Note 6 - Commitments and Contingencies
Operating Leases
The Company’s corporate office space, as well as certain office equipment, is leased under
operating lease agreements. Total rent expense was approximately $309,800 and $344,800
for the years ended December 31, 2017 and 2016, respectively.
The remaining non-cancelable lease commitments for the corporate office space and leased
equipment as of December 31, 2017 were as follows:
The following table presents a period-end reconciliation of DB Plan assets measured and
recorded at fair value on a recurring basis, using significant unobservable inputs (Level 3):
(in thousands) 2017 2016
Balance, beginning of year $ 2,264 $ 2,581
Plan transfers 1,314 493
Contributions 222 196
Benefits paid (651) (1,068)
Return on plan assets (net of investment expenses) 66 62
Balance, end of year $ 3,215 $ 2,264
(continued)
(in thousands) Fair Value Level 1 Level 2 Level 3
OPEB Plans:
Common stocks 268 268 - -
Mutual funds 131 131 - -
Fixed income funds 173 173 - -
Money market funds 13 - 13 -
Total Assets in the Fair Value Hierarchy 585 572 13 -
Investments measured at net asset value” - - - -
OPEB Plans Investments, at Fair Value 585 572 13 -
Totals $ 15,474 $ 572 $ 13 $ 2,264
(continued)
(in thousands) Fair Value Level 1 Level 2 Level 3
OPEB Plans:
Common stocks 310 310 - -
Mutual funds 111 111 - 7
Fixed income funds 180 180 - -
Money market funds 11 - 11 -
Total Assets in the Fair Value Hierarchy 612 601 11 -
Investments measured at net asset value!” : - - “
OPEB Plans Investments, at Fair Value 612 601 11 -
Totals $ 18,378 $ 601 $ li $ 3,215
The DB Plan also holds assets under an immediate participation guarantee group annuity
contract with a life insurance company. The assets under the contract are invested in pooled
separate accounts and in a general investment account. The pooled separate accounts are
valued based on net asset value (NAV) per unit of participation in the fund. The NAV is used
as a practical expedient to estimate fair values. This practical expedient is not used when it is
determined to be probable that the fund will sell the investment for an amount different than
The assets of our Post-65 Plan are held in two separate Voluntary Employee Beneficiary
Association (“VEBA”) trusts. The VEBA plan assets are maintained in directed trust
accounts at a commercial bank.
The investment strategy for the Company’s DB Plan and OPEB Plans utilizes several
different asset classes with varying risk/return characteristics. The following table indicates
the asset allocation percentages of the fair value of the DB Plan and OPEB Plans’ assets for
Amounts recognized in regulatory assets for the DB and OPEB Plans that have not yet been
recognized as components of net periodic benefit cost of the following as of December 31,
2017:
(in thousands) DB Plan OPEB Plans
Net actuarial loss $ 7,593 $ 815
Prior service cost - (164)
Regulatory asset $ 7,593 $ 651
Amounts recognized in regulatory assets for the DB and OPEB Plans that have not yet been
recognized as components of net periodic benefit cost of the following as of December 31,
2016:
The following table sets forth information regarding our DB Plan and our OPEB Plans as of
December 31, 2016 and for the year then ended:
(in thousands) DB Plan OPEB Plans
Projected benefit obligations $ 23,899 $ 3,165
Employer contribution 970 10
Benefits paid, excluding expenses (1,056) (47)
Fair value of plan assets 14,889 586
Accumulated benefit obligation 21,547 -
Funded status (9,010) (2,578)
Net periodic benefit cost 1,284 194
Amount of the funded status recognized in the
Consolidated Balance Sheet consisted of:
Note 5 — Post-retirement Benefit Plans
Pension Plan and Other Post-retirement Benefits
The provision for depreciation is computed on the straight-line method over the estimated
useful lives of the assets, which range from 3 to 91 years. The weighted average composite
depreciation rate was 2.56% and 2.54% in 2017 and 2016, respectively.
Note 3 — Accounts Receivable
Accounts receivable consisted of the following at December 31, 2017 and 2016:
