FINANCIAL STATEMENTS AND
REPORT OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
THE UNITIL CORPORATION
TAX DEFERRED
SAVINGS AND INVESTMENT PLAN
December 31, 1999, 1998 and 1997
Report of Independent Certified Public Accountants
Administrator of
The UNITIL Corporation Tax Deferred
Savings and Investment Plan
We have audited the accompanying statements of net
assets available for benefits of The UNITIL Corporation Tax
Deferred Savings and Investment Plan (the "Plan") as of December
31, 1999 and 1998, and the related statements of changes in net
assets available for benefits for each of the three years in the
period ended December 31, 1999. These financial statements are
the responsibility of the Plan's management. Our responsibility
is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally
accepted auditing standards. Those standards require that we
plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation.
We believe our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to
above present fairly, in all material respects, the net assets
available for benefits of The UNITIL Corporation Tax Deferred
Savings and Investment Plan as of December 31, 1999 and 1998, and
the changes in net assets available for benefits for each of the
three years in the period ended December 31, 1999, in conformity
with generally accepted accounting principles.
GRANT THORNTON LLP
Boston, Massachusetts
June 9, 2000
The UNITIL Corporation Tax Deferred Savings and Investment Plan
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
December 31, 1999 (in dollars)
Putnam
UNITIL Putnam Putnam Inter- George Inter-
Corporation Putnam Stable Putnam Putnam New national Putnam national
Stock Loan Growth & Value Voyager Income Opportunity S&P Growth Fund of Voyager
Fund Fund Income Fund Fund Fund Fund 500 Fund Boston Fund Total
Participant
Loan
Receivable 526,954 526,954
Investment at
market value 3,182,499 2,924,252 9,090,933 279,664 3,230,404 1,288,537 1,063,755 34,879 350,279 21,445,202
Employer securities
(UNITIL common
stock at market
value) 4,604,611 4,604,611
Net assets
available
for
benefits 4,604,611 526,954 3,182,499 2,924,252 9,090,933 279,664 3,230,404 1,288,537 1,063,755 34,879 350,279 26,576,767
The accompanying notes are an integral part of this statement.
The UNITIL Corporation Tax Deferred Savings and Investment Plan
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
December 31, 1998 (in dollars)
Putnam
UNITIL Putnam Putnam Inter-
Corporation Putnam Stable Putnam Putnam New national
Stock Loan Growth & Value Voyager Income Opportunity S&P Growth
Fund Fund Income Fund Fund Fund Fund 500 Fund Total
Participant
Loan
Receivable 519,634 519,634
Investments at
market value 3,372,521 2,691,166 6,095,519 279,913 1,640,789 965,459 597,051 15,642,418
Employer securities
(UNITIL common
stock at
market
value) 3,153,429 3,153,429
Net assets
available
for benefits 3,153,429 519,634 3,372,521 2,691,166 6,095,519 279,913 1,640,789 965,459 597,051 19,315,481
The accompanying notes are an integral part of this statement.
The UNITIL Corporation Tax Deferred Savings and Investment Plan
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
For the year ended December 31, 1999 (in dollars)
Putnam
UNITIL Putnam Putnam Inter- George Inter-
Corporation Putnam Stable Putnam Putnam New Oppor- national Putnam national
Stock Loan Growth & Value Voyager Income tunity S&P Growth Fund of Voyager Pending
Fund Fund Income Fund Fund Fund Fund 500 Fund Boston Fund Account Total
Additions to net
assets attributed to:
Investment income
Interest 45,973 45,973
Dividends 174,253 324,391 162,781 793,503 17,563 246,447 37,820 2,909 16,527 1,776,194
Other
receipts 11,033 25,243 18,371 26,958 14,249 1,036 3,450 5,694 100,340
Net apprec-
iation 1,298,371 (278,802) 2,442,805 (23,335) 1,127,539 218,581 345,466 (4,748) 99,875 5,225,752
1,483,657 45,973 70,832 181,152 3,263,266 (5,772) 1,388,235 219,617 386,736 (1,839) 116,402 5,694 7,148,259
Contributions:
Participant 153,398 177,566 59,363 297,141 37,501 264,427 98,437 96,822 1,047 7,576 1,193,278
Employer 57,623 58,336 23,587 103,055 13,808 84,989 33,507 29,637 199 1,736 406,477
Rollover 4,888 7,600 17,471 26,583 2,337 8,143 26,346 5,227 98,595
215,909 243,502 100,421 426,779 53,646 357,559 158,290 131,686 1,246 9,312 1,698,350
Total
additions 1,699,566 45,973 314,334 281,573 3,690,045 47,874 1,745,794 377,907 518,422 (593) 125,714 5,694 8,852,609
Deductions:
Deductions
from net
assets
attributed to:
Benefits to
participants (203,200) (171,923)(471,864)(439,415) (27,389) (97,321) (30,841) (34,961) (1,476,914)
Loan distributions (6,639) (6,639)
Other/
forfeitures (11,083) (25,524) (17,056) (27,511) (15,800) (1,036) (3,760) (5,694) (101,770)
Total
deductions (214,283) (6,639) (197,447)(488,920)(466,926) (27,389)(113,121)(31,877) (38,721) (5,694)(1,585,323)
Net Increase
(decrease)
prior
to interfund
transfers 1,485,284 39,334 116,887 (207,347)3,223,119 20,485 1,632,673 346,030 479,701 (593) 125,714 7,261,286
Interfund
transfers (34,101)(32,014) (306,909) 440,433 (227,705)(20,734) (43,058)(22,952) (12,997) 35,472 224,565
Net increase
(decrease) 1,451,182 7,320 (190,022) 233,086 2,995,414 (249)1,589,615 323,078 466,704 34,879 350,279 7,261,286
Beginning
balance 3,153,429 519,634 3,372,521 2,691,166 6,095,519 279,913 1,640,789 965,459 597,051 19,315,481
Ending
balance 4,604,611 526,954 3,182,499 2,924,252 9,090,933 279,664 3,230,404 1,288,537 1,063,755 34,879 350,279$ 26,576,767
The accompanying notes are an integral part of this statement.
The UNITIL Corporation Tax Deferred Savings and Investment Plan
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
For the year ended December 31, 1998
UNITIL
Corporation Putnam Putnam Putnam
Stock Loan Growth & Stable Voyager
Fund Fund Income Value Fund Fund
Assets
Additions to
net assets
attributed to:
Investment
income
Interest - $43,495 - - -
Dividends 164,029 - $300,125 150,048 406,027
Other Receipts 123,298 - - 116,106 49,534
Net appreciation
(depreciation)
in full value
of investmentS 162,559 - 177,037 480 766,564
449,886 43,495 477,162 266,634 1,222,125
Contributions:
Participants 141,055 - 157,677 51,903 290,924
Employers' 53,677 - 52,496 22,401 99,552
Rollovers 19,855 - 32,765 20,973 42,123
214,587 - 242,938 95,277 432,599
Total Additions 644,473 43,495 720,100 361,911 1,654,724
Deductions:
Deductions from
net assets
attributed to:
Benefits to
participants (205,520) - (659,713) (370,191) (257,851)
Loan distributions - (9,413) - - -
Other/forfeitures (124,030) - (376) (125,652) (50,851)
Total deductions (329,550) (9,413) (660,089) (495,843) (308,702)
Net Increase
(decrease) prior
to interfund
transfers 334,923 34,082 60,011 (133,932) 1,346,022
Interfund transfers (143,247) 782 (208,379) 388,778 (43,795)
Net (Decrease)
Increase 191,676 34,864 (148,368) 254,846 1,302,227
Net assets
available for
benefits:
Net assets
available,
beginning of
year 2,961,753 484,770 3,520,889 2,436,320 4,793,292
Net assets
available,
end of year $3,153,429 $519,634 $3,372,521 $2,691,166 $6,095,519
Putnam Putnam
Putnam New Putnam International
Income Opportunity S & P Growth
Fund Fund 500 Fund Total
Assets
Additions to
net assets
attributed to:
Investment
income
Interest - - - - 43,495
Dividends $ 18,425 62,779 - 17,510 1,118,943
Other Receipts - - - - 288,938
Net appreciation
(depreciation)
in fair value
of investments (9,501) 269,944 180,927 69,154 1,617,164
8,924 332,723 180,927 86,664 3,068,540
Contributions:
Participants 37,987 273,985 80,293 101,015 1,134,839
Employers' 13,265 90,451 26,043 29,698 387,583
Rollovers 2,471 23,935 10,427 6,382 158,931
53,723 388,371 116,763 137,095 1,681,353
Total Additions 62,647 721,094 297,690 223,759 4,749,893
Deductions:
Deductions from
net assets
attributed to:
Benefits to
participants (61,606) (170,391) (34,429) (20,644) (1,780,345)
Loan distributions - - - - (9,413)
Other/forfeitures (205) (2,063) (127) (430) (303,734)
Total deductions (61,811) (172,454) (34,556) (21,074) 2,093,492
Net Increase
(decrease) prior
to interfund
transfers 836 548,640 263,134 202,685 2,656,401
Interfund transfers 18,276 (119,775) 153,471 (46,111) -
Net (Decrease)
Increase 19,112 428,865 416,605 156,574 2,656,401
Net assets
available for
benefits:
Net assets
available,
beginning of
year 260,801 1,211,924 548,854 440,477 16,659,080
Net assets
available,
end of year $279,913 $1,640,789 $965,459 $597,051 $19,315,481
The accompanying notes are an integral part of this statement.
The UNITIL Corporation Tax Deferred Savings and Investment Plan
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
For the year ended December 31, 1997
UNITIL
Corporation Putnam Putnam Putnam
Stock Loan Growth & Stable Voyager
Fund Fund Income Value Fund Fund
Additions to
net assets
attributed to:
Investment
income
Interest $ 1,868 $43,301 - - $ 38
Dividends 173,232 - $445,715 151,356 286,001
Other Receipts 286 - 383 13,010 317
Net appreciation
(depreciation)
in fair value
of investments 554,675 - 155,195 - 691,115
730,061 43,301 601,293 164,366 977,471
Contributions:
Participants 148,292 - 135,199 55,201 278,585
Employers' 58,668 - 47,997 25,045 99,119
Rollovers 5,185 - 19,680 3,137 15,692
212,145 - 202,876 83,383 393,396
Total Additions 942,206 43,301 804,169 247,749 1,370,867
Deductions:
Deductions from
net assets
attributed to:
Benefits to
participants (149,037) - (52,101) (31,643) (235,343)
Loan distributions - (24,512) - - -
Other/forfeitures (2,729) - (3,739) (1,124) (4,521)
Total deductions (151,766) (24,512) (55,840) (32,767) (239,864)
Net Increase
(decrease) prior
to interfund
transfers 790,440 18,789 748,329 214,982 1,131,003
Interfund transfers (642,063) 31,463 469,225 (290,054) (170,482)
Net (Decrease)
Increase 148,377 50,252 1,217,554 (75,072) 960,521
Net assets
available for
benefits:
Net assets
available,
beginning of
year 2,813,376 434,518 2,303,335 2,511,392 3,832,771
Net assets
available,
end of year $2,961,753 $484,770 $3,520,889 $2,436,320 $4,793,292
Putnam Putnam
Putnam New Putnam International
Income Opportunity S & P Growth
Fund Fund 500 Fund Total
Additions to
net assets
attributed to:
Investment
income
Interest $ 38 $ 38 $ 38 $ 45,321
Dividends $ 13,037 26,540 - 25,351 1,121,232
Other Receipts - - - - 13,996
Net appreciation
(depreciation)
in fair value
of investments 1,890 145,287 89,239 11,401 1,648,802
14,927 171,865 89,277 36,790 2,829,351
Contributions:
Participants 35,496 278,956 62,139 82,843 1,076,711
Employers' 13,011 92,962 22,691 27,127 386,620
Rollovers 2,171 12,197 5,006 3,698 66,766
50,678 384,115 89,836 113,668 1,530,097
Total Additions 65,605 555,980 179,113 150,458 4,359,448
Deductions:
Deductions from
net assets
attributed to:
Benefits to
participants (6,430) (24,726) (1,784) (5,436) (506,500)
Loan distributions - - - - (24,512)
Other/forfeitures (36) (931) (282) (189) (13,551)
Total deductions (6,466) (25,657) (2,066) (5,625) (544,563)
Net Increase
(decrease) prior
to interfund
transfers 59,139 530,323 177,047 144,833 3,814,885
Interfund transfers 49,390 170,643 214,922 166,956 -
Net (Decrease)
Increase 108,529 700,966 391,969 311,789 3,814,885
Net assets
available for
benefits:
Net assets
available,
beginning of
year 152,272 510,958 156,885 128,688 12,844,195
Net assets
available,
end of year $260,801 $1,211,924 $548,854 $440,477 $16,659,080
The accompanying notes are an integral part of this statement.
The UNITIL Corporation Tax Deferred Savings and Investment Plan
NOTES TO FINANCIAL STATEMENTS
December 31, 1999, 1998 and 1997
NOTE A - DESCRIPTION OF PLAN
The following description of The UNITIL Corporation and subsidiaries (the
"Company") Tax Deferred Savings and Investment Plan (the "Plan") provides
only general information. Participants should refer to the Plan
agreement for a more complete description of the Plan's provisions.
General
The Plan is a defined contribution plan covering substantially all full-
time employees of the Company and its wholly owned subsidiaries UNITIL
Service Corporation, Concord Electric Company, Exeter and Hampton
Electric Company and Fitchburg Gas and Electric Light Company (the
"subsidiaries"), who satisfy the eligibility requirements. It is
subject to the provisions of the Employee Retirement Income Security
Act of 1974 ("ERISA").
During 1998, the Plan Administrator directed the transfer of all Plan
assets from the Fleet Boston to Putnam Investments ("Putnam"). The
transfer was made as a result of a change in custodianship of the
assets.
Contributions
A member may authorize a Basic Employee Contribution from 1% to 15%
with a maximum contribution not to exceed $10,000 for 1999.
The Employer shall contribute as of December 31, of each plan year from
current or accumulated net profits on behalf of each member
participating in the Plan on December 31, of each plan year, an amount
equal to 100% of the first 3% of salary the employee puts into the plan
(except Fitchburg Gas and Electric Light Company Union Employees whose
matching is as follows: first year 1%, second year 2%, third year and
after 3%).
Participant Accounts
Each participant's account is credited with the participant's
contribution and allocations of (a) the Company's contribution and, (b)
Plan earnings, and charged (as applicable) with an allocation of
administrative expenses. Allocations are based on participant earnings
or account balances, as defined. The benefit to which a participant is
entitled is the benefit that can be provided from the participant's
vested account. The Plan administrator will pay for substantially all
expenses of the Plan.
The UNITIL Corporation Tax Deferred Savings and Investment Plan
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1999, 1998 and 1997
NOTE A - DESCRIPTION OF PLAN - Continued
Vesting
Participants are immediately vested in their contributions plus actual
earnings thereon. Vesting in the Company's matching and discretionary
contribution portion of their accounts plus actual earnings thereon is
based on years of continuous service. A participant is 100 percent
vested after three years of credited service. If a participant
terminates employment for any reason other than disability or
retirement, he will be entitled to the full amount of contributions he
has deposited, plus a percentage of his account balance derived from
employer contributions based upon the following schedule:
Year of Service % Vested
0-1 0%
1-2 33%
2-3 67%
3+ 100%
A member will become 100% vested in his account as a result of
disability, death or retirement.
Participant Loans Receivable
Participants may borrow from their fund accounts a minimum of $1,000 up
to a maximum equal to the lesser of $50,000 or 50% of their account
balance. Net loan transactions are treated as a transfer to (from) the
Investment Fund from (to) the Participant Loan Fund. Loan terms range
from 1-5 years or up to 25 years for the purchase of primary residence.
The loans are secured by the balance in the participant's account and
bear interest at a rate of prime plus one percent (1%). Principal and
interest is paid ratably through monthly payroll deductions.
Payment of Benefits
On termination of service due to death, disability or retirement, a
participant may elect to receive either a lump-sum amount equal to the
value of the participant's vested interest in his or her account, or
annual installments over a fixed number of calendar quarters or years.
Forfeitures
A member who terminates his employment prior to becoming eligible for
benefits and does not have a 100% vested right to Company
contributions, forfeits the amounts not vested. Such forfeited amounts
are used to reduce future Company contributions.
The UNITIL Corporation Tax Deferred Savings and Investment Plan
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1999, 1998 and 1997
NOTE A - DESCRIPTION OF PLAN - Continued
Upon enrollment and reenrollment, each participant shall direct that his
contributions are to be invested in accordance with any of the following
investment options.
UNITIL Corporation Common Stock Fund (UNITIL Corporation, no par value
common stock).
Putnam S & P 500: This fund invests primarily in publicly traded common
stocks, to achieve a return that closely approximates the return of the
Standard & Poors 500- composite stock price index.
Putnam Stable Value Fund: This fund invests in high-quality guaranteed
investment contracts (GIC's) issued by insurance companies and banks
with the objective to achieve a high current income.
Putnam Income Fund: This fund invests in debt securities, including
both government and corporate obligations, preferred stocks and dividend
- paying common stocks.
Putnam Fund for Growth and Income: This fund seeks capital growth and
current income by investing primarily in common stocks that offer
potential for capital growth and current income.
Putnam New Opportunities Fund: This fund seeks long-term capital
appreciation through the investment in common stocks with the potential
of above-average long-term growth.
Putnam Voyager Fund: This fund seeks capital appreciation for investors
willing to assume above-average risk in return for above-average capital
growth potential.
Putnam International Growth Fund: This fund seeks capital appreciation
by investing primarily in equity securities of companies located in a
country other than the United States.
George Putnam Fund of Boston: This fund seeks to provide a balanced
investment comprised of a well-diversified portfolio of stocks and bonds
that will produce both capital growth and current income.
Putnam International Voyager Fund: This fund seeks long-term capital
appreciation by investing primarily in smaller company stocks in a
variety of countries outside the United States.
Participants may change their investment options daily.
The UNITIL Corporation Tax Deferred Savings and Investment Plan
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1999, 1998 and 1997
NOTE A - DESCRIPTION OF PLAN - Continued
The number of participants in each fund at December 31 was as follows:
1999 1998
Unitil Corporation Stock Fund 179 245
Putnam Growth & Income Fund 262 262
Putnam Stable Value Fund 179 177
Putnam Voyager Fund 329 305
Putnam Income Fund 104 102
Putnam New Opportunities Fund 250 234
Putnam S&P 500 Fund 146 127
Putnam International Growth Fund 147 133
George Putnam Fund of Boston 7 N/A
Putnam International Voyager Fund 29 N/A
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Effective Date
The Plan's effective date is July 1, 1987, as amended effective May 8,
1992 and January 1, 1994. The Plan as amended effective May 8, 1992,
provided for the merger of the Fitchburg Gas and Electric Tax Deferred
Savings and Investment Plan with The Plan. The Plan as amended
effective January 1, 1994, provided for the merger of the Fitchburg Gas
and Electric Light Company Union Tax Deferred Savings and Investment
Plan into the Plan.
Basis of Accounting
The financial statements of the Plan are prepared under the accrual
method of accounting.
The UNITIL Corporation Tax Deferred Savings and Investment Plan
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1999, 1998 and 1997
NOTE B - SUMMARY OF ACCOUNTING POLICIES - Continued
Management Estimates
In preparing the financial statements in conformity to generally
accepted accounting principles, management is required to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent assets and liabilities at
the date of the financial statements and revenues and expenses during
the reporting period. Actual results could differ from those estimates.
Investment Valuation and Income Recognition
The Plan is administered by a trustee. The Plan's investments
(including investments bought, sold and held during the year) are
carried at current fair value. The difference between current fair
value and the cost of investments are included in net appreciation or
(depreciation) in fair value of investments.
Purchases and sales of securities are recorded on a trade-date basis.
Interest income is recorded on the accrual basis. Dividends are
recorded on the ex-dividend date.
Payment of Benefits
Benefits are recorded when paid.
Eligibility
Employees are eligible for membership on either January 1 or July 1
coincident with or the next day following on which they have both:
(1)Attained the age of 18, and
(2)Completed 1000 hours of credited service
Normal Retirement Date
A participant's normal retirement benefit date is the date he/she
reaches his/her 65th birthday or, if later, the 10th anniversary of the
date he/she becomes a participant.
The UNITIL Corporation Tax Deferred Savings and Investment Plan
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1999, 1998 and 1997
NOTE C - PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the
right under the Plan to terminate the Plan at any time subject to the
provision of ERISA with respect to its employees by a written resolution
with a copy delivered to the trustee. In the event of a Plan
termination, participants will become fully vested in their accounts.
NOTE D - DETERMINATION LETTER
The Internal Revenue Service has determined and informed the Company by a
letter dated May 9, 1995, that the Plan and related trust are designed in
accordance with applicable sections of the Internal Revenue Code (IRC).
The Plan was amended in July 1998 and the Company believes that this
amendment will not affect the status of the Plan with the IRC.
Consent of Independent Certified Public Accountants
We have issued our report dated June 9, 2000,
accompanying the financial statements of The UNITIL
Corporation Tax Deferred Savings and Investment Plan
contained in the information required by Form 11-K filed as
an exhibit to the UNITIL Corporation Annual Report on Form
10-K for the year ended December 31, 1999. We herby consent
to the incorporation by reference of said report in the
Registration Statement of The UNITIL Corporation Tax
Deferred Savings and Investment Plan on Form S-8 (File No.
33-24436).
GRANT THORNTON LLP
Boston, Massachusetts
June 9, 2000
