x
|
Annual Report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 for the fiscal year ended
December 31, 2010
or
|
o
|
Transition report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from
|
to
|
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)
|
Title of each Class
Common Stock, without par value
|
Name of each exchange on which registered
The Nasdaq Stock Market, Inc.
|
Large Accelerated Filer
o
|
Accelerated Filer
x
|
Non-Accelerated Filer
o
|
Smaller Reporting Company
o
|
Document
|
Part of Form 10-K Into Which Document is Incorporated
|
|
Definitive Proxy Statement, dated March 31, 2011, for Annual Meeting of Shareholders to be held on May 12, 2011.
|
Part III
|
For the Year Ended December 31, 2010
|
||||
Page Number
|
||||
4
|
||||
Part I
|
||||
5
|
||||
8
|
||||
11
|
||||
11
|
||||
12
|
||||
12
|
||||
Part II
|
||||
12
|
||||
14
|
||||
15
|
||||
23
|
||||
23
|
||||
23
|
||||
24
|
||||
24
|
||||
Part III
|
||||
24
|
||||
24
|
||||
24
|
||||
24
|
||||
24
|
||||
Part IV
|
||||
25
|
||||
26
|
·
|
projected capital expenditures and related funding requirements;
|
·
|
the availability and cost of capital;
|
·
|
developments, trends and consolidation in the water and wastewater utility industries;
|
·
|
dividend payment projections;
|
·
|
our ability to successfully acquire and integrate regulated water and wastewater systems, as well as unregulated businesses, that are complementary to our operations and the growth of our business;
|
·
|
the capacity of our water supplies, water facilities and wastewater facilities;
|
·
|
the impact of limited geographic diversity on our exposure to unusual weather;
|
·
|
the impact of conservation awareness of customers and more efficient plumbing fixtures and appliances on water usage per customer;
|
·
|
our capability to pursue timely rate increase requests;
|
·
|
our authority to carry on our business without unduly burdensome restrictions;
|
·
|
our ability to maintain our operating costs at the lowest possible level, while providing good quality water service;
|
·
|
our ability to obtain fair market value for condemned assets;
|
·
|
the impact of fines and penalties;
|
·
|
changes in laws, governmental regulations and policies, including environmental, health and water quality and public utility regulations and policies;
|
·
|
the decisions of governmental and regulatory bodies, including decisions to raise or lower rates;
|
·
|
our ability to successfully extend and expand our service contract work within our Service and Rentals Segment;
|
·
|
the development of new services and technologies by us or our competitors;
|
·
|
the availability of qualified personnel;
|
·
|
the condition of our assets;
|
·
|
the impact of legal proceedings;
|
·
|
general economic conditions;
|
·
|
the profitability of our Real Estate Segment, which is subject to the amount of land we have available for sale and/or donation, the demand for any available land, the continuation of the current state tax benefits relating to the donation of land for open space purposes and regulatory approval for land dispositions; and
|
·
|
acquisition-related costs and synergies.
|
·
|
changes in general economic, business, credit and financial market conditions;
|
·
|
changes in government regulations and policies, including environmental and public utility regulations and policies;
|
·
|
changes in environmental conditions, including those that result in water use restrictions;
|
·
|
abnormal weather conditions;
|
·
|
increases in energy and fuel costs;
|
·
|
unfavorable changes to the federal and/or state tax codes;
|
·
|
significant changes in, or unanticipated, capital requirements;
|
·
|
significant changes in our credit rating or the market price of our common stock;
|
·
|
our ability to integrate businesses, technologies or services which we may acquire;
|
·
|
our ability to manage the expansion of our business;
|
·
|
the extent to which we are able to develop and market new and improved services;
|
·
|
the continued demand by telecommunication companies for antenna site leases on our property;
|
·
|
the effect of the loss of major customers;
|
·
|
our ability to retain the services of key personnel and to hire qualified personnel as we expand;
|
·
|
labor disputes;
|
·
|
increasing difficulties in obtaining insurance and increased cost of insurance;
|
·
|
cost overruns relating to improvements or the expansion of our operations;
|
·
|
increases in the costs of goods and services;
|
·
|
civil disturbance or terroristic threats or acts; and
|
·
|
changes in accounting pronouncements.
|
·
|
Employee Code of Conduct
|
·
|
Audit Committee Charter
|
·
|
Board of Directors Code of Conduct
|
·
|
Compensation Committee Charter
|
·
|
Corporate Governance Committee Charter
|
2010
|
2009
|
2008
|
||||||||||
Customers:
|
||||||||||||
Residential
|
79,604 | 78,820 | 78,254 | |||||||||
Commercial
|
5,692 | 5,690 | 5,646 | |||||||||
Industrial
|
422 | 425 | 425 | |||||||||
Public Authority
|
609 | 608 | 606 | |||||||||
Fire Protection
|
1,724 | 1,705 | 1,648 | |||||||||
Other (including non-metered accounts)
|
1,351 | 1,286 | 782 | |||||||||
Total
|
89,402 | 88,534 | 87,361 | |||||||||
Water Revenues
(in thousands):
|
||||||||||||
Residential
|
$ | 42,103 | $ | 36,471 | $ | 37,963 | ||||||
Commercial
|
7,725 | 6,729 | 7,150 | |||||||||
Industrial
|
1,755 | 1,459 | 1,822 | |||||||||
Public Authority
|
2,280 | 1,926 | 2,027 | |||||||||
Fire Protection
|
11,430 | 10,958 | 10,606 | |||||||||
Other (including non-metered accounts)
|
1,115 | 1,848 | 1,702 | |||||||||
Total
|
$ | 66,408 | $ | 59,391 | $ | 61,270 | ||||||
Customer Water Consumption
(millions of gallons):
|
||||||||||||
Residential
|
5,124 | 4,737 | 4,954 | |||||||||
Commercial
|
1,151 | 1,078 | 1,180 | |||||||||
Industrial
|
335 | 306 | 396 | |||||||||
Public Authority
|
348 | 351 | 365 | |||||||||
Total
|
6,958 | 6,472 | 6,895 |
Name
|
Age in 2011*
|
Office
|
Period Held or Prior Position
|
Term of Office Expires
|
||||
E. W. Thornburg
|
50
|
Chairman, President, and Chief Executive Officer
|
Held position since March 2006
|
2011 Annual Meeting
|
||||
D. C. Benoit
|
54
|
Vice President – Finance, Chief Financial Officer and Treasurer
|
Held current position or other executive position with the Company since April 1996
|
2011 Annual Meeting
|
||||
T. P. O’Neill
|
56
|
Vice President – Service Delivery
|
Held current position or other engineering position with the Company since February 1980
|
2011 Annual Meeting
|
||||
M. P. Westbrook
|
52
|
Vice President – Customer and Regulatory Affairs
|
Held current position or other management position with the Company since September 1988
|
2011 Annual Meeting
|
||||
K. A. Johnson
|
44
|
Vice President – Human Resources and Corporate Secretary
|
Held current position or other human resources position with the Company since May 2007. Ms. Johnson previously served as the senior vice president, Human Resources and Organizational Development Officer for Rockville Bank.
|
2011 Annual Meeting
|
Income (Loss) from Real Estate Transactions from Continuing Operations
|
||||||||||||
Regulated
|
Unregulated
|
Total
|
||||||||||
2010
|
$ | (7,000 | ) | $ | 237,000 | $ | 230,000 | |||||
2009
|
$ | 1,427,000 | $ | 22,000 | $ | 1,449,000 | ||||||
2008
|
$ | (160,000 | ) | -- | $ | (160,000 | ) |
·
|
dilutive issuances of our equity securities;
|
·
|
incurrence of debt and contingent liabilities;
|
·
|
failure to have effective internal control over financial reporting;
|
·
|
fluctuations in quarterly results; and
|
·
|
other acquisition-related expenses.
|
·
|
the number of years to depreciate certain assets;
|
·
|
amounts to set aside for uncollectible accounts receivable and uninsured losses;
|
·
|
our legal exposure and the appropriate accrual for claims, including medical and workers’ compensation claims;
|
·
|
future costs for pensions and other post-retirement benefit obligations; and
|
·
|
possible tax allowances.
|
System
|
Estimated Available Supply
(million gallons per day)
|
|||
Chester System
|
1.69 | |||
Collinsville System
|
1.65 | |||
Danielson System
|
3.76 | |||
Gallup System
|
0.60 | |||
Guilford System
|
10.10 | |||
Naugatuck System
|
7.07 | |||
Northern Western System
|
16.55 | |||
Plainfield System
|
1.01 | |||
Stafford System
|
1.00 | |||
Terryville System
|
0.91 | |||
Thomaston System
|
1.73 | |||
Thompson System
|
0.29 | |||
Unionville System
|
6.02 | |||
Total
|
52.38 |
Price
|
Dividends
|
|||||||||||
Period
|
High
|
Low
|
Paid
|
|||||||||
2010
|
||||||||||||
First Quarter
|
$ | 25.12 | $ | 21.57 | $ | .2275 | ||||||
Second Quarter
|
24.28 | 20.00 | .2275 | |||||||||
Third Quarter
|
24.15 | 20.80 | .2325 | |||||||||
Fourth Quarter
|
27.90 | 23.60 | .2325 | |||||||||
2009
|
||||||||||||
First Quarter
|
$ | 24.76 | $ | 17.31 | $ | .2225 | ||||||
Second Quarter
|
22.63 | 19.31 | .2225 | |||||||||
Third Quarter
|
22.86 | 20.57 | .2275 | |||||||||
Fourth Quarter
|
26.45 | 21.68 | .2275 |
2005
|
2006
|
2007
|
2008
|
2009
|
2010
|
|||||||||||||||||||
Connecticut Water Service, Inc.
|
100.00 | 96.31 | 103.44 | 107.31 | 117.36 | 137.52 | ||||||||||||||||||
Standard & Poor’s 500 Index
|
100.00 | 115.79 | 122.16 | 76.96 | 97.33 | 111.99 | ||||||||||||||||||
Standard & Poor’s 500 Utilities Index
|
100.00 | 120.99 | 144.43 | 102.58 | 114.79 | 121.06 |
Increase (Decrease) in Pension Expense
|
Increase (Decrease) in Postretirement Expense
|
|||||||
1% Increase in the discount rate
|
$ | (370,000 | ) | $ | (189,000 | ) | ||
1% Decrease in the discount rate
|
$ | 430,000 | $ | 229,000 |
Gross Construction Expenditures
|
Construction Funded by Developers & Others
|
Construction Funded by Company
|
||||||||||
2010
|
$ | 26,692,000 | $ | 452,000 | $ | 26,240,000 | ||||||
2009
|
$ | 28,349,000 | $ | 751,000 | $ | 27,598,000 | ||||||
2008
|
$ | 20,737,000 | $ | 860,000 | $ | 19,877,000 | ||||||
2011 (Projected)
|
$ | 23,000,000 | ** | $ | 23,000,000 |
Payments due by Periods
|
||||||||||||||||||||
(in thousands)
|
||||||||||||||||||||
Contractual Obligations
|
Total
|
Less
than 1
year
|
Years
2 and 3
|
Years
4 and 5
|
More
than 5
years
|
|||||||||||||||
Long-Term Debt (LTD)
|
$ | 111,675 | $ | -- | $ | -- | $ | -- | $ | 111,675 | ||||||||||
Interest on LTD
|
107,296 | 4,860 | 9,720 | 9,720 | 82,996 | |||||||||||||||
Operating Lease Obligations
|
536 | 273 | 263 | -- | -- | |||||||||||||||
Purchase Obligations
(1)
(2)
|
95,675 | 1,034 | 2,051 | 2,207 | 90,383 | |||||||||||||||
Long-Term Compensation Agreement
(3)
|
39,622 | 2,470 | 4,267 | 4,258 | 28,627 | |||||||||||||||
Total
(4) (5)
|
$ | 354,804 | $ | 8,637 | $ | 16,301 | $ | 16,185 | $ | 313,681 |
Business Segment
|
2010 Net Income
|
2009 Net Income
|
Increase (Decrease)
|
|||||||||
Water Activities
|
$ | 8,669,000 | $ | 7,831,000 | $ | 838,000 | ||||||
Real Estate
|
230,000 | 1,449,000 | (1,219,000 | ) | ||||||||
Services and Rentals
|
899,000 | 929,000 | (30,000 | ) | ||||||||
Total
|
$ | 9,798,000 | $ | 10,209,000 | $ | (411,000 | ) |
2010
|
2009
|
Increase (Decrease)
|
||||||||||
Operating Revenues
|
$ | 66,408,000 | $ | 59,391,000 | $ | 7,017,000 | ||||||
Operation and Maintenance
|
33,105,000 | 32,181,000 | 924,000 | |||||||||
Depreciation
|
7,088,000 | 6,403,000 | 685,000 | |||||||||
Income Taxes
|
5,323,000 | 2,466,000 | 2,857,000 | |||||||||
Taxes Other than Income Taxes
|
6,271,000 | 5,953,000 | 318,000 | |||||||||
Organizational Review Charge
|
786,000 | -- | 786,000 | |||||||||
Other Utility Income
|
742,000 | 704,000 | 38,000 | |||||||||
Other Deductions
|
(226,000 | ) | (784,000 | ) | 558,000 | |||||||
Interest and Debt Expense (net of AFUDC)
|
5,682,000 | 4,477,000 | 1,205,000 | |||||||||
Total Income from Water Activities
|
$ | 8,669,000 | $ | 7,831,000 | $ | 838,000 |
-
|
Water production increased by 6.2% for the year ended December 31, 2010. The increase in production was due to more favorable weather during the second and third quarters of 2010 when compared to the same periods of 2009. During these two quarters, when the weather is warm and dry, residential customers are more likely to use more water. During 2009, the Town of Windsor Locks, CT, part of our largest service area, saw 102 days of rain compared to 77 days in 2010. During the six month period of April through September 2010, the Company’s water production increased by approximately 13%, when compared to the same six month period of 2009.
|
-
|
During the first six months of 2010, customers were charged a 2.1% cumulative WICA surcharge that was not in effect during 2009.
|
-
|
Effective July 14, 2010, the WICA surcharge was folded into the Company’s approximate 13% rate increase to customers.
|
Components of O&M
|
2010
|
2009
|
Increase (Decrease)
|
|||||||||
Labor
|
$ | 12,093,000 | $ | 11,637,000 | $ | 456,000 | ||||||
Water treatment (including chemicals)
|
2,553,000 | 2,253,000 | 300,000 | |||||||||
Pension costs
|
2,010,000 | 1,718,000 | 292,000 | |||||||||
Post-retirement medical costs
|
984,000 | 725,000 | 259,000 | |||||||||
Vehicle
|
1,481,000 | 1,351,000 | 130,000 | |||||||||
Customer
|
1,075,000 | 947,000 | 128,000 | |||||||||
Utility costs
|
3,527,000 | 3,433,000 | 94,000 | |||||||||
Regulatory commission expense
|
301,000 | 324,000 | (23,000 | ) | ||||||||
Other employee benefit costs
|
351,000 | 414,000 | (63,000 | ) | ||||||||
Outside services
|
1,404,000 | 1,590,000 | (186,000 | ) | ||||||||
Medical expense
|
1,714,000 | 2,220,000 | (506,000 | ) | ||||||||
Other
|
5,612,000 | 5,569,000 | 43,000 | |||||||||
Total O&M Expense
|
$ | 33,105,000 | $ | 32,181,000 | $ | 924,000 |
-
|
Labor costs increased in 2010 primarily due to a larger component of 2009 labor costs being capitalized as part of the implementation of a new Enterprise Resource Planning (ERP) system;
|
-
|
Water treatment costs increased due to higher costs associated with laboratory testing and waste disposal. Additionally, the costs of chemicals increased when compared to 2009 due to higher prices and an increase in water production;
|
-
|
Pension and post-retirement medical costs increased due primarily to a decrease in the discount rate used to determine the future liabilities of the plans and, partially, to a decline in the market value of the plans’ assets in prior periods; and
|
-
|
Customer costs increased due to higher bad debt expense. This was driven by a higher Accounts Receivable balance at December 31, 2010, when compared to 2009, due to higher consumption and higher rates in effect during the second half of 2010 and due to an increase in accounts receivable aged over 180 days, due in part to employees focusing on bill integrity with the implementation of the ERP system in the first quarter of 2010. These increases to Customer costs were partially offset by a decrease in customer communication and postage costs.
|
-
|
Outside services decreased due to a reduction in legal fees associated with the favorable resolution of an on-going legal matter in our Unionville decision during 2010 and a reduction in temporary labor used as part of cost containment; and
|
-
|
Medical costs decreased 23% due to a reduction in claims and administrative expense as well as an increase in the amount contributed by employees through payroll deductions. While the Company has taken steps to manage its medical costs by offering a wider variety of plans, including a high-deductible health plan, and passing some cost increases on to employees, it is difficult to project future costs as they are primarily dependant on claims made by employees in any given year.
|
Business Segment
|
2009 Net Income
|
2008 Net Income (Loss)
|
Increase (Decrease)
|
|||||||||
Water Activities
|
$ | 7,831,000 | $ | 8,794,000 | $ | (963,000 | ) | |||||
Real Estate
|
1,449,000 | (160,000 | ) | 1,609,000 | ||||||||
Services and Rentals
|
929,000 | 790,000 | 139,000 | |||||||||
Total
|
$ | 10,209,000 | $ | 9,424,000 | $ | 785,000 |
2009
|
2008
|
Increase (Decrease)
|
||||||||||
Operating Revenues
|
$ | 59,391,000 | $ | 61,270,000 | $ | (1,879,000 | ) | |||||
Operation and Maintenance
|
32,181,000 | 31,877,000 | 304,000 | |||||||||
Depreciation
|
6,403,000 | 6,438,000 | (35,000 | ) | ||||||||
Income Taxes
|
2,466,000 | 3,518,000 | (1,052,000 | ) | ||||||||
Taxes Other than Income Taxes
|
5,953,000 | 6,041,000 | (88,000 | ) | ||||||||
Other Utility Income
|
704,000 | 579,000 | 125,000 | |||||||||
Other Deductions
|
(784,000 | ) | (143,000 | ) | (641,000 | ) | ||||||
Interest and Debt Expense (net of AFUDC)
|
4,477,000 | 5,038,000 | (561,000 | ) | ||||||||
Total Income from Water Activities
|
$ | 7,831,000 | $ | 8,794,000 | $ | (963,000 | ) |
-
|
On July 1, 2009, the Company’s first WICA surcharge and the voluntarily enacted rate decrease, became effective. The net effect of these two new items on customers’ bills was a decrease to operating revenue of approximately $287,000, or approximately 15% 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, including increases to WICA charges between cases, while the rate reduction was eliminated on January 1, 2010.
|
-
|
Water production for the year ended December 31, 2009 decreased by 4%. A portion of this decline was related to lower residential demand due to the extremely wet and cool weather experienced in the second quarter of 2009. In addition, our residential customers continued the declining usage throughout 2009.
|
-
|
Industrial revenues decreased by $363,000, or 20%, to $1,459,000 when compared to 2008, primarily due to the economic downturn affecting companies in our service regions. A portion of the decrease was 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.
|
-
|
The January 2009 acquisition of Ellington Acres added approximately $261,000 in new revenues from the additional customers served.
|
Components of O&M
|
2009
|
2008
|
Increase (Decrease)
|
|||||||||
Medical expense
|
$ | 2,220,000 | $ | 1,477,000 | $ | 743,000 | ||||||
Pension costs
|
1,718,000 | 1,258,000 | 460,000 | |||||||||
Water treatment (including chemicals)
|
2,253,000 | 2,051,000 | 202,000 | |||||||||
Other employee benefit costs
|
414,000 | 269,000 | 145,000 | |||||||||
Purchased water
|
1,121,000 | 993,000 | 128,000 | |||||||||
Property and Liability Insurance
|
1,119,000 | 993,000 | 126,000 | |||||||||
Customer
|
947,000 | 826,000 | 121,000 | |||||||||
Vehicle
|
1,351,000 | 1,442,000 | (91,000 | ) | ||||||||
Utility costs
|
3,433,000 | 3,534,000 | (101,000 | ) | ||||||||
Labor
|
11,637,000 | 11,935,000 | (298,000 | ) | ||||||||
Post-retirement medical costs
|
725,000 | 1,565,000 | (840,000 | ) | ||||||||
Other
|
5,243,000 | 5,534,000 | (291,000 | ) | ||||||||
Total O&M Expense
|
$ | 32,181,000 | $ | 31,877,000 | $ | 304,000 |
Page
|
||||
Index to Consolidated Financial Statements and Schedule
|
F-1 | |||
Report of Independent Registered Pubic Accounting Firm
|
F-2 | |||
Consolidated Statements of Income for the years ended December 31, 2010, 2009 and 2008
|
F-3 | |||
Consolidated Statements of Comprehensive Income for the years ended December 31, 2010, 2009 and 2008
|
F-3 | |||
Consolidated Balance Sheets at December 31, 2010 and 2009
|
F-4 | |||
Consolidated Statements of Cash Flows for the years ended December 31, 2010, 2009 and 2008
|
F-5 | |||
Notes to Consolidated Financial Statements
|
F-6 | |||
Schedule II – Valuation Accounts
|
S-1 |
CONSOLIDATED BALANCE SHEETS
|
||||||||||
December 31, (in thousands, except share amounts)
|
2010
|
2009
|
||||||||
ASSETS
|
||||||||||
Utility Plant
|
$ | 467,589 | $ | 441,412 | ||||||
Construction Work in Progress
|
4,013 | 6,751 | ||||||||
471,602 | 448,163 | |||||||||
Accumulated Provision for Depreciation
|
(127,383 | ) | (122,961 | ) | ||||||
Net Utility Plant
|
344,219 | 325,202 | ||||||||
Other Property and Investments
|
5,568 | 5,513 | ||||||||
Cash and Cash Equivalents
|
952 | 5,437 | ||||||||
Accounts Receivable (Less Allowance, 2010 - $1,061; 2009 - $472)
|
10,135 | 6,502 | ||||||||
Accrued Unbilled Revenues
|
6,344 | 5,416 | ||||||||
Materials and Supplies, at Average Cost
|
1,248 | 1,136 | ||||||||
Prepayments and Other Current Assets
|
1,749 | 1,471 | ||||||||
Total Current Assets
|
20,428 | 19,962 | ||||||||
Restricted Cash
|
1,226 | 12,697 | ||||||||
Unamortized Debt Issuance Expense
|
7,334 | 7,766 | ||||||||
Unrecovered Income Taxes
|
24,696 | 25,649 | ||||||||
Pension Benefits
|
6,296 | 6,897 | ||||||||
Post-Retirement Benefits Other Than Pension
|
5,451 | 2,496 | ||||||||
Goodwill
|
3,608 | 3,608 | ||||||||
Deferred Charges and Other Costs
|
6,385 | 5,486 | ||||||||
Total Regulatory and Other Long-Term Assets
|
54,996 | 64,599 | ||||||||
Total Assets
|
$ | 425,211 | $ | 415,276 | ||||||
CAPITALIZATION AND LIABILITIES
|
||||||||||
Common Stockholders' Equity:
|
||||||||||
Common Stock Without Par Value:
|
||||||||||
Authorized - 25,000,000 Shares - Issued and Outstanding:
|
||||||||||
2010 - 8,676,849; 2009 - 8,573,744 | $ | 70,024 | $ | 67,286 | ||||||
Retained Earnings
|
43,603 | 41,785 | ||||||||
Accumulated Other Comprehensive Income
|
(436 | ) | (502 | ) | ||||||
Common Stockholders' Equity
|
113,191 | 108,569 | ||||||||
Preferred Stock
|
772 | 772 | ||||||||
Long-Term Debt
|
111,675 | 111,955 | ||||||||
Total Capitalization
|
225,638 | 221,296 | ||||||||
Interim Bank Loans Payable
|
26,342 | 25,000 | ||||||||
Accounts Payable and Accrued Expenses
|
6,552 | 6,538 | ||||||||
Accrued Taxes
|
598 | 18 | ||||||||
Accrued Interest
|
993 | 954 | ||||||||
Other Current Liabilities
|
617 | 546 | ||||||||
Total Current Liabilities
|
35,102 | 33,056 | ||||||||
Advances for Construction
|
36,719 | 39,543 | ||||||||
Contributions in Aid of Construction
|
55,761 | 52,072 | ||||||||
Deferred Federal and State Income Taxes
|
34,246 | 32,454 | ||||||||
Unfunded Future Income Taxes
|
19,474 | 20,451 | ||||||||
Long-Term Compensation Arrangements
|
16,747 | 14,898 | ||||||||
Unamortized Investment Tax Credits
|
1,376 | 1,437 | ||||||||
Other Long-Term Liabilities
|
148 | 69 | ||||||||
Commitments and Contingencies
|
||||||||||
Total Capitalization and Liabilities
|
$ | 425,211 | $ | 415,276 | ||||||
The accompanying notes are an integral part of these consolidated financial statements.
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
||||||||||||
For the Years Ended December 31, (in thousands)
|
2010
|
2009
|
2008
|
|||||||||
Operating Activities:
|
||||||||||||
Net Income
|
$ | 9,798 | $ | 10,209 | $ | 9,424 | ||||||
Adjustments to Reconcile Net Income to Net Cash
|
||||||||||||
Provided by Operating Activities:
|
||||||||||||
Deferred Revenues
|
239 | 527 | (777 | ) | ||||||||
Allowance for Funds Used During Construction
|
(171 | ) | (238 | ) | (123 | ) | ||||||
Depreciation (including $806 in 2010, $763 in 2009,
|
||||||||||||
and $642 in 2008 charged to other accounts)
|
7,894 | 7,166 | 7,080 | |||||||||
Change in Assets and Liabilities:
|
||||||||||||
(Increase) Decrease in Accounts Receivable and Accrued Unbilled Revenues
|
(4,561 | ) | 175 | (974 | ) | |||||||
(Increase) Decrease in Other Current Assets
|
(380 | ) | 328 | 204 | ||||||||
Decrease (Increase) in Other Non-Current Items, net
|
968 | 551 | (146 | ) | ||||||||
Increase (Decrease) in Accounts Payable, Accrued
|
||||||||||||
Expenses and Other Current Liabilities
|
1,272 | 438 | (879 | ) | ||||||||
Increase in Deferred Income Taxes and Investment Tax Credits, Net
|
1,708 | 1,575 | 1,878 | |||||||||
Total Adjustments
|
6,969 | 10,522 | 6,263 | |||||||||
Net Cash and Cash Equivalents Provided by Continuing Operations
|
16,767 | 20,731 | 15,687 | |||||||||
Investing Activities:
|
||||||||||||
Company Financed Additions to Utility Plant
|
(26,240 | ) | (27,598 | ) | (19,877 | ) | ||||||
Advances from Others for Construction
|
(281 | ) | (513 | ) | (737 | ) | ||||||
Net Additions to Utility Plant Used in Continuing Operations
|
(26,521 | ) | (28,111 | ) | (20,614 | ) | ||||||
Purchase of water systems, net of cash acquired
|
(297 | ) | (1,469 | ) | (3,500 | ) | ||||||
Purchase of customer contracts
|
(900 | ) | -- | -- | ||||||||
Release of Restricted Cash
|
11,460 | -- | 8,393 | |||||||||
Net Cash and Cash Equivalents Used in Investing Activities in Continuing Operations
|
(16,258 | ) | (29,580 | ) | (15,721 | ) | ||||||
Financing Activities:
|
||||||||||||
Net Proceeds from Interim Bank Loans
|
26,342 | 25,000 | 12,074 | |||||||||
Net Repayment of Interim Bank Loans
|
(25,000 | ) | (12,074 | ) | (6,459 | ) | ||||||
Repayment of Long-Term Debt Including Current Portion
|
(280 | ) | (280 | ) | (57 | ) | ||||||
Proceeds from Issuance of Long-Term Debt
|
-- | 6,903 | -- | |||||||||
Proceeds from Issuance of Common Stock
|
1,358 | 1,323 | 1,281 | |||||||||
Proceeds from Exercise of Stock Options
|
287 | 390 | 218 | |||||||||
Costs Incurred to Issue Long-Term Debt and Common Stock
|
(2 | ) | (464 | ) | (2 | ) | ||||||
Advances from Others for Construction
|
281 | 513 | 737 | |||||||||
Cash Dividends Paid
|
(7,980 | ) | (7,709 | ) | (7,411 | ) | ||||||
Net Cash and Cash Equivalents (Used in) Provided by Financing Activities
|
(4,994 | ) | 13,602 | 381 | ||||||||
Net Increase (Decrease) in Cash and Cash Equivalents
|
(4,485 | ) | 4,753 | 347 | ||||||||
Cash and Cash Equivalents at Beginning of Year
|
5,437 | 684 | 337 | |||||||||
Cash and Cash Equivalents at End of Year
|
$ | 952 | $ | 5,437 | $ | 684 | ||||||
Non-Cash Investing and Financing Activities:
|
||||||||||||
Non-Cash Contributed Utility Plant (see Note 1 for details)
|
$ | 707 | $ | 1,664 | $ | 4,089 | ||||||
Short-term Investment of Bond Proceeds Held in Trust
|
$ | 1,226 | $ | 12,697 | $ | -- | ||||||
Supplemental Disclosures of Cash Flow Information:
|
||||||||||||
Cash Paid for Continuing Operations During the Year for:
|
||||||||||||
Interest
|
$ | 5,478 | $ | 4,366 | $ | 4,876 | ||||||
State and Federal Income Taxes
|
$ | 3,814 | $ | 2,907 | $ | 3,273 | ||||||
The accompanying notes are an integral part of these consolidated financial statements.
|
(in thousands)
|
December 31
|
|||||||
2010
|
2009
|
|||||||
Assets:
|
||||||||
Postretirement benefits
|
$ | 11,747 | $ | 9,393 | ||||
Unrecovered income taxes and other
|
19,474 | 20,451 | ||||||
Deferred revenue (included in deferred charges)
|
4,122 | 4,361 | ||||||
Other (included in deferred charges)
|
2,049 | 1,536 | ||||||
Total regulatory assets
|
$ | 37,392 | $ | 35,741 | ||||
Liabilities:
|
||||||||
Investment Tax Credits
|
$ | 1,376 | $ | 1,437 | ||||
Unfunded future income taxes and other
|
19,474 | 20,451 | ||||||
Total regulatory liabilities
|
$ | 20,850 | $ | 21,888 |
(in thousands)
|
2010
|
2009
|
2008
|
|||||||||
Additions to Utility Plant:
|
||||||||||||
Company Financed
|
$ | 26,240 | $ | 27,598 | $ | 19,877 | ||||||
Allowance for Funds Used During Construction
|
171 | 238 | 123 | |||||||||
Subtotal – Utility Plant Increase to Rate Base
|
26,411 | 27,836 | 20,000 | |||||||||
Advances from Others for Construction
|
281 | 513 | 737 | |||||||||
Net Additions to Utility Plant
|
$ | 26,692 | $ | 28,349 | $ | 20,737 |
Years ended December 31,
|
2010
|
2009
|
2008
|
|||||||||
Numerator (in thousands)
|
||||||||||||
Basic Net Income Applicable to Common Stock
|
$ | 9,760 | $ | 10,171 | $ | 9,386 | ||||||
Diluted Net Income Applicable to Common Stock
|
$ | 9,760 | $ | 10,171 | $ | 9,386 | ||||||
Denominator (in thousands)
|
||||||||||||
Basic Weighted Average Shares Outstanding
|
8,532 | 8,448 | 8,377 | |||||||||
Dilutive Effect of Stock Awards
|
101 | 75 | 53 | |||||||||
Diluted Weighted Average Shares Outstanding
|
8,633 | 8,523 | 8,430 | |||||||||
Earnings per Share
|
||||||||||||
Basic Earnings per Share
|
$ | 1.14 | $ | 1.20 | $ | 1.12 | ||||||
Dilutive Effect of Stock Awards
|
0.01 | 0.01 | 0.01 | |||||||||
Diluted Earnings per Share
|
$ | 1.13 | $ | 1.19 | $ | 1.11 |
(in thousands)
|
2010
|
2009
|
2008
|
|||||||||
Federal Classified as Operating Expense
|
$ | 5,513 | $ | 3,566 | $ | 3,631 | ||||||
Federal Classified as Other Utility Income
|
368 | 342 | 267 | |||||||||
Federal Classified as Other Income
|
||||||||||||
Land Sales and Donations
|
(230 | ) | 409 | 178 | ||||||||
Non-Water Sales
|
487 | 469 | 360 | |||||||||
Other
|
(257 | ) | (162 | ) | (195 | ) | ||||||
Total Federal Income Tax Expense
|
5,881 | 4,624 | 4,241 | |||||||||
State Classified as Operating Expense
|
(190 | ) | (1,100 | ) | (113 | ) | ||||||
State Classified as Other Utility Income
|
97 | 90 | 64 | |||||||||
State Classified as Other Income
|
||||||||||||
Land Sales and Donations
|
-- | 27 | (19 | ) | ||||||||
Non-Water Sales
|
120 | 123 | 90 | |||||||||
Other
|
(43 | ) | (17 | ) | (23 | ) | ||||||
Total State Income Tax Expense
|
(16 | ) | (877 | ) | (1 | ) | ||||||
Total Income Tax Expense
|
$ | 5,865 | $ | 3,747 | $ | 4,240 |
(in thousands)
|
2010
|
2009
|
2008
|
|||||||||
Current Income Taxes
|
||||||||||||
Federal
|
$ | 3,902 | $ | 2,338 | $ | 1,906 | ||||||
State
|
338 | 154 | 110 | |||||||||
Total Current
|
4,240 | 2,492 | 2,016 | |||||||||
Deferred Income Taxes, Net
|
||||||||||||
Federal
|
||||||||||||
Investment Tax Credit
|
(61 | ) | (63 | ) | (63 | ) | ||||||
Deferred Revenue
|
(75 | ) | (75 | ) | 264 | |||||||
Land Donations
|
201 | 272 | 187 | |||||||||
Depreciation
|
1,909 | 2,254 | 1,583 | |||||||||
Other
|
5 | (102 | ) | 364 | ||||||||
Total Federal
|
1,979 | 2,286 | 2,335 | |||||||||
State
|
||||||||||||
Land Donations
|
-- | 35 | 85 | |||||||||
Other (A)
|
(354 | ) | (1,066 | ) | (196 | ) | ||||||
Total State
|
(354 | ) | (1,031 | ) | (111 | ) | ||||||
Total Deferred Income Taxes
|
1,625 | 1,255 | 2,224 | |||||||||
Total Income Tax
|
$ | 5,865 | $ | 3,747 | $ | 4,240 |
(A)
|
– Fixed capital credits account for $(1,089) of Other in 2009.
|
(in thousands)
|
2010
|
2009
|
||||||
Unrecovered Income Taxes
|
$ | (24,696 | ) | $ | (25,649 | ) | ||
Deferred Federal and State Income Taxes
|
34,246 | 32,454 | ||||||
Unfunded Future Income Taxes
|
19,474 | 20,451 | ||||||
Unamortized Investment Tax Credit
|
1,376 | 1,437 | ||||||
Other
|
(185 | ) | (139 | ) | ||||
Net Deferred Income Tax Liability
|
$ | 30,215 | $ | 28,554 |
(in thousands)
|
2010
|
2009
|
||||||
Charitable Contribution Carryforward (1)
|
$ | (1,778 | ) | $ | (2,216 | ) | ||
Valuation Allowance
|
1,386 | 1,623 | ||||||
Tax Credit Carryforward (2)
|
(2,551 | ) | (2,350 | ) | ||||
Prepaid Income Taxes on CIAC
|
(66 | ) | (66 | ) | ||||
Prepaid Federal Income Tax on Services
|
(159 | ) | (145 | ) | ||||
Other Comprehensive Income
|
(234 | ) | (275 | ) | ||||
Accelerated Depreciation
|
32,520 | 30,626 | ||||||
Net of AFUDC and Capitalized Interest
|
264 | 257 | ||||||
Unamortized Investment Tax Credit
|
1,376 | 1,437 | ||||||
Other
|
(543 | ) | (337 | ) | ||||
Net Deferred Income Tax Liability
|
$ | 30,215 | $ | 28,554 |
(1)
|
2010 charitable contribution carryover expires in 2012.
|
(2)
|
State tax credit carry-forwards expire beginning 2013 and ending in 2032.
|
(in thousands)
|
2010
|
2009
|
2008
|
|||||||||
Pre-Tax Income
|
||||||||||||
Net Income
|
$ | 9,798 | $ | 10,209 | $ | 9,424 | ||||||
Income Taxes
|
5,865 | 3,747 | 4,240 | |||||||||
Total Pre-Tax Income
|
$ | 15,663 | $ | 13,956 | $ | 13,664 |
2010
|
2009
|
2008
|
||||||||||
Federal Statutory Tax Rate
|
34.0 | % | 34.0 | % | 34.0 | % | ||||||
Tax Effect Differences:
|
||||||||||||
State Income Taxes Net of Federal Benefit
|
-- | (4.3 | %) | -- | ||||||||
Depreciation
|
0.4 | % | 1.7 | % | 1.6 | % | ||||||
Charitable Contributions – Land Donation (Net of Valuation Allowance)
|
(1.5 | %) | (1.3 | )% | 1.5 | % | ||||||
Pension Costs
|
1.8 | % | (4.1 | %) | (5.1 | %) | ||||||
Allowance for Funds Used During Construction
|
(0.4 | %) | (0.6 | %) | (0.3 | %) | ||||||
Change in Estimate of Prior Year Income Tax Expense
|
-- | 0.9 | % | (0.5 | %) | |||||||
Rate Case Expense
|
(0.7 | %) | 0.4 | % | 0.6 | % | ||||||
Other
|
3.8 | % | 0.2 | % | (0.7 | %) | ||||||
Effective Income Tax Rate
|
37.4 | % | 26.9 | % | 31.1 | % |
(in thousands, except share data)
|
Shares
|
Issuance Amount
|
Expense
|
Total
|
||||||||||||
Balance, January 1, 2008
|
8,376,842 | $ | 64,414 | $ | (1,606 | ) | $ | 62,808 | ||||||||
Stock and equivalents issued through Performance Stock Program, Net of Forfeitures
|
22,046 | 465 | -- | 465 | ||||||||||||
Dividend Reinvestment Plan
|
52,606 | 1,287 | -- | 1,287 | ||||||||||||
Stock Options Exercised and Expensed
|
11,775 | 246 | (2 | ) | 244 | |||||||||||
Balance, December 31, 2008
|
8,463,269 | $ | 66,412 | $ | (1,608 | ) | $ | 64,804 | ||||||||
Stock and equivalents issued through Performance Stock Program, Net of Forfeitures
|
31,515 | 767 | -- | 767 | ||||||||||||
Dividend Reinvestment Plan
|
61,462 | 1,323 | -- | 1,323 | ||||||||||||
Stock Options Exercised and Expensed
|
17,498 | 394 | (2 | ) | 392 | |||||||||||
Balance, December 31, 2009
|
8,573,744 | $ | 68,896 | $ | (1,610 | ) | $ | 67,286 | ||||||||
Stock and equivalents issued through Performance Stock Program, Net of Forfeitures
|
31,282 | 1,077 | -- | 1,077 | ||||||||||||
Dividend Reinvestment Plan
|
57,749 | 1,358 | -- | 1,358 | ||||||||||||
Stock Options Exercised and Expensed
|
14,074 | 305 | (2 | ) | 303 | |||||||||||
Balance, December 31, 2010 (1)
|
8,676,849 | $ | 71,636 | $ | (1,612 | ) | $ | 70,024 |
(1)
|
Includes 42,594 restricted shares and 102,140 common stock equivalent shares issued through the Performance Stock Programs through December 31, 2010.
|
(in thousands, except per share data)
|
2010
|
2009
|
2008
|
|||||||||
Balance, beginning of year
|
$ | 41,785 | $ | 39,285 | $ | 37,272 | ||||||
Net Income
|
9,798 | 10,209 | 9,424 | |||||||||
Sub-total
|
51,583 | 49,494 | 46,696 | |||||||||
Dividends declared:
|
||||||||||||
Cumulative Preferred Stock, Series A, $0.80 per share
|
12 | 12 | 12 | |||||||||
Cumulative Preferred Stock, Series $0.90, $0.90 per share
|
26 | 26 | 26 | |||||||||
Common Stock:
|
||||||||||||
2010 $0.920 per Common Share
|
7,942 | -- | -- | |||||||||
2009 $0.900 per Common Share
|
-- | 7,671 | -- | |||||||||
2008 $0.880 per Common Share
|
-- | -- | 7,373 | |||||||||
Total Dividends Declared
|
7,980 | 7,709 | 7,411 | |||||||||
Balance, end of year
|
$ | 43,603 | $ | 41,785 | $ | 39,285 |
|
Level 1 –
|
Quoted market prices in active markets for identical assets or liabilities
|
|
Level 2 –
|
Inputs other than Level 1 that are either directly or indirectly observable
|
|
Level 3 –
|
Unobservable inputs developed using the Company’s estimates and assumptions, which reflect those that the Company believes market participants would use.
|
(in thousands)
|
Level 1
|
Level 2
|
Level 3
|
|||||||||
Asset Type:
|
||||||||||||
Money Market Fund
|
$ | 107 | $ | -- | $ | -- | ||||||
Mutual Funds:
|
||||||||||||
Equity Funds (1)
|
494 | -- | -- | |||||||||
Index Funds (3)
|
160 | -- | -- | |||||||||
Total
|
$ | 761 | $ | -- | $ | -- |
(in thousands)
|
Level 1
|
Level 2
|
Level 3
|
|||||||||
Asset Type:
|
||||||||||||
Money Market Fund
|
$ | 46 | $ | -- | $ | -- | ||||||
Mutual Funds:
|
||||||||||||
Equity Funds (1)
|
789 | -- | -- | |||||||||
Fixed Income Funds (2)
|
53 | -- | -- | |||||||||
Index Funds (3)
|
263 | -- | -- | |||||||||
Total
|
$ | 1,151 | $ | -- | $ | -- |
(1)
|
Mutual funds consisting primarily of equity securities.
|
(2)
|
Mutual funds consisting primarily of fixed income securities.
|
(3)
|
Mutual funds consisting primarily of funds linked to indices.
|
(in thousands)
|
2010
|
2009
|
|||||||||
The Connecticut Water Company:
|
|||||||||||
Unsecured Water Facilities Revenue Bonds
|
|||||||||||
5.05 | % |
1998 Series A, Due 2028
|
$ | 9,580 | $ | 9,625 | |||||
5.125 | % |
1998 Series B, Due 2028
|
7,530 | 7,600 | |||||||
4.40 | % |
2003A Series, Due 2020
|
8,000 | 8,000 | |||||||
5.00 | % |
2003C Series, Due 2022
|
14,795 | 14,795 | |||||||
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
|
14,885 | 14,885 | |||||||
5.00 | % |
2007 A Series, Due 2037
|
14,835 | 15,000 | |||||||
5.10 | % |
2009 A Series, Due 2039
|
20,000 | 20,000 | |||||||
Total Long-Term Debt
|
$ | 111,675 | $ | 111,955 |
(in thousands, except share data)
|
2010
|
2009
|
||||||
Connecticut Water Service, Inc.
|
||||||||
Cumulative Series A Voting, $20 Par Value; Authorized, Issued and Outstanding 15,000 Shares
|
$ | 300 | $ | 300 | ||||
Cumulative Series $0.90 Non-Voting, $16 Par Value; Authorized 50,000 Shares, Issued and Outstanding 29,499
|
472 | 472 | ||||||
Total Preferred Stock
|
$ | 772 | $ | 772 |
(in thousands)
|
2010
|
2009
|
||||||
Land
|
$ | 11,084 | $ | 10,391 | ||||
Source of supply
|
29,742 | 28,922 | ||||||
Pumping
|
29,624 | 28,511 | ||||||
Water treatment
|
55,891 | 55,377 | ||||||
Transmission and distribution
|
309,658 | 292,140 | ||||||
General
|
37,306 | 32,493 | ||||||
Held for future use
|
478 | 478 | ||||||
Acquisition Adjustment
|
(6,194 | ) | (6,900 | ) | ||||
Total
|
$ | 467,589 | $ | 441,412 |
(in thousands)
|
2010
|
2009
|
2008
|
|||||||||
Municipal Property Taxes
|
$ | 5,293 | $ | 5,052 | $ | 5,129 | ||||||
Payroll Taxes
|
978 | 901 | 912 | |||||||||
Total Taxes Other than Income Taxes
|
$ | 6,271 | $ | 5,953 | $ | 6,041 |
(in thousands)
|
2010
|
2009
|
||||||
Defined Benefit Pension Plan
|
$ | 3,768 | $ | 5,899 | ||||
Post Retirement Benefit Other than Pension
|
7,019 | 3,340 | ||||||
Supplemental Executive Retirement Plan
|
4,297 | 4,012 | ||||||
Deferred Compensation
|
1,409 | 1,358 | ||||||
Other Long-Term Compensation
|
254 | 289 | ||||||
Total Long-Term Compensation Arrangements
|
$ | 16,747 | $ | 14,898 |
2010
|
2009
|
|||||||
Equity
|
65 | % | 65 | % | ||||
Fixed Income
|
35 | % | 35 | % | ||||
Total
|
100 | % | 100 | % |
Pension Benefits
(in thousands)
|
2010
|
2009
|
||||||
Change in benefit obligation:
|
||||||||
Benefit obligation, beginning of year
|
$ | 37,182 | $ | 32,886 | ||||
Service cost
|
1,668 | 1,454 | ||||||
Interest cost
|
2,175 | 2,024 | ||||||
Actuarial loss (gain)
|
1,462 | 1,969 | ||||||
Benefits paid
|
(1,729 | ) | (1,151 | ) | ||||
Benefit obligation, end of year
|
$ | 40,758 | $ | 37,182 | ||||
Change in plan assets:
|
||||||||
Fair value, beginning of year
|
$ | 31,283 | $ | 23,262 | ||||
Actual return on plan assets
|
4,036 | 5,872 | ||||||
Employer contributions
|
3,400 | 3,300 | ||||||
Benefits paid
|
(1,729 | ) | (1,151 | ) | ||||
Fair value, end of year
|
$ | 36,990 | $ | 31,283 | ||||
Funded Status
|
$ | (3,768 | ) | $ | (5,899 | ) | ||
Amount Recognized in Consolidated Balance Sheets Consisted of:
|
||||||||
Non-current asset
|
$ | -- | $ | -- | ||||
Current liability
|
-- | -- | ||||||
Non-current liability
|
(3,768 | ) | (5,899 | ) | ||||
Net amount recognized
|
$ | (3,768 | ) | $ | (5,899 | ) |
Weighted-average assumptions used to determine benefit obligations at December 31:
|
2010
|
2009
|
||||||
Discount rate
|
5.50 | % | 5.95 | % | ||||
Rate of compensation increase
|
3.50 | % | 4.50 | % | ||||
Weighted-average assumptions used to determine net periodic cost for years ended December 31:
|
||||||||
Discount rate
|
5.95 | % | 6.25 | % | ||||
Expected long-term return on plan assets
|
8.00 | % | 8.00 | % | ||||
Rate of compensation increase
|
4.50 | % | 4.50 | % |
Pension Benefits
(in thousands)
|
2010
|
2009
|
2008
|
|||||||||
Components of net periodic benefit costs
|
||||||||||||
Service cost
|
$ | 1,668 | $ | 1,454 | $ | 1,259 | ||||||
Interest cost
|
2,175 | 2,024 | 1,906 | |||||||||
Expected return on plan assets
|
(2,507 | ) | (2,229 | ) | (2,120 | ) | ||||||
Amortization of:
|
||||||||||||
Net transition obligation
|
2 | 2 | 2 | |||||||||
Net loss
|
69 | 69 | 69 | |||||||||
Prior service cost
|
602 | 398 | 142 | |||||||||
Net Periodic Pension Benefit Costs
|
$ | 2,009 | $ | 1,718 | $ | 1,258 |
Pension Benefits
(in thousands)
|
2010
|
2009
|
||||||
Change in net (gain) loss
|
$ | (67 | ) | $ | (1,674 | ) | ||
Amortization of transition obligation
|
(2 | ) | (2 | ) | ||||
Amortization of net loss
|
(69 | ) | (69 | ) | ||||
Amortization of prior service cost
|
(602 | ) | (398 | ) | ||||
Total recognized to Regulatory (Liability) Asset
|
$ | (740 | ) | $ | (2,143 | ) |
Amounts Recognized as a Regulatory Asset (Liability) at December 31:
(in thousands)
|
2010
|
2009
|
||||||
Transition obligation
|
$ | 2 | $ | 4 | ||||
Prior service cost
|
378 | 447 | ||||||
Net (gain) loss
|
5,916 | 6,446 | ||||||
Total Recognized as a Regulatory Asset (Liability)
|
$ | 6,296 | $ | 6,897 |
Amounts Recognized in Other Comprehensive Income at December 31:
(in thousands)
|
2010
|
2009
|
||||||
Transition obligation
|
$ | -- | $ | -- | ||||
Prior service cost
|
-- | -- | ||||||
Net (gain) loss
|
327 | 466 | ||||||
Total Recognized in Other Comprehensive Income
|
$ | 327 | $ | 466 |
Estimated Net Periodic Benefit Cost Amortizations for the periods January 1 - December 31,:
(in thousands)
|
2011
|
|||
Amortization of transition obligation
|
$ | 2 | ||
Amortization of prior service cost
|
69 | |||
Amortization of net loss
|
750 | |||
Total Estimated Net Periodic Benefit Cost Amortizations
|
$ | 821 |
2010
|
2009
|
|||||||
Equity
|
67 | % | 66 | % | ||||
Fixed Income
|
33 | % | 34 | % | ||||
Total
|
100 | % | 100 | % |
(in thousands)
|
Level 1
|
Level 2
|
Level 3
|
|||||||||
Asset Type:
|
||||||||||||
Money Market Fund
|
$ | 277 | $ | -- | $ | -- | ||||||
Mutual Funds:
|
||||||||||||
Fixed Income Funds (1)
|
12,015 | -- | -- | |||||||||
Equity Funds (2)
|
15,553 | -- | -- | |||||||||
Index Funds (3)
|
9,152 | -- | -- | |||||||||
Total
|
$ | 36,997 | $ | -- | $ | -- |
(in thousands)
|
Level 1
|
Level 2
|
Level 3
|
|||||||||
Asset Type:
|
||||||||||||
Money Market Fund
|
$ | 208 | $ | -- | $ | -- | ||||||
Mutual Funds:
|
||||||||||||
Fixed Income Funds (1)
|
10,529 | -- | -- | |||||||||
Equity Funds (2)
|
13,017 | -- | -- | |||||||||
Index Funds (3)
|
7,529 | -- | -- | |||||||||
Total
|
$ | 31,283 | $ | -- | $ | -- |
(1)
|
Mutual funds consisting primarily of fixed income securities.
|
(2)
|
Mutual funds consisting primarily of equity securities.
|
(3)
|
Mutual funds consisting primarily of funds linked to indices.
|
(in thousands)
|
||||
2011
|
$ | 1,585 | ||
2012
|
2,839 | |||
2013
|
2,253 | |||
2014
|
2,717 | |||
2015
|
3,480 | |||
Years 2016 – 2020
|
19,475 |
PBOP Benefits
(in thousands)
|
2010
|
2009
|
||||||
Change in benefit obligation:
|
||||||||
Benefit obligation, beginning of year
|
$ | 9,518 | $ | 7,989 | ||||
Service cost
|
567 | 473 | ||||||
Interest cost
|
574 | 488 | ||||||
Plan participant contributions
|
-- | 94 | ||||||
Actuarial (gain) loss
|
3,403 | 875 | ||||||
Benefits paid
|
(619 | ) | (401 | ) | ||||
Benefit obligation, end of year
|
$ | 13,443 | $ | 9,518 | ||||
Change in plan assets:
|
||||||||
Fair value, beginning of year
|
$ | 6,230 | $ | 4,694 | ||||
Actual return on plan assets
|
606 | 1,185 | ||||||
Employer contributions
|
258 | 658 | ||||||
Plan participant contributions
|
-- | 94 | ||||||
Benefits paid
|
(619 | ) | (401 | ) | ||||
Fair value, end of year
|
$ | 6,475 | $ | 6,230 | ||||
Funded Status
|
$ | (6,968 | ) | $ | (3,288 | ) | ||
Amount Recognized in Consolidated Balance Sheets Consisted of:
|
||||||||
Non-current asset
|
$ | -- | $ | -- | ||||
Current liability
|
-- | -- | ||||||
Non-current liability
|
(6,968 | ) | (3,288 | ) | ||||
Net amount recognized
|
$ | (6,968 | ) | $ | (3,288 | ) |
Weighted-average assumptions used to determine benefit obligations at December 31:
|
2010
|
2009
|
||||||
Discount rate
|
5.35 | % | 5.80 | % | ||||
Weighted-average assumptions used to determine net periodic cost for years ended December 31:
|
||||||||
Discount rate
|
5.80 | % | 6.20 | % | ||||
Expected long-term return on plan assets
|
5.00 | % | 5.00 | % |
PBOP Benefits
(in thousands)
|
2010
|
2009
|
2008
|
|||||||||
Components of net periodic benefit costs
|
||||||||||||
Service cost
|
$ | 567 | $ | 473 | $ | 632 | ||||||
Interest cost
|
574 | 488 | 657 | |||||||||
Expected return on plan assets
|
(306 | ) | (272 | ) | (271 | ) | ||||||
Other
|
225 | 225 | 225 | |||||||||
Amortization of:
|
||||||||||||
Net transition obligation
|
(406 | ) | (406 | ) | 120 | |||||||
Recognized net loss
|
329 | 217 | 202 | |||||||||
Net Periodic Post Retirement Benefit Costs
|
$ | 983 | $ | 725 | $ | 1,565 |
PBOP Benefits
(in thousands)
|
2010
|
2009
|
||||||
Change in net loss (gain)
|
$ | 3,103 | $ | (37 | ) | |||
Amortization of transition obligation
|
-- | -- | ||||||
Amortization of prior service credit
|
406 | 406 | ||||||
Amortization of net loss
|
(329 | ) | (218 | ) | ||||
Total recognized to Regulatory Asset
|
$ | 3,180 | $ | 151 |
Amounts Recognized as a Regulatory Asset at December 31:
(in thousands)
|
2010
|
2009
|
||||||
Transition obligation
|
$ | -- | $ | -- | ||||
Prior service cost
|
(1,794 | ) | (2,200 | ) | ||||
Net (gain) loss
|
5,724 | 2,950 | ||||||
Total Recognized as a Regulatory Asset
|
$ | 3,930 | $ | 750 |
Estimated Benefit Cost Amortizations for the periods January 1 - December 31,:
(in thousands)
|
2011
|
|||
Amortization of transition obligation
|
$ | -- | ||
Amortization of prior service cost
|
(406 | ) | ||
Amortization of net loss (gain)
|
606 | |||
Total Estimated Net Periodic Benefit Cost Amortizations
|
$ | 200 |
Assumed health care cost trend rates at December 31:
|
2010
|
2009
|
||||||||||||||
Medical
|
Dental
|
Medical
|
Dental
|
|||||||||||||
Health care cost trend rate assumed for next year
(1)
|
10.0 | % | 10.0 | % | 10.0 | % | 10.0 | % | ||||||||
Rate to which the cost trend rate is assumed to decline
|
5.0 | % | 5.0 | % | 5.0 | % | 5.0 | % | ||||||||
Year that the rate reaches the ultimate trend rate
|
2021 | 2021 | 2020 | 2020 |
(in thousands)
|
1 Percentage-Point
|
|||||||
Increase
|
Decrease
|
|||||||
Effect on total of service and interest cost components
|
$ | 177 | $ | (144 | ) | |||
Effect on post-retirement benefit obligation
|
$ | 1,717 | $ | (1,430 | ) |
2010
|
2009
|
|||||||
Equity
|
63 | % | 65 | % | ||||
Fixed Income
|
37 | % | 35 | % | ||||
Total
|
100 | % | 100 | % |
(in thousands)
|
Level 1
|
Level 2
|
Level 3
|
|||||||||
Asset Type:
|
||||||||||||
Money Market
|
$ | 492 | $ | -- | $ | -- | ||||||
Mutual Funds:
|
||||||||||||
Fixed Income Funds (1)
|
1,897 | -- | -- | |||||||||
Equity Funds (2)
|
2,601 | -- | -- | |||||||||
Index Funds (3)
|
1,485 | -- | -- | |||||||||
Total
|
$ | 6,475 | $ | -- | $ | -- |
(in thousands)
|
Level 1
|
Level 2
|
Level 3
|
|||||||||
Asset Type:
|
||||||||||||
Money Market
|
$ | 163 | $ | -- | $ | -- | ||||||
Mutual Funds:
|
||||||||||||
Fixed Income Funds (1)
|
2,043 | -- | -- | |||||||||
Equity Funds (2)
|
2,553 | -- | -- | |||||||||
Index Funds (3)
|
1,471 | -- | -- | |||||||||
Total
|
$ | 6,230 | $ | -- | $ | -- |
(1)
|
Mutual funds consisting primarily of fixed income securities.
|
(2)
|
Mutual funds consisting primarily of equity securities.
|
(3)
|
Mutual funds consisting primarily of funds linked to indices.
|
(in thousands)
|
||||
2011
|
$ | 467 | ||
2012
|
522 | |||
2013
|
557 | |||
2014
|
601 | |||
2015
|
651 | |||
Years 2016 – 2020
|
4,584 |
2010
|
2009
|
2008
|
||||||||||||||||||||||
Shares
|
Weighted Average Exercise Price
|
Shares
|
Weighted Average Exercise Price
|
Shares
|
Weighted Average Exercise Price
|
|||||||||||||||||||
Options:
|
||||||||||||||||||||||||
Outstanding, beginning of year
|
77,388 | $ | 26.24 | 94,886 | $ | 25.52 | 106,661 | $ | 24.74 | |||||||||||||||
Forfeited
|
(9,640 | ) | 27.54 | -- | -- | -- | -- | |||||||||||||||||
Exercised
|
(14,074 | ) | 20.42 | (17,498 | ) | 22.33 | (11,775 | ) | 18.47 | |||||||||||||||
Outstanding, end of year
|
53,674 | $ | 27.54 | 77,388 | $ | 26.24 | 94,886 | $ | 25.52 | |||||||||||||||
Exercisable, end of year
|
53,674 | $ | 27.54 | 77,388 | $ | 26.24 | 94,886 | $ | 25.52 |
Options Outstanding and Exercisable
|
||||||||||||||
Shares
|
Weighted Average Remaining Contractual Life (years)
|
Weighted Average Exercise Price
|
||||||||||||
Range of prices:
|
||||||||||||||
$18.00 - $20.99 | -- | -- | $ | -- | ||||||||||
$21.00 - $23.99 | -- | -- | -- | |||||||||||
$24.00 - $26.99 | 19,104 | 1.9 | 25.78 | |||||||||||
$27.00 - $29.99 | 34,570 | 1.9 | 28.51 | |||||||||||
53,674 | 1.9 | $ | 27.54 |
For the years ended December 31,
|
2010
|
2009
|
||||||||||||||
Number of Shares
|
Grant Date Weighted Average Fair Value
|
Number of Shares
|
Grant Date Weighted Average Fair Value
|
|||||||||||||
Non-vested at beginning of year
|
8,449 | $ | 25.18 | 12,220 | $ | 25.18 | ||||||||||
Granted
|
-- | -- | -- | -- | ||||||||||||
Vested
|
(4,370 | ) | 24.95 | (3,771 | ) | 25.18 | ||||||||||
Forfeited
|
-- | -- | -- | -- | ||||||||||||
Non-vested at end of year
|
4,079 | $ | 25.43 | 8,449 | $ | 25.18 |
For the years ended December 31,
|
2010
|
2009
|
||||||||||||||
Number of Shares
|
Grant Date Weighted Average Fair Value
|
Number of Shares
|
Grant Date Weighted Average Fair Value
|
|||||||||||||
Non-vested at beginning of year
|
45,257 | $ | 23.97 | 32,444 | $ | 24.43 | ||||||||||
Granted
|
28,878 | 22.75 | 26,157 | 23.28 | ||||||||||||
Vested
|
(19,733 | ) | 23.38 | (10,548 | ) | 23.68 | ||||||||||
Forfeited
|
(6,328 | ) | 23.28 | (2,796 | ) | 23.92 | ||||||||||
Non-vested at end of year
|
48,074 | $ | 23.57 | 45,257 | $ | 23.97 |
(in thousands)
|
Revenues
|
Depreciation
|
Other Operating Expenses
|
Other Income (Deductions)
|
Interest Expense (net of AFUDC)
|
Income Taxes
|
Net Income (Loss)
|
|||||||||||||||||||||
For the year ended December 31, 2010
|
||||||||||||||||||||||||||||
Water Activities
|
$ | 67,753 | $ | 7,088 | $ | 40,301 | $ | (525 | ) | $ | 5,682 | $ | 5,488 | $ | 8,669 | |||||||||||||
Real Estate Transactions
|
-- | -- | -- | -- | -- | (230 | ) | 230 | ||||||||||||||||||||
Services and Rentals
|
5,074 | 7 | 3,618 | -- | (57 | ) | 607 | 899 | ||||||||||||||||||||
Total
|
$ | 72,827 | $ | 7,095 | $ | 43,919 | $ | (525 | ) | $ | 5,625 | $ | 5,865 | $ | 9,798 | |||||||||||||
For the year ended December 31, 2009
|
||||||||||||||||||||||||||||
Water Activities
|
$ | 60,648 | $ | 6,403 | $ | 38,255 | $ | (934 | ) | $ | 4,506 | $ | 2,719 | $ | 7,831 | |||||||||||||
Real Estate Transactions
|
2,160 | -- | 275 | -- | -- | 436 | 1,449 | |||||||||||||||||||||
Services and Rentals
|
4,735 | 14 | 3,204 | -- | (5 | ) | 593 | 929 | ||||||||||||||||||||
Total
|
$ | 67,543 | $ | 6,417 | $ | 41,734 | $ | (934 | ) | $ | 4,501 | $ | 3,748 | $ | 10,209 | |||||||||||||
For the year ended December 31, 2008
|
||||||||||||||||||||||||||||
Water Activities
|
$ | 62,288 | $ | 6,438 | $ | 38,027 | $ | (326 | ) | $ | 5,075 | $ | 3,628 | $ | 8,794 | |||||||||||||
Real Estate Transactions
|
-- | -- | -- | -- | -- | 160 | (160 | ) | ||||||||||||||||||||
Services and Rentals
|
4,855 | 23 | 3,596 | -- | (6 | ) | 452 | 790 | ||||||||||||||||||||
Total
|
$ | 67,143 | $ | 6,461 | $ | 41,623 | $ | (326 | ) | $ | 5,069 | $ | 4,240 | $ | 9,424 |
At December 31 (in thousands):
|
2010
|
2009
|
||||||
Total Plant and Other Investments:
|
||||||||
Water
|
$ | 349,221 | $ | 330,151 | ||||
Non-Water
|
566 | 564 | ||||||
Total Plant and Other Investments
|
349,787 | 330,715 | ||||||
Other Assets:
|
||||||||
Water
|
72,600 | 77,622 | ||||||
Non-Water
|
2,824 | 6,939 | ||||||
Total Other Assets
|
75,424 | 84,561 | ||||||
Total Assets
|
$ | 425,211 | $ | 415,276 |
First Quarter
|
Second Quarter
|
Third Quarter
|
Fourth Quarter
|
|||||||||||||||||||||||||||||
2010
|
2009
|
2010
|
2009
|
2010
|
2009
|
2010
|
2009
|
|||||||||||||||||||||||||
Operating Revenues
|
$ | 13,801 | $ | 13,381 | $ | 15,901 | $ | 15,147 | $ | 21,006 | $ | 16,659 | $ | 15,700 | $ | 14,204 | ||||||||||||||||
Total Utility Operating Income
|
2,283 | 2,223 | 3,714 | 3,215 | 5,910 | 5,451 | 2,670 | 2,203 | ||||||||||||||||||||||||
Net Income
|
1,070 | 1,144 | 2,312 | 2,266 | 4,651 | 5,759 | 1,765 | 1,040 | ||||||||||||||||||||||||
Basic Earnings per Common Share
|
0.12 | 0.13 | 0.28 | 0.27 | 0.54 | 0.67 | 0.20 | 0.13 | ||||||||||||||||||||||||
Diluted Earnings per Common Share
|
0.12 | 0.13 | 0.27 | 0.27 | 0.54 | 0.67 | 0.20 | 0.12 |
Exhibit
Number
|
Description
|
3.1
|
Certificate of Incorporation of Connecticut Water Service, Inc. amended and restated as of April, 1998. (Exhibit 3.1 to Form 10-K for the year ended 12/31/98).
|
3.2
|
By-Laws, as amended, of Connecticut Water Service, Inc. as amended and restated as of August 16, 2007. (Exhibit 3.1 to Form 8-K filed on August 21, 2007).
|
3.3
|
Certification of Incorporation of The Connecticut Water Company effective April, 1998. (Exhibit 3.3 to Form 10-K for the year ended 12/31/98).
|
3.4
|
Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Connecticut Water Service, Inc. dated August 6, 2001. (Exhibit 3.4 to Form 10-K for the year ended 12/31/01).
|
3.5
|
Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Connecticut Water Service, Inc. dated April 23, 2004. (Exhibit 3.5 to Form 10-Q for the quarter ended 3/31/03).
|
4.1
|
Loan Agreement dated as of October 1, 2003 between the Connecticut Development Authority and The Connecticut Water Company. (Exhibit 4.12 to Form 10-K for the year ended 12/31/03).
|
4.2
|
Indenture of Trust dated as of October 1, 2003 between the Connecticut Development Authority and The Connecticut Water Company. (Exhibit 4.13 to Form 10-K for the year ended 12/31/03).
|
4.3
|
Loan Agreement dated as of October 1, 2003 between the Connecticut Development Authority and The Connecticut Water Company. (Exhibit 4.14 to Form 10-K for the year ended 12/31/03).
|
4.4
|
Indenture of Trust dated as of October 1, 2003 between the Connecticut Development Authority and The Connecticut Water Company. (Exhibit 4.15 to Form 10-K for the year ended 12/31/03).
|
4.5
|
Bond Purchase Agreement dated as of October 10, 2003 among Connecticut Development Authority, The Connecticut Water Company and A.G. Edwards and Sons, Inc. (Exhibit 4.16 to Form 10-K for the year ended 12/31/03).
|
4.6
|
Line of Credit Agreement dated as of March 12, 2004 between Webster Bank and Connecticut Water Service, Inc. (Exhibit 4.17 to Form 10-Q for the quarter ended 3/31/04).
|
4.7
|
Bond Purchase Agreement dated as of March 12, 2004, among The Connecticut Water Company and A.G. Edwards & Sons, Inc. (Exhibit 4.18 to Form 10-Q for the quarter ended 3/31/04).
|
4.8
|
Indenture of Trust, dated as of March 1, 2004, between The Connecticut Water Company and U.S. Bank National Association, as Trustee. (Exhibit 4.19 to Form 10-Q for the quarter ended 3/31/04).
|
4.9
|
Reimbursement and Credit Agreement, dated as of March 1, 2004, between The Connecticut Water Company and Citizen’s Bank of Rhode Island. (Exhibit 4.20 to Form 10-Q for the quarter ended 3/31/04).
|
4.10
|
Letter of Credit issued by Citizen’s Bank of Rhode Island, dated as of March 4, 2004. (Exhibit 4.21 to Form 10-Q for the quarter ended 3/31/04).
|
4.11
|
Agreement No. DWSRF 200103-C Project Loan Agreement between the State of Connecticut and Unionville Water Company under the Drinking Water State Revolving Fund (DWSRF) Program, dated as of April 19, 2004. (Exhibit 4.22 to Form 10-Q for the quarter ended 6/30/04).
|
4.12
|
Collateral Assignment of Water Service Charges and Right to Receive Water Service Expense Assessments and Security Agreement between Unionville Water Company and the State of Connecticut, dated as of June 3, 2004. (Exhibit 4.23 to Form 10-Q for the quarter ended 6/30/04).
|
4.13
|
Bond Purchase Agreement, dated September 1, 2004, among The Connecticut Water Company, Connecticut Development Authority, and A.G. Edwards & Sons, Inc. (Exhibit 4.24 to Form 10-Q for the quarter ended 9/30/04).
|
4.14
|
Indenture of Trust, dated August 1, 2004, between The Connecticut Water Company and U.S. Bank National Association, as Trustee, 2004A Series. (Exhibit 4.25 to Form 10-Q for the quarter ended 9/30/04).
|
4.15
|
Indenture of Trust, dated August 1, 2004, between The Connecticut Water Company and U.S. Bank National Association, as Trustee, 2004B Series. (Exhibit 4.26 to Form 10-Q for the quarter ended 9/30/04).
|
4.16
|
Loan Agreement, dated August 1, 2004, between The Connecticut Water Company and Connecticut Development Authority for 2004 Series. (Exhibit 4.27 to Form 10-Q for the quarter ended 9/30/04).
|
4.17
|
Loan Agreement, dated August 1, 2004, between The Connecticut Water Company and Connecticut Development Authority for 2004B Series. (Exhibit 4.28 to Form 10-Q for the quarter ended 9/30/04).
|
4.18
|
Reimbursement and Credit Agreement, dated as of August 1, 2004, between The Connecticut Water Company and Citizen’s Bank of Rhode Island, 2004A Series. (Exhibit 4.29 to Form 10-Q for the quarter ended 9/30/04).
|
4.19
|
Reimbursement and Credit Agreement, dated as of August 1, 2004, between The Connecticut Water Company and Citizen’s Bank of Rhode Island, 2004B Series. (Exhibit 4.30 to Form 10-Q for the quarter ended 9/30/04).
|
4.20
|
Letters of Credit, each dated September 2, 2004, between The Connecticut Water Company and Citizen’s Bank of Rhode Island, with respect to each of the 2004A and 2004B Series Bonds. (Exhibit 4.31 to Form 10-Q for the quarter ended 9/30/04).
|
4.21
|
Bond Purchase Agreement, dated October 28, 2005, among The Connecticut Water Company, Connecticut Development Authority and A.G. Edwards & Sons, Inc., Connecticut Water 2005A Series. (Exhibit 4.24 to Form 10-K for the year ended 12/31/05).
|
4.22
|
Loan Agreement, dated October 1, 2005, between The Connecticut Water Company and Connecticut Development Authority, Connecticut Water 2005A Series. (Exhibit 4.25 to Form 10-K for the year ended 12/31/05).
|
4.23
|
Indenture of Trust, dated October 1, 2005, between Connecticut Development Authority and U.S. Bank National Association, as Trustee, Connecticut Water 2005A Series. (Exhibit 4.26 to Form 10-K for the year ended 12/31/05).
|
4.24
|
Insurance Agreement, dated November 30, 2005, between The Connecticut Water Company and Financial Guaranty Insurance Company, as Insurer for The Connecticut Water 2005A Series. (Exhibit 4.27 to Form 10-K for the year ended 12/31/05).
|
4.25
|
Bond Purchase Agreement, dated November 16, 2005, among The Crystal Water Company of Danielson, Connecticut Water Service, Inc., Connecticut Development Authority and A.G. Edwards & Sons, Inc., Crystal Water 2005A Series. (Exhibit 4.28 to Form 10-K for the year ended 12/31/05).
|
4.26
|
Guaranty dated as of October 1, 2005 from Connecticut Water Service, Inc. to U.S. Bank National Association, as Trustee, Crystal Water 2005A Series. (Exhibit 4.29 to Form 10-K for the year ended 12/31/05).
|
4.27
|
Loan Agreement, dated October 1, 2005, between The Crystal Water Company of Danielson and Connecticut Development Authority, Crystal Water 2005A Series. (Exhibit 4.30 to Form 10-K for the year ended 12/31/05).
|
4.28
|
Indenture of Trust, dated October 1, 2005, between Connecticut Development Authority and U.S. Bank National Association, as Trustee, Crystal Water 2005A Series. (Exhibit 4.31 to Form 10-K for the year ended 12/31/05).
|
4.29
|
Insurance Agreement, dated November 30, 2005, between The Crystal Water Company of Danielson and Financial Guaranty Insurance Company, as Insurer for the Crystal Water 2005A Series. (Exhibit 4.32 to Form 10-K for the year ended 12/31/05).
|
4.30
|
First Amendment to Reimbursement and Credit Agreement, dated as of April 28, 2006, between The Connecticut Water Company and Citizen’s Bank of Rhode Island, 2004A Series. (Exhibit 10.1 to Form 10-Q for the period ending 3/31/06).
|
4.31
|
First Amendment to Reimbursement and Credit Agreement, dated as of April 28, 2006, between The Connecticut Water Company and Citizen’s Bank of Rhode Island, 2004B Series. (Exhibit 10.2 to Form 10-Q for the period ending 3/31/06).
|
4.32
|
First Amendment to Reimbursement and Credit Agreement, dated as of April 28, 2006, between The Connecticut Water Company and Citizen’s Bank of Rhode Island, 2004 Series Variable Rate, due 2029. (Exhibit 10.3 to Form 10-Q for the period ending 3/31/06).
|
4.33
|
Bond Purchase Agreement, dated December 5, 2007, among The Connecticut Water Company, Connecticut Development Authority, and Edward Jones and Company, L.P. water facilities Revenue Bonds – 2007A Series (AMT). (Exhibit 4.33 to Form 10-K for the year ended 12/31/07)
|
4.34
|
Loan Agreement dated as of December 5, 2007, among The Connecticut Water Company, and Connecticut Development Authority, Water Facilities Revenue Bonds – 2007A Series (AMT). (Exhibit 4.34 to Form 10-K for the year ended 12/31/07)
|
4.35
|
Indenture of Trust dated as of December 5, 2007, among The Connecticut Water Company, and Connecticut Development Authority, Water Facilities Revenue Bonds – 2007A Series (AMT). (Exhibit 4.35 to Form 10-K for the year ended 12/31/07)
|
4.36
|
Second Amendment to Reimbursement and Credit Agreement, dated as of August 23, 2007 between The Connecticut Water Company and Citizen’s Bank of Rhode Island 2004 A Series. (Exhibit 10.2 to the Form 10-Q for the period ending June 30, 2009)
|
4.37
|
Second Amendment to Reimbursement and Credit Agreement, dated as of August 23, 2007 between The Connecticut Water Company and Citizen’s Bank of Rhode Island 2004 B Series. (Exhibit 10.3 to the Form 10-Q for the period ending June 30, 2009)
|
4.38
|
Second Amendment to Reimbursement and Credit Agreement, dated as of August 23, 2007 between The Connecticut Water Company and Citizen’s Bank of Rhode Island 2004 Series Variable Rate, due 2009. (Exhibit 10.4 to the Form 10-Q for the period ending June 30, 2009)
|
4.39
|
Third Amendment to Reimbursement and Credit Agreement, dated as of August 23, 2007 between The Connecticut Water Company and Citizen’s Bank of Rhode Island 2004 A Series. (Exhibit 10.5 to the Form 10-Q for the period ending June 30, 2009)
|
4.40
|
Third Amendment to Reimbursement and Credit Agreement, dated as of August 23, 2007 between The Connecticut Water Company and Citizen’s Bank of Rhode Island 2004 B Series. (Exhibit 10.6 to the Form 10-Q for the period ending June 30, 2009)
|
4.41
|
Third Amendment to Reimbursement and Credit Agreement, dated as of August 23, 2007 between The Connecticut Water Company and Citizen’s Bank of Rhode Island 2004 Series Variable Rate, due 2009. (Exhibit 10.7 to the Form 10-Q for the period ending June 30, 2009)
|
4.42
|
Bond Purchase Agreement among The Connecticut Water Company, the Connecticut Development Authority and Edward D. Jones &Co., L.P., as underwriter dated December 2, 2009. (Exhibit 4.42 to Form 10-K for the year ended December 31, 2009).
|
4.43
|
Loan Agreement between The Connecticut Water Company and the Connecticut Development Authority, dated as of December 1, 2009. (Exhibit 4.43 to Form 10-K for the year ended December 31, 2009).
|
4.44
|
Indenture of Trust for the Bonds between the Connecticut Development Authority and U.S. Bank National Associations, as Trustee, dated December 1, 2009. (Exhibit 4.44 to Form 10-K for the year ended December 31, 2009).
|
10.1
|
Pension Plan Fiduciary Liability Insurance for The Connecticut Water Company Employees' Retirement Plan and Trust, Savings Plan of The Connecticut Water Company and The Connecticut Water Company VEBA Trust Fund. (Exhibit 10.1 to Registration Statement No. 2-74938).
|
10.2
|
Directors and Officers Liability and Corporation Reimbursement Insurance. (Exhibit 10.2 to Registration Statement No. 2-74938).
|
10.3
|
Directors Deferred Compensation Plan, effective as of January 1, 1980, as amended as of January 1, 2008. (Exhibit 10.7 to Form 8-K filed on January 30, 2008).
|
10.4
|
Nonstandardized Adoption Agreement Prototype Cash or Deferred Profit-Sharing Plan, effective as of January 1, 2009.
|
10.5
|
The Connecticut Water Company Employees’ Retirement Plan as amended and restated as of August 10, 2010. (Exhibit 10.1 to Form 8-K filed on August 13, 2010).
|
10.6
|
November 4, 1994 Amendment to Agreement dated December 11, 1957 between The Connecticut Water Company (successor to the Thomaston Water Company) and the City of Waterbury. (Exhibit 10.16 to Form 10-K for year ended 12/31/94).
|
10.7
|
Agreement dated August 13, 1986 between The Connecticut Water Company and the Metropolitan District. (Exhibit 10.14 to Form 10-K for the year ended 12/31/86).
|
10.8
|
Report of the Commission to Study the Feasibility of Expanding the Water Supply Services of the Metropolitan District. (Exhibit 14 to Registration Statement No. 2-61843).
|
10.9
|
Bond Exchange Agreements between Connecticut Water Service, Inc., The Connecticut Water Company Bankers Life Company and Connecticut Mutual Life Insurance Company dated October 23, 1978. (Exhibit 14 to Form 10-K for the year ended 12/31/78).
|
10.10
|
Dividend Reinvestment and Common Stock Purchase Plan, as amended and restated as of August 19, 2008. (Exhibit 4 to Form S-3, Registration Statement No. 333-153910, filed on October 8, 2008).
|
10.11
|
Contract for Supplying Bradley International Airport. (Exhibit 10.21 to Form 10-K for the year ended 12/31/84).
|
10.12
|
Report of South Windsor Task Force. (Exhibit 10.23 to Form 10-K for the year ended 12/31/87).
|
10.13
|
Trust Agreement for The Connecticut Water Company Welfare Benefits Plan (VEBA) dated January 1, 1989. (Exhibit 10.21 to Form 10-K for year ended 12/31/89).
|
10.14
|
1994 Performance Stock Program, as amended and restated as of April 26, 2002. (Exhibit A to Proxy Statement dated 3/19/02).
|
10.14a
|
First Amendment to The Connecticut Water Service, Inc. Performance Stock Program Amended and Restated as of April 26, 2002 (the “Plan”) dated December 1, 2005.
(Exhibit 10.22a to Form 10-K for the year ended 12/31/05).
|
10.14b
|
Second Amendment to The Connecticut Water Service, Inc. Performance Stock Program Amended and Restated as of April 26, 2002 (the “Plan”) dated January 1, 2008. (Exhibit 10.5 to 8-K filed on 1/30/08).
|
10.15
|
2004 Performance Stock Program, as of April 23, 2004. (Appendix A to Proxy Statement dated 3/12/04).
|
10.15a
|
First Amendment to The Connecticut Water Service, Inc. 2004 Performance Stock Program, dated January 7, 2004. (Exhibit 10.23f to Form 10-K for the year ended 12/31/05).
|
10.15b
|
Second Amendment to The Connecticut Water Service, Inc. 2004 Performance Stock Program, dated January 1, 2008. (Exhibit 10.6 to Form 8-K filed on 1/30/08).
|
10.15c
|
Connecticut Water Service, Inc. Performance Stock Program Incentive Stock Option Grant Form. (Exhibit 10.1 to Form 10-Q for the quarter ended 9/30/04).
|
10.15d
|
Connecticut Water Service, Inc. Performance Stock Program Non-Qualified Stock Option Grant Form. (Exhibit 10.2 to Form 10-Q for the quarter ended 9/30/04).
|
10.15e
|
Restricted Stock Agreement, standard form for officers, dated December 1, 2005 (Exhibit 10.1 to Form 8-K dated 1/13/06).
|
10.15f
|
Long-Term Performance Award Agreement, standard form for officers, dated January 11, 2006 (Exhibit 10.2 to Form 8-K dated 1/13/06).
|
10.15g
|
Performance Award Agreement, standard form for officers, dated January 11, 2006 (Exhibit 10.3 to Form 8-K dated 1/13/06).
|
10.16
|
Settlement Agreement between Connecticut Water Company, Mary J. Healey, Office of Consumer Counsel of the State of Connecticut, and the Prosecutorial Staff of the DPUC, dated December 4, 2006. (Exhibit 10.1 to Form 8-K dated 12/6/06).
|
10.16a
|
Revised Settlement Agreement between Connecticut Water Company, Mary J. Healey, Office of Consumer Counsel of the State of Connecticut, and the Prosecutorial Staff of the DPUC, dated December 20, 2006. (Exhibit 99.1 to Form 8-K dated 1/18/07).
|
10.16b
|
Final Decision of the Connecticut DPUC, Docket No. 06-07-08, dated January 16, 2007. (Exhibit 99.2 to Form 8-K dated 1/18/07).
|
10.16c
|
Final Decision of the Connecticut DPUC, Docket No. 06-07-08, dated March 28, 2008. (Exhibit 99.1 to Form 8-K dated 4/3/08).
|
10.17
|
Form of Amended Restated Employment Agreement with the Company’s executive officers (Exhibit 10.19 to Form 10-K for year ended December 31, 2008), including:
a) Peter J. Bancroft
b) David C. Benoit
c) Terrance P. O’Neill
d) Eric W. Thornburg
e) Maureen P. Westbrook
|
10.18
|
Form of Amended Restated Employment Agreement with the Company’s executive officers (Exhibit 10.20 to Form 10-K for year ended December 31, 2008), including:
a) Kristen A. Johnson
b) Daniel J. Meaney
c) Nicholas A. Rinaldi
|
10.19
|
Form of Amended and Restated Supplemental Executive Retirement Agreement with the Company’s executive officers (Exhibit 10.21 to Form 10-K for year ended December 31, 2008), including:
a) Peter J. Bancroft
b) David C. Benoit
c) Kristen A. Johnson
d) Daniel J. Meaney
e) Terrance P. O’Neill
f) Nicholas A. Rinaldi
g) Eric W. Thornburg
h) Maureen P. Westbrook
|
10.20*
|
Form of Amended and Restated Deferred Compensation Agreement with the Company’s executive officers (effective January 1, 2011), including:
a) Peter J. Bancroft
b) David C. Benoit
c) Kristen A. Johnson
d) Daniel J. Meaney
e) Terrance P. O’Neill
f) Nicholas A. Rinaldi
g) Eric W. Thornburg
h) Maureen P. Westbrook
|
10.21
|
Master Loan Agreement and Promissory Note between Connecticut Water Service, Inc. and CoBank, ACB, dated June 29, 2009. (Exhibit 10.1 to Form 8-K filed on July 2, 2009)
|
10.22
|
Line of credit agreement dated August 12, 2009 between Bank of America, N.A. and Connecticut Water Service, Inc. (Exhibit 10.1 to Form 10-Q for the quarter ending September 30, 2009)
|
10.23
|
Line of credit agreement dated August 12, 2009 between RBS Citizens, National Association and Connecticut Water Service, Inc. (Exhibit 10.2 to Form 10-Q for the quarter ending September 30, 2009)
|
21*
|
Connecticut Water Service, Inc. Subsidiaries Listing.
|
23.1*
|
Consent of Independent Registered Public Accounting Firm.
|
31.1*
|
Rule 13a-14 Certification of Eric W. Thornburg, Chief Executive Officer.
|
31.2*
|
Rule 13a-14 Certification of David C. Benoit, Chief Financial Officer.
|
32.1**
|
Certification of Eric W. Thornburg, Chief Executive Officer, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
32.2**
|
Certification of David C. Benoit, Chief Financial Officer, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
Note:
|
Exhibits 10.1 through 10.5l, 10.13 through 10.15g, and 10.19 through 10.22 set forth each management contract or compensatory plan or arrangement required to be filed as an exhibit to this Form 10-K.
|
CONNECTICUT WATER SERVICE, INC.
Registrant
|
|
March 11, 2011
|
By
/s/ Eric W. Thornburg
Eric W. Thornburg
Chairman, President and Chief Executive Officer
|
Signature
|
Title
|
Date
|
||
/s/ Eric W. Thornburg
Eric W. Thornburg
|
Chairman, President, and Chief Executive Officer (Principal Executive Officer)
|
March 11, 2011
|
||
/s/ David C. Benoit
David C. Benoit
|
Vice President – Finance, Chief Financial Officer and Treasurer (Principal Financial Officer)
|
March 11, 2011
|
||
/s/ Nicholas A. Rinaldi
Nicholas A. Rinaldi
|
Controller (Principal Accounting Officer)
|
March 11, 2011
|
Signature
|
Title
|
Date
|
||
/s/ Mary Ann Hanley
Mary Ann Hanley
|
Director
|
March 9, 2011
|
||
/s/ Heather Hunt
Heather Hunt
|
Director
|
March 9, 2011
|
||
/s/ Mark G. Kachur
Mark G. Kachur
|
Director
|
March 5, 2011
|
||
/s/ David A. Lentini
David A. Lentini
|
Director
|
March 9, 2011
|
||
/s/ Arthur C. Reeds
Arthur C. Reeds
|
Director
|
March 8, 2011
|
||
/s/ Lisa J. Thibdaue
Lisa J. Thibdaue
|
Director
|
March 9, 2011
|
||
/s/ Carol P. Wallace
Carol P. Wallace
|
Director
|
March 9, 2011
|
||
/s/ Donald B. Wilbur
Donald B. Wilbur
|
Director
|
March 2, 2011
|
Description
|
Balance Beginning of Year
|
Additions Charged to Income
|
Deductions From Reserves
(1)
|
Balance End of Year
|
||||||||||||
Allowance for Uncollectible Accounts
|
||||||||||||||||
Year Ended December 31, 2010
|
$ | 472 | $ | 648 | $ | 59 | $ | 1,061 | ||||||||
Year Ended December 31, 2009
|
$ | 376 | $ | 401 | $ | 305 | $ | 472 | ||||||||
Year Ended December 31, 2008
|
$ | 352 | $ | 286 | $ | 262 | $ | 376 |
Name
|
State of Incorporation
|
Registrant:
|
|
Connecticut Water Service, Inc.
|
Connecticut
|
Subsidiaries:
|
|
The Connecticut Water Company
|
Connecticut
|
Chester Realty, Inc.
|
Connecticut
|
New England Water Utility Services, Inc.
|
Connecticut
|
The Barnstable Holding Company
|
Connecticut
|
1.
|
I have reviewed this annual report on Form 10-K of Connecticut Water Service, Inc.;
|
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;
|
d.
|
Disclosed in the 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 controls over financial reporting.
|
1.
|
I have reviewed this annual report on Form 10-K of Connecticut Water Service, Inc.;
|
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;
|
d.
|
Disclosed in the 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 controls over financial reporting.
|
|
(A)
|
the Employee's rendering, while employed by the Employer, of any services, assistance or advice, either directly or indirectly, to any person, firm or organization competing with, or in opposition to, the Employer;
|
|
(B)
|
the Employee's allowing, while employed by the Employer, any use of his name by any person, firm or organization competing with, or in opposition to, the Employer; or
|
|
(C)
|
willful misconduct by the Employee, including, but not limited to, the commission by the Employee of a felony or the perpetration by the Employee of a common law fraud upon the Employer.
|