ========
</TABLE>
<PAGE>
Schedule II
<TABLE>
<CAPTION>
CUC 401(k) Employee Benefit Plan
Allocation of Plan Equity to Investment Options
December 31, 1993
Guaranteed Bond Insurance Loan
Stock Fund Income Funds Equity Fund Fund Fund Fund
---------- ------------ ----------- ---- --------- ----
<S> <C> <C> <C> <C> <C> <C>
Assets:
Investment in Citizens
Utilities Company
Series B Common
Stock at market value $86,441,328 $ -- $ -- $ -- $ -- $ --
Investment in Group Annuity
Contract at contract
value -- 10,983,889 -- -- -- --
Investment in Equity TRAC,
Capital Initiatives
at market value -- -- 2,217,105 -- -- --
Investment in Vanguard GNMA
Bond at market value -- -- -- 648,694 -- --
Cash 330,149 -- -- -- 13,633 75,933
Contributions receivable 654,700 -- 114,105 19,969 564,433 --
Loans receivable -- -- -- -- -- 2,077,656
Other receivable 42,207 12,175 5,549 1,037 165 59,109
Interest Receivable 525 132,464 -- 3,095 -- --
----------- ----------- ---------- -------- -------- ---------
Total Assets 87,468,909 11,128,528 2,336,759 672,795 578,231 2,212,698
----------- ----------- ----------- -------- -------- ---------
Liabilities:
Accounts payable -- 452,566 5,683 6,913 25,537 133,215
Distributions payable
to participants 2,013,965 78,996 11,085 2,215 -- --
----------- ----------- ---------- -------- -------- ---------
Total Liabilities 2,013,965 531,562 16,768 9,128 25,537 133,215
----------- ----------- ---------- -------- -------- ---------
Plan Equity $85,454,944 $10,596,966 $2,319,991 $663,667 $552,694 $2,079,483
=========== =========== ========== ======== ======== =========
</TABLE>
Schedule II-1
<TABLE>
<CAPTION>
CUC 401(k) Employee Benefit Plan
Allocation of Plan Equity to Investment Options
December 31, 1992
Guaranteed Bond Loan
Stock Fund Income Funds Equity Fund Fund Fund
---------- ------------ ----------- ---- ----
<S> <C> <C> <C> <C> <C>
Assets:
Investment in Citizens
Utilities Company Series B
Common Stock at market
value $58,205,071 $ -- $ -- $ -- $ --
Investment in Group Annuity
Contract at contract value -- 9,927,099 -- -- --
Investment in Equity TRAC,
Capital Initiatives
at market value -- -- 1,532,895 -- --
Investment in Vanguard GNMA
Bond at market value -- -- -- 498,882 --
Cash 5,477 273 2,895 -- --
Contributions receivable -- -- 31,847 497 --
Loans receivable -- -- -- -- 1,005,626
Other receivable 28,578 91,886 6,344 702 60,983
---------- ---------- ---------- -------- ---------
Total Assets 58,239,126 10,019,258 1,573,981 500,081 1,066,609
---------- ---------- ---------- -------- ---------
Liabilities:
Accounts payable 88,741 334,305 10,647 5,097 60,983
Distributions payable
to participants 3,849,566 135,991 42,221 10,097 --
---------- ---------- ---------- -------- ---------
Total Liabilities 3,938,307 470,296 52,868 15,194 60,983
---------- ---------- ---------- -------- ---------
Plan Equity $54,300,819 $9,548,962 $1,521,113 $484,887 $1,005,626
========== ========== ========== ======== =========
</TABLE>
<PAGE>
Schedule III
<TABLE>
<CAPTION>
CUC 401(k) Employee Benefit Plan
Allocation of Plan Income and Changes in Plan Equity to Investment Options
Year Ended December 31, 1993
Guaranteed Bond Insurance Loan
Stock Fund Income Funds Equity Fund Fund Fund Fund
----------- ------------ ----------- ---- --------- ----
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Dividends $ -- $ -- $ -- $ -- $ -- $ --
Interest 5,652 819,322 -- 28,911 878 111,352
Realized appreciation 10,705,195 -- 11,785 86 -- --
Unrealized appreciation 4,234,695 -- 171,805 3,148 -- --
Transfer of allocated
shares of Citizens Utilities
Company Series B Common
Stock from the LGS Employees'
Savings and Investment
Plan 2,388,736 -- -- -- -- --
Transfer of shares of Citizens
Utilities Company Series B
Common Stock from TRASOP 21,758,402 -- -- -- -- --
Contributions:
Employee 2,691,281 1,637,442 652,682 201,260 579,180 --
Employer 1,184,394 240,936 99,895 28,307 -- --
----------- ----------- ---------- -------- -------- ---------
Total contributions 3,875,675 1,878,378 752,577 229,567 579,180 --
----------- ----------- ---------- -------- -------- ---------
Net transfers - other 1,022,585 (879,155) (77,152) (66,278) -- --
Net transfers - loans (704,539) (253,554) (25,440) (6,426) -- 989,959
Distributions (12,132,276) (516,987) (34,697) (10,228) -- --
Cancellation of loan notes -- -- -- -- -- (27,454)
Participants' contributions
used for life insurance
policy payments -- -- -- -- (27,364) --
----------- ----------- ---------- -------- -------- ----------
Changes in Plan Equity 31,154,125 1,048,004 798,878 178,780 552,694 1,073,857
----------- ----------- ---------- -------- -------- ----------
Plan Equity, beginning
of year 54,300,819 9,548,962 1,521,113 484,887 -- 1,005,626
----------- ----------- ---------- -------- -------- ----------
Plan Equity, end of year $85,454,944 $10,596,966 $2,319,991 $663,667 $552,694 $2,079,483
=========== =========== ========== ======== ======== ==========
</TABLE>
<PAGE>
Schedule III-I
<TABLE>
<CAPTION>
CUC 401(k) Employee Benefit Plan
Allocation of Plan Income and Changes in Plan Equity to Investment Options
Year Ended December 31, 1992
Guaranteed Bond Insurance Loan
Stock Fund Income Funds Equity Fund Fund Fund Fund
----------- ------------ ----------- ---- --------- ----
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Dividends $ -- $ -- $ 65 $ -- $ -- $ --
Interest -- 738,790 -- 26,519 -- 38,018
Realized appreciation 280,835 -- -- -- -- --
Unrealized appreciation 4,317,012 -- 96,740 2,286 -- --
Transfer of allocated
shares of Citizens Utilities
Company Series B Common
Stock from the LGS Employees'
Savings and Investment
Plan 44,169,944 -- -- -- -- --
Transfer of TRASOP shares -- -- -- -- -- --
Contributions:
Employee 2,138,891 1,324,520 575,898 164,636 30,223 --
Employer 738,565 454,922 182,617 51,086 -- --
----------- ---------- ---------- -------- -------- ----------
Total contributions 2,877,456 1,779,442 758,515 215,722 30,223 --
----------- ---------- ---------- -------- -------- ----------
Net transfers - other (1,056,504) 1,456,968 (674,128) 273,664 -- --
Net transfers - loans (498,324) (124,520) 10,057 2,264 -- 610,523
Distributions (4,401,503) (1,102,432) (60,479) (35,568) -- --
Cancellation of loan notes -- -- -- -- -- (7,316)
Participants' contributions
used for life insurance
policy payments --- -- -- -- (30,223) --
----------- ---------- ---------- -------- -------- ----------
Changes in Plan Equity 45,688,916 2,748,248 130,770 484,887 -- 641,225
----------- ---------- ---------- -------- -------- ----------
Plan Equity, beginning
of year 8,611,903 6,800,714 1,390,343 -- -- 364,401
----------- ---------- ---------- -------- -------- ----------
Plan Equity, end of year $54,300,819 $9,548,962 $1,521,113 $484,887 $ -- $1,005,626
=========== ========== ========== ======== ======== ==========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Schedule III-2
CUC 401(k) Employee Benefit Plan
Allocation of Plan Income and Changes in Plan Equity to Investment Options
Year Ended December 31, 1991
Guaranteed Insurance Loan
Stock Fund Income Funds Equity Fund Fund Fund
---------- ------------ ----------- --------- -----
<S> <C> <C> <C> <C> <C>
Investment income:
Dividends $ -- $ -- $ 130,371 $ -- $ --
Interest -- 560,900 -- -- 31,193
Unrealized appreciation 3,185,317 -- 112,191 -- --
Contributions:
Employee 1,259,154 1,140,239 155,653 41,570 --
Employer 397,443 380,272 57,932 -- --
---------- ---------- ---------- -------- --------
Total contributions 1,656,597 1,520,511 213,585 41,570 --
---------- ---------- ---------- -------- --------
Net transfers - other (173,195) 244,332 (71,137) -- --
Net transfers - loans (3,934) (86,192) (3,050) -- 93,176
Distributions (838,367) (915,312) (97,813) -- --
Cancellation of loan notes -- -- -- -- (75,229)
Participants' contributions
used for life insurance
policy payments -- -- -- (41,570) --
---------- ---------- ---------- -------- --------
Changes in Plan Equity 3,826,418 1,324,239 284,147 -- 49,140
---------- ---------- ---------- -------- --------
Plan Equity, beginning
of year 4,785,485 5,476,475 1,106,196 -- 315,261
---------- ---------- ---------- -------- --------
Plan Equity, end of year $8,611,903 $6,800,714 $1,390,343 $ -- $364,401
========== ========== ========== ======== ========
</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.
33-48683) on Form S-8 of Citizens Utilities Company of our report dated March
28, 1994, relating to the statements of plan equity of the CUC 401(k) Employee
Benefit 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 CUC 401(k) Employee Benefit
Plan.
KPMG Peat Marwick
New York, New York
May 4, 1994
