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 Ended December 31, 1995
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 001-11001
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 thereunto duly authorized.
Date: June 27, 1996 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, 1995 and 1994 4
Statements of Income and Changes in Plan
Equity for the Years Ended
December 31, 1995, 1994 and 1993 5-6
Notes to Financial Statements 7-11
Schedules:
I - Investments as of December 31, 1995 12
II - Allocation of Plan Equity to Investment
Options as of December 31, 1995 and 1994 13-14
III - Allocations of Plan Income and Changes in
Plan Equity to Investment Options for the
Years Ended December 31, 1995, 1994 and 1993 15-17
IV - 5% Reportable Transactions for the Year Ended
December 31, 1995 18
Independent Auditors' Consent Exhibit 23
<PAGE>
Independent Auditors' Report
Citizens Utilities Company, Plan Administrator of the
CUC 401(k) Employee Benefit Plan:
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, 1995 and 1994 and the income and changes in plan equity for each
of the years in the three-year period ended December 31, 1995 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.
/s/ KPMG PEAT MARWICK LLP
New York, New York
June 27, 1996
<PAGE>
CUC 401(k) Employee Benefit Plan
Statements of Plan Equity
December 31,
------------
Assets 1995 1994
- ------ ---- ----
Investment:
Stock Fund - at market value
(Cost $41,969,019 in 1995
and $32,371,878 in 1994) $ 69,716,659 $ 65,069,654
Guaranteed Income Fund - at contract value 19,950,741 14,178,486
Equity Fund - at market value
(Cost $8,331,326 in 1995 and
$3,525,961 in 1994) 10,231,636 3,533,380
Bond Fund - at market value
(Cost $2,059,493 in 1995 and
$884,394 in 1994) 2,190,353 855,542
Cash and cash equivalents 575,941 8,934,183
Contributions receivable 837,608 1,404,589
Loans receivable 3,325,563 2,738,549
Other receivables 385,314 349,444
Interest receivable - 214,333
-------------- ------------
Total Assets $ 107,213,815 $ 97,278,160
-------------- ------------
Liabilities and Plan Equity
- ---------------------------
Account Payable 140,187 278,013
Distributions Payable to Participants - 50,922
-------------- ------------
Total Liabilities 140,187 328,935
-------------- ------------
Plan Equity $ 107,073,628 $ 96,949,225
============== ============
See accompanying notes to financial statements
<PAGE>
CUC 401(k) Employee Benefit Plan
Statements of Income and Changes in Plan Equity
Year Ended December 31,
1995 1994 1993
---- ---- ----
Investment Income:
Dividends $ 209,321 $ 248 $ 0
Interest 489,538 1,116,095 966,115
--------------- ------------ -------------
Total Investment Income 698,859 1,116,343 966,115
Realized Gains (losses):
Stock Fund (856,668) 4,760,080 10,705,195
Guaranteed Income Fund 108,042 293 0
Equity Fund 278,263 164,133 11,785
Bond Fund 23,189 (3,426) 86
--------------- ------------ -----------
Total Realized Gains
(losses) (447,174) 4,921,080 10,717,066
Unrealized Appreciation
(depreciation):
Stock Fund 5,128,579 (28,411,309) 4,234,695
Guaranteed Income Fund 1,070,673 (80,222) 0
Equity Fund 1,866,379 (214,561) 171,805
Bond Fund 122,292 (40,208) 3,148
--------------- ------------- -----------
Total Unrealized Appreciation
(depreciation) 8,187,923 (28,746,300) 4,409,648
Transfer into Plan:
Citizens Utilities Company
Common Stock Series B from
the LGS Employees' Saving
and Investment Plan 0 0 2,388,736
Citizens Utilities Company
Common Stock Series B from
the TRASOP 0 0 21,758,402
GTE Savings Plan Assets 1,632,046 13,280,760 0
NORCO Plan Assets 0 1,683,414 0
ALLTEL Savings Plan Assets 4,404,538 0 0
--------- ---------- ----------
Total transfer into Plan 6,036,584 14,964,174 24,147,138
Contributions:
Employees 7,645,296 5,907,898 5,761,845
Employer 2,392,307 2,109,411 1,553,532
-------------- ------------- -------------
Total Contributions 10,037,603 8,017,309 7,315,377
Distributions (14,373,473) (4,915,838) (12,694,188)
Cancellation of loan notes of
former participants 0 (52,153) (27,454)
Participants' Contributions used for life
Insurance premium payments (15,919) (23,135) (27,364)
--------------- ------------- -----------
Change in Plan Equity 10,124,403 (4,718,520) 34,806,338
Plan Equity, Beginning of Year 96,949,225 101,667,745 66,861,407
--------------- ------------- -------------
Plan Equity, End of Year $ 107,073,628 96,949,225 $101,667,745
=============== ============= ============
See accompanying notes to financial statements
<PAGE>
CUC 401(k) Employee Benefit Plan
Notes to Financial Statements
Years Ended December 31, 1995, 1994 and 1993
(1) Summary of Significant Accounting Policies
------------------------------------------
(a) Basis of Presentation
---------------------
The Citizens Utilities 401(k) Employee Benefit Plan (the "Plan") provides
Participants with the following investment options: a Citizens Utilities Company
(the "Company") Common Stock Series B Stock Fund, a Guaranteed Income Fund, an
Equity Fund, a Bond Fund and Life Insurance.
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 the Company's
Common Stock Series B. On June 7, 1993 and August 5, 1993 all previously
unallocated shares of the Company's Common Stock Series B Common Stock (66,342
shares) in 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.
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
the Company's Common Stock Series B. On December 13, 1993 all allocated shares
of the Company's Common Stock Series B (1,117,853 shares) in the TRASOP were
transferred to the Plan. Market value and cost of the shares at the date of
transfer was $21,758,402 and $3,916,302, respectively.
Effective January 1, 1994, participants in the Natural Gas Company of Louisiana
("NORCO") became participants in the Plan. NORCO assets in the amount of
$1,683,414 were transferred to the Plan on August 15, 1994.
On December 31, 1993, the Company acquired from GTE Corp. certain
telecommunications operations in Idaho, Tennessee, Utah and West Virginia. On
June 30, 1994, the Company acquired from GTE Corp. certain telecommunications
operations in New York. Effective January 1, 1994, participants in the GTE
Savings Plan from the acquired GTE properties in Idaho, Tennessee, Utah and West
Virginia became participants in the Plan. Assets in the GTE Savings Plan
totalling $4,448,828 were transferred to the Plan on August 30, 1994. Effective
July 1, 1994, participants in the GTE Savings Plan from the acquired GTE New
York property became participants in the Plan. Assets in the GTE Savings Plan
totaling $8,831,932, were transferred to the plan on November 2, 1994. Assets in
the GTE Savings Plan, totaling $526,418 and $1,105,628 were transferred to the
plan on January 10, 1995 and May 17, 1995, respectively.
On November 29, 1994, Citizens and ALLTEL corporation announced the signing of
definitive agreements pursuant to which Citizens agreed to acquire from ALLTEL
at a net purchase price of $282 million, approximately 110,000 local telephone
access lines and 7,000 cable television subscribers in eight states. From June
30, 1995 to December 31, 1995, approximately 93,000 local telephone access lines
and approximately 7,000 cable television subscribers were transferred to the
Company. On March 31, 1996, the remainder of the local telephone access lines
were transferred to the Company. Effective July 1, 1995, participants in the
ALLTEL Savings Plan from the acquired ALLTEL properties in West Virginia and
Oregon became participants in the Plan. Effective October 1, 1995, participants
in the ALLTEL Savings Plan from the acquired ALLTEL properties in Arizona, New
Mexico, Utah and California became participants in the Plan.
Effective January 1, 1996, participants in the ALLTEL Savings Plan from the
acquired ALLTEL properties in California became participants in the Plan. Assets
in the ALLTEL Savings Plan totaling $27,023, $837,054, $58,150, $3,482,311, were
transferred to the Plan on September 27, 1995, October 7, 1995, November 24,
1995 and December 27, 1995, respectively.
(b) Stock Fund
----------
The Stock Fund invests in shares of the Company's Common Stock Series B. Stock
dividends are paid on the Common Stock Series B shares in additional full and
fractional shares. Stock dividends are not reported as dividend income in the
Statements of Income and Changes in Plan Equity, rather, stock dividends are
capital transactions which have the effect of increasing plan shares and
decreasing per share cost. Shares received from stock dividends in 1995, 1994
and 1993 were 339,132, 240,385, and 140,146, respectively.
<PAGE>
(c) Guaranteed Income Fund
----------------------
Contributions to the Guaranteed Income Fund have been invested in the following
Guaranteed Income Contracts:
Annual
Compound
Maturity Rate of
Contribution Period Guaranteed Income Contract Issuer Date Return
- ------------------- --------------------------------- --------- --------
PNC Bank Guaranteed
Various Investment Contract Fund N/A Various
11/1/95 to 6/30/96 Allstate Life Insurance Company 6/30/00 6.14%
1/18/95 Allstate Life Insurance Company 6/30/00 8.11%
9/08/94 New York Life Insurance Company 6/30/99 7.11%
John Hancock Mutual Life Insurance
7/1/94 to 6/30/95 Company 6/30/98 6.94%
Principal Mutual Life Insurance
7/1/93 to 6/30/94 Company 6/30/99 5.60%
Pacific Mutual Life Insurance
7/1/92 to 6/30/93 Company 6/30/97 7.30%
Prior to 12/31/93 AUSA Life Insurance Company 6/30/97 5.00%
7/1/91 to 6/30/92 General American Life Insurance
Company 6/30/96 8.30%
Participants in the Guaranteed Income Fund receive a blended interest rate
calculated using a weighted average of contract assets and the above annual
compound rates of return. The blended interest rate is projected using assets in
the above contracts and varies as contracts mature, as new contracts are
purchased and with deposit and withdrawal experience.
(d) Equity Fund
-----------
Contributions to the Equity Fund are invested in the Index Trust 500 Portfolio
managed by the Vanguard Group. This fund is a passive equity management vehicle
which seeks to replicate the total return of the Standard and Poor's 500 stock
index with dividends reinvested. Prior to June 30, 1994, contributions were
invested in Capital Initiatives Equity Total Return Account Contract ("Equity
TRAC"). The Equity TRAC's balance was transferred to the Vanguard Index Trust
500 Portfolio as of June 30, 1994.
(e) Bond Fund
---------
Contributions to the Bond Fund are invested in the GNMA Bond Fund managed by the
Vanguard Group. The GNMA Bond Fund is primarily comprised of securities backed
by the "full faith and credit of the U.S. Government". Dividends are received in
cash and are 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, life insurance, which may cover
the participant, his/her spouse and dependent children, was provided by
Inter-American Life Insurance Company ("Inter-American"). Participants who
maintained life insurance policies prior to January 1, 1992 had their coverage
remain intact. These Participants may continue to 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 has no effect on Plan assets as the
Participants' contributions used to purchase life insurance policies are not
assets of the Plan. The face values and cash surrender values of the
Inter-American policies have been assumed by Jackson National Life Insurance
Company and Commonwealth Life Insurance Company.
<PAGE>
(g) Loans
-----
A Participant in the Plan for two years or more may request to borrow up to the
lesser of 50% of his/her vested account balance or $50,000, in both cases
limited to the Participant's salary deferral account balance on the valuation
date preceding the date on which the loan is made. The loans are allocated to a
Loan Fund. The interest rate paid by partcipants 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 for the term of the loan. Loan
repayments are made through payroll deductions and are credited to the
Participants' accounts as the payments are made. In the event of termination of
employment, a Participant's loan note is generally canceled and the
Participant's distribution is reduced by the amount of the 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, the Plan Sponsor.
(3) Eligibility
-----------
The plan is a voluntary defined contribution plan. Under the terms of the Plan,
non-bargaining unit employees who have attained 30 days of service are eligible
to participate in the Plan. Enrollment dates are on January 1 and July 1 of each
year. At December 31, 1995 there were 3,134 employees eligible to participate in
the Plan and 2,883 are participating 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. Contributions may be apportioned in 5% increments to any combination
of the four investment options specified below. At December 31, 1995 the number
of accounts in each fund was as follows:
Number of
Accounts
---------
Investment Option:
Stock Fund 2,724
Guaranteed Income Fund 2,107
Equity Fund 1,152
Bond Fund 501
Life Insurance 41
Loan Fund 562
The Company contribution is determined for each Plan year by the Board of
Directors of the Company. The Company contribution for the 1995, 1994 and 1993
Plan years amounted to 50% of the first 6% of each Participant's annual
compensation (as defined by the Plan). Prior to July 1, 1993, Company
contributions were invested in the same ratio of fund options that the
Participant elected except that contrib,utions for life insurance premium
payments were not considered in such investment ratio. Effective July 1, 1993
the Company contributions are invested entirely in the Stock fund.
<PAGE>
(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
contributions and the related earnings on the Company's contributions upon
disability, death, attainment of normal retirement age or after five years of
service. For any other termination of employment, the vesting schedule is as
follows:
Vested Percentage
of Company's Contribution
Years of Service and Related Earnings
---------------- ---------------------------
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 Company contributions which had been allocated to the
Guaranteed Income Fund, Equity Fund, Bond Fund and Stock Fund are used to reduce
future Company contributions.
Forfeitures by Fund for the years ended December 31, 1995, 1994 and
1993 were as follows:
Fund 1995 1994 1993
---- ---- ---- ----
Stock Fund $56,123 $21,456 $7,916
Guaranteed Income Fund 15,698 12,937 6,714
Equity Fund 4,091 706 3,809
Bond Fund 1,042 1,146 994
(6) Termination of Plan
-------------------
The Company's Board of Directors has the right under the terms of the Plan to
discontinue Company contributions at any time and to terminate the Plan, subject
to the terms of the Employee Retirement Income Security Act of 1974 ("ERISA").
(7) Distribution of Benefits
------------------------
Upon termination of employment, a Participant is entitled to receive payment in
full of the vested portion of his/her account. 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 1/2.
(8) Federal Income Tax
------------------
The Plan is 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>
Schedule I
CUC 401(k) Employee Benefit Plan
Investments
December 31, 1995
Cost or Market or
Number of Contract Contract
Shares Value Value
-------------- -------------- --------------
Stock Fund
----------
Citizens Utilities Company
Common Stock Series B 5,467,973 $ 41,969,019 $ 69,716,659
============= ============== ==============
Guaranteed Income Fund
- ----------------------
Guaranteed Income Fund $ 19,950,741 $ 19,950,741
============== ==============
Equity Fund
- -----------
Vanguard Index Trust Fund 177,633 $ 8,331,326 $ 10,231,636
============== ============== ==============
Bond Fund
- ---------
Vanguard GNMA Fund 210,005 $ 2,059,493 $ 2,190,353
============== ============== ==============
<PAGE>
Schedule II
CUC 401(k) Employee Benefit Plan
Allocation of Plan Equity to Investment Options
December 31, 1995
<TABLE>
<CAPTION>
Insurance or
Stock Guaranteed Equity Bond Disbursement Loan
Fund Income Fund Fund Fund Fund Fund
------------ ------------- ---------- ---------- ---------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Assets:
Investment in Stock Fund
at market value $69,716,659 $ - $ - $ - $ - $ -
Investment in Guaranteed
Income Fund - at contract
value - 19,950,741 - - - -
Investment in Equity Fund
at market value - - 10,231,636 - - -
Investment in Bond Fund
at market value - - - 2,190,353 - -
Cash and cash equivalents 575,941 - - - - -
Contributions receivable 507,167 153,993 145,305 31,143 - -
Loans receivable - - - - - 3,325,563
Other receivables 89,753 22,999 132,519 4,687 - 135,356
Interest receivables - - - - - -
-------------- ------------ ---------- --------- --------- -----------
Total Assets 70,889,520 20,127,733 10,509,460 2,226,183 - 3,460,919
-------------- ------------ ---------- ---------- --------- ------------
Liabilities:
Accounts payable 4,831 - - - - 135,356
-------------- ------------ ----------- ----------- ---------- ------------
Total Liabilities 4,831 - - - 135,356
-------------- ------------ ----------- ----------- ---------- ------------
Plan Equity $ 70,884,689 $ 20,127,733 $ 10,509,460 $2,226,183 $ 0 $ 3,325,563
============== ============ ============ ========== ========== ============
</TABLE>
<PAGE>
Schedule II-1
CUC 401(k) Employee Benefit Plan
Allocation of Plan Equity to Investment Options
December 31, 1994
<TABLE>
<CAPTION>
Stock Guaranteed Equity Bond Disbursement Loan
Fund Income Fund Fund Fund Fund Fund
-------------- -------------- ------------ ------------- ---------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Assets:
Investment in Stock Fund
at market value $ 65,069,654 $ - $ - $ - $ - $ -
Investment in Guaranteed
Income Fund - at contract
value - 14,178,486 - - - -
Investment in Equity Fund
at market value - - 3,533,380 - - -
Investment in Bond Fund
at market value - - - 855,542 - -
Cash and cash equivalents 4,516,819 1,460,294 2,350,406 606,664 - -
Contributions receivable 948,216 240,917 173,443 42,013 - -
Loans receivable - - - - - 2,738,549
Other receivables 132,479 28,442 13,108 1,630 - 173,785
Interest receivables 21,635 131,158 59,098 2,442 - -
-------------- ------------- ----------- --------- ----------- ------------
Total Assets 70,688,803 16,039,297 6,129,435 1,508,291 - 2,912,334
-------------- ------------- ----------- --------- ----------- ------------
Liabilities:
Accounts payable 21,456 12,937 706 3,968 6,066 232,880
Distribution payable to
participants - 48,464 2,458 - - -
-------------- ------------- ----------- ---------- --------- -------------
Total Liabilities 21,456 61,401 3,164 3,968 6,066 232,880
-------------- ------------- ------------ -------- ---------- -------------
Plan Equity $ 70,667,347 $ 15,977,896 $ 6,126,271 $ 1,504,323 $ (6,066) $ 2,679,454
============== ============ =========== ========= ========== =============
</TABLE>
<PAGE>
Schedule III
CUC 401(k) Employee Benefit Plan
Allocation of Plan Income and Changes in Plan Equity to Investment Options
Year Ended December 31, 1995
<TABLE>
<CAPTION>
Stock Guaranteed Equity Insurance
Fund Income Fund Fund Fund Bond Fund Loan Fund
------------ --------------- -------------- -------------- --------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Investment Income:
Dividends $ - $ 641 $ 207,514 $ 1,166 $ - $ -
Interest 141,168 180,712 24,660 124,218 18,780 -
Realized gains (losses) (856,668) 108,042 278,263 23,189 - -
Unrealized appreciation
(depreciation) 5,128,579 1,070,673 1,866,379 122,292 - -
Transfer into Plan:
GTE Hourly Savings
Plan Assets 729,627 178,424 114,036 58,883 551,076 -
ALLTEL Savings Plan 486,675 3,002,808 779,261 135,794 - -
------------ ------------- ------------ ------------ ----------- ----------
Total transfers
into Plan 1,216,302 3,181,232 893,297 194,677 551,076 -
Contributions:
Employees 3,703,766 1,923,073 1,618,582 399,875 - -
Employer 2,280,602 48,689 48,397 14,619 - -
------------- ------------- ------------ ------------ ----------- ------------
Total Contributions 5,984,368 1,971,762 1,666,979 414,494 - -
------------- ------------- ------------ ------------ ----------- ------------
Net transfers - other (1,235,076) (328,236) 168,498 (12,354) 1,401,102 6,066
Net transfers - loans 786,603 195,503 121,890 27,795 1,131,791) -
Distribution (10,939,012) (2,225,346) (842,760) (173,297) (193,058) -
Cancellation of loan notes - - - - - -
Participants' contributions
insurance used for life
policy payments (8,922) (5,146) (1,531) (320) - -
------------- ------------- ------------ ------------- ------------ ------------
Change in Plan Equity 217,342 4,149,837 4,383,189 721,860 646,109 6,066
------------ ------------- ------------- ------------- ---------- -------------
Plan Equity, beginning of
year 70,667,347 15,977,896 6,126,271 1,504,323 2,679,454 (6,066)
------------- ------------- ------------- ------------- ------------ -------------
Plan Equity, end of
year $ 70,884,689 $ 20,127,733 $ 10,509,460 $ 2,226,183 $ 3,325,563 $ -
============= ============= ============= ============= ============= ==============
</TABLE>
<PAGE>
Schedule III-1
CUC 401(k) Employee Benefit Plan
Allocation of Plan Income and Changes in Plan Equity to Investment Options
Year Ended December 31, 1994
<TABLE>
<CAPTION>
Stock Guaranteed Equity Bond Insurance Loan
Fund Income Fund Fund Fund Fund Fund
------------ ------------- ------------- -------------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Investment Income:
Dividends $ - $ - $ - $ - $ - $ 248
-
Interest 65,439 733,654 95,356 35,577 27,357 158,712
Realized gains (losses) 4,760,080 293 164,133 (3,426) - -
Unrealized appreciation
(depreciation) (28,411,309) (80,222) (214,561) (40,208) - -
Transfer into Plan:
GTE Hourly Savings
Plan Assets 6,620,286 2,264,128 2,919,227 742,156 - 734,963
NORCO Plan Assets - 1,683,414 - - - -
------------ ------------ ------------ ---------- ---------- ----------
Total transfers
into Plan 6,620,286 3,947,542 2,919,227 742,156 - 734,963
Contributions:
Employees 3,413,023 1,403,690 850,056 217,994 23,135 -
Employer 2,073,877 22,209 10,074 3,251 - -
------------- ------------ ------------ ----------- ---------- ----------
Total Contributions 5,486,900 1,425,899 860,130 221,245 23,135 -
Net transfers - other 1,050,442 (431,649) 55,473 (88,149) (586,117) -
Net transfers - loans (29,422) 299,255 (30,585) 2,551 - (241,799)
Distribution (4,330,013) (513,842) (42,893) (29,090) - -
Cancellation of loan notes - - - - - (52,153)
Participants' contributions
used for life insurance
policy payments - - - - (23,135) -
------------ ------------ ----------- ---------- ---------- ---------
Change in Plan Equity (14,787,597) 5,380,930 3,806,280 840,656 (558,760) 599,971
------------- ------------ ----------- ---------- ---------- ---------
Plan Equity, beginning of
year 85,454,944 10,596,966 2,319,991 663,667 552,694 2,079,483
------------- ------------ ----------- ---------- ---------- ---------
Plan Equity, end of year $ 70,667,347 $ 15,977,896 $ 6,126,271 $ 1,504,323 $ (6,066) $ 2,679,454
============= ============ ============ =========== ============ ===========
</TABLE>
<PAGE>
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, 1993
<TABLE>
<CAPTION>
Stock Guaranteed Equity Bond Insurance Loan
Fund Income Fund 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 gains (losses) 10,705,195 - 11,785 86 - -
Unrealized appreciation
(depreciation) 4,234,695 - 171,805 3,148 - -
Transfers into Plan:
Citizens Utilities
Company Common
Stock Series B from
the LGS Employees'
Savings and Investment
Plan 2,388,736 - - - - -
Citizens Utilities
Company Common
Stock Series B from the
TRASOP 21,758,402 - - - - -
------------- ------------- ------------ ------------ ----------- -----------
Transfers into plan 24,147,138 - - - - -
Contributions:
Employees 2,691,281 1,637,442 652,682 201,260 579,180 -
Employers 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
Distribution (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) -
------------- ------------ -------------- ------------ ---------- ------------
Change 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>
Citizens Utilities 401(K) Benefits Plan
5% Reportable Transactions
Series Of Transactions In The Same Security
For Plan Year Ended December 31, 1995
<TABLE>
<CAPTION>
Current
Value
of Asset on
Number of Purchase Selling Cost of Transaction Net Gain/
Description of Asset Transactions Price Price Asset Date (Loss)
<S> <C> <C> <C> <C> <C> <C>
Citizens Utilities Company
Series B Common Stock 13 $ 7,917,149 - $ 7,917,149 $ 7,917,149 -
Citizens Utilities Company
Series B Common Stock 7 - $ 244,631 $ 272,745 $ 244,631 $ (28,114)
PNC Short Term
Investment Fund 9 $ 2,046,855 - $ 2,046,855 $ 2,046,855 -
PNC Short Term 7 - $ 1,947,187 $ 1,947,187 $ 1,947,187 -
Investment Fund
Investment Contract Fund 91 $ 6,424,478 - $ 6,424,478 $ 6,424,478 -
Investment Contract Fund 114 - $ 3,333,243 $ 3,225,201 $ 3,333,243 $ 108,042
Vanguard GNMA 94 $ 1,655,977 - $ 1,655,977 $ 1,655,977 -
Vanguard GNMA 112 - $ 467,192 $ 444,003 $ 467,192 $ 23,189
Vanguard Index Trust 126 $ 6,222,213 - $ 6,222,213 $ 6,222,213 -
Vanguard Index Trust 136 - $ 1,674,619 $ 1,396,356 $ 1,674,619 $ 278,263
</TABLE>
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 June 27,
1996, relating to the statements of plan equity of the Citizens Utilities 401
(k) Benefit Plan as of December 31, 1995 and 1994 and the related statements of
income and changes in plan equity and related schedules for each of the years
then ended, which report appears in the December 31,1995 annual report on Form
11-K of Citizens Utilities 401(k) Benefit Plan.
/s/ KPMG PEAT MARWICK LLP
New York, New York
June 27, 1996
