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FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended March 31, 1995
Commission File Number 1-8858
UNITIL Corporation
(Exact name of registrant as specified in its charter)
New Hampshire 02-0381573
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
216 Epping Road, Exeter, New Hampshire 03833
(Address of principal executive office) (Zip Code)
(603) 772-0775
(Registrant's telephone number, including area code)
NONE
(Former name, former address and former fiscal year, if changed
since last report.)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for
the past 90 days.
Yes X No
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Class Outstanding at May 8, 1995
Common Stock, No par value 4,284,866 Shares
UNITIL CORPORATION AND SUBSIDIARY COMPANIES
INDEX
Part I. Financial Information Page No.
Consolidated Statements of Earnings - Three
Months Ended March 31, 1995 and 1994 3
Consolidated Balance Sheets, March 31, 1995,
March 31, 1994 and December 31, 1994 4-5
Consolidated Statements of Cash Flows - Three Months
Ended March 31, 1995 and 1994 6
Notes to Consolidated Financial Statements 7-8
Management's Discussion and Analysis of Results of
Operations and Financial Condition 9-10
Exhibit 11 - Computation of Earnings per Average
Common Share Outstanding 11
Part II. Other Information 12
PART 1. FINANCIAL INFORMATION
UNITIL CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED)
Three Months Ended
March 31,
1995 1994
Operating Revenues:
Electric $34,630,716 $35,422,153
Gas 6,182,175 7,716,382
Other 219,636 113,299
Total Operating Revenues 41,032,527 43,251,834
Operating Expenses:
Fuel and Purchased Power 21,366,538 22,187,617
Gas Purchased for Resale 3,458,550 4,415,821
Operating and Maintenance Expense 7,217,447 7,227,948
Depreciation 1,570,675 1,546,691
Amort. of Cost of Abandoned Properties 420,719 422,321
Provisions for Taxes:
Local Property and Other 1,194,442 1,183,594
Federal and State Income 1,463,536 1,688,503
Total Operating Expenses 36,691,907 38,672,495
Operating Income 4,340,620 4,579,339
Non-Operating Income (Expense) (57,724) 11,783
Gross Income 4,282,896 4,591,122
Interest and Other Expenses:
Interest on Long-Term Debt 1,333,808 1,172,060
Other Interest Charges 230,221 249,214
Total Income Deductions 1,564,029 1,421,274
---------- ----------
Net Income 2,718,867 3,169,848
---------- ----------
Less Dividends on Preferred Stock 71,301 74,218
---------- ----------
Net Income Applicable to Common Stock $2,647,566 $3,095,630
---------- ----------
Average Common Shares Outstanding 4,274,626 4,211,801
Earnings Per Share of Common Stock $0.62 $0.73
Dividends Declared per Share
of Common Stock (Note 1) $0.66 $0.62
(The accompanying notes are an integral part of these statements.)
UNITIL CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
March 31, December 31,
1995 1994 1994
ASSETS:
Utility Plant (at cost):
Electric $143,467,360 $137,121,546 $142,311,415
Gas 25,894,103 24,359,258 25,652,522
Common 6,951,814 9,706,501 9,783,183
Construction Work in 1,452,591 1,563,637 1,029,681
Progress
Total Utility Plant 177,765,868 172,750,942 178,776,801
Less: Accumulated Depr. 57,509,133 54,845,686 57,203,799
Net Utility Plant 120,256,735 117,905,256 121,573,002
Non-operating Property (at 32,605 120,355 120,355
cost)
Miscellaneous (at cost) 9,843 17,478 17,343
Current Assets:
Cash 6,345,082 2,457,258 3,810,123
Accounts Receivable - less
allowance for doubtful
acounts of $568,626
$618,008 and $573,849 14,492,916 16,881,818 13,281,686
Materials and Supplies 1,529,955 1,783,658 2,089,979
Prepayments 688,645 751,498 408,701
Accrued Revenue 655,514 1,775,102 2,292,297
Total Current Assets 23,712,112 23,649,334 21,882,786
Deferred Debits:
Unamortized Debt Expense
(amortized)
over term of securities) 926,128 704,671 955,931
Unamortized Cost of Aband. 28,352,120 29,956,157 28,772,838
Property
Prepaid Pension Costs 5,971,880 5,180,911 5,801,714
Other 25,511,424 25,603,608 25,397,492
Total Deferred Debits 60,761,552 61,445,347 60,927,975
TOTAL ASSETS $204,772,847 $203,137,770 $204,521,461
(The accompanying notes are an integral part of these statements.)
UNITIL CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
March 31, December 31,
1995 1994 1994
CAPITALIZATION AND
LIABILITIES:
Capitalization:
Common Stock Equity (Notes 1
and 2):
Common Stock, No Par
Value, 8,000,000 Shares
Authorized,4,283,482,
4,219,326 and 4,267,837
Shares Outstanding $32,011,689 $30,903,148 $31,751,984
Paid in Capital - Stock 1,157,807 999,889 1,062,198
Options
Retained Earnings 27,092,529 25,162,903 27,183,016
Total Common Equity 60,262,025 57,065,940 59,997,198
Preferred Stock:
Non-Redeemable, 225,000 225,000 225,000
Non-Cumulative,
Redeemable, Cumulative, 3,809,600 3,972,700 3,868,600
Total Preferred Stock 4,034,600 4,197,700 4,093,600
(Note 3)
Long-Term Debt (Note 4) 63,466,000 55,567,750 65,288,231
Total Capitalization 127,762,625 116,831,390 129,379,029
Capital Lease Obligations 3,381,675 3,633,901 3,377,389
Current Liabilities:
Long-Term Debt Due Within 144,000 1,771,331 292,090
One Year
Notes Payable 0 7,000,000 0
Accounts Payable 11,398,398 12,778,639 12,491,041
Dividends Declared 1,525,877 1,444,786 152,210
Customer Deposits 2,917,450 1,744,204 2,482,779
Taxes Accrued 1,193,442 1,828,359 (345,243)
Interest Accrued 1,428,365 1,039,847 1,376,477
Capitalized Lease 525,989 404,937 460,152
Obligations
Other 2,201,055 1,728,049 2,546,878
Total Current 21,334,576 29,740,152 19,456,384
Liabilities
Deferred Credits:
Unamortized Investment Tax 1,955,581 2,164,178 2,006,168
Credit
Other 9,258,089 9,598,340 9,212,872
Total Deferred Credits 11,213,670 11,762,518 11,219,040
Deferred Income Taxes 41,080,301 41,169,809 41,089,619
TOTAL LIABILITIES AND 204,772,847 203,137,770 204,521,461
CAPITALIZATION
(The accompanying notes are an integral part of these statements.)
UNITIL CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
March 31,
1995 1994
Net Cash Flow from Operating Activities:
Net Income $2,718,867 $3,169,848
Adjustments to Reconcile Net Income to
Net Cash provided by Operating
Activities:
Depreciation and Amortization 1,991,394 1,969,012
Deferred Taxes 48,205 (50,496)
Amortization of Investment Tax (50,587) (52,667)
Credit
Provision for Doubtful Accounts 185,217 188,468
Amortization of Debt Expense 29,802 16,149
Change in Assets and Liabilities
(Increase) Decrease in:
Accounts Receivable (1,396,447) (3,352,415)
Materials and Supplies 560,025 743,806
Prepayments (279,944) (262,994)
Prepaid Pension (170,166) (163,790)
Accrued Revenue 1,636,783 1,871,387
Increase (Decrease) in:
Accounts Payable (1,092,643) (661,647)
Customers' Deposits and Refunds 434,671 5,750
Taxes Accrued 1,538,685 1,561,178
Interest Accrued 51,888 (120,906)
Other (233,428) 5,611
Net Cash Provided by Operating Activities 5,972,322 4,866,294
Net Cash Flows from Investing
Activities:
Acqusition of Property, Plant and (2,304,238) (1,406,810)
Equip.
Proceeds from Taking of Land & 2,002,056 0
Building
Net Cash Used in Investing Activities (302,182) (1,406,810)
Cash Flows from Financing Activities:
Net (Decrease) in Short-term Debt 0 (1,400,000)
Net (Decrease) in Long-term Debt (1,970,322) (39,013)
Payments of Dividends (1,435,686) (1,373,469)
Issuance of Common Stock 259,705 260,140
Retirement of Preferred Stock (59,000) 0
Net Increase/(Decrease) in Capital 70,122 (155,670)
Leases
Net Cash Flows from Financing Activities (3,135,181) (2,708,012)
Net Increase in Cash 2,534,959 751,472
Cash at beginning of year 3,810,123 1,705,786
Cash at March 31, $6,345,082 $2,457,258
Supplemental Disclosure of Cash Flow
Information:
Cash Paid for:
Interest $1,482,339 $1,526,031
Federal Income Taxes $0 $326,000
(The accompanying notes are an integral part of these statements.)
UNITIL CORPORATION AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Note 1.
Dividends Declared Per Share:
Two regular quarterly common stock dividends were declared
during the first quarter of 1995 and 1994.
Common Stock Dividend:
On March 23, 1995, the Company's Board of Directors declared its
regular quarterly dividend on the Company's Common Stock of $0.32 per
share which is payable on May 15, 1995 to shareholders of record as
of May 1, 1995.
On January 17, 1995, the Company's Board of Directors approved a
3.2% increase to the dividend rate on its common stock. The new
regular dividend rate is $0.32 per share and was payable February 15,
1995 to shareholders of record as of February 1, 1995.
Note 2.
Common Stock:
During the first quarter of 1995, the Company sold 15,645 shares
of Common Stock, at an average price of $16.625 per share, in
connection with its Dividend Reinvestment and Stock Purchase Plan and
its 401(k) plans. Net proceeds of $259,705 were used to reduce
short-term borrowings.
Note 3.
Preferred Stock:
Details on preferred stock at March 31, 1995, March 31, 1994 and
December 31, 1994 are shown below:
March 31, December 31,
1995 1994 1994
Preferred Stock:
Non-Redeemable,
Non-Cumulative,
6%, $100 Par Value 225,000 225,000 225,000
Redeemable, Cumulative,
$100 Par Value:
8.70% Series 215,000 230,000 230,000
5% Dividend Series 98,000 105,000 105,000
6% Dividend Series 168,000 175,000 175,000
8.75% Dividend Series 344,300 344,300 344,300
8.25% Dividend Series 406,000 436,000 436,000
5.125% Dividend Series 1,108,100 1,150,100 1,108,100
8% Dividend Series 1,470,200 1,532,300 1,470,200
Total Redeemable 3,809,600 3,972,700 3,868,600
Preferred Stock
Total Preferred 4,034,600 4,197,700 4,093,600
Stock
Note 4.
Long-term Debt:
Details on long-term debt at March 31, 1995, March 31, 1994 and
December 31, 1994 are shown below:
March 31, December 31,
1995 1994 1994
Concord Electric Company:
First Mortgage Bonds:
Series C, 6 3/4%, due 1,584,000 1,584,000 1,584,000
January 15, 1998
Series D, 8.70%, due --- 930,000 ---
November 15, 2001
Series G, 9.85%, due --- 1,500,000 ---
October 15, 1997
Series H, 9.43%, due 6,500,000 6,500,000 6,500,000
September 1, 2003
Series I, 8.49%, due 6,000,000 --- 6,000,000
October 14, 2024
Exeter & Hampton Electric
Company:
First Mortgage Bonds:
Series D, 4 3/4%, due June --- 547,500 ---
1, 1994
Series E, 6 3/4%, due 511,000 518,000 518,000
January 15, 1998
Series F, 8.70%, due --- 1,235,000 ---
November 15, 2001
Series G, 8 7/8%, due April --- 940,000 ---
1, 2004
Series H, 8.50%, due 1,015,000 1,120,000 1,015,000
December 15, 2002
Series I, 9.85%, due --- 1,400,000 ---
October 15, 1997
Series J, 9.43%, due 5,000,000 5,000,000 5,000,000
September 1, 2003
Series K, 8.49%, due 9,000,000 --- 9,000,000
October 14, 2024
Fitchburg Gas and Electric
Light Company:
Promissory Notes:
8.55% Notes due March 31, 15,000,000 15,000,000 15,000,000
2004
6.75% Notes due November 19,000,000 19,000,000 19,000,000
30, 2023
Realty Corp.:
Promissory Note:
10.59% Note due October 25, --- 2,064,581 1,963,321
1998
Total 63,610,000 57,339,081 65,580,321
Less: Installments due 2,083,712 1,771,331 292,090
within one year
Total Long-term Debt 61,526,288 55,567,750 65,288,231
Note 5.
In the opinion of the Company, the accompanying unaudited
consolidated financial statements contain all adjustments (consisting
only of normal recurring accruals) necessary to present fairly the
consolidated financial position as of March 31, 1995 and 1994; and
results of operations for the three months ended March 31, 1995 and
1994; and consolidated statements of cash flows for the three months
ended March 31, 1995 and 1994.
The results of operations for the three months ended March 31,
1995 and 1994 are not necessarily indicative of the results to be
expected for the full year.
UNITIL CORPORATION AND SUBSIDIARY COMPANIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL CONDITION
EARNINGS
Earnings per average common share outstanding were $0.62 for the
three-months ended March 31, 1995, as compared to $0.73 per average
common share outstanding for the three-months ended March 31, 1994.
This decrease of $0.11 per share was primarily due to lower electric
and gas base revenues and higher interest-related costs. A reduction
in the System's operating costs and growing energy consulting revenue
contributed positively to the first quarter earnings performance and
partially offset this decrease.
Over two-thirds of the decrease in earnings during the first
quarter of 1995 was attributable to lower electric and gas base
revenues in an extremely mild heating season. The weather in this
quarter, as measured by heating degree days, was 16% warmer than the
same period in 1994. As a result, gas firm therm sales, which are
impacted most by the weather, decreased 14.8% in the first quarter of
1995 to 9,719,744 therms from 11,408,888 therms in the first quarter
of 1994.
Electric KWH sales to residential and commercial customers were
also adversly impacted by the mild weather in the first quarter of
1995. Sales to the residential sector declined by approximately 7.0%
in the first quarter of 1995, to 142,642,426 KWH from 153,348,444 KWH
in the year earlier period. Electric sales to commercial customers
declined a more modest 2.4% in the first quarter of 1995, to
87,042,181 KWH from 89,175,920 in the first quarter of 1994.
Offsetting a portion of these decreases were increases in industrial
KWH and KW sales. Not as sensitive to the weather, these sales
increased more than 4.2% and 4.5%, respectively, as the System's
operating companies experienced relatively strong growth in this
sector. Electric KWH sales to industrial customers increased to
105,424,064 KWH in the first quarter of 1995 from 100,714,830 KWH in the
first quarter of 1994.
The UNITIL System's operating costs decreased over 5.6% in the
first quarter of 1995, partially offsetting the impact of mild
weather on overall energy sales. The cost reduction was primarily
derived from lower gas maintenance costs and a reduction in the cost
of benefits and insurance. In addition, UNITIL Resources, the
Company's non-utility subsidiary, continued to provide new sources of
earnings, as energy consulting revenues increased in the first
quarter of 1995, as compared to the prior year period.
Interest-related expenses increased approximately 13.8% in the
first quarter of 1995, primarily reflecting the conversion of
short-term debt into long-term, completed in late 1994 by the
Company's two New Hampshire retail distribution subsidiaries.
CAPITAL REQUIREMENTS
Capital expenditures for the three months ended March 31, 1995
were approximately $2,300,000. This compares to $1,500,000 during
the same period last year. Capital expenditures for the year 1995
are estimated to be approximately $15,400,000 as compared to
$9,800,000 for 1994. The projected increase of $5,600,000 primarily
reflects additional capital expenditures of approximately $3,200,000
for the commencement of construction of a new corporate headquarters,
as well as an increase of approximately $2,400,000 for planned
utility system expansions, replacements and other improvements.
EMINENT DOMAIN PROCEDURE
In late 1993, UNITIL Realty, the Company's wholly-owned real
estate subsidiary, first received written notice that the State of
New Hampshire intended to acquire the Company's corporate
headquarters and related land (the "Property") by purchase or
condemnation in connection with the State of New Hampshire's Route
101 highway expansion project. On February 2, 1995, UNITIL Realty
received a formal Notice of Offer from the State for the
purchase of the Property for $2,000,000. The Company did not accept
the State's offer based on the results of an independant appraisal
conducted for the Company which valued the property significantly in
excess of the State's offer.
As prescribed by statue, the State initiated an eminent domain
procedure by filing a declaration of taking with the New Hampshire
Board of Tax and Land Appeals (the Board) on February 13, 1995, and
depositing with the Board the offer price of $2,000,000. UNITIL
Realty withdrew these funds from the Board during the first quarter
of 1995, without prejudice as to the Appeal process, and on March 17,
1995 the funds were used towards the payment in full of all principal
and interest due on the note secured by the mortgage on the Property.
The financial results for the first quarter of 1995 reflect fully the
impact of the taking of the building and the repayment of the
outstanding loan on the Property.
PART I. EXHIBIT 11.
UNITIL CORPORATION AND SUBSIDIARY COMPANIES
COMPUTATION OF EARNINGS PER AVERAGE COMMON SHARE OUTSTANDING
(UNAUDITED)
Three Months Ended
PRIMARY March 31,
1995 1994
Net Income $2,718,867 $3,169,848
Less: Dividend Requirement
on Preferred Stock 71,301 74,218
Net Income Applicable
to Common Stock 2,647,566 3,095,630
Average Number of Common
Shares Outstanding 4,274,626 4,211,801
Earnings Per Common Share $0.62 $0.73
Three Months Ended
FULLY-DILUTED March 31,
1995 1994
Net Income $2,718,867 $3,169,848
Less: Dividend Requirement
on Preferred Stock 71,301 74,218
Net Income Applicable
to Common Stock 2,647,566 3,095,630
Average Number of Common
Shares Outstanding 4,343,520 4,283,014
Earnings Per Common Share $0.61 $0.72
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
Exhibit No. Description of Exhibit Reference
11 Computation in Support of
Earnings Per Average Common Share Filed herewith
(b) Reports on Form 8-K
During the quarter ended March 31, 1995, the Company did not
file any reports on Form 8-K.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
UNITIL CORPORATION
(Registrant)
Date: May 12, 1995 _/s/ Gail A. Siart
Gail A. Siart, Treasurer
(Gail A. Siart is the Principal Financial Officer and
has been duly authorized to sign on behalf of the registrant.)