FINANCIAL STATEMENTS AND
REPORT OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
THE UNITIL CORPORATION
TAX DEFERRED
SAVINGS AND INVESTMENT PLAN
December 31, 1996, 1995 and 1994
C O N T E N T S
Page
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS 3
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS -
DECEMBER 31, 1996, 1995 AND 1994 4
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR
BENEFITS - YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994 7
NOTES TO FINANCIAL STATEMENTS
SUPPLEMENTAL SCHEDULES
INDEPENDENT AUDITORS' REPORT 17
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES -
DECEMBER 31, 1996 18
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
WHICH WERE BOTH ACQUIRED AND DISPOSED OF WITHIN
THE PLAN YEAR - DECEMBER 31, 1996 23
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS 31
C O N T E N T S
Page
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS 3
FINANCIAL STATEMENTS
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS -
DECEMBER 31, 1996, AND 1995 4
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR
BENEFITS - YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994 6
NOTES TO FINANCIAL STATEMENTS 9
Report of Independent Certified Public Accountants
Administrator of
The UNITIL Corporation Tax Deferred
Savings and Investment Plan
We have audited the accompanying statements of net
assets available for benefits of The UNITIL Corporation Tax
Deferred Savings and Investment Plan as of December 31, 1996 and
1995, and the related statements of changes in net assets
available for benefits for each of the three years in the period
ended December 31, 1996. 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 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 UNITIL Corporation Tax Deferred
Savings and Investment Plan as of December 31, 1996 and 1995, and
the changes in net assets available for benefits for each of the
three years in the period ended December 31, 1996, in conformity
with generally accepted accounting principles.
Boston, Massachusetts
June 13, 1997
The UNITIL Corporation Tax Deferred Savings and Investment Plan
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
December 31, 1996
<TABLE>
<CAPTION>
UNITIL Putnam Putnam
Corporation Putnam Putnam Putnam Putnam New International
Stock Loan Growth & Stable Voyager Income Opportunity S & P Growth
Fund Fund Income Value Fund Fund Fund Fund 500 Fund Total
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Guaranteed insurance contracts $2,511,392 $ 2,511,392
Participant Loan Receivable $434,518 434,518
Investments at market value $2,303,335 $3,832,771 $152,272 $510,958 $156,885 $128,688 7,084,909
Employer securities (UNITIL
Common stock at market
value) $2,813,376 2,813,376
Net assets available for
benefits $2,813,376 $434,518 $2,303,335 $2,511,392 $3,832,771 $152,272 $510,958 $156,885 $128,688 $12,844,195
</TABLE>
The accompanying notes are an integral part of this statement.
The UNITIL Corporation Tax Deferred Savings and Investment Plan
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
December 31, 1995
<TABLE>
<CAPTION>
UNITIL
Fidelity Fidelity Corporation
Loan Fund GIC Puritan Magellan Stock Fund Total
<S> <C> <C> <C> <C> <C>
Cash and cash equivalents $ 6,364 $ 29 $ 6,393
Guaranteed insurance contracts 2,497,528 2,497,528
Participant loan receivable $406,491 406,491
Interest and dividends receivable 167 $ 8 $ 15 190
Investments at market value 1,707,383 3,729,746 5,437,129
Employer securities (UNITIL
Common stock at market value) 2,608,791 2,608,791
Net assets available for benefits $406,491 $2,504,059 $1,707,391 $3,729,761 $2,608,820 $10,956,522
</TABLE>
The accompanying notes are an integral part of this statement.
The UNITIL Corporation Tax Deferred Savings and Investment Plan
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
For the year ended December 31, 1996
<TABLE>
<CAPTION>
UNITIL
Fidelity Fidelity Corporation Loan
GIC Puritan Magellan Stock Fund Fund
<S> <C> <C> <C> <C> <C>
Assets
Additions to net assets attributed to:
Investment income
Interest $ 88,718 $ 1,107 $ 2,203 $ 358 $ 32,859
Dividends - 29,077 609,825 174,515
Other receipts 340
Net appreciation/(depreciation) in
fair value of investments - 54,356 (562,265) (152,561) -
88,718 84,540 49,763 22,652 32,859
Contributions:
Participants' 92,252 100,678 193,518 164,120
Employers' 35,001 32,618 75,431 68,573
Rollovers 42,843 2,792 88,859
Transfer from BankBoston - - - 2,809,892 454,124
127,253 176,139 271,741 3,131,444 454,124
Total additions 215,971 260,679 321,504 3,154,096 486,983
Deductions
Deductions from net assets attributed to:
Benefits paid to participants (17,707) (17,875) (50,084) (137,978)
Other (6) (2) (103,818)
Transfer to Putnam (2,616,342) (1,922,154) (3,980,377) (2,809,892) (454,124)
Total deductions (2,634,055) (1,940,029) (4,030,461) (2,947,872) (557,942)
Net increase (decrease) prior to interfund
transfers (2,418,084) (1,679,350) (3,708,957) 206,224 (70,959)
Interfund transfers (85,975) (28,041) (20,804) (1,668) 98,986
Net (decrease)/increase (2,504,059) (1,707,391) (3,729,761) 204,556 28,027
Net assets available for benefits:
Beginning of year 2,504,059 1,707,391 3,729,761 2,608,820 406,491
End of year $ - $ - $ - $2,813,376 $434,518
<CAPTION>
New International
Growth Stable Voyager Income Opportunity S & P Growth
and Income Value Fund Fund Fund Fund 500 Fund Total
<S>
Assets
Additions to net assets attributed to: <C> <C> <C> <C> <C> <C> <C> <C>
Investment income
Interest $ 11,012 $ 38,501 $ 136 $ 13 $ 145 $ 16 $ 15 $ 175,083
Dividends 160,061 36,544 246,303 1,906 2,446 - 1,480 1,262,157
Other receipts 1,151 1,491
Net appreciation/(depreciation) in
fair value of investments 49,113 - (224,215) (943) (5,459) 6,103 4,315 ( 831,556)
220,186 76,196 22,224 976 (2,868) 6,119 5,810 607,175
Contributions:
Participants' 61,790 30,252 133,349 18,381 138,360 24,943 31,943 989,586
Employers' 21,259 11,635 46,884 6,278 46,230 8,655 11,146 363,710
Rollovers 20,220 20,224 51,622 2,378 48,094 24,494 25,476 327,002
Transfer from BankBoston 1,922,154 2,616,342 3,980,377 - - - - 11,782,889
2,025,423 2,678,453 4,212,232 27,037 232,684 58,092 68,565 13,463,187
Total additions 2,245,609 2,754,649 4,234,456 28,013 229,816 64,211 74,375 14,070,362
Deductions
Deductions from net assets attributed to:
Benefits paid to participants (29,673) (3,096) (36,934) (13) (645) - (772) (294,777)
Other (191) (9) (849) (6) (65) - (77) (105,023)
Transfer to Putnam - - - - - - - (11,782,889)
Total deductions (29,864) (3,105) (37,783) (19) (710) - (849) (12,182,689)
Net increase (decrease) prior to interfund
transfers 2,215,745 2,751,544 4,196,673 27,994 229,106 64,211 73,526 1,887,673
Interfund transfers 87,590 (240,152) (363,902) 124,278 281,852 92,674 55,162 -
Net (decrease)/increase 2,303,335 2,511,392 3,832,771 152,272 510,958 156,885 128,688 1,887,673
Net assets available for benefits:
Beginning of year - - - - - - - 10,956,522
End of year $2,303,335 $2,511,392 $3,832,771 $152,272 $510,958 $156,885 $128,688 $12,844,195
</TABLE>
The accompanying notes are an integral part of this statement.
The UNITIL Corporation Tax Deferred Savings and Investment Plan
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
For the year ended December 31, 1995
<TABLE>
<CAPTION>
UNITIL
Loan Fidelity Fidelity Corporation
Fund GIC Puritan Magellan Stock Fund Total
<S> <C> <C> <C> <C> <C> <C>
Assets
Additions to net assets attributed to:
Investment Income
Interest $ 20,300 $ 139,508 $ 201 $ 429 $ 69 $ 160,507
Dividends 45,147 24,037 151,356 220,540
20,300 139,508 45,348 24,466 151,425 381,047
Net appreciation in fair value of investments 233,806 934,626 561,927 1,730,359
Contrbutions:
Participants 200,737 175,177 297,598 156,011 829,523
UNITIL Corporation 64,925 48,917 119,180 69,672 302,694
Rollovers 3,528 15,937 61,238 7,759 88,462
269,190 240,031 478,016 233,442 1,220,679
Total additions 20,300 408,698 519,185 1,437,108 946,794 3,332,085
Deductions
Deductions from net assets attributed to:
Distributions
Benefits paid to participants 181,029 94,780 123,200 110,171 509,180
Distributions in stock 80,761 80,761
Other 7 7 15 29
Total deductions 181,036 94,787 123,215 190,932 589,970
Net increase prior to interfund transfers 20,300 227,662 424,398 1,313,893 755,862 2,742,115
Inter-fund transfers 10,512 138,122 112,027 (244,395) (16,266) -
NET INCREASE 30,812 365,784 536,425 1,069,498 739,596 2,742,115
Net assets available for benefits at beginning of year 375,679 2,138,275 1,170,966 2,660,263 1,869,224 8,214,407
Net assets available for benefits at end of year $406,491 $2,504,059 $1,707,391 $3,729,761 $2,608,820 $10,956,522
</TABLE>
The accompanying notes are an integral part of this statement.
The UNITIL Corporation Tax Deferred Savings and Investment Plan
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
For the year ended December 31, 1994
<TABLE>
<CAPTION>
UNITIL
Loan Fidelity Fidelity Corporation
Fund GIC Puritan Magellan Stock Fund Total
<S> <C> <C> <C> <C> <C> <C>
Income
Interest $ 21,588 $ 108,501 $ 69 $ 165 $ 48 $ 130,371
Dividends 37,109 4,491 131,590 173,190
21,588 108,501 37,178 4,656 131,638 303,561
Net appreciation in fair value of investments (19,765) (64,290) (359,654) (443,709)
Contribution
Participants 174,229 155,036 321,079 182,376 832,720
UNITIL Corporation 51,576 40,226 113,925 74,659 280,386
Rollovers 13,098 13,098 26,196
Other 42 42
225,847 195,262 448,102 270,133 1,139,344
Transfer from Fitchburg Gas and Electric Light
Company Union Tax Deferred Savings and
Investment Plan (note G) 9,049 232,646 253,594 175,394 376,618 1,047,301
Total additions 30,637 566,994 466,269 563,862 418,735 2,046,497
Distributions
Benefits to participants 14,345 9,563 51,649 83,826 159,383
Distributions in stock 51,140 51,140
Other 6 5 10 3 24
Total deductions 14,351 9,568 51,659 134,969 210,547
Net increase 30,637 552,643 456,701 512,203 283,766 1,835,950
Inter-fund transfers 62,137 (82,670) (24,459) 38,343 6,649 -
92,774 469,973 432,242 550,546 290,415 1,835,950
Net assets available for benefits at beginning of year 282,905 1,668,302 738,724 2,109,717 1,578,809 6,378,457
Net assets available for benefits at end of year $375,679 $2,138,275 $1,170,966 $2,660,263 $1,869,224 $8,214,407
</TABLE>
The accompanying notes are an integral part of this statement.
The UNITIL Corporation Tax Deferred Savings and Investment Plan
NOTES TO FINANCIAL STATEMENTS
December 31, 1996, 1995 and 1994
NOTE A - DESCRIPTION OF PLAN
The following description of The UNITIL Corporation and subsidiaries (the
"Company") Tax Deferred Savings and Investment Plan (the "Plan") provides
only general information. Participants should refer to the Plan
agreement for a more complete description of the Plan's provisions.
General
The Plan is a defined contribution plan covering substantially all full-
time employees of the Company and its' wholly owned subsidiaries UNITIL
Service Corporation, Concord Electric Company, Exeter and Hampton
Electric Company and Fitchburg Gas and Electric Light Company (the
"subsidiaries"), who satisfy the eligibility requirements. It is
subject to the provisions of the Employee Retirement Income Security
Act of 1974 (ERISA).
During the Plan year, the Plan Administrator directed the transfer of
all Plan assets from the Bank of Boston to Putnam Investments (Putnam).
The transfer was made as a result of a change in custodianship of the
assets.
Contributions
A member may authorize a Basic Employee Contribution from 1% to 12%
with a maximum contribution not to exceed $9,500 for 1996.
The Employer shall contribute as of December 31, of each plan year from
current or accumulated net profits on behalf of each member
participating in the Plan on December 31, of each plan year, an amount
equal to 100% of the first 3% of salary the employee puts into the plan
(except Fitchburg Gas and Electric Light Company Union Employees whose
matching is as follows: first year 1%, second year 2%, third year and
after 3%).
Participant Accounts
Each participant's account is credited with the participant's
contribution and allocations of (a) the Company's contribution and, (b)
Plan earnings, and charged (as applicable) with an allocation of
administrative expenses. Allocations are based on participant earnings
or account balances, as defined. The benefit to which a participant is
entitled is the benefit that can be provided from the participant's
vested account. The Plan administrator will pay for substantially all
expenses of the Plan.
The UNITIL Corporation Tax Deferred Savings and Investment Plan
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1996, 1995 and 1994
NOTE A - DESCRIPTION OF PLAN - Continued
Vesting
Participants are immediately vested in their contributions plus actual
earnings thereon. Vesting in the Company's matching and discretionary
contribution portion of their accounts plus actual earnings thereon is
based on years of continuous service. A participant is 100 percent
vested after three years of credited service. If a participant
terminates employment for any reason other than disability or
retirement, he will be entitled to the full amount of contributions he
has deposited, plus a percentage of his account balance derived from
employer contributions based upon the following schedule:
Year of Service % Vested
0-1 0%
1-2 33%
2-3 67%
3+ 100%
A member will become 100% vested in his account as a result of
disability, death or retirement.
Participant Loans Receivable
Participants may borrow from their fund accounts a minimum of $1,000 up
to a maximum equal to the lesser of $50,000 or 50% of their account
balance. Net loan transactions are treated as a transfer to (from) the
investment fund from (to) the Participant Loans fund. Loan terms range
from 1-5 years or up to 25 years for the purchase of primary residence.
The loans are secured by the balance in the participant's account and
bear interest at a rate of prime plus one percent (1%). Principal and
interest is paid ratably through monthly payroll deductions.
Payment of Benefits
On termination of service due to death, disability or retirement, a
participant may elect to receive either a lump-sum amount equal to the
value of the participant's vested interest in his or her account, or
annual installments over a fixed number of calendar quarters or years.
Forfeitures
A member who terminates his employment prior to becoming eligible for
benefits and does not have a 100% vested right to Company contributions,
forfeits the amounts not vested. Such forfeited amounts are used to
reduce future Company contributions.
The UNITIL Corporation Tax Deferred Savings and Investment Plan
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1996, 1995 and 1994
NOTE A - DESCRIPTION OF PLAN - Continued
Investment Option: Upon enrollment and reenrollment, each participant
shall direct that his contributions are to be invested in accordance with
any of the following investment options.
Guaranteed Investment Fund (GIC): This fund invested in guaranteed
insurance contracts with various insurance companies and banks
(available up to June 30, 1996).
Fidelity Puritan Fund: This fund invested in various investments
including common stocks and bonds and placed an emphasis on income and
stability (available up to June 30, 1996).
Fidelity Magellan Fund: This fund invested in common stocks which
placed more emphasis on investment return and less on stability
(available up to June 30, 1996).
UNITIL Corporation Common Stock Fund (UNITIL Corporation, no par value
common stock).
Putnam S & P 500: This fund invests primarily in publicly traded common
stocks, to achieve a return that closely approximates the return of the
Standard & Poors 500- composite stock price index.
Putnam Stable Value Fund: This fund invests in high-quality guaranteed
investment contracts (GIC's) issued by insurance companies and banks
with the objective to achieve a high current income.
Putnam Income Fund: This fund invests in debt securities, including
both government and corporate obligations, preferred stocks and dividend
- paying common stocks.
Putnam Fund for Growth and Income: This fund seeks capital growth and
current income by investing primarily in common stocks that offer
potential for capital growth and current income.
Putnam New Opportunities Fund: This fund seeks long-term capital
appreciation through the investment in common stocks with the potential
of above-average long-term growth.
Putnam Voyager Fund: This fund seeks capital appreciation for investors
willing to assume above-average risk in return for above-average capital
growth potential.
Putnam International Growth Fund: This fund seeks capital appreciation
by investing primarily in equity securities of companies located in a
country other than the United States.
The UNITIL Corporation Tax Deferred Savings and Investment Plan
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1996, 1995 and 1994
NOTE A - DESCRIPTION OF PLAN - Continued
Participants may change their investment options daily.
NOTE B - SUMMARY OF ACCOUNTING POLICIES
Effective Date
The Plan's effective date is July 1, 1987, as amended effective May 8,
1992 and January 1, 1994. The Plan as amended effective May 8, 1992,
provided for the merger of the Fitchburg Gas and Electric Tax Deferred
Savings and Investment Plan with The Plan. The Plan as amended
effective January 1, 1994, provided for the merger of the Fitchburg Gas
and Electric Light Company Union Tax Deferred Savings and Investment
Plan into the Plan.
Basis of Accounting
The financial statements of the Plan are prepared under the accrual
method of accounting.
Management Estimates
In preparing the financial statements in conformity to Generally
Accepted Accounting Principles, management is required to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent assets and liabilities at
the date of the financial statements and revenues and expenses during
the reporting period. Actual results could differ from those estimates.
Investment Valuation and Income Recognition
The Plan is administered by a trustee. The Plan's investments
(including investments bought, sold and held during the year) are
carried at current fair value. The difference between current fair
value and the cost of investments are included in net appreciation or
(depreciation) in fair value of investments.
The UNITIL Corporation Tax Deferred Savings and Investment Plan
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1996, 1995 and 1994
NOTE B - SUMMARY OF ACCOUNTING POLICIES - Continued
Purchases and sales of securities are recorded on a trade-date basis.
Interest income is recorded on the accrual basis. Dividends are
recorded on the ex-dividend date.
Payment of Benefits
Benefits are recorded when paid.
Eligibility
Employees are eligible for membership on either January 1 or July 1
coincident with or the next day following on which they have both:
(1) Attained the age of 18, and
(2) Completed 1000 hours of credited service
Normal Retirement Date
A participant's normal retirement benefit date is the date he/she
reaches his/her 65th birthday or, if later, the 10th anniversary of the
date he/she becomes a participant.
NOTE C - INVESTMENT CONTRACT WITH INSURANCE COMPANY
The Plan entered into an investment contract with three insurance
companies (the "Companies"). The Companies maintain the contributions in
a pooled account. The account is credited with earnings on the
underlying investments and charged for Plan withdrawals and
administrative expenses charged by the insurance companies. The contract
is included in the financial statements at contract value, as reported to
the Plan by the Companies. Contract value represents contributions made
under the contract, plus earnings, less Plan withdrawals and
administrative expenses , because it is fully benefit responsive.
The UNITIL Corporation Tax Deferred Savings and Investment Plan
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1996, 1995 and 1994
NOTE D - PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the
right under the Plan to terminate the Plan at any time subject to the
provision of ERISA with respect to its employees by a written resolution
with a copy delivered to the trustee. In the event of a Plan
termination, participants will become fully vested in their accounts.
NOTE E - DETERMINATION LETTER
The Internal Revenue Service has determined and informed the Company by a
letter dated May 9, 1995, that the Plan and related trust are designed in
accordance with applicable sections of the Internal Revenue Code (IRC).
NOTE F - TRANSFER OF THE FITCHBURG GAS AND ELECTRIC LIGHT COMPANY UNION
TAX DEFERRED SAVINGS AND INVESTMENT PLAN AND TAX DEFERRED
SAVINGS AND INVESTMENT PLAN
The Fitchburg Gas and Electric Light Company Union Tax Deferred Savings
and Investment Plan has been incorporated into The Plan as of January 1,
1994. As of January 1, 1994 $1,047,301 was transferred into this Plan.
In 1992, the Fitchburg Gas and Electric Light Company ESOP Plan had been
incorporated into the Fitchburg Gas and Electric Light Company Union Tax
Deferred Savings and Investment Plan (which as noted above has
subsequently been merged into the UNITIL Corporation Tax Deferred Savings
and Investment Plan). The investment instruments as of May 1, 1989, were
transferred into the Plan as the Frozen ESOP Fund which is included in
the UNITIL Corporation Stock Fund and will be distributed in accordance
with the original Plan.
The Fitchburg Gas and Electric Light Company became a wholly-owned
subsidiary of The UNITIL Corporation as a result of a merger which
occurred in 1992.
SUPPLEMENTAL SCHEDULES
Independent Auditors' Report
Administrator of
The UNITIL Corporation Tax Deferred
Savings and Investment Plan
Our audits were performed for the purpose of forming an
opinion on the basic financial statements taken as a whole. The
supplemental schedules of assets held for investment purposes and
schedule of reportable transactions are presented for the purpose
of additional analysis and are not a required part of the basic
financial statements but are supplementary information required
by the Department of Labor's Rules and Regulations for Reporting
and Disclosure under the Employee Retirement Income Security Act
of 1974. The supplemental schedules have been subjected to the
auditing procedures applied in the audits of the basic financial
statements, in our opinion, are fairly stated in all material
respects in relation to the basic financial statements taken as a
whole.
Boston, Massachusetts
June 13, 1997
