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Equity
 12 Months Ended
Dec. 31, 2012
Equity

Note 2: Equity

 

The Company has common stock outstanding and one of our subsidiaries has preferred stock outstanding. Details regarding these forms of capitalization follow:

 

Common Stock

 

The Company’s common stock trades on the New York Stock Exchange under the symbol “UTL”. On April 21, 2011, the Company’s shareholders approved an increase in the authorized shares of the Company’s common stock. Shareholders approved an amendment to the Company’s Articles of Incorporation to increase the authorized number of shares of the Company’s common stock, from 16,000,000 shares to 25,000,000 shares in the aggregate. The Company had 13,780,601, and 10,954,065 shares of common stock outstanding at December 31, 2012 and December 31, 2011, respectively.

 

Unitil Corporation Common Stock Offering—On May 16, 2012, the Company issued and sold 2,760,000 shares of its common stock at a price of $25.25 per share in a registered public offering (Offering). The Company’s net increase to Common Equity and Cash proceeds from the Offering was approximately $65.7 million and was used to make equity capital contributions to the Company’s regulated utility subsidiaries, repay short-term debt and for general corporate purposes.

 

Dividend Reinvestment and Stock Purchase Plan—During 2012, the Company sold 41,752 shares of its common stock, at an average price of $26.37 per share, in connection with its Dividend Reinvestment and Stock Purchase Plan (DRP) and its 401(k) plans resulting in net proceeds of $1.1 million. The DRP provides participants in the plan a method for investing cash dividends on the Company’s common stock and cash payments in additional shares of the Company’s common stock. During 2011 and 2010, the Company raised $1.0 million and $0.9 million, respectively, through the issuance of 39,473 and 41,455 shares, respectively, of its common stock in connection with its DRP and 401(k) plans.

 

Common Shares Repurchased, Cancelled and Retired—Pursuant to the written trading plan under Rule 10b5-1 under the Securities Exchange Act of 1934, as amended (the Exchange Act), adopted by the Company on March 22, 2012, the Company may periodically repurchase shares of its common stock on the open market related to Employee Length of Service Awards and the stock portion of the Directors’ annual retainer. (See Part II, Item 5 ( for additional information). During 2012, 2011 and 2010, the Company repurchased 6,368, 8,765 and 3,225 shares of its common stock, respectively, pursuant to the Rule 10b5-1 trading plan. The expense recognized by the Company for these repurchases was $0.2 million, $0.2 million and $0.1 million in 2012, 2011 and 2010, respectively.

 

During 2012, 2011 and 2010, the Company did not cancel or retire any of its common stock.

 

Stock-Based Compensation Plans—Unitil maintains a stock plan. The Company accounts for its stock-based compensation plan in accordance with the provisions of the FASB Codification and measures compensation costs at fair value at the date of grant. Details of the plan are as follows:

 

Stock Plan—The Company maintains the Unitil Corporation Amended and Restated 2003 Stock Plan (the Stock Plan). Participants in the Stock Plan are selected by the Compensation Committee of the Board of Directors to receive awards under the Stock Plan, including awards of restricted shares (Restricted Shares), or of restricted stock units (Restricted Stock Units). The Compensation Committee has the authority to determine the sizes of awards; determine the terms and conditions of awards in a manner consistent with the Stock Plan; construe and interpret the Stock Plan and any agreement or instrument entered into under the Stock Plan as they apply to participants; establish, amend, or waive rules and regulations for the Stock Plan’s administration as they apply to participants; and, subject to the provisions of the Stock Plan, amend the terms and conditions of any outstanding award to the extent such terms and conditions are within the discretion of the Compensation Committee as provided for in the Stock Plan. On April 19, 2012, the Company’s shareholders approved an amendment to the Stock Plan to, among other things, increase the maximum number of shares of common stock available for awards to plan participants.

 

The maximum number of shares available for awards to participants under the Stock Plan is 677,500. The maximum number of shares that may be awarded in any one calendar year to any one participant is 20,000. In the event of any change in capitalization of the Company, the Compensation Committee is authorized to make an equitable adjustment to the number and kind of shares of common stock that may be delivered under the Stock Plan and, in addition, may authorize and make an equitable adjustment to the Stock Plan’s annual individual award limit.

 

Outstanding awards of Restricted Shares fully vest over a period of four years at a rate of 25% each year. During the vesting period, dividends on Restricted Shares underlying the award may be credited to a participant’s account. Awards may be grossed up to offset the participant’s tax obligations in connection with the award. Prior to the end of the vesting period, the restricted shares are subject to forfeiture if the participant ceases to be employed by the Company other than due to the participant’s death.

 

Restricted Shares issued for 2010 – 2012 in conjunction with the Stock Plan are presented in the following table:

 

Issuance Date

   

Shares

   

Aggregate
Market Value (millions)

2/5/10

    12,520    $0.3

2/9/11

    24,330    $0.6

2/3/12

    25,600    $0.7

 

The compensation expense associated with the issuance of shares under the Stock Plan is being recorded over the vesting period and was $1.3 million, $0.7 million and $0.5 million in 2012, 2011 and 2010, respectively. There were 53,932 and 52,362 non-vested shares under the Stock Plan as of December 31, 2012 and 2011, respectively. The weighted average grant date fair value of these shares was $24.67 per share and $22.21 per share, respectively. At December 31, 2012, there was approximately $0.7 million of total unrecognized compensation cost under the Stock Plan which is expected to be recognized over approximately 2.5 years. There were 816 restricted shares forfeited and there were no cancellations under the Stock Plan during 2012.

 

There were no Restricted Stock Units issued in conjunction with the Stock Plan during 2010 and 2011. On October 1, 2012, there were 5,470 fully-vested Restricted Stock Units issued to members of the Company’s Board of Directors. These Restricted Stock Units earn dividend equivalents and will generally be settled by payment to each Director as soon as practicable following the Director’s separation from service to the Company. The Restricted Stock Units will be paid such that the Director will receive (i) 70% of the shares of the Company’s common stock underlying the restricted stock units and (ii) cash in an amount equal to the fair market value of 30% of the shares of the Company’s common stock underlying the Restricted Stock Units. Restricted Stock Units issued during 2012 in conjunction with the Stock Plan during 2012 are presented in the following table:

 

Equity RSUs    2012  
     Equity
RSUs		      Weighted
Average
Stock
Price		  

Beginning Equity Restricted Stock Units

      —      

Equity Restricted Stock Units Granted

      3,829       $ 27.43   

Dividend Equivalents Earned—Prior Years

      —      

Dividend Equivalents Earned—Current Year

      54       $ 24.62   

Equity Restricted Stock Units Settled

      —      
  

 

 

     

 

 

  

Ending Equity Restricted Stock Units

      3,883       $ 27.39   
  

 

 

     

 

 

  

 

Included in Other Noncurrent Liabilities on the Company’s Consolidated Balance Sheets as of December 31, 2012 is less than $0.1 million representing the fair value of liabilities associated with the portion of fully vested RSUs that will be settled in cash.

 

Unitil Corporation 1998 Stock Option Plan—The “Unitil Corporation 1998 Stock Option Plan” became effective on December 11, 1998 and was terminated by the Board of Directors on January 16, 2003. There was no compensation expense associated with this plan in 2012, 2011 and 2010. The plan has remained in effect solely for the purposes of the continued administration of any options outstanding under the plan. No further grants of options have been or will be made under this plan since it was terminated by the Board of Directors in 2003. As of December 31, 2012, 2011 and 2010, there was no aggregate intrinsic value of the options exercisable. As of December 31, 2011, all options under this plan have expired.

 

     2011      2010  
     Number
of
Shares		     Average
Exercise
Price		      Number
of
Shares		     Average
Exercise
Price		  

Beginning Options Outstanding

      33,000      $ 25.88         63,500      $ 28.90   

Options Granted

      —        —         —        —   

Options Exercised

      —        —         —        —   

Options Forfeited / Expired

      (33,000 )    $ 25.88         (30,500 )    $ 32.17   
  

 

 

    

 

 

     

 

 

    

 

 

  

Ending Options Outstanding

      —      $ —         33,000      $ 25.88   
  

 

 

    

 

 

     

 

 

    

 

 

  

Options Vested and Exercisable- end of year

      —      $ —         33,000      $ 25.88   

 

Preferred Stock

 

One of Unitil’s distribution utility companies, Unitil Energy, has an aggregate of $0.2 million of 6.00% Series Non-Redeemable, Non-Cumulative Preferred Stock outstanding at December 31, 2012.

 

On December 1, 2012, Fitchburg redeemed and retired the two outstanding issues of its Redeemable, Cumulative Preferred Stock. The 8.00% Series was redeemed at par (aggregate par value of $965,400). The 5.125% Series was redeemed at par plus a premium of 1.28% (aggregate value of $792,313). Fitchburg used operating cash to effect this transaction.

 

Fitchburg was required to offer to redeem annually a given number of shares of each series of its Redeemable, Cumulative Preferred Stock and to purchase such shares that were tendered by holders of the respective stock. In addition, Fitchburg had the option to redeem the Redeemable, Cumulative Preferred Stock at a given redemption price, plus accrued dividends.

 

The aggregate purchases of Redeemable, Cumulative Preferred Stock during 2012, 2011 and 2010 related to the annual redemption offer were $8,000, $8,600 and $25,000, respectively.

 

Earnings Per Share

 

The following table reconciles basic and diluted earnings per share.

 

(Millions except shares and per share data)

    2012      2011      2010  

Earnings Available to Common Shareholders

    $ 18.1       $ 16.3       $ 9.5   
  

 

 

     

 

 

     

 

 

  

Weighted Average Common Shares Outstanding—Basic (000’s)

      12,669         10,880         10,823   

Plus: Diluted Effect of Incremental Shares (000’s)

      3         3         1   
  

 

 

     

 

 

     

 

 

  

Weighted Average Common Shares Outstanding—Diluted (000’s)

      12,672         10,883         10,824   
  

 

 

     

 

 

     

 

 

  

Earnings per Share—Basic and Diluted

    $ 1.43       $ 1.50       $ 0.88   
  

 

 

     

 

 

     

 

 

  

 

Weighted average options to purchase 33,000 shares of common stock were outstanding during 2010 but were not included in the computation of Weighted Average Common Shares Outstanding for purposes of computing diluted earnings per share, because the effect would have been antidilutive. Additionally, 24,325, 1,642 and 6,164 weighted average non-vested restricted shares for 2012, 2011 and 2010, respectively, were not included in the above computation because the effect would have been antidilutive.