Mail Stop 3-8
June 23, 2005
By Facsimile and U.S. Mail
Ms. Betsy Henley-Cohn
Chairwoman of the Board and
Chief Executive Officer
BIW Limited
230 Beaver Street
Ansonia, CT 06401
Re: BIW Limited
Form 10-K for the Year Ended
December 31, 2004
Filed March 31, 2005
File No. 1-31374
Dear Ms. Henley-Cohn:
We have reviewed the above referenced filing and have the
following comments. Where indicated, we think you should revise
your
document in response to these comments. If you disagree, we will
consider your explanation as to why our comment is inapplicable or
a
revision is unnecessary. Please be as detailed as necessary in
your
explanation. In some of our comments, we may ask you to provide
us
with information so we may better understand your disclosure.
After
reviewing this information, we may raise additional comments.
Please understand the purpose of our review is to assist you
in
your compliance with the applicable disclosure requirements and to
enhance the overall disclosure in your filing. We look forward to
working with you in these respects. We welcome any questions you
may
have about our comments or any other aspect of our review. Feel
free
to call us at the telephone numbers listed at the end of this
letter.
Part IV, page 7
Item 15. Exhibits and Financial Statement Schedule, page 7
1. Please advise or include in future filings a reconciliation of
sales refund allowances. See Rule 12-09 of Regulation S-X. In
your
response, please show us what your revised schedule will look
like.
Exhibit 13
2004 Annual Report, BIW Limited
Financial Highlights, page 1
2. Include a brief description of issues, or cross reference to
other
disclosures in your filing, that materially impact the
comparability
of the information presented in your selected financial data, as
required by Item 301(b)2 of Regulation S-K. Your description or
references to other disclosures should quantify the effects of:
* non-recurring approved rate cases on regulated revenues;
* the costs associated with the relocation of the Eastern Division
office and staff reorganizations;
* the non-recurring, unexpected water purchase costs in the
Eastern
Division;
* the pre and post acquisition impact Eastern Connecticut Regional
Water Company, Inc. has had on regulated and non-regulated
revenues,
operating expenses, total assets, short and long-term debt and
interest expense; and
* the issuance of $9 million in First Mortgage Bonds at a
significantly reduced interest rate and the related savings on
interest expense.
Management`s Discussion and Analysis of Financial Condition and
Results of Operations, page 6
Off-Balance Sheet Arrangements and Contractual Obligations, page
12
3. Please disclose scheduled interest payments for long-term
obligations in your table of contractual obligations. When
interest
rates are variable and unknown, estimates of future variable rate
interest payments may be included or excluded provided you include
the appropriate disclosure in a footnote to the table. Please
show
us what your revised disclosures will look like. See the
instructions to Item 303(a) of Regulation S-K.
Notes to Consolidated Financial Statements, page 18
Note 1 Accounting Policies, page 18
Utility Plant, page 18
4. We note you are required to receive approval from the
Connecticut
Department of Public Health before you may abandon or dispose of
land
holdings associated with a source of water supply. Please tell us
if
you have a legal obligation, as described in SFAS No. 143, to
incur
retirement costs for your water supply sources. If so, tell us if
you can reasonably estimate the fair value for asset retirement
obligations, the amounts you have recorded and if you recorded the
initial application of the Statement as a change in accounting
principle in accordance with paragraph 20 of APB No. 20. Also,
tell
us if you recognized a regulatory asset or liability for the
timing
differences between the recognition of asset retirement obligation
period costs for financial reporting purposes and for ratemaking
purposes. See paragraph 20 of SFAS No. 143. If you can not
reasonably estimate the fair value of retirement liabilities for
asset retirement obligations please include in your response a
description of the reasons precluding you from recording these
estimates and when you estimate you will incur asset retirement
obligations.
Depreciation, page 18
5. Please disclose your depreciation policy for non-regulated
property, plant and equipment. Include in your response why H20
Services did not record any depreciation expense in the three
fiscal
years ended December 31, 2004 as disclosed in your segment
disclosures on page 30.
Revenue Recognition, page 19
6. Expand the H20 non-regulated revenue recognition policy to
discuss
contract operations, maintenance services, water testing services,
billing services and other products or services this segment may
offer. Tell us how you bill and recognize revenue for contracted
services, unplanned additional services and how you estimate the
fair
value of these services. Include accounting pronouncements as
applicable. In your response please show us what your revised
disclosures will look like.
Note 2 Acquisition, page 20
7. We note your purchase price allocation does not identify any
acquired intangible assets or assign excess cost over the amounts
assigned to acquired assets and assumed liabilities as goodwill.
Tell us your basis for allocating the cost of the acquired entity
based on its estimated fair value on the date of acquisition as
described in paragraphs 36 - 46 of SFAS No. 141. In your response
include the assumptions, independent appraisals or other relevant
information used to estimate fair value.
Note 3 Utility Plant, page 21
8. Please advise or revise your future interim and annual filings
to
disclose regulated and non-regulated property, plant and
equipment,
depreciation expense and accumulated depreciation balances
separately
as of your balance sheet dates. In your response, please show us
what your revised disclosure will look like.
Note 12 Employee Benefits, page 25
9. Please tell us why the assumed discount rate of 8% is a
representative assumption for use in the measurement of your
benefit
obligations and net periodic pension cost for the prior three
fiscal
years. In selecting the discount rate it is generally a best
practice approach to look to available information in current
prices
of annuity contracts that can be used to effect settlement of your
obligation or look to annuity rates published by the Pension
Benefit
Guaranty Corporation ("PBGC"). The interest rate the PBGC will
charge on employer liability during the calendar quarter beginning
January 1 and ending March 31, 2005, is 5.25%. See paragraphs 43
- -
48 of SFAS No. 87.
Note 18 Segment Information, page 30
10. Please advise or revise your segment disclosures to include
interest expense, amortization of deferred income on land
dispositions and total expenditures for additions to long-lived
assets and deferred tax assets for each reportable segment. See
paragraphs 27.e., f. and 28.b. of SFAS No. 131.
Please respond to these comments within 10 business
days,
or tell us when you will provide us with a response. Please
provide
us with a response letter that keys your responses to our comments
and provides any requested information. Detailed letters greatly
facilitate our review. File your response on EDGAR as a
correspondence file. Please understand that we may have
additional
comments after reviewing your responses to our comments.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filing reviewed by the staff to
be
certain that they have provided all information investors require
for
an informed decision. Since the company and its management are in
possession of all facts relating to a company`s disclosure, they
are
responsible for the accuracy and adequacy of the disclosures they
have made.
In connection with responding to our comments, please
provide,
in writing, a statement from the company acknowledging that:
* the company is responsible for the adequacy and accuracy of the
disclosure in the filing;
* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with
respect to the filing; and
* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.
In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in our review of your filing or in
response to our comments on your filing.
You may contact Brian V. McAllister at (202) 551-3341
or,
in his absence to the undersigned at (202) 551-3841 if you have
any
questions regarding comments on the financial statements and
related
matters.
Sincerely,
Michael Moran
Accounting Branch
Chief
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Ms. Henley-Cohn
BIW Limited
June 23, 2005
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