|
x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED September 30, 2009 or
|
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM
|
Connecticut
(State or other jurisdiction of
incorporation or organization)
|
06-0739839
(I.R.S. Employer Identification No.)
|
93 West Main Street, Clinton, CT
(Address of principal executive office)
|
06413
(Zip Code)
|
Large Accelerated Filer
o
|
Accelerated Filer
x
|
Non-Accelerated Filer
o
|
Smaller Reporting Company
o
|
Part I, Item 1: Financial Statements
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Page 3
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Page 4
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Page 5
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Page 6
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Page 7
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Page 8
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Page 9
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Page 10
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Page 15
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Page 20
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Page 20
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Page 20
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Page 21
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Page 21
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Page 21
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Page 22
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Page 23
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Connecticut Water Service, Inc. and Subsidiaries
|
||||||||
CONSOLIDATED
BALANCE SHEETS
|
||||||||
At September 30, 2009 and December 31, 2008
|
||||||||
(Unaudited)
|
||||||||
(In thousands)
|
||||||||
September 30,
|
December 31,
|
|||||||
ASSETS
|
2009
|
2008
|
||||||
Utility Plant
|
$ | 430,208 | $ | 410,471 | ||||
Construction Work in Progress
|
9,348 | 4,577 | ||||||
439,556 | 415,048 | |||||||
Accumulated Provision for Depreciation
|
(121,414 | ) | (115,815 | ) | ||||
Net Utility Plant
|
318,142 | 299,233 | ||||||
|
||||||||
Other Property and Investments
|
5,452 | 6,034 | ||||||
|
||||||||
Cash and Cash Equivalents
|
8,120 | 684 | ||||||
Accounts Receivable (Less Allowance, 2009 - $459; 2008 - $376)
|
7,702 | 6,653 | ||||||
Accrued Unbilled Revenues
|
5,907 | 5,372 | ||||||
Materials and Supplies, at Average Cost
|
1,210 | 1,095 | ||||||
Prepayments and Other Current Assets
|
2,999 | 1,976 | ||||||
Total Current Assets
|
25,938 | 15,780 | ||||||
Unamortized Debt Issuance Expense
|
6,981 | 7,318 | ||||||
Unrecovered Income Taxes
|
23,434 | 22,856 | ||||||
Pension Benefits
|
8,559 | 8,911 | ||||||
Post-Retirement Benefits Other Than Pension
|
2,538 | 2,570 | ||||||
Goodwill
|
3,608 | 3,608 | ||||||
Deferred Charges and Other Costs
|
5,897 | 6,121 | ||||||
Total Regulatory and Other Long-Term Assets
|
51,017 | 51,384 | ||||||
Total Assets
|
$ | 400,549 | $ | 372,431 | ||||
CAPITALIZATION AND LIABILITIES
|
||||||||
Common Stockholders' Equity
|
$ | 108,539 | $ | 103,476 | ||||
Preferred Stock
|
772 | 772 | ||||||
Long-Term Debt
|
92,020 | 92,227 | ||||||
Total Capitalization
|
201,331 | 196,475 | ||||||
Current Portion of Long Term Debt
|
-- | 8 | ||||||
Interim Bank Loans Payable
|
31,607 | 12,074 | ||||||
Accounts Payable and Accrued Expenses
|
6,753 | 5,700 | ||||||
Accrued Taxes
|
1,636 | -- | ||||||
Accrued Interest
|
950 | 870 | ||||||
Other Current Liabilities
|
217 | 418 | ||||||
Total Current Liabilities
|
41,163 | 19,070 | ||||||
Advances for Construction
|
40,708 | 38,928 | ||||||
Contributions in Aid of Construction
|
50,305 | 49,420 | ||||||
Deferred Federal and State Income Taxes
|
31,533 | 30,472 | ||||||
Unfunded Future Income Taxes
|
18,128 | 18,128 | ||||||
Long-Term Compensation Arrangements
|
15,882 | 18,331 | ||||||
Unamortized Investment Tax Credits
|
1,453 | 1,497 | ||||||
Other Long-Term Liabilities
|
46 | 110 | ||||||
Total Long-Term Liabilities
|
158,055 | 156,886 | ||||||
Commitments and Contingencies
|
||||||||
Total Capitalization and Liabilities
|
$ | 400,549 | $ | 372,431 |
Connecticut Water Service, Inc. and Subsidiaries
|
||||||||
CONSOLIDATED
STATEMENTS OF CAPITALIZATION
|
||||||||
At September 30, 2009 and December 31, 2008
|
||||||||
(Unaudited)
|
||||||||
(In thousands, except share data)
|
||||||||
September 30,
|
December 31,
|
|||||||
2009
|
2008
|
|||||||
Common Stockholders' Equity
|
||||||||
Common Stock Without Par Value Authorized - 25,000,000 Shares;
|
$ | 67,792 | $ | 66,412 | ||||
Shares Issued and Outstanding: 2009 - 8,541,346 ; 2008 - 8,463,269
|
||||||||
Stock Issuance Expense
|
(1,608 | ) | (1,608 | ) | ||||
Retained Earnings
|
42,751 | 39,285 | ||||||
Accumulated Other Comprehensive Loss
|
(396 | ) | (613 | ) | ||||
Total Common Stockholders' Equity
|
108,539 | 103,476 | ||||||
Preferrred Stock
|
||||||||
Cumulative Preferred Stock of Connecticut Water Service, Inc.
|
||||||||
Series A Voting, $20 Par Value; Authorized, Issued and
|
||||||||
Outstanding 15,000 Shares, Redeemable at $21.00 Per Share
|
300 | 300 | ||||||
Series $.90 Non-Voting, $16 Par Value; Authorized 50,000 Shares
|
||||||||
Issued and Outstanding 29,499 Shares, Redeemable at $16.00 Per Share
|
472 | 472 | ||||||
Total Preferred Stock of Connecticut Water Service, Inc.
|
772 | 772 | ||||||
Long-Term Debt
|
||||||||
The Connecticut Water Company
|
||||||||
Unsecured Water Facilities Revenue Refinancing Bonds
|
||||||||
5.05% 1998 Series A, due 2028
|
9,625 | 9,635 | ||||||
5.125% 1998 Series B, due 2028
|
7,615 | 7,615 | ||||||
4.40% 2003A Series, due 2020
|
8,000 | 8,000 | ||||||
5.00% 2003C Series, due 2022
|
14,795 | 14,915 | ||||||
Var. 2004 Series Variable Rate, due 2029
|
12,500 | 12,500 | ||||||
Var. 2004 Series A, due 2028
|
5,000 | 5,000 | ||||||
Var. 2004 Series B, due 2028
|
4,550 | 4,550 | ||||||
5.00% 2005 A Series, due 2040
|
14,935 | 14,935 | ||||||
5.00% 2007 A Series, due 2037
|
15,000 | 15,000 | ||||||
Total The Connecticut Water Company
|
92,020 | 92,150 | ||||||
Unregulated Secured
|
||||||||
6.39% NewAlliance Bank, Due 2017
|
-- | 85 | ||||||
Total Connecticut Water Service, Inc.
|
92,020 | 92,235 | ||||||
Less Current Portion
|
-- | (8 | ) | |||||
Total Long-Term Debt
|
92,020 | 92,227 | ||||||
Total Capitalization
|
$ | 201,331 | $ | 196,475 |
Connecticut Water Service, Inc. and Subsidiaries
|
||||||||
CONSOLIDATED
STATEMENTS OF INCOME
|
||||||||
For the Three Months Ended September 30, 2009 and 2008
|
||||||||
(Unaudited)
|
||||||||
(In thousands, except per share amounts)
|
||||||||
2009
|
2008
|
|||||||
Operating Revenues
|
$ | 16,659 | $ | 17,040 | ||||
Operating Expenses
|
||||||||
Operation and Maintenance
|
7,554 | 8,528 | ||||||
Depreciation
|
1,592 | 1,588 | ||||||
Income Taxes
|
785 | 1,601 | ||||||
Taxes Other Than Income Taxes
|
1,474 | 1,491 | ||||||
Total Operating Expenses
|
11,405 | 13,208 | ||||||
Net Operating Revenues
|
5,254 | 3,832 | ||||||
Other Utility Income, Net of Taxes
|
197 | 162 | ||||||
Total Utility Operating Income
|
5,451 | 3,994 | ||||||
Other Income (Deductions), Net of Taxes
|
||||||||
Gain on Property Transactions
|
1,389 | -- | ||||||
Non-Water Sales Earnings
|
255 | 136 | ||||||
Allowance for Funds Used During Construction
|
41 | 29 | ||||||
Other
|
(162 | ) | (46 | ) | ||||
Total Other Income, Net of Taxes
|
1,523 | 119 | ||||||
Interest and Debt Expense
|
||||||||
Interest on Long-Term Debt
|
981 | 1,067 | ||||||
Other Interest Charges
|
129 | 112 | ||||||
Amortization of Debt Expense
|
105 | 99 | ||||||
Total Interest and Debt Expense
|
1,215 | 1,278 | ||||||
Net Income
|
5,759 | 2,835 | ||||||
Preferred Stock Dividend Requirement
|
10 | 10 | ||||||
Net Income Applicable to Common Stock
|
$ | 5,749 | $ | 2,825 | ||||
Weighted Average Common Shares Outstanding:
|
||||||||
Basic
|
8,530 | 8,437 | ||||||
Diluted
|
8,531 | 8,442 | ||||||
Earnings Per Common Share:
|
||||||||
Basic
|
$ | 0.67 | $ | 0.34 | ||||
Diluted
|
$ | 0.67 | $ | 0.34 | ||||
Dividends Per Common Share
|
$ | 0.2275 | $ | 0.2225 |
Connecticut Water Service, Inc. and Subsidiaries
|
||||||||
CONSOLIDATED
STATEMENTS OF INCOME
|
||||||||
For the Nine Months Ended September 30, 2009 and 2008
|
||||||||
(Unaudited)
|
||||||||
(In thousands, except per share amounts)
|
||||||||
2009
|
2008
|
|||||||
Operating Revenues
|
$ | 45,187 | $ | 46,629 | ||||
Operating Expenses
|
||||||||
Operation and Maintenance
|
24,154 | 23,749 | ||||||
Depreciation
|
4,674 | 4,707 | ||||||
Income Taxes
|
1,632 | 3,385 | ||||||
Taxes Other Than Income Taxes
|
4,383 | 4,438 | ||||||
Total Operating Expenses
|
34,843 | 36,279 | ||||||
Net Operating Revenues
|
10,344 | 10,350 | ||||||
Other Utility Income, Net of Taxes
|
545 | 438 | ||||||
Total Utility Operating Income
|
10,889 | 10,788 | ||||||
Other Income (Deductions), Net of Taxes
|
||||||||
Gain on Property Transactions
|
1,389 | -- | ||||||
Non-Water Sales Earnings
|
717 | 530 | ||||||
Allowance for Funds Used During Construction
|
100 | 63 | ||||||
Other
|
(425 | ) | (89 | ) | ||||
Total Other Income, Net of Taxes
|
1,781 | 504 | ||||||
Interest and Debt Expense
|
||||||||
Interest on Long-Term Debt
|
2,968 | 3,152 | ||||||
Other Interest Charges
|
230 | 352 | ||||||
Amortization of Debt Expense
|
303 | 297 | ||||||
Total Interest and Debt Expense
|
3,501 | 3,801 | ||||||
Net Income
|
9,169 | 7,491 | ||||||
Preferred Stock Dividend Requirement
|
29 | 29 | ||||||
Net Income Applicable to Common Stock
|
$ | 9,140 | $ | 7,462 | ||||
Weighted Average Common Shares Outstanding:
|
||||||||
Basic
|
8,512 | 8,416 | ||||||
Diluted
|
8,512 | 8,422 | ||||||
Earnings Per Common Share:
|
||||||||
Basic
|
$ | 1.07 | $ | 0.89 | ||||
Diluted
|
$ | 1.07 | $ | 0.89 | ||||
Dividends Per Common Share
|
$ | 0.6725 | $ | 0.6575 |
Connecticut Water Service, Inc. and Subsidiaries
|
||||||||
CONSOLIDATED
STATEMENTS OF COMPREHENSIVE INCOME
|
||||||||
For the Three Months Ended September 30, 2009 and 2008
|
||||||||
(Unaudited)
|
||||||||
(In thousands)
|
||||||||
2009
|
2008
|
|||||||
Net Income Applicable to Common Stock
|
$ | 5,749 | $ | 2,825 | ||||
Other Comprehensive Income, net of tax
|
||||||||
Qualified Cash Flow Hedging Instrument Income,
|
||||||||
net of tax expense of $0 in 2009 and $23
in 2008
|
-- | 37 | ||||||
Adjustment to Pension and Post-Retirement Benefits Other
|
||||||||
Than Pension, net of tax expense of $25 in 2009 and $0 in 2008
|
(25 | ) | -- | |||||
Unrealized Gain on Investments, net of tax expense of $85 in 2009 and $0 in 2008
|
131 | -- | ||||||
Comprehensive Income
|
$ | 5,855 | $ | 2,862 | ||||
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
|
||||||||
For the Nine Months Ended September 30, 2009 and 2008
|
||||||||
(Unaudited)
|
||||||||
(In thousands)
|
||||||||
2009 | 2008 | |||||||
Net Income Applicable to Common Stock
|
$ | 9,140 | $ | 7,462 | ||||
Other Comprehensive Income, net of tax
|
||||||||
Qualified Cash Flow Hedging Instrument Income (Expense),
|
||||||||
net of tax expense (benefit) of $20 in 2009 and $(19)
in 2008
|
31 | (30 | ) | |||||
Adjustment to Pension and Post-Retirement Benefits Other
|
||||||||
Than Pension, net of tax expense (benefit) of $24 in 2009 and $(1) in 2008
|
(26 | ) | (1 | ) | ||||
Unrealized Gain on Investments, net of tax expense of $137 in 2009 and $0 in 2008
|
212 | -- | ||||||
Comprehensive Income
|
$ | 9,357 | $ | 7,431 |
Connecticut Water Service, Inc. and Subsidiaries
|
||||||||
CONSOLIDATED
STATEMENTS OF RETAINED EARNINGS
|
||||||||
For the Three Months Ended September 30, 2009 and 2008
|
||||||||
(Unaudited)
|
||||||||
(In thousands, except per share amounts)
|
||||||||
2009
|
2008
|
|||||||
Balance at Beginning of Period
|
$ | 38,926 | $ | 38,265 | ||||
Net Income Before Preferred Dividends
|
5,759 | 2,835 | ||||||
44,685 | 41,100 | |||||||
Dividends Declared:
|
||||||||
Cumulative Preferred, Class A, $0.20 per share
|
3 | 3 | ||||||
Cumulative Preferred, Series $0.90, $0.225 per share
|
7 | 7 | ||||||
Common Stock - 2009 $0.2275 per share; 2008 $0.2225 per share
|
1,924 | 1,866 | ||||||
1,934 | 1,876 | |||||||
Balance at End of Period
|
$ | 42,751 | $ | 39,224 | ||||
CONSOLIDATED STATEMENTS OF RETAINED EARNINGS
|
||||||||
For the Nine Months Ended September 30, 2009 and 2008
|
||||||||
(Unaudited)
|
||||||||
(In thousands, except per share amounts)
|
||||||||
2009 | 2008 | |||||||
Balance at Beginning of Period
|
$ | 39,285 | $ | 37,272 | ||||
Net Income Before Preferred Dividends
|
9,169 | 7,491 | ||||||
48,454 | 44,763 | |||||||
Dividends Declared:
|
||||||||
Cumulative Preferred, Class A, $0.20 per share
|
9 | 9 | ||||||
Cumulative Preferred, Series $0.90, $0.225 per share
|
20 | 20 | ||||||
Common Stock - 2009 $0.6725 per share; 2008 $0.6575 per share
|
5,674 | 5,510 | ||||||
5,703 | 5,539 | |||||||
Balance at End of Period
|
$ | 42,751 | $ | 39,224 |
Connecticut Water Service, Inc. and Subsidiaries
|
||||||||
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
||||||||
For the Nine Months Ended September 30, 2009 and 2008
|
||||||||
(Unaudited)
|
||||||||
(In thousands)
|
||||||||
2009
|
2008
|
|||||||
Operating Activities:
|
||||||||
Net Income
|
$ | 9,169 | $ | 7,491 | ||||
Adjustments to Reconcile Net Income to Net Cash Provided by
|
||||||||
Operating Activities:
|
||||||||
Deferred Revenues
|
179 | (836 | ) | |||||
Allowance for Funds Used During Construction
|
(165 | ) | (103 | ) | ||||
Depreciation (including $556 in 2009, $479 in 2008 charged to other accounts)
|
5,230 | 5,186 | ||||||
Change in Assets and Liabilities:
|
||||||||
Increase in Accounts Receivable and Accrued Unbilled Revenues
|
(1,516 | ) | (2,694 | ) | ||||
Increase in Other Current Assets
|
(1,274 | ) | (2,542 | ) | ||||
(Increase) Decrease in Other Non-Current Items
|
(291 | ) | (1,620 | ) | ||||
Increase in Accounts Payable, Accrued Expenses and Other
|
||||||||
Current Liabilities
|
1,460 | 333 | ||||||
Increase in Deferred Income Taxes and Investment Tax Credits, Net
|
562 | 1,463 | ||||||
Total Adjustments
|
4,185 | (813 | ) | |||||
Net Cash and Cash Equivalents Provided by Operating Activities
|
13,354 | 6,678 | ||||||
Investing Activities:
|
||||||||
Company Financed Additions to Utility Plant
|
(18,795 | ) | (12,469 | ) | ||||
Advances from Others for Construction
|
(558 | ) | (525 | ) | ||||
Net Additions to Utility Plant Used in Continuing Operations
|
(19,353 | ) | (12,994 | ) | ||||
Purchase of Ellington Acres Company, net of cash acquired of $26
|
(1,469 | ) | -- | |||||
Purchase of Eastern and H2O Services Assets
|
-- | (3,500 | ) | |||||
Net Cash and Cash Equivalents Used in Investing Activities
|
(20,822 | ) | (16,494 | ) | ||||
Financing Activities:
|
||||||||
Proceeds from Interim Bank Loans
|
31,607 | 15,423 | ||||||
Repayment of Interim Bank Loans
|
(12,074 | ) | (6,459 | ) | ||||
Proceeds from Issuance of Common Stock
|
731 | 728 | ||||||
Proceeds from the Exercise of Stock Options
|
-- | 218 | ||||||
Proceeds from the Issuance of Long-Term Debt
|
-- | 4,987 | ||||||
Repayment of Long-Term Debt Including Current Portion
|
(215 | ) | (55 | ) | ||||
Costs Incurred to Issue Long-Term Debt and Common Stock
|
-- | (2 | ) | |||||
Advances from Others for Construction
|
558 | 525 | ||||||
Cash Dividends Paid
|
(5,703 | ) | (5,532 | ) | ||||
Net Cash and Cash Equivalents Provided by Financing Activities
|
14,904 | 9,833 | ||||||
Net Increase in Cash and Cash Equivalents
|
7,436 | 17 | ||||||
Cash and Cash Equivalents at Beginning of Period
|
684 | 337 | ||||||
Cash and Cash Equivalents at End of Period
|
$ | 8,120 | $ | 354 | ||||
Non-Cash Investing and Financing Activities:
|
||||||||
Non-Cash Contributed Utility Plant
|
$ | 961 | $ | 3,420 | ||||
Short-term Investment of Bond Proceeds Held in Restricted Cash
|
-- | $ | 3,399 | |||||
Supplemental Disclosures of Cash Flow Information:
|
||||||||
Cash Paid for:
|
||||||||
Interest
|
$ | 3,257 | $ | 3,465 | ||||
State and Federal Income Taxes
|
$ | 410 | $ | 2,773 | ||||
Three Months
|
Nine Months
|
|||||||||||||||
Period ended September 30
|
2009
|
2008
|
2009
|
2008
|
||||||||||||
Service Cost
|
$ | 363 | $ | 314 | $ | 1,090 | $ | 944 | ||||||||
Interest Cost
|
506 | 476 | 1,518 | 1,429 | ||||||||||||
Expected Return on Plan Assets
|
(557 | ) | (530 | ) | (1,671 | ) | (1,590 | ) | ||||||||
Amortization of:
|
||||||||||||||||
Transition Obligation
|
1 | 1 | 2 | 2 | ||||||||||||
Prior Service Cost
|
18 | 18 | 52 | 52 | ||||||||||||
Net Loss
|
99 | 36 | 298 | 107 | ||||||||||||
Net Periodic Benefit Cost
|
$ | 430 | $ | 315 | $ | 1,289 | $ | 944 |
Three Months
|
Nine Months
|
|||||||||||||||
Period ended September 30
|
2009
|
2008
|
2009
|
2008
|
||||||||||||
Service Cost
|
$ | 118 | $ | 158 | $ | 354 | $ | 474 | ||||||||
Interest Cost
|
126 | 164 | 366 | 493 | ||||||||||||
Expected Return on Plan Assets
|
(68 | ) | (68 | ) | (204 | ) | (204 | ) | ||||||||
Other
|
57 | 169 | 169 | 169 | ||||||||||||
Amortization of:
|
||||||||||||||||
Transition Obligation
|
-- | 30 | -- | 90 | ||||||||||||
Prior Service Cost
|
(101 | ) | -- | (304 | ) | -- | ||||||||||
Recognized Net Loss
|
60 | 51 | 163 | 152 | ||||||||||||
Net Periodic Benefit Cost
|
$ | 192 | $ | 504 | $ | 544 | $ | 1,174 |
Three months ended September 30,
|
2009
|
2008
|
||||||
Common Shares Outstanding End of Period:
|
8,541,346 | 8,448,855 | ||||||
Weighted Average Shares Outstanding (Days Outstanding Basis):
|
||||||||
Basic
|
8,530,037 | 8,436,519 | ||||||
Diluted
|
8,530,961 | 8,442,004 | ||||||
Basic Earnings per Share
|
$ | 0.67 | $ | 0.34 | ||||
Dilutive Effect of Unexercised Stock Options
|
-- | -- | ||||||
Diluted Earnings per Share
|
$ | 0.67 | $ | 0.34 | ||||
Nine Months ended September 30,
|
||||||||
Weighted Average Shares Outstanding (Days Outstanding Basis):
|
||||||||
Basic
|
8,511,726 | 8,415,648 | ||||||
Diluted
|
8,512,391 | 8,421,528 | ||||||
Basic Earnings per Share
|
$ | 1.07 | $ | 0.89 | ||||
Dilutive Effect of Unexercised Stock Options
|
-- | -- | ||||||
Diluted Earnings per Share
|
$ | 1.07 | $ | 0.89 | ||||
Level 1
|
Level 2
|
Level 3
|
||||||||||
Assets:
|
||||||||||||
Investments
|
$ | 1,132 | $ | -- | $ | -- |
Level 1
|
Level 2
|
Level 3
|
||||||||||
Assets:
|
||||||||||||
Investments
|
$ | 1,288 | $ | -- | $ | -- | ||||||
Liabilities
|
||||||||||||
Interest Rate Swap
|
$ | -- | $ | 88 | $ | -- |
Three Months Ended September 30, 2009
|
||||||||||||||||
Segment
|
Revenues
|
Pre-Tax Income
|
Income Tax Expense
|
Net Income
|
||||||||||||
Water Activities
|
$ | 17,015 | $ | 5,033 | $ | 918 | $ | 4,115 | ||||||||
Real Estate Transactions
|
2,160 | 1,885 | 496 | 1,389 | ||||||||||||
Service and Rentals
|
1,298 | 416 | 161 | 255 | ||||||||||||
Total
|
$ | 20,473 | $ | 7,334 | $ | 1,575 | $ | 5,759 |
Three Months Ended September 30, 2008
|
||||||||||||||||
Segment
|
Revenues
|
Pre-Tax Income
|
Income Tax Expense
|
Net Income
|
||||||||||||
Water Activities
|
$ | 17,325 | $ | 4,371 | $ | 1,672 | $ | 2,699 | ||||||||
Real Estate Transactions
|
-- | -- | -- | -- | ||||||||||||
Service and Rentals
|
1,201 | 223 | 87 | 136 | ||||||||||||
Total
|
$ | 18,526 | $ | 4,594 | $ | 1,759 | $ | 2,835 |
Nine Months Ended September 30, 2009
|
||||||||||||||||
Segment
|
Revenues
|
Pre-Tax Income
|
Income Tax Expense
|
Net Income
|
||||||||||||
Water Activities
|
$ | 46,149 | $ | 8,891 | $ | 1,828 | $ | 7,063 | ||||||||
Real Estate Transactions
|
2,160 | 1,885 | 496 | 1,389 | ||||||||||||
Service and Rentals
|
3,601 | 1,173 | 456 | 717 | ||||||||||||
Total
|
$ | 51,910 | $ | 11,949 | $ | 2,780 | $ | 9,169 |
Nine Months Ended September 30, 2008
|
||||||||||||||||
Segment
|
Revenues
|
Pre-Tax Income
|
Income Tax Expense
|
Net Income
|
||||||||||||
Water Activities
|
$ | 47,399 | $ | 10,561 | $ | 3,600 | $ | 6,961 | ||||||||
Real Estate Transactions
|
-- | -- | -- | -- | ||||||||||||
Service and Rentals
|
3,538 | 869 | 339 | 530 | ||||||||||||
Total
|
$ | 50,937 | $ | 11,430 | $ | 3,939 | $ | 7,491 |
September 30, 2009
|
December 31, 2008
|
|||||||
Total Plant and Other Investments:
|
||||||||
Water
|
$ | 323,028 | $ | 304,591 | ||||
Non-Water
|
566 | 676 | ||||||
323,594 | 305,267 | |||||||
Other Assets:
|
||||||||
Water
|
74,362 | 64,734 | ||||||
Non-Water
|
2,593 | 2,430 | ||||||
76,955 | 67,164 | |||||||
Total Assets
|
$ | 400,549 | $ | 372,431 |
Business Segment
|
September 30, 2009
|
September 30, 2008
|
Increase
|
|||||||||
Water Activities
|
$ | 4,115,000 | $ | 2,699,000 | $ | 1,416,000 | ||||||
Real Estate Transactions
|
1,389,000 | -- | 1,389,000 | |||||||||
Services and Rentals
|
255,000 | 136,000 | 119,000 | |||||||||
Total
|
$ | 5,759,000 | $ | 2,835,000 | $ | 2,924,000 |
·
|
On July 1, 2009, the Company’s first WICA surcharge and the voluntarily enacted rate decrease, each discussed above in “Regulatory Matters and Inflation”, became effective. The net effect of these two new items on customers’ bills was a decrease to operating revenue of approximately $152,000, or approximately 40% of the
total decrease. WICA charges will continue to appear on customer’s bills until the Company’s next general rate case while the rate reduction will be eliminated on January 1, 2010.
|
·
|
The water production for the third quarter declined approximately 4%. The majority of this decline was related to lower residential demand due to the wet and cool weather experienced in the third quarter of 2009, despite similar weather patterns in the same period of 2008.
|
·
|
Industrial revenues decreased by $92,000, or 18%, to $419,000 when compared to the third quarter of 2008, primarily due to the adverse economic conditions facing companies in the region.
|
Expense Components
|
September 30, 2009
|
September 30, 2008
|
Increase/(Decrease)
|
|||||||||
Customer
|
$ | 213,000 | $ | 120,000 | $ | 93,000 | ||||||
Purchased water
|
418,000 | 390,000 | 28,000 | |||||||||
Water treatment (including chemical costs)
|
643,000 | 665,000 | (22,000 | ) | ||||||||
Investor relations
|
66,000 | 89,000 | (23,000 | ) | ||||||||
Employee benefit costs
|
1,151,000 | 1,209,000 | (58,000 | ) | ||||||||
Utility costs
|
879,000 | 945,000 | (66,000 | ) | ||||||||
Vehicles
|
315,000 | 399,000 | (84,000 | ) | ||||||||
Outside services
|
255,000 | 420,000 | (165,000 | ) | ||||||||
Maintenance
|
250,000 | 448,000 | (198,000 | ) | ||||||||
Labor
|
2,746,000 | 3,045,000 | (299,000 | ) | ||||||||
Other
|
618,000 | 798,000 | (180,000 | ) | ||||||||
Total
|
$ | 7,554,000 | $ | 8,528,000 | $ | (974,000 | ) |
-
|
Operating costs declined in the third quarter of 2009 largely due to cost containment and the employee focus on capital projects, both administrative and field related. Operations and Maintenance expense declined 11% in the third quarter of 2009. This was attributable to a decrease in labor costs, maintenance expense, and outside
services costs. Labor costs charged to Operation and Maintenance expense have decreased compared to the third quarter of 2008 due to a large number of ongoing capital projects, including the implementation of an Enterprise Resource Planning (ERP) system, where approximately 25% of our employees are directly participating in the design and implementation of the new system. For the quarter ended September 30, 2009, approximately $240,000 in Labor costs were charged to the ERP system. Maintenance
expense decreased primarily due to reduced costs associated with tank painting and increased infrastructure improvement to replace aging pipe, which is more efficient than repairing main breaks. Outside services decreased primarily due to lower costs associated with audit fees, legal expenses and decreased consulting expenses, after management authorized the use of external services in only unique circumstances. Utility costs decreased due to decreases in power costs in the third quarter
of 2009. Employee benefit costs decreased over 2008 levels, primarily due to a decrease in costs associated with post-retirement medical costs. These decreases in benefit costs are offset by increases in medical costs due to increased claims and higher pension costs in 2009. Investor relations costs have decreased as the Company completes many SEC filings in-house as opposed to using outside vendors to assist in filings. Purchased water costs increased in the quarter
primarily due to an increase in water purchased in our Unionville system. Customer costs increased in the current quarter due to an increase in uncollectible accounts due in part to the general economic downturn.
|
-
|
The Company saw a modest increase in its Depreciation expense due an increase in the Company’s Utility Plant investment, despite the reduction in depreciation rates that resulted in a temporary reduction in rates for customers.
|
-
|
Income Tax expense associated with Water Activities decreased due to a lower effective tax rate in 2009. The drivers of the lower effective tax rate are increases to flow through timing difference, including planned pension contributions, and the utilization of state tax credits associated with infrastructure investment made by the Company.
|
Business Segment
|
September 30, 2009
|
September 30, 2008
|
Increase
|
|||||||||
Water Activities
|
$ | 7,063,000 | $ | 6,961,000 | $ | 102,000 | ||||||
Real Estate Transactions
|
1,389,000 | -- | 1,389,000 | |||||||||
Services and Rentals
|
717,000 | 530,000 | 187,000 | |||||||||
Total
|
$ | 9,169,000 | $ | 7,491,000 | $ | 1,678,000 |
·
|
On July 1, 2009, the Company’s first WICA surcharge and the voluntarily enacted rate decrease, each discussed above in “Regulatory Matters and Inflation”, became effective. The net effect of these two new items on customers’ bills was a decrease to operating revenue of approximately $152,000, or approximately 11% of the
total year over year decrease in customer revenues. WICA charges will continue to appear on customer’s bills until the Company’s next general rate case while the rate reduction will be eliminated on January 1, 2010.
|
·
|
Water production for the first nine months declined approximately 4%. The majority of this decline was related to lower residential demand due to the extremely wet and cool weather experienced in the second quarter of 2009.
|
·
|
Industrial revenues decreased by $280,000, or 20%, to $1,106,000 when compared to the first nine months of 2008, primarily due to the economic condition facing companies in the region. A portion of the decrease is due to industrial customers cutting back on shifts and other budget cuts.
|
·
|
Partially offsetting the declining usage described above, was the implementation of the second phase of the Company’s 2006 rate increase that was effective April 1, 2008. As a result, the first quarter of 2009 included an increase of rates of approximately 4.5% that was not included in rates in the first quarter of 2008.
|
Expense Components
|
September 30, 2009
|
September 30, 2008
|
Increase/(Decrease)
|
|||||||||
Purchased water
|
$ | 928,000 | $ | 693,000 | $ | 235,000 | ||||||
Water treatment (including chemical costs)
|
1,710,000 | 1,520,000 | 190,000 | |||||||||
Outside services
|
1,257,000 | 1,072,000 | 185,000 | |||||||||
Customer
|
723,000 | 587,000 | 136,000 | |||||||||
Insurance
|
841,000 | 743,000 | 98,000 | |||||||||
Employee benefit costs
|
3,655,000 | 3,562,000 | 93,000 | |||||||||
Investor relations
|
379,000 | 425,000 | (46,000 | ) | ||||||||
Maintenance
|
1,094,000 | 1,195,000 | (101,000 | ) | ||||||||
Labor
|
8,742,000 | 8,858,000 | (116,000 | ) | ||||||||
Other
|
4,825,000 | 5,094,000 | (269,000 | ) | ||||||||
Total
|
$ | 24,154,000 | $ | 23,749,000 | $ | 405,000 |
-
|
Operating costs increased only 2% in the first three months of 2009 largely due to the employee focus on capital projects, both administrative and field related. Purchased water costs increased in the period primarily due to an increase in water purchased in our Unionville system. Additionally, the Company negotiated a reduction of
bills related to 2007 purchased water that the Company realized as a reduction of expense in the first quarter of 2008. During 2009, the Company was billed for water as it was purchased from neighboring utilities at the negotiated rates. Water treatment costs increased primarily due to an increase in the cost of key chemicals, despite a decrease in production when compared to prior year. Outside services increased over prior years primarily due to increased legal costs associated
with the Perry Street litigation detailed in “Commitments and Contingencies” and the increased use of temporary labor in the early part of the year. Customer costs increased primarily due to an increase in uncollectible accounts. Employee benefit costs increased primarily due to an increase in costs associated with medical and pension expenses, partially offset by a decrease in post-retirement medical costs. Medical costs increased due to additional claims filed in
the current year compared to 2008. Labor costs have decreased compared to the third quarter of 2008 due to a large number of ongoing capital projects, including the implementation of the ERP system, where approximately 25% of our employees are directly participating in the design and implementation of the new system. For the nine months ended September 30, 2009, approximately $516,000 in Labor costs were charged to the ERP system. Maintenance expense decreased primarily due to
reduced costs associated with tank painting and increased infrastructure improvement to replace aging pipe rather than less efficient maintenance of main breaks.
|
-
|
The Company saw a slight decrease in its Depreciation expense due to the reduction in depreciation rates that resulted in a temporary reduction in rates for customers, despite an increase in the Company’s Utility Plant investment.
|
-
|
Income Tax expense associated with Water Activities decreased due to a lower effective tax rate in 2009. The drivers of the lower effective tax rate are increases to flow through timing difference, including planned pension contributions, and the utilization of state tax credits associated with infrastructure investment made by the Company.
|
Connecticut Water Service, Inc.
(Registrant)
|
|
Date: November 6, 2009
|
By:
/s/ David C. Benoit
David C. Benoit
Vice President – Finance and
Chief Financial Officer
|
Date: November 6, 2009
|
By:
/s/ Nicholas A. Rinaldi
Nicholas A. Rinaldi
Controller
|
|
(a)
|
During the availability period described below, the Bank will provide a line of credit to the Borrower. The amount of the line of credit (the "Facility No.1 Commitment") is Ten Million and
OO/100
Dollars ($10,000,000.00).
|
|
(b)
|
This is a revolving line of credit. During the availability period, the Borrower may repay principal amounts and reborrow them.
|
|
(c)
|
The Borrower agrees not to permit the principal balance outstanding to exceed the Facility No.1 Commitment. If the Borrower exceeds this limit, the Borrower will immediately pay the excess to the Bank upon the Bank's demand.
|
|
subject to all the terms and conditions set forth in this Agreement except as modified by the Renewal Notice. If this line of credit is renewed, the term "Expiration Date" shall mean the date set forth in the Renewal Notice as the Expiration Date and the same process for renewal will apply to any subsequent renewal of this line of credit. A renewal fee may be charged at the Bank's option. The amount of the renewal fee
will be specified in the Renewal Notice.
|
|
(a)
|
The Borrower will pay interest on September 11, 2009, and then on the same day of each month thereafter until payment in full of any principal outstandinq under this facility.
|
|
(b)
|
The Borrower will repay in full any principal, interest or other charges outstanding under this facility no later than the Facility No.1 Expiration Date.
|
|
(b)
|
The BBA LIBOR Daily Floating Rate is a fluctuating rate of interest equal to the rate per annum equal to the British Bankers Association LIBOR Rate ("BBA LIBOR"), as published by Reuters (or other commercially available source providing quotations of BBA LIBOR as selected by the Bank from time to time as determined for each banking day at approximately 11 :00 a.m. London time two (2) London Banking Days prior to the
date in question, for U.S. Dollar deposits (for delivery on the first day of such interest period) with a one month term, as adjusted from time to time in the Bank's sole discretion for reserve requirements, deposit insurance assessment rates and other regulatory costs. If such rate is not available at such time for any reason, then the rate for that interest period will be determined by such alternate method as reasonably selected by the Bank. A "London Banking Day" is a day on which banks in London are open
for business and dealing in offshore dollars.
|
|
(b)
|
Waiver Fee
. If the Bank, at its discretion, agrees to waive or amend any terms of this Agreement, the Borrower will, at the Bank's option, pay the Bank a fee for each waiver or amendment in an amount advised by the Bank at the time the Borrower requests the waiver or amendment. Nothing in this paragraph shall imply that the Bank is obligated to agree to
any waiver or amendment requested by the Borrower. The Bank may impose additional requirements as a condition to any waiver or amendment.
|
|
(c)
|
Late Fee
. To the extent permitted by law, the Borrower agrees to pay a late fee in an amount not to exceed four percent (4%) of any payment that is more than fifteen (15) days late. The imposition and payment of a late fee shall not constitute a waiver of the Bank's rights with respect to the default.
|
|
(a)
|
The Borrower agrees to reimburse the Bank for any expenses it incurs in the preparation of this Agreement and any agreement or instrument required by this Agreement. Expenses include, but are not limited to, reasonable attorneys' fees, including any allocated costs of the Bank's in-house counsel to the extent permitted by applicable law.
|
|
(a)
|
Each payment by the Borrower will be made in U.S. Dollars and immediately available funds by debit to a deposit account as described in this Agreement or otherwise authorized by the Borrower. For payments not made by direct debit, payments will be made by mail to the address shown on the Borrower's statement or at one of the Bank's banking centers in the United States, or by such other method as may be permitted by
the Bank.
|
|
(b)
|
The Bank may honor instructions for advances or repayments given by the Borrower (if an individual), or by any one of the individuals authorized to sign loan agreements on behalf of the Borrower, or any other individual designated by anyone of authorized signers (each an "Authorized Individual").
|
|
(c)
|
For any payment under this Agreement made by debit to a deposit account, the Borrower will maintain sufficient immediately available funds in the deposit account to cover each debit. If there are insufficient immediately available funds in the deposit account on the date the Bank enters such debit authorized by this Agreement, the Bank may reverse the debit.
|
|
(d)
|
Each disbursement by the Bank and each payment by the Borrower will be evidenced by records kept by the Bank. In addition, the Bank may, at its discretion, require the Borrower to sign one or more promissory notes.
|
|
(e)
|
Prior to the date each payment of principal and interest and any fees from the Borrower becomes due (the "Due Date"), the Bank will mail to the Borrower a statement of the amounts that will be due on that Due Date (the "Billed Amount"). The calculations in the bill will be made on the assumption that no new extensions- of credit or payments will be made between the date of the billing statement and the Due Date, and
that there will be no changes in the applicable interest rate. If the Billed Amount differs from the actual amount due on the Due Date (the "Accrued Amount"), the discrepancy will be treated as follows:
|
|
(i)
|
If the Billed Amount is less than the Accrued Amount, the Billed Amount for the following Due Date will be increased by the amount of the discrepancy. The Borrower will not be in default by reason of any such discrepancy.
|
|
(ii)
|
If the Billed Amount is more than the Accrued Amount, the BilIed Amount for the following Due Date will be decreased by the amount of the discrepancy.
|
|
(a)
|
The Bank may honor telephone or telefax instructions for advances or repayments given, or purported to be given, by anyone of the Authorized Individuals.
|
|
(b)
|
Advances wm be deposited in and repayments will be withdrawn from account number CT-1262769 owned by the Borrower or such other of the Borrower's accounts with the Bank as designated in writing by the Borrower.
|
|
(c)
|
The Borrower will indemnify and hold the Bank harmless from all liability, loss, and costs in connection with any act resulting from telephone or telefax instructions the Bank reasonably believes are made by any Authorized Individual. This paragraph will survive this Agreement's termination, and will benefit the Bank and its officers, employees, and agents.
|
|
(a)
|
The Borrower agrees that on the Due Date the Bank will debit the Billed Amount from deposit account number CT -1262769 owned by the Borrower or such other of the Borrower's accounts with the Bank as designated in writing by the Borrower (the "Designated Account").
|
|
(b)
|
The Borrower may terminate this direct debit arrangement at any time by sending written notice to the Bank at the address specified at the end of this Agreement. If the Borrower terminates this arrangement, then the principal amount outstanding under this Agreement will at the option of the Bank bear interest at a rate per annum which is 0.5 percentage point(s) higher than the rate of interest otherwise provided under
this Agreement.
|
5.9
|
Permits, Franchises
. The Borrower possesses all permits, memberships, franchises, contracts and licenses required and all trademark rights, trade name rights, patent rights, copyrights and fictitious name rights necessary to enable it to conduct the business in which it is now engaged.
|
|
(a)
|
Each Plan (other than a multiemployer plan) is in compliance in all material respects with the applicable provisions of ERISA, the Code and other federal or state law. Each Plan has received a favorable determination letter from the IRS and to the best knowledge of the Borrower, nothing has occurred which would cause the loss of such qualification. The Borrower has fulfilled its obligations, if any, under the minimum
funding standards of ERISA and the Code with respect to each Plan, and has not incurred any liability with respect to any Plan under Title IV of ERISA.
|
|
(b)
|
There are no claims, lawsuits or actions (including by any governmental authority), and there has been no prohibited transaction or violation of the fiduciary responsibility rules, with respect to any Plan which has resulted or could reasonably be expected to result in a material adverse effect.
|
|
(i)
|
No reportable event has occurred under Section 4043(c) of ERISA for which the PBGC requires 3D-day notice.
|
|
(ii)
|
No action by the Borrower or any ERISA Affiliate to terminate or withdraw from any Plan has been taken and no notice of intent to terminate a Plan has been filed under Section 4041 of ERISA.
|
|
(iii)
|
No termination proceeding has been commenced with respect to a Plan under Section 4042 of ERISA, and no event has occurred or condition exists which might constitute grounds for the commencement of such a proceeding.
|
|
(iii)
|
"ERISA Affiliate" means any trade or business (whether or not incorporated) under common control with the Borrower within the meaning of Section 414(b) or (c) of the Code.
|
|
(v)
|
"Plan" means a pension, profit-sharing, or stock bonus plan intended to qualify under Section 401 (a) of the Code, maintained or contributed to by the Borrower or any ERISA Affiliate, including any multiemployer plan within the meaning of Section 4001 (a)(3) of ERISA.
|
|
(b)
|
The proceeds of the credit extended under this Loan Agreement may not be used directly or indirectly to purchase or carry any "margin stock" as that term is defined in Regulation U of the Board of Governors of the Federal Reserve System, or extend credit to or invest in other parties for the purpose of purchasing or carrying any such "margin stock," or to reduce or retire any indebtedness incurred for such purpose.
|
(a)
|
Copies of the Form 1
O-K
Annual Report for the Borrower within 90 days after the date of filing with the Securities and Exchange Commission.
|
(b)
|
Copies of the Form 10-Q Quarterly Report for the Borrower within 45 days after the date of filing with the Securities and Exchange Commission"
|
|
(iii)
|
readily marketable securities (including commercial paper, but excluding restricted stock and stock subject to the provisions of Rule
144
of the Securities and Exchange Commission).
|
|
(c)
|
Extensions of credit in the nature of accounts receivable or notes receivable arising from the sale or lease of goods or services in the ordinary course of business to non-affiliated entities.
|
|
(b)
|
Any
event
of default under this Agreement, or any event which, with notice or lapse of time or both, would constitute an event of default.
|
|
(c)
|
Any material adverse change in the Borrower's Obligor's business condition (financial or otherwise), operations, properties or prospects, or ability to repay the credit,
|
|
(d)
|
Any change in the Borrower's or any Obligor's name, legal structure, principal residence (for an individual), state of registration (for a registered entity), place of business, or chief executive office if the Borrower or any Obligor has more than one place of business.
|
|
(e)
|
Any actual contingent liabilities of the Borrower or any Obligor, and any such contingent liabilities which are reasonably foreseeable, where such liabilities are in excess of Two Hundred Fifty Thousand and
00/100
Dollars
($250,000.00)
in the aggregate.
|
|
(a)
|
General Business Insurance
. To maintain insurance satisfactory to the Bank as to amount, nature and carrier covering property damage (including loss of use and occupancy) to any of the Borrower's properties, business interruption insurance, public liability insurance including coverage for contractual liability, product liability and workers' compensation,
and any other insurance which is usual for the Borrower's business. Each policy shall provide for at least 30 days prior notice to the Bank of any cancellation thereof.
|
|
6.15
|
Compliance with Laws
.
To comply with the laws (including any fictitious or trade name statute), regulations, and orders of any government body with authority over the Borrower's business. The Bank shall have no obligation to make any advance to the Borrower except in compliance
with all applicable laws and regulations and the Borrower shall fully cooperate with the Bank in complying with all such applicable laws and regulations.
|
|
(a)
|
The occurrence of any reportable event under Section 4043(c} of ERISA for which the PBGC requires 3D-day notice.
|
|
(b)
|
Any action by the Borrower or any ERISA Affiliate to terminate or withdraw from a Plan or the filing of any notice of intent to terminate under Section 4041 of ERISA.
|
|
6.19
|
Audits
. To allow the Bank and its agents to inspect the Borrower's properties and examine, audit, and make copies of books and records at any reasonable time. If any of the Borrower's properties, books or records are in the possession of a third party, the Borrower authorizes that third party to permit the Bank or its agents to have access to perform inspections
or audits and to respond to the Bank's requests for information concerning such properties, books and records.
|
|
7.12
|
ERISA Plans
. Anyone or more of the following events occurs with respect to a Plan of the Borrower subject to Title IV of ERISA, provided such event or events could reasonably be expected, in the judgment of the Bank, to subject the Borrower to any tax, penalty or liability (or any combination of the foregoing) which, in the aggregate, could have a material
adverse effect on the financial condition of the Borrower:
|
|
(b)
|
Any Plan termination (or commencement of proceedings to terminate a Plan) or the full or partial withdrawal from a Plan by the Borrower or any ERISA Affiliate.
|
|
8.2
|
Governing Law
. This Agreement shall be governed by and construed in accordance with the laws of Connecticut. To the extent that the Bank has greater rights or remedies under federal law, whether as a national bank or otherwise, this paragraph shall not be deemed to deprive the Bank of such rights and remedies as may be available under federal law .
|
|
(a)
|
This Dispute Resolution Provision concerns the resolution of any controversies or claims between the parties, whether arising in contract, tort or by statute, including but not limited to controversies or claims that arise out of or relate to: (i) this agreement (including any renewals, extensions or modifications); or (ii) any document related to this agreement (collectively a "Claim"). For the purposes of this Dispute
Resolution Provision only, the term "parties" shall include any parent corporation, subsidiary or affiliate of the Bank involved in the servicing, management or administration of any obligation described or evidenced by this agreement.
|
|
(b)
|
At the request of any party to this agreement, any Claim shall be resolved by binding arbitration in accordance with the Federal Arbitration Act (Title 9,
U.S.
Code) (the "Act"). The Act will apply even though this agreement provides that it is governed by the law of a specified state.
|
|
(c)
|
Arbitration proceedings will be determined in accordance with the Act, the then-current rules and procedures for the arbitration of financial services disputes of the American Arbitration Association or any successor thereof ("AAA"), and the terms of this Dispute Resolution Provision. tn the event of any inconsistency, the terms of this Dispute Resolution Provision shall control. If AAA is unwilling or unable to (I)
serve as the provider of arbitration or (Ii) enforce any provision of this arbitration clause, the Bank may designate another arbitration organization with similar procedures to serve as the provider of arbitration.
|
|
(d)
|
The arbitration shall be administered by AAA and conducted, unless otherwise required by law, in any
U.S.
state where real or tangible personal property collateral for this credit is located or if there is no such collateral, in the state specified in the governing law section of this agreement. All Claims shall be determined by one arbitrator; however, if Claims
exceed Five Million Dollars ($5,000,000), upon the request of any party, the Claims shall be decided by three arbitrators. All arbitration hearings shall commence within ninety (90) days of the demand for arbitration and close within ninety (90) days of commencement and the award of the arbitrator(s) shall be issued within thirty (30) days of the close of the hearing. However, the arbitrator(s), upon a showing of good cause, may extend the commencement of the hearing for up to an additional sixty (60) days. The
arbitrator(s) shall provide a concise written statement of reasons for the award. The arbitration award may be submitted to any court having jurisdiction to be confirmed and have judgment entered and enforced.
|
|
(e)
|
The arbitrator(s) will give effect to statutes of limitation in determining any Claim and may dismiss the arbitration on the basis that the Claim is barred. For purposes of the application of any statutes of limitation, the service on AAA under applicable AAA rules of a notice of Claim is the equivalent of the filing of a lawsuit. Any dispute concerning this arbitration provision or whether a Claim is arbitrable shall
be determined by the arbitrator(s), except as set forth at subparagraph (h) of this Dispute Resolution Provision. The arbitrator(s) shall have the power to award legal fees pursuant to the terms of this agreement.
|
|
(f)
|
This paragraph does not limit the right of any party to: (i) exercise self-help remedies, such as but not limited to, setoff; (ii) initiate judicial or non-judicial foreclosure against any real or personal property collateral; (iii) exercise any judicial or power of sale rights, or (iv) act in a court of law to obtain an interim remedy, such as but not limited to, injunctive relief, writ of possession or appointment
of a receiver, or additional or supplementary remedies.
|
|
(g)
|
The filing of a court action is not intended to constitute a waiver of the right of any party, including the suing party, thereafter to require submittal of the Claim to arbitration.
|
|
(h)
|
Any arbitration or trial by a judge of any Claim will take place on an individual basis without resort to any form of class or representative action (the "Class Action Waiver"). Regardless of anything else in this Dispute Resolution Provision, the validity and effect of the Class Action Waiver may be determined only by a court and not by an arbitrator. The parties to this Agreement acknowledge that the Class Action
Waiver is material and essential to the arbitration of any disputes between the parties and is nonseverable from the agreement to arbitrate Claims. If the Class Action Waiver is limited, voided or found unenforceable, then the parties' agreement to arbitrate shall be null and void with respect to such proceeding, Subject to the right to appeal the limitation or invalidation of the Class Action Waiver. The Parties acknowledge and agree that under no circumstances will a class action be arbitrated,
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(a)
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In addition to any rights and remedies of the Bank provided by law, upon the occurrence and during the continuance of any event of default under this Agreement, the Bank is authorized, at any time, to set off and apply any and all Deposits of the Borrower or any Obligor held by the Bank against any and all Obligations owing to the Bank. The set-off may be made irrespective of whether or not the Bank shall have made
demand under this Agreement or any guaranty, and although such Obligations may be contingent or unmatured or denominated in a currency different from that of the applicable Deposits.
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(b)
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The set-off may be made without prior notice to the Borrower or any other party, any such notice being waived by the Borrower (on its own behalf and on behalf of each Obligor) to the fullest extent permitted by law. The Bank agrees promptly to notify the Borrower after any such set-off and application;
provided
,
however,
that
the failure to give such notice shall not affect the validity of such set-off and application.
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(c)
|
For the purposes of this paragraph, "Deposits' means any deposits (general or special, time or demand, provisional or final, individual or joint) and any instruments owned by the Borrower or any Obligor which come into the possession or custody or under the control of the Bank. "Obligations" means all obligations, now or hereafter existing, of the Borrower to the Bank under this Agreement and under any other agreement
or instrument executed in connection with this Agreement, and the obligations .to the Bank of any Obligor.
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(a)
|
represent the sum of the understandings and agreements between the Bank and the Borrower concerning this credit;
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|
(c)
|
are intended by the Bank and the Borrower as the final, complete and exclusive statement of the terms agreed to by them.
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8.16
Waiver of Jury Trial.
By agreeing to binding arbitration, the parties irrevocably and voluntarily waive any right they may have to a trial by jury in respect of any Claim. Furthermore, without intending in any way to limit this agreement to arbitrate, to the extent
any Claim is not arbitrated, the parties irrevocably and voluntarily waive any right they may have to a trial by jury in respect of such Claim. This waiver of jury trial shall remain in effect even if the Class Action Waiver is limited, voided or found unenforceable. WHETHER THE CLAIM IS DECIDED BY ARBITRATION OR BY TRIAL BY A JUDGE, THE PARTIES AGREE AND UNDERSTAND THAT THE EFFECT OF THIS AGREEMENT IS THAT THEY ARE GIVING UP THE RIGHT TO TRIAL BY JURY TO THE EXTENT PERMITTED BY LAW.
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.
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1.
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2.
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SUBJECT MATTER HEREOF, UNLESS SUCH COMMITMENT LETTER, TERM SHEET OR OTHER WRITTEN OUTLINE OF TERMS AND CONDITIONS EXPRESSLY PROVIDES TO THE CONTRARY, (C) THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES, AND (D) THIS DOCUMENT MAY NOT BE CONTRADICTED BY EVIDENCE OF ANY PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OR UNDERSTANDINGS OF THE PARTIES.
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RBS CITIZENS, NATIONAL ASSOCIATION
(successor-by-merger to Citizens Bank of Connecticut)
By:
/s/ Anthony Castellon
Name: Anthony Castellon
Title: Senior Vice President
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|
CONNECTICUT WATER SERVICE, INC
By:
/s/ David C. Benoit
Name: David C. Benoit
Title: Vice President, Finance and CFO
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September 15, 2009
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CONNECTICUT WATER SERVICE, INC
By:
/s/ David C. Benoit
Name: David C. Benoit
Title: Vice President, Finance and CFO
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RBS CITIZENS, NATIONAL ASSOCIATION
(successor-by-merger to Citizens Bank of Connecticut)
By:
/s/ Anthony Castellon
Name: Anthony Castellon
Title: Senior Vice President
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Connecticut Water Service, Inc. (the “registrant”).
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report.
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4.
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The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)), for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being
prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal
control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Connecticut Water Service, Inc. (the “registrant”).
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report.
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)), for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being
prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal
control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and result of operation of the Company.
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