Note 6: 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”. The Company had 13,916,026 and 13,841,400 shares of common stock outstanding at December 31, 2014 and December 31, 2013, respectively. The Company has 25,000,000 shares of common stock authorized as of December 31, 2014 and December 31, 2013.

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 were approximately $65.7 million and were 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 2014, the Company sold 38,020 shares of its common stock, at an average price of $32.83 per share, in connection with its Dividend Reinvestment and Stock Purchase Plan (DRP) and its 401(k) plans resulting in net proceeds of $1.2 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 2013 and 2012, the Company raised $1.1 million and $1.1 million, respectively, through the issuance of 39,559 and 41,752 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 May 1, 2014, 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 2014, 2013 and 2012, the Company repurchased 2,763, 2,969 and 6,368 shares of its common stock, respectively, pursuant to the Rule 10b5-1 trading plan. The expense recognized by the Company for these repurchases was $0.1 million, $0.1 million and $0.2 million in 2014, 2013 and 2012, respectively.

During 2014, 2013 and 2012, 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 Second 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.

Restricted Shares

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. The Company may deduct or withhold, or require a participant to remit to the Company, an amount sufficient to satisfy any taxes required by federal, state, or local law or regulation to be withheld with respect to any taxable event arising in connection with an 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 2012 – 2014 in conjunction with the Stock Plan are presented in the following table:


Issuance Date	Shares	Aggregate Market Value (millions)
2/3/12	25,600	$0.7
2/4/13	21,240	$0.6
1/31/14	35,500	$1.1

There were 67,334 and 53,480 non-vested shares under the Stock Plan as of December 31, 2014 and 2013, respectively. The weighted average grant date fair value of these shares was $28.51 per share and $25.99 per share, respectively. The compensation expense associated with the issuance of shares under the Stock Plan is being recorded over the vesting period and was $1.4 million, $0.7 million and $1.3 million in 2014, 2013 and 2012, respectively. At December 31, 2014, there was approximately $0.8 million of total unrecognized compensation cost under the Stock Plan which is expected to be recognized over approximately 2.5 years. There were no restricted shares forfeited or cancelled under the Stock Plan during 2014. On January 26, 2015, there were 40,010 Restricted Shares issued under the Stock Plan with an aggregate market value of $1.5 million.

Restricted Stock Units

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.

The equity portion of Restricted Stock Units activity during 2014 and 2013 in conjunction with the Stock Plan are presented in the following table:


Restricted Stock Units (Equity Portion)
	2014					2013
	Units			Weighted Average Stock Price		Units		Weighted Average Stock Price
Beginning Restricted Stock Units		14,903		$	28.90		3,883	$	27.39
Restricted Stock Units Granted		9,078		$	31.23		10,710	$	29.43
Dividend Equivalents Earned		701		$	33.18		310	$	29.47
Restricted Stock Units Settled		(1,106	)	$	29.49		—

Ending Restricted Stock Units		23,576		$	29.90		14,903	$	28.90

Included in Other Noncurrent Liabilities on the Company’s Consolidated Balance Sheets as of December 31, 2014 and 2013 is $0.4 million and $0.2 million, respectively, representing the fair value of liabilities associated with the portion of fully vested RSUs that will be settled in cash.

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, 2014.

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 $1.0 million). The 5.125% Series was redeemed at par plus a premium of 1.28% (aggregate value of $0.8 million). Fitchburg used operating cash to effect this transaction.

The aggregate purchases of Redeemable, Cumulative Preferred Stock during 2014, 2013 and 2012 related to the annual redemption offer were $0, $0 and $8,000, respectively.

Earnings Per Share

The following table reconciles basic and diluted earnings per share.


(Millions except shares and per share data)	2014		2013		2012
Earnings Available to Common Shareholders	$	24.7	$	21.6	$	18.1

Weighted Average Common Shares Outstanding—Basic (000’s)		13,843		13,773		12,669
Plus: Diluted Effect of Incremental Shares (000’s)		4		2		3

Weighted Average Common Shares Outstanding—Diluted (000’s)		13,847		13,775		12,672

Earnings per Share—Basic and Diluted	$	1.79	$	1.57	$	1.43

For 2014, 2013 and 2012, respectively, 0, 4,481 and 24,325 weighted average non-vested restricted shares were not included in the above computation because the effect would have been antidilutive.