1
File No. 30- 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM U5S
ANNUAL REPORT
For the Year Ended December 31, 1997
Filed Pursuant to the Public Utility Holding Company Act of 1935
by
UNITIL CORPORATION
6 Liberty Lane West, Hampton, New Hampshire 03842-1720
TABLE OF CONTENTS
ITEMS PAGE
Item 1 1
Item 2 2
Item 3 3
Item 4 4
Item 5 5
Item 6 Part I 6
Part II 8
Part III(a) 9
(b) 13
(c) 14
(d) 14
(e) 14
(f) 15
Item 7 Part I 17
Part II 17
Item 8 Part I 17
Part II 17
Part III 17
Item 9 Part I 17
Part II 17
Part III 17
Item 10 Financial Statements 18
Exhibits 29
ITEM 1
SYSTEM COMPANIES AND INVESTMENTS THEREIN AS OF DECEMBER 31, 1997
Name of Company Number of
Common % of
Shares Voting Issuer Owner's
Owned Power Book Value Book Value
Unitil Corporation
Concord Electric 131,745 100% 10,180,258 10,180,258
Company (CECO)
Exeter & Hampton 195,000 100% 11,478,339 11,478,339
Electric Company (E&H)
Fitchburg Gas and Electric 1,244,629 100% 37,572,688 37,572,688
Light Company (FG&E)
Unitil Power Corp. (UPC) 100 100% 407,697 407,697
Unitil Realty Corp. (URC) 100 100% 1,302,470 1,302,470
Unitil Resources, Inc. (URI) 100 100% 24,629 24,629
Unitil Service Corp. (USC) 100 100% 2,688 2,688
ITEM 2
ACQUISITIONS OR SALES OF UTILITY ASSETS
Information concerning acquisitions or sales of utility assets by System
companies not reported in a certificate filed pursuant to Rule 24 - None
ITEM 3. ISSUE, SALE, PLEDGE, GUARANTEE, OR ASSUMPTION OF SYSTEM SECURITIES
Name of Name Of Company Brief Description Consideration Authori
Issuer Issuing, Selling, of Transaction zation or
and Title Pledging, Guaranteeing Exemption
of Issue or Assuming
(1) (2) (3) (4) (5)
Unitil (In Whole
Corporation Dollars)
(UTL)
UTL Issuance of Shares
Pursuant to Stock
Option Plan on 5/9/97
- 1,139 shares and on HCAR No.
12/31/97 -27,083 shares. $241,710 35-25677
UTL Issued on Various Dates,
51,529 Shares in Connection
with the Company's Dividend
Reinvestment and Stock
Purchase Plan and Tax
Deferred Savings and HCAR No.
Investment Plan $1,042,974 35-25677
Short-term UTL, CECo, E&H, Bank Borrowings Made
Bank FG&E, Service, on Various Dates and
Borrowings Realty, Power, Such Funds Lent to
Resources Affiliates Under the HCAR No.
Unitil Cash Pool (A) 35-26328
Unitil Realty UTL,URC Issuance and Sale of $7,500,000 HCAR No.
Corp. $7.5 million Senior 35-26739
(URC) Secured Notes by URC
guaranteed by UTL
(A) Maximum borrowing authority is $25,000,000. Borrowings outstanding at
December 31, 1997 were $18,000,000.
ITEM 4. ACQUISITION, REDEMPTION OR RETIREMENT OF SYSTEM SECURITIES
Name of Name Of
Issuer Company Acquiring, Extinguished (EXT)
and Redeeming, or Distributed (D)
Title of Retiring Consider or Held (H) For Authorization
Issue Securities ation Further Disposition or Exemption
(1) (2) (3) (4) (5)
(In Whole
Dollars)
Unitil
Corporation
(UTL)
Common Stock, Unitil D & H (B) HCAR No.
No Par Value Service Corp. 35-25951
(B) Common Stock Purchased on the Open-Market to Satisfy Requirements of
the Management Performance Compensation Program.
ITEM 5. INVESTMENTS IN SECURITIES OF NONSYSTEM COMPANIES AS OF
DECEMBER 31, 1997
1. Aggregate amount of Investments in persons operating in the retail
service area.
Name of Name of Nature of Description Number Percent Owner's
Company Issuer Issuer's of of of Voting Book
Business Securities Shares Power Value
(In Dollars)
(1) (2) (3) (4) (5) (6) (7)
CECo Concord Economic Common Stock 120 * $3,000
Regional Development
Development
Corp.
E&H Collin Retail 12% S. F. * $500
& Alkman Debenture
Group
Wickes Retail Capital Stock 3 * $6
Companies,
Inc.
FG&E Ames Retail Cum.Preferred 32 * $170
Department Stk.
Store
Massachusetts
Business Economic Common Stock 350 * $3,500
Development Development
Corp.
Boundary Gas
Gas, Inc. Distribution Common Stock 0.57 * $57
2. Securities owned not included in 1 above.
None
ITEM 6
OFFICERS AND DIRECTORS OF UNITIL CORPORATION AND SUBSIDIARIES
Part I. As of December 31, 1997:
LEGEND OF ABBREVIATIONS
CB Chairman of the Board
D Director
CEO Chief Executive Officer
P President
COO Chief Operating Officer
CFO Chief Financial Officer
SEVP Senior Executive Vice President
EVP Executive Vice President
SVP Senior Vice President
VP Vice President
T Treasurer
S Secretary/Clerk
C Controller
Name and
Business Address Unitil CECo E&H FG&E USC URC UPC URI
Michael J. Dalton
6 Liberty Lane West
Hampton, NH 03842 D, P, D, P D, P D,P D, D D D, VP
COO SEVP
Thomas M. Hardiman
5 Walker Street
Concord, NH 03301 D
G. Arnold Haynes
34 Washington Street
Wellesley, MA 02181 D D
Douglas K. Macdonald
8 Wilson Avenue
Concord, NH 03301 D D
J. Parker Rice, Jr.
112 River Street
Fitchburg, MA 01420 D D
John J. Quinn
13 Williams Circle
Stratham. NH 03885 D
Robert G. Schoenberger
6 Liberty Lane West D, CB,
Hampton, NH 03842 CEO
ITEM 6. (continued)
Name and
Business Address Unitil CECo E&H FG&E USC URC UPC URI
Charles H. Tenney II
300 Friberg Parkway
Westborough, MA 01581 D
Charles H. Tenney III
300 Friberg Parkway
Westborough, MA 01581 D
William W. Treat
P.O. Box 800
Stratham, NH 03885 D D
W. William VanderWolk, Jr.
Route 109, Box 20
Melvin Village,
NH 03850 D D
Robert L. Ware
P.O. Box 2202
Fitchburg, MA 01420 D
Franklin Wyman, Jr.
211 Congress Street
Boston, MA 02110 D D
Joan D. Wheeler
P.O. Box 895
Hollis, NH 03049 D
Michael B. Green
250 Pleasant Street
Concord, NH 03301 D
H. Alfred Casassa
459 Lafayette Road
Hampton, NH 03841 D
Gail A. Siart
6 Liberty Lane West CFO, T,
Hampton, NH 03842 S SVP,D D,P VP,T
David K. Foote
6 Liberty Lane West
Hampton, NH 03842 SVP VP D,SVP
Raymond J. Morrissey
6 Liberty Lane West
Hampton, NH 03842 VP
Name and
Business Address Unitil CECo E&H FG&E USC URC UPC URI
Mark H. Collin
6 Liberty Lane West
Hampton, NH 03842 T T T VP,T T T
Richard Heath
One McGuire Street
Concord, NH 03302 VP
Anthony Smoker
6 Liberty Lane West
Hampton, NH 03842 VP
Glenn D. Appleton
6 Liberty Lane West
Hampton, NH 03842 VP
James G. Daly
6 Liberty Lane West
Hampton, NH 03842 SVP, D D D P
George R. Gantz
6 Liberty Lane West
Hampton, NH 03842 SVP, D D P D
Sandra L. Whitney
6 Liberty Lane West
Hampton, NH 03842 S S S S S S
Laurence M. Brock
6 Liberty Lane West
Hampton, NH 03842 C C C C C C C
M. Mitchell Bodnarchuk
285 John Fitch Highway
Fitchburg, MA 01420 VP, S
Part II. Each officer and director with a financial connection within
the provisions of Section 17(c) of the Act are as follows:
Name of Officer Name and Location of Position Held in Applicable
or Director Financial Institution Financial Exemption Rule
Institution
(1) (2) (3) (4)
Franklin Wyman, Brookline Savings Bank, Trustee, 70(c)
Jr. Brookline MA Vice President
Part III. The disclosures made in the System companies' most
recent proxy statement and annual report on Form 10-K with respect
to items (a) through (f) follow:
(a) COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
Directors' Compensation
Members of the Board of Directors who are not officers of Unitil or
any of its subsidiaries receive an annual retainer fee of $7,000 and $500 for
each Board meeting attended. Members of the Executive Committee, who are not
officers of Unitil or any of its subsidiaries, receive an annual retainer fee
of $2,000 and $400 for each meeting attended. Members of the Audit Committee
and Compensation Committee receive an annual retainer fee of $1,000 and $400
for each meeting attended. Those Directors of Unitil who also serve as Directors
of CECo, E&H or FG&E and who are not officers of Unitil or any of its
subsidiaries receive a meeting fee of $100 per subsidiary meeting attended and
no annual retainer fee from CECo, E&H or FG&E. All Directors are entitled to
reimbursement of expenses incurred in connection with attendance at meetings of
the Board of Directors and any Committee on which they serve. In March, 1998
The Board of Directors approved an increase of $5,500 in the annual
compensation received by Directors, to be paid in Unitil Common Stock,
effective January 1, 1998. The annual retainer fee of $7,000 and $500 for each
Board Meeting attended remain unchanged.
Executive Compensation
The tabulation below shows the compensation Unitil Corporation, or
any of its subsidiaries, has paid to its Chief Executive Officer and its
most highly compensated officers whose total annual salary and bonus were in
excess of $100,000 during the year 1997.
Long-Term Compensation
Annual Compensation Awards Payouts
Name and Other Restricted All Other
Principal Salary Bonus Annual Stock Options LTIP Compensa
Position (1) Year ($) ($) Comp.($)Awards (#) Payouts tion($)
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Robert G.
Schoenberger(2) 1997 65,833(3) - - - 25,000(4) $13,207 (5)
Chairman of the - - - - - - -
Board & CEO - - - - - - -
- - - -
Peter J. 1997 218,499 104,800(7) - - - - $3,791 (8)
Stulgis (6)
Chairman of the 1996 241,025 100,036 - - - -
Board & CEO 1995 215,300 110,411 - - - -
- - - -
Michael J. 1997 174,000 63,834(7) - - - $10,912 (9)
Dalton 1996 169,200 61,959 - - - -
President & COO 1995 164,400 63,347 - - - -
Gail A. 1997 135,000 33,568(7) - - - - $ 5,432 (11)
Siart (10) 1996 97,500 32,580 - - - -
CFO, Treasurer 1995 90,000 47,228 - - 3,000(12)
& Secretary
James G. Daly 1997 125,625 33,658(7) - - - - $ 5,466 (13)
Senior VP, 1996 95,625 32,580 - - -
Unitil Service 1995 88,675 47,228 - - 3,000(12) -
George R. Gantz 1997 104,475 33,568(7) - - - $ 4,369 (14)
Senior VP, 1996 95,625 32,580 - - -
Unitil Service 1995 89,000 42,428 - - 3,000(12) - -
NOTES:
(1) Officers of the Company also hold various positions with subsidiary
companies. Compensation for those positions is included in the above table.
(2) Robert G. Schoenberger was elected Chairman of the Board and Chief
Executive Officer in October 1997. Mr. Schoenberger was not employed by the
Company or any of its subsidiary companies prior to October 1997.
(3) Base salary paid to Mr. Schoenberger for 1997 includes salary for the
months of November and December, and a $25,000 payment received on his first
day of employment with the Company. Mr. Schoenberger's annual base salary is
$245,000.
(4) Options were granted to Mr. Schoenberger on November 3, 1997 under the
Key Employee Stock Option Plan (see "Other Compensation Arrangements" and
subsequent notes.)
(5) All Other Compensation for Mr. Schoenberger for the year 1997 includes
the Supplemental Life Insurance payment, Group Term Life Insurance payment,
and taxable relocation payment valued at $64, $255 and $12,888, respectively.
(6) Peter J. Stulgis served as Chairman of the Board and Chief Executive
Officer of the Company until his death in May 1997.
(7) Bonus amounts are comprised of Management Performance Compensation Program
(MPCP) cash and stock awards and distributions from the System's non-utility
subsidiary, Unitil Resources. Unitil maintains a management performance
compensation program ("MPCP") for certain management employees, including
Executive Officers. The MPCP provides for awards to be calculated annually and
paid in a combination of cash and Unitil Common Stock. Awards are based on
several factors designed to reflect the Company's performance and the attainment
of individual performance goals. There was no distribution from Unitil
Resources in 1996 or 1997.
(8) All Other Compensation for Mr. Stulgis for the year 1997 includes the
company's contribution to the Tax Qualified Savings and Investment Plan
("401(K)") and Group Term Life Insurance payment, valued at $3,283 and $508,
respectively.
(9) All Other Compensation for Mr. Dalton for the year 1997 includes, 401(K)
company contribution, Supplemental Life Insurance payment and Group Term Life
Insurance payment, valued at $4,800, $3,452 and $2,660, respectively.
(10) Gail A. Siart resigned from the Company effective January 23, 1998.
(11) All Other Compensation for Ms. Siart for the year 1997 includes 401(K)
company contribution, Supplemental Life Insurance payment and Group Term Life
Insurance payment, valued at $4,742, $424 and $266, respectively.
(12) Options were granted in 1995 under the Key Employee Stock Option Plan
(see "Other Compensation Arrangements" and subsequent notes).
(13) All Other Compensation for Mr. Daly for the year 1997 includes 401(K)
company contribution, Supplemental Life Insurance payment and Group Term Life
Insurance payment, valued at $4,452, $603 and $411, respectively.
(14) All Other Compensation for Mr. Gantz for the year 1997 includes 401(K)
company contribution, Supplemental Life Insurance payment and Group Term Life
Insurance payment, valued at $3,134, $682 and $553, respectively.
OTHER COMPENSATION ARRANGEMENTS
The table below provides information with respect to options to purchase shares
of the Company's Common Stock exercised in fiscal 1997 and the value of
unexercised options granted in prior years under the Key Employee Stock Option
Plan ("Option Plan") to the named executive officers in the Summary
Compensation Table and held by them as of December 31, 1997. The Company has
no compensation plan under which Stock Appreciation Rights (SARs) are granted.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR (FY) AND FY-END OPTION VALUES
Shares Number of Unexercised Value of Unexercised
Acquired Options at In-the-Money Options at
Name and on Value FY-End (#) (2) FY-End ($)
Principal Exercise Realized Exercisable/ Exercisable/
Position (1) (#) ($) Unexercisable Unexercisable
(a) (b) (c) (d) (e)
Robert G. - - exercisable 0 exercisable 0
Schoenberger
Chairman of the - unexercisable 25,000(3) unexercisable 153,563
Board & CEO - -
Peter J. 5,280 73,709 exercisable 18,720 exercisable 313,981
Stulgis(4)
Chairman of the - unexercisable 0 unexercisable 0
Board & CEO - -
Michael J. Dalton - exercisable 24,000 exercisable 398,700
President & Chief - unexercisable 0 unexercisable 0
Operating Officer - -
- -
Gail A. 5,078 68,350 exercisable 0 exercisable 0
Siart(5)
CFO, Treasurer & - unexercisable 0 unexercisable 0
Secretary - -
- -
James G. Daly - - exercisable 5,078 exercisable 67,492
Senior VP, - - unexercisable 0 unexercisable 0
Unitil Service - -
- -
George R. Gantz - - exercisable 5,078 exercisable 72,425
Senior VP, - - unexercisable 0 unexercisable 0
Unitil Service
NOTES:
(1) The Option Plan authorizes the KESOP Committee to provide in the award
agreements that the participant's right to exercise the options provided for
therein will be accelerated upon the occurrence of a "Change in Control" of
Unitil. The term "Change in Control" is defined in substantially the same manner
as in the Severance Agreements as defined below. All of the award agreements
entered into with participants in the Option Plan to date contain such a "Change
in Control" provision. Each award agreement also provides that, upon the
exercise of an option on or after a Change in Control, Unitil shall pay to the
optionee, within five business days, a lump sum cash amount equal to the
economic benefit of the optionee's outstanding options and associated dividend
equivalents that the optionee would have received had the option remained
unexercised until the day preceding the expiration of the grant.
(2) Amounts listed in column (d) in the table above do not include
non-preferential dividend equivalents associated with options outstanding.
(3) In accordance with the terms of Mr. Schoenberger's employment agreement,
on November 3, 1997, he received 25,000 options to purchase shares of Company
stock under the Key Employee Stock Option Plan. The options granted to Mr.
Schoenberger are not exercisable until November 3, 1998.
(4) Peter J. Stulgis served as Chairman of the Board and Chief Executive
Officer of the Company until his death in May 1997.
(5) Gail A. Siart resigned from the Company effective January 23, 1998.
Unitil maintains a tax-qualified defined benefit pension plan and
related trust agreement (the "Retirement Plan"), which provides retirement
annuities for eligible employees of Unitil and its subsidiaries. Since the
Retirement Plan is a defined benefit plan, no amounts were contributed or
accrued specifically for the benefit of any officer of Unitil under the
Retirement Plan. Directors of Unitil who are not and have not been officers
of Unitil or any of its subsidiaries are not eligible to participate in the
Retirement Plan.
The table below sets forth the estimated annual benefits (exclusive
of Social Security payments) payable to participants in the specified
compensation and years of service classifications, assuming continued active
service until retirement. The average annual earnings used to compute the
annual benefits are subject to a $160,000 limit.
PENSION PLAN TABLE
Average Annual
Earnings Used for
Computing Pension
ANNUAL PENSION
10 Years 20 Years 30 Years 40 Years
of Service of Service of Service of Service
100,000 20,000 40,000 50,000 55,000
125,000 25,000 50,000 62,500 68,750
150,000 30,000 60,000 75,000 82,500
160,000 32,000 64,000 80,000 88,000
The present formula for determining annual benefits under the Retirement
Plan's life annuity option is (i) 2% of average annual salary (average annual
salary during the five consecutive years out of the last twenty years of
employment that give the highest average salary) for each of the first twenty
years of benefit service, plus (ii) 1% of average annual salary for each of the
next ten years of benefit service and (iii) 1/2% of average annual salary for
each year of benefit service in excess of thirty, minus (iv) 50% of age 65
annual Social Security benefit (as defined in the Retirement Plan), and (v) any
benefit under another Unitil retirement plan of a former employer for which
credit for service is given under the Retirement Plan. A participant is
eligible for early retirement at an actuarially reduced pension upon the
attainment of age 55 with at least 15 years of service with Unitil or one of
its subsidiaries. A participant is 100% vested in his benefit under the
Retirement Plan after 5 years of service with Unitil or one of its subsidiaries.
As of January 1, 1998, Executive Officers Shoenberger, Dalton, Siart, Daly and
Gantz had .17, 30, 15, 9 and 14 credited years of service, respectively,
under the Retirement Plan.
Unitil Service also maintains a Supplemental Executive Retirement Plan
("SERP"), a non-qualified defined benefit plan. SERP provides for supplemental
retirement benefits to executives selected by the Board of Directors. At the
present time, Messrs. Schoenberger and Dalton are eligible for SERP benefits
upon attaining normal or early retirement eligibility. Annual benefits are based
on a participant's final average earnings less the participant's benefits
payable under the Retirement Plan, less other retirement income payable to
such participant by Unitil or any previous employer and less income that a
participant receives as a primary Social Security benefit. Early retirement
benefits are available to a participant, with the Unitil Board's approval, if
the participant has attained age 55 and completed 15 years of service. Should
a participant elect to begin receiving early retirement benefits under SERP
prior to attaining age 60, the benefits are reduced by 5% for each year that
commencement of benefits precedes attainment of age 60. If a participant
terminates employment for any reason prior to retirement, the participant will
not be entitled to any benefits. Under the SERP, Messrs. Schoenberger and
Dalton would be entitled to receive an annual benefit of $14,238 and $21,859,
respectively, assuming their normal retirement at age 65 and that their
projected final average earnings are equal to the average of their respective
three consecutive years of highest compensation prior to the date thereof.
(b) OWNERSHIP OF SECURITIES
NAME DIRECTOR OF SHARES OF UNITIL
COMMON STOCK
BENEFICIALLY OWNED (1)
Michael J. Dalton UNITIL, CECO, E&H, 63,162 (2)(3)(4)(5)
Service, Power,
URI, FG&E, Realty
Joan D. Wheeler UNITIL 1,000
Bruce W. Keough UNITIL 0
Douglas K. MacDonald UNITIL, CECO 924
J. Parker Rice, Jr. UNITIL, FG&E 1,254
Robert G. Schoenberger UNITIL 25,335 (3)
Charles H. Tenney II (7) UNITIL 275,420 (2)(3)(4)(6)
Charles H. Tenney III (7) UNITIL 2,530
William W. Treat UNITIL, E&H 18,486 (8)
W. William VanderWolk, Jr.UNITIL, CECO 16,786 (9)
Franklin Wyman, Jr. UNITIL, FG&E 5,000
NOTES:
(1) Based on information furnished to Unitil by the nominees and continuing
Directors.
(2) Included are 3,977 and 3,689 shares which are held in trust for Messrs.
Dalton and Tenney, respectively, under the terms of the Unitil Tax Deferred
Savings and Investment Plan ("401(k)"); they have voting power only with respect
to the shares credited to their accounts. For further information regarding
401(k), see "Other Compensation Arrangements - Tax-Qualified Savings and
Investment Plan" below.
(3) Included are 25,335, 45,754 and 43,733 shares which Messrs. Schoenberger,
Dalton and Tenney, respectively, have the right to purchase pursuant to the
exercise of options under the Key Employee Stock Option Plan. (See "Other
Compensation Arrangements").
(4) With the exception of Messrs. Dalton and Tenney, who own shares totaling
1.40% and 6.08%, respectively, of the total outstanding shares, no Director or
officer owns more than one percent of the total outstanding shares.
(5) Included are 13,431 shares held by Mr. Dalton jointly with his wife with
whom he shares voting and investment power.
(6) Included are 124,522 shares (2.75%) owned by two trusts of which Mr.
Tenney is Co-Trustee with shared voting and investment power; he has a 1/6
beneficial interest in both trusts and disclaims any beneficial ownership of
such shares other than such 1/6 beneficial interest.
(7) Charles H. Tenney II is the father of Charles H. Tenney III.
(8) Included are 5,387 shares owned by three trusts of which Mr. Treat is
Trustee with voting and investment power; he has no beneficial interest in
such shares. Also included are 7,500 shares owned by one organization in which
Mr. Treat has shared voting and investment power and a 1/3 beneficial interest,
and also 500 shares owned by a member of Mr. Treat's family; he has no voting
or investment power with respect to, and no beneficial interest in, such shares.
(9) Included are 3,508 shares owned by a member of Mr. VanderWolk's family;
he has no voting or investment power with respect to, and no beneficial interest
in, such shares.
(c) TRANSACTIONS WITH SYSTEM COMPANIES
In 1992, the Company entered into a Senior Advisory Agreement with
Charles H. Tenney II. This agreement provides that Mr. Tenney will be
compensated $105,000 per annum for his role as Chairman of the Executive
Committee of the Board of the Company, as well as for other advisory services
which he will provide. In consideration of this Agreement, Mr. Tenney waives
all Board-related fees and retainers that he is otherwise entitled to receive
as a Director of the Company. As of October 1997, Mr. Tenney no longer serves
as chairman of the Executive Committee, and therefore the Agreement has been
discontinued. As a result of the discontinuation of the Agreement, Mr. Tenney
will receive the annual retainer fee and all other Board-related fees he is
entitled to as a Director of the Company.
(d) INDEBTEDNESS TO SYSTEM COMPANIES - None
(e) OTHER BENEFITS
Unitil and certain subsidiaries maintain severance agreements (the
"Severance Agreements") with certain management employees, including
Executive Officers. The Severance Agreements are intended to help assure
continuity in the management and operation of Unitil and its subsidiaries in
the event of a proposed "Change in Control". Each Severance Agreement only
becomes effective upon the occurrence of a Change in Control of Unitil as
defined in the Severance Agreements. If an employee's stipulated compensation
and benefits, position, responsibilities and other conditions of employment
are reduced during the thirty-six month period following a Change in Control,
the employee is entitled to a severance benefit.
The severance benefit is a lump sum cash amount equal to (i) the
present value of three years' base salary and bonus; (ii) the present value of
the additional amount the employee would have received under the Retirement
Plan if the employee had continued to be employed for such thirty-six month
period; (iii) the present value of contributions that would have been made by
Unitil or its subsidiaries under the 401(k) if the employee had been employed
for such thirty-six month period; and (iv) the economic benefit on any
outstanding Unitil stock options and associated dividend equivalents, assuming
such options remained unexercised until the day preceding the expiration of the
grant, including the spread on any stock options that would have been granted
under the Option Plan if the employee had been employed for such thirty-six
month period. Each Severance Agreement also provides for the continuation of
all employee benefits for a period of thirty-six months, commencing with the
month in which the termination occurred. In addition, pursuant to each
Severance Agreement, Unitil is required to make an additional payment to the
employee sufficient on an after-tax basis to satisfy any additional individual
tax liability incurred under Section 280G of the Internal Revenue Code of 1986,
as amended, in respect to such payments.
The Company entered into an employment agreement with Mr. Schoenberger
on November 1, 1997. The term of the agreement is for three years and the
expiration date is October 31, 2000. Under the terms of the employment
agreement, Mr. Schoenberger shall receive an annual base salary of $245,000
and is subject to annual review by the Board for discretionary periodic
increases in accordance with the Company's compensation policies.
Mr. Schoenberger is entitled to participate in the Company's SERP, Executive
Supplemental Life Insurance Program, Management Performance Compensation
Program and all other employee benefit plans made available by the Company.
On November 3, 1997, Mr. Schoenberger also received 25,000 options to purchase
shares of Company stock under the Company's Key Employee Stock Option Plan.
Mr. Schoenberger shall be reimbursed for all direct moving, reasonable interim
living and reasonable travel expenses. In addition, Mr. Schoenberger shall
receive $50,000 at the time he relocates to the area. The agreement also
provides that the Company and Mr. Schoenberger will enter into a Severance
Agreement, more fully described above. The Company, by action of the Board,
may terminate Mr. Schoenberger's employment for any reason. If Mr.
Schoenberger's employment is terminated by the Company during the term of the
agreement for any reason other than Cause, death or disability, the Company
shall pay Mr. Schoenberger's base pay at the rate in effect on the date of
employment termination and benefits until the end of the term of the agreement,
or if employment termination is after November 1, 1999, for one year.
(f) RIGHTS TO INDEMNITY
Unitil Corporation (the Corporation) shall indemnify any person who
was or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, by reason of the person's having served as,
or by reason of the person's alleged acts or omissions while serving as a
director, officer, employee or agent of the Corporation, or while serving at
the request of the Corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses, including attorney's fees, judgments, fines and amounts paid
in settlement or otherwise actually and reasonably incurred by him in
connection with the action, suit or proceeding, if the person acted in good
faith and in a manner he reasonable believed to be in or not opposed to the
best interests of the Corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful, said
indemnification to be to the full extent permitted by law under the
circumstances, including, without limitation, by all applicable provisions of
the New Hampshire Business Corporation Act ("the Act").
Any indemnification under this Article shall be made by the
Corporation with respect to Directors or other persons after a determination
that the person to be indemnified has met the standards of conduct set forth
in the Act, such determination to be made by the Board of Directors, by
majority vote of a quorum, or by other persons authorized to make such a
determination under the Act.
The right of indemnification arising under this Article is adopted for
the purpose of inducing persons to serve and to continue to serve the
Corporation without concern that their service may expose them to personal
financial harm. It shall be broadly construed, applied and implemented in
light of this purpose. It shall not be exclusive of any other right to which
any such person is entitled under any agreement, vote of the stockholders or
the Board of Directors, statute, or as a matter of law, or otherwise, nor
shall it be construed to limit or confine in any respect the power of the
Board of Directors to grant indemnity pursuant to any applicable statutes or
laws of The State of New Hampshire. The provisions of this Article are
separable, and, if any provision or portion hereof shall for any reason be held
inapplicable, illegal or ineffective, this shall not affect any other right of
indemnification existing under this Article or otherwise. As used herein, the
term "person: includes heirs, executors, administrators or other legal
representatives. As used herein, the terms "Director" and "officer" include
persons elected or appointed as officers by the Board of Directors, persons
elected as Directors by the stockholders or by the Board of Directors, and
persons who serve by vote or at the request of the Corporation as directors,
officers or trustees of another organization in which the Corporation has any
direct or indirect interest as a shareholder, creditor or otherwise.
The Corporation may purchase and maintain insurance on behalf of any
person who was or is a Director, officer or employee of the Corporation or any
of its subsidiaries, or who was or is serving at the request of the Corporation
as a fiduciary of any employee benefit plan of the Corporation or any
subsidiary, against any liability asserted against, and incurred by, such
person in any such capacity, or arising out of such person's status as such,
whether or not the Corporation would have the power to indemnify such person
against such liability under the provisions of the Act. The obligation to
indemnify and reimburse such person under this Article, if applicable, shall
be reduced by the amount of any such insurance proceeds paid to such person,
or the representatives or successors of such person.
ITEM 7
CONTRIBUTIONS AND PUBLIC RELATIONS
Part I. Payments to any political party, candidate for public office
or holder of such office, or any committee or agent thereof. - None
Part II. Payments to any citizens group or public relations counsel.
- None
ITEM 8
SERVICE, SALES AND CONSTRUCTION CONTRACTS
Part I. Contracts for services, including engineering or construction
services, or goods supplied or sold between system companies.
There are a number of areas in which Concord Electric Company (CECo),
Exeter & Hampton Electric Company (E&H) and Fitchburg Gas and Electric Light
Company (FG&E) work closely together and cooperate on a regular basis. The
areas of cooperation include the following:
CECo and E&H have jointly shared a Mobile Substation at cost for many years.
Under an Agreement originally made in 1964, CECo and E&H have obtained the
benefits of an emergency mobile substation at a cost far below that which each
company would have incurred without the sharing agreement. During emergencies
and other occasional situations, FG&E, CECo and E&H share line crews at cost.
FG&E, CECo and E&H occasionally exchange materials and supplies, a practice
which assists substantially in the companies' maintenance of cost-effective
inventory and stock levels.
FG&E, CECo and E&H, with the support and coordination provided by Unitil
Service Corp., participate in joint purchasing and sharing of computer software,
hardware and supplies, a practice which benefits all of the companies.
Part II. Contracts to purchase services or goods between any System
company and (1) any affiliate company (other than a System company) or (2) any
other company in which any officer or director of the System company, receiving
service under the contract, is a partner or owns 5 percent or more of any class
of equity securities. - None
Part III. The Company does not employ any other person or persons for the
performance of management, supervisory or financial advisory services.
ITEM 9
WHOLESALE GENERATORS AND FOREIGN UTILITY COMPANIES
Part I. None
Part II. None
Part III. None
ITEM 10
FINANCIAL STATEMENTS AND EXHIBITS
FINANCIAL STATEMENTS Page No.
Consolidating Income Statement 19-20
Consolidating Balance Sheet
Assets 21-22
Capitalization and Liabilities 23-24
Consolidating Statement of Cash Flows 25-26
Consolidating Statement of Retained Earnings 27-28
EXHIBITS
Exhibit A 29
Exhibit B 29
Exhibit C 31
Exhibit D 33
Exhibit E 40
Exhibit F 40
Exhibit G 42
Exhibit H 47
Exhibit I 47
UNITIL CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATING INCOME STATEMENT - YEAR TO DATE
Consolidated Eliminations Concord Exeter & FG&E
Electric Hampton. Consolidated
Company Electric Co
Operating Revenues:
Electric 149,972,422 (82,539,918) 49,801,485 53,818,166 49,435,710
Gas 19,729,377 0 0 0 19,729,377
Other 36,200 (14,295,052) 0 0 0
Total Operating
Revenue 169,737,999 (96,834,970) 49,801,485 53,818,166 69,165,087
Operating Expenses:
Fuel and 99,973,506 (74,733,237) 39,115,558 42,680,782 23,350,391
Purchased Power
Gas Purchased 12,032,051 0 0 0 12,032,051
For Resale
Operating and 23,549,929 (22,101,733) 4,800,190 4,828,651 14,267,966
Maintenance
Depreciation 7,631,665 0 1,421,910 1,815,303 3,354,541
Amortization
of Cost of
Abandoned
Property 1,547,230 0 0 0 1,547,230
Provisions for Taxes:
Local Property 5,276,277 0 1,745,921 1,325,901 1,700,642
and Other
Federal and 4,165,566 (29,200) 300,860 411,733 3,297,901
State Income
Total Operating 154,176,224 (96,864,170) 47,384,439 51,062,370 59,550,722
Expenses
Operating Income 15,561,775 29,200 2,417,046 2,755,796 9,614,365
Non-operating
Expenses 160,207 6,399,573 4,095 19,760 62,114
Income Before
Interest Expense 15,401,568 (6,370,373) 2,412,951 2,736,036 9,552,251
Interest Expense,
Net 7,166,506 (460,828) 1,498,106 1,623,716 3,530,702
Net Income 8,235,062 (5,909,545) 914,845 1,112,320 6,021,549
Less Dividends on
Preferred Stock 276,040 0 32,205 78,251 165,583
Net Income Applicable
to Common Stock 7,959,022 (5,909,545) 882,640 1,034,069 5,855,966
Average Common
Shares Outstand 4,412,869
Basic Earnings
per Share $1.80
Diluted Earnings
per Share $1.76
Note: Individual columns may not add to Consolidated due to rounding.
UNITIL CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATING INCOME STATEMENT - YEAR TO DATE
Unitil Unitil Unitil Unitil Unitil
Service Power Realty Resources Corporation
Corp. Corp. Corp. Inc.
Operating Revenues:
Electric 0 78,973,254 0 483,726 0
Gas 0 0 0 0 0
Other 12,965,280 0 1,359,772 6,200 0
Total Operating
Revenue 12,965,280 78,973,254 1,359,772 489,926 0
Operating Expenses:
Fuel and 0 68,931,656 0 628,356 0
Purchased Power
Gas Purchased 0 0 0 0 0
For Resale
Operating and 11,510,526 9,850,720 188,636 20,270 184,703
Maintenance
Depreciation 785,609 0 254,301 0 0
Amortization of Cost of
Abandoned Property 0 0 0 0 0
Provisions for Taxes:
Local Property 402,731 0 101,083 0 0
and Other
Federal and (116) 30,596 111,358 (35,661) 78,095
State Income
Total Operating
Expenses 12,698,750 78,812,972 655,378 612,965 262,798
Operating Income 266,530 160,282 704,394 (123,039) (262,798)
Non-operating
Expenses (6,306) (17,784) 0 (2,027) (6,299,218)
Income Before 272,836 178,066 704,394 (121,012) 6,036,420
Interest Expense
Interest Expense, 272,836 133,000 559,497 9,478 0
Net
Net Income 0 45,066 144,897 (130,490) 6,036,420
Less Dividends
on Preferred Stock 0 0 0 0 0
Net Income Applicable
to Common Stock 0 45,066 144,897 (130,490) 6,036,420
Note: Individual columns may not add to Consolidated due to rounding.
UNITIL CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATING BALANCE SHEET
ASSETS: Consolidated Eliminations Concord Exeter & FG&E
Electric Hampton. Consolidated
Company Electric Co
Utility Plant,
at cost:
Electric 166,636,311 0 42,143,648 52,172,604 72,320,060
Gas 30,472,495 0 0 0 30,472,495
Common 19,689,260 0 0 0 5,364,189
Construction 2,676,684 0 533,220 799,168 841,513
Work in Process
Utility Plant 219,474,750 0 42,676,868 52,971,772 108,998,257
Less: Accumulated
Provision for
Depreciation 68,359,889 0 12,557,848 18,632,802 35,018,132
Net Utility
Plant 151,114,861 0 30,119,020 34,338,970 73,980,125
Other Property
& Investments 42,448 (44,335,505) 23,827 507 18,114
Current Assets:
Cash 2,336,627 (8,250,146) 330,373 245,645 322,275
Accounts
Receivable,
net of Provision for
Doubtful
Accounts 16,889,396 0 4,146,909 4,436,453 8,108,609
Accounts
Receivable -
Associated
Companies 0 (12,405,757) 50,785 136,571 54,324
Materials and
Supplies 2,663,285 0 354,229 382,761 1,926,296
Prepayments 433,909 (8,120,000) 2,005,332 2,926,319 3,751,435
Accrued
Revenue 6,796,187 0 209,964 968,023 4,181,980
Total Current
Assets 29,119,404 (28,775,903) 7,097,592 9,095,772 18,344,919
Deferred Assets:
Debt Issuance
Costs 918,347 0 246,856 194,939 330,374
Cost of Abandoned
Properties 23,885,028 0 0 0 23,885,028
Prepaid
Pension Costs 8,120,000 8,120,000
Other Deferred
Assets 24,777,056 (2,584,269) 4,756,254 5,032,478 16,449,642
Total
Deferred
Assets 57,700,431 5,535,731 5,003,110 5,227,417 40,665,044
TOTAL 237,977,144 (67,575,677) 42,243,549 48,662,666 133,008,202
Note: Individual columns may not add to Consolidated due to rounding.
UNITIL CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATING BALANCE SHEET
ASSETS: Unitil Unitil Unitil Unitil Unitil
Service Power Realty Resources Corporation
Corp. Corp. Corp. Inc.
Utility Plant, at cost:
Electric 0 0 0 0 0
Gas 0 0 0 0 0
Common 4,766,665 0 9,558,405 0 0
Construction
Work in Process 0 0 502,783 0 0
Utility Plant 4,766,665 0 10,061,188 0 0
Less: Accumulated
Provision
for Depreciation 1,769,333 0 381,775 0 0
Net Utility Plant 2,997,332 0 9,679,413 0 0
Other Property
& Investments 0 0 0 0 44,335,505
Current Assets:
Cash 493,562 1,526,142 0 51,232 7,617,544
Accounts
Receivable,
net of
Provision
for Doubtful
Accounts 113,241 0 0 84,185 0
Accounts
Receivable -
Associated
Companies 2,032,757 7,155,626 0 254 2,975,441
Materials
and Supplies 0 0 0 0 0
Prepayments (137,842) 7,232 1,328 105 0
Accrued Revenue 0 1,350,682 0 85,537 0
Total
Current Assets 2,501,718 10,039,682 1,328 221,313 10,592,985
Deferred Assets:
Debt Issuance
Costs 0 0 146,178 0 0
Cost of
Abandoned
Properties 0 0 0 0 0
Prepaid
Pension Costs 0 0 0 0 0
Other Deferred
Assets 1,288,227 0 (165,276) 0 0
Total
Deferred Assets 1,288,227 0 (19,098) 0 0
TOTAL 6,787,277 10,039,682 9,661,643 221,313 54,928,490
Note: Individual columns may not add to Consolidated due to rounding.
UNITIL CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATING BALANCE SHEET
Consolidated Eliminations Concord Exeter & FG&E
Electric Hampton. Consolidated
Company Electric Co
CAPITALIZATION:
Common Stock
Equity 71,644,368 (44,411,621) 10,180,258 11,478,339 37,572,688
Preferred Stock:
Non-Redeemable
Non-Cumulative 225,000 0 225,000 0 0
Redeemable,
Cumulative 3,665,900 0 215,000 1,009,300 2,441,600
Long-Term Debt,
Less Current
Portion 63,895,589 0 10,550,000 13,060,000 33,000,000
Total
Capitalization 139,430,857 (44,411,621) 21,170,258 25,547,639 73,014,288
Capitalized Leases,
Less Current
Portion 4,732,702 0 0 0 2,499,103
Current
Liabilities:
Long-Term Debt,
Current Portion 4,469,795 0 2,170,000 1,137,000 1,000,000
Short-Term Debt 18,000,000 (8,246,282) 5,982,985 7,437,717 10,020,914
Accounts Payable 14,733,908 0 103,801 214,527 5,728,304
A/P -
Associated
Companies 0 (10,929,308) 3,738,012 4,144,683 1,084,877
Dividends
Declared and
Payable 212,097 (1,480,314) 166,156 234,037 1,149,116
Refundable
Customer
Deposits 2,187,032 0 238,788 738,680 1,176,764
Taxes Accrued (553,854) 0 (316,234) (162,182) 275,780
Interest Accrued 1,086,651 0 337,553 318,881 427,500
Capitalized Leases,
Current Portion 883,528 0 0 0 130,642
Accrued and Other
Current
Liabilities 2,634,829 76,118 344,939 119,887 274,259
Total
Current
Liabilities 43,653,986 (20,579,786) 12,766,000 14,183,230 21,268,156
Deferred Liabilities:
Investment
Tax Credits 1,437,639 0 315,673 299,283 822,684
Other
Deferred
Liabilities 7,863,691 0 1,463,008 922,020 5,478,663
Total
Deferred
Liabilities 9,301,330 0 1,778,681 1,221,303 6,301,347
Deferred
Income Taxes 40,858,269 (2,584,270) 6,528,610 7,710,494 29,925,308
Total
Liabilities and
Capitalization 237,977,144 (67,575,677) 42,243,549 48,662,666 133,008,202
Note: Individual columns may not add to Consolidated due to rounding.
UNITIL CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATING BALANCE SHEET
CAPITALIZATION: Unitil Unitil Unitil Unitil Unitil
Service Power Realty Resources Corporation
Corp. Corp. Corp. Inc.
Common Stock Equity 2,688 407,697 1,302,470 24,629 55,087,220
Preferred Stock:
Non-Redeemable,
Non-Cumulative 0 0 0 0 0
Redeemable, Cumulative 0 0 0 0 0
Long-Term Debt,
Less Current Portion 0 0 7,285,589 0 0
Total Capitalization 2,688 407,697 8,588,059 24,629 55,087,220
Capitalized Leases,
Less Current Portion 2,233,598 0 0 0 0
Current Liabilities:
Long-Term Debt.,
Current Portion 0 0 162,795 0 0
Short-Term Debt 1,816,986 0 836,870 150,810 0
Accounts Payable 666,092 7,958,151 59,830 3,202 0
A/P - Associated
Companies 1,452,443 364,610 33,738 110,945 0
Dividends
Declared and
Payable 0 0 0 0 143,102
Refundable
Customer
Deposits 0 32,800 0 0 0
Taxes Accrued 35,932 1,928 (19,649) (67,597) (301,832)
Interest Accrued 0 2,717 0 0 0
Capitalized Leases,
Current Portion 752,887 0 0 0 0
Accrued and Other
Current
Liabilities 547,570 1,271,779 0 280 0
Total Current
Liabilities 5,271,910 9,631,985 1,073,584 197,640 (158,730)
Deferred Liabilities:
Investment
Tax Credits 0 0 0 0 0
Other
Deferred
Liabilities 0 0 0 0 0
Total
Deferred
Liabilities 0 0 0 0 0
Deferred Income Taxes (720,919) 0 0 (956) 0
Total
Liabilities and
Capitalization 6,787,277 10,039,682 9,661,643 221,313 54,928,490
Note: Individual columns may not add to Consolidated due to rounding.
UNITIL CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENT OF CASH FLOWS
Consolidated Eliminations Concord Exeter & FG&E
Electric Hampton. Consolidated
Company Electric Co
Cash Flows From
Operating Activities:
Net Income 8,235,062 (5,909,545) 914,845 1,112,320 6,021,549
Adjustments to
Reconcile Net
Income to Net
Cash Provided
by Operating
Activities:
Depreciation and
Amortization 9,178,742 0 1,421,911 1,815,303 4,901,618
Deferred Taxes 660,061 449,457 290,946 (31,271)
Amortization of
Investment
Tax Credit (172,478) 0 (39,377) (37,748) (95,352)
Amortization of
Debt Issuance
Costs 59,594 0 26,643 10,599 19,277
Provision for
Doubtful Accounts 853,249 0 156,066 99,753 597,431
Changes in Assets
and Liabilities:
(Increase) Decrease in:
Accounts
Receivable (1,359,323) 1,229,122 349,908 (418,247) (1,149,892)
Materials and
Supplies (184,353) 0 32,974 (9,867) (207,461)
Prepayments and
Prepaid Pension (725,447) (202,000) (286,546) (386,395) (60,701)
Accrued Revenue 2,063,001 0 (73,026) (889,803) (365,575)
Increase (Decrease) in:
Accounts
Payable (370,017) (1,189,339) 382,937 429,837 856,300
Refundable
Customer Deposits 601,916 0 (59,487) (80,069) 746,772
Taxes and Interest
Accrued (803,431) (27,483) (391,299) (332,335) (328,517)
Other, Net (1,864,046) 903,000 (16,863) (224,720) (2,072,290)
Net Cash provided
by Operating
Activities 16,172,530 (5,196,245) 2,868,143 1,379,574 8,831,888
Cash Flows From
Investing Activities:
Acquisition of
Property, Plant,
Equipment (13,887,448) 357,000 (2,822,038) (3,830,402) (6,004,568)
Other Property
and Investments 0 0 0 0 0
Net Cash Used in
Investing
Activities (13,887,448) 357,000 (2,822,038) (3,830,402) (6,004,568)
Cash Flows From
Financing
Activities:
Proceeds From
(Repayment of )
Short-Term Debt (3,400,000) (3,594,712) 1,598,697 4,015,048 1,512,217
Proceeds from
Long-Term Debt 7,500,000
Repayment of
Long-Term Debt (1,345,616) 0 (682,000) (612,000) 0
Dividends Paid (6,158,876) 5,865,897 (887,230) (969,401) (4,285,305)
Issuance of
Common Stock 1,668,732 0 0 0 0
Capital Lease
Obligations (1,115,537) (1,058,000) 0 (295,390)
Net Cash Used in
Financing
Activities (2,851,297) 1,213,185 29,467 2,433,647 (3,068,478)
Net Increase
(Decrease) in Cash (566,215) (3,626,060) 75,572 (17,181) (241,158)
Cash at
Beginning of Year 2,902,842 (4,624,086) 254,801 262,826 563,433
Cash at End of Year 2,336,627 (8,250,146) 330,373 245,645 322,275
Note : Individual columns may not add to Consolidated due to rounding.
UNITIL CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENT OF CASH FLOWS
Unitil Unitil Unitil Unitil Unitil
Service Power Realty Resources Corporation
Corp. Corp. Corp. Inc.
Cash Flows From
Operating
Activities:
Net Income 0 45,066 144,897 (130,490) 6,036,420
Adjustments to
Reconcile Net
Income to Net
Cash Provided
by Operating
Activities:
Depreciation
and Amortization 785,609 0 254,301 0 0
Deferred Taxes (53,727) 0 4,650 6 0
Amortization of
Investment
Tax Credit 0 0 0 0 0
Amortization of
Debt Issuance
Costs 0 0 3,074 0 0
Provision for
Doubtful Accounts 0 0 0 0 0
Changes in Assets
and Liabilities:
(Increase) Decrease in:
Accounts
Receivable (664,392) (663,471) 113,936 (12,834) (143,453)
Materials and
Supplies 0 0 0 0 0
Prepayments
and Prepaid
Pension 158,668 3,130 (198) (104) 48,700
Accrued Revenue 0 3,437,319 0 (45,914) 0
Increase (Decrease)
in:
Accounts Payable 174,372 (948,695) (30,352) 11,342 (56,421)
Refundable
Customer Deposits 0 (5,300) 0 0 0
Taxes and
Interest Accrued 29,768 6,302 228,959 112,207 (101,033)
Other, Net (752,234) 658,069 (168,766) (136,282) (53,960)
Net Cash provided
by Operating
Activities (321,936) 2,532,420 550,501 (202,069) 5,730,253
Cash Flows From
Investing
Activities:
Acquisition of
Property, Plant,
Equipment (1,031,521) 0 (555,918) 0 0
Other Property
and Investments 0 0 0 100,000 (100,000)
Net Cash Used in
Investing
Activities (1,031,521) 0 (555,918) 100,000 (100,000)
Cash Flows From Financing Activities:
Proceeds From
(Repayment of )
Short-Term
Debt 1,367,185 (1,006,278)(7,442,967) 150,810 0
Proceeds from
Long-Term Debt 0 0 7,500,000
Repayment of
Long-Term Debt 0 0 (51,616) 0 0
Dividends Paid 0 0 0 0 (5,882,836)
Issuance of
Common Stock 0 0 0 0 1,668,732
Retirement of
Preferred Stock 0 0 0 0 0
Capital Lease
Obligations 237,853 0 0 0 0
Net Cash Used
in Financing
Activities 1,605,038 (1,006,278) 5,417 150,810 (4,214,104)
Net Increase
(Decrease) in
Cash 251,581 1,526,142 0 48,741 1,416,149
Cash at Beginning
of Year 241,981 0 0 2,491 6,201,395
Cash at End
of Year 493,562 1,526,142 0 51,232 7,617,544
Note : Individual columns may not add to Consolidated due to rounding.
UNITIL CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENT OF RETAINED EARNINGS
Consolidated Eliminations Concord Exeter & FG&E
Electric Hampton. Consolidated
Company Electric Co
Retained Earnings,
Beginning of Year 32,484,185 (17,712,695) 8,676,381 9,414,751 14,803,394
Additions:
Net Income,
Excluding
Dividends
Received 8,235,062 0 914,845 1,112,320 6,021,549
Dividends
Received
From
Subsidiaries 0 (5,909,545) 0 0 0
Total Additions 8,235,062 (5,909,545) 914,845 1,112,320 6,021,549
Deductions:
Dividends Declared:
Preferred Stock
of Subsidiaries 276,040 0 32,205 78,251 165,583
Common Stock
of Subsidiaries 0 (5,909,545) 811,549 891,150 4,206,846
Common Stock of
Registrant 5,903,688 0 0 0 0
Adjustments to
Retained Earnings 0 0 0 0 0
Total Deductions 6,179,728 (5,909,545) 843,754 969,401 4,372,429
Retained Earnings,
End of Year 34,539,519 (17,712,695) 8,747,472 9,557,670 16,452,514
Note : Individual columns may not add to Consolidated due to rounding.
UNITIL CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENT OF RETAINED EARNINGS
Unitil Unitil Unitil Unitil Unitil
Service Power Realty Resources Corporation
Corp. Corp. Corp. Inc.
Retained Earnings,
Beginning of Year 1,688 261,631 831,573 45,119 16,162,343
Additions:
Net Income,
Excluding
Dividends Received 0 45,066 144,897 (130,490) 126,875
Dividends Received
From Subsidiaries 0 0 0 0 5,909,545
Total Additions 0 45,066 144,897 (130,490) 6,036,420
Deductions:
Dividends Declared:
Preferred Stock of
Subsidiaries 0 0 0 0 0
Common Stock of
Subsidiaries 0 0 0 0 0
Common Stock of
Registrant 0 0 0 0 5,903,688
Adjustments to
Retained Earnings 0 0 0 0 0
Total Deductions 0 0 0 0 5,903,688
Retained Earnings,
End of Year 1,688 306,697 976,470 (85,371) 16,295,075
Note : Individual columns may not add to Consolidated due to rounding.
EXHIBITS
Exhibit A. A copy of Unitil Corporation's Annual Report and Form 10-K for
the year ended December 31, 1997 (Incorporated herein by
reference to File No. 1-8858 and File No. 1-7536, respectively)
Exhibit B.
Exhibit No. Description of Exhibit Reference
B-1 Unitil Corporation
B -1(a) Certificate of Incorporation Exhibit B-1(a)
Form U5B
File No. 30 - 1
B-1(b) Amendment to Certificate of Incorporation Exhibit B-1(b)
Form U5B
File No. 30 - 1
B-1(c) Articles of Incorporation Exhibit B-1(c)
Form U5B
File No. 30 - 1
B-1(d) Articles of Amendment to Articles of Exhibit B-1(d)
Incorporation Form U5B
File No. 30 - 1
B-1(e) By - Laws Exhibit B-1(e)
Form U5B
File No. 30 - 1
B-2 Concord Electric Company
B-2(a) Charter (Articles of Association) and Exhibit B-2(a)
Amendments thereto Form U5B
File No. 30 - 1
B-2(b) By - Laws Exhibit B-2(b)
Form U5B
File No. 30 - 1
B-3 Exeter & Hampton Electric Company
B-3(a) Charter (Articles of Association) and Exhibit B-3(a)
Amendments thereto Form U5B
File No. 30 - 1
B-3(b) By - Laws Exhibit B-3(b)
Form U5B
File No. 30 - 1
B-4 Fitchburg Gas and Electric Light Company
B-4(a) Articles of Incorporation and Amendments Exhibit B-4(a)
thereto Form U5B
File No. 30 - 1
B-4(b) By - Laws Exhibit B-4(b)
Form U5B
File No. 30 - 1
B-5 Fitchburg Energy Development Company
B-5(a) Certificate of Incorporation Exhibit B-5(a)
Form U5B
File No. 30 - 1
B-5(b) By - Laws Exhibit B-5(b)
Form U5B
File No. 30 - 1
B-6 Unitil Power Corp.
B-6(a) Certificate of Incorporation Exhibit B-6(a)
Form U5B
File No. 30 - 1
B-6(b) Articles of Incorporation Exhibit B-6(b)
Form U5B
File No. 30 - 1
B-6(c) Statement of Change of Registered Office Exhibit B-6(c)
Form U5B
File No. 30 - 1
B-6(d) By - Laws Exhibit B-6(d)
Form U5B
File No. 30 - 1
B-7 Unitil Realty Corp.
B-7(a) Certificate of Incorporation Exhibit B-7(a)
Form U5B
File No. 30 - 1
B-7(b) Articles of Incorporation Exhibit B-7(b)
Form U5B
File No. 30 - 1
B-7(c) By - Laws Exhibit B-7(c)
Form U5B
File No. 30 - 1
B-8 Unitil Service Corp.
B-8(a) Certificate of Incorporation Exhibit B-8(a)
Form U5B
File No. 30 - 1
B-8(b) Articles of Incorporation Exhibit B-8(b)
Form U5B
File No. 30 - 1
B-8(c) By - Laws Exhibit B-8(c)
Form U5B
File No. 30 - 1
B-9 Unitil Resources, Inc.
B-9(a) Certificate of Incorporation Exhibit B-9(a)
1993 Form U5S
File No. 30 - 1
B-9(b) Articles of Incorporation and Exhibit B-9(b)
Addendum to Articles of Incorporation 1993 Form U5S
File No. 30 - 1
B-9(c) By - Laws Exhibit B-9(c)
1993 Form U5S
File No. 30 - 1
Exhibit C
(a) INDENTURES
Exhibit No. Description of Exhibit Reference
C-1 Indenture of Mortgage and Deed of Trust dated Exhibit C-1
July 15, 1958 of Concord Electric Company (CECO) Form U5B
relating to First Mortgage Bonds, and relating to File No. 30 - 1
all series unless supplemented.
C-2 First Supplemental Indenture dated January 15, 1968 Exhibit C-2
relating to CECO's First Mortgage Bonds, Series C, Form U5B
6 3/4% due January 15 1998 and all additional series File No. 30 - 1
unless supplemented.
C-3 Second Supplemental Indenture dated November 15, 1971 Exhibit C-3
relating to CECO's First Mortgage Bonds, Series D, Form U5B
8.70% due November 15, 2001 and all prior and File No. 30 - 1
additional series unless supplemented.
C-4 Fourth Supplemental Indenture dated March 28, 1984 Exhibit C-4
relating to CECO's First Mortgage Bonds, amending Form U5B
certain provisions of the Original Indenture as File No. 30 - 1
supplemented and all additional series unless
supplemented.
C-5 Sixth Supplemental Indenture dated October 29, 1987 Exhibit C-5
relating to CECO's First Mortgage Bonds, Series G, Form U5B
9.85% due October 15, 1997 and all additional series File No. 30 - 1
unless supplemented.
C-6 Seventh Supplemental Indenture dated August 29, 1991 Exhibit C-6
relating to CECO's First Mortgage Bonds, Series H, Form U5B
9.43% due September 1, 2003 and all series unless File No. 30 - 1
supplemented.
C-7 Eighth Supplemental Indenture dated October 14, 1994 Exhibit 4.8
relating to CECO's First Mortgage Bonds, Series I, 1994 Form 10-K
8.49% due October 14, 2024 and all additional series File No. 1-8858
unless supplemented.
C-8 Indenture of Mortgage and Deed of Trust dated Exhibit C-7
December 1, 1952 of Exeter & Hampton Electric Company Form U5B
(E&H) relating to all series unless supplemented. File No. 30 - 1
C-9 Third Supplemental Indenture dated June 1, 1964 Exhibit C-8
relating to E&H's First Mortgage Bonds, Series D, Form U5B
4 3/4% due June 1, 1994 and all additional series File No. 30 - 1
unless supplemented.
C-10 Fourth Supplemental Indenture dated January 15, 1968 Exhibit C-9
relating to E&H's First Mortgage Bonds, Series E, Form U5B
6 3/4% due January 15, 1998 and all additional series File No. 30 - 1
unless supplemented.
C-11 Fifth Supplemental Indenture dated November 15, 1971 Exhibit C-10
relating to E&H's First Mortgage Bonds, Series F, Form U5B
8.70% due November 15, 2001 and all additional series File No. 30 - 1
unless supplemented.
C-12 Sixth Supplemental Indenture dated April 1, 1974 Exhibit C-11
relating to E&H's First Mortgage Bonds, Series G, Form U5B
8 7/8% due April 1, 2004 and all additional series File No. 30 - 1
unless supplemented.
C-13 Seventh Supplemental Indenture dated December 15, 1977 Exhibit C-12
relating to E&H's First Mortgage Bonds, Series H, Form U5B
8.50% due December 15, 2002 and all additional series File No. 30 - 1
unless supplemented.
C-14 Eighth Supplemental Indenture dated October 28, 1987 Exhibit C-13
relating to E&H's First Mortgage Bonds, Series I, Form U5B
9.85% due October 15, 1997 and all additional series File No. 30 - 1
unless supplemented.
C-15 Ninth Supplemental Indenture dated August 29, 1991 Exhibit C-14
relating to E&H's First Mortgage Bonds, Series J, Form U5B
9.43% due September 1, 2003 and all additional series File No. 30 - 1
unless supplemented.
C-16 Tenth Supplemental Indenture dated October 14, 1994 Exhibit 4.17
relating to E&H's First Mortgage Bonds, Series K, 1994 Form 10-K
8.49% due October 14, 2024 and all additional series File No. 1-8858
unless supplemented.
C-17 Purchase Agreement dated March 20, 1992 for the 8.55% Exhibit C-20
Senior Note due March 31, 2004. Form U5B
File No. 30 - 1
C-18 Loan Agreement dated October 24, 1988 with ComPlan, Exhibit C-21
Inc. in connection with UNITIL Realty Corp. (Realty) Form U5B
borrowing to acquire and renovate facilities in File No. 30 - 1
Exeter, New Hampshire; and related Assignment and
Consent Agreement between Realty, ComPlan, Inc. and
the tenants, UNITIL Service Corp. and E&H.
C-19 Purchase Agreement dated November 30, 1993 for the Exhibit 4.18
6.75% Notes due November 30, 2023. 1993 Form 10-K
File No. 1-8858
C-20 Note Purchase Agreement dated July 1, 1997 for the Exhibit 4.22
8.0% Senior Secured Notes due August 1, 2017 to Form 10-K
for 1997
Exhibit D Tax Allocation Agreement
AGREEMENT made as of September 10, 1985, among Concord Electric Company,
a New Hampshire corporation, Exeter & Hampton Electric Company, a New Hampshire
corporation, UNITIL Service Corp., a New Hampshire corporation, and UNITIL
Power Corp., a New Hampshire corporation, and UNITIL Corporation ('UNITIL"),
a New Hampshire corporation, ("AFFILIATE" companies or collectively, the
"AFFILIATES"). Whenever it is intended to include UNITIL in the context of
the affiliated group, the term "CONSOLIDATED AFFILIATE" or "CONSOLIDATED
AFFILIATES" may be used, and when reference is to the affiliated group as a
collective tax paying unit the term "Group" may be used.
WHEREAS, UNITIL owns at least 80 percent of the issued and outstanding
shares of each class of voting common stock of each of the AFFILIATES: each of
the CONSOLIDATED AFFILIATES is a member of the affiliated group within the
meaning of section 1504 of the Internal Revenue Code of 1954, as amended (the
"Code"), of which UNITIL is the common parent corporation; and UNITIL proposes
to include each of the AFFILIATES in filing a consolidated income tax return
for the calendar year 1985;
NOW, THEREFORE, UNITIL and the AFFILIATES agree as follows:
1. Consolidated Return Election. If at any time and from time to time
UNITIL so elects, each of the AFFILIATES will join in the filing of a
consolidated Federal income tax return for the calendar year 1985 and for any
subsequent period for which the Group is required of permitted to file such a
return. UNITIL and its affiliates agree to file such consents, elections and
other documents and to take such other action as may be necessary or
appropriate to carry out the purposes of this Section 1. Any period for which
any of the AFFILIATES is included in a consolidated Federal income tax return
filed by UNITIL is referred to in the Agreement as a "Consolidated Return Year".
2. AFFILIATES' Liability to UNITIL for Consolidated Return Year. Prior to
the filing of each consolidated return by UNITIL each of the AFFILIATES included
therein shall pay to UNITIL the amount, if any, on the Federal income tax for
which the AFFILIATES would have been liable for that year, computed in
accordance with Treasury Regulations, section 1.1552-1(a)(2)(ii) as though that
AFFILIATE had filed a separate return for such year, giving the effect to any
net operating loss carryovers, capital loss carryovers, investment tax credit
carryovers, foreign tax carryovers or other similar items, incurred by that
AFFILIATE for any period ending on or before the date of this Agreement.
The foregoing allocation of Federal income tax liability is being made
in accordance with Treasury Regulations, sections 1.1552-1(a)(2) and
1.1502-33(d)(2)(ii), and no amount shall be allocated to any CONSOLIDATED
AFFILIATE in excess of the amount permitted under Treasure Regulations,
section 1.1502-33(d)(2)(ii). Accordingly, after taking into account the
allocable portion of the Group's Federal income tax liability, no amount shall
be allocated to any CONSOLIDATED AFFILIATE in excess of the amount permitted in
accordance with Treasury Regulations, section 1.1502-33(d)(2)(ii).
3. UNITIL Liability to Each Affiliate for Consolidated Return Year. If
for any Consolidated Return Year, any AFFILIATE included in the consolidated
return filed by UNITIL for such year has available a net operating loss,
capital loss, foreign tax credit, investment tax credit or similar items
(computed by taking into account carryovers of such items from periods ending
on or before the date of this Agreement) that reduces the consolidated tax
liability of the Group below the amount that would have been payable if that
AFFILIATE did not have such item available, UNITIL shall pay the amount of the
reduction attributable to such AFFILIATE prior to the filing of the
consolidated return for such year.
The amount of the reduction shall be equal to a portion of the excess
of (i) the total of the separate return tax liabilities of each of the
CONSOLIDATED AFFILIATES computed in accordance with Section 2 of this Agreement,
over (ii) the Federal income tax liability of the Group for the year. The
portion of such reduction attributable to an AFFILIATE shall be computed by
multiplying the total reduction by a fraction, the numerator of which is the
value of the tax benefits contributed by the AFFILIATE to the Group and the
denominator of which is the value of the total value of such benefits
contributed by all CONSOLIDATED AFFILIATES during the year.
For purposes of the foregoing paragraph a deduction of credit generated
by a CONSOLIDATED AFFILIATE which is in excess of the amount required to
eliminate its separate tax return liability but which is utilized in the
computation of the Federal income tax liability of the Group shall be deemed
to be a tax benefit contributed by the CONSOLIDATED AFFILIATE to the Group.
The value of a deduction which constitutes such a benefit shall be determined
by applying the current corporate income tax rate, presently 46 percent, to
the amount for the deduction. The value of a credit that constitutes such a
benefit shall be the tax savings, currently 100 percent thereof. The value of
capital losses used to offset capital gains shall be computed at the then
current rate applicable to capital gains for corporations.
4. Payment of Estimated Taxes. Prior to the paying and filing of estimated
consolidated tax declaration by UNITIL, each of the AFFILIATES included in such
estimated tax declaration shall pay to UNITIL the amount, if any, of the
estimated Federal income tax for which the AFFILIATE would have been liable for
that year, computed as though that AFFILIATE had filed a separate estimated tax
declaration for such year.
5. Tax Adjustments. In the event of any adjustments to the consolidated
tax return as filed (by reason of an amended return, a claim for refund of an
audit by the Internal Revenue Service), the liability, if any, of each of the
AFFILIATES under Sections 2, 3, and 4 shall be redetermined to give effect to
any such adjustment as if it had been made as part of the original computation
of tax liability, and payments between UNITIL and the appropriate AFFILIATES
shall be made within 120 days after any such payments are made or refunds are
received, or, in the case of contested proceedings, within 120 days after a
final determination of the contest.
Interest and penalties, if any, attributable to such an adjustment shall
be paid by each AFFILIATE to UNITIL in proportion to the increase in such
AFFILIATE'S separate return tax liability that is required to be paid to UNITIL,
as computed under Section 2.
6. Subsidiaries of Affiliates. If at any time, any of the AFFILIATES
acquire or creates one or more subsidiary corporations that are includable
corporations of the Group, they shall be subject to this Agreement and all
references to the AFFILIATES herein shall be interpreted to include such
subsidiaries as a group.
7. Successors. This Agreement shall be binding on and inure to the
benefit of any successor, by merger, acquisition of assets or otherwise, to any
of the parties hereto (including but not limited to any successor of UNITIL or
any of the AFFILIATES succeeding to the tax attributes of such corporation under
Section 381 of the Code) to the same extent as if such successor had been an
original party to this Agreement.
8. Affiliates' Liability for Separate Return Years. If any of the
AFFILIATES leaves the Group and files separate Federal income tax returns,
within 120 days of the end of each of the first fifteen taxable years for which
it files such returns, it shall pay to UNITIL the excess, if any, of (A)
Federal income tax that such AFFILIATE would have paid for such year (on a
separate return basis giving the effect to its net operating loss carryovers)
if it never had been a member of the Group, over (B) the amount of Federal
income tax such AFFILIATE has actually paid or will actually pay for such years.
9. Examples of Calculations. Attached hereto and made part hereof , as
"Appendix A to Tax Sharing Agreement By and Between UNITIL Corporation and Its
Affiliated Companies", are illustrated examples of the matters contained herein.
IN WITNESS WHEREOF, the duly authorized representatives of the parties hereto
have set their hands this tenth day of September, 1985.
UNITIL CORPORATION
By /s/ Michael J. Dalton
its President
EXETER & HAMPTON ELECTRIC COMPANY
By /s/ Michael J. Dalton
its President
CONCORD ELECTRIC COMPANY
By /s/ Douglas K. Macdonald
its President
UNITIL POWER CORP.
By /s/ Michael J. Dalton
its President
UNITIL SERVICE CORP.
By /s/ Peter J. Stulgis
its President
APPENDIX A TO TAX SHARING AGREEMENT
BY AND BETWEEN UNITIL CORPORATION AND ITS
AFFILIATED COMPANIES
The allocation agreement follows the Internal Revenue Service
Regulations for "basic" and "supplemental" allocation of consolidated return
liability and benefits.
The "basic" method used to allocate UNITIL'S liability shown on the
consolidated return is provided by Internal Revenue Code Section 1552(a) and
provides for allocation based on the amount of tax liability calculated on a
separate return basis.
The "supplemental" method provides that the tax savings of credits and
deductions in excess of the amount of the individual company can use, but which
can be used in consolidations, is allocated among the members supplying the
savings and the benefiting members reimburse them.
For example, assume that a three member group has consolidated tax
liability of $200,000 and $100,000 respectively. The individual members, A,
B, and C have separate return taxable income (loss) of $150,000, $100,000, and
$(50,000) and the individual members have separate return liabilities of
$75,000, $50,000, and none, respectively. (Loss members are deemed to have a
zero tax liability.) Under the proposed method, the Individual tax liability
and benefit is allocated as follows:
Member A B C
Taxable Income (Loss) $150,000 $100,000 $(50,000)
Separate Tax Liability 75,000 50,000 none
Percent of Total ($125,000) 60% 40% 0%
Consolidated Tax Allocation 60,000 40,000 none
Separate Tax Liability 75,000 50,000 0
Less Consolidated Tax 60,000 40,000 0
15,000 10,000 0
100% 100%
Supplemental Allocation 15,000 10,000 0
Benefits paid to C $(15,000) $(10,000) $(25,000)
Regulation 1.1502-33(d) provides the "supplemental" method of allocating
tax liability in order to permit members to receive reimbursement for
contributing tax deductions or credits to the group. The method adopted by the
Company and outlined at Regulation 1.1502-33(2)(ii) provides for immediate
reimbursement for the tax year involved. The steps are as follows:
(1) Tax liability is allocated to the members by the basic method
outlined above.
(2) Each member with a separate company tax will be allocated 100% of the
excess of its separate return liability over its share of the consolidated
liability under step (1).
(3) The amounts allocated to benefiting members under Step 2 are credited
to the members supplying the capital losses, deductions, credits or other items
to which the savings are attributable. For this purpose an amount generated
by a member which is in its own separate return tax liability and which is
utilized in the computation of the Federal income tax liability of the group
shall be deemed to be a tax benefit contributed by the member to the group.
In some years the Step 2 savings to be credited may be less than the
total tax savings items available for use. In such a case, the savings shall
be attributed to tax savings items in the order that they are used on the
consolidated return and in an amount equal to the savings actually realized.
Under this method, capital losses would normally be used first to the
extent there are capital gains, since these items are netted in order to reach
income, and are used before any deductions or credits are taken into account.
The value of the capital loss would be the current rate of tax for capital gain
income of the loss. The next item to be used would be deductions resulting in
a current year operating loss, and these would be valued at the marginal rate
of tax on the income they offset. This is normally 46 percent under current
law, but would be less for income under $100,000, which falls in to the
graduated tax brackets under Reg.1.1502-33(d)(2), the amount of each graduated
rate bracket is apportioned equally by dividing that amount by the number of
corporations that where members of the group. Additionally, an alternative is
to allocate the amount of each graduated rate bracket based on an election made
be each of the companies' and including with that year's tax return. Operating
loss carryovers would be used next, and finally credits would be used. Credits
will be valued at 100 percent, since they result in dollar for dollar savings.
Where the total amount of an item is not used, the savings will be allocated
to each member in proportion to his share of the total of that benefit available
from all members of the consolidated group.
(4) Benefiting members will reimburse the other members prior to the filing
of the consolidated tax return.
A more complicated Situation is presented when there are several loss
companies. Assume that the facts are the same as above except that there are
three loss companies: C, D, and E with the following tax savings items:
C D E
Capital Loss 0 5,000 0
Current Operating Loss 5,000 0 3,000
Operating Loss Carryover 0 10,000 0
Credits 4,000 8,000 4,000
Allocation of the $25,000 benefit from Step 2 would proceed as follows:
C D E Remaining
Benefit
Capital Gains @ 28% 0 1,400 0 23,600
Current Operating Loss
Offsetting 46% Income 2,300 0 1,380 19,920
Operating Loss Carryover
Offsetting 46% Income 4,600 15,320
Credits @ 100% (proportionate) 3,830 7,600 3,830 0
Total Allocated 6,130 13,660 5,210 0
Thus companies A and B would reimburse C, D and E for the above amounts.
There will be credit carryovers for C, D, and E of $170, $340, and $170,
respectively.
Separate Return Liability
The Allocations and reimbursements outline above use the concept of a
"separate return tax liability" as a starting point for allocations. This
liability is the amount which a member of the affiliated group would pay of it
filed a separate return. It is calculated in three basic steps.
(1) The rules for consolidated return deferred accounting, inventory
adjustments, basis determination, basis adjustments, excess losses, earnings
and profits, and obligations of members must be applied.
(2) Intercompany dividends are eliminated and no dividend received or paid
deduction is allowed on intercompany dividends.
(3) Adjustments are made for specific items used in the consolidated return
which must be divided by some equitable method among the members.
The third step is the subject of this part of the Appendix. Two
different approaches may be taken for the apportionment of the limits,
deductions, and exemptions used to reach tax liability.
It is recognized that each company is a part of an affiliated group, and
that all credits, deductions and limitations must be apportioned in some
equitable manner.
Specific Apportionments
(1) Carryovers. On a consolidated basis, items such as operating losses,
capital losses, and contributions will be used first from the current year and
then carried forward from the oldest year forward until exhausted. It is the
intention of the Tax Sharing Agreement, for allocation and reimbursement
purposes, that a member shall use its own carryovers first before it is
required to reimburse another member for use of its carryover in consolidation,
without regard for the fact that the tax regulations for consolidated returns
may require a different order.
(2) Contribution Deduction. The amount of the contribution deduction is
limited to 10% of consolidated taxable income. Thus the amount allowable may
exceed the actual contributions. In order to avoid having a consolidated
contribution carryover which is not owned by a member, each member agrees that
its deduction be limited to its proportionate share on a separate return basis
of the consolidated contribution deduction in a given year, rather than 10% of
its separate return income, and that any contribution in excess of such amount
be treated as its own carryover.
If the consolidated deduction is greater than the separate deductions of the
profitable members (thus permitting a deduction for contributions of a loss
member) the excess allowable deduction will be allocated to the loss members
in proportion to the excess allowable over their available contributions.
Contribution Illustration
Example A A B C Consolidated
Income before contributions 12,000 100 (5,600) 6,500
Contributions - current 400 25 100
- carryover 300 25
- available 700 50 100
10% Limit 650
Allowable on SR basis 1,200 10
Allowable by agreement 644 6
Carryover by agreement
- current 0 19 100
- prior 56 25
Taxable income 11,356 94 (5,600) 5,850
Example B A B C Consolidated
Income before contributions 12,000 (100) (5,400) 6,500
Contributions - current only 200 50 200
10% Limit 650
Available on SR basis 200 200
Excess deduction allowable 250
Allocation by agreement 50 200
Carryover by agreement 50 200
Taxable income 11,800 (150) (5,600) 6,050
(3) Tax Brackets. The members agree that the brackets will first be
applied equally to the members with ordinary income. If the allocated amount
exceeds income, the excess can be reapplied equally to the other members with
remaining income.
(4) I.T.C. Limitation. The limitation on 100% utilization of investment
tax credit provided by Internal Revenue Code S46(a)(3), currently $25,000, will
be allocated equally among the members with tax liability and available credits,
with any excess to be allocated equally to those with remaining liability and
credits.
(5) I.T.C. Limit for Used Property. The limitations on used property cost
deemed eligible for investment credit, currently $215,000, will be allocated
equally among the companies that have used property acquisitions with a ten
year recovery life in any year. If a member is unable to utilize all of its
allocated amount the excess will be allocated proportionately to the members
with used property acquisitions in excess of their allocated share. If there
are insufficient ten year recovery life assets, the remainder will be allocated
to five year recovery life assets in a similar manner. Likewise, if there are
not enough ten and five year recovery life assets, the remainder of the
$100,000 limitation will be allocated equally to members having three year
recovery life used property additions.
(6) Future Developments. Any credits, deductions, or other items
established by future legislation will be allocated in a manner consistent with
the above methods.
The foregoing examples are for illustrative purposes and are not
intended to cover all possible situations that may arise.
Exhibit E Other Documents - None
Exhibit F Supporting Schedules
Report of Independent Public Accounts
To Unitil Corporation
We have audited the consolidated balance sheet and consolidated
statement of capitalization of Unitil Corporation and subsidiaries as of
December 31, 1997, and the related consolidated statements of earnings, cash
flows and changes in common stock equity for the year then ended, included in
the 1997 annual report to the shareholders and incorporated by reference in this
Form U5S. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit 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 audit provides a reasonable basis for
our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the consolidated financial position
of Unitil Corporation and subsidiaries as of December 31, 1997, and the
consolidated results of their operations and their consolidated cash flows for
the year then ended, in conformity with generally accepted accounting
principles.
Grant Thornton LLP
Boston, Massachusetts
February 10, 1998
Exhibit G Financial Data Schedules - See Exhibits 27.1 through 27.5
Exhibit G 27.1
[ARTICLE] OPUR1
[FISCAL-YEAR-END] DEC-31-1997
[PERIOD-START] JAN-01-1997
[PERIOD-END] DEC-31-1997
[PERIOD-TYPE] YEAR
[BOOK-VALUE] PER-BOOK
[TOTAL-NET-UTILITY-PLANT] 151,114,861
[OTHER-PROPERTY-AND-INVEST] 42,448
[TOTAL-CURRENT-ASSETS] 29,119,404
[TOTAL-DEFERRED-CHARGES] 57,700,431
[OTHER-ASSETS] 0
[TOTAL-ASSETS] 237,977,144
[COMMON] 35,653,142
[CAPITAL-SURPLUS-PAID-IN] 1,451,707
[RETAINED-EARNINGS] 34,539,519
[TOTAL-COMMON-STOCKHOLDERS-EQ] 71,644,368
[PREFERRED-MANDATORY] 3,665,900
[PREFERRED] 225,000
[LONG-TERM-DEBT-NET] 63,895,589
[SHORT-TERM-NOTES] 18,000,000
[LONG-TERM-NOTES-PAYABLE] 0
[COMMERCIAL-PAPER-OBLIGATIONS] 0
[LONG-TERM-DEBT-CURRENT-PORT] 4,469,795
[PREFERRED-STOCK-CURRENT] 0
[CAPITAL-LEASE-OBLIGATIONS] 4,732,702
[LEASES-CURRENT] 883,528
[OTHER-ITEMS-CAPITAL-AND-LIAB] 70,460,262
[TOT-CAPITALIZATION-AND-LIAB] 237,977,144
[GROSS-OPERATING-REVENUE] 169,737,999
[INCOME-TAX-EXPENSE] 4,165,566
[OTHER-OPERATING-EXPENSES] 150,010,658
[TOTAL-OPERATING-EXPENSES] 154,176,224
[OPERATING-INCOME-LOSS] 15,561,775
[OTHER-INCOME-NET] -160,207
[INCOME-BEFORE-INTEREST-EXPEN] 15,401,568
[TOTAL-INTEREST-EXPENSE] 7,166,506
[NET-INCOME] 8,235,062
[PREFERRED-STOCK-DIVIDENDS] 276,040
[EARNINGS-AVAILABLE-FOR-COMM] 7,959,022
[COMMON-STOCK-DIVIDENDS] 5,803,688
[TOTAL-INTEREST-ON-BONDS] 4,981,741
CASH-FLOW-OPERATIONS> 16,172,530
[EPS-PRIMARY] 1.80
[EPS-DILUTED] 1.76
Exhibit G 27.2
[ARTICLE] OPUR1
[SUBSIDIARY] EXETER & HAMPTON ELECTRIC COMPANY
[NUMBER] 02
[FISCAL-YEAR-END] DEC-31-1997
[PERIOD-START] JAN-01-1997
[PERIOD-END] DEC-31-1997
[PERIOD-TYPE] YEAR
[BOOK-VALUE] PER-BOOK
[TOTAL-NET-UTILITY-PLANT] 34,338,970
[OTHER-PROPERTY-AND-INVEST] 507
[TOTAL-CURRENT-ASSETS] 9,095,772
[TOTAL-DEFERRED-CHARGES] 5,227,417
[OTHER-ASSETS] 0
[TOTAL-ASSETS] 48,662,666
[COMMON] 1,920,669
[CAPITAL-SURPLUS-PAID-IN] 0
[RETAINED-EARNINGS] 9,557,670
[TOTAL-COMMON-STOCKHOLDERS-EQ] 11,478,339
[PREFERRED-MANDATORY] 1,009,300
[PREFERRED] 0
[LONG-TERM-DEBT-NET] 13,060,000
[SHORT-TERM-NOTES] 7,437,717
[LONG-TERM-NOTES-PAYABLE] 0
[COMMERCIAL-PAPER-OBLIGATIONS] 0
[LONG-TERM-DEBT-CURRENT-PORT] 1,137,000
[PREFERRED-STOCK-CURRENT] 0
[CAPITAL-LEASE-OBLIGATIONS] 0
[LEASES-CURRENT] 0
[OTHER-ITEMS-CAPITAL-AND-LIAB] 14,540,310
[TOT-CAPITALIZATION-AND-LIAB] 48,662,666
[GROSS-OPERATING-REVENUE] 53,818,166
[INCOME-TAX-EXPENSE] 411,733
[OTHER-OPERATING-EXPENSES] 50,650,637
[TOTAL-OPERATING-EXPENSES] 51,062,370
[OPERATING-INCOME-LOSS] 2,755,796
[OTHER-INCOME-NET] -19,760
[INCOME-BEFORE-INTEREST-EXPEN] 2,736,036
[TOTAL-INTEREST-EXPENSE] 1,623,716
[NET-INCOME] 1,112,320
[PREFERRED-STOCK-DIVIDENDS] 78,251
[EARNINGS-AVAILABLE-FOR-COMM] 1,034,069
[COMMON-STOCK-DIVIDENDS] 0
[TOTAL-INTEREST-ON-BONDS] 1,273,899
[CASH-FLOW-OPERATIONS] 1,379,574
[EPS-PRIMARY] 5.30
[EPS-DILUTED] 5.30
Exhibit G 27.3
[ARTICLE] OPUR1
[SUBSIDIARY] CONCORD ELECTRIC COMPANY
[NUMBER] 01
[FISCAL-YEAR-END] DEC-31-1997
[PERIOD-START] JAN-01-1997
[PERIOD-END] DEC-31-1997
[PERIOD-TYPE] YEAR
[BOOK-VALUE] PER-BOOK
[TOTAL-NET-UTILITY-PLANT] 30,119,020
[OTHER-PROPERTY-AND-INVEST] 23,827
[TOTAL-CURRENT-ASSETS] 7,097,592
[TOTAL-DEFERRED-CHARGES] 5,003,110
[OTHER-ASSETS] 0
[TOTAL-ASSETS] 42,243,549
[COMMON] 1,432,786
[CAPITAL-SURPLUS-PAID-IN] 0
[RETAINED-EARNINGS] 8,747,472
[TOTAL-COMMON-STOCKHOLDERS-EQ] 10,180,258
[PREFERRED-MANDATORY] 215,000
[PREFERRED] 225,000
[LONG-TERM-DEBT-NET] 10,550,000
[SHORT-TERM-NOTES] 5,982,985
[LONG-TERM-NOTES-PAYABLE] 0
[COMMERCIAL-PAPER-OBLIGATIONS] 0
[LONG-TERM-DEBT-CURRENT-PORT] 2,170,000
[PREFERRED-STOCK-CURRENT] 0
[CAPITAL-LEASE-OBLIGATIONS] 0
[LEASES-CURRENT] 0
[OTHER-ITEMS-CAPITAL-AND-LIAB] 12,920,306
[TOT-CAPITALIZATION-AND-LIAB] 42,243,549
[GROSS-OPERATING-REVENUE] 49,801,485
[INCOME-TAX-EXPENSE] 300,860
[OTHER-OPERATING-EXPENSES] 47,083,579
[TOTAL-OPERATING-EXPENSES] 47,384,439
[OPERATING-INCOME-LOSS] 2,417,046
[OTHER-INCOME-NET] -4,095
[INCOME-BEFORE-INTEREST-EXPEN] 2,412,951
[TOTAL-INTEREST-EXPENSE] 1,498,106
[NET-INCOME] 914,845
[PREFERRED-STOCK-DIVIDENDS] 32,205
[EARNINGS-AVAILABLE-FOR-COMM] 882,640
[COMMON-STOCK-DIVIDENDS] 0
[TOTAL-INTEREST-ON-BONDS] 1,142,842
[CASH-FLOW-OPERATIONS] 2,868,143
[EPS-PRIMARY] 6.70
[EPS-DILUTED] 6.70
Exhibit G 27.4
[ARTICLE] OPUR1
[SUBSIDIARY] FITCHBURG GAS AND ELECTRIC LIGHT COMPANY
[NUMBER] 03
[FISCAL-YEAR-END] DEC-31-1997
[PERIOD-START] JAN-01-1997
[PERIOD-END] DEC-31-1997
[PERIOD-TYPE] YEAR
[BOOK-VALUE] PER-BOOK
[TOTAL-NET-UTILITY-PLANT] 73,980,125
[OTHER-PROPERTY-AND-INVEST] 18,114
[TOTAL-CURRENT-ASSETS] 18,344,919
[TOTAL-DEFERRED-CHARGES] 40,665,044
[OTHER-ASSETS] 0
[TOTAL-ASSETS] 133,008,202
[COMMON] 21,112,064
[CAPITAL-SURPLUS-PAID-IN] -1,890
[RETAINED-EARNINGS] 16,452,514
[TOTAL-COMMON-STOCKHOLDERS-EQ] 37,572,688
[PREFERRED-MANDATORY] 2,441,600
[PREFERRED] 0
[LONG-TERM-DEBT-NET] 33,000,000
[SHORT-TERM-NOTES] 10,020,914
[LONG-TERM-NOTES-PAYABLE] 0
[COMMERCIAL-PAPER-OBLIGATIONS] 0
[LONG-TERM-DEBT-CURRENT-PORT] 1,000,000
[PREFERRED-STOCK-CURRENT] 0
[CAPITAL-LEASE-OBLIGATIONS] 2,499,103
[LEASES-CURRENT] 130,642
[OTHER-ITEMS-CAPITAL-AND-LIAB] 46,343,255
[TOT-CAPITALIZATION-AND-LIAB] 133,008,202
[GROSS-OPERATING-REVENUE] 69,165,087
[INCOME-TAX-EXPENSE] 3,297,901
[OTHER-OPERATING-EXPENSES] 56,252,821
[TOTAL-OPERATING-EXPENSES] 59,550,722
[OPERATING-INCOME-LOSS] 9,614,365
[OTHER-INCOME-NET] -62,114
[INCOME-BEFORE-INTEREST-EXPEN] 9,552,251
[TOTAL-INTEREST-EXPENSE] 3,530,702
[NET-INCOME] 6,021,549
[PREFERRED-STOCK-DIVIDENDS] 165,583
[EARNINGS-AVAILABLE-FOR-COMM] 5,855,966
[COMMON-STOCK-DIVIDENDS] 0
[TOTAL-INTEREST-ON-BONDS] 2,565,000
[CASH-FLOW-OPERATIONS] 8,831,888
[EPS-PRIMARY] 4.70
[EPS-DILUTED] 4.70
Exhibit G 27.5
[ARTICLE] OPUR1
[SUBSIDIARY] UNITIL POWER CORP.
[NUMBER] 04
[FISCAL-YEAR-END] DEC-31-1997
[PERIOD-START] JAN-01-1997
[PERIOD-END] DEC-31-1997
[PERIOD-TYPE] YEAR
[BOOK-VALUE] PER-BOOK
[TOTAL-NET-UTILITY-PLANT] 0
[OTHER-PROPERTY-AND-INVEST] 0
[TOTAL-CURRENT-ASSETS] 10,039,682
[TOTAL-DEFERRED-CHARGES] 0
[OTHER-ASSETS] 0
[TOTAL-ASSETS] 10,039,682
[COMMON] 101,000
[CAPITAL-SURPLUS-PAID-IN] 0
[RETAINED-EARNINGS] 306,697
[TOTAL-COMMON-STOCKHOLDERS-EQ] 407,697
0
[PREFERRED] 0
[LONG-TERM-DEBT-NET] 0
[SHORT-TERM-NOTES] 0
[LONG-TERM-NOTES-PAYABLE] 0
[COMMERCIAL-PAPER-OBLIGATIONS] 0
[LONG-TERM-DEBT-CURRENT-PORT] 0
[PREFERRED-STOCK-CURRENT] 0
[CAPITAL-LEASE-OBLIGATIONS] 0
[LEASES-CURRENT] 0
[OTHER-ITEMS-CAPITAL-AND-LIAB] 9,631,985
[TOT-CAPITALIZATION-AND-LIAB] 10,039,682
[GROSS-OPERATING-REVENUE] 78,973,254
[INCOME-TAX-EXPENSE] 30,596
[OTHER-OPERATING-EXPENSES] 78,782,376
[TOTAL-OPERATING-EXPENSES] 78,812,972
[OPERATING-INCOME-LOSS] 160,282
[OTHER-INCOME-NET] 17,784
[INCOME-BEFORE-INTEREST-EXPEN] 178,066
[TOTAL-INTEREST-EXPENSE] 133,000
[NET-INCOME] 45,066
[PREFERRED-STOCK-DIVIDENDS] 0
[EARNINGS-AVAILABLE-FOR-COMM] 45,066
[COMMON-STOCK-DIVIDENDS] 0
[TOTAL-INTEREST-ON-BONDS] 0
[CASH-FLOW-OPERATIONS] 2,532,420
[EPS-PRIMARY] 450.66
[EPS-DILUTED] 450.66
Exhibit H Organizational Chart - Not Applicable
Exhibit I Majority Owned Associate Company - Not Applicable
SIGNATURE
Each undersigned system company has duly caused this annual report to
be signed on its behalf by the undersigned, thereunto duly authorized pursuant
to the requirements of the Public Utility Holding Company Act of 1935.
UNITIL CORPORATION
By ___________________________
Robert G. Schoenberger
Chairman of the Board &
Chief Executive Officer
UNITIL SERVICE CORP.
By ___________________________
Robert G. Schoenberger
President
UNITIL RESOURCES, INC.
By ___________________________
James G. Daly
President
CONCORD ELECTRIC COMPANY,
EXETER & HAMPTON ELECTRIC COMPANY,
FITCHBURG GAS AND ELECTRIC LIGHT COMPANY.
UNITIL REALTY CORP.
By ___________________________
Michael J. Dalton
President
UNITIL POWER CORP.
By ___________________________
George R. Gantz
President
Date ___________________________
