x
|
Annual
Report pursuant to section 13 or 15(d) of the Securities Exchange Act of
1934 for the fiscal year ended December 31, 2008
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, 2009, for Annual Meeting of Shareholders
to be held on May 13, 2009.
|
Part
III
|
Part
I
|
Page Number
|
|||
Part
II
|
||||
Part
III
|
||||
Part
IV
|
||||
·
|
Employee
Code of Conduct
|
·
|
Audit
Committee Charter
|
·
|
Board
of Directors Code of Conduct
|
·
|
Compensation
Committee Charter
|
·
|
Corporate
Governance Committee Charter
|
·
|
Amended
and Restated Bylaws of Connecticut Water Service,
Inc.
|
·
|
2008
Annual Meeting of Shareholders (Annual Report and
Proxy)
|
2008
|
2007
|
2006
|
||||||||||
Customers:
|
||||||||||||
Residential
|
78,254 | 75,579 | 74,253 | |||||||||
Commercial
|
5,646 | 5,532 | 5,485 | |||||||||
Industrial
|
425 | 426 | 429 | |||||||||
Public
Authority
|
606 | 602 | 587 | |||||||||
Fire
Protection
|
1,648 | 1,599 | 1,562 | |||||||||
Other
(including non-metered accounts)
|
782 | 680 | 931 | |||||||||
Total
|
87,361 | 84,418 | 83,247 | |||||||||
Water Revenues (in
thousands):
|
||||||||||||
Residential
|
$ | 37,963 | $ | 38,354 | $ | 29,067 | ||||||
Commercial
|
7,150 | 6,762 | 5,652 | |||||||||
Industrial
|
1,822 | 1,764 | 1,589 | |||||||||
Public
Authority
|
2,027 | 1,924 | 1,507 | |||||||||
Fire
Protection
|
10,606 | 9,482 | 8,708 | |||||||||
Other
(including non-metered accounts)
|
1,702 | 740 | 422 | |||||||||
Total
|
$ | 61,270 | $ | 59,026 | $ | 46,945 | ||||||
Customer Water
Consumption (millions of
gallons):
|
||||||||||||
Residential
|
4,954 | 5,186 | 4,933 | |||||||||
Commercial
|
1,180 | 1,259 | 1,198 | |||||||||
Industrial
|
396 | 423 | 424 | |||||||||
Public
Authority
|
365 | 389 | 363 | |||||||||
Total
|
6,895 | 7,257 | 6,918 |
Income
(Loss) from Real Estate Transactions from Continuing
Operations
|
||||||||||||
Regulated
|
Unregulated
|
Total
|
||||||||||
2008
|
$ | (160,000 | ) | $ | -- | $ | (160,000 | ) | ||||
2007
|
$ | 199,000 | $ | (32,000 | ) | $ | 167,000 | |||||
2006
|
$ | 1,083,000 | $ | 980,000 | $ | 2,063,000 |
·
|
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, inventory obsolesces
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 benefits,
and;
|
·
|
possible
tax allowances.
|
System
|
Estimated
Available Supply
(million
gallons per day)
|
|||
Chester
System
|
1.69 | |||
Collinsville
System
|
0.65 | |||
Danielson
System
|
3.76 | |||
Gallup
System
|
0.60 | |||
Guilford
System
|
10.31 | |||
Naugatuck
System
|
6.91 | |||
Northern
Western System
|
16.37 | |||
Plainfield
System
|
1.01 | |||
Somers
System
|
0.28 | |||
Stafford
System
|
1.00 | |||
Terryville
System
|
0.94 | |||
Thomaston
System
|
0.73 | |||
Thompson
System
|
0.29 | |||
Unionville
System
|
3.88 | |||
Total
|
48.42 |
Price
|
Dividends
|
|||||||||||
Period
|
High
|
Low
|
Paid
|
|||||||||
2008
|
||||||||||||
First
Quarter
|
$ | 25.48 | $ | 23.00 | $ | .2175 | ||||||
Second
Quarter
|
24.98 | 21.82 | .2175 | |||||||||
Third
Quarter
|
28.95 | 22.28 | .2225 | |||||||||
Fourth
Quarter
|
28.71 | 19.26 | .2225 | |||||||||
2007
|
||||||||||||
First
Quarter
|
$ | 25.09 | $ | 22.52 | $ | .2150 | ||||||
Second
Quarter
|
25.00 | 23.62 | .2150 | |||||||||
Third
Quarter
|
25.61 | 23.10 | .2175 | |||||||||
Fourth
Quarter
|
25.15 | 22.40 | .2175 |
2003
|
2004
|
2005
|
2006
|
2007
|
2008
|
|||||||||||||||||||
Connecticut
Water Service, Inc.
|
$100.00 | $98.82 | $94.53 | $91.04 | $97.77 | $101.43 | ||||||||||||||||||
Standard
& Poor’s 500 Index
|
100.00 | 110.88 | 116.33 | 134.70 | 142.10 | 89.53 | ||||||||||||||||||
Standard
& Poor’s 500 Utilities Index
|
100.00 | 124.28 | 145.21 | 175.69 | 209.73 | 148.95 |
SELECTED
FINANCIAL DATA
|
||||||||||||||||||||
Years
Ended December 31, (thousands of dollars except per share
|
||||||||||||||||||||
amounts
and where otherwise indicated)
|
2008
|
2007
|
2006
|
2005
|
2004
|
|||||||||||||||
CONSOLIDATED
STATEMENTS OF INCOME
|
||||||||||||||||||||
Continuing
Operations
|
||||||||||||||||||||
Operating
Revenues
|
$ | 61,270 | $ | 59,026 | $ | 46,945 | $ | 47,453 | $ | 46,008 | ||||||||||
Operating
Expenses
|
$ | 47,874 | $ | 46,324 | $ | 39,962 | $ | 37,486 | $ | 35,487 | ||||||||||
Other
Utility Income, Net of Taxes
|
$ | 579 | $ | 552 | $ | 542 | $ | 571 | $ | 520 | ||||||||||
Total
Utility Operating Income
|
$ | 13,975 | $ | 13,254 | $ | 7,525 | $ | 10,538 | $ | 11,041 | ||||||||||
Interest
and Debt Expense
|
$ | 5,198 | $ | 4,411 | $ | 4,461 | $ | 3,583 | $ | 3,451 | ||||||||||
Income
from Continuing Operations
|
$ | 9,424 | $ | 8,781 | $ | 6,708 | $ | 7,166 | $ | 9,163 | ||||||||||
Cash
Common Stock Dividends Paid
|
$ | 7,373 | $ | 7,146 | $ | 7,014 | $ | 6,773 | $ | 6,641 | ||||||||||
Dividend
Payout Ratio from Continuing Operations
|
78 | % | 81 | % | 105 | % | 95 | % | 72 | % | ||||||||||
Weighted
Average Common Shares Outstanding
|
8,377,428 | 8,270,494 | 8,187,801 | 8,094,346 | 7,999,318 | |||||||||||||||
Basic
Earnings Per Common Share from Continuing Operations
|
$ | 1.12 | $ | 1.06 | $ | 0.81 | $ | 0.89 | $ | 1.15 | ||||||||||
Number
of Shares Outstanding at Year End
|
8,463,269 | 8,376,842 | 8,270,394 | 8,169,627 | 8,035,199 | |||||||||||||||
ROE
on Year End Common Equity
|
9.1 | % | 8.8 | % | 7.0 | % | 7.6 | % | 10.4 | % | ||||||||||
Declared
Common Dividends Per Share
|
$ | 0.880 | $ | 0.865 | $ | 0.855 | $ | 0.845 | $ | 0.835 | ||||||||||
CONSOLIDATED
BALANCE SHEET
|
||||||||||||||||||||
Common
Stockholders' Equity
|
$ | 103,476 | $ | 100,098 | $ | 95,938 | $ | 94,076 | $ | 87,865 | ||||||||||
Long-Term
Debt (Consolidated, Excluding Current Maturities)
|
92,227 | 92,285 | 77,347 | 77,404 | 66,399 | |||||||||||||||
Preferred
Stock
|
772 | 772 | 772 | 847 | 847 | |||||||||||||||
Total
Capitalization
|
$ | 196,475 | $ | 193,155 | $ | 174,057 | $ | 172,327 | $ | 155,111 | ||||||||||
Stockholders'
Equity (Includes Preferred Stock)
|
53 | % | 52 | % | 56 | % | 55 | % | 57 | % | ||||||||||
Long-Term
Debt
|
47 | % | 48 | % | 44 | % | 45 | % | 43 | % | ||||||||||
Net
Utility Plant
|
$ | 299,233 | $ | 277,662 | $ | 263,187 | $ | 247,703 | $ | 241,776 | ||||||||||
Total
Assets
|
$ | 372,431 | $ | 360,813 | $ | 328,140 | $ | 306,035 | $ | 290,940 | ||||||||||
Book
Value - Per Common Share
|
$ | 12.23 | $ | 11.95 | $ | 11.60 | $ | 11.52 | $ | 10.94 | ||||||||||
OPERATING
REVENUES BY
|
||||||||||||||||||||
REVENUE
CLASS
|
||||||||||||||||||||
Residential
|
$ | 37,963 | $ | 38,354 | $ | 29,067 | $ | 29,980 | $ | 28,974 | ||||||||||
Commercial
|
7,150 | 6,762 | 5,652 | 5,619 | 5,479 | |||||||||||||||
Industrial
|
1,822 | 1,764 | 1,589 | 1,538 | 1,635 | |||||||||||||||
Public
Authority
|
2,027 | 1,924 | 1,507 | 1,625 | 1,430 | |||||||||||||||
Fire
Protection
|
10,606 | 9,482 | 8,708 | 8,267 | 8,087 | |||||||||||||||
Other
(Including Non-Metered Accounts)
|
1,702 | 740 | 422 | 424 | 403 | |||||||||||||||
Total
Operating Revenues
|
$ | 61,270 | $ | 59,026 | $ | 46,945 | $ | 47,453 | $ | 46,008 | ||||||||||
Number
of Customers (Average)
|
87,028 | 84,023 | 82,552 | 81,211 | 87,259 | |||||||||||||||
Billed
Consumption (Millions of Gallons)
|
6,895 | 7,257 | 6,918 | 7,276 | 7,801 | |||||||||||||||
Number
of Employees
|
226 | 206 | 200 | 191 | 193 |
Increase
(Decrease) in Pension Expense
|
Increase
(Decrease) in Postretirement Expense
|
|||||||
1%
Increase in the discount rate
|
$ | (317,000 | ) | $ | (210,000 | ) | ||
1%
Decrease in the discount rate
|
$ | 366,000 | $ | 254,000 |
Gross
Construction Expenditures
|
Construction
Funded by Developers & Others
|
Construction
Funded by Company
|
||||||||||
2008
|
$ | 20,737,000 | $ | 860,000 | $ | 19,877,000 | ||||||
2007
|
$ | 19,841,000 | $ | 1,092,000 | $ | 18,749,000 | ||||||
2006
|
$ | 17,792,000 | $ | 1,593,000 | $ | 16,199,000 | ||||||
2009
(Projected)
|
$ | 31,400,000 | $ | 5,000,000 | $ | 26,400,000 |
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)
|
$ | 92,235 | $ | 8 | $ | 16 | $ | 18 | $ | 92,193 | ||||||||||
Interest
on LTD
|
96,633 | 4,182 | 8,362 | 8,361 | 75,728 | |||||||||||||||
Operating
Lease Obligations
|
731 | 309 | 347 | 75 | -- | |||||||||||||||
Purchase
Obligations (1)
(2)
|
100,006 | 1,192 | 2,103 | 2,180 | 94,531 | |||||||||||||||
Long-Term
Compensation Agreement(3)
|
47,735 | 4,461 | 6,685 | 6,690 | 29,899 | |||||||||||||||
Total
(4)
(5)
|
$ | 337,340 | $ | 10,152 | $ | 17,513 | $ | 17,324 | $ | 292,351 |
Business
Segment
|
2008
Net Income (Loss)
|
2007
Net Income
|
Increase
(Decrease)
|
|||||||||
Water
Activities
|
$ | 8,794,000 | $ | 7,963,000 | $ | 831,000 | ||||||
Real
Estate
|
(160,000 | ) | 167,000 | (327,000 | ) | |||||||
Services
and Rentals
|
790,000 | 651,000 | 139,000 | |||||||||
Total
|
$ | 9,424,000 | $ | 8,781,000 | $ | 643,000 |
2008
|
2007
|
Increase
(Decrease)
|
||||||||||
Operating
Revenues
|
$ | 61,270,000 | $ | 59,026,000 | $ | 2,244,000 | ||||||
Operation
and Maintenance
|
31,877,000 | 29,864,000 | 2,013,000 | |||||||||
Depreciation
|
6,438,000 | 6,525,000 | (87,000 | ) | ||||||||
Income
Taxes
|
3,518,000 | 4,195,000 | (677,000 | ) | ||||||||
Taxes
Other than Income Taxes
|
6,041,000 | 5,740,000 | 301,000 | |||||||||
Other
Utility Income
|
579,000 | 552,000 | 27,000 | |||||||||
Other
(Deductions) Income
|
(143,000 | ) | (972,000 | ) | 829,000 | |||||||
Interest
and Debt Expense (net of AFUDC)
|
5,038,000 | 4,319,000 | 719,000 | |||||||||
Total
Income from Water Activities
|
$ | 8,794,000 | $ | 7,963,000 | $ | 831,000 |
-
|
The
Eastern acquisition added approximately $1.7 million in new revenues from
both the additional customers served and the make whole payments received
from the RWA.
|
-
|
The
second phase of the 2006 rate case, which became effective April 1, 2008,
contributed approximately $2.0 million in additional revenues over 2007
levels.
|
-
|
The
weather impact was most notable in the Company’s northern service area,
which is the Company’s largest service area, where there were 96 days
during the period May 1, 2008 through October 31, 2008 with at least a
trace of rain, totaling 34.8 inches of rain in the aggregate, compared to
17.4 inches during the same period in 2007. The change in
weather conditions between years resulted in an approximate $1.5 million
revenue disparity between years. The impact of the unfavorable
weather can be seen in Operating Revenues from residential
customers. Despite increasing the customer count in this class
of customer by over 2,600 additional customers (or 3.5%), consumption
decreased by approximately 232 million gallons (or -4.5%). In
fact, despite a decrease in consumption across all customer classes, only
the residential class saw a decrease in Operating
Revenues.
|
Components
of O&M
|
2008
|
2007
|
Increase
(Decrease)
|
|||||||||
Labor
|
$ | 11,935,000 | $ | 10,842,000 | $ | 1,093,000 | ||||||
Medical
expense
|
1,477,000 | 1,097,000 | 380,000 | |||||||||
Water
treatment (including chemicals)
|
2,051,000 | 1,754,000 | 297,000 | |||||||||
Utility
costs
|
3,534,000 | 3,282,000 | 252,000 | |||||||||
Vehicle
|
1,442,000 | 1,214,000 | 228,000 | |||||||||
Customer
|
826,000 | 709,000 | 117,000 | |||||||||
Outside
services
|
1,556,000 | 1,480,000 | 76,000 | |||||||||
Other
employee benefit costs
|
269,000 | 206,000 | 63,000 | |||||||||
Purchased
water
|
993,000 | 1,291,000 | (298,000 | ) | ||||||||
Pension
costs
|
1,258,000 | 1,465,000 | (207,000 | ) | ||||||||
Post-retirement
medical costs
|
1,565,000 | 1,759,000 | (194,000 | ) | ||||||||
Other
|
4,971,000 | 4,765,000 | 206,000 | |||||||||
Total
O&M Expense
|
$ | 31,877,000 | $ | 29,864,000 | $ | 2,013,000 |
Business
Segment
|
2007
Net Income
|
2006
Net Income
|
Increase
(Decrease)
|
|||||||||
Water
Activities
|
$ | 7,963,000 | $ | 4,130,000 | $ | 3,833,000 | ||||||
Real
Estate
|
167,000 | 2,063,000 | (1,896,000 | ) | ||||||||
Services
and Rentals Transactions
|
651,000 | 515,000 | 136,000 | |||||||||
Total
|
$ | 8,781,000 | $ | 6,708,000 | $ | 2,073,000 |
2007
|
2006
|
Increase
(Decrease)
|
||||||||||
Operating
Revenues
|
$ | 59,026,000 | $ | 46,945,000 | $ | 12,081,000 | ||||||
Operation
and Maintenance
|
29,864,000 | 26,451,000 | 3,413,000 | |||||||||
Depreciation
|
6,525,000 | 5,881,000 | 644,000 | |||||||||
Income
Taxes
|
4,195,000 | 2,055,000 | 2,140,000 | |||||||||
Taxes
Other than Income Taxes
|
5,740,000 | 5,575,000 | 165,000 | |||||||||
Other
Utility Income
|
552,000 | 542,000 | 10,000 | |||||||||
Other
(Deductions) Income
|
(972,000 | ) | 608,000 | (1,580,000 | ) | |||||||
Interest
and Debt Expense (net of AFUDC)
|
4,319,000 | 4,003,000 | 316,000 | |||||||||
Total
Income from Water Activities
|
$ | 7,963,000 | $ | 4,130,000 | $ | 3,833,000 |
-
|
an
increase of $9,287,000, or 32.0%, in revenues from residential customers
in 2007, including $3,823,000 in deferred
revenues;
|
-
|
a
$1,701,000, or 19.4%, increase in all other metered customers, including
commercial, industrial and public authority customers;
and
|
-
|
a
$1,092,000, or 12.0%, increase in non-metered revenues which was primarily
due to increased fire protection charges related to the expansion of our
water system which increased the number of fire hydrants and revenue
generating mains upon which these charges are
based.
|
Components
of O&M
|
2007
|
2006
|
Increase
(Decrease)
|
|||||||||
Post-retirement
medical expense
|
$ | 1,759,000 | $ | 473,000 | $ | 1,286,000 | ||||||
Labor
|
10,842,000 | 10,240,000 | 602,000 | |||||||||
Outside
services
|
1,480,000 | 998,000 | 482,000 | |||||||||
Purchased
water
|
1,291,000 | 866,000 | 425,000 | |||||||||
Utility
costs
|
3,282,000 | 2,947,000 | 335,000 | |||||||||
Vehicle
|
1,214,000 | 942,000 | 272,000 | |||||||||
Rate
case cost amortization
|
270,000 | 35,000 | 235,000 | |||||||||
Maintenance
|
1,632,000 | 1,526,000 | 106,000 | |||||||||
Customer
|
709,000 | 606,000 | 103,000 | |||||||||
Other
employee benefit costs
|
2,768,000 | 3,697,000 | (929,000 | ) | ||||||||
Other
|
4,617,000 | 4,121,000 | 496,000 | |||||||||
Total
O&M Expense
|
$ | 29,864,000 | $ | 26,451,000 | $ | 3,413,000 |
Name
|
Age
in 2009*
|
Office
|
Period
Held or Prior Position
|
Term
of Office Expires
|
||||
E.
W. Thornburg
|
48
|
Chairman,
President, and Chief Executive Officer
|
Held
position since March 2006
|
2009
Annual Meeting
|
||||
D.
C. Benoit
|
52
|
Vice
President – Finance, Chief Financial Officer and Treasurer
|
Held
current position or other executive position with the Company since April
1996
|
2009
Annual Meeting
|
||||
T.
P. O’Neill
|
54
|
Vice
President – Service Delivery
|
Held
current position or other engineering position with the Company since
February 1980
|
2009
Annual Meeting
|
||||
M.
P. Westbrook
|
50
|
Vice
President – Customer and Regulatory Affairs
|
Held
current position or other management position with the Company since
September 1988
|
2009
Annual Meeting
|
||||
T.
R. Marston
|
56
|
Vice
President – Business Development
|
Held
current position or other position with the Company since June
1974
|
2009
Annual Meeting
|
||||
D.
J. Meaney
|
48
|
Corporate
Secretary
|
Held
current position or other communications position with the Company since
August 1994
|
2009
Annual Meeting
|
||||
K.
A. Johnson
|
42
|
Vice
President – Human Resources
|
Held
current position or other human resources position with the Company since
May 2007
|
2009
Annual Meeting
|
(a)
|
1.
|
Financial
Statements:
|
||||
The
report of independent registered public accounting firm and the Company’s
Consolidated Financial Statements listed in the Index to Consolidated
Financial Statements on page F-1 hereof are filed as part of this report,
commencing on page F-2
|
||||||
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, 2008, 2007 and
2006
|
F-3
|
|||||
Consolidated
Statements of Comprehensive Income for the years ended December 31, 2008,
2007 and 2006
|
F-3
|
|||||
Consolidated
Balance Sheets at December 31, 2008 and 2007
|
F-4
|
|||||
Consolidated
Statements of Cash Flows for the years ended December 31, 2008, 2007 and
2006
|
F-5
|
|||||
Notes
to Consolidated Financial Statements
|
F-6
|
|||||
2.
|
Financial
Statement Schedule:
|
|||||
The
following schedule of the Company is included on the attached page as
indicated
|
||||||
Schedule
II Valuation and Qualifying Accounts and Reserves for the years ended
December 31, 2008, 2007 and 2006
|
S-1
|
|||||
All
other schedules provided for in the applicable regulations of the
Securities and Exchange Commission have been omitted because of the
absence of conditions under which they are required or because the
required information is set forth in the financial statements or notes
thereto.
|
||||||
(b)
|
Exhibits
|
|||||
Exhibits
for Connecticut Water Service Inc, are in the Index to
Exhibits
|
E-1
|
|||||
Exhibits
heretofore filed with the Securities and Exchange Commission as indicated
below are incorporated herein by reference and made a part hereof as if
filed herewith. Exhibits marked by asterisk (*) are being filed
herewith.
|
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, 2008, 2007 and
2006
|
F-3
|
|
Consolidated
Statements of Comprehensive Income for the years ended December 31, 2008,
2007 and 2006
|
F-3
|
|
Consolidated
Balance Sheets at December 31, 2008 and 2007
|
F-4
|
|
Consolidated
Statements of Cash Flows for the years ended December 31, 2008, 2007 and
2006
|
F-5
|
|
Notes
to Consolidated Financial Statements
|
F-6
|
|
Schedule
II – Valuation Accounts
|
S-1
|
For
the Years Ended December 31, (in thousands, except per share
data)
|
2008
|
2007
|
2006
|
|||||||||
Operating
Revenues
|
$ | 61,270 | $ | 59,026 | $ | 46,945 | ||||||
Operating
Expenses
|
||||||||||||
Operation
and Maintenance
|
31,877 | 29,864 | 26,451 | |||||||||
Depreciation
|
6,438 | 6,525 | 5,881 | |||||||||
Income
Taxes
|
3,518 | 4,195 | 2,055 | |||||||||
Taxes
Other Than Income Taxes
|
6,041 | 5,740 | 5,575 | |||||||||
Total
Operating Expenses
|
47,874 | 46,324 | 39,962 | |||||||||
Net
Operating Revenues
|
13,396 | 12,702 | 6,983 | |||||||||
Other
Utility Income, Net of Taxes
|
579 | 552 | 542 | |||||||||
Total
Utility Operating Income
|
13,975 | 13,254 | 7,525 | |||||||||
Other
Income (Deductions), Net of Taxes
|
||||||||||||
Gain
(Loss) on Real Estate Transactions
|
(160 | ) | 167 | 2,063 | ||||||||
Non-Water
Sales Earnings
|
790 | 651 | 515 | |||||||||
Allowance
for Funds Used During Construction
|
160 | 92 | 458 | |||||||||
Other
|
(143 | ) | (972 | ) | 608 | |||||||
Total
Other Income (Deductions), Net of Taxes
|
647 | (62 | ) | 3,644 | ||||||||
Interest
and Debt Expenses
|
||||||||||||
Interest
on Long-Term Debt
|
4,241 | 3,500 | 3,526 | |||||||||
Other
Interest Charges
|
560 | 537 | 514 | |||||||||
Amortization
of Debt Expense
|
397 | 374 | 421 | |||||||||
Total
Interest and Debt Expenses
|
5,198 | 4,411 | 4,461 | |||||||||
Income
from Continuing Operations
|
9,424 | 8,781 | 6,708 | |||||||||
Discontinued
Operations, Net of Tax of $(244) in 2006
|
-- | -- | 243 | |||||||||
Net
Income
|
9,424 | 8,781 | 6,951 | |||||||||
Preferred
Stock Dividend Requirement
|
38 | 38 | 38 | |||||||||
Total
Net Income Applicable to Common Stock
|
$ | 9,386 | $ | 8,743 | $ | 6,913 | ||||||
Weighted
Average Common Shares Outstanding:
|
||||||||||||
Basic
|
8,377 | 8,270 | 8,188 | |||||||||
Diluted
|
8,430 | 8,333 | 8,237 | |||||||||
Earnings
Per Common Share:
|
||||||||||||
Basic
- Continuing Operations
|
$ | 1.12 | $ | 1.06 | $ | 0.81 | ||||||
Basic
- Discontinued Operations
|
-- | -- | 0.03 | |||||||||
Basic
- Net Income Applicable to Common Stock
|
$ | 1.12 | $ | 1.06 | $ | 0.84 | ||||||
Diluted
- Continuing Operations
|
$ | 1.11 | $ | 1.05 | $ | 0.81 | ||||||
Diluted
- Discontinued Operations
|
-- | -- | 0.03 | |||||||||
Diluted
- Net Income Applicable to Common Stock
|
$ | 1.11 | $ | 1.05 | $ | 0.84 | ||||||
CONSOLIDATED
STATEMENTS OF COMPREHENSIVE INCOME
|
||||||||||||
For
the Years Ended December 31, (in thousands)
|
2008
|
2007
|
2006
|
|||||||||
Net
Income Applicable to Common Stock
|
$ | 9,386 | $ | 8,743 | $ | 6,913 | ||||||
Other
Comprehensive Income, net of tax
|
||||||||||||
Qualified
cash flow hedging instrument net of tax benefit
|
||||||||||||
of
$(52), $(148), and $(22) in 2008, 2007, and 2006,
respectively
|
(81 | ) | (222 | ) | (45 | ) | ||||||
Adjustment
to pension and post-retirement benefits other than
pension,
|
||||||||||||
net
of tax (benefit) expense of $(189) and $56 in 2008 and 2007,
respectively
|
(296 | ) | 143 | -- | ||||||||
Unrealized
loss on investments, net of tax benefit of $(162)
|
(254 | ) | -- | -- | ||||||||
Comprehensive
Income
|
$ | 8,755 | $ | 8,664 | $ | 6,868 | ||||||
CONSOLIDATED
BALANCE SHEETS
|
||||||||||
December
31, (in thousands, except share amounts)
|
2008
|
2007
|
||||||||
ASSETS
|
||||||||||
Utility
Plant
|
$ | 410,471 | $ | 384,421 | ||||||
Construction
Work in Progress
|
4,577 | 1,407 | ||||||||
415,048 | 385,828 | |||||||||
Accumulated
Provision for Depreciation
|
(115,815 | ) | (108,166 | ) | ||||||
Net
Utility Plant
|
299,233 | 277,662 | ||||||||
Other
Property and Investments
|
6,034 | 6,652 | ||||||||
Cash
and Cash Equivalents
|
684 | 337 | ||||||||
Restricted
Cash
|
-- | 8,220 | ||||||||
Accounts
Receivable (Less Allowance, 2008 - $376; 2007 - $352)
|
6,653 | 6,507 | ||||||||
Accrued
Unbilled Revenues
|
5,372 | 4,545 | ||||||||
Materials
and Supplies, at Average Cost
|
1,095 | 987 | ||||||||
Prepayments
and Other Current Assets
|
1,976 | 2,375 | ||||||||
Total
Current Assets
|
15,780 | 22,971 | ||||||||
Unamortized
Debt Issuance Expense
|
7,318 | 7,685 | ||||||||
Unrecovered
Income Taxes
|
22,856 | 30,278 | ||||||||
Pension
Benefits
|
8,911 | -- | ||||||||
Post-Retirement
Benefits Other Than Pension
|
2,570 | 6,410 | ||||||||
Goodwill
|
3,608 | 3,608 | ||||||||
Deferred
Charges and Other Costs
|
6,121 | 5,547 | ||||||||
Total
Regulatory and Other Long-Term Assets
|
51,384 | 53,528 | ||||||||
Total
Assets
|
$ | 372,431 | $ | 360,813 | ||||||
CAPITALIZATION
AND LIABILITIES
|
||||||||||
Common
Stockholders' Equity:
|
||||||||||
Common
Stock Without Par Value:
|
||||||||||
Authorized
- 25,000,000 Shares - Issued and Outstanding:
|
||||||||||
2008 - 8,463,269; 2007 - 8,376,842 | $ | 64,804 | $ | 62,808 | ||||||
Retained
Earnings
|
39,285 | 37,272 | ||||||||
Accumulated
Other Comprehensive Income
|
(613 | ) | 18 | |||||||
Common
Stockholders' Equity
|
103,476 | 100,098 | ||||||||
Preferred
Stock
|
772 | 772 | ||||||||
Long-Term
Debt
|
92,227 | 92,285 | ||||||||
Total
Capitalization
|
196,475 | 193,155 | ||||||||
Interim
Bank Loans Payable
|
12,074 | 6,459 | ||||||||
Current
Portion of Long-Term Debt
|
8 | 7 | ||||||||
Accounts
Payable and Accrued Expenses
|
5,700 | 5,984 | ||||||||
Accrued
Taxes
|
-- | 1,316 | ||||||||
Accrued
Interest
|
870 | 810 | ||||||||
Other
Current Liabilities
|
418 | 337 | ||||||||
Total
Current Liabilities
|
19,070 | 14,913 | ||||||||
Advances
for Construction
|
38,928 | 34,583 | ||||||||
Contributions
in Aid of Construction
|
49,420 | 47,865 | ||||||||
Deferred
Federal and State Income Taxes
|
30,472 | 28,616 | ||||||||
Unfunded
Future Income Taxes
|
18,128 | 25,404 | ||||||||
Long-Term
Compensation Arrangements
|
18,331 | 14,717 | ||||||||
Unamortized
Investment Tax Credits
|
1,497 | 1,560 | ||||||||
Other
Long-Term Liabilities
|
110 | |||||||||
Commitments
and Contingencies
|
||||||||||
Total
Capitalization and Liabilities
|
$ | 372,431 | $ | 360,813 |
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
||||||||||||
For
the Years Ended December 31, (in thousands)
|
2008
|
2007
|
2006
|
|||||||||
Operating
Activities:
|
||||||||||||
Net
Income
|
$ | 9,424 | $ | 8,781 | $ | 6,951 | ||||||
Adjustments
to Reconcile Net Income to Net Cash
|
||||||||||||
Provided
by Operating Activities:
|
||||||||||||
Deferred
Revenues
|
(777 | ) | (3,823 | ) | -- | |||||||
Gain
on Sale of BARLACO Assets Sold
|
-- | -- | (980 | ) | ||||||||
Earnings
from Discontinued Operations
|
-- | -- | (243 | ) | ||||||||
Allowance
for Funds Used During Construction
|
(123 | ) | (131 | ) | (491 | ) | ||||||
Depreciation
(including $642 in 2008, $338 in 2007,
|
||||||||||||
and
$396 in 2006 charged to other accounts)
|
7,080 | 7,173 | 6,277 | |||||||||
Change
in Assets and Liabilities:
|
||||||||||||
Decrease
(Increase) in Accounts Receivable and Accrued Unbilled
Revenues
|
(974 | ) | (1,513 | ) | 268 | |||||||
Decrease
(Increase) in Other Current Assets
|
204 | (129 | ) | (805 | ) | |||||||
(Increase)
Decrease in Other Non-Current Items, net
|
(146 | ) | 2,072 | (549 | ) | |||||||
(Decrease)
Increase in Accounts Payable, Accrued
|
||||||||||||
Expenses
and Other Current Liabilities
|
(879 | ) | 1,258 | 690 | ||||||||
Increase
(Decrease) in Deferred Income Taxes and
|
||||||||||||
Investment
Tax Credits, Net
|
1,878 | 1,893 | (1,492 | ) | ||||||||
Total
Adjustments
|
6,263 | 6,800 | 2,675 | |||||||||
Net
Cash and Cash Equivalents Provided by Continuing
Operations
|
15,687 | 15,581 | 9,626 | |||||||||
Net
Cash and Cash Equivalents Provided by Discontinued
Operations
|
-- | -- | 243 | |||||||||
Net
Cash and Cash Equivalents Provided by Operating Activities
|
15,687 | 15,581 | 9,869 | |||||||||
Investing
Activities:
|
||||||||||||
Company
Financed Additions to Utility Plant
|
(19,877 | ) | (18,749 | ) | (16,199 | ) | ||||||
Advances
from Others for Construction
|
(737 | ) | (961 | ) | (1,102 | ) | ||||||
Net
Additions to Utility Plant Used in Continuing Operations
|
(20,614 | ) | (19,710 | ) | (17,301 | ) | ||||||
Purchase
of Eastern and H20 Services Assets
|
(3,500 | ) | -- | -- | ||||||||
Release
of Restricted Cash
|
8,393 | -- | 2,686 | |||||||||
Proceeds
from Sale of BARLACO Assets Sold (Net of $35 in Transaction
Costs)
|
-- | -- | 965 | |||||||||
Sale
(Purchase) of Short Term Investments
|
-- | -- | 6,922 | |||||||||
Net
Cash and Cash Equivalents Used in Investing Activities in Continuing
Operations
|
(15,721 | ) | (19,710 | ) | (6,728 | ) | ||||||
Net
Cash and Cash Equivalents Used in Investing Activities in Discontinued
Operations
|
-- | -- | -- | |||||||||
Net
Cash Used in Investing Activities
|
(15,721 | ) | (19,710 | ) | (6,728 | ) | ||||||
Financing
Activities:
|
||||||||||||
Proceeds
from Interim Bank Loans
|
12,074 | 6,459 | 5,250 | |||||||||
Repayment
of Interim Bank Loans
|
(6,459 | ) | (5,250 | ) | (4,750 | ) | ||||||
Repayment
of Long-Term Debt Including Current Portion
|
(57 | ) | (62 | ) | (2,381 | ) | ||||||
Proceeds
from Issuance of Long-Term Debt
|
-- | 6,482 | -- | |||||||||
Proceeds
from Issuance of Common Stock
|
1,281 | 1,238 | 1,401 | |||||||||
Proceeds
from Exercise of Stock Options
|
218 | 809 | 284 | |||||||||
Redemption
of Preferred Stock
|
-- | -- | (75 | ) | ||||||||
Costs
Incurred to Issue Long-Term Debt and Common Stock
|
(2 | ) | (367 | ) | (4 | ) | ||||||
Advances
from Others for Construction
|
737 | 961 | 1,102 | |||||||||
Cash
Dividends Paid
|
(7,411 | ) | (7,181 | ) | (7,030 | ) | ||||||
Net
Cash and Cash Equivalents Provided by (Used in)
|
||||||||||||
Financing
Activities in Continuing Operations
|
381 | 3,089 | (6,203 | ) | ||||||||
Net
Cash and Cash Equivalents Used in Financing Activities in Discontinued
Operations
|
-- | -- | -- | |||||||||
Net
Cash and Cash Equivalents Provided by (Used in) Financing
Activites
|
381 | 3,089 | (6,203 | ) | ||||||||
Net
Increase (Decrease) in Cash and Cash Equivalents
|
347 | (1,040 | ) | (3,062 | ) | |||||||
Cash
and Cash Equivalents at Beginning of Year
|
337 | 1,377 | 4,439 | |||||||||
Cash
and Cash Equivalents at End of Year
|
$ | 684 | $ | 337 | $ | 1,377 | ||||||
Non-Cash
Investing and Financing Activities:
|
||||||||||||
Non-Cash
Contributed Utility Plant (see Note 1 for details)
|
$ | 4,089 | $ | 2,116 | $ | 3,295 | ||||||
Short-term
Investment of Bond Proceeds Held in Trust
|
$ | -- | $ | 8,220 | $ | -- | ||||||
Supplemental
Disclosures of Cash Flow Information:
|
||||||||||||
Cash
Paid for Continuing Operations During the Year for:
|
||||||||||||
Interest
|
$ | 4,876 | $ | 4,398 | $ | 4,159 | ||||||
State
and Federal Income Taxes
|
$ | 3,273 | $ | 2,096 | $ | 1,176 | ||||||
Cash
Paid for Discontinued Operations During the Year for:
|
||||||||||||
Interest
|
$ | -- | $ | -- | $ | -- | ||||||
State
and Federal Income Taxes
|
$ | -- | $ | -- | $ | 73 | ||||||
(in
thousands)
|
December
31
|
|||||||
2008
|
2007
|
|||||||
Assets:
|
||||||||
Postretirement
benefits
|
$ | 11,481 | $ | 6,136 | ||||
Unrecovered
income taxes and other
|
18,128 | 25,404 | ||||||
Deferred
revenue (included in deferred charges)
|
4,600 | 3,823 | ||||||
Other
(included in deferred charges)
|
1,363 | 1,806 | ||||||
Total
regulatory assets
|
$ | 35,572 | $ | 37,169 | ||||
Liabilities:
|
||||||||
Investment
Tax Credits
|
$ | 1,497 | $ | 1,560 | ||||
Unfunded
future income taxes and other
|
18,128 | 25,404 | ||||||
Total
regulatory liabilities
|
$ | 19,625 | $ | 26,964 |
(in
thousands)
|
2008
|
2007
|
2006
|
|||||||||
Additions
to Utility Plant:
|
||||||||||||
Company
Financed
|
$ | 19,877 | $ | 18,749 | $ | 16,199 | ||||||
Allowance
for Funds Used During Construction
|
123 | 131 | 491 | |||||||||
Subtotal
– Utility Plant Increase to Rate Base
|
20,000 | 18,880 | 16,690 | |||||||||
Advances
from Others for Construction
|
737 | 961 | 1,102 | |||||||||
Net
Additions to Utility Plant
|
$ | 20,737 | $ | 19,841 | $ | 17,792 |
Years
ended December 31,
|
2008
|
2007
|
2006
|
|||||||||
Numerator
(in thousands)
|
||||||||||||
Basic
Income from Continuing Operations
|
$ | 9,424 | $ | 8,781 | $ | 6,708 | ||||||
Diluted
Income from Continuing Operations
|
$ | 9,424 | $ | 8,781 | $ | 6,708 | ||||||
Denominator
(in thousands)
|
||||||||||||
Basic
Weighted Average Shares Outstanding
|
8,377 | 8,270 | 8,188 | |||||||||
Dilutive
Effect of Stock Awards
|
53 | 63 | 49 | |||||||||
Diluted
Weighted Average Shares Outstanding
|
8,430 | 8,333 | 8,237 | |||||||||
Earnings
per Share
|
||||||||||||
Basic
Earnings per Share from Continuing Operations
|
$ | 1.12 | $ | 1.06 | $ | 0.81 | ||||||
Dilutive
Effect of Stock Awards
|
0.01 | 0.01 | -- | |||||||||
Diluted
Earnings per Share from Continuing Operations
|
$ | 1.11 | $ | 1.05 | $ | 0.81 |
(in
thousands)
|
Year
ended
December
31, 2006
|
|||
Water
Activities:
|
||||
Operating
Revenues
|
$ | -- | ||
Income
Taxes
|
(244 | ) | ||
Net
Income from Water Activities
|
243 | |||
Services
and Rentals:
|
||||
Revenues
|
$ | -- | ||
Income
Taxes
|
(12 | ) | ||
Net
Income from Services and Rentals
|
-- | |||
Total
Net Income from Discontinued Operations
|
$ | 243 |
(in
thousands)
|
2008
|
2007
|
2006
|
|||||||||
Federal
Classified as Operating Expense from Continuing Operations
|
$ | 3,631 | $ | 3,834 | $ | 2,080 | ||||||
Federal
Classified as Other Utility Income from Continuing
Operations
|
267 | 238 | 232 | |||||||||
Federal
Classified as Other Income from Continuing Operations
|
||||||||||||
Land
Sales
|
-- | 61 | 287 | |||||||||
Land
Donations
|
178 | 83 | (892 | ) | ||||||||
Non-Water
Sales
|
360 | 332 | 264 | |||||||||
Other
|
(195 | ) | (529 | ) | (981 | ) | ||||||
Total
Federal Income Tax Expense from Continuing Operations
|
4,241 | 4,019 | 990 | |||||||||
State
Classified as Operating Expense from Continuing Operations
|
(113 | ) | 361 | (26 | ) | |||||||
State
Classified as Other Utility Income from Continuing
Operations
|
64 | 57 | 68 | |||||||||
State
Classified as Other Income from Continuing Operations
|
||||||||||||
Land
Sales
|
-- | 14 | 89 | |||||||||
Land
Donations
|
(19) | (199 | ) | (902 | ) | |||||||
Non-Water
Sales
|
90 | 79 | 79 | |||||||||
Other
|
(23) | (101 | ) | (191 | ) | |||||||
Total
State Income Tax Expense from Continuing Operations
|
(1 | ) | 211 | (883 | ) | |||||||
Total
Income Tax Expense from Continuing Operations
|
$ | 4,240 | $ | 4,230 | $ | 107 |
(in
thousands)
|
2008
|
2007
|
2006
|
|||||||||
Current
from Continuing Operations
|
||||||||||||
Federal
|
$ | 1,906 | $ | 1,938 | $ | 1,165 | ||||||
State
|
110 | 158 | 221 | |||||||||
Total
Current from Continuing Operations
|
2,016 | 2,096 | 1,386 | |||||||||
Deferred
Income Taxes from Continuing Operations, Net
|
||||||||||||
Federal
|
||||||||||||
Investment
Tax Credit
|
(63 | ) | (63 | ) | (63 | ) | ||||||
Deferred
Revenue
|
264 | 1,202 | -- | |||||||||
Land
Donations
|
187 | 260 | (501 | ) | ||||||||
Depreciation
|
1,583 | 1,206 | 1,173 | |||||||||
Other
|
364 | (524 | ) | (784 | ) | |||||||
Total
Federal from Continuing Operations
|
2,335 | 2,081 | (175 | ) | ||||||||
State
|
||||||||||||
Land
Donations
|
85 | (108 | ) | (134 | ) | |||||||
Other
|
(196 | ) | 161 | (970 | ) | |||||||
Total
State from Continuing Operations
|
(111 | ) | 53 | (1,104 | ) | |||||||
Total
Deferred Income Taxes from Continuing Operations
|
2,224 | 2,134 | (1,279 | ) | ||||||||
Total
from Continuing Operations
|
$ | 4,240 | $ | 4,230 | $ | 107 |
(in
thousands)
|
2008
|
2007
|
||||||
Unrecovered
Income Taxes
|
$ | (22,856 | ) | $ | (30,278 | ) | ||
Deferred
Federal and State Income Taxes
|
30,472 | 28,616 | ||||||
Unfunded
Future Income Taxes
|
18,128 | 25,404 | ||||||
Unamortized
Investment Tax Credit
|
1,497 | 1,560 | ||||||
Other
|
(142 | ) | (80 | ) | ||||
Net
Deferred Income Tax Liability
|
$ | 27,099 | $ | 25,222 |
(in
thousands)
|
2008
|
2007
|
||||||
Charitable
Contribution Carryforward (1)
|
$ | (2,705 | ) | $ | (2,977 | ) | ||
Valuation
Allowance
|
2,064 | 1,888 | ||||||
Tax
Credit Carryforward (2)
|
(1,624 | ) | (1,436 | ) | ||||
Prepaid
Income Taxes on CIAC
|
(120 | ) | (209 | ) | ||||
Prepaid
FIT on Services
|
(112 | ) | (174 | ) | ||||
Other
Comprehensive Income
|
(432 | ) | (29 | ) | ||||
Accelerated
Depreciation
|
28,438 | 26,975 | ||||||
Net
of AFUDC and Capitalized Interest
|
234 | 211 | ||||||
Unamortized
Investment Tax Credit
|
1,497 | 1,560 | ||||||
Other
|
(141 | ) | (587 | ) | ||||
Net
Deferred Income Tax Liability
|
$ | 27,099 | $ | 25,222 |
(1)
|
2008
charitable contribution carryover expires beginning in 2009 and ending in
2012.
|
(2)
|
State
tax credit carry-forwards expire beginning 2017 and ending in
2020.
|
(in
thousands)
|
2008
|
2007
|
2006
|
|||||||||
Pre-Tax
Income
|
||||||||||||
Income
From Continuing Operations
|
$ | 9,424 | $ | 8,781 | $ | 6,708 | ||||||
Income
Taxes
|
4,240 | 4,230 | 107 | |||||||||
Total
Pre-Tax Income From Continuing Operations
|
$ | 13,664 | $ | 13,011 | $ | 6,815 |
2008
|
2007
|
2006
|
||||||||||
Federal
Statutory Tax Rate
|
34.0 | % | 34.0 | % | 34.0 | % | ||||||
Tax
Effect Differences:
|
||||||||||||
State
Income Taxes Net of Federal Benefit
|
-- | 1.1 | % | (0.1 | %) | |||||||
Reversal
of Regulatory Liability
|
-- | -- | (14.4 | %) | ||||||||
Adjustment
to Taxes Due to Closed IRS Examination
|
-- | -- | (14.3 | %) | ||||||||
Depreciation
|
1.6 | % | 1.7 | % | 2.6 | % | ||||||
Charitable
Contributions – Land Donation (Net of Valuation Allowance)
|
1.5 | % | 0.4 | % | (7.7 | %) | ||||||
Pension
Costs
|
(5.1 | %) | (5.3 | %) | 7.7 | % | ||||||
Allowance
for Funds Used During Construction
|
(0.3 | %) | (0.3 | %) | (2.9 | %) | ||||||
Change
in Estimate of Prior Year Income Tax Expense
|
(0.5 | %) | 0.2 | % | 0.6 | % | ||||||
Rate
Case Expense
|
0.6 | % | 0.6 | % | (3.6 | %) | ||||||
Other
|
(0.7 | %) | 0.1 | % | (0.3 | %) | ||||||
Effective
Income Tax Rate for Continuing Operations
|
31.1 | % | 32.5 | % | 1.6 | % |
(in
thousands, except share data)
|
Shares
|
Issuance
Amount
|
Expense
|
Total
|
||||||||||||
Balance,
January 1, 2006
|
8,169,627 | $ | 59,604 | $ | (1,599 | ) | $ | 58,005 | ||||||||
Stock
and equivalents issued through Performance Stock Program, Net of
Forfeitures
|
23,058 | 323 | -- | 323 | ||||||||||||
Dividend
Reinvestment Plan
|
60,747 | 1,401 | -- | 1,401 | ||||||||||||
Stock
Options Exercised and Expensed
|
16,962 | 441 | (2 | ) | 439 | |||||||||||
Other
Paid in Capital
|
-- | (3 | ) | -- | (3 | ) | ||||||||||
Balance,
December 31, 2006
|
8,270,394 | $ | 61,766 | $ | (1,601 | ) | $ | 60,165 | ||||||||
Stock
and equivalents issued through Performance Stock Program, Net of
Forfeitures
|
13,975 | 420 | -- | 420 | ||||||||||||
Dividend
Reinvestment Plan
|
54,567 | 1,326 | -- | 1,326 | ||||||||||||
Stock
Options Exercised and Expensed
|
37,906 | 902 | (5 | ) | 897 | |||||||||||
Balance,
December 31, 2007
|
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 (1)
|
8,463,269 | $ | 66,412 | $ | (1,608 | ) | $ | 64,804 |
(1)
|
Includes
37,281 restricted shares and 49,199 common stock equivalent shares issued
through the Performance Stock Programs through December 31,
2008.
|
(in
thousands, except per share data)
|
2008
|
2007
|
2006
|
|||||||||
Balance,
beginning of year
|
$ | 37,272 | $ | 35,676 | $ | 35,777 | ||||||
Net
Income
|
9,424 | 8,781 | 6,951 | |||||||||
Sub-total
|
46,696 | 44,457 | 42,728 | |||||||||
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:
|
||||||||||||
2008
$0.880 per Common Share
|
7,373 | -- | -- | |||||||||
2007
$0.865 per Common Share
|
-- | 7,147 | -- | |||||||||
2006
$0.855 per Common Share
|
-- | -- | 7,014 | |||||||||
Total
Dividends Declared
|
7,411 | 7,185 | 7,052 | |||||||||
Balance,
end of year
|
$ | 39,285 | $ | 37,272 | $ | 35,676 |
|
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
|
|||||||||
Assets:
|
||||||||||||
Investments
|
$ | 1,288 | $ | -- | $ | -- | ||||||
Liabilities:
|
||||||||||||
Interest
Rate Swap
|
$ | -- | $ | 88 | $ | -- |
(in
thousands)
|
2008
|
2007
|
|||||||||
The
Connecticut Water Company:
|
|||||||||||
Unsecured
Water Facilities Revenue Bonds
|
|||||||||||
5.05 | % |
1998
Series A, Due 2028
|
$ | 9,635 | $ | 9,640 | |||||
5.125 | % |
1998
Series B, Due 2028
|
7,615 | 7,635 | |||||||
4.40 | % |
2003A
Series, Due 2020
|
8,000 | 8,000 | |||||||
5.00 | % |
2003C
Series, Due 2022
|
14,915 | 14,915 | |||||||
Var.
|
2004
Series Variable Rate, Due 2029
|
12,500 | 12,500 | ||||||||
Var.
|
2004
Series A, Due 2028
|
5,000 | 5,000 | ||||||||
Var.
|
2004
Series B, Due 2028
|
4,550 | 4,550 | ||||||||
5.00 | % |
2005
A Series, Due 2040
|
14,935 | 14,960 | |||||||
5.00 | % |
2007
A Series, Due 2037
|
15,000 | 15,000 | |||||||
Total
The Connecticut Water Company
|
92,150 | 92,200 | |||||||||
Chester
Realty:
|
|||||||||||
Secured
|
|||||||||||
6.39 | % |
NewAlliance
Bank, Due 2017
|
85 | 92 | |||||||
Total
Chester Realty
|
85 | 92 | |||||||||
Total
Connecticut Water Service, Inc.
|
92,235 | 92,292 | |||||||||
Less
Current Portion
|
(8 | ) | (7 | ) | |||||||
Total
Long-Term Debt
|
$ | 92,227 | $ | 92,285 |
(in
thousands)
|
||||
2009
|
$ | 8 | ||
2010
|
8 | |||
2011
|
8 | |||
2012
|
9 | |||
2013
|
9 |
(in
thousands, except share data)
|
2008
|
2007
|
||||||
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 24,999
|
472 | 472 | ||||||
Total
Preferred Stock
|
$ | 772 | $ | 772 |
(in
thousands)
|
2008
|
2007
|
||||||
Land
|
$ | 9,917 | $ | 9,507 | ||||
Source
of supply
|
27,605 | 25,876 | ||||||
Pumping
|
27,646 | 24,999 | ||||||
Water
treatment
|
54,643 | 52,919 | ||||||
Transmission
and distribution
|
268,927 | 246,676 | ||||||
General
|
28,921 | 25,235 | ||||||
Held
for future use
|
419 | 429 | ||||||
Acquisition
Adjustment
|
(7,607 | ) | (1,220 | ) | ||||
Total
|
$ | 410,471 | $ | 384,421 |
(in
thousands)
|
2008
|
2007
|
2006
|
|||||||||
Municipal
Property Taxes
|
$ | 5,129 | $ | 4,903 | $ | 4,743 | ||||||
Payroll
Taxes
|
912 | 837 | 832 | |||||||||
Total
Taxes Other than Income Taxes
|
$ | 6,041 | $ | 5,740 | $ | 5,575 |
(in
thousands)
|
2008
|
2007
|
||||||
Defined
Benefit Pension Plan
|
$ | 9,624 | $ | 2,199 | ||||
Post
Retirement Benefit Other than Pension
|
3,347 | 6,464 | ||||||
Supplemental
Executive Retirement Plan
|
3,723 | 4,055 | ||||||
Deferred
Compensation
|
1,342 | 1,325 | ||||||
Other
Long-Term Compensation
|
295 | 674 | ||||||
Total
Long-Term Compensation Arrangements
|
$ | 18,331 | $ | 14,717 |
2008
|
2007
|
|||||||
Equity
|
65 | % | 65 | % | ||||
Fixed
Income
|
35 | % | 35 | % | ||||
Total
|
100 | % | 100 | % |
Pension Benefits (in
thousands)
|
2008
|
2007
|
||||||
Change
in benefit obligation:
|
||||||||
Benefit
obligation, beginning of year
|
$ | 30,365 | $ | 31,539 | ||||
Service
cost
|
1,259 | 1,277 | ||||||
Interest
cost
|
1,906 | 1,789 | ||||||
Actuarial
loss (gain)
|
410 | (2,415 | ) | |||||
Benefits
paid
|
(1,054 | ) | (1,825 | ) | ||||
Benefit
obligation, end of year
|
$ | 32,886 | $ | 30,365 | ||||
Change
in plan assets:
|
||||||||
Fair
value, beginning of year
|
$ | 28,166 | $ | 28,015 | ||||
Actual
return on plan assets
|
(7,350 | ) | 1,931 | |||||
Employer
contributions
|
3,500 | 45 | ||||||
Benefits
paid
|
(1,054 | ) | (1,825 | ) | ||||
Fair
value, end of year
|
$ | 23,262 | $ | 28,166 | ||||
Funded
Status
|
$ | (9,624 | ) | $ | (2,199 | ) | ||
Amount
Recognized in Consolidated Balance Sheets Consisted of:
|
||||||||
Non-current
asset
|
$ | -- | $ | -- | ||||
Current
liability
|
-- | -- | ||||||
Non-current
liability
|
(9,624 | ) | (2,199 | ) | ||||
Net
amount recognized
|
$ | (9,624 | ) | $ | (2,199 | ) |
Weighted-average
assumptions used to determine benefit obligations at December
31:
|
2008
|
2007
|
||||||
Discount
rate
|
6.25 | % | 6.30 | % | ||||
Rate
of compensation increase
|
4.50 | % | 4.50 | % | ||||
Weighted-average
assumptions used to determine net periodic cost for years ended December
31:
|
||||||||
Discount
rate
|
6.30 | % | 5.75 | % | ||||
Expected
long-term return on plan assets
|
8.00 | % | 8.00 | % | ||||
Rate
of compensation increase
|
4.50 | % | 4.50 | % |
Pension Benefits (in
thousands)
|
2008
|
2007
|
2006
|
|||||||||
Components
of net periodic benefit costs:
|
||||||||||||
Service
cost
|
$ | 1,259 | $ | 1,277 | $ | 1,228 | ||||||
Interest
cost
|
1,906 | 1,789 | 1,681 | |||||||||
Expected
return on plan assets
|
(2,120 | ) | (2,017 | ) | (1,836 | ) | ||||||
Amortization
of:
|
||||||||||||
Net
transition obligation
|
2 | 2 | 2 | |||||||||
Net
loss
|
69 | 69 | 75 | |||||||||
Prior
service cost
|
142 | 345 | 491 | |||||||||
Net
Periodic Pension Benefit Costs
|
$ | 1,258 | $ | 1,465 | $ | 1,641 |
Pension Benefits (in
thousands)
|
2008
|
2007
|
||||||
Change
in net loss (gain)
|
$ | 9,880 | $ | (2,329 | ) | |||
Amortization
of transition obligation
|
(2 | ) | (2 | ) | ||||
Amortization
of net loss
|
(69 | ) | (69 | ) | ||||
Amortization
of prior service cost
|
(142 | ) | (345 | ) | ||||
Total
recognized to Regulatory Asset (Liability)
|
$ | 9,667 | $ | (2,745 | ) |
Amounts
Recognized as a Regulatory Asset (Liability) at December 31:
|
2008
|
2007
|
||||||
Transition
obligation
|
$ | 6 | $ | 9 | ||||
Prior
service cost
|
516 | 585 | ||||||
Net
(gain) loss
|
8,984 | (754 | ) | |||||
Total
Recognized as a Regulatory Asset (Liability)
|
$ | 9,506 | $ | (160 | ) |
Estimated
Net Periodic Benefit Cost Amortizations for the periods January 1 -
December 31:
|
2009
|
|||
Amortization
of transition obligation
|
$ | 2 | ||
Amortization
of prior service cost
|
69 | |||
Amortization
of net loss
|
380 | |||
Total
Estimated Net Periodic Benefit Cost Amortizations
|
$ | 451 |
2008
|
2007
|
|||||||
Equity
|
58 | % | 64 | % | ||||
Fixed
Income
|
42 | % | 36 | % | ||||
Total
|
100 | % | 100 | % |
(in
thousands)
|
||||
2009
|
$ | 1,443 | ||
2010
|
1,924 | |||
2011
|
1,482 | |||
2012
|
2,713 | |||
2013
|
1,982 | |||
Years
2014 – 2018
|
16,465 |
PBOP Benefits (in
thousands)
|
2008
|
2007
|
||||||
Change
in benefit obligation:
|
||||||||
Benefit
obligation, beginning of year
|
$ | 12,316 | $ | 10,283 | ||||
Service
cost
|
632 | 651 | ||||||
Interest
cost
|
657 | 610 | ||||||
Plan
participant contributions
|
144 | 138 | ||||||
Plan
amendments
|
(3,088 | ) | -- | |||||
Actuarial
(gain) loss
|
(2,249 | ) | 1,083 | |||||
Benefits
paid
|
(423 | ) | (449 | ) | ||||
Benefit
obligation, end of year
|
$ | 7,989 | $ | 12,316 | ||||
Change
in plan assets:
|
||||||||
Fair
value, beginning of year
|
$ | 5,906 | $ | 4,260 | ||||
Actual
return on plan assets
|
(1,774 | ) | 198 | |||||
Employer
contributions
|
842 | 1,759 | ||||||
Participants’
contributions
|
143 | 138 | ||||||
Benefits
paid
|
(423 | ) | (449 | ) | ||||
Fair
value, end of year
|
$ | 4,694 | $ | 5,906 | ||||
Funded
Status
|
$ | (3,295 | ) | $ | (6,410 | ) | ||
Amount
Recognized in Consolidated Balance Sheets Consisted of:
|
||||||||
Non-current
asset
|
$ | -- | $ | -- | ||||
Current
liability
|
-- | -- | ||||||
Non-current
liability
|
(3,295 | ) | (6,410 | ) | ||||
Net
amount recognized
|
$ | (3,295 | ) | $ | (6,410 | ) |
Weighted-average
assumptions used to determine benefit obligations at December
31:
|
2008
|
2007
|
||||||
Discount
rate
|
6.20 | % | 6.30 | % | ||||
Rate
of compensation increase
|
4.50 | % | 4.50 | % | ||||
Weighted-average
assumptions used to determine net periodic cost for years ended December
31:
|
||||||||
Discount
rate
|
6.30 | % | 5.75 | % | ||||
Expected
long-term return on plan assets
|
5.00 | % | 5.00 | % | ||||
Rate
of compensation increase
|
4.50 | % | 4.50 | % |
PBOP Benefits (in
thousands)
|
2008
|
2007
|
2006
|
|||||||||
Components
of net periodic benefit costs:
|
||||||||||||
Service
cost
|
$ | 632 | $ | 651 | $ | 599 | ||||||
Interest
cost
|
657 | 610 | 485 | |||||||||
Expected
return on plan assets
|
(271 | ) | (189 | ) | (178 | ) | ||||||
Other
|
225 | 225 | -- | |||||||||
Amortization
of:
|
||||||||||||
Net
transition obligation
|
120 | 120 | 120 | |||||||||
Recognized
net loss
|
202 | 342 | 273 | |||||||||
Net
Periodic Post Retirement Benefit Costs
|
$ | 1,565 | $ | 1,759 | $ | 1,299 |
PBOP Benefits (in
thousands)
|
2008
|
2007
|
||||||
Change
in prior service (credit)
|
$ | (3,088 | ) | $ | -- | |||
Change
in net (gain) loss
|
(203 | ) | 1,074 | |||||
Amortization
of transition obligation
|
(120 | ) | (120 | ) | ||||
Amortization
of net loss
|
(203 | ) | (342 | ) | ||||
Total
recognized to Regulatory (Liability) Asset
|
$ | (3,614 | ) | $ | 612 |
Amounts
Recognized as a Regulatory Asset at December 31:
|
2008
|
2007
|
||||||
Transition
obligation
|
$ | -- | $ | 602 | ||||
Prior
service cost
|
(2,606 | ) | -- | |||||
Net
(gain) loss
|
3,205 | 3,611 | ||||||
Total
Recognized as a Regulatory Asset
|
$ | 599 | $ | 4,213 |
Estimate
Benefit Cost Amortizations for the periods January 1 - December 31:
|
2009
|
|||
Amortization
of transition obligation
|
$ | -- | ||
Amortization
of prior service cost
|
(406 | ) | ||
Amortization
of net loss (gain)
|
208 | |||
Total
Estimated Net Periodic Benefit Cost Amortizations
|
$ | (198 | ) |
Assumed
health care cost trend rates at December 31:
|
2008
|
2007
|
||||||||||||||
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
|
2018
|
2018
|
2017
|
2017
|
(in
thousands)
|
1
Percentage-Point
|
|||||||
Increase
|
Decrease
|
|||||||
Effect
on total of service and interest cost components
|
$ | 219 | $ | (178 | ) | |||
Effect
on post-retirement benefit obligation
|
$ | 868 | $ | (731 | ) |
2008
|
2007
|
|||||||
Equity
|
56 | % | 44 | % | ||||
Fixed
Income
|
44 | % | 56 | % | ||||
Total
|
100 | % | 100 | % |
(in
thousands)
|
||||
2009
|
$ | 368 | ||
2010
|
380 | |||
2011
|
407 | |||
2012
|
454 | |||
2013
|
474 | |||
Years
2014 – 2018
|
3,121 |
For
the Years Ended December 31:
|
2008
|
2007
|
2006
|
|||||||||||||||||||||
Shares
|
Weighted
Average Exercise Price
|
Shares
|
Weighted
Average Exercise Price
|
Shares
|
Weighted
Average Exercise Price
|
|||||||||||||||||||
Options:
|
||||||||||||||||||||||||
Outstanding,
beginning of year
|
106,661 | $ | 24.74 | 180,853 | $ | 24.62 | 202,271 | $ | 24.04 | |||||||||||||||
Granted
|
-- | -- | -- | -- | -- | -- | ||||||||||||||||||
Forfeited
|
-- | -- | -- | -- | -- | -- | ||||||||||||||||||
Terminated
|
-- | -- | (36,286 | ) | 27.71 | (4,456 | ) | 27.95 | ||||||||||||||||
Exercised
|
(11,775 | ) | 18.47 | (37,906 | ) | 21.33 | (16,962 | ) | 16.76 | |||||||||||||||
Outstanding,
end of year
|
94,886 | $ | 25.52 | 106,661 | $ | 24.74 | 180,853 | $ | 24.62 | |||||||||||||||
Exercisable,
end of year
|
94,886 | $ | 25.52 | 106,661 | $ | 24.74 | 171,840 | $ | 24.39 |
Options
Outstanding and Exercisable
|
||||||||||||||
Shares
|
Weighted
Average Remaining Contractual Life (years)
|
Weighted
Average Exercise Price
|
||||||||||||
Range
of prices:
|
||||||||||||||
$18.00 - $20.99 | 14,074 | 1.9 | $ | 20.42 | ||||||||||
$21.00 - $23.99 | 17,498 | 0.9 | 22.33 | |||||||||||
$24.00 - $26.99 | 22,535 | 3.9 | 25.78 | |||||||||||
$27.00 - $29.99 | 40,779 | 3.9 | 28.51 | |||||||||||
94,886 | 3.1 | $ | 25.52 |
For
the years ended December 31,
|
2008
|
2007
|
||||||||||||||
Number
of Shares
|
Grant
Date Weighted Average Fair Value
|
Number
of Shares
|
Grant
Date Weighted Average Fair Value
|
|||||||||||||
Non-vested
at beginning of year
|
15,993 | $ | 25.17 | 26,495 | $ | 25.20 | ||||||||||
Granted
|
-- | -- | -- | -- | ||||||||||||
Vested
|
(3,773 | ) | 25.18 | (8,458 | ) | 25.24 | ||||||||||
Forfeited
|
-- | -- | (2,044 | ) | 25.24 | |||||||||||
Non-vested
at end of year
|
12,220 | $ | 25.18 | 15,993 | $ | 25.17 |
For
the years ended December 31,
|
2008
|
2007
|
||||||||||||||
Number
of Shares
|
Grant
Date Weighted Average Fair Value
|
Number
of Shares
|
Grant
Date Weighted Average Fair Value
|
|||||||||||||
Non-vested
at beginning of year
|
22,703 | $ | 24.45 | 18,059 | $ | 25.90 | ||||||||||
Granted
|
17,108 | 23.92 | 13,186 | 22.38 | ||||||||||||
Vested
|
(5,126 | ) | 22.88 | (7,666 | ) | 24.26 | ||||||||||
Forfeited
|
(2,241 | ) | 24.26 | (876 | ) | 24.93 | ||||||||||
Non-vested
at end of year
|
32,444 | $ | 24.43 | 22,703 | $ | 24.45 |
(in
thousands)
|
Revenues
|
Depreciation
|
Other
Operating Expenses
|
Other
Income (Deductions)
|
Interest
Expense (net of AFUDC)
|
Income
Taxes
|
Income
(Loss) from Continuing Operations
|
|||||||||||||||||||||
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 | |||||||||||||
For
the year ended December 31, 2007
|
||||||||||||||||||||||||||||
Water
Activities
|
$ | 60,025 | $ | 6,525 | $ | 35,755 | $ | (1,641 | ) | $ | 4,281 | $ | 3,860 | $ | 7,963 | |||||||||||||
Real
Estate Transactions
|
227 | -- | 101 | -- | -- | (41 | ) | 167 | ||||||||||||||||||||
Services
and Rentals
|
4,411 | 25 | 3,304 | -- | 20 | 411 | 651 | |||||||||||||||||||||
Total
|
$ | 64,663 | $ | 6,550 | $ | 39,160 | $ | (1,641 | ) | $ | 4,301 | $ | 4,230 | $ | 8,781 | |||||||||||||
For
the year ended December 31, 2006
|
||||||||||||||||||||||||||||
Water
Activities
|
$ | 47,927 | $ | 5,881 | $ | 32,166 | $ | (598 | ) | $ | 3,969 | $ | 1,183 | $ | 4,130 | |||||||||||||
Real
Estate Transactions
|
1,002 | -- | 359 | -- | -- | (1,420 | ) | 2,063 | ||||||||||||||||||||
Services
and Rentals
|
4,092 | 36 | 3,189 | -- | 8 | 344 | 515 | |||||||||||||||||||||
Total
|
$ | 53,021 | $ | 5,917 | $ | 35,714 | $ | (598 | ) | $ | 3,977 | $ | 107 | $ | 6,708 |
At
December 31 (in thousands):
|
2008
|
2007
|
||||||
Total
Plant and Other Investments:
|
||||||||
Water
|
$ | 304,591 | $ | 283,641 | ||||
Non-Water
|
676 | 673 | ||||||
Total
Plant and Other Investments
|
305,267 | 284,314 | ||||||
Other
Assets:
|
||||||||
Water
|
64,734 | 73,421 | ||||||
Non-Water
|
2,430 | 3,078 | ||||||
Total
Other Assets
|
67,164 | 76,499 | ||||||
Total
Assets
|
$ | 372,431 | $ | 360,813 |
First
Quarter
|
Second
Quarter
|
Third
Quarter
|
Fourth
Quarter
|
|||||||||||||||||||||||||||||
2008
|
2007
|
2008
|
2007
|
2008
|
2007
|
2008
|
2007
|
|||||||||||||||||||||||||
Operating
Revenues
|
$ | 13,569 | $ | 13,162 | $ | 16,020 | $ | 14,446 | $ | 17,040 | $ | 16,951 | $ | 14,641 | $ | 14,467 | ||||||||||||||||
Total
Utility Operating Income
|
2,812 | 2,412 | 3,982 | 2,969 | 3,994 | 5,021 | 3,187 | 2,852 | ||||||||||||||||||||||||
Income
from Continuing Operations
|
1,705 | 1,475 | 2,951 | 1,862 | 2,835 | 3,899 | 1,933 | 1,545 | ||||||||||||||||||||||||
Net
Income
|
1,705 | 1,475 | 2,951 | 1,862 | 2,835 | 3,899 | 1,933 | 1,545 | ||||||||||||||||||||||||
Basic
Earnings per Common Share – Continuing Operations
|
0.20 | 0.18 | 0.35 | 0.22 | 0.34 | 0.47 | 0.23 | 0.19 | ||||||||||||||||||||||||
Basic
Earnings per Common Share
|
0.20 | 0.18 | 0.35 | 0.22 | 0.34 | 0.47 | 0.23 | 0.19 |
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 17, 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)
|
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
|
Savings
Plan of The Connecticut Water Company, amended and restated effective as
of October 1, 2000. (Exhibit 10.12 to Form 10-K for the year ended
12/31/01).
|
10.4a
|
Trust
Agreement between Connecticut Water Company and Riggs Bank N.A., Trustee,
dated as of June 1, 2002. (Exhibit 10.12.1 to Form 10-K for the
year ended 12/31/03).
|
10.4b
|
Post-EGTRRA
Amendment to the Savings Plan of The Connecticut Water Company, effective
January 1, 2002. (Exhibit 10.12.2 to Form 10-K for the year
ended 12/31/03).
|
10.4c
|
Supplemental
Participation Agreement to the Savings Plan of The Connecticut Water
Company between The Unionville Water Company and Connecticut Water
Company, dated December 30, 2003. (Exhibit 10.12.3 to Form 10-K
for the year ended 12/31/03).
|
10.4d
|
Supplemental
Participation Agreement to the Savings Plan of The Connecticut Water
Company between The Crystal Water Company of Danielson and Connecticut
Water Company, dated December 30, 2003. (Exhibit 10.12.4 to
Form 10-K for the year ended 12/31/03).
|
10.4e
|
Supplemental
Participation Agreement to the Savings Plan of The Connecticut Water
Company between Unionville Water Company and Connecticut Water Company,
dated February 23, 2004. (Exhibit 10.12.5 to Form 10-K for the
year ended 12/31/04).
|
10.4f*
|
Nonstandardized
Adoption Agreement Prototype Cash or Deferred Profit-Sharing
Plan.
|
10.5
|
The
Connecticut Water Company Employees’ Retirement Plan as amended and
restated as of January 1, 1997. (Exhibit 10.11 to Form 10-K for
the year ended 12/31/98).
|
10.5a
|
First
Amendment, dated August 16, 2000 to the amended and restated Connecticut
Water Company Employees’ Retirement Plan effective January 1,
1997. (Exhibit 10.13.1 to Form 10-K for the year ended
12/31/02).
|
10.5b
|
Second
Amendment, dated November 14, 2000 to the amended and restated Connecticut
Water Company Employees’ Retirement Plan effective January 1, 1997.
(Exhibit 10.13.2 to Form 10-K for the year ended
12/31/02).
|
10.5c
|
Third
Amendment, dated November 14, 2001 to the amended and restated Connecticut
Water Company Employees’ Retirement Plan effective January 1, 1997.
(Exhibit 10.13.3 to Form 10-K for the year ended
12/31/02).
|
10.5d
|
Fourth
Amendment, dated August 14, 2002 to the amended and restated Connecticut
Water Company Employees’ Retirement Plan effective January 1, 1997.
(Exhibit 10.13.4 to Form 10-K for the year ended
12/31/02).
|
10.5e
|
Fifth
Amendment, dated August 14, 2002 to the amended and restated Connecticut
Water Company Employees’ Retirement Plan effective January 1,
1997. (Exhibit 10.13.5 to Form 10-K for the year ended
12/31/02).
|
10.5f
|
Sixth
Amendment, dated November 10, 2003 to the amended and restated Connecticut
Water Company Employees’ Retirement Plan effective November 12,
2003. (Exhibit 10.13.6 to Form 10-K for the year ended
12/31/03).
|
10.5g
|
Seventh
Amendment, dated May 12, 2004 to the amended and restated Connecticut
Water Employees’ Retirement Plan effective January 1,
1997. (Exhibit 10.13.7 to Form 10-K for the year ended
12/31/04).
|
10.5h
|
Eighth
Amendment, effective March 28, 2005, to the amended and restated
Connecticut Water Company Employees’ Retirement Plan effective January 1,
1997. (Exhibit 10.5h to Form 10-K for the year ended
12/31/07).
|
10.5i
|
Ninth
Amendment, effective August 9, 2006, to the amended and restated
Connecticut Water Company Employees’ Retirement Plan effective January 1,
1997. (Exhibit 10.5i to Form 10-K for the year ended
12/31/07).
|
10.5j
|
Tenth
Amendment, effective January 1, 2008, to the amended and restated
Connecticut Water Company Employees’ Retirement plan effective January 1,
1997. (Exhibit 10.1 to Form 8-K dated
1/13/09).
|
10.5k
|
Eleventh
Amendment, effective January 1, 2009, to the amended and restated
Connecticut Water Company Employees’ Retirement Plan effective January 1,
1997. (Exhibit 10.2 to Form 8-K dated
1/13/09).
|
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
|
Connecticut
Water Service, Inc. and Subsidiaries Employee Code of Conduct, January 24,
2008.
|
10.18
|
Stock
Purchase Agreement between The Connecticut Water Company and Ellington
Acres Company and the shareholders of Ellington Acres Company, dated as of
July 21, 2008 (Exhibit 10.1 to Form 10-Q for the quarter ended June 30,
2008).
|
10.19*
|
Form
of Amended Restated Employment Agreement with the Company’s executive
officers, including:
a) Peter
J. Bancroft
b) David
C. Benoit
c) Thomas
R. Marston
d) Terrance
P. O’Neill
e) Eric
W. Thornburg
f) Maureen
P. Westbrook
|
10.20*
|
Form
of Amended Restated Employment Agreement with the Company’s executive
officers, including:
a) Kristen
A. Johnson
b) Daniel
J. Meaney
c) Nicholas
A. Rinaldi
|
10.21*
|
Form
of Amended and Restated Supplemental Executive Retirement Agreement with
the Company’s executive officers, including:
a) Peter
J. Bancroft
b) David
C. Benoit
c) Kristen
A. Johnson
d) Thomas
R. Marston
e) Daniel
J. Meaney
f) Terrance
P. O’Neill
g) Nicholas
A. Rinaldi
h) Eric
W. Thornburg
i) Maureen
P. Westbrook
|
10.22
|
Form
of Amended and Restated Deferred Compensation Agreement with the Company’s
executive officers (Exhibit 10.3 to Form 8-K filed on January 30, 2008),
including:
a) Peter
J. Bancroft
b) David
C. Benoit
c) Kristen
A. Johnson
d) Thomas
R. Marston
e) Daniel
J. Meaney
f) Terrance
P. O’Neill
g) Nicholas
A. Rinaldi
h) Eric
W. Thornburg
i) Maureen
P. Westbrook
|
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 10.5k, 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
13, 2009
|
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
13, 2009
|
||
/s/ David
C. Benoit
David
C. Benoit
|
Vice
President – Finance, Chief Financial Officer and Treasurer (Principal
Financial Officer)
|
March
13, 2009
|
||
/s/ Nicholas
A. Rinaldi
Nicholas
A. Rinaldi
|
Controller
(Principal Accounting Officer)
|
March
13, 2009
|
Signature
|
Title
|
Date
|
||
/s/ Mary
Ann Hanley
Mary
Ann Hanley
|
Director
|
March
11, 2009
|
||
/s/ Heather
Hunt
Heather
Hunt
|
Director
|
March
11, 2009
|
||
/s/ Mark
G. Kachur
Mark
G. Kachur
|
Director
|
March
11, 2009
|
||
/s/ David
A. Lentini
David
A. Lentini
|
Director
|
March
11, 2009
|
||
/s/ Arthur
C. Reeds
Arthur
C. Reeds
|
Director
|
March
11, 2009
|
||
/s/ Lisa
J. Thibdaue
Lisa
J. Thibdaue
|
Director
|
March
11, 2009
|
||
/s/ Carol
P. Wallace
Carol
P. Wallace
|
Director
|
March
11, 2009
|
||
/s/ Donald
B. Wilbur
Donald
B. Wilbur
|
Director
|
March
11, 2009
|
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, 2008
|
$ | 352 | $ | 286 | $ | 262 | $ | 376 | ||||||||
Year
Ended December 31, 2007
|
$ | 285 | $ | 265 | $ | 198 | $ | 352 | ||||||||
Year
Ended December 31, 2006
|
$ | 256 | $ | 225 | $ | 196 | $ | 285 |