The following table indicates the asset allocation percentages of the fair value of the DB Plan
and OPEB Plans’ assets for each major type of plan asset as of December 31, 2017, as well as
the targeted allocation range:
DB Plan OPEB Plans
Asset Asset
Allocation Allocation
Range Range
Equities 63% 30% - 100% 69% 30% - 100%
Fixed income 37% 20% - 70% 29% 0% - 50%
Cash and cash equivalents 0% 0% - 15% 2% 0% - 15%
Total 100% 100%
The key assumptions used to value benefit obligations and calculate net periodic benefit cost
for our DB and OPEB Plans include the following:
2018 2017
Discount rate for net periodic benefit cost, beginning of year 3.50% 4.02%
Discount rate for benefit obligations, end of year (a) 4.15% 3.50%
Expected return on plan assets for the period (net of investment expenses) 7.00% 7.00%
Rate of compensation increase, beginning of year 3.00% 3.00%
Healthcare cost trend rate (applicable only to OPEB Plans) 7.00% 7.50%
Changes in plan assets and benefit obligations recognized in regulatory assets, for the year
ended December 31, 2018, were as follows:
(in thousands) DB Plan OPEB Plans
Regulatory asset balance, beginning of period $ 7,593 $ 651
Net actuarial loss incurred during the period 374 (77)
Prior service cost incurred during the period - 16
Recognized net actuarial (gain)/loss (335) (25)
Regulatory asset balance, end of period $ 7,632 $ 565
Upon retirement, if a qualifying employee elects to receive medical benefits under our Post-65
Plan, we pay up to a maximum monthly benefit of $350 based on years of service.
The following table sets forth information regarding our DB Plan and our OPEB Plans as of
December 31, 2018 and for the year then ended:
Note 5 — Deferred Charges and Other Assets
Deferred charges and other assets as of December 31, 2018 and 2017 consisted of the
following:
Recovery
Period
(in thousands) 2018 2017 (in years)
Regulatory assets:
Source development charges $ 873 $ 952 5-25
Miscellaneous studies 865 980 2-25
Unrecovered pension and post-retirement
benefits expense 8,197 8,244 (1)
Total regulatory assets 9,935 10,176
Supplemental executive retirement plan asset 762 735
Total deferred charges and other assets $ 10,697 $ 10,911
Note 3 — Restricted Cash
The following table provides a reconciliation of cash, cash equivalents, and restricted cash
reported within the consolidated balance sheets that sum to the total of the same such amounts
shown in the statement of cash flows.
(in thousands) 2018 2017
Cash and cash equivalents $ 1,575 $ 994
Restricted cash - RSF 3,428 4,953
Restricted cash - Bond Project Funds 3,337 3,288
Total cash, cash equivalents and restricted cash
shown in the consolidated statements of cash flows $ 8,340 $ 9,235
Investment in Joint Venture
Southwood uses the equity method of accounting for its investment in a joint venture in which it
does not have a controlling interest. Under this method, Southwood records its proportionate
share of losses under “Other, net” in the accompanying Consolidated Statements of Income
(Loss) with a corresponding decrease in the carrying value of the investment.
Income Taxes
Deferred Charges and Other Assets
Deferred charges include certain regulatory assets and other assets. Regulatory assets are
amortized over the periods they are recovered through NHPUC-authorized water rates. The
Company’s utility subsidiaries have recorded certain regulatory assets in cases where the
NHPUWC has permitted, or is expected to permit, recovery of these costs over future periods.
Currently, the regulatory assets are being amortized over periods ranging from 2 to 25 years.
Unamortized Debt Issuance Costs
Concentration of Credit Risks
