1
File No. 30- 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM U5S
ANNUAL REPORT
For the Year Ended December 31, 1999
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) 16
(c) 17
(d) 17
(e) 17
(f) 18
Item 7 Part I 19
Part II 19
Item 8 Part I 19
Part II 19
Part III 19
Item 9 Part I 19
Part II 19
Part III 19
Item 10 Financial
Statements 20
Exhibits 31
ITEM 1
SYSTEM COMPANIES AND INVESTMENTS THEREIN AS OF DECEMBER 31, 1999
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% 11,667,244 11,667,244
Company (CECO)
Exeter & Hampton 195,000 100% 12,994,773 12,994,773
Electric Company (E&H)
Fitchburg Gas and Electric 1,244,629 100% 38,631,111 38,631,111
Light Company (FG&E)
Unitil Power Corp. (UPC) 100 100% 458,492 458,492
Unitil Realty Corp. (URC) 100 100% 1,462,406 1,462,406
Unitil Resources, Inc. (URI) 100 100% 382,399 382,399
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.
In accordance with Massachusetts Electric Restructuring Law, Fitchburg Gas
and Electric Light Company completed the sale of its 4.5% interest in New
Haven Harbor Station on April 14, 1999. The consideration received was
$5,288,000. The book value of the assets sold was $2,698,000.
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 (000's) zation or
and Title Pledging, Guaranteeing Exemption
of Issue or Assuming
(1) (2) (3) (4) (5)
Unitil
Corporation
(UTL)
UTL Issuance of Shares
Pursuant to Stock
Option Plan on various
dates, HCAR No.
109,753 shares $804 35-25677
UTL Issued on Various Dates,
27,619 Shares in Connection
with the Company's Dividend
Reinvestment and Stock
Purchase Plan and Tax
Deferred Savings and HCAR No.
Investment Plan $676 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
Fitchburg Gas and
Electric Light
Company (FG&E) FG&E Issuance and Sale of $12
million of Long-term notes
at par to institutional
investors $12,000 HCAR No.
35-26739
(A)Maximum borrowing authority is $21,000,000. Borrowings outstanding at
December 31, 1999 were $10,500,000.
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
Exeter & Hampton
Electric Company (E&H)
Redeemable Preferred Stock
$100 Par Value
8.25% Series E&H $20,700 EXT
Fitchburg Gas and
Electric Light Company
(FG&E)
Redeemable Preferred Stock
$100 Par Value
5.125% Series FG&E $11,300 EXT
8.0% Series FG&E $54,300 EXT
(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, 1998
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
Collin Retail Capital Stock 3 * $6
& Alkman
Group
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, 1999:
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
Robert G. Schoenberger D,CB, D D D D, P D D D
6 Liberty Lane West CEO
Hampton, NH 03842
Michael J. Dalton
6 Liberty Lane West
Hampton, NH 03842 D, P, D, P D, P D,P D, D,P D
COO SEVP
Anthony J. Baratta, Jr.
6 Liberty Lane West
Hampton, NH 03842 SVP, SVP
CFO D
Bruce Keough
P.O. Box 1052
Dublin, NH 03444 D D D D
M. Brian O'Shaughnessy
One Revere Park
Rome, NY 13440 D D D D
J. Parker Rice, Jr.
112 River Street
Fitchburg, MA 01420 D D D D
Ross B. George
12 Treehaven Lane
Austin, TX 78738 D D D D
Charles H. Tenney III
300 Friberg Parkway
Westborough, MA 01581 D D D D
Albert H. Elfner, III
53 Chestnut Street
Boston, MA 02108 D D D D
W. William VanderWolk, Jr.
Route 109, Box 20
Melvin Village,
NH 03850 D D D D
Franklin Wyman, Jr.
211 Congress Street
Boston, MA 02110 D D D D
Joan D. Wheeler
P.O. Box 895
Hollis, NH 03049 D D D D
William E. Aubuchon, III
95 Aubuchon Drive
Westminster, MA 01473
D D D D
George R. Gantz
6 Liberty Lane West
Hampton, NH 03842 SVP, D P,D D
D
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
Mark H. Collin
6 Liberty Lane West
Hampton, NH 03842 T,S T T T VP,T T,D T VP,T
Richard Heath
One McGuire Street
Concord, NH 03302 VP VP
James G. Daly
6 Liberty Lane West SVP SVP,D D D, P,D
Hampton, NH 03842 SVP
Glenn D. Appleton
6 Liberty Lane West
Hampton, NH 03842 VP
Todd R. Black
6 Liberty Lane West VP VP
Hampton, NH 03842
Frederick J. Stewart
6 Liberty Lane West
Hampton, NH 03842 VP
Thomas E. Smith
6 Liberty Lane West
Hampton, NH 03842 VP
Laurence M. Brock
6 Liberty Lane West
Hampton, NH 03842 C C C C,VP C C C
Sandra L. Whitney
6 Liberty Lane West
Hampton, NH 03842 S S S S S S 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, Director, 70(c)
Jr. Brookline MA Vice President
Franklin Wyman, Brookline Bank Corp. Trustee 70(c)
Jr. MHC, Brookline, MA
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
In 1999, members of the Board of Directors who are not officers of
Unitil or any of its subsidiaries received an annual retainer fee of $7,000
in cash and $5,500 in Unitil Common Stock, and $500 for each Board meeting
attended. Members of the Executive Committee, who are not officers of Unitil
or any of its subsidiaries, received an annual retainer fee of $3,000 and
$400 for each meeting attended. The Chairman of the Executive Committee
received an annual retainer fee of $15,000, 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. The
Chairman of the Audit Committee and the Chairman of the Compensation
Committee received an annual retainer fee of $2,000, respectively, 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.
As part of the Company's overall support for charitable institutions,
in 1999 the Company instituted a program which provides a perpetual gift of
$1,000 annually to the Greater Seacoast United Way ("United Way") on behalf
of each Director who retires from the Board. The Director(s) receive no
financial benefit from this program as the charitable deductions accrue
solely to the Company. In 1999, three Directors retired from the Board.
In 1999, the Board of Directors approved the Unitil Corporation
Directors' Deferred Compensation Plan ("Deferred Plan") for the purpose of
allowing non-employee members of the Board to defer payment of all or a
specified part of compensation for services performed as Directors. The
Deferred Plan is administered by the Compensation Committee and stipulates
that eligible Directors may elect to defer all or a portion of their cash
retainer and meeting fees. Separate accounts are maintained for each
Director participant, which are an unfunded liability of the Company.
Additionally, accounts are credited monthly with interest based on the
current rate of 60-month Treasury bills. Funds contributed and interest
credited is tax deferred until withdrawn from the Deferred Plan. Director
participants may elect to withdraw funds from the Deferred Plan after a
fixed amount of time, upon resignation or retirement from the Board, upon
death or disability, or upon a Change in Control. Withdrawals may be taken
in cash, either in one lump sum or in a series of installments.
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 $100,000 during the year 1999.
Long-Term Compensation
Annual Compensation Awards Payouts
Name and Other Restricted All Other
Principal Salary Bonus Annual Stock Options LTIP Compensation
Position (1) Year ($) ($)(2) Comp($) Awards (#) Payouts ($)
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Robert G.
Schoenberger
(3) 1999 267,048 109,415 - - 20,000(5) - 6,080 (7)
Chairman of
the Board & 1998 245,003 - - - - -
Chief Executive
Officer 1997 65,833(4) - - - 25,000(6) -
Michael J.
Dalton 1999 199,500 67,882 - - 10,000(5) - 7,271(8)
President &
Chief 1998 190,005 67,959 - - - -
Operating
Officer 1997 174,000 63,834 - - - -
Anthony J.
Baratta, Jr.
(9) 1999 159,078 33,606 - - 10,000(5) - 26,667(11)
Senior Vice
President &
1998 107,501(10) - - - - -
Chief Financial
Officer 1997 - - - - - -
James G.
Daly (12) 1999 151,668 38,074 - - 2,500(5) - 4,962 (13)
Senior Vice
President, 1998 142,092 39,314 - - - -
Unitil
Service 1997 125,625 33,568 - - - -
George R.
Gantz 1999 132,420 32,261 - - 2,500(5) - 4,540 (14)
Senior VP, 1998 120,399 39,314 - - - -
Unitil
Service 1997 104,475 33,658 - - - -
NOTES:
(1) Officers of the Company also hold various positions with subsidiary
companies. Compensation for those positions is included in the above table.
(2) Bonus amounts reflected are comprised of the Unitil Management
Incentive Plan ("Incentive Plan") cash awards paid in February, 1999, for
1998 results. The terms of the Incentive Plan provide a cash incentive
opportunity if the Company meets certain pre-established performance targets
(see "Other Compensation Arrangements").
(3) 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.
(4) 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 in
1997 was $245,000.
(5) Options were granted in March, 1999, under the 1998 Stock Option Plan
("Option Plan"). Options will vest at a rate of 25% in year one, 25% in year
two, and 50% in year three, following the date of the grant. As of February,
2000, no options are vested and no options are exercisable.
(6) Options were granted to Mr. Schoenberger on November 3, 1997 under the
Key Employee Stock Option Plan (see "Other Compensation Arrangements" and
subsequent notes.)
(7) All Other Compensation for Mr. Schoenberger for the year 1999 includes
401(K) company contribution and Group Term Life Insurance payment valued at
$4,800 and $1,280, respectively.
(8) All Other Compensation for Mr. Dalton for the year 1999 includes,
401(K) company contribution and Group Term Life Insurance payment, valued at
$4,800 and $2,471, respectively.
(9) Anthony J. Baratta, Jr. began his employment with the Company as Senior
Vice President and Chief Financial Officer in April, 1998. Mr. Baratta was
not employed by the Company or any of its subsidiary companies prior to
April, 1998.
(10) Base salary paid to Mr. Baratta for 1998 includes salary for the
months of April through December. Mr. Baratta's annual salary in 1998 was
$150,000.
(11) All Other Compensation for Mr. Baratta for the year 1999 includes
401(K) company contribution Group Term Life Insurance payment, and taxable
relocation payment valued at $4,770, $1,897 and $20,000, respectively.
(12) Mr. Daly resigned from the Company on February 7, 2000.
(13) All Other Compensation for Mr. Daly for the year 1999 includes
401(K) company contribution and Group Term Life Insurance payment, valued at
$4,550 and $411, respectively.
(14) All Other Compensation for Mr. Gantz for the year 1999 includes
401(K) company contribution and Group Term Life Insurance payment, valued at
$3,973 and $568, respectively.
OTHER COMPENSATION ARRANGEMENTS
The table below provides information with respect to options granted in
fiscal 1999 under the 1998 Stock Option Plan (See also "Other Compensation
Arrangements") to the named executive officers in the Summary Compensation
table. The Company has no compensation plan under which Stock Appreciation
Rights (SARs) are granted and thus reference to SARs has been omitted from
the table.
OPTION GRANTS IN LAST FISCAL YEAR
Individual Grants Potential Realizable
Value at Assumed
Annual Rates of Stock
Price Appreciation
for Option Term
(a) (b) (c) (d) (e) (f) (g)
Number of % of Total Option Price
Securities Options Market
Underlying Granted to Exer. Price Expir.
Name Option Employees or base on Date 5% ($) 10%($)
Robert G. Granted (#) in Fiscal price date
Schoenberger Year ($/Sh) of grant
Chairman of
the Board & 20,000 32.3% $23.375 $23.375 3/5/09 294,000 745,000
Chief Executive
Officer
Michael J.
Dalton
President & 10,000 16.1% $23.375 $23.375 3/5/09 147,000 372,500
Chief
Operating
Officer
Anthony J.
Baratta, Jr.
Senior Vice
President & 10,000 16.1% $23.375 $23.375 3/5/09 147,000 372,500
Chief
Financial
Officer
James G. Daly
Senior Vice
President, 2,500 4.0% $23.375 $23.375 3/5/09 36,750 93,125
Unitil
Service
George R.
Gantz
Senior Vice
President, 2,500 4.0% $23.375 $23.375 3/5/09 36,750 93,125
Unitil
Service
OTHER COMPENSATION ARRANGEMENTS
The table below provides information with respect to options to purchase
shares of the Company's Common Stock exercised in fiscal 1999 under the 1989
Key Employee Stock Option Plan ("KESOP") and the value of unexercised
options granted in prior years and in 1999 under the KESOP and the 1998
Stock Option Plan ("Option Plan"), respectively, to the named executive
officers in the Summary Compensation Table and held by them as of December
31, 1999.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR (FY)
AND FY-END OPTION VALUES(1)(2)
Shares Number of Unexercised Value of Unexercised
Acquired Options at In-the-Money Options at
Name and on Value FY-End (#) (2) FY-End ($)
Principal Exercise Realized Exercisable/ Exercisable/
Position (#) ($) Unexercisable Unexercisable
(a) (b) (c) (d) (e)
Robert G.
Schoenberger - - exercisable 25,000(3)(4) exercisable 487,750
Chairman of the unexercisable 20,000 unexercisable 247,500
Board & CEO
Michael J.
Dalton 12,000 197,280 exercisable 0 exercisable 0
President
& Chief unexercisable 10,000 unexercisable 123,750
Operating
Officer
Anthony J.
Baratta, Jr. - - exercisable 0 exercisable 0
Senior Vice unexercisable 10,000 unexercisable 123,750
President
and CFO
James G.
Daly - - exercisable 0 exercisable 0
Senior VP, unexercisable 2,500 unexercisable 30,938
Unitil
Service
George R.
Gantz 5,078 69,873 exercisable 0 exercisable 0
Senior VP, unexercisable 2,500 unexercisable 30,938
Unitil
Service
NOTES:
(1) The KESOP authorizes the Compensation 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 KESOP 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. Upon the exercise of any option by an employee and upon payment
of the option price for shares of Unitil CommonStock as to which the option
was granted (the "Primary Shares"), Unitil will cause to be delivered to
such employee (i) the Primary Shares and (ii) the number of shares of Unitil
Common Stock (the "Dividend Equivalent Shares") equal to the dollar amount
of dividends which would have been paid on the Primary Shares (and previously
accrued Dividend Equivalent Shares) had they been outstanding, divided by
the fair market value of Unitil Common Stock determined as of the record
date for each dividend. All options, with the exception of Mr. Schoenberger's
options (See Note 3), associated with the KESOP were exercised as of March 7,
1999.
(2) The Option Plan authorizes the Compensation Committee to provide in
the award agreements that the participant's right to exercise the options
provided for therein will be accelerated upon the occurrance of a "Change in
Control" of Unitil, and will become 100% vested and fully exercisable. The
term "Change in Control" is defined in substantially the same manner as in
the Severance Agrements 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. All options reported as "unexercisable" in
the table were granted in March, 1999, under the Option Plan.
(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 KESOP. The options granted to Mr. Schoenberger became
exercisable on November 3, 1998. In 1998, the Compensation Committee
extended the expiration date for Mr. Schoenberger's options until November
3, 2007 (ten years from the date of the grant), because the Option Plan
originally provided ten years between grant and expiration of options.
(4) Mr. Schoenberger's exercisable options listed in column (d) in the
table above do not include non-preferential dividend equivalents associated
with options outstanding.
In December, 1998, the Unitil Board of Directors adopted the Unitil
Corporation 1998 Stock Option Plan ("Option Plan"). The Company intends to
grant stock options each year through March 1, 2004 under the plan to
certain employees and directors, for the purchase of up to 350,000 shares of
Unitil Common Stock. To date, grants were made to certain management
employees in March, 1999, and in January, 2000. Each option grant will vest
over a three year period and each grant will expire ten years after the date
of grant.
The purpose of the Option Plan is to provide an incentive to key employees
and directors of Unitil and its affiliates who are in a position to
contribute materially to the long-term success of Unitil and/or its
affiliates, to increase their interest in the welfare of Unitil and its
affiliates, and to attract and retain employees and directors of outstanding
ability. The compensation Committee will administer the plan. The Committee
has the authority to interpret the plan and to designate recipients of the
stock options.
Stock options granted under the Option Plan will entitle the holders of
those options to purchase up to the number of shares of common stock
specified in the grant at a price established by the Committee. All grants
will be issued at 100% of market value. Under the Option Plan, stock options
for shares constituting not more than five percent of the common stock may
be issued in any one year.
The Company adopted a new management Incentive Plan and a new Employee
Incentive Plan in December, 1998, to provide cash incentive payments which
are tied directly to achievement of the Company's strategic goals. Annual
goals are established each year by the Board of Directors and payment of
awards are made in February of the year following achievement of the goals.
Target incentive payments have been established which vary based upon the
grade level of each position. Actual awards can be less than or greater than
the target payout depending upon actual results achieved.
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, 2000,
Messrs. Shoenberger, Dalton, Baratta, Daly and Gantz had 2, 32, 1, 11 and 16
credited years of service, respectively, under the Retirement Plan.
Unitil 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 $38,551 and $28,191, 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 retirement.
(b) OWNERSHIP OF SECURITIES
NAME DIRECTOR OF SHARES OF UNITIL
COMMON STOCK
BENEFICIALLY OWNED
(1)
Robert G.
Schoenberger UNITIL, CECO, E&H, Service,
Power, URI, FG&E, Realty 73,590 (2)(3)(4)
Michael J. Dalton UNITIL, CECO, E&H, Service,
Power, FG&E, Realty 61,753 (2)(5)(6)(7)
Joan D. Wheeler UNITIL, CECo, E&H, FG&E 1,355
Bruce W. Keough UNITIL, CECo, E&H, FG&E 2,355
J. Parker Rice, Jr. UNITIL, CECo, E&H, FG&E 1,807
Ross B. George UNITIL, CECo, E&H, FG&E 2,655
Charles H. Tenney III UNITIL, CECo, E&H, FG&E 2,885
M. Brian O'Shaughnessy UNITIL, CECo, E&H, FG&E 455
Albert H. Elfner, III UNITIL, CECo, E&H, FG&E 1,155
William E. Aubuchon, III UNITIL, CECo, E&H, FG&E --
NOTES:
(1) Based on information furnished to Unitil by the nominees and
continuing Directors. No Director standing for election, no Director whose
term is continuing and no officer owns more than one percent of the total
outstanding shares.
(2) Included are 1,294 and 4,439 shares which are held in trust for
Messrs. Schoenberger and Dalton, respectively, under the terms of the Unitil
Tax Deferred Savings and Investment Plan ("401(k)"). Messrs. Schoenberger
and Dalton 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".
(3) Included are 28,296 options which Mr. Schoenberger has the right to
purchase pursuant to the exercise of those options under the terms of the
1989 Key Employee Stock Option Plan ("KESOP"). For further information
regarding the KESOP, see "Other Compensation Arrangements" above.
(4) Included are 40,000 options which Mr. Schoenberger has the right to
purchase upon the exercise of those options under the terms of the 1998
Stock Option Plan ("Option Plan"). See "Other Compensation Arrangements."
Mr. Schoenberger was granted 20,000 options in March, 1999, and 20,000
options in January, 2000, all of which will vest at a rate of 25% in year
one, 25% in year two, and 50% in year three, following the dates of the
respective grants.
(5) Included are 20,000 options which Mr. Dalton has the right to
purchase upon the exercise of those options under the terms of the 1998
Stock Option Plan ("Option Plan"). See "Other Compensation Arrangements."
Mr. Dalton was granted 10,000 options in March, 1999, and 10,000 options in
January, 2000, all of which will vest at a rate of 25% in year one, 25% in
year two, and 50% in year three, following the dates of the respective
grants.
(6) Included are 100 shares held by Mr. Dalton jointly with his wife with
whom he shares voting and investment power.
(7) Included are 9,501 shares owned by a member of Mr. Dalton's family.
He has no voting rights or investment power with respect to, and no
beneficial interest in, such shares.
(c) TRANSACTIONS WITH SYSTEM COMPANIES - None
(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 will receive an annual base salary of $245,000
which 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 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 1989 Key Employee Stock Option Plan ("KESOP"). In 1998, the
Compensation Committee extended the expiration date of the options granted
to Mr. Schoenberger under the KESOP until Novermber 3, 2007. Said options
were originally set to expire on March 7, 1999. Mr. Schoenberger was
reimbursed for all reasonable interim living and reasonable travel expenses.
In addition, in 1998, Mr. Schoenberger was reimbursed for all direct moving
expenses and received $50,000 when he relocated to the area, as was
stipulated in the terms of his employment agreement. The agreement also
provides that the Company and Mr. Schoenberger will enter into a Severance
Agreement, more fully described above. Mr. Schoenberger and the Company
entered into said Severance Agreement in February, 1998. 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 reasonably 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 21-22
Consolidating Balance Sheet
Assets 23-24
Capitalization and Liabilities 25-26
Consolidating Statement of Cash Flows 27-28
Consolidating Statement of Retained Earnings 29-30
EXHIBITS
Exhibit A 31
Exhibit B 31
Exhibit C 33
Exhibit D 35
Exhibit E 42
Exhibit F 42
Exhibit G 44
Exhibit H 49
Exhibit I 49
UNITIL CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATING INCOME STATEMENT - YEAR TO DATE
Exeter &
Consol- Concord Hampton FG&E
idated Elimin- Electric Electric Cons-
ations Company Company olidated
Operating Revenues:
Electric 154,077 (75,607) 46,143 50,820 55,090
Gas 18,116 0 0 0 18,116
Other 180 (19,089) 0 0 0
Total Operating
Revenues 172,373 (94,696) 46,143 50,820 73,206
Operating Expenses:
Fuel and Purchased
Power 102,171 (75,469) 35,553 39,708 29,426
Gas Purchased For
Resale 9,854 0 0 0 9,854
Operation and
Maintenance 24,404 (19,227) 3,717 3,938 15,008
Depreciation and
Amortization 11,412 0 1,598 2,035 6,187
Provisions for Taxes:
Local Property
and Other 5,077 0 1,595 1,255 1,387
Federal and
State Income 4,047 0 594 594 2,676
Total Operating
Expenses 156,965 (94,696) 43,057 47,530 64,538
Operating Income 15,408 0 3,086 3,290 8,668
Non-operating
Expense (Income) 51 0 0 2 (47)
Income Before
Interest Expense 15,357 0 3,086 3,288 8,715
Interest Expense, Net 6,919 6,447 1,417 1,662 3,547
Net Income 8,438 (6,447) 1,669 1,626 5,168
Less Dividends
on Preferred Stock 268 0 32 76 160
Net Income Applicable
to Common Stock 8,170 (6,447) 1,637 1,550 5,008
Weighted Average Common
Shares Outstanding 4,683,273
Basic Earnings per Share $1.74
Diluted Earnings per Share $1.74
UNITIL CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATING INCOME STATEMENT - YEAR TO DATE
Unitil Unitil Unitil Unitil
Service Power Realty Resources Unitil
Corp. Corp. Corp. Inc. Corp.
Operating Revenues:
Electric 0 77,007 0 624 0
Gas 0 0 0 0 0
Other 17,618 0 1,501 150 0
Total Operating
Revenues 17,618 77,007 1,501 774 0
Operating Expenses:
Fuel and Purchased
Power 0 72,288 0 665 0
Gas Purchased For
Resale 0 0 0 0 0
Operation and
Maintenance 14,997 4,947 163 770 91
Depreciation and
Amortization 1,196 0 293 103 0
Provisions for Taxes:
Local Property
and Other 721 0 110 9 0
Federal and
State Income 262 11 105 (268) 73
Total Operating
Expenses 17,176 77,246 671 1,279 164
Operating Income 442 (239) 830 (505) (164)
Non-operating
Expenses 96 0 0 0 0
Income Before
Interest Expense 346 (239) 830 (505) (164)
Interest Expense, Net 346 (296) 610 19 (6,833)
Net Income 0 57 220 (524) 6,669
Less Dividends
on Preferred Stock 0 0 0 0 0
Net Income Applicable
to Common Stock 0 57 220 (524) 6,669
UNITIL CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATING BALANCE SHEET
Exeter &
Consol- Concord Hampton FG&E
idated Elimin- Electric Electric Cons-
ASSETS: ations Company Company olidated
Utility Plant,
at cost:
Electric 161,767 0 47,603 58,349 55,815
Gas 34,031 0 0 0 34,031
Common 21,541 0 0 0 5,363
Construction
Work in Process 2,499 0 223 821 1,455
Utility Plant 219,838 0 47,826 59,170 96,664
Less: Accumulated
Depreciation 66,429 0 14,732 21,597 25,514
Net Utility Plant 153,409 0 33,094 37,573 71,150
Other Property and
Investments 5,051 (47,825) 23 1 18
Current Assets:
Cash 2,847 (9,269) 75 54 54
Accounts Receivable, Less
Allowance for
Doubtful Accounts 16,630 0 3,541 3,920 8,626
Accounts Receivable -
Associated Companies 0 (10,157) 5 1 5
Taxes Refundable
(Payable) 1,419 0 (499) 424 1,596
Materials and
Supplies 2,503 0 403 366 1,734
Prepayments 713 0 131 116 310
Accrued Revenue 2,262 0 568 1,049 814
Total Current
Assets 26,374 (19,426) 4,224 5,930 13,139
Noncurrent Assets:
Regulatory Assets 143,470 0 0 0 143,470
Prepaid Pension Costs 9,119 0 2,847 3,937 3,297
Debt Issuance Costs 1,351 0 447 381 387
Other Noncurrent
Assets 24,753 (2,797) 4,706 5,040 16,051
Total Noncurrent
Assets 178,693 (2,797) 8,000 9,358 163,205
TOTAL 363,527 (70,048) 45,341 52,862 247,512
UNITIL CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATING BALANCE SHEET
Unitil Unitil Unitil Unitil
ASSETS: Service Power Realty Resources Unitil
Corp. Corp. Corp. Inc. Corp.
Utility Plant, at cost:
Electric 0 0 0 0 0
Gas 0 0 0 0 0
Common 5,924 0 10,151 103 0
Construction Work
in Process 0 0 0 0 0
Utility Plant 5,924 0 10,151 103 0
Less: Accumulated
Depreciation 3,518 0 968 100 0
Net Utility Plant 2,406 0 9,183 3 0
Other Property and
Investments 0 0 0 584 52,250
Current Assets:
Cash 568 6,339 0 7 5,019
Accounts Receivable, Less
Allowance for
Doubtful Accounts 45 415 0 83 0
Accounts Receivable -
Associated
Companies 1,992 6,338 6 0 1,810
Taxes Refundable
(Payable) (65) (17) (7) 16 (29)
Materials and
Supplies 0 0 0 0 0
Prepayments 76 5 64 11 0
Accrued Revenue 0 (169) 0 0 0
Total Current
Assets 2,616 12,911 63 117 6,800
Noncurrent Assets:
Regulatory Assets 0 0 0 0 0
Prepaid Pension
Costs (962) 0 0 0 0
Debt Issuance Costs 0 0 136 0 0
Other Noncurrent
Assets 1,676 40 (151) 80 108
Total Noncurrent
Assets 714 40 (15) 80 108
TOTAL 5,736 12,951 9,231 784 59,158
UNITIL CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATING BALANCE SHEET
Exeter &
Consol- Concord Hampton FG&E
CAPITALIZATION: idated Elimin- Electric Electric Cons-
ations Company Company olidated
Common Stock Equity 78,675 (47,898) 12,091 13,343 39,605
Preferred Stock:
Non-Redeemable,
Non-Cumulative 225 0 225 0 0
Redeemable,
Cumulative 3,532 0 215 977 2,340
Long-Term Debt,
Less Current
Portion 84,966 0 16,000 19,000 43,000
Total
Capitalization 167,398 (47,898) 28,531 33,320 84,945
Current Liabilities:
Long-Term Debt,
Current Portion 1,191 0 0 0 1,000
Capitalized Leases,
Current Portion 902 0 0 0 179
Accounts Payable 16,515 0 80 205 4,146
Short-Term Debt 10,500 (9,269) 3,800 4,944 8,567
A/P - Associated
Companies 0 (8,547) 3,327 3,723 964
Dividends Declared
and Payable 220 (1,610) 407 356 914
Refundable Customer
Deposits 1,302 0 307 721 274
Interest Payable 1,245 0 164 217 790
Other Current
Liabilities 3,042 72 256 136 480
Total Current
Liabilities 34,917 (19,354) 8,341 10,302 17,314
Deferred Income Taxes 42,634 (2,796) 7,151 8,549 30,380
Noncurrent Liabilities:
Power Supply Contract
Obligations 106,184 0 0 0 106,184
Capitalized Leases,
Less Current
Portion 3,860 0 0 0 2,164
Other Noncurrent
Liabilities 8,534 0 1,318 691 6,525
Total Noncurrent
Liabilities 118,578 0 1,318 691 114,873
TOTAL 363,527 (70,048) 45,341 52,862 247,512
UNITIL CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATING BALANCE SHEET
Unitil Unitil Unitil Unitil
CAPITALIZATION: Service Power Realty Resources Unitil
Corp. Corp. Corp. Inc. Corp.
Common Stock Equity 3 516 1,682 359 58,974
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 6,966 0 0
Total Capitalization 3 516 8,648 359 58,974
Current Liabilities:
Long-Term Debt,
Current Portion 0 0 191 0 0
Capitalized Leases,
Current Portion 723 0 0 0 0
Accounts Payable 489 11,410 10 149 26
Short-Term Debt 1,915 0 374 169 0
A/P - Associated
Companies (82) 472 8 130 5
Dividends Declared
and Payable 0 0 0 0 153
Refundable Customer
Deposits 0 0 0 0 0
Interest Payable 74 0 0 0 0
Other Current
Liabilities 1,543 553 0 2 0
Total Current
Liabilities 4,662 12,435 583 450 184
Deferred Income Taxes (625) 0 0 (25) 0
Noncurrent Liabilities:
Power Supply Contract
Obligations 0 0 0 0 0
Capitalized Leases,
Less Current
Portion 1,696 0 0 0 0
Other Noncurrent
Liabilities 0 0 0 0 0
Total Noncurrent
Liabilities 1,696 0 0 0 0
TOTAL 5,736 12,951 9,231 784 59,158
UNITIL CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENT OF CASH FLOWS
Exeter &
Consol- Concord Hampton FG&E
idated Elimin- Electric Electric Cons-
ations Company Company olidated
Cash Flows From
Operating Activities:
Net Income 8,438 (6,447) 1,669 1,626 5,168
Adjustments to
Reconcile Net
Income to
Cash Provided by
Operating Activities:
Depreciation and
Amortization 11,412 0 1,598 2,035 6,187
Deferred Tax
Provision 72 0 399 414 (866)
Amortization of
Investment Tax
Credit (322) 0 (106) (76) (140)
Amortization of
Debt Issuance
Costs 60 0 16 14 22
Changes in Working
Capital:
Accounts Receivable (631) (989) (93) (258) (81)
Materials and
Supplies 459 0 8 38 413
Prepayments (94) 0 (564) (631) 708
Accrued Revenue (1,087) 0 (315) (532) 1,199
Accounts Payable 5,133 1,068 (105) 6 (382)
Refundable
Customer Deposits 9 0 64 81 (104)
Taxes and
Interest Payable 41 0 703 (454) (445)
Other, Net (5,182) (500) 47 8 (4,606)
Cash provided by
Operating Activities 18,308 (6,868) 3,321 2,271 7,073
Cash Flows From
Investing Activities:
Acquisition of
Property, Plant,
Equipment (15,411) 0 (3,007) (3,775) (8,128)
Proceeds from Sale
of Electric
Generating Assets 5,288 0 0 0 5,288
Acquisition of
Other Property
and Investments (5,008) 500 0 0 0
Net Cash Used in
Investing
Activities (15,131) 500 (3,007) (3,775) (2,840)
Cash Flows Used In
Financing
Activities:
Proceeds From
(Repayment of )
Short-Term Debt (9,500) (983) 642 2,435 (10,993)
Proceeds from
Long-Term Debt 12,000 0 0 0 12,000
Repayment of
Long-Term Debt (1,065) 0 0 0 (1,000)
Dividends Paid (6,722) 6,368 (1,144) (1,164) (4,330)
Issuance of
Common Stock 1,945 0 0 0 0
Retirement of
Preferred Stock (86) 0 0 (21) (65)
Repayment of Capital
Lease Obligations (985) 0 0 0 (155)
Net Cash (Used In)
Provided by
Financing Activities (4,413) 5,385 (502) 1,250 (4,543)
Net (Decrease)
Increase in Cash (1,236) (983) (188) (254) (310)
Cash at Beginning
of Year 4,083 (8,286) 263 308 364
Cash at End of Year 2,847 (9,269) 75 54 54
UNITIL CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENT OF CASH FLOWS
Unitil Unitil Unitil Unitil
Service Power Realty Resources Unitil
Corp. Corp. Corp. Inc. Corp.
Cash Flows From
Operating Activities:
Net Income 0 57 220 (524) 6,669
Adjustments to
Reconcile Net
Income to
Net Cash Provided
by Operating Activities:
Depreciation and
Amortization 1,196 0 293 103 0
Deferred Tax
Provision 173 0 (24) (24) 0
Amortization of
Investment Tax Credit 0 0 0 0 0
Amortization of
Debt Issuance Costs 0 0 8 0 0
Changes in
Working Capital:
Accounts Receivable (159) (32) (2) 53 930
Materials and
Supplies 0 0 0 0 0
Prepayments 435 1 (63) 20 0
Accrued Revenue 0 (1,565) 0 126 0
Accounts Payable (656) 5,010 (56) 225 23
Refundable Customer
Deposits 0 (32) 0 0 0
Taxes and
Interest Accrued 234 11 (4) (10) 6
Other, Net 489 (688) 0 426 (358)
Net Cash provided
by Operating
Activities 1,712 2,762 372 395 7,270
Cash Flows From
Investing Activities:
Acquisition of
Property, Plant,
Equipment (348) 0 (47) (106) 0
Proceeds from Sale
of Electric
Generating Assets 0 0 0 0 0
Acquisition of
Other Property
and Investments 0 0 0 (584) (4,924)
Net Cash Used in
Investing Activities (348) 0 (47) (690) (4,924)
Cash Flows From
Financing Activities:
Proceeds From
(Repayment of )
Short-Term Debt (509) 0 (260) 168 0
Proceeds from
Long-Term Debt 0 0 0 0 0
Repayment of
Long-Term Debt 0 0 (65) 0 0
Dividends Paid 0 0 0 0 (6,452)
Issuance of
Common Stock 0 0 0 0 1,945
Retirement of
Preferred Stock 0 0 0 0 0
Repyament of Capital
Lease Obligations (830) 0 0 0 0
Net Cash Used in
Financing Activities (1,339) 0 (325) 168 (4,507)
Net Increase
(Decrease) in Cash 25 2,762 0 (127) (2,161)
Cash at Beginning
of Year 543 3,577 0 134 7,180
Cash at End of Year 568 6,339 0 7 5,019
UNITIL CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENT OF RETAINED EARNINGS
Exeter &
Consol- Concord Hampton FG&E
idated Elimin- Electric Electric Cons-
ations Company Company olidated
Retained Earnings,
Beginning of Year 36,401 (17,711) 8,985 9,824 17,511
Additions:
Net Income, Excluding
Dividends Received 8,438 0 1,669 1,626 5,168
Dividends Received
From Subsidiaries 0 (6,447) 0 0 0
Total Additions 8,438 (6,447) 1,669 1,626 5,168
Deductions:
Dividends Declared:
Preferred Stock
of Subsidiaries 268 0 32 76 160
Common Stock of
Subsidiaries 0 (6,447) 1,213 1,201 4,033
Common Stock
of Registrant 6,442 0 0 0 0
Total Deductions 6,710 (6,447) 1,245 1,277 4,193
Retained Earnings,
End of Year 38,129 (17,711) 9,409 10,173 18,486
UNITIL CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENT OF RETAINED EARNINGS
Unitil Unitil Unitil Unitil
Service Power Realty Resources Unitil
Corp. Corp. Corp. Inc. Corp.
Retained Earnings,
Beginning of Year 2 358 1,136 (218) 16,514
Additions:
Net Income, Excluding
Dividends Received 0 57 220 (524) 222
Dividends Received
From Subsidiaries 0 0 0 0 6,447
Total Additions 0 57 220 (524) 6,669
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 6,442
Total Deductions 0 0 0 0 6,442
Retained Earnings,
End of Year 2 415 1,356 (742) 16,741
EXHIBITS
Exhibit A. A copy of Unitil Corporation's Annual Report and Form
10-K and Form 10-K/A for the year ended December 31,
1999 (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
C-21 Eleventh Supplemental Indenture dated September 1, Exhibit 4.23
1998 relating to E&H's First Mortgage Bonds Series L to Form 10-K
6.96% due September 1, 2028. for 1998
C-22 Ninth Supplemental Indenture dated September 1, 1998 Exhibit 4.22
relating to CECo's First Mortgage Bonds Series J to Form 10-K
6.96% due September 1, 2028. for 1998
C-23 FG&E Note Agreement dated January 26, 1999 for
the 7.37% Notes due January 15, 2028. Exhibit 4.25
to Form 10-K
for 1999
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 (the "Company") as
of December 31, 1999, and the related consolidated statement of earnings,
cash flows and changes in common stock equity for the year then ended,
included in the 1999 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 auditing standards generally
accepted in the United States. 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, 1999, and the consolidated
results of their operations and their consolidated cash flows for the year
then ended, in conformity with accounting principles generally accepted in
the United States.
Grant Thornton LLP
Boston, Massachusetts
February 7, 2000
Exhibit G Financial Data Schedules - See Exhibits 27.1 through 27.5
Exhibit G 27.1
[ARTICLE] OPUR1
[MULTIPLIER] 1,000
[FISCAL-YEAR-END] DEC-31-1999
[PERIOD-START] JAN-01-1999
[PERIOD-END] DEC-31-1999
[PERIOD-TYPE] YEAR
[BOOK-VALUE] PER-BOOK
[TOTAL-NET-UTILITY-PLANT] 153,409
[TOTAL-CURRENT-ASSETS] 26,374
[TOTAL-DEFERRED-CHARGES] 178,693
[OTHER-ASSETS] 5,051
[TOTAL-ASSETS] 363,527
[COMMON] 40,352
[CAPITAL-SURPLUS-PAID-IN] 194
[RETAINED-EARNINGS] 38,129
[TOTAL-COMMON-STOCKHOLDERS-EQ] 78,675
[PREFERRED-MANDATORY] 3,532
[PREFERRED] 225
[LONG-TERM-DEBT-NET] 84,966
[SHORT-TERM-NOTES] 10,500
[LONG-TERM-NOTES-PAYABLE] 0
[COMMERCIAL-PAPER-OBLIGATIONS] 0
[LONG-TERM-DEBT-CURRENT-PORT] 1,191
[PREFERRED-STOCK-CURRENT] 0
[CAPITAL-LEASE-OBLIGATIONS] 3,860
[LEASES-CURRENT] 902
[OTHER-ITEMS-CAPITAL-AND-LIAB] 179,676
[TOT-CAPITALIZATION-AND-LIAB] 363,527
[GROSS-OPERATING-REVENUE] 172,373
[INCOME-TAX-EXPENSE] 4,047
[OTHER-OPERATING-EXPENSES] 152,918
[TOTAL-OPERATING-EXPENSES] 156,965
[OPERATING-INCOME-LOSS] 15,408
[OTHER-INCOME-NET] (51)
[INCOME-BEFORE-INTEREST-EXPEN] 15,357
[TOTAL-INTEREST-EXPENSE] 6,919
[NET-INCOME] 8,438
[PREFERRED-STOCK-DIVIDENDS] 268
[EARNINGS-AVAILABLE-FOR-COMM] 8,170
[COMMON-STOCK-DIVIDENDS] 6,442
[TOTAL-INTEREST-ON-BONDS] 6,477
CASH-FLOW-OPERATIONS> 18,308
[EPS-BASIC] 1.74
[EPS-DILUTED] 1.74
Exhibit G 27.2
[ARTICLE] OPUR1
[SUBSIDIARY] EXETER & HAMPTON ELECTRIC
[NUMBER] 02
[MULTIPLIER] 1,000
[FISCAL-YEAR-END] DEC-31-1999
[PERIOD-START] JAN-01-1999
[PERIOD-END] DEC-31-1999
[PERIOD-TYPE] YEAR
[BOOK-VALUE] PER-BOOK
[TOTAL-NET-UTILITY-PLANT] 37,573
[TOTAL-CURRENT-ASSETS] 5,930
[TOTAL-DEFERRED-CHARGES] 9,358
[OTHER-ASSETS] 1
[TOTAL-ASSETS] 52,862
[COMMON] 2,186
[CAPITAL-SURPLUS-PAID-IN] 1,250
[RETAINED-EARNINGS] 9,907
[TOTAL-COMMON-STOCKHOLDERS-EQ] 13,343
[PREFERRED-MANDATORY] 977
[PREFERRED] 0
[LONG-TERM-DEBT-NET] 19,000
[SHORT-TERM-NOTES] 4,944
[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] 14,598
[TOT-CAPITALIZATION-AND-LIAB] 52,862
[GROSS-OPERATING-REVENUE] 50,820
[INCOME-TAX-EXPENSE] 594
[OTHER-OPERATING-EXPENSES] 46,936
[TOTAL-OPERATING-EXPENSES] 47,530
[OPERATING-INCOME-LOSS] 3,290
[OTHER-INCOME-NET] (2)
[INCOME-BEFORE-INTEREST-EXPEN] 3,288
[TOTAL-INTEREST-EXPENSE] 1,662
[NET-INCOME] 1,626
[PREFERRED-STOCK-DIVIDENDS] 76
[EARNINGS-AVAILABLE-FOR-COMM] 1,550
[COMMON-STOCK-DIVIDENDS] 1,201
[TOTAL-INTEREST-ON-BONDS] 1,460
[CASH-FLOW-OPERATIONS] 2,271
[EPS-BASIC] 7.95
[EPS-DILUTED] 7.95
Exhibit G 27.3
[ARTICLE] OPUR1
[SUBSIDIARY] CONCORD ELECTRIC COMPANY
[NUMBER] 01
[MULTIPLIER] 1,000
[FISCAL-YEAR-END] DEC-31-1999
[PERIOD-START] JAN-01-1999
[PERIOD-END] DEC-31-1999
[PERIOD-TYPE] YEAR
[BOOK-VALUE] PER-BOOK
[TOTAL-NET-UTILITY-PLANT] 33,094
[TOTAL-CURRENT-ASSETS] 4,224
[TOTAL-DEFERRED-CHARGES] 8,000
[OTHER-ASSETS] 23
[TOTAL-ASSETS] 45,341
[COMMON] 1,670
[CAPITAL-SURPLUS-PAID-IN] 1,250
[RETAINED-EARNINGS] 9,171
[TOTAL-COMMON-STOCKHOLDERS-EQ] 12,091
[PREFERRED-MANDATORY] 215
[PREFERRED] 225
[LONG-TERM-DEBT-NET] 16,000
[SHORT-TERM-NOTES] 3,800
[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] 13,010
[TOT-CAPITALIZATION-AND-LIAB] 45,341
[GROSS-OPERATING-REVENUE] 46,143
[INCOME-TAX-EXPENSE] 594
[OTHER-OPERATING-EXPENSES] 42,463
[TOTAL-OPERATING-EXPENSES] 43,057
[OPERATING-INCOME-LOSS] 3,086
[OTHER-INCOME-NET] 0
[INCOME-BEFORE-INTEREST-EXPEN] 3,086
[TOTAL-INTEREST-EXPENSE] 1,417
[NET-INCOME] 1,669
[PREFERRED-STOCK-DIVIDENDS] 32
[EARNINGS-AVAILABLE-FOR-COMM] 1,637
[COMMON-STOCK-DIVIDENDS] 1,245
[TOTAL-INTEREST-ON-BONDS] 1,205
[CASH-FLOW-OPERATIONS] 3,321
[EPS-BASIC] 12.43
[EPS-DILUTED] 12.43
Exhibit G 27.4
[ARTICLE] OPUR1
[SUBSIDIARY] FITCHBURG GAS AND ELECTRIC
[NUMBER] 03
[MULTIPLIER] 1,000
[FISCAL-YEAR-END] DEC-31-1999
[PERIOD-START] JAN-01-1999
[PERIOD-END] DEC-31-1999
[PERIOD-TYPE] YEAR
[BOOK-VALUE] PER-BOOK
[TOTAL-NET-UTILITY-PLANT] 71,150
[TOTAL-CURRENT-ASSETS] 13,139
[TOTAL-DEFERRED-CHARGES] 163,205
[OTHER-ASSETS] 18
[TOTAL-ASSETS] 247,512
[COMMON] 22,177
[CAPITAL-SURPLUS-PAID-IN] 0
[RETAINED-EARNINGS] 17,428
[TOTAL-COMMON-STOCKHOLDERS-EQ] 39,605
[PREFERRED-MANDATORY] 2,340
[PREFERRED] 0
[LONG-TERM-DEBT-NET] 43,000
[SHORT-TERM-NOTES] 8,567
[LONG-TERM-NOTES-PAYABLE] 0
[COMMERCIAL-PAPER-OBLIGATIONS] 0
[LONG-TERM-DEBT-CURRENT-PORT] 1,000
[PREFERRED-STOCK-CURRENT] 0
[CAPITAL-LEASE-OBLIGATIONS] 2,164
[LEASES-CURRENT] 179
[OTHER-ITEMS-CAPITAL-AND-LIAB] 150,657
[TOT-CAPITALIZATION-AND-LIAB] 247,512
[GROSS-OPERATING-REVENUE] 73,206
[INCOME-TAX-EXPENSE] 2,676
[OTHER-OPERATING-EXPENSES] 61,862
[TOTAL-OPERATING-EXPENSES] 64,538
[OPERATING-INCOME-LOSS] 8,668
[OTHER-INCOME-NET] 47
[INCOME-BEFORE-INTEREST-EXPEN] 8,715
[TOTAL-INTEREST-EXPENSE] 3,547
[NET-INCOME] 5,168
[PREFERRED-STOCK-DIVIDENDS] 160
[EARNINGS-AVAILABLE-FOR-COMM] 5,008
[COMMON-STOCK-DIVIDENDS] 4,193
[TOTAL-INTEREST-ON-BONDS] 3,236
[CASH-FLOW-OPERATIONS] 7,073
[EPS-BASIC] 4.02
[EPS-DILUTED] 4.02
Exhibit G 27.5
[ARTICLE] OPUR1
[SUBSIDIARY] UNITIL POWER CORP.
[NUMBER] 04
[MULTIPLIER] 1,000
[FISCAL-YEAR-END] DEC-31-1999
[PERIOD-START] JAN-01-1999
[PERIOD-END] DEC-31-1999
[PERIOD-TYPE] YEAR
[BOOK-VALUE] PER-BOOK
[TOTAL-NET-UTILITY-PLANT] 0
[OTHER-PROPERTY-AND-INVEST] 0
[TOTAL-CURRENT-ASSETS] 12,911
[TOTAL-DEFERRED-CHARGES] 40
[OTHER-ASSETS] 0
[TOTAL-ASSETS] 12,951
[COMMON] 152
[CAPITAL-SURPLUS-PAID-IN] 0
[RETAINED-EARNINGS] 364
[TOTAL-COMMON-STOCKHOLDERS-EQ] 516
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] 12,435
[TOT-CAPITALIZATION-AND-LIAB] 12,951
[GROSS-OPERATING-REVENUE] 77,007
[INCOME-TAX-EXPENSE] 11
[OTHER-OPERATING-EXPENSES] 77,235
[TOTAL-OPERATING-EXPENSES] 77,246
[OPERATING-INCOME-LOSS] -239
[OTHER-INCOME-NET] 0
[INCOME-BEFORE-INTEREST-EXPEN] -239
[TOTAL-INTEREST-EXPENSE] -296
[NET-INCOME] 57
[PREFERRED-STOCK-DIVIDENDS] 0
[EARNINGS-AVAILABLE-FOR-COMM] 57
[COMMON-STOCK-DIVIDENDS] 0
[TOTAL-INTEREST-ON-BONDS] 0
[CASH-FLOW-OPERATIONS] 2,762
[EPS-BASIC] 571.25
[EPS-DILUTED] 571.25
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 /s/ Robert G. Schoenberger
Robert G. Schoenberger
Chairman of the Board &
Chief Executive Officer
UNITIL SERVICE CORP.
By /s/ Robert G. Schoenberger
Robert G. Schoenberger
President
CONCORD ELECTRIC COMPANY,
EXETER & HAMPTON ELECTRIC COMPANY,
FITCHBURG GAS AND ELECTRIC LIGHT COMPANY.
UNITIL REALTY CORP.
By /s/ Michael J. Dalton
Michael J. Dalton
President
UNITIL POWER CORP.
By /s/George R. Gantz
George R. Gantz
President
Date April 28, 2000
