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 offices)
|
|
06413
(Zip Code)
|
Large accelerated filer
o
|
|
Accelerated filer
x
|
Non-accelerated filer
o
(Do not check if a smaller reporting company)
|
|
Smaller reporting company
o
|
ASSETS
|
|
March 31, 2014
|
|
December 31, 2013
|
||||
Utility Plant
|
|
$
|
642,703
|
|
|
$
|
639,704
|
|
Construction Work in Progress
|
|
13,947
|
|
|
12,066
|
|
||
|
|
656,650
|
|
|
651,770
|
|
||
Accumulated Provision for Depreciation
|
|
(182,947
|
)
|
|
(179,894
|
)
|
||
Net Utility Plant
|
|
473,703
|
|
|
471,876
|
|
||
Other Property and Investments
|
|
7,626
|
|
|
7,388
|
|
||
Cash and Cash Equivalents
|
|
15,275
|
|
|
18,371
|
|
||
Accounts Receivable (Less Allowance, 2014 - $1,087; 2013 - $1,127)
|
|
11,375
|
|
|
12,340
|
|
||
Accrued Unbilled Revenues
|
|
7,083
|
|
|
7,624
|
|
||
Materials and Supplies, at Average Cost
|
|
1,598
|
|
|
1,633
|
|
||
Prepayments and Other Current Assets
|
|
8,460
|
|
|
6,928
|
|
||
Total Current Assets
|
|
43,791
|
|
|
46,896
|
|
||
Restricted Cash
|
|
4,613
|
|
|
5,777
|
|
||
Unamortized Debt Issuance Expense
|
|
6,704
|
|
|
6,841
|
|
||
Unrecovered Income Taxes - Regulatory Asset
|
|
48,757
|
|
|
47,135
|
|
||
Pension Benefits - Regulatory Asset
|
|
2,835
|
|
|
3,085
|
|
||
Post-Retirement Benefits Other Than Pension - Regulatory Asset
|
|
1,361
|
|
|
1,288
|
|
||
Goodwill
|
|
31,685
|
|
|
31,685
|
|
||
Deferred Charges and Other Costs
|
|
8,929
|
|
|
8,840
|
|
||
Total Regulatory and Other Long-Term Assets
|
|
104,884
|
|
|
104,651
|
|
||
Total Assets
|
|
$
|
630,004
|
|
|
$
|
630,811
|
|
CAPITALIZATION AND LIABILITIES
|
|
|
|
|
|
|
||
Common Stockholders' Equity:
|
|
|
|
|
|
|
||
Common Stock Without Par Value: Authorized - 25,000,000 Shares
|
|
|
|
|
|
|
||
Issued and Outstanding: 2014 - 11,078,336; 2013 - 11,038,232
|
|
$
|
139,176
|
|
|
$
|
138,591
|
|
Retained Earnings
|
|
59,519
|
|
|
59,277
|
|
||
Accumulated Other Comprehensive Loss
|
|
(57
|
)
|
|
(115
|
)
|
||
Common Stockholders' Equity
|
|
198,638
|
|
|
197,753
|
|
||
Preferred Stock
|
|
772
|
|
|
772
|
|
||
Long-Term Debt
|
|
174,400
|
|
|
175,042
|
|
||
Total Capitalization
|
|
373,810
|
|
|
373,567
|
|
||
Current Portion of Long-Term Debt
|
|
4,131
|
|
|
4,121
|
|
||
Accounts Payable and Accrued Expenses
|
|
6,494
|
|
|
10,846
|
|
||
Accrued Interest
|
|
1,449
|
|
|
753
|
|
||
Current Portion of Refund to Customers - Regulatory Liability
|
|
6,199
|
|
|
4,650
|
|
||
Other Current Liabilities
|
|
2,261
|
|
|
2,359
|
|
||
Total Current Liabilities
|
|
20,534
|
|
|
22,729
|
|
||
Advances for Construction
|
|
28,508
|
|
|
28,718
|
|
||
Deferred Federal and State Income Taxes
|
|
47,714
|
|
|
47,470
|
|
||
Unfunded Future Income Taxes
|
|
48,345
|
|
|
46,723
|
|
||
Long-Term Compensation Arrangements
|
|
21,287
|
|
|
20,651
|
|
||
Unamortized Investment Tax Credits
|
|
1,395
|
|
|
1,414
|
|
||
Refund to Customers - Regulatory Liability
|
|
6,199
|
|
|
7,749
|
|
||
Other Long-Term Liabilities
|
|
1,016
|
|
|
1,018
|
|
||
Total Long-Term Liabilities
|
|
154,464
|
|
|
153,743
|
|
||
Contributions in Aid of Construction
|
|
81,196
|
|
|
80,772
|
|
||
Commitments and Contingencies
|
|
—
|
|
|
—
|
|
||
Total Capitalization and Liabilities
|
|
$
|
630,004
|
|
|
$
|
630,811
|
|
|
2014
|
|
2013
|
||||
Operating Revenues
|
$
|
20,260
|
|
|
$
|
19,729
|
|
Operating Expenses
|
|
|
|
||||
Operation and Maintenance
|
10,667
|
|
|
10,378
|
|
||
Depreciation
|
2,808
|
|
|
2,704
|
|
||
Income Taxes
|
494
|
|
|
1,128
|
|
||
Taxes Other Than Income Taxes
|
2,387
|
|
|
2,160
|
|
||
Total Operating Expenses
|
16,356
|
|
|
16,370
|
|
||
Net Operating Revenues
|
3,904
|
|
|
3,359
|
|
||
Other Utility Income, Net of Taxes
|
185
|
|
|
206
|
|
||
Total Utility Operating Income
|
4,089
|
|
|
3,565
|
|
||
Other Income (Deductions), Net of Taxes
|
|
|
|
||||
Non-Water Sales Earnings
|
433
|
|
|
386
|
|
||
Allowance for Funds Used During Construction
|
98
|
|
|
54
|
|
||
Other
|
18
|
|
|
(61
|
)
|
||
Total Other Income, Net of Taxes
|
549
|
|
|
379
|
|
||
Interest and Debt Expense
|
|
|
|
||||
Interest on Long-Term Debt
|
1,751
|
|
|
1,787
|
|
||
Other Interest (Income) Charges, Net
|
(158
|
)
|
|
(543
|
)
|
||
Amortization of Debt Expense and Premium, Net
|
59
|
|
|
87
|
|
||
Total Interest and Debt Expense
|
1,652
|
|
|
1,331
|
|
||
Net Income
|
2,986
|
|
|
2,613
|
|
||
Preferred Stock Dividend Requirement
|
9
|
|
|
9
|
|
||
Net Income Applicable to Common Stock
|
$
|
2,977
|
|
|
$
|
2,604
|
|
Weighted Average Common Shares Outstanding:
|
|
|
|
||||
Basic
|
10,869
|
|
|
10,803
|
|
||
Diluted
|
11,061
|
|
|
10,965
|
|
||
Earnings Per Common Share:
|
|
|
|
||||
Basic
|
$
|
0.27
|
|
|
$
|
0.24
|
|
Diluted
|
$
|
0.27
|
|
|
$
|
0.24
|
|
Dividends Per Common Share
|
$
|
0.2475
|
|
|
$
|
0.2425
|
|
|
2014
|
|
2013
|
||||
Net Income
|
$
|
2,986
|
|
|
$
|
2,613
|
|
Other Comprehensive Income/(Loss), net of tax
|
|
|
|
|
|
||
Reclassification to Pension and Post-Retirement Benefits Other than Pension, net of tax (expense) benefit of $(13) in 2014 and $17 in 2013
|
61
|
|
|
(25
|
)
|
||
Unrealized (loss) gain on investments, net of tax benefit (expense) of $2 in 2014 and $(32) in 2013
|
(3
|
)
|
|
48
|
|
||
Other Comprehensive Income, net of tax
|
58
|
|
|
23
|
|
||
Comprehensive Income
|
$
|
3,044
|
|
|
$
|
2,636
|
|
|
2014
|
|
2013
|
||||
Balance at Beginning of Period
|
$
|
59,277
|
|
|
$
|
51,804
|
|
Net Income
|
2,986
|
|
|
2,613
|
|
||
|
62,263
|
|
|
54,417
|
|
||
Dividends Declared:
|
|
|
|
|
|
||
Cumulative Preferred, Class A, $0.20 per share
|
3
|
|
|
3
|
|
||
Cumulative Preferred, Series $0.90, $0.225 per share
|
6
|
|
|
6
|
|
||
Common Stock - 2014 $0.2475 per share; 2013 $0.2425 per share
|
2,735
|
|
|
2,652
|
|
||
|
2,744
|
|
|
2,661
|
|
||
Balance at End of Period
|
$
|
59,519
|
|
|
$
|
51,756
|
|
|
2014
|
|
2013
|
||||
Operating Activities:
|
|
|
|
||||
Net Income
|
$
|
2,986
|
|
|
$
|
2,613
|
|
Adjustments to Reconcile Net Income to Net Cash Provided by
|
|
|
|
|
|
||
Operating Activities:
|
|
|
|
|
|
||
Deferred Revenues
|
(47
|
)
|
|
60
|
|
||
Provision for Deferred Income Taxes and Investment Tax Credits, Net
|
226
|
|
|
1,504
|
|
||
Allowance for Funds Used During Construction
|
(98
|
)
|
|
(54
|
)
|
||
Depreciation and Amortization (including $291 and $296 in 2014 and 2013 charged to other accounts)
|
3,099
|
|
|
3,000
|
|
||
Change in Assets and Liabilities:
|
|
|
|
|
|
||
Decrease in Accounts Receivable and Accrued Unbilled Revenues
|
1,506
|
|
|
608
|
|
||
Increase in Prepaid Income Taxes and Prepayments and Other Current Assets
|
(1,498
|
)
|
|
(1,465
|
)
|
||
Decrease in Other Non-Current Items
|
715
|
|
|
4
|
|
||
Decrease in Accounts Payable, Accrued Expenses and Other Current Liabilities
|
(1,933
|
)
|
|
(1,684
|
)
|
||
Total Adjustments
|
1,970
|
|
|
1,973
|
|
||
Net Cash and Cash Equivalents Provided by Operating Activities
|
4,956
|
|
|
4,586
|
|
||
Investing Activities:
|
|
|
|
|
|
||
Net Additions to Utility Plant Used in Continuing Operations
|
(6,402
|
)
|
|
(5,447
|
)
|
||
Release of Restricted Cash
|
1,165
|
|
|
—
|
|
||
Net Cash and Cash Equivalents Used in Investing Activities
|
(5,237
|
)
|
|
(5,447
|
)
|
||
Financing Activities:
|
|
|
|
|
|
||
Proceeds from Interim Bank Loans
|
—
|
|
|
1,041
|
|
||
Repayment of Interim Bank Loans
|
—
|
|
|
(1,660
|
)
|
||
Proceeds from the Issuance of Long-Term Debt
|
—
|
|
|
14,550
|
|
||
Proceeds from Issuance of Common Stock
|
419
|
|
|
393
|
|
||
Repayment of Long-Term Debt Including Current Portion
|
(554
|
)
|
|
(14,776
|
)
|
||
Advances from (refunds to) Others for Construction
|
64
|
|
|
(100
|
)
|
||
Cash Dividends Paid
|
(2,744
|
)
|
|
(2,661
|
)
|
||
Net Cash and Cash Equivalents Used in Financing Activities
|
(2,815
|
)
|
|
(3,213
|
)
|
||
Net Decrease in Cash and Cash Equivalents
|
(3,096
|
)
|
|
(4,074
|
)
|
||
Cash and Cash Equivalents at Beginning of Period
|
18,371
|
|
|
13,150
|
|
||
Cash and Cash Equivalents at End of Period
|
$
|
15,275
|
|
|
$
|
9,076
|
|
Non-Cash Investing and Financing Activities:
|
|
|
|
|
|
||
Non-Cash Contributed Utility Plant
|
$
|
247
|
|
|
$
|
332
|
|
Short-term Investment of Bond Proceeds Held in Restricted Cash
|
$
|
4,613
|
|
|
$
|
9,821
|
|
Supplemental Disclosures of Cash Flow Information:
|
|
|
|
|
|
||
Cash Paid for:
|
|
|
|
|
|
||
Interest
|
$
|
969
|
|
|
$
|
749
|
|
State and Federal Income Taxes
|
$
|
75
|
|
|
$
|
1,450
|
|
1.
|
Basis of Preparation of Financials
|
2.
|
Pension and Other Post-Retirement Benefits
|
|
Three Months
|
||||||
Period ended March 31,
|
2014
|
|
2013
|
||||
Service Cost
|
$
|
488
|
|
|
$
|
587
|
|
Interest Cost
|
763
|
|
|
698
|
|
||
Expected Return on Plan Assets
|
(889
|
)
|
|
(808
|
)
|
||
Amortization of:
|
|
|
|
|
|
||
Prior Service Cost
|
18
|
|
|
18
|
|
||
Net Loss
|
273
|
|
|
538
|
|
||
Net Periodic Benefit Cost
|
$
|
653
|
|
|
$
|
1,033
|
|
|
Three Months
|
||||||
Period ended March 31,
|
2014
|
|
2013
|
||||
Service Cost
|
$
|
154
|
|
|
$
|
161
|
|
Interest Cost
|
160
|
|
|
125
|
|
||
Expected Return on Plan Assets
|
(77
|
)
|
|
(75
|
)
|
||
Other
|
56
|
|
|
56
|
|
||
Amortization of:
|
|
|
|
|
|
||
Prior Service Cost
|
(201
|
)
|
|
(201
|
)
|
||
Recognized Net Loss
|
68
|
|
|
97
|
|
||
Net Periodic Benefit Cost
|
$
|
160
|
|
|
$
|
163
|
|
3.
|
Earnings per Share
|
Three months ended March 31,
|
2014
|
|
2013
|
||||
Common Shares Outstanding End of Period:
|
11,078,336
|
|
|
10,982,430
|
|
||
Weighted Average Shares Outstanding (Days Outstanding Basis):
|
|
|
|
|
|
||
Basic
|
10,868,784
|
|
|
10,803,230
|
|
||
Diluted
|
11,061,324
|
|
|
10,964,794
|
|
||
|
|
|
|
||||
Basic Earnings per Share
|
$
|
0.27
|
|
|
$
|
0.24
|
|
Dilutive Effect of Unexercised Stock Options
|
—
|
|
|
—
|
|
||
Diluted Earnings per Share
|
$
|
0.27
|
|
|
$
|
0.24
|
|
4.
|
New Accounting Pronouncements
|
5.
|
Accumulated Other Comprehensive Income (Loss)
|
Three Months Ended March 31, 2014
|
|
Interest Rate Swap
|
|
Unrealized Gains on Investments
|
|
Defined Benefit Items
|
|
Total
|
||||||||
Beginning Balance (a)
|
|
$
|
—
|
|
|
$
|
259
|
|
|
$
|
(374
|
)
|
|
$
|
(115
|
)
|
Other Comprehensive Income Before Reclassification
|
|
—
|
|
|
(14
|
)
|
|
—
|
|
|
(14
|
)
|
||||
Amounts Reclassified from AOCI
|
|
—
|
|
|
11
|
|
|
61
|
|
|
72
|
|
||||
Net current-period Other Comprehensive Income
|
|
—
|
|
|
(3
|
)
|
|
61
|
|
|
58
|
|
||||
Ending Balance
|
|
$
|
—
|
|
|
$
|
256
|
|
|
$
|
(313
|
)
|
|
$
|
(57
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Three Months Ended March 31, 2013
|
|
Interest Rate Swap
|
|
Unrealized Gains on Investments
|
|
Defined Benefit Items
|
|
Total
|
||||||||
Beginning Balance (a)
|
|
$
|
(41
|
)
|
|
$
|
69
|
|
|
$
|
(1,356
|
)
|
|
$
|
(1,328
|
)
|
Other Comprehensive Income Before Reclassification
|
|
—
|
|
|
37
|
|
|
—
|
|
|
37
|
|
||||
Amounts Reclassified from AOCI
|
|
—
|
|
|
11
|
|
|
(25
|
)
|
|
(14
|
)
|
||||
Net current-period Other Comprehensive Income
|
|
—
|
|
|
48
|
|
|
(25
|
)
|
|
23
|
|
||||
Ending Balance
|
|
$
|
(41
|
)
|
|
$
|
117
|
|
|
$
|
(1,381
|
)
|
|
$
|
(1,305
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
(a) All amounts shown are net of tax. Amounts in parentheses indicate loss.
|
6.
|
Long-Term Debt
|
7.
|
Fair Value Disclosures
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Asset Type:
|
|
|
|
|
|
|
|
||||||||
Company Owned Life Insurance
|
$
|
—
|
|
|
$
|
2,866
|
|
|
$
|
—
|
|
|
$
|
2,866
|
|
Money Market Fund
|
80
|
|
|
—
|
|
|
—
|
|
|
80
|
|
||||
Mutual Funds:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Equity Funds (1)
|
1,475
|
|
|
—
|
|
|
—
|
|
|
1,475
|
|
||||
Total
|
$
|
1,555
|
|
|
$
|
2,866
|
|
|
$
|
—
|
|
|
$
|
4,421
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Asset Type:
|
|
|
|
|
|
|
|
||||||||
Company Owned Life Insurance
|
$
|
—
|
|
|
$
|
2,843
|
|
|
$
|
—
|
|
|
$
|
2,843
|
|
Money Market Fund
|
62
|
|
|
—
|
|
|
—
|
|
|
62
|
|
||||
Mutual Funds:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Equity Funds (1)
|
1,528
|
|
|
—
|
|
|
—
|
|
|
1,528
|
|
||||
Total
|
$
|
1,590
|
|
|
$
|
2,843
|
|
|
$
|
—
|
|
|
$
|
4,433
|
|
(1)
|
Mutual funds consist primarily of equity securities and are presented on the Other Property and Investments line item of the Company's Condensed Consolidated Balance Sheets.
|
8.
|
Segment Reporting
|
Three Months Ended March 31, 2014
|
||||||||||||||||
Segment
|
|
Revenues
|
|
Pre-Tax Income
|
|
Income Tax Expense
|
|
Net Income
|
||||||||
Water Activities
|
|
$
|
20,620
|
|
|
$
|
2,918
|
|
|
$
|
365
|
|
|
$
|
2,553
|
|
Real Estate Transactions
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Services and Rentals
|
|
1,412
|
|
|
710
|
|
|
277
|
|
|
433
|
|
||||
Total
|
|
$
|
22,032
|
|
|
$
|
3,628
|
|
|
$
|
642
|
|
|
$
|
2,986
|
|
Three Months Ended March 31, 2013
|
||||||||||||||||
Segment
|
|
Revenues
|
|
Pre-Tax Income
|
|
Income Tax Expense
|
|
Net Income
|
||||||||
Water Activities
|
|
$
|
20,128
|
|
|
$
|
3,550
|
|
|
$
|
1,323
|
|
|
$
|
2,227
|
|
Real Estate Transactions
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Services and Rentals
|
|
1,389
|
|
|
653
|
|
|
267
|
|
|
386
|
|
||||
Total
|
|
$
|
21,517
|
|
|
$
|
4,203
|
|
|
$
|
1,590
|
|
|
$
|
2,613
|
|
|
March 31,
2014 |
|
December 31,
2013 |
||||
Total Plant and Other Investments:
|
|
|
|
||||
Water Activities
|
$
|
480,584
|
|
|
$
|
478,560
|
|
Non-Water
|
745
|
|
|
704
|
|
||
|
481,329
|
|
|
479,264
|
|
||
Other Assets:
|
|
|
|
||||
Water Activities
|
136,225
|
|
|
136,246
|
|
||
Non-Water
|
12,450
|
|
|
15,301
|
|
||
|
148,675
|
|
|
151,547
|
|
||
Total Assets
|
$
|
630,004
|
|
|
$
|
630,811
|
|
9.
|
Income Taxes
|
10.
|
Lines of Credit
|
•
|
Connecticut Water will fund a 5-mile pipeline from Tolland and other necessary infrastructure improvements at no cost to UCONN, the Town or the state’s taxpayers to serve the area;
|
•
|
Current off-campus customers of UCONN will become customers of Connecticut Water at UCONN’s water rates in effect at that time (subject to any state-approved surcharges);
|
•
|
Future customers of Connecticut Water in the Town of Mansfield will pay Connecticut Water rates authorized by the PURA;
|
•
|
Connecticut Water will assume responsibility for maintaining, repairing and replacing the off-campus water system serving the Town of Mansfield;
|
•
|
A Water System Advisory Group will be created with representatives of the Town of Mansfield, UCONN, regional representatives and other key stakeholders to advise Connecticut Water regarding water service and the system’s operations, expansion or integration as well as recommended best management practices, including water conservation programs.
|
Business Segment
|
|
March 31, 2014
|
|
March 31, 2013
|
|
Increase/(Decrease)
|
||||||
Water Activities
|
|
$
|
2,553
|
|
|
$
|
2,227
|
|
|
$
|
326
|
|
Real Estate Transactions
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Services and Rentals
|
|
433
|
|
|
386
|
|
|
47
|
|
|||
Total
|
|
$
|
2,986
|
|
|
$
|
2,613
|
|
|
$
|
373
|
|
Expense Components
|
|
March 31, 2014
|
|
March 31, 2013
|
|
Increase / (Decrease)
|
||||||
Other benefits
|
|
$
|
585
|
|
|
$
|
310
|
|
|
$
|
275
|
|
Payroll
|
|
3,780
|
|
|
3,525
|
|
|
255
|
|
|||
Maintenance
|
|
704
|
|
|
621
|
|
|
83
|
|
|||
Medical
|
|
714
|
|
|
631
|
|
|
83
|
|
|||
Water treatment (including chemicals)
|
|
691
|
|
|
611
|
|
|
80
|
|
|||
Property and liability insurance
|
|
340
|
|
|
276
|
|
|
64
|
|
|||
Purchased water
|
|
300
|
|
|
269
|
|
|
31
|
|
|||
Investor relations
|
|
151
|
|
|
173
|
|
|
(22
|
)
|
|||
Regulatory and commission expense
|
|
85
|
|
|
113
|
|
|
(28
|
)
|
|||
Outside services
|
|
481
|
|
|
564
|
|
|
(83
|
)
|
|||
Customer
|
|
328
|
|
|
436
|
|
|
(108
|
)
|
|||
Pension
|
|
648
|
|
|
997
|
|
|
(349
|
)
|
|||
Other
|
|
1,860
|
|
|
1,852
|
|
|
8
|
|
|||
Total
|
|
$
|
10,667
|
|
|
$
|
10,378
|
|
|
$
|
289
|
|
•
|
The increase in Other benefit costs was attributable primarily to an increase in costs associated with certain stock-based compensation awarded to executives;
|
•
|
Payroll costs increased in the first quarter of 2014 due to an ongoing procurement project that allocated certain employee time to capital was completed during 2013 and normal wage increases. Employee time that had been charged to capital projects during the first quarter of 2013 returned to O&M at the completion of the project;
|
•
|
Medical costs increased due to higher claims and administrative costs during the first quarter of 2014 when compared to the same period in 2013; and
|
•
|
The increase in water treatment costs was due primarily to an increase in waste disposal costs and an increase in the cost of chemicals used in 2014.
|
•
|
Outside services decreased primarily as a result of the completion of the procurement project discussed above. A portion of the consulting fees paid during this project was expensed through O&M during 2013;
|
•
|
Customer costs decreased primarily due to a reduction in bad debt expense. Additionally, the Company saw a reduction in costs associated with postage and customer communications as the Company has implemented a process to directly reach customers with targeted information on their regular bills, which reduced the need for special inserts and one-off mailings; and
|
•
|
Pension costs decreased primarily due to an increase in the discount rate.
|
•
|
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 in both Connecticut and Maine;
|
•
|
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;
|
•
|
the amount of repair tax deductions and the Internal Revenue Service’s ultimate acceptance of the deduction methodology; and
|
•
|
acquisition-related costs and synergies.
|
•
|
changes in general economic, business, credit and financial market conditions;
|
•
|
changes in environmental conditions, including those that result in water use restrictions;
|
•
|
the determination of what qualifies for a repair expense tax deduction;
|
•
|
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.
|
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 December 31, 1998).
|
|
|
|
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 December 31, 1998).
|
|
|
|
3.4
|
|
Certificate of Amendment to the Certificate of Incorporation of Connecticut Water Service, Inc. dated August 6, 2001 (Exhibit 3.4 to Form 10-K for the year ended December 31, 2001).
|
|
|
|
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 March 31, 2003).
|
|
|
|
10.1*
|
|
Severance Agreement and General Release, dated March 20, 2014, between Terrance P. O’Neill and Connecticut Water Service, Inc. and The Connecticut Water Company, is filed herewith.
|
|
|
|
10.2*
|
|
Employment Agreement of Craig J. Patla, dated April 1, 2014, is filed herewith.
|
|
|
|
10.3*
|
|
Deferred compensation agreement for Craig J. Patla, dated April 1, 2014, is filed herewith.
|
|
|
|
10.4
|
|
Form of First Amendment to Amended and Restated Employment Agreement (Messrs. Thornburg, Benoit and Bancroft, and Ms. Westbrook). (Exhibit 10.1 to Form 8-K filed on April 3, 2014).
|
|
|
|
10.5
|
|
Form of Second Amendment to Employment Agreement (Ms. Johnson and Ms. Wallingford). (Exhibit 10.2 to Form 8-K filed on April 3, 2014).
|
|
|
|
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**
|
|
Certification of Eric W. Thornburg, Chief Executive Officer, and David C. Benoit, Chief Financial Officer, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
101.INS**
|
|
XBRL Instance Document
|
|
|
|
101.SCH**
|
|
XBRL Taxonomy Extension Schema
|
|
|
|
101.CAL**
|
|
XBRL Taxonomy Extension Calculation Linkbase
|
|
|
|
101.DEF**
|
|
XBRL Taxonomy Extension Definition Linkbase
|
|
|
|
101.LAB**
|
|
XBRL Taxonomy Extension Label Linkbase
|
|
|
|
101.PRE**
|
|
XBRL Taxonomy Extension Presentation Linkbase
|
|
|
|
* filed herewith
|
||
** furnished herewith
|
|
|
Connecticut Water Service, Inc.
(Registrant)
|
|
|
|
Date:
|
May 8, 2014
|
By:
/s/ David C. Benoit
|
|
|
David C. Benoit
Senior Vice President – Finance and Chief Financial Officer |
|
|
|
Date:
|
May 8, 2014
|
By:
/s/ Nicholas A. Rinaldi
|
|
|
Nicholas A. Rinaldi
Controller |
•
|
The Employee Retirement Income Security Act of 1974 ("ERISA") (except for any vested benefits under any tax qualified benefit plan);
|
•
|
Any other federal, state or local civil or human rights law or any other federal, state or local law, regulation or ordinance;
|
•
|
Any obligation or claim arising under any public policy, contract express or implied, written or oral), tort, or common law, including but not limited to, wrongful discharge, defamation, emotional distress, misrepresentation and/or obligations arising out of any of the Company's employment policies or practices, employee handbooks and/or any statements by any employee or agent of the Company whether oral or written, except for the Company's obligation to pay Mr. O'Neill the Benefits described herein and to pay Mr. O'Neill his otherwise vested employee benefits; and
|
/s/ Terrance P. O’Neill
|
Date:
3/20/14
|
Terrance P. O'Neill
|
|
/s/ Eric W. Thornburg
|
Date:
3/21/14
|
Eric W. Thornburg, President and CEO
|
|
Re:
|
Resignation as Officer of Connecticut Water Service, Inc. and The Connecticut Water Company and Notice of Retirement
|
2.
|
Employment.
|
(ii)
|
The voluntary termination of Employee's employment by Employee other than for Good Reason.
|
(v)
|
Full compliance by Company with the provisions of Paragraph 7(e) below, if Employee's employment shall have been terminated by Company during the Term for any reason
other than
Cause, or if Employee's employment shall have been terminated by reason of Employee's Disability, or if Employee shall have voluntarily terminated Employee's employment during the Term for Good Reason.
|
(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.
|
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.
|
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 results of operations of the Company.
|