11-K 1 annualpensonfiling.txt ANNUALREPORTONPENSIONPLAN GREEN MOUNTAIN POWER CORPORATION EMPLOYEE SAVINGS AND INVESTMENT PLAN AND TRUST Financial Statements and Schedules December 31, 2001, 2000 and 1999 (With Independent Auditors' Report Thereon) GREEN MOUNTAIN POWER CORPORATION EMPLOYEE SAVINGS AND INVESTMENT PLAN AND TRUST TABLE OF CONTENTS PAGE Independent Auditors' Report 1 Financial Statements: Statements of Net Assets Available for Plan Benefits 2 Statements of Changes in Net Assets Available for Plan Benefits 3 Notes to Financial Statements 4 Supplementary Schedules: SCHEDULE 1 Schedule H, Line 4i - Assets Held at Year End 10 2 Schedule H, Line 4j - Reportable Transactions 11 3 Schedule G, Part III - Nonexempt Transactions 12 INDEPENDENT AUDITORS' REPORT The Retirement Board Green Mountain Power Corporation Employee Savings and Investment Plan and Trust: We have audited the accompanying statements of net assets available for plan benefits of Green Mountain Power Corporation Employee Savings and Investment Plan and Trust (the Plan) as of December 31, 2001 and 2000, and the related statements of changes in net assets available for plan benefits for each of the years in the three year period ended December 31, 2001. 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 auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits 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 that 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 plan benefits of the Plan as of December 31, 2001 and 2000, and the changes in net assets available for plan benefits for each of the years in the three year period ended December 31, 2001, in conformity with accounting principles generally accepted in the United States of America. Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplementary schedules of assets held at year end, reportable transactions and nonexempt transactions are presented for purposes of additional analysis and are not a required part of the basic financial statements but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. Such information has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. June 17, 2002 Burlington, Vermont KPMG,LLP Vt. Reg. No. 92-0000241
GREEN MOUNTAIN POWER CORPORATION Employee Savings and Investment Plan and Trust Statements of Net Assets Available for Plan Benefits December 31, 2001 and 2000 2001 2000 ----------- ----------- Assets: Investments at fair value: Green Mountain Power Corporation, common stock, cost $2,341,258 and $2,138,400, respectively . . . . $ 3,301,978 $ 2,191,258 Registered investment companies, cost $18,608,015 and $18,810,915, respectively. . . . . . 17,866,507 19,662,313 ----------- ----------- 21,168,485 21,853,571 Investments at cost, which approximates fair value: Participants' loans. . . . . . . . . . . . . . . . . 608,170 585,824 ----------- ----------- Total investments. . . . . . . . . . . . . . . . . . 21,776,655 22,439,395 ----------- ----------- Net assets available for Plan benefits . . . . . . . $21,776,655 $22,439,395 =========== ===========
See accompanying notes to financial statements.
GREEN MOUNTAIN POWER CORPORATION Employee Savings and Investment Plan and Trust Statements of Changes in Net Assets Available for Plan Benefits Years ended December 31, 2001, 2000 and 1999 2001 2000 1999 ------------ ------------ ----------- Investment income (loss): Interest . . . . . . . . . . . . . . . . . . $ 39,881 $ 24,918 $ 204,251 Dividends. . . . . . . . . . . . . . . . . . 495,128 1,548,294 889,448 Net appreciation (depreciation) in fair value of investments . . . . . . . . . . . . (747,774) (1,506,097) 3,303,029 ------------ ------------ ----------- (212,765) 67,115 4,396,728 ------------ ------------ ----------- Contributions: Employer . . . . . . . . . . . . . . . . . . 361,102 390,913 420,901 Participant. . . . . . . . . . . . . . . . . 1,022,150 980,369 1,116,295 ------------ ------------ ----------- 1,383,252 1,371,282 1,537,196 ------------ ------------ ----------- Net additions. . . . . . . . . . . . . . . . 1,170,487 1,438,397 5,933,924 ------------ ------------ ----------- Administrative expenses. . . . . . . . . . . 33,784 27,436 37,260 Participants' withdrawals and distributions. 1,799,443 1,839,662 5,387,658 ------------ ------------ ----------- Total deductions . . . . . . . . . . . . . . 1,833,227 1,867,098 5,424,918 ------------ ------------ ----------- Net increase (decrease). . . . . . . . . . . (662,740) (428,701) 509,006 Net assets available for Plan benefits: Beginning of year. . . . . . . . . . . . . . 22,439,395 22,868,096 22,359,090 ------------ ------------ ----------- End of year. . . . . . . . . . . . . . . . . $21,776,655 $22,439,395 $22,868,096 ============ ============ ===========
See accompanying notes to financial statements. GREEN MOUNTAIN POWER CORPORATION EMPLOYEE SAVINGS AND INVESTMENT PLAN AND TRUST Notes to Financial Statements December 31, 2001, 2000 and 1999 (1) PLAN DESCRIPTION The following description of the Green Mountain Power Corporation Employee Savings and Investment Plan and Trust (the Plan) is provided for general information only. Participants should refer to the Plan document for a more complete description of the Plan's provisions. (A) GENERAL The Plan is a defined contribution plan established by Green Mountain Power Corporation. The Plan covers substantially all full-time employees of Green Mountain Power Corporation (the Company). The Company's Retirement Board is the Plan Administrator with the authority to control and manage the operation and administration of the Plan. The Plan's assets are held by the Trustee of the Plan, which invests cash received, including interest and dividend income, and makes distributions to participants. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). (B) CONTRIBUTIONS Each year, participants may contribute up to 15% of pretax annual compensation, as defined by the Plan. The Company contributed $.50 for every $1.00 contributed by the participant on the first 6% of the participant's eligible compensation until January 31, 1999, when the Company began contributing 100% of the first 4% of contributions made by the participants. (C) PARTICIPANT ACCOUNTS Each participant's account is credited with the participant's contributions, allocations of the Company's contributions, and plan earnings, and charged with participant's withdrawals, distributions and 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, net of applicable Federal tax. (D) VESTING Participants are immediately vested in their voluntary contributions as well as the employers' contribution and any earnings thereon. GREEN MOUNTAIN POWER CORPORATION EMPLOYEE SAVINGS AND INVESTMENT PLAN AND TRUST Notes to Financial Statements December 31, 2001, 2000 and 1999 (E) INVESTMENT OPTIONS Upon enrollment participants may direct their contributions to any of the following investment options in 1% increments: Intermediate Term Treasury Fund - This fund is invested in U.S. Treasury bills, -------------------------------- notes and bonds. Value Fund - A conservative equity fund seeking long-term capital growth. ----------- Income is a secondary objective. ----- International Discovery Fund - Emerging growth fund seeking long-term growth ------------------------------ primarily through a diversified international portfolio of equity investments. --- Strategic Allocation Funds: Conservative/Moderate/Aggressive - Asset allocation ------------------------------------------------------------- funds that invest in stocks, bonds and money market securities. This diversification of these investments depends on the objective; whether it is conservative, moderate or aggressive. Premium Capital Reserve Fund - This fund is invested in high quality U.S. dollar ---------------------------- denominated money market instruments and other short-term obligations of banks, governments and corporations. Charles Schwab Fund - With a minimum amount of $1,000 an individual can purchase ------------------- investments that are offered through Schwab. These investments include mutual funds, over-the-counter stocks, certificates of deposits, money markets, and federally backed investments and bonds. A participant may not reallocate more than 50% of their total balance to this investment group. Baron Asset Fund - A small mid-cap growth fund seeking capital appreciation. Investments are primarily in small and mid-cap companies with market values -- between $100 million and $5 billion. -- U.S. Small Company Fund - A fund that invests in small U.S. companies seeking to ----------------------- outperform the Russell 2000 index. Investment strategies include spreading risk among many different industries so performance is less dependent on one particular industry. International Growth Fund - A fund seeking capital growth through equity --------------------------- securities of small foreign companies. The high return potential corresponds ------- with high price fluctuation. -- Equity Index Fund - This fund seeks to match investment results with the ------------------- Standard & Poor's 500 Composite Stock Index. Stock mixes are weighted as ------- similar to the S&P 500 Index as possible. ------ GREEN MOUNTAIN POWER CORPORATION EMPLOYEE SAVINGS AND INVESTMENT PLAN AND TRUST Notes to Financial Statements December 31, 2001, 2000 and 1999 GMP Stock Fund - This fund is invested in Green Mountain Power Corporation ---------------- common stock, a participating employer. ----- Participants may change their investment options daily. During 1999 the Vista Fund and the Barclay's Equity Index Fund were removed and the Baron Asset Fund, U.S. Small Company Fund, International Growth Fund and Equity Index Fund were added as investment options. The following number of employees were participating in each investment fund at December 31, 2001 and 2000:
2001 2000 ---- ---- Baron Asset Fund . . . . . . . . . . . 136 135 U.S. Small Company Fund. . . . . . . . 50 40 GMP Stock Fund . . . . . . . . . . . . 300 285 Intermediate Term Treasury Fund. . . . 62 4 Value Fund . . . . . . . . . . . . . . 129 112 International Discovery Fund . . . . . 155 161 Strategic Allocation Conservative Fund 49 47 Strategic Allocation Moderate Fund . . 138 137 Strategic Allocation Aggressive Fund . 145 144 Premium Capital Reserve Fund . . . . . 71 71 Charles Schwab Fund. . . . . . . . . . 3 3 Equity Index Fund. . . . . . . . . . . 156 162 International Growth Fund. . . . . . . 46 48
(F) PARTICIPANTS' LOANS 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. 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 30 years for the purchase of a principal residence. The loans are secured by the balance in the participant's account and bear interest at the Trustee's prime rate. Principal and interest is paid ratably through monthly payroll deductions. (G) PAYMENT OF BENEFITS On termination of service due to death, disability or retirement, a participant may elect to receive either a lump-sum amount or to purchase an annuity equal to the value of the participant's vested interest in his or her account. For termination of service due to other reasons, a participant may receive the value of the vested interest in his or her account as a lump-sum distribution. GREEN MOUNTAIN POWER CORPORATION EMPLOYEE SAVINGS AND INVESTMENT PLAN AND TRUST Notes to Financial Statements December 31, 2001, 2000 and 1999 (2) SUMMARY OF ACCOUNTING POLICIES (A) BASIS OF ACCOUNTING The financial statements of the Plan are prepared under the accrual method of accounting. (B) USE OF ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires the Plan Administrator to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Actual results could differ from those estimates. (C) INVESTMENT VALUATION AND INCOME RECOGNITION The Plan's investments are stated at fair value. Shares of registered investment companies are valued at quoted market prices which represent the net asset value of shares held by the Plan at year-end. The Company stock is valued at its quoted market price. Participant loans are valued at cost which approximates fair value. (D) PAYMENT OF BENEFITS Benefits are recorded when paid. (3) RELATED PARTY TRANSACTIONS The Plan's investments are held in trust by UMB Bank, N.A. and managed by American Century Recordkeeping Services. The Plan's administrative expenses represent fees paid for these services and qualify as party-in-interest transactions. Automatic Data Processing, Inc. provides payroll processing for the Company and qualifies as a party-in-interest, however the Company pays for the cost of the services directly. (4) PLAN TERMINATION Although it has not expressed any intention to do so, the Company has the right under the Plan to discontinue contributions or terminate the Plan at any time, subject to the provisions of ERISA. GREEN MOUNTAIN POWER CORPORATION EMPLOYEE SAVINGS AND INVESTMENT PLAN AND TRUST Notes to Financial Statements December 31, 2001, 2000 and 1999 (5) INVESTMENTS Investments that represent 5% or more of the Plan's net assets available for benefits at December 31, 2001 and 2000 are as follows:
2001 2000 ---------- ---------- Value Fund . . . . . . . . . . . . . $2,447,903 $1,937,050 International Discovery Fund . . . . 2,709,068 3,626,663 Strategic Allocation Moderate Fund . 2,220,409 2,472,098 Strategic Allocation Aggressive Fund 2,201,568 2,450,577 Premium Capital Reserve Fund . . . . 1,478,713 1,321,501 Equity Index Fund. . . . . . . . . . 3,126,519 3,888,677 Baron Asset Fund . . . . . . . . . . 1,263,571 1,493,982 GMP Stock Fund . . . . . . . . . . . 3,301,978 2,191,258
(6) TAX STATUS The Internal Revenue Service has determined and informed the Company by a letter dated May 26, 1995, that the Plan is qualified under the Internal Revenue Code (IRC) section 401(a) and the trust is tax-exempt under IRC 501(a). The Plan has been amended since receiving the determination letter. In the opinion of the Plan administrator and the Plan's tax counsel, the Plan has operated within the terms of the Plan and should remain qualified under the applicable provisions of the IRC. (7) REALIZED GAIN (LOSS) ON SALE OF INVESTMENTS Aggregate cost, proceeds and realized net gain (loss) on investment transactions were as follows for the years ended December 31, 2001, 2000 and 1999:
Green Mountain Registered Power Corporation Investment Common Stock Companies Total -------------- ------------ ------------ 2001 Aggregate proceeds. . . . . . . . . . $ 1,133,439 $ 2,953,750 $ 4,087,189 Aggregate cost(based on average cost) (959,299) (3,190,620) (4,149,919) -------------- ------------ ------------ Net gain(loss). . . . . . . . . . . . $ 174,140 $ (236,870) $ (62,730) ============== ============ ============ 2000 Aggregate proceeds. . . . . . . . . . $ 356,875 $ 4,112,491 $ 4,469,366 Aggregate cost(based on average cost) (460,674) (3,707,641) (4,168,315) -------------- ------------ ------------ Net gain(loss). . . . . . . . . . . . $ (103,799) $ 404,850 $ 301,051 ============== ============ ============ 1999 Aggregate proceeds. . . . . . . . . . $ 315,443 $10,175,188 $10,490,631 Aggregate cost(based on average cost) (447,274) (8,082,512) (8,529,786) -------------- ------------ ------------ Net gain(loss). . . . . . . . . . . . $ (131,831) $ 2,092,676 $ 1,960,845 ============== ============ ============
(8) NET UNREALIZED APPRECIATION (DEPRECIATION) IN FAIR VALUE OF INVESTMENTS The following summarizes the changes in net unrealized appreciation (depreciation) in fair value of investments for the years ended December 31, 2001, 2000 and 1999:
Beginning of Increase End of Year (Decrease) Year ---------- ------------ ---------- 2001 $ 904,256 $ (685,044) $ 219,212 2000 2,711,404 (1,807,148) 904,256 1999 1,369,220 1,342,184 2,711,404
(9) PROHIBITED PARTY-IN-INTEREST TRANSACTION During the 2000 audit the Plan administrator discovered that the quarterly employer contributions were calculated based upon inaccurate eligible earnings since the Company outsourced its payroll processing in 1999. In 2001 the Company contributed $13,852 to make the Plan whole. During the 2001 audit, the Plan Administrator discovered that an administrative fee was paid by the Plan which was not an obligation of the Plan. The Plan was made whole during 2001 with a contribution of $506.
GREEN MOUNTAIN POWER CORPORATION SCHEDULE 1 Employee Savings and Investment Plan and Trust Schedule H, Line 4i - Assets Held at Year End December 31, 2001 (C) NUMBER OF SHARES, UNITS (E) CURRENT (B) IDENTITY OF ISSUE OR LOANS VALUE ------------------------------------------------ --------- ----------- *Green Mountain Power Corporation, common stock. 176,950 $ 3,301,978 American Century: *Intermediate Term Treasury Fund . . . . . . . . 94,932 1,024,317 *Value Fund. . . . . . . . . . . . . . . . . . . 349,700 2,447,903 *International Discovery Fund. . . . . . . . . . 264,557 2,709,068 *Strategic Allocation Conservative Fund. . . . . 100,754 526,947 *Strategic Allocation Moderate Fund. . . . . . . 375,703 2,220,409 *Strategic Allocation Aggressive Fund. . . . . . 339,748 2,201,568 *Premium Capital Reserve Fund. . . . . . . . . . 1,478,713 1,478,713 *International Growth Fund . . . . . . . . . . . 46,227 368,433 *Equity Index Fund . . . . . . . . . . . . . . . 681,158 3,126,519 Baron Asset Fund . . . . . . . . . . . . . . . 28,420 1,263,571 U.S. Small Company Fund. . . . . . . . . . . . 19,291 242,500 Charles Schwab Fund. . . . . . . . . . . . . . 256,559 256,559 *Participants' loans, interest rates ranging . 91 608,170 from 5% to 9.5% Total investments $21,776,655 ===========
Note: There were no assets held for investment which were both acquired and disposed during the Plan year, except for securities purchased from a broker/dealer and listed on a national securities exchange * Party-in-interest See accompanying independent auditors' report.
GREEN MOUNTAIN POWER CORPORATION SCHEDULE 2 Employee Savings and Investment Plan and Trust Schedule H, Line 4j - Reportable Transactions Year ended December 31, 2001 (H) CURRENT VALUE OF (C) PURCHASE (D) SELLING (G) COST OF ASSET ON (I) NET GAIN (A) IDENTITY OF PARTY INVOLVED PRICE PRICE ASSET TRANS. DATE OR (LOSS) --------------------------------- ---------- -------- ---------- ------------ ---------- Green Mountain Power Corporation, common stock. . . . . . . . . . . $1,032,443 $ - $1,032,443 $ 1,032,443 $ - Green Mountain Power Corporation, common stock. . . . . . . . . . . $ - $973,608 $ 799,468 $ 973,608 $ 174,140
Note: Reportable transactions, for the purpose of this schedule, are: (a) Any single transaction within the Plan year, with respect to any Plan asset, in excess of 5% of the fair value of Plan assets as of the beginning of the Plan year; or (b) Series of transactions within the Plan year with, or in conjunction with, the same person, involving property other than securities, that amount in the aggregate to more than 5% of the fair value of Plan assets as of the beginning of the Plan year; or (c) Series of transactions within the Plan year with respect to securities of the same issue that amount in the aggregate to more than 5% of the fair value of Plan assets at the beginning of the Plan year; or (d) Any "Securities" transaction within the Plan year with or in conjunction with a person, if any prior or subsequent securities transaction has occurred with that same person in an amount in excess of 5% of the fair value of Plan assets at the beginning of the Plan year. See accompanying independent auditors' report.
SCHEDULE 3 GREEN MOUNTAIN POWER CORPORATION Employee Savings and Investment Plan and Trust Schedule G, Part III - Nonexempt Transactions Year ended December 31, 2001 RELATIONSHIP OF EXPENSES NET GAIN PLAN EMPLOYER INCURRED COST CURRENT OR (LOSS) IDENTITY OF OR OTHER DESCRIPTION OF PURCHASE SELLING LEASE WITH OF VALUE OF ON EACH PARTY INVOLVED PARTY-IN-INTEREST TRANSACTION PRICE PRICE RENTAL TRANSACTION ASSET ASSET TRANSACTION -------------- ------------------ ----------------------- ------ ------ ------- ------------ ------ ------ ------------ Plan Administrator Administrative expenses paid that were not Plan obligations $ - $ - $ - $ - $7,754 $7,248 $ 506
See accompanying independent auditors' report. CONSENT OF INDEPENDENT AUDITORS' We consent to the inclusion in the Annual Report on Form 11-K under the Securities Exchange Act of 1934 for the years ended December 31, 2001, 2000 and 1999, of Green Mountain Power Corporation Employee Savings and Investment Plan and Trust of our report dated June 17, 2002. June 28, 2002 KPMG LLP Burlington, Vermont June 28, 2002 KPMG LLP Burlington, Vermont 15 Pursuant to the requirements of the Securities Exchange Act of 1934, the Retirement Board of Green Mountain Power Corporation, which administers the Plan, has duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized. GREEN MOUNTAIN POWER CORPORATION EMPLOYEE SAVINGS AND INVESTMENT PLAN AND TRUST By: /s/Robert J. Griffin ------------------- Robert J. Griffin Chairperson of The Retirement Board of Directors June 28, 2002