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 Ended December 31, 1997
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 29, 1998 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 Net Assets Available for Benefits
December 31, 1997 and 1996 4
Statement of Changes in Net Assets Available for
Benefits with Fund Information for the
Year Ended December 31, 1997 5
Notes to Financial Statements 6-12
Schedules:*
I - Item 27a - Schedule of Assets Held for
Investment Purposes 13
II - Item 27d - Schedule of Reportable Transactions for
the Year Ended December 31, 1997 14
Independent Auditors' Consent 15
*Certain schedules omitted due to absence of conditions under which
they are required.
<PAGE>
Independent Auditors' Report
----------------------------
Citizens Utilities Company, Plan Administrator of the
CUC 401(k) Employee Benefit Plan:
We have audited the accompanying Statements of Net Assets Available for Benefits
of the CUC 401(k) Employee Benefit Plan 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 Plan 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 Items
27a-Schedule of Assets Held for Investment Purposes and Item 27d-Schedule of
Reportable Transactions are presented for the 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 Rules and
Regulations of Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. These supplemental schedules are the responsibility of the
Plan's management. The Fund Information is presented for the purpose of
additional analysis and is not a required part of the basic financial
statements. The supplemental schedules and Fund Information have been subjected
to the auditing procedures applied in the audits 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.
KPMG PEAT MARWICK LLP
New York, New York
June 29, 1998
Page 3
<PAGE>
CUC 401(k) Employee Benefit Plan
Statements of Net Assets Available for Benefits
at December 31, 1997 and 1996
<TABLE>
<CAPTION>
<S> <C> <C>
Assets 1997 1996
- ------ ---- ----
Investment:
Stock Fund - at market value
(Cost $54,758,440 in 1997 and $50,125,568 in 1996) $ 60,624,599 $ 66,677,999
Guaranteed Income Fund - at contract value 25,406,241 23,632,971
Equity Fund - at market value
(Cost $19,750,456 in 1997 and $13,272,985 in 1996) 28,160,595 17,404,943
Bond Fund - at market value
(Cost $4,113,440 in 1997 and $2,972,237 in 1996) 4,211,586 3,048,696
Loans receivable 3,991,899 4,258,639
-------------- ------------------
122,394,920 115,023,248
Employer's contribution receivable 514,456 243,164
Participants' contribution receivable 1,403,310 662,873
Other receivables 740,649 370,409
-------------- ------------------
Net Assets Available for Benefits $ 125,053,335 $ 116,299,694
============== ==================
</TABLE>
See accompanying notes to financial statements
Page 4
<PAGE>
<TABLE>
<CAPTION>
CUC 401(k) Employee Benefit Plan
Statement of Changes in Net Assets Available for Benefits with Fund Information
Year Ended December 31, 1997
Participant Directed
-----------------------------------------------
Stock Guaranteed Equity
Fund Income Fund Fund
-------------- ------------- -------------
<S> <C> <C> <C>
Investment Income:
Dividends ............... $ -- $ -- $ 180,771
Interest ................ 189,625 67,156 122,167
Net (Depreciation)
Appreciation in Fair
Value of Investments ..... (3,848,747) 1,705,641 5,808,960
------------- ------------- -------------
(3,659,122) 1,772,797 6,111,898
Contributions:
Participants' .......... 3,370,887 2,517,110 5,066,311
Employer ............... -- 39,152 52,927
------------- ------------- -------------
Total Contributions .... 3,370,887 2,556,262 5,119,238
------------- ------------- -------------
Net transfers - other ....... (1,149,761) (202,733) 1,295,532
Net transfers - loans ....... (87,899) (48,148) (21,978)
Distribution:
Benefits Paid to Participants (3,628,824) (2,302,808) (1,747,493)
Participants' contributions
used for life insurance
premium payments .......... (2,904) (2,100) (1,545)
------------- ------------- -------------
Total Distributions ... (3,631,728) (2,304,908) (1,749,038)
------------- ------------- -------------
Change in Net Assets ........ (5,157,623) 1,773,270 10,755,652
------------- ------------- -------------
Net Assets Available
for Benefits:
Beginning of year ........... 44,280,615 23,632,971 17,404,943
------------- ------------- -------------
End of year ................. $ 39,122,992 $ 25,406,241 $ 28,160,595
============= ============= =============
</TABLE>
Page 5
<PAGE>
CUC 401(k) Employee Benefit Plan
Statement of Changes in Net Assets Available for Benefits with Fund Information
Year Ended December 31, 1997
(Continued)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Non-Participant
Participant Directed Directed
-------------------------------------------------- -------------
Stock
Bond Fund Loans Other Fund Total
-------------- ------------- ------------ ------------- -------------
Investment Income:
Dividends ............... $ -- $ -- $ 208,946 $ -- $ 389,717
Interest ................ 253,770 (284) -- -- 632,434
Net (Depreciation)
Appreciation in Fair
Value of Investments ..... 76,641 -- -- (2,142,558) 1,599,937
------------- ------------- ------------- ------------- ------------
330,411 (284) 208,946 (2,142,558) 2,622,088
Contributions:
Participants' .......... 983,608 -- 740,437 -- 12,678,353
Employer ............... 7,962 -- 271,293 3,266,910 3,638,244
------------- ------------- ------------- ------------- -------------
Total Contributions .... 991,570 -- 1,011,730 3,266,910 16,316,597
------------- ------------- ------------- ------------- -------------
Net transfers - other ....... 135,874 (78,912) -- -- --
Net transfers - loans ....... (3,438) 170 161,293 -- --
Distribution:
Benefits Paid to Participants (290,838) (187,714) -- (2,020,129) (10,177,806)
Participants' contributions
used for life insurance
premium payments .......... (689) -- -- -- (7,238)
------------- ------------- ------------- ------------- -------------
Total Distributions ... (291,527) (187,714) -- (2,020,129) (10,185,044)
------------- ------------- ------------- ------------- -------------
Change in Net Assets ........ 1,162,890 (266,740) 1,381,969 (895,777) 8,753,641
------------- ------------- ------------ ------------- -------------
Net Assets Available
for Benefits:
Beginning of year ........... 3,048,696 4,258,639 1,276,446 22,397,384 116,299,694
------------- ------------- ------------ ------------- -------------
End of year ................. $ 4,211,586 $ 3,991,899 $ 2,658,415 $ 21,501,607 125,053,335
============= ============= ============= ============= =============
</TABLE>
Page 5a
<PAGE>
CUC 401(k) Employee Benefit Plan
Notes to Financial Statements
December 31, 1997 and 1996
(1) Description of the Plan
-----------------------
The following brief description of the Citizens Utilities
Company (the "Company") 401(k) Employee Benefit Plan (the
"Plan") provides general information. Participants should
refer to the Plan document for a more comprehensive
description of the Plan's provisions.
a. General. 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, 1997 there were 3,648 employees
eligible to participate in the Plan and 3,497 were
participating in the Plan.
b. 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, 1997
the number of accounts in each fund were as follows:
Number of
Accounts
__________
Investment Option:
Stock Fund 3,901
Guaranteed Income Fund 2,286
Equity Fund 2,400
Bond Fund 1,009
Loan Fund 798
Life Insurance 37
The Company contribution is determined for each Plan year by
the Board of Directors of the Company. The Company
contribution for the 1997 and 1996 Plan years amounted to 50%
of the first 6% of each Participant's annual base compensation
(as defined by the Plan) that a participant contributes to the
Plan. The Company contributions are invested entirely in the
Stock Fund unless a participant is age 55 or older in which
case they may elect to have the Company contribution invested
in the same investments as their own contributions and may
transfer previous Company contributions invested in Citizens
Common Stock Fund to other investment options.
c. Participant accounts. Each participant's account is
credited with the participant's contribution and an allocation
of the Company contribution and plan earnings or losses.
Allocations are based on each participant's contribution, as
defined. The benefit to which a participant is entitled is the
amount which can be provided from the participant's account.
Page 6
<PAGE>
CUC 401(k) Employee Benefit Plan
Notes to Financial Statements
December 31, 1997 and 1996
d. Vesting. Participants are at all times fully vested in
their own contributions and the allocated earnings thereon.
Participants become 100% vested in the Company contributions
and the related earnings on the Company contributions upon
disability, death, and 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 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%
e. Investment Options. The Plan provides participants with the
following investment options: the Company's Common Stock Fund,
a Guaranteed Income Fund, an Equity Fund, a Bond Fund and Life
Insurance. A description of each fund follows:
Stock Fund:
The Stock Fund invests in shares of the Company's Common
Stock. Stock dividends are paid on Common Stock shares in
additional full and fractional shares. Stock dividends are not
reported as dividend income in the Statements of Changes in
Net Assets Available for Benefits, rather, stock dividends are
capital transactions which have the effect of increasing plan
shares and decreasing per share cost. Shares received from
stock dividends were 251,664 in 1997 and 366,476 in 1996.
Guaranteed Income Fund:
Contributions to the Guaranteed Income Fund have been invested
in the following Guaranteed Income Contracts:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Annual
Compound
Contribution Period Guaranteed Income Contract Issuer Maturity Date Rate of Return
------------------- --------------------------------- ------------- --------------
Various PNC Bank Guaranteed
Investment Contract Fund N/A Various
7/1/97 Travelers Life & Annuity 3/31/03 6.81%
7/1/96 to 6/30/97 Principal Mutual Life Insurance
Company 6/29/02 7.16%
7/1/96 CIGNA 6/30/01 7.14%
3/6/96 Life of Virginia 6/30/01 6.11%
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%
7/1/94 to 6/30/95 John Hancock Mutual Life Insurance
Company 6/30/98 6.94%
7/1/93 to 6/30/94 Principal Mutual Life Insurance
Company 6/30/99 5.60%
7/1/92 to 6/30/93 Pacific Mutual Life Insurance
Company 6/30/97 7.30%
Prior to 12/31/93 AUSA Life Insurance Company 6/10/97 5.00%
</TABLE>
Page 7
<PAGE>
CUC 401(k) Employee Benefit Plan
Notes to Financial Statements
December 31, 1997 and 1996
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.
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.
Bond Fund:
Contributions to the Bond Fund are invested in the GNMA Bond
Fund managed by 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.
Life Insurance:
Effective January 1, 1992 the life insurance option was 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.
f. Participant Loans. Participants 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 the participant is equal to the prime interest
rate in effect at the beginning of the month in which the loan
is 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 may be repaid in full or will be
canceled and the Participant's distribution reduced by the
amount of the outstanding loan balance.
g. Payment 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. Prior to January
1, 1997, the distribution must have begun on or before April
1st of the calendar year following the year the Participant
attained age 70 1/2. After December 31, 1996, the distribution
must begin either on or before April 1st of the year following
the year the participant attains age 70 1/2 or if the
Participant is still employed by the Company, on or before
April 1st of the calendar year after the year in which the
participant retires.
Page 8
<PAGE>
CUC 401(k) Employee Benefit Plan
Notes to Financial Statements
December 31, 1997 and 1996
h. Forfeitures. At December 31, 1997 and 1996, forfeited
nonvested Company contributions totaled $215,247 and $128,812,
respectively. These amounts are used to reduce the future
obligation of the Company to make contributions to the Plan.
i. Administrative Costs. Plan administration costs are paid by
the Company.
j. As of January 1, 1998, the Company changed administrative
service provider and trustee to Putnam Investments. In
addition, the Citizens Utilities 401(k) Savings Plan was
merged into the CUC 401(k) Employee Benefit Plan and restated
to reflect such merger. The restated Plan shall be known as
Citizens 401(k) Savings Plan. At the same time certain
enhancements were made to the Plan. Following is a
comparison of the provisions of the Plan prior to January 1,
1998 with the enhanced Plan.
<TABLE>
<CAPTION>
<S> <C> <C>
CURRENT PLAN ENHANCED PLAN
--------------------------------------------------------------------------------------
Plan enrollment
--------------------------------------------------------------------------------------
Only on January 1 or July 1 after the At any time after the completion of six
completion of 30 days of service months of continuous service (provided
(provided employee is a full-time or a employee is full-time or a part-time
part-time employee regularly scheduled employee scheduled to work at least 20
to work at least 20 hours per week) hours per week)
Changing salary deferral
percentages
-------------------------------------------------------------------------------------
Quarterly, by form, at least 15 Daily, by telephone, generally effective
days in advance to be effective at with the first payroll of the following
the beginning of the next calendar month
quarter
Investment choices
--------------------------------------------------------------------------------------
Guaranteed Income Fund Stable Value Fund
Bond Fund Putnam Income Fund
Citizens Utilities Company Citizens Utilities Company
Common Stock Fund Common Stock Fund
Equity Fund Putnam S&P 500 Index Fund
Putnam OTC & Emerging
Growth Fund
Putnam International Growth
Fund
</TABLE>
Page 9
<PAGE>
CUC 401(k) Employee Benefit Plan
Notes to Financial Statements
December 31, 1997 and 1996
<TABLE>
<CAPTION>
<S> <C> <C>
CURRENT PLAN ENHANCED PLAN
----------------------------------------------------------------------------------------
Investment performance on account
statements
----------------------------------------------------------------------------------------
Unit accounting Share accounting
Ability to transfer existing
investments
---------------------------------------------------------------------------------------
Up to eight times per year (no more than Daily
twice per quarter)
Eligibility to take a loan
---------------------------------------------------------------------------------------
Must be a Plan participant for at least Available immediately upon par-
two years ticipation in the Plan
Spousal consent for loans and
distributions
---------------------------------------------------------------------------------------
Necessary Not necessary
Eligibility to take a hardship
withdrawal
---------------------------------------------------------------------------------------
Must be a Plan participant for at Available immediately upon
least one year participation in the Plan
</TABLE>
Page 10
<PAGE>
CUC 401(k) Employee Benefit Plan
Notes to Financial Statements
December 31, 1997 and 1996
(2) Summary of Accounting Policies
------------------------------
(a) Basis of Accounting
-------------------
The financial statements of the Plan are prepared under the
accrual method of accounting. The Fund Information reflected in
the Statement of Changes in Net Assets includes the application of
assets to the applicable funds as directed by the participants as
of December 31, 1997 and 1996.
(b) Use of Estimate
---------------
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amount of
assets and liabilities at the date of the financial statements and
the reported amount of additions and deductions during the
reporting period. Actual results could differ from these
estimates.
(c) Investment Valuation, Income Recognition and Payment of Benefits
----------------------------------------------------------------
The Plan's investments are stated at fair value, except for
investment contracts in the Guaranteed Income Fund, which are
valued at contract value. Shares of registered investment
companies are valued at quoted market prices, which represent
the net asset value of shares held by the Plan. The Company stock
is valued at its quoted market price. Participant notes receivable
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 payment date. Benefits are recorded when paid.
(d) Reclassifications
-----------------
Certain 1996 balances have been reclassified to conform to the
1997 presentation.
(3) Investment of 5% or more of the Net Assets Available for Plan Benefits
----------------------------------------------------------------------
At December 31, 1997 the Plan had $60,624,599, $25,406,241 and $28,160,595
invested in Stock Fund, Guaranteed Income Fund and Equity Fund,
respectively, which represents an investment of 5% or more of the Net
Assets Available for Plan Benefits. In addition, the Guaranteed Income
Fund includes an investment of $8,237,573 in the PNC Guaranteed Investment
Fund, which represents an investment of 5% or more of the Net Assets
Available for Plan Benefits.
(4) Related Party Transactions
--------------------------
PNC
---
Certain Plan investments are shares of mutual funds that were managed by
PNC through December 31, 1997. PNC is the trustee as defined by the Plan
and, therefore, these transactions qualify as party-in-interest. Fees paid
by the Company for investment management services amounted to $134,294 in
1997.
Putnam Investments
------------------
As of January 1, 1998, the Company changed its administrative service
provider and trustee to Putnam Investments.
Page 11
<PAGE>
CUC 401(k) Employee Benefit Plan
Notes to Financial Statements
December 31, 1997 and 1996
(5) Transfer from Other Plans
-------------------------
Effective January 1, 1996, participants in the ALLTEL Savings Plan from
the acquired ALLTEL properties in California became participants in the
Plan. Effective April 1, 1996, participants in the acquired ALLTEL
property in Nevada became participants in the Plan. Assets in the ALLTEL
Savings Plan totaling $6,484,042 in 1996 were transferred to the Plan.
(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 may terminate the
Plan, subject to the terms of the Employee Retirement Income Security Act
of 1974 ("ERISA").
(7) Tax Status
----------
The Plan has received a favorable determination letter from the Internal
Revenue Service dated October 26, 1994, stating that the Plan is qualified
under Section 401(a) of the Internal Revenue Code (the "Code") and the
related trust is tax exempt under Section 501(a) of the Code.
Page 12
<PAGE>
Schedule I
CUC 401(k) Employee Benefit Plan
Item 27a - Schedule of Assets Held for Investment Purposes
December 31, 1997
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Identity of Issuer, Cost or Market or
Borrowers, Lesser, Number of Contract Contract
or Similar Party Description of Assets Shares Value Value
----------------- --------------------- ------------ -------------- ---------------
Stock Fund
----------
Citizens Utilities Company Citizens Utilities Company
Common Stock 6,298,660 $ 54,758,440 $ 60,624,599
============ ============== ===============
Guaranteed Income Fund
----------------------
Allstate Life Insurance Company Guaranteed Income Contract 1,105,878 1,105,878
Allstate Life Insurance Company Guaranteed Income Contract 1,578,856 1,578,856
CIGNA Guaranteed Income Contract 2,200,976 2,200,976
John Hancock Mutual Life Ins. Co. Guaranteed Income Contract 2,099,817 2,099,817
Life of Virginia Guaranteed Income Contract 2,674,056 2,674,056
New York Life Insurance Company Guaranteed Income Contract 427,304 427,304
PNC Bank Guaranteed Investment Fund 8,237,573 8,237,573
Principal Mutual Life Ins. Company Guaranteed Income Contract 2,095,783 2,095,783
Principal Mutual Life Ins. Company Guaranteed Income Contract 1,922,665 1,922,665
Travelers Life Insurance Company Guaranteed Income Contract 3,063,333 3,063,333
------------- ---------------
Total Guaranteed Income 2,089,426 $ 25,406,241 $ 25,406,241
============ ============== ===============
Equity Fund
-----------
Vanguard Group Vanguard Index Trust Fund 317,585 $ 19,750,456 $ 28,160,595
============ ============== ===============
Bond Fund
---------
Vanguard Group Vanguard GNMA Fund 407,436 $ 4,113,440 $ 4,211,586
============ ============== ===============
Loan Fund
---------
Participants' Loans Receivable $ 3,991,899 $ 3,991,899
============== ===============
</TABLE>
See Independent Auditors' Report
Page 13
<PAGE>
CUC 401(k)Employee Benefit Plan
Item 27d - Schedule of Reportable Transactions
For Plan Year Ended December 31, 1997
<TABLE>
<CAPTION>
Purchase Selling
Issuer Description of Asset Price Price
- -------------- -------------------- ------------- -------------
<S> <C> <C> <C>
PNC Bank Investment Contract Fund $ 7,260,620 $ --
PNC Bank Investment Contract Fund -- 6,981,676
Vanguard Group Vanguard GNMA 1,889,822 --
Vanguard Group Vanguard GNMA -- 765,572
Vanguard Group Vanguard Index Trust 11,439,746 --
Vanguard Group Vanguard Index Trust -- 6,048,775
</TABLE>
See Independent Auditors' Report
Page 14
<PAGE>
CUC 401(k) Employee Benefit Plan
Item 27d - Schedule of Reportable Transactions
For Plan Year Ended December 31, 1997
<TABLE>
<CAPTION>
Expenses Current Value
Incurred of Asset on
Lease with Cost of Transaction Net Gain/
Issuer Description of Asset Rental Transaction Asset Date (Loss)
- -------------------- -------------------- ------------- ------------- ------------- --------------- --------------
<S> <C> <C> <C> <C> <C> <C>
PNC Bank Investment Contract Fund $ -- $ -- $ 7,260,620 $ 7,260,620 $ --
PNC Bank Investment Contract Fund -- -- 6,515,554 6,981,676 466,122
Vanguard Group Vanguard GNMA -- -- 1,889,822 1,889,822 --
Vanguard Group Vanguard GNMA -- -- 747,835 765,572 17,737
Vanguard Group Vanguard Index Trust -- -- 11,439,746 11,439,746 --
Vanguard Group Vanguard Index Trust -- -- 4,962,276 6,048,775 1,086,499
</TABLE>
See Independent Auditors' Report
Page 14a
<PAGE>
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 29,
1998, relating to the Statements of Net Assets Available for Benefits of the CUC
401 (k) Employee Benefit Plan as of December 31, 1997 and 1996 and the related
Statement of Changes in Net Assets Available for Benefits and the supplemental
schedules for the year then ended December 31, 1997, which report appears in the
December 31,1997 annual report on Form 11-K of the CUC 401(k) Employee Benefit
Plan.
KPMG PEAT MARWICK LLP
New York, New York
June 29, 1998
Page 15
