SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 11-K
For the fiscal year ended December 31, 2003
_X_ Annual Report Pursuant to Section 15(d) of the Securities Exchange Act of
1934
___ Transition Report Pursuant to Section 15(d) of the Securities Exchange Act
of 1394 For the transition period from to
Commission file number 1-8291
GREEN MOUNTAIN POWER CORPORATION
Employee Savings and Investment Plan and Trust
(Full title of the Plan)
Green Mountain Power Corporation
163 Acorn Lane
Colchester, VT 05446
(802) 864-5731
(Name of issuer of the securities held pursuant to the Plan and the address of
its principal executive office)
Green Mountain Power Corporation
Employee Savings and Investment Plan and Trust
FINANCIAL STATEMENTS AND SCHEDULES
December 31, 2003 and 2002
Green Mountain Power Corporation
Employee Savings and Investment Plan and Trust
TABLE OF CONTENTS
December 31, 2003 and 2002
Page
----
REPORT OF INDEPENDENT PUBLIC ACCOUNTING FIRM
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 4-9
SUPPLEMENTAL SCHEDULES
Assets Held at Year End 10-11
REPORT OF INDEPENDENT PUBLIC ACCOUNTING FIRM
----------------------------
To the Retirement Board and Participants in the
Green Mountain Power Corporation
Employee Savings and Investment Plan and Trust
We have audited the accompanying statements of net assets for benefits of Green
Mountain Power Corporation Employee Savings and Investment Plan and Trust (the
"Plan") as of December 31, 2003 and 2002, and the related statements of changes
in net assets available for benefits for the years then ended. 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 standards of the Public Company
Accounting Oversight Board (United States). 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 that our
audits provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the net assets available for plan benefits of the Plan as of December
31, 2003 and 2002 and the changes in net assets available for plan benefits for
the year then ended, 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 supplemental schedules of assets
(held at end of year) is presented for the purpose of additional analysis and is
not a required part of the basic financial statements, but is 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. The supplemental schedule is the responsibility of the Plan's management.
Such supplemental schedule has been subjected to the auditing procedures applied
in our 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.
Boston, Massachusetts
June 25, 2004
GREEN MOUNTAIN POWER CORPORATION
Employee Savings and Investment Plan and Trust
Statements of Net Assets Available for Plan Benefits
December 31, 2003 and 2002
2003 2002
----------- -----------
Assets:
Investments at fair value:
Green Mountain Power Corporation, common stock, $ 3,591,482 $ 3,862,796
Registered investment companies . . . . . . . . 20,013,814 16,004,081
----------- -----------
23,605,296 19,866,877
Participants' loans . . . . . . . . . . . . . . 439,357 560,683
----------- -----------
Total investments . . . . . . . . . . . . . . . 24,044,653 20,427,560
----------- -----------
Net assets available for Plan benefits. . . . . $24,044,653 $20,427,560
=========== ===========
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
For the Years ended December 31, 2003 and 2002
2003 2002
----------- ------------
Investment income (loss):
Interest . . . . . . . . . . . . . . . . . . $ 117,273 $ 46,512
Dividends. . . . . . . . . . . . . . . . . . 142,613 330,343
Net appreciation (depreciation) in
fair value of investments . . . . . . . . 3,809,986 (1,828,958)
----------- ------------
4,069,872 (1,452,103)
----------- ------------
Contributions:
Employer . . . . . . . . . . . . . . . . . . 406,726 365,456
Participant. . . . . . . . . . . . . . . . . 1,104,372 1,034,104
----------- ------------
1,511,098 1,399,560
----------- ------------
Administrative expenses. . . . . . . . . . . 23,798 15,567
Participants' withdrawals and distributions. 1,940,079 1,280,985
----------- ------------
Total deductions . . . . . . . . . . . . . . 1,963,877 1,296,552
----------- ------------
Net increase (decrease). . . . . . . . . . . 3,617,093 (1,349,095)
Net assets available for Plan benefits:
Beginning of year. . . . . . . . . . . . . . 20,427,560 21,776,655
----------- ------------
End of year. . . . . . . . . . . . . . . . . $24,044,653 $20,427,560
=========== ============
See accompanying notes to financial statements.
Green Mountain Power Corporation
Employee Savings and Investment Plan and Trust
NOTES TO FINANCIAL STATEMENTS
December 31, 2003
NOTE 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.
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 provision of the Employee Retirement Income Security
Act of 1974 (ERISA).
Contributions
-------------
Each year, participants may contribute up to 15% of pretax annual
compensation, as defined by the Plan. The Company contributes a matching
contribution of 100% of the first 4% of contributions made by the participants.
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.
Vesting
-------
Participants are immediately vested in their voluntary contributions as
well as the employers' contribution and any earnings thereon.
Trustee
-------
The Company changed Trustees on December 2, 2002, changing from American
Century to Cigna. Prudential Financial Inc. acquired the retirement business of
CIGNA, including the Plan, on April 1, 2004.
Investment Options
-------------------
Upon enrollment, participants may direct their contributions to any of the
following investment options in 1% increments.
GMP Stock Fund - This fund is invested in Green Mountain Power
----------------
Corporation common stock.
Guaranteed Income Fund - This fixed income fund offers safety of
------------------------
principal and an attractive rate of return. The principal and interest are
currently guaranteed by Connecticut General Life Insurance Company.
Core Bond Fund - This fund invests in high quality domestic fixed
----------------
income securities, including mortgage and asset backed securities as well as
Government issues.
Green Mountain Power Corporation
Employee Savings and Investment Plan and Trust
NOTES TO FINANCIAL STATEMENTS
December 31, 2003
NOTE 1 PLAN DESCRIPTION (continued)
Cigna Lifetime Funds - This family of funds offers five multi-asset,
----------------------
multi-managed investment portfolios. Each fund offers a different risk/return
characteristic and is based on the life-cycle theory of investing in that
different bond/stock mixes are appropriate for individuals at different times of
their lives based on age.
American Century Ultra Account - This mutual fund invests in primarily
------------------------------
equity securities of large companies that offer the potential of
better-than-average capital appreciation.
Large Cap Value Fund - This fund is managed by Wellington Management
----------------------
Company, LLP following their Research Value style.
S&P 500 Index Fund - This fund is managed by Times Square Capital
---------------------
Management, Inc. and reflects the composition of the S&P 500 Index.
American Century Equity Index Fund- This mutual fund seeks to provide
-----------------------------------
current income with capital appreciation as a secondary objective.
Mid Cap Growth/Artisan Partners - This fund is managed by Artisan
-------------------------------------
Partners Limited Partnership and invests primarily in the common stocks of
medium-sized companies.
AIM Small Cap Growth Fund - This fund seeks long-term capital growth.
--------------------------
Strong Advisor Small Cap Value Fund - This fund invests wholly in
----------------------------------------
Class Z shares of the Strong Advisor Small Cap Value Fund.
T. Rowe Price Small-Cap Stock Fund- This account invests wholly in
--------------------------------------
Advisor shares of the T. Rowe Price Small-Cap Stock Fund. The objective of this
fund is to seek capital growth by investing in undervalued stock of small
capitalization companies.
International Growth/Artisan Partners - This fund is managed by
---------------------------------------
Artisan Partners Limited Partnership and invests in a diversified portfolio of
international, growth-oriented companies.
Templeton Foreign Account - This account invests wholly in the
---------------------------
Templeton Foreign Fund. This mutual fund seeks long-term capital growth by
investing primarily in the equity securities of companies located outside the
U.S., including emerging markets.
American Century Strategic Allocation Funds: 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 moderate or aggressive.
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 between the
investment fund and the participant loan fund. Loan terms range from 1 -
Green Mountain Power Corporation
Employee Savings and Investment Plan and Trust
NOTES TO FINANCIAL STATEMENTS
December 31, 2003
NOTE 1 PLAN DESCRIPTION (continued)
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.
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.
NOTE 2 SUMMARY OF ACCOUNTING POLICIES
Basis of Accounting
---------------------
The financial statements of the Plan are prepared in accordance with
accounting principles generally accepted in the United States of America.
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.
The Plan utilizes various investment instruments, including mutual funds
and investment contracts. Investment securities, in general, are exposed to
various risks, such as interest rate, credit, and overall market volatility.
Due to the level of risk associated with certain investment securities, it is
reasonably possible that changes in the values of investment securities will
occur in the near term and that such changes could materially affect the amounts
reported in the financial statements.
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 stated at cost, which
approximates fair value.
Purchases and sales of securities are recorded on a trade-date basis.
Interest income is recorded on an accrual basis. Dividends are recorded on the
ex-dividend date.
Management fees and operating expenses charged to the Plan for investments
in the mutual funds are deducted from income earned on a daily basis and are not
separately reflected. Consequently, management fees and operating expenses are
reflected as a reduction of investment return for such investments.
Payment of Benefits
---------------------
Benefit payments are recorded when paid.
Green Mountain Power Corporation
Employee Savings and Investment Plan and Trust
NOTES TO FINANCIAL STATEMENTS
December 31, 2003
Administrative Expenses
------------------------
Administrative expenses of the Plan are paid by the Plan as provided in the
Plan document.
NOTE 3 RELATED PARTY TRANSACTIONS
The Plan's investments were held in trust by UMB Bank, N.A. and managed by
Cigna for the year ended December 31, 2003. During 2004, UMB Bank sold its
employee benefit accounts, including the Plan, to Marshall & Illsley Trust
Company. Prudential Financial, Inc. acquired the retirement business of CIGNA,
on April 1, 2004. 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.
At December 31, 2003 and 2002, the Plan held 152,181 and 182,163 shares,
respectively, of common stock of Green Mountain Power Corporation, the
sponsoring employer, with a cost basis of $3,125,119 and $3,740,816,
respectively. During the year ended December 31, 2003, the Plan recorded
dividend income of $93,069.
NOTE 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 provisions of ERISA.
NOTE 5 INVESTMENTS
Investments that represent 5% or more of the Plan's net assets available
for benefits at December 31, 2003 and 2002 are as follows:
2003 2002
---------- ----------
Mid Growth Artisan. . . . . . . . . . $1,479,648 $ -
GMP Stock Fund. . . . . . . . . . . . 3,591,482 3,862,796
Large Cap Value/Wellington Management 2,980,731 2,222,715
International Growth/Putnam . . . . . 2,753,453 2,333,606
American Century Moderate Investor. . 2,363,685 2,030,017
Amercian Century Aggressive Investor. 2,425,499 1,944,011
Guaranteed Income Fund. . . . . . . . 2,887,378 3,076,177
S&P 500 Index Fund. . . . . . . . . . 2,966,593 2,334,728
NOTE 6 TAX STATUS
The Internal Revenue Service has determined and informed the Company by a
letter dated October 8, 2002, 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, however, the
Plan administrator and the Plan's tax counsel believe the Plan is currently
designed and operated within the terms of the Plan and should remain qualified
under the applicable provisions of the IRC.
GREEN MOUNTAIN POWER CORPORATION SCHEDULE 1
Employee Savings and Investment Plan and Trust
Schedule H, Line 4i - Assets Held at Year End
December 31, 2003
(C) NUMBER
OF SHARES,
UNITS (E) CURRENT
(B) IDENTITY OF ISSUE OR LOANS VALUE
---------------------- ---------- -----
*Green Mountain Power Corporation, common stock. 152,181 $3,591,482
American Century:
*Cigna Lifetime 60 . . . . . . . . . . . . . . . 51,186 692,191
Guaranteed Income . . . . . . . . . . . . . . . 111,826 2,887,378
*American Century Ultra (ADV). . . . . . . . . . 5,024 154,836
LG CAP Value/Wellington Management. . . . . . . 288,446 2,980,731
S&P 500 Index . . . . . . . . . . . . . . . . . 46,779 2,966,593
*American Century Equity Income. . . . . . . . . 12,778 107,132
MD Cap Growth/Artisan Partners. . . . . . . . . 164,750 1,479,648
AIM Small Cap Growth CL A . . . . . . . . . . . 3,282 84,370
T. Rowe Price Small Cap-Adv. Sh.. . . . . . . . 11,508 331,224
International Growth/Artisan Partners . . . . . 305,202 2,753,453
*AM Century Aggressive Investor. . . . . . . . . 347,991 2,425,499
*AM Century Moderate Investor. . . . . . . . . . 372,234 2,363,685
Core Bond . . . . . . . . . . . . . . . . . . . 26,584 362,801
Strong Adv. Small Cap Value CL Z. . . . . . . . 9,387 265,447
Templeton Foreign Account . . . . . . . . . . . 7,321 118,432
Cigna Direct. . . . . . . . . . . . . . . . . . 40,394 40,394
*Participants' loans, interest rates ranging . . 439,357
from 5% to 9.5%
Total investments. . . . . . . . . . . . . . . . $24,044,653
===================
* Parties-in-interest
See accompanying notes to financial statements.
GREEN MOUNTAIN POWER CORPORATION SCHEDULE 1
Employee Savings and Investment Plan and Trust
Schedule H, Line 4i - Assets Held at Year End
December 31, 2002
(C) NUMBER
OF SHARES,
UNITS (E) CURRENT
(B) IDENTITY OF ISSUE OR LOANS VALUE
---------------------- ---------- -----
*Green Mountain Power Corporation, common stock. 182,163 $3,862,796
American Century:
*Cigna Lifetime 60 . . . . . . . . . . . . . . . 46,949 561,973
Guaranteed Income . . . . . . . . . . . . . . . 122,711 3,076,177
*American Century Ultra (ADV). . . . . . . . . . 1,172 28,756
LG CAP Value/Wellington Management. . . . . . . 275,842 2,222,715
S&P 500 Index . . . . . . . . . . . . . . . . . 47,212 2,334,728
*American Century Equity Income. . . . . . . . . 4,001 27,003
MD Cap Growth/Artisan Partners. . . . . . . . . 144,113 982,483
AIM Small Cap Growth CL A . . . . . . . . . . . 2 36
T. Rowe Price Small Cap-Adv. Sh.. . . . . . . . 11,850 258,278
International Growth/Putnam . . . . . . . . . . 329,623 2,333,606
*AM Century Aggressive Investor. . . . . . . . . 353,457 1,944,011
*AM Century Moderate Investor. . . . . . . . . . 386,670 2,030,017
Core Bond . . . . . . . . . . . . . . . . . . . 341 4,469
Strong Adv. Small Cap Value CL Z. . . . . . . . 110 2,091
Templeton Foreign Account . . . . . . . . . . . 1 18
Cash-transfer funds . . . . . . . . . . . . . . 197,720
*Participants' loans, interest rates ranging . . 560,683
from 5% to 9.5%
Total investments. . . . . . . . . . . . . . . . $ 20,427,560
======================
* Parties-in-interest
See accompanying notes to financial statements.
SCHEDULE 3
GREEN MOUNTAIN POWER CORPORATION
Employee Savings and Investment Plan and Trust
Schedule G, Part III - Nonexempt Transactions
Year ended December 31, 2003
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
-------------------- ----------------- ----------- ----- ----- ------ ----------- ----- ----- -----------
None to report
See accompanying notes to financial statements.
SCHEDULE 3
GREEN MOUNTAIN POWER CORPORATION
Employee Savings and Investment Plan and Trust
Schedule G, Part III - Nonexempt Transactions
Year ended December 31, 2002
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
-------------------- ----------------- ----------- ----- ----- ------ ----------- ----- ----- -----------
None to report
See accompanying notes to financial statements.
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 29, 2004