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File No. 30-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM U5S
ANNUAL REPORT
For the Year Ended December 31, 1998
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, 1998
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 - 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 various
dates, HCAR No.
66,951 shares $561,208 35-25677
UTL Issued on Various Dates,
43,862 Shares in Connection
with the Company's Dividend
Reinvestment and Stock
Purchase Plan and Tax
Deferred Savings and HCAR No.
Investment Plan $1,034,195 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
Concord
Electric
Company
(CECo)
CECo Issuance and Sale of
$10 million of 30-year
Series J First Mortgage
Bonds at par to an
institutional investor 10,000,000 HCAR No.
35-26739
Exeter & Hampton
Electric
Company (E&H)
E&H Issuance and Sale of $10
million of 30-year Series
L First Mortgage Bonds at
par to an institutional
investor 10,000,000 HCAR No.
35-26739
(A)Maximum borrowing authority is $25,000,000. Borrowings outstanding at
December 31, 1998 were $20,000,000.
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
Concord
Electric
Company (CECo)
First Mortgage Bonds,
Series C, 6.75%,
Due January 15, 1998 CECo $1,520,000 EXT
First Mortgage Bonds,
Series H, 9.43%,
Due September 1, 2003 CECo $5,200,000 EXT
Exeter & Hampton
Electric Company (E&H)
First Mortgage Bonds,
Series E, 6.75%,
Due January 15, 1998 E&H $498,000 EXT
First Mortgage Bonds,
Series H, 9.43%,
Due September 1, 2003 E&H $700,000 EXT
First Mortgage Bonds,
Series J, 8.49%,
Due September 1, 2003 E&H $4,000,000 EXT
Redeemable Preferred Stock
$100 Par Value
8.75% Series E&H $11,200 EXT
Fitchburg Gas and
Electric Light Company
(FG&E)
Redeemable Preferred Stock
$100 Par Value
5.125% Series FG&E $36,100 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, 1998:
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
Bruce Keough
P.O. Box 1052
Dublin, NH 03444 D D D D
Douglas K. Macdonald
8 Wilson Avenue
Concord, NH 03301 D D D D
J. Parker Rice, Jr.
112 River Street
Fitchburg, MA 01420 D D D D
Charles H. Tenney II
300 Friberg Parkway
Westborough, MA 01581 D D D D
Charles H. Tenney III
300 Friberg Parkway
Westborough, MA 01581 D D D D
William W. Treat
P.O. Box 800
Stratham, NH 03885 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
James G. Daly
6 Liberty Lane West
Hampton, NH 03842 SVP SVP, D D P,D
D
George R. Gantz
6 Liberty Lane West
Hampton, NH 03842 SVP, D P 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
D
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
Todd R. Black
6 Liberty Lane West
Hampton, NH 03842 VP
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
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, 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 1998, 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
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. 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. 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.
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 $100,000 during the year 1998.
Long-Term Compensation
Annual Compensation Awards Payouts
Name and Other Restricted All Other
Principal Salary Bonus Annual Stock Options LTIP Compensation
Position (1) Year ($) ($)(2) Comp($) Awards (#) Payouts ($)
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Robert G.
Schoenberger
(3) 1998 245,003 - - - - - $88,160(6)
Chairman of
the Board & 1997 65,833(4) - - - 25,000(5) - -
Chief
Executive - - - - - - - -
Officer
Michael J.
Dalton 1998 190,005 67,959 - - - - $14,224(7)
President
& Chief 1997 174,000 63,834 - - - -
Operating
Officer 1996 169,200 61,959 - - - -
Anthony J.
Baratta, Jr.
(8) 1998 107,501(9) - - - - - $32,955(10)
Senior Vice
President & - - - - - - -
Chief Financial
Officer - - - - - - -
James G. Daly 1998 142,092 39,314 - - - - $ 6,516 (11)
Senior Vice
President, 1997 125,625 33,658 - - - -
Unitil
Service 1996 95,625 32,580 - - - -
George R.
Gantz 1998 120,399 39,314 - - - - $ 6,070 (12)
Senior VP,
Unitil 1997 104,475 33,568 - - - -
Service
1996 95,625 32,580 - - - -
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 are comprised of Management Performance Compensation
Program (MPCP) cash and stock awards. In 1998, Unitil maintained 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. In December, 1998, the
MPCP was replaced by the Unitil Management Incentive Plan (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 to Mr. Schoenberger on November 3, 1997 under the
Key Employee Stock Option Plan (see "Other Compensation Arrangements" and
subsequent notes.)
(6) All Other Compensation for Mr. Schoenberger for the year 1998 includes
401(K) company contribution, the Supplemental Life Insurance payment, Group
Term Life Insurance payment, and taxable relocation payment valued at $4,800,
$2,651, $1,534 and $79,175, respectively.
(7) All Other Compensation for Mr. Dalton for the year 1998 includes,
401(K) company contribution, Supplemental Life Insurance payment and Group
Term Life Insurance payment, valued at $5,700, $5,644 and $2,880,
respectively.
(8) 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.
(9) 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.
(10) All Other Compensation for Mr. Baratta for the year 1998 includes
401(K) company contribution, Group Term Life Insurance payment, and
taxable relocation payment valued at $1,125, $750 and $31,080, respectively.
(11) All Other Compensation for Mr. Daly for the year 1998 includes
401(K) company contribution, Supplemental Life Insurance payment and Group
Term Life Insurance payment, valued at $5,085, $957 and $475, respectively.
(12) All Other Compensation for Mr. Gantz for the year 1998 includes
401(K) company contribution, Supplemental Life Insurance payment and Group
Term Life Insurance payment, valued at $4,434, $1,012 and $654, respectively.
OTHER COMPENSATION ARRANGEMENTS
The table below provides information with respect to options to purchase
shares of the Company's Common Stock exercised in fiscal 1998 and the value
of unexercised options granted in prior years under the Key Employee Stock
Option Plan ("Option Plan") to the named executive officers in the Summary
Compensation Table and held by them as of December 31, 1998. The Company has
no compensation plan under which Stock Appreciation Rights (SARs) are granted.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR (FY)
AND FY-END OPTION VALUES(1)
Shares Number of Unexercised Value of Unexercised
Name Acquired Options at In-the-Money Options
and on Value FY-End (#) (2) FY-End ($)
Principal Exercise Realized Exercisable/ Exercisable/
Position (#) ($) Unexercisable Unexercisable
(a) (b) (c) (d) (e)
Robert G.
Schoenberger - - exercisable 25,000(3) exercisable 206,938
Chairman of the unexercisable 0 unexercisable 0
Board & CEO
Michael J.
Dalton 12,000 243,480 exercisable 12,000(4) exercisable 218,010
President
& Chief unexercisable 0 unexercisable 0
Operating
Officer
Anthony J.
Baratta, Jr. - - exercisable 0 exercisable 0
Senior Vice unexercisable 0 unexercisable 0
President
and CFO
James G.
Daly 5,032 70,951 exercisable 0 exercisable 0
Senior VP, unexercisable 0 unexercisable 0
Unitil
Service
George R.
Gantz - - exercisable 5,078(5) exercisable 80,981
Senior VP, unexercisable 0 unexercisable 0
Unitil
Service
NOTES:
(1) 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 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. Upon the exercise of any option by an employee and
upon payment of the option price for shares of Unitil Common Stock 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
Option Plan have been exercised as of March 7, 1999.
(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 Option Plan. 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. Dalton exercised his remaining 12,000 stock options in February,
1999.
(5) Mr. Gantz exercised his 5,078 stock options in February, 1999.
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, 1999,
Executive Officers Shoenberger, Dalton, Baratta, Daly and Gantz had 1, 31,
.75, 10 and 15 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 $48,957 and
$42,490, 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)
Michael J. Dalton UNITIL, CECO, E&H, Service, 42,112(2)(3)(4)
Power, URI, FG&E, Realty
Joan D. Wheeler UNITIL, CECo, E&H, FG&E 1,200
Bruce W. Keough UNITIL, CECo, E&H, FG&E 2,200
J. Parker Rice, Jr. UNITIL, CECo, E&H, FG&E 1,652
Robert G. Schoenberger UNITIL, CECo, E&H, FG&E 27,824 (5)
Charles H. Tenney II UNITIL, CECo, E&H, FG&E 2,730
W. William
VanderWolk, Jr. UNITIL, CECo, E&H, FG&E 17,563
Franklin Wyman, Jr. UNITIL, CECo, E&H, FG&E 5,200
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 4,208 shares which are held in trust for Mr. Dalton under
the terms of the Unitil Tax Deferred Savings and Investment Plan ("401(k)").
Mr. Dalton has voting power only with respect to the shares credited to his
account. For further information regarding 401(k), see "Other Compensation
Arrangements - Tax-Qualified Savings and Investment Plan" below.
(3) Included are 100 shares held by Mr. Dalton jointly with his wife
with whom he shares voting and investment power.
(4) 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.
(5) Included are 26,824 shares which Mr. Schoenberger has the right to
purchase pursuant to the exercise of options under the Key Employee Stock
Option Plan ("KESOP" or "Option Plan"). (See "Other Compensation
Arrangements").
(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, 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 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 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 149,639,410 (80,716,554) 48,759,378 52,264,816 51,162,454
Gas 17,008,885 0 0 0 17,008,885
Other 30,000 (18,483,246) 0 0 0
Total
Operating
Revenue 166,678,295 (99,199,800) 48,759,378 52,264,816 68,171,339
Operating Expenses:
Fuel and
Purchased
Power 98,589,428 (80,565,678) 38,382,537 41,547,197 25,674,422
Gas Purchased
For Resale 9,874,087 0 0 0 9,874,087
Operation and
Maintenance 23,652,162 (18,634,122) 4,087,710 4,045,253 13,747,382
Depreciation
and
Amortization 10,006,477 0 1,494,849 1,918,814 5,396,318
Provisions for Taxes:
Local
Property
and Other 5,540,097 0 1,777,125 1,357,796 1,744,835
Federal and
State Income 3,710,202 0 343,967 427,546 2,727,322
Total
Operating
Expenses 151,372,453 (99,199,800) 46,086,188 49,296,606 59,164,366
Operating
Income 15,305,842 0 2,673,190 2,968,210 9,006,973
Non-operating
Expenses 155,888 0 50,547 13,499 48,336
Income Before
Interest
Expense 15,149,954 0 2,622,643 2,954,711 8,958,637
Interest
Expense, Net 6,900,957 6,121,768 1,419,379 1,629,774 3,527,587
Net Income 8,248,997 (6,121,768) 1,203,264 1,324,937 5,431,050
Less Dividends
on Preferred
Stock 273,672 32,205 77,271 164,196
Net Income Applicable
to Common
Stock 7,975,325 (6,121,768) 1,171,059 1,247,666 5,266,854
Average Common
Shares Outstanding 4,505,784
Basic Earnings per Share $1.77
Diluted Earnings per Share $1.72
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 77,458,601 0 710,716 0
Gas 0 0 0 0 0
Other 17,033,091 0 1,480,155 0 0
Total
Operating
Revenue 17,033,091 77,458,601 1,480,155 710,716 0
Operating Expenses:
Fuel and
Purchased Power 0 72,847,935 0 703,015 0
Gas Purchased
For Resale 0 0 0 0 0
Operation and
Maintenance 15,198,293 4,723,636 173,834 214,142 96,035
Depreciation
and Amortization 903,178 0 293,317 0 0
Provisions for Taxes:
Local Property
and Other 551,633 0 108,709 0 0
Federal and
State Income 18,412 32,786 100,036 (68,093) 128,226
Total Operating
Expenses 16,671,516 77,604,357 675,896 849,064 224,261
Operating Income 361,575 (145,756) 804,259 (138,348) (224,261)
Non-operating
Expenses 43,506 0 0 0 0
Income Before
Interest Expense 318,069 (145,756) 804,259 (138,348) (224,261)
Interest
Expense, Net 318,069 (196,550) 644,323 (6,118)(6,557,275)
Net Income 0 50,794 159,936 (132,230) 6,333,014
Less Dividends
on Preferred Stock 0 0 0 0 0
Net Income Applicable
to Common Stock 0 50,794 159,936 (132,230) 6,333,014
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 152,940,326 0 44,763,796 55,331,364 52,845,166
Gas 32,622,024 0 0 0 32,622,024
Common 20,875,830 0 0 0 5,400,405
Construction
Work in
Process 3,024,119 0 727,013 644,856 1,652,249
Utility Plant 209,462,299 0 45,490,809 55,976,220 92,519,844
Less:
Accumulated
Depreciation 63,428,441 0 13,805,455 20,143,237 26,134,481
Net
Utility
Plant 146,033,858 0 31,685,354 35,832,983 66,385,363
Current Assets:
Cash 4,083,475 (8,285,677) 262,851 308,151 363,711
Accounts Receivable, Less
Allowance for
Doubtful
Accounts 15,998,803 0 3,446,138 3,659,667 8,535,381
Accounts Receivable -
Associated
Companies 0 (11,146,620) 6,600 3,301 14,538
Taxes
Refundable 1,056,135 0 203,515 (29,824) 767,307
Materials
and Supplies 2,961,830 0 410,675 403,739 2,147,416
Prepayments 1,146,529 0 38,699 36,829 965,353
Accrued
Revenue 5,322,076 0 253,255 516,968 6,160,058
Total
Current
Assets 30,568,848 (19,432,297) 4,621,733 4,898,831 18,953,764
Noncurrent Assets:
Regulatory
Assets 163,034,292 0 83,590 141,351 162,034,194
Prepaid
Pension Costs 8,591,245 0 2,374,731 3,384,026 3,350,431
Debt Issuance
Costs 1,319,991 0 462,445 395,115 318,070
Other
Noncurrent
Assets 27,287,517 (49,969,022) 4,688,241 4,933,747 19,485,711
Total
Noncurrent
Assets 200,233,045 (49,969,022) 7,609,007 8,854,239 185,188,406
TOTAL 376,835,751 (69,401,319) 43,916,094 49,586,053 270,527,533
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 5,371,304 0 10,104,120 0 0
Construction
Work in Process 0 0 0 0 0
Utility Plant 5,371,304 0 10,104,120 0 0
Less: Accumulated
Depreciation 2,670,176 0 675,092 0 0
Net Utility
Plant 2,701,128 0 9,429,028 0 0
Current Assets:
Cash 543,413 3,577,309 0 133,976 7,179,743
Accounts Receivable, Less
Allowance for
Doubtful
Accounts 221,826 0 0 135,791 0
Accounts Receivable -
Associated
Companies 1,656,544 6,721,267 3,603 0 2,740,767
Taxes Refundable 144,013 (695) (11,534) 5,938 (22,583)
Materials and
Supplies 0 0 0 0 0
Prepayments 66,259 6,016 2,004 31,368 0
Accrued Revenue 0 (1,733,790) 0 125,585 0
Total Current
Assets 2,632,055 8,570,107 (5,927) 432,658 9,897,927
Noncurrent Assets:
Regulatory Assets 775,157 0 0 0 0
Prepaid Pension
Costs (517,943) 0 0 0 0
Debt Issuance Costs 0 0 144,361 0 0
Other Noncurrent
Assets 867,658 26,352 (174,400) 3,724 47,425,505
Total Noncurrent
Assets 1,124,872 26,352 (30,039) 3,724 47,425,505
TOTAL 6,458,055 8,596,459 9,393,062 436,382 57,323,432
Note: Individual columns may not add to Consolidated due to rounding.
UNITIL CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATING BALANCE SHEET
CAPITALIZATION Consolidated Eliminations Concord Exeter & FG&E
Electric Hampton. Consolidated
Company Electric Co
Common Stock
Equity 75,350,919 (47,399,654) 11,667,244 12,994,773 38,631,111
Preferred Stock:
Non-Redeemable,
Non-Cumulative 225,000 0 225,000 0 0
Redeemable,
Cumulative 3,618,600 0 215,000 998,100 2,405,500
Long-Term Debt,
Less
Current
Portion 74,046,632 0 16,000,000 19,000,000 32,000,000
Total
Capitaliz-
ation 153,241,151 (47,399,654) 28,107,244 32,992,873 73,036,611
Current Liabilities:
Long-Term Debt,
Current
Portion 1,175,139 0 0 0 1,000,000
Capitalized
Leases, Current
Portion 907,314 0 0 0 152,770
Accounts
Payable 11,381,620 0 81,489 181,413 4,015,096
Short-Term
Debt 20,000,000 (8,285,677) 3,157,919 2,508,299 19,560,543
A/P - Associated
Companies 0 (9,615,658) 3,431,078 3,739,795 1,476,708
Dividends Declared
and Payable 231,907 (1,530,962) 304,488 242,568 1,052,194
Refundable Customer
Deposits 1,293,138 0 243,467 639,809 377,061
Interest
Payable 841,170 0 164,125 217,188 406,125
Other Current
Liabilities 2,776,372 74,149 176,759 86,437 189,190
Total Current
Liabilities 38,606,660 (19,358,148) 7,559,325 7,615,509 28,229,687
Deferred Income
Taxes 43,027,445 (2,643,517) 6,864,457 8,215,995 31,389,630
Noncurrent Liabilities:
Power Supply
Contract
Obligations 129,688,000 0 0 0 129,688,000
Capitalized Leases,
Less Current
Portion 4,286,765 0 0 0 2,344,618
Other Noncurrent
Liabilities 7,985,730 0 1,385,068 761,676 5,838,987
Total Noncurrent
Liabilities 141,960,495 0 1,385,068 761,676 137,871,605
TOTAL 376,835,751 (69,401,319) 43,916,094 49,586,053 270,527,533
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 2,688 458,492 1,462,406 382,399 57,151,461
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 7,046,632 0 0
Total
Capitalization 2,688 458,492 8,509,038 382,399 57,151,461
Current Liabilities:
Long-Term Debt,
Current Portion 0 0 175,139 0 0
Capitalized Leases,
Current Portion 754,544 0 0 0 0
Accounts Payable 636,931 6,390,416 59,830 16,446 0
Short-Term Debt 2,424,099 0 634,818 0 0
A/P - Associated
Companies 425,804 481,396 14,137 38,386 8,352
Dividends Declared
and Payable 0 0 0 0 163,619
Refundable Customer
Deposits 0 32,800 0 0 0
Interest Payable 48,826 4,907 0 0 0
Other Current
Liabilities 1,021,189 1,228,448 100 100 0
Total Current
Liabilities 5,311,393 8,137,967 884,024 54,932 171,971
Deferred Income
Taxes (798,173) 0 0 (949) 0
Noncurrent Liabilities:
Power Supply
Contract Obligations 0 0 0 0 0
Capitalized Leases,
Less Current
Portion 1,942,147 0 0 0 0
Other Noncurrent
Liabilities 0 0 0 0 0
Total Noncurrent
Liabilities 1,942,147 0 0 0 0
TOTAL 6,458,055 8,596,459 9,393,062 436,382 57,323,432
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
Operating Activities:
Net Income 8,248,997 (6,121,768) 1,203,264 1,324,937 5,431,050
Adjustments to Reconcile
Net Income to
Cash Provided by
Operating Activities:
Depreciation
and
Amortization 10,067,612 0 1,517,515 1,930,423 5,415,595
Deferred Tax
Provision 1,514,549 0 154,999 244,974 1,182,096
Amortization of
Investment Tax
Credit (402,349) 0 (110,968) (87,748) (203,633)
Changes in Working Capital:
Accounts
Receivable 890,593 (1,259,137) 744,955 910,056 (386,986)
Materials and
Supplies (298,545) 0 (56,447) (20,978) (221,120)
Prepayments (712,620) 0 (7,367) (6,510) (664,918)
Accrued
Revenue 1,474,110 0 (43,291) 451,055 (1,978,078)
Accounts
Payable (3,352,287) 1,313,650 (329,246) (438,002) (1,321,377)
Refundable
Customer
Deposits (893,894) 0 4,680 (98,870) (799,703)
Taxes and
Interest
Accrued (747,761) 0 (60,709) 90,313 (1,064,462)
Other, Net (2,573,763) 0 (900,713) (887,109) (1,287,608)
Net Cash
provided by
Operating
Activities 13,214,642 (6,067,255) 2,116,672 3,412,541 4,100,856
Cash Flows From Investing Activities:
Acquisition of
Property,
Plant,
Equipment (14,462,738) 0 (3,061,183 (3,412,827) (7,962,630)
Other Property
and Investments 0 0 1,250,000 1,250,000 0
Net Cash Used in
Investing
Activities (14,462,738) 0 (1,811,183)(2,162,827) (7,962,630)
Cash Flows Used In Financing Activities:
Proceeds From
(Repayment of )
Short-Term Debt 2,000,000 (39,396) (2,825,066)(4,929,418) 9,539,629
Proceeds from
Long-Term Debt 20,000,000 0 10,000,000 10,000,000 0
Repayment of
Long-Term Debt (13,143,613) 0 (6,720,000)(5,197,000) (1,000,000)
Dividends Paid (6,367,717) 6,071,120 (827,945)(1,049,590) (4,467,963)
Issuance of
Common Stock 1,599,535 0 0 0 0
Retirement of
Preferred Stock (47,300) 0 0 (11,200) (36,100)
Repayment of
Capital Lease
Obligations (1,045,961) 0 0 0 (132,356)
Net Cash Provided
by Financing
Activities 2,994,944 6,031,724 (373,011)(1,187,208) 3,903,210
Net Increase (Decrease)
in Cash 1,746,848 (35,531) (67,522) 62,506 41,436
Cash at
Beginning of Year 2,336,627 (8,250,146) 330,373 245,645 322,275
Cash at End
of Year 4,083,475 (8,285,677) 262,851 308,151 363,711
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 50,794 159,936 (132,230) 6,333,014
Adjustments to Reconcile
Net Income to
Net Cash Provided by
Operating Activities:
Depreciation
and
Amortization 903,178 0 300,901 0 0
Deferred Tax
Provision (77,254) 0 9,727 7 0
Amortization of
Investment Tax
Credit 0 0 0 0 0
Changes in Working Capital:
Accounts
Receivable 267,627 434,358 (3,603) (51,352) 234,675
Materials and
Supplies 0 0 0 0 0
Prepayments (3,101) 1,216 (676) (31,263) 0
Accrued Revenue 0 3,084,472 0 (40,048) 0
Accounts
Payable (1,055,799)(1,450,949) (19,601) (59,316) 8,352
Refundable
Customer
Deposits 0 0 0 0 0
Taxes and
Interest
Accrued (131,118) 957 31,185 61,659 324,415
Other, Net 435,976 (69,681) (6,271) (3,903) 145,547
Net Cash provided
by Operating
Activities 339,509 2,051,167 471,598 (256,446) 7,046,003
Cash Flows From Investing Activities:
Acquisition of
Property,
Plant,
Equipment 16,834 0 (42,932) 0 0
Other Property
and Investments 0 0 0 490,000 (2,990,000)
Net Cash Used in
Investing Activities 16,834 0 (42,932) 490,000 (2,990,000)
Cash Flows From Financing Activities:
Proceeds From (Repayment of )
Short-Term Debt 607,113 0 (202,053) (150,810) 0
Proceeds from
Long-Term Debt 0 0 0 0 0
Repayment of
Long-Term Debt 0 0 (226,613) 0 0
Dividends Paid 0 0 0 0 (6,093,339)
Issuance of Common Stock 0 0 0 0 1,599,535
Retirement of
Preferred Stock 0 0 0 0 0
Repyament of
Capital Lease
Obligations (913,605) 0 0 0 0
Net Cash Used in
Financing
Activities (306,492) 0 (428,666) (150,810)(4,493,804)
Net Increase (Decrease)
in Cash 49,851 2,051,167 0 82,744 (437,801)
Cash at Beginning
of Year 493,562 1,526,142 0 51,231 7,617,544
Cash at End of Year 543,413 3,577,309 0 133,975 7,179,743
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 34,539,519 (17,712,694) 8,747,471 9,557,670 16,452,514
Additions:
Net Income, Excluding
Dividends
Received 8,248,997 0 1,203,264 1,324,937 5,431,050
Dividends Received
From
Subsidiaries 0 (6,121,768) 0 0 0
Total
Additions 8,248,997 (6,121,768) 1,203,264 1,324,937 5,431,050
Deductions:
Dividends Declared:
Preferred
Stock of
Subsidiaries 273,672 0 32,205 77,271 164,196
Common Stock of
Subsidiaries 0 (6,121,768) 934,072 980,850 4,206,846
Common Stock of
Registrant 6,113,855 0 0 0 0
Adjustments to
Retained
Earnings 0 (1,967) 0 382 1,585
Total
Deductions 6,387,527 (6,123,735) 966,277 1,058,503 4,372,627
Retained Earnings,
End of Year 36,400,989 (17,710,727) 8,984,458 9,824,104 17,510,937
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 1,688 306,697 976,470 (85,371) 16,295,075
Additions:
Net Income, Excluding
Dividends
Received 0 50,794 159,936 (132,230) 211,246
Dividends Received
From
Subsidiaries 0 0 0 0 6,121,768
Total Additions 0 50,794 159,936 (132,230) 6,333,014
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 6,113,855
Adjustments to
Retained 0 0 0 0 0
Total Deductions 0 0 0 0 6,113,855
Retained Earnings,
End of Year 1,688 357,491 1,136,406 (217,601) 16,514,234
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, 1998 (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
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, 1998, and the related consolidated statement
of earnings, cash flows and changes in common stock equity for the year then
ended, included in the 1998 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, 1998, 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 9, 1999
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-31-1998
[PERIOD-START] JAN-01-1998
[PERIOD-END] DEC-31-1998
[PERIOD-TYPE] YEAR
[BOOK-VALUE] PER-BOOK
[TOTAL-NET-UTILITY-PLANT] 146,034
[TOTAL-CURRENT-ASSETS] 30,569
[TOTAL-DEFERRED-CHARGES] 200,232
[OTHER-ASSETS] 0
[TOTAL-ASSETS] 376,835
[COMMON] 38,407
[CAPITAL-SURPLUS-PAID-IN] 543
[RETAINED-EARNINGS] 36,401
[TOTAL-COMMON-STOCKHOLDERS-EQ] 75,351
[PREFERRED-MANDATORY] 3,618
[PREFERRED] 225
[LONG-TERM-DEBT-NET] 74,047
[SHORT-TERM-NOTES] 20,000
[LONG-TERM-NOTES-PAYABLE] 0
[COMMERCIAL-PAPER-OBLIGATIONS] 0
[LONG-TERM-DEBT-CURRENT-PORT] 1,175
[PREFERRED-STOCK-CURRENT] 0
[CAPITAL-LEASE-OBLIGATIONS] 4,287
[LEASES-CURRENT] 907
[OTHER-ITEMS-CAPITAL-AND-LIAB] 197,225
[TOT-CAPITALIZATION-AND-LIAB] 376,835
[GROSS-OPERATING-REVENUE] 166,678
[INCOME-TAX-EXPENSE] 3,710
[OTHER-OPERATING-EXPENSES] 147,662
[TOTAL-OPERATING-EXPENSES] 151,372
[OPERATING-INCOME-LOSS] 15,306
[OTHER-INCOME-NET] (156)
[INCOME-BEFORE-INTEREST-EXPEN] 15,150
[TOTAL-INTEREST-EXPENSE] 6,901
[NET-INCOME] 8,249
[PREFERRED-STOCK-DIVIDENDS] 274
[EARNINGS-AVAILABLE-FOR-COMM] 7,975
[COMMON-STOCK-DIVIDENDS] 6,113
[TOTAL-INTEREST-ON-BONDS] 5,412
CASH-FLOW-OPERATIONS> 13,215
[EPS-PRIMARY] 1.77
[EPS-DILUTED] 1.72
Exhibit G 27.2
[ARTICLE] OPUR1
[SUBSIDIARY] EXETER & HAMPTON ELECTRIC
COMPANY
[NUMBER] 02
[MULTIPLIER] 1,000
[FISCAL-YEAR-END] DEC-31-1998
[PERIOD-START] JAN-01-1998
[PERIOD-END] DEC-31-1998
[PERIOD-TYPE] YEAR
[BOOK-VALUE] PER-BOOK
[TOTAL-NET-UTILITY-PLANT] 35,833
[TOTAL-CURRENT-ASSETS] 4,899
[TOTAL-DEFERRED-CHARGES] 8,854
[OTHER-ASSETS] 0
[TOTAL-ASSETS] 49,586
[COMMON] 1,920
[CAPITAL-SURPLUS-PAID-IN] 1,250
[RETAINED-EARNINGS] 9,824
[TOTAL-COMMON-STOCKHOLDERS-EQ] 12,994
[PREFERRED-MANDATORY] 998
[PREFERRED] 0
[LONG-TERM-DEBT-NET] 19,000
[SHORT-TERM-NOTES] 2,508
[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] 14,086
[TOT-CAPITALIZATION-AND-LIAB] 49,586
[GROSS-OPERATING-REVENUE] 52,265
[INCOME-TAX-EXPENSE] 427
[OTHER-OPERATING-EXPENSES] 48,870
[TOTAL-OPERATING-EXPENSES] 49,297
[OPERATING-INCOME-LOSS] 2,968
[OTHER-INCOME-NET] (13)
[INCOME-BEFORE-INTEREST-EXPEN] 2,955
[TOTAL-INTEREST-EXPENSE] 1,630
[NET-INCOME] 1,325
[PREFERRED-STOCK-DIVIDENDS] 77
[EARNINGS-AVAILABLE-FOR-COMM] 1,248
[COMMON-STOCK-DIVIDENDS] 0
[TOTAL-INTEREST-ON-BONDS] 1,272
[CASH-FLOW-OPERATIONS] 3,413
[EPS-PRIMARY] 6.40
[EPS-DILUTED] 6.40
Exhibit G 27.3
[ARTICLE] OPUR1
[SUBSIDIARY] CONCORD ELECTRIC COMPANY
[NUMBER] 01
[MULTIPLIER] 1,000
[FISCAL-YEAR-END] DEC-31-1998
[PERIOD-START] JAN-01-1998
[PERIOD-END] DEC-31-1998
[PERIOD-TYPE] YEAR
[BOOK-VALUE] PER-BOOK
[TOTAL-NET-UTILITY-PLANT] 31,685
[TOTAL-CURRENT-ASSETS] 4,622
[TOTAL-DEFERRED-CHARGES] 7,609
[OTHER-ASSETS] 0
[TOTAL-ASSETS] 43,916
[COMMON] 1,433
[CAPITAL-SURPLUS-PAID-IN] 1,250
[RETAINED-EARNINGS] 8,984
[TOTAL-COMMON-STOCKHOLDERS-EQ] 11,667
[PREFERRED-MANDATORY] 215
[PREFERRED] 225
[LONG-TERM-DEBT-NET] 16,000
[SHORT-TERM-NOTES] 3,158
[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] 12,651
[TOT-CAPITALIZATION-AND-LIAB] 43,916
[GROSS-OPERATING-REVENUE] 48,759
[INCOME-TAX-EXPENSE] 344
[OTHER-OPERATING-EXPENSES] 45,742
[TOTAL-OPERATING-EXPENSES] 46,086
[OPERATING-INCOME-LOSS] 2,673
[OTHER-INCOME-NET] (51)
[INCOME-BEFORE-INTEREST-EXPEN] 2,622
[TOTAL-INTEREST-EXPENSE] 1,419
[NET-INCOME] 1,203
[PREFERRED-STOCK-DIVIDENDS] 32
[EARNINGS-AVAILABLE-FOR-COMM] 1,171
[COMMON-STOCK-DIVIDENDS] 0
[TOTAL-INTEREST-ON-BONDS] 1,051
[CASH-FLOW-OPERATIONS] 2,117
[EPS-PRIMARY] 8.89
[EPS-DILUTED] 8.89
Exhibit G 27.4
[ARTICLE] OPUR1
[SUBSIDIARY] FITCHBURG GAS AND ELECTRIC
LIGHT COMPANY
[NUMBER] 03
[MULTIPLIER] 1,000
[FISCAL-YEAR-END] DEC-31-1998
[PERIOD-START] JAN-01-1998
[PERIOD-END] DEC-31-1998
[PERIOD-TYPE] YEAR
[BOOK-VALUE] PER-BOOK
[TOTAL-NET-UTILITY-PLANT] 66,385
[TOTAL-CURRENT-ASSETS] 18,954
[TOTAL-DEFERRED-CHARGES] 185,188
[OTHER-ASSETS] 0
[TOTAL-ASSETS] 270,527
[COMMON] 21,122
[CAPITAL-SURPLUS-PAID-IN] -2
[RETAINED-EARNINGS] 17,511
[TOTAL-COMMON-STOCKHOLDERS-EQ] 38,631
[PREFERRED-MANDATORY] 2,406
[PREFERRED] 0
[LONG-TERM-DEBT-NET] 32,000
[SHORT-TERM-NOTES] 19,561
[LONG-TERM-NOTES-PAYABLE] 0
[COMMERCIAL-PAPER-OBLIGATIONS] 0
[LONG-TERM-DEBT-CURRENT-PORT] 1,000
[PREFERRED-STOCK-CURRENT] 0
[CAPITAL-LEASE-OBLIGATIONS] 2,345
[LEASES-CURRENT] 153
[OTHER-ITEMS-CAPITAL-AND-LIAB] 174,431
[TOT-CAPITALIZATION-AND-LIAB] 270,527
[GROSS-OPERATING-REVENUE] 68,171
[INCOME-TAX-EXPENSE] 2,727
[OTHER-OPERATING-EXPENSES] 56,437
[TOTAL-OPERATING-EXPENSES] 59,164
[OPERATING-INCOME-LOSS] 9,007
[OTHER-INCOME-NET] (48)
[INCOME-BEFORE-INTEREST-EXPEN] 8,959
[TOTAL-INTEREST-EXPENSE] 3,528
[NET-INCOME] 5,431
[PREFERRED-STOCK-DIVIDENDS] 164
[EARNINGS-AVAILABLE-FOR-COMM] 5,267
[COMMON-STOCK-DIVIDENDS] 0
[TOTAL-INTEREST-ON-BONDS] 2,501
[CASH-FLOW-OPERATIONS] 4,101
[EPS-PRIMARY] 4.23
[EPS-DILUTED] 4.23
Exhibit G 27.5
[ARTICLE] OPUR1
[SUBSIDIARY] UNITIL POWER CORP.
[NUMBER] 04
[MULTIPLIER] 1,000
[FISCAL-YEAR-END] DEC-31-1998
[PERIOD-START] JAN-01-1998
[PERIOD-END] DEC-31-1998
[PERIOD-TYPE] YEAR
[BOOK-VALUE] PER-BOOK
[TOTAL-NET-UTILITY-PLANT] 0
[OTHER-PROPERTY-AND-INVEST] 0
[TOTAL-CURRENT-ASSETS] 8,570
[TOTAL-DEFERRED-CHARGES] 26
[OTHER-ASSETS] 0
[TOTAL-ASSETS] 8,596
[COMMON] 101
[CAPITAL-SURPLUS-PAID-IN] 0
[RETAINED-EARNINGS] 357
[TOTAL-COMMON-STOCKHOLDERS-EQ] 458
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] 8,138
[TOT-CAPITALIZATION-AND-LIAB] 8,596
[GROSS-OPERATING-REVENUE] 77,458
[INCOME-TAX-EXPENSE] 33
[OTHER-OPERATING-EXPENSES] 77,571
[TOTAL-OPERATING-EXPENSES] 77,604
[OPERATING-INCOME-LOSS] -146
[OTHER-INCOME-NET] 0
[INCOME-BEFORE-INTEREST-EXPEN] -146
[TOTAL-INTEREST-EXPENSE] -197
[NET-INCOME] 51
[PREFERRED-STOCK-DIVIDENDS] 0
[EARNINGS-AVAILABLE-FOR-COMM] 51
[COMMON-STOCK-DIVIDENDS] 0
[TOTAL-INTEREST-ON-BONDS] 0
[CASH-FLOW-OPERATIONS] 2,051
[EPS-PRIMARY] 507.94
[EPS-DILUTED] 507.94
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 ___________________________