<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED
September 30, 1994 OR
-----------------------
( ) TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM
TO
----------------------- -----------------------
Commission File Number 0-8084
----------------------------
Connecticut Water Service, Inc.
- - -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Connecticut 06-0739839
- - ------------------------------------- ---------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
93 West Main Street, Clinton, CT 06413
- - -------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(203) 669-8636
- - -------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
Not Applicable
- - -------------------------------------------------------------------------------
(Former name, address and former fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15 (d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
-------- --------
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents
and reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a count. Yes No
-------- --------
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
2,829,933
- - -------------------------------------------------------------------------------
Number of shares of common stock outstanding, September 30, 1994
<PAGE> 2
CONNECTICUT WATER SERVICE, INC.
Financial Report
September 30, 1994 and 1993
TABLE OF CONTENTS
<TABLE>
<S> <C>
PART I, ITEM 1: Financial Statements
Consolidated Balance Sheets at September 30, 1994 Page 3
and December 31, 1993 Page 3a
Consolidated Statements of Capitalization at
September 30, 1994 and December 31, 1993 Page 4
Consolidated Statements of Income for Three Months
Ended September 30, 1994 and 1993 Page 5
Schedules of Operating Revenues, Taxes Other Than
Income and Other Income for Three Months
Ended September 30, 1994 and 1993 Page 6
Consolidated Statements of Income for Nine Months
Ended September 30, 1994 and 1993 Page 7
Schedules of Operating Revenues, Taxes Other Than
Income and Other Income for Nine Months
Ended September 30, 1994 and 1993 Page 8
Consolidated Statements of Income for Twelve Months
Ended September 30, 1994 and 1993 and for Twelve Months
Ended June 30, 1994 Page 9
Schedules of Operating Revenues, Taxes Other Than
Income and Other Income for Twelve Months
Ended September 30, 1994 and 1993 and for Twelve Months
Ended June 30, 1994 Page 10
Consolidated Statements of Retained Earnings for Three
Months Ended September 30, 1994 and 1993 Page 11
Consolidated Statements of Retained Earnings for Nine
Months Ended September 30, 1994 and 1993 Page 11
Consolidated Statements of Retained Earnings for Twelve
Months Ended September 30, 1994 and 1993 Page 11
Consolidated Statements of Cash Flows for Nine Months
Ended September 30, 1994 and 1993 Page 12
Notes to Consolidated Financial Statements Page 13
PART I, ITEM 2: Management's Discussion and Analysis of
Financial Condition and Results of Operations Page 14
Signature Page Page 15
</TABLE>
<PAGE> 3
Page 3
Connecticut Water Service, Inc. and Subsidiary
CONSOLIDATED BALANCE SHEETS
At September 30, 1994 and December 31, 1993
<TABLE>
<CAPTION>
SEPT. 30,
1994 DEC. 31,
(UNAUDITED) 1993
----------- --------
ASSETS
- - ------
(THOUSANDS OF DOLLARS)
<S> <C> <C>
Utility Plant
Utility Plant........................................................... $178,151 $176,308
Construction Work in Progress........................................... 3,310 2,596
Utility Plant Acquisition Adjustments................................... (1,206) (1,206)
---------- ---------
180,255 177,698
Accumulated Provision for Depreciation.................................. (41,849) (40,130)
---------- ---------
Net Utility Plant..................................................... 138,406 137,568
---------- ---------
Investments
Unconsolidated Subsidiary at Underlying Equity.......................... 35 35
Other................................................................... 754 727
---------- ---------
Total Investments..................................................... 789 762
---------- ---------
Current Assets
Cash.................................................................... 101 44
Accounts Receivable (Less Allowance, 1994 - $244; 1993 - $166).......... 3,945 3,423
Accrued Unbilled Revenues............................................... 3,200 2,800
Materials and Supplies, at Average Cost................................. 647 681
Prepayments and Other Current Assets.................................... 1,290 255
---------- ---------
Total Current Assets.................................................. 9,183 7,203
---------- ---------
Deferred Charges
Unamortized Debt Issuance Expense...................................... 5,635 5,111
Receivables from Customers for Unrecovered Future Income Taxes......... 9,250 10,000
Receivables from Customers for Unrecovered SFAS 106 Postretirement
Medical and Dental Benefits......................................... 800 640
Reynolds Bridge Well Field Contamination Clean Up Costs................ 1,254 912
Prepaid Income Taxes on Contributions in Aid of Construction........... 511 439
Other Costs............................................................ 863 445
---------- ---------
Total Deferred Charges................................................ 18,313 17,547
---------- ---------
Total Assets........................................................ $166,691 $163,080
========== =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 4
Page 3a
CONNECTICUT WATER SERVICE, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
AT SEPTEMBER 30, 1994 AND DECEMBER 31, 1993
<TABLE>
<CAPTION>
SEPT. 30,
1994 DEC. 31,
(UNAUDITED) 1993
---------- ---------
CAPITALIZATION AND LIABILITIES
- - ------------------------------
(Thousands of dollars)
<S> <C> <C>
Capitalization (See accompanying statements)
Common Stockholders' Equity............................................. $47,094 $45,160
Preferred Stock......................................................... 772 772
Preferred Stock with Mandatory Redemption Provisions.................... 0 2,976
Long-Term Debt ......................................................... 54,600 51,600
---------- ---------
Total Capitalization.................................................. 102,466 100,508
---------- ---------
Current Liabilities
Interim Bank Loans Payable.............................................. 4,689 3,950
Current Portion of Long-Term Debt....................................... 0 0
Current Portion of Preferred Stock...................................... 30 30
Accounts Payable........................................................ 2,635 2,574
Accrued Taxes........................................................... 2,231 1,466
Accrued Interest........................................................ 663 1,196
Other................................................................... 1,346 1,263
---------- ---------
Total Current Liabilities............................................. 11,594 10,479
---------- ---------
Advances for Construction................................................. 11,986 11,584
---------- ---------
Contributions in Aid of Construction...................................... 18,133 18,128
---------- ---------
Deferred Federal Income Taxes............................................. 10,173 9,408
---------- ---------
Unfunded Future Income Taxes.............................................. 9,250 10,000
---------- ---------
Unfunded SFAS 106 Postretirement Medical and Dental Benefits.............. 800 640
---------- ---------
Unamortized Investment Tax Credits........................................ 2,289 2,333
---------- ---------
Total Capitalization and Liabilities................................ $166,691 $163,080
========== =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 5
Page 4
CONNECTICUT WATER SERVICE, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CAPITALIZATION
AT SEPTEMBER 30, 1994 AND DECEMBER 31, 1993
<TABLE>
<CAPTION>
SEPT. 30,
1994 DEC. 31,
(UNAUDITED) 1993
----------- ---------
(THOUSANDS OF DOLLARS)
<S> <C> <C>
Common Stockholders' Equity
Common Stock Without Par Value Authorized - 7,500,000 Shares;
Shares Issued and Outstanding: 1994 - 2,829,933; 1993 - 2,789,977............... $39,164 $38,218
Stock Issuance Expense.......................................................... (1,150) (1,150)
Retained Earnings............................................................... 9,080 8,092
----------- ---------
Total Common Stockholders' Equity............................................... 47,094 45,160
----------- ---------
Cumulative Preferred Stock of Connecticut Water Service, Inc.
Series A Voting, $20 Par Value; Authorized, Issued and
Outstanding 15,000 Shares, Redeemable at $21.00 Per Share..................... 300 300
Series $.90 Non-Voting, $16 Par Value; Authorized 50,000 Shares
Issued and Outstanding 29,499 Shares, Redeemable at $16.00 Per Share.......... 472 472
----------- ---------
Total Preferred Stock of Connecticut Water Service, Inc.................... 772 772
----------- ---------
Cumulative Preferred Stock of The Connecticut Water Company, with
Mandatory Redemption Provisions, Voting, $100 Par Value; Authorized
50,000 Shares, Issued and Outstanding:
SHARES
-----------------
SERIES 1994 1993
--------- -------- --------
4 3/4% 300 600 ................................................ 30 60
9 1/2% 0 30,000 ................................................ 0 3,000
Stock Issuance Expense.......................................................... 0 (54)
----------- ---------
30 3,006
Less Current Portion of Preferred Stock........................................ 30 30
----------- ---------
Total Preferred Stock of The Connecticut Water Company...................... 0 2,976
----------- ---------
Long-Term Debt
The Connecticut Water Company
First Mortgage Bonds
9 3/8% Series L, due 1997.................................................... 0 1,800
8 1/2% Series O, due 1999.................................................... 0 2,250
10% Series P, due 2004.................................................... 0 5,000
6.9% Series Q, due 2021.................................................... 10,000 10,000
5 7/8% Series R, due 2022.................................................... 15,000 15,000
6.65% Series S, due 2020.................................................... 8,000 8,000
5 3/4% Series T, due 2028.................................................... 5,000 5,000
5.3% Series U, due 2028.................................................... 4,550 4,550
6.94% Series V, due 2029.................................................... 12,050 0
----------- ---------
54,600 51,600
Less Current Portion of Long-Term Debt.......................................... 0 0
----------- ---------
Total Long-Term Debt........................................................ 54,600 51,600
----------- ---------
Total Capitalization...................................................... $102,466 $100,508
=========== =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 6
Page 5
CONNECTICUT WATER SERVICE, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1994 AND 1993
<TABLE>
<CAPTION>
1994 1993 INCREASE
(UNAUDITED) (UNAUDITED) (DECREASE)
----------- ----------- ----------
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C>
Operating Revenues (See accompanying schedule)...................... $11,022 $11,230 ($208)
---------- ----------- ---------
Operating Expenses
Operation......................................................... 3,161 3,012 149
Maintenance....................................................... 405 386 19
Depreciation...................................................... 771 765 6
Federal Income Taxes.............................................. 1,443 1,588 (145)
Connecticut Corporation Business Taxes............................ 348 436 (88)
Taxes Other Than Income Taxes
(See accompanying schedule)..................................... 1,427 1,542 (115)
---------- ----------- ---------
Total Operating Expenses..................................... 7,555 7,729 (174)
---------- ----------- ---------
Utility Operating Income............................................ 3,467 3,501 (34)
---------- ----------- ---------
Other Income (Deductions)
Interest.......................................................... 26 24 2
Allowance for Funds Used During Construction...................... 30 17 13
Preferred Stock Dividends of Subsidiary........................... (1) (72) 71
Other (See accompanying schedule)................................. 6 (42) 48
Taxes on Other Income............................................. 4 10 (6)
---------- ----------- ---------
Total Other Income (Deductions).............................. 65 (63) 128
---------- ----------- ---------
Interest and Debt Expense
Interest on Long-Term Debt........................................ 854 953 (99)
Other Interest Charges............................................ 102 50 52
Amortization of Debt Expense...................................... 48 53 (5)
---------- ----------- ---------
Total Interest and Debt Expense.............................. 1,004 1,056 (52)
---------- ----------- ---------
Net Income.......................................................... 2,528 2,382 146
Preferred Stock Dividend Requirement................................ 10 10 0
---------- ----------- ---------
Net Income Applicable to Common Stockholders........................ $2,518 $2,372 $146
========== =========== =========
Weighted Average Common Shares Outstanding.......................... 2,817 2,774 43
========== =========== =========
Earnings Per Average Common Share................................... $0.89 $0.86 $0.03
========== =========== =========
Dividends Per Common Share.......................................... $0.41 $0.41 $0.00
========== =========== =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 7
Page 6
CONNECTICUT WATER SERVICE, INC. AND SUBSIDIARY
SCHEDULE OF OPERATING REVENUES, TAXES OTHER THAN INCOME
AND OTHER INCOME
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1994 AND 1993
<TABLE>
<CAPTION>
1994 1993 INCREASE
(UNAUDITED) (UNAUDITED) (DECREASE)
----------- ----------- ----------
(THOUSANDS OF DOLLARS)
<S> <C> <C> <C>
Operating Revenues:
Residential.................................................... $6,651 $6,899 ($248)
Seasonal....................................................... 140 84 56
Commercial..................................................... 1,352 1,365 (13)
Industrial..................................................... 544 527 17
Public Authority............................................... 252 281 (29)
Metered Sales - Temporary and Non-Recurring.................... 18 17 1
Private Fire................................................... 214 210 4
Public Fire.................................................... 1,292 1,283 9
Other.......................................................... 14 11 3
--------- --------- --------
Revenues Billed................................................ 10,477 10,677 (200)
Change in Revenues Accrued..................................... 545 553 (8)
--------- --------- --------
Total Operating Revenue................................... $11,022 $11,230 ($208)
========= ========= ========
Taxes - Other Than Income Taxes
Municipal Taxes................................................ $769 $872 ($103)
Payroll Taxes.................................................. 109 109 0
Connecticut Gross Earnings Tax................................. 549 561 (12)
--------- --------- --------
Total Other Taxes......................................... $1,427 $1,542 ($115)
========= ========= ========
Other Income
Merchandising, Jobbing and Contracting - Net................... $10 $1 $9
Income from Lease of Other Physical Property - Net............. 5 5 0
Miscellaneous Non-Operating Income............................. (6) (1) (5)
Miscellaneous Income Deductions................................ (3) (47) 44
--------- --------- --------
Total Other Income........................................ $6 ($42) $48
========= ========= ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 8
Page 7
CONNECTICUT WATER SERVICE, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1994 AND 1993
<TABLE>
<CAPTION>
1994 1993 INCREASE
(UNAUDITED) (UNAUDITED) (DECREASE)
----------- ----------- ----------
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C>
Operating Revenues (See accompanying schedule)...................... $29,087 $29,089 ($2)
--------- --------- --------
Operating Expenses
Operation......................................................... 9,714 9,628 86
Maintenance....................................................... 1,292 1,137 155
Depreciation...................................................... 2,311 2,270 41
Federal Income Taxes.............................................. 3,060 3,061 (1)
Connecticut Corporation Business Taxes............................ 789 848 (59)
Taxes Other Than Income Taxes
(See accompanying schedule)..................................... 4,335 4,358 (23)
--------- --------- --------
Total Operating Expenses..................................... 21,501 21,302 199
--------- --------- --------
Utility Operating Income............................................ 7,586 7,787 (201)
--------- --------- --------
Other Income (Deductions)
Interest.......................................................... 74 75 (1)
Allowance for Funds Used During Construction...................... 41 53 (12)
Preferred Stock Dividends of Subsidiary........................... (73) (219) 146
Other (See accompanying schedule)................................. 23 (50) 73
Taxes on Other Income............................................. 23 22 1
--------- --------- --------
Total Other Income (Deductions).............................. 88 (119) 207
--------- --------- --------
Interest and Debt Expense
Interest on Long-Term Debt........................................ 2,600 2,911 (311)
Other Interest Charges............................................ 210 193 17
Amortization of Debt Expense...................................... 141 156 (15)
--------- --------- --------
Total Interest and Debt Expense.............................. 2,951 3,260 (309)
--------- --------- --------
Net Income.......................................................... 4,723 4,408 315
Preferred Stock Dividend Requirement................................ 29 29 0
--------- --------- --------
Net Income Applicable to Common Stockholders........................ $4,694 $4,379 $315
========= ========= ========
Weighted Average Common Shares Outstanding.......................... 2,806 2,765 41
========= ========= ========
Earnings Per Average Common Share................................... $1.67 $1.58 $0.09
========= ========= ========
Dividends Per Common Share.......................................... $1.23 $1.23 $0.00
========= ========= ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 9
Page 8
CONNECTICUT WATER SERVICE, INC. AND SUBSIDIARY
SCHEDULE OF OPERATING REVENUES, TAXES OTHER THAN INCOME
AND OTHER INCOME
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1994 AND 1993
<TABLE>
<CAPTION>
1994 1993 INCREASE
(UNAUDITED) (UNAUDITED) (DECREASE)
----------- ----------- ----------
(THOUSANDS OF DOLLARS)
<S> <C> <C> <C>
Operating Revenues:
Residential.................................................... $18,021 $18,084 ($63)
Seasonal....................................................... 404 404 0
Commercial..................................................... 3,531 3,575 (44)
Industrial..................................................... 1,463 1,397 66
Public Authority............................................... 660 683 (23)
Metered Sales - Temporary and Non-Recurring.................... 30 24 6
Private Fire................................................... 640 628 12
Public Fire.................................................... 3,877 3,843 34
Other.......................................................... 61 56 5
---------- ---------- -------
Revenues Billed................................................ 28,687 28,694 (7)
Change in Revenues Accrued..................................... 400 395 5
---------- ---------- -------
Total Operating Revenue................................... $29,087 $29,089 ($2)
========== ========== =======
Taxes - Other Than Income Taxes
Municipal Taxes................................................ $2,480 $2,526 ($46)
Payroll Taxes.................................................. 400 378 22
Connecticut Gross Earnings Tax................................. 1,455 1,454 1
---------- ---------- -------
Total Other Taxes......................................... $4,335 $4,358 ($23)
========== ========== =======
Other Income
Merchandising, Jobbing and Contracting - Net................... $7 $5 $2
Income from Lease of Other Physical Property - Net............. 17 14 3
Miscellaneous Non-Operating Income............................. 5 (22) 27
Miscellaneous Income Deductions................................ (6) (47) 41
---------- ---------- -------
Total Other Income........................................ $23 ($50) $73
========== ========== =======
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 10
Page 9
CONNECTICUT WATER SERVICE, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
FOR THE TWELVE MONTHS ENDED SEPTEMBER 30, 1994 AND 1993
AND FOR THE TWELVE MONTHS ENDED JUNE 30, 1994
<TABLE>
<CAPTION>
SEPTEMBER 30, JUNE 30,
1994 1993 INCREASE 1994 INCREASE
(UNAUDITED) (UNAUDITED) (DECREASE) (UNAUDITED) (DECREASE)
----------- ----------- ---------- ----------- ----------
(In thousands except per share amounts)
<S> <C> <C> <C> <C> <C>
Operating Revenues (See accompanying schedule).......... $38,129 $37,796 $333 $38,337 ($208)
---------- ---------- -------- ------------ --------
Operating Expenses
Operation............................................. 12,950 13,065 (115) 12,801 149
Maintenance........................................... 1,948 1,471 477 1,929 19
Depreciation.......................................... 3,078 2,983 95 3,072 6
Federal Income Taxes.................................. 3,709 3,524 185 3,854 (145)
Connecticut Corporation Business Taxes................ 904 914 (10) 992 (88)
Taxes Other Than Income Taxes
(See accompanying schedule)......................... 5,758 5,771 (13) 5,873 (115)
---------- ---------- -------- ------------ ---------
Total Operating Expenses......................... 28,347 27,728 619 28,521 (174)
---------- ---------- -------- ------------ ---------
Utility Operating Income................................ 9,782 10,068 (286) 9,816 (34)
---------- ---------- -------- ------------ ---------
Other Income (Deductions)
Interest.............................................. 104 102 2 102 2
Allowance for Funds Used During Construction.......... 59 132 (73) 46 13
Preferred Stock Dividends of Subsidiary............... (144) (291) 147 (215) 71
Other (See accompanying schedule)..................... 44 (34) 78 (4) 48
Taxes on Other Income................................. 66 19 47 72 (6)
---------- ---------- -------- ------------ ---------
Total Other Income (Deductions).................. 129 (72) 201 1 128
---------- ---------- -------- ------------ ---------
Interest and Debt Expense
Interest on Long-Term Debt............................ 3,544 3,900 (356) 3,643 (99)
Other Interest Charges................................ 290 280 10 238 52
Amortization of Debt Expense.......................... 195 208 (13) 200 (5)
---------- ---------- -------- ------------ ---------
Total Interest and Debt Expense.................. 4,029 4,388 (359) 4,081 (52)
---------- ---------- -------- ------------ ---------
Net Income.............................................. 5,882 5,608 274 5,736 146
Preferred Stock Dividend Requirement.................... 38 38 0 38 0
---------- ---------- -------- ------------ ---------
Net Income Applicable to Common Stockholders............ $5,844 $5,570 $274 $5,698 $146
========== ========== ======== ============ =========
Weighted Average Common Shares Outstanding.............. 2,800 2,759 41 2,789 11
========== ========== ======== ============ =========
Earnings Per Average Common Share....................... $2.09 $2.02 $0.07 $2.04 $0.05
========== ========== ======== ============ =========
Dividends Per Common Share.............................. $1.64 $1.64 $0.00 $1.64 $0.00
========== ========== ======== ============ =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 11
Page 10
CONNECTICUT WATER SERVICE, INC. AND SUBSIDIARY
SCHEDULE OF OPERATING REVENUES, TAXES OTHER THAN INCOME
AND OTHER INCOME
FOR THE TWELVE MONTHS ENDED SEPTEMBER 30, 1994 AND 1993
AND FOR THE TWELVE MONTHS ENDED JUNE 30, 1994
<TABLE>
<CAPTION>
SEPTEMBER 30, JUNE 30,
1994 1993 INCREASE 1994 INCREASE
(UNAUDITED) (UNAUDITED) (DECREASE) (UNAUDITED) (DECREASE)
---------- ----------- ---------- ----------- ----------
(THOUSANDS OF DOLLARS)
<S> <C> <C> <C> <C> <C>
Operating Revenues:
Residential............................................ $23,983 $23,831 $152 $24,231 ($248)
Seasonal............................................... 560 453 107 504 56
Commercial............................................. 4,708 4,764 (56) 4,721 (13)
Industrial............................................. 1,917 1,877 40 1,900 17
Public Authority....................................... 882 890 (8) 911 (29)
Metered Sales - Temporary and Non-Recurring............ 32 25 7 25 7
Private Fire........................................... 853 834 19 849 4
Public Fire............................................ 5,160 5,115 45 5,151 9
Other.................................................. 70 67 3 73 (3)
--------- ---------- -------- ---------- --------
Revenues Billed........................................ 38,165 37,856 309 38,365 (200)
Change in Revenues Accrued............................. (36) (60) 24 (28) (8)
--------- ---------- -------- ---------- --------
Total Operating Revenue........................... $38,129 $37,796 $333 $38,337 ($208)
========= ========== ======== ========== ========
Taxes - Other Than Income Taxes
Municipal Taxes........................................ $3,356 $3,403 ($47) $3,459 ($103)
Payroll Taxes.......................................... 495 478 17 495 0
Connecticut Gross Earnings Tax......................... 1,907 1,890 17 1,919 (12)
--------- ---------- -------- ---------- --------
Total Other Taxes................................. $5,758 $5,771 ($13) $5,873 ($115)
========= ========== ======== ========== ========
Other Income
Merchandising, Jobbing and Contracting - Net........... $11 $9 $2 $2 $9
Income from Lease of Other Physical Property - Net..... 19 17 2 19 0
Miscellaneous Non-Operating Income..................... 26 (4) 30 32 (6)
Miscellaneous Income Deductions........................ (12) (56) 44 (57) 45
--------- ---------- -------- ---------- --------
Total Other Income................................ $44 ($34) $78 ($4) $48
========= ========== ======== ========== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 12
Page 11
CONNECTICUT WATER SERVICE, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF RETAINED EARNINGS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1994 AND 1993
<TABLE>
<CAPTION>
1994 1993
(UNAUDITED) (UNAUDITED)
----------- -----------
(THOUSANDS OF DOLLARS)
<S> <C> <C>
Balance at Beginning of Period...................................................... $7,716 $6,847
Net Income.......................................................................... 2,528 2,382
---------- --------
10,244 9,229
---------- --------
Dividends Declared:
Cumulative Preferred, Class A, $.20 per share.................................. 3 3
Cumulative Preferred, Series $.90, $.225 per share............................. 7 7
Common Stock - 1994 $.41 per share; 1993 $.41 per share........................ 1,154 1,137
---------- --------
1,164 1,147
---------- --------
Balance at End of Period............................................................ $9,080 $8,082
========== ========
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1994 AND 1993
Balance at Beginning of Period...................................................... $8,092 $7,102
Net Income.......................................................................... 4,723 4,408
---------- --------
12,815 11,510
---------- --------
Charges Related to Redemption of Subsidiary's 9 1/2% Series Preferred Stock......... 257 0
---------- --------
Dividends Declared:
Cumulative Preferred, Class A, $.60 per share.................................. 9 9
Cumulative Preferred, Series $.90, $.675 per share............................. 20 20
Common Stock - 1994 $1.23 per share; 1993 $1.23 per share...................... 3,449 3,399
---------- --------
3,478 3,428
---------- --------
Balance at End of Period............................................................ $9,080 $8,082
========== ========
FOR THE TWELVE MONTHS ENDED SEPTEMBER 30, 1994 AND 1993
Balance at Beginning of Period...................................................... $8,082 $7,036
Net Income.......................................................................... 5,882 5,608
---------- --------
13,964 12,644
---------- --------
Charges Related to Redemption of Subsidiary's 9 1/2% Series Preferred Stock......... 257 0
---------- --------
Dividends Declared:
Cumulative Preferred, Class A, $.80 per share.................................. 12 12
Cumulative Preferred, Series $.90, $.90 per share.............................. 26 26
Common Stock - 1994 $1.64 per share; 1993 $1.64 per share...................... 4,589 4,524
---------- --------
4,627 4,562
---------- --------
Balance at End of Period............................................................ $9,080 $8,082
========== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 13
Page 12
CONNECTICUT WATER SERVICE, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1994 AND 1993
<TABLE>
<CAPTION>
1994 1993
(UNAUDITED) (UNAUDITED)
----------- -----------
(THOUSANDS OF DOLLARS)
<S> <C> <C>
Operating Activities:
Net Income Before Preferred Dividends of Parent................................... $4,723 $4,408
---------- ----------
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities:
Depreciation (including $102 in 1994, $144 in 1993 charged to other accounts)... 2,415 2,414
Change in Assets and Liabilities:
(Increase) Decrease in Accounts Receivable and Accrued Unbilled Revenues...... (922) (592)
(Increase) Decrease in Other Current Assets................................... (1,001) (631)
(Increase) Decrease in Other Non-Current Items................................ (664) (33)
Increase (Decrease) in Accounts Payable, Accrued
Expenses and Other Current Liabilities...................................... 376 395
Increase (Decrease) in Deferred Federal Income Taxes and
Investment Tax Credits, Net................................................. 721 706
---------- ----------
Total Adjustments......................................................... 925 2,259
---------- ----------
Net Cash Provided by Operating Activities................................. 5,648 6,667
---------- ----------
Investing Activities:
Gross Additions to Utility Plant (including Allowance for Funds
Used During Construction of $41 in 1994 and $53 in 1993)........................ (3,290) (3,673)
---------- ----------
Financing Activities:
Proceeds from Interim Bank Loans.................................................. 4,689 4,975
Repayment of Interim Bank Loans................................................... (3,950) (4,983)
Proceeds from Issuance of Long-Term Debt.......................................... 12,050 9,550
Reduction of Long-Term Debt Including Current Portion............................. (9,050) (9,700)
Proceeds from Issuance of Common Stock............................................ 946 799
Retirement of Preferred Stock..................................................... (3,030) (102)
Charges Related to Redemption of Subsidiary's 9 1/2% Series Preferred Stock....... (257) 0
Advances, Contributions and Funds From Others for Construction, Net............... 444 916
Costs Incurred to Issue Long-Term Debt, Preferred Stock, and Common Stock......... (665) (1,050)
Cash Dividends Paid............................................................... (3,478) (3,428)
---------- ----------
Net Cash Provided by (Used in) Financing Activities....................... (2,301) (3,023)
---------- ----------
Net Increase (Decrease) in Cash..................................................... 57 (29)
Cash at Beginning of Year........................................................... 44 60
---------- ----------
Cash at End of Year................................................................. $101 $31
========== ==========
Supplemental Disclosures of Cash Flow Information:
Cash Paid During the Year for:
Interest (Net of Amounts Capitalized)........................................... $3,343 $3,461
Income Taxes.................................................................... $2,555 $2,875
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 14
Page 13
CONNECTICUT WATER SERVICE, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. The consolidated financial statements included herein have been
prepared by CONNECTICUT WATER SERVICE, INC. (the Company), without audit,
pursuant to the rules and regulations of the Securities and Exchange Commission
and reflect all adjustments which are, in the opinion of management, necessary
to a fair statement of the results for interim periods. Certain information
and footnote disclosures have been omitted pursuant to such rules and
regulations, although the Company believes that the disclosures are adequate to
make the information presented not misleading. It is suggested that these
consolidated financial statements be read in conjunction with the financial
statements and the notes thereto included in the Company's latest annual report
on 10-K.
The results for interim periods are not necessarily indicative of
results to be expected for the year since the consolidated earnings are subject
to seasonal factors.
2. Earnings per average common share are calculated by dividing net
income applicable to common stock by the average number of shares of common
stock outstanding during the respective periods as detailed:
<TABLE>
<CAPTION>
3 Months Ended 12 Months Ended
--------------------------- --------------------------------------
<S> <C> <C> <C> <C> <C>
9/30/94 9/30/93 9/30/94 9/30/93 12/31/93
------- ------- ------- ------- --------
Common Shares Outstanding:
January 1, 1993 -- -- -- -- 2,751,331
October 1, 1993 & 1992
respectively -- -- 2,781,330 2,741,724 --
July 1, 1994 & 1993 respectively 2,813,916 2,772,944 -- -- --
Common Shares Issued:
To DRIP - December 15, 1992 -- -- -- 9,607 --
To PSP - Feb. 2, 1993 -- -- -- 3,074 3,074
To DRIP - March 15, 1993 -- -- -- 8,451 8,451
To 401-K - March 30, 1993 -- -- -- 446 446
To DRIP - June 15,1993 -- -- -- 9,186 9,186
To 401-K - June 30, 1993 -- -- -- 456 456
To DRIP - Sept 15, 1993 -- 7,965 -- 7,965 7,965
To 401-K - Sept. 30, 1993 -- 421 -- 421 421
To DRIP - Dec. 15, 1993 -- -- 8,647 -- 8,647
To PSP - Jan. 21, 1994 -- -- 4,061 -- --
To DRIP - March 15, 1994 -- -- 8,798 -- --
To 401-K - March 30, 1994 -- -- 565 -- --
To DRIP - June 15, 1994 -- -- 9,878 -- --
To 401-K - June 30, 1994 -- -- 637 -- --
To DRIP - Sept. 15, 1994 15,397 -- 15,397 -- --
To 401-K - Sept. 30, 1994 620 -- 620 -- --
--------- --------- --------- --------- --------
Common Shares Outstanding:
September 30, 1994 & 1993
respectively 2,829,933 2,781,330 2,829,933 2,781,330
========= ========= ========= =========
December 31, 1993 2,789,977
=========
Weighted Average Common Shares Outstanding:
Days outstanding basis 2,816,600 2,774,334 2,799,864 2,759,428 2,769,347
========= ========= ========= ========= =========
</TABLE>
DRIP = Dividend Reinvestment Plan
PSP = Performance Stock Program
401-K = Company contribution to employees' 401-K savings plan
<PAGE> 15
Page 14
CONNECTICUT WATER SERVICE, INC. AND SUBSIDIARY
PART I, ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATION
LIQUIDITY AND CORPORATE RESOURCES
- - ---------------------------------
At September 30, 1994 the Company had $7,310,648 of unused lines of
interim bank loan credit available.
During this quarter the Company initiated an extension of its Dividend
Reinvestment Plan (DRIP) allowing the Company to sell stock to customers of its
Subsidiary, The Connecticut Water Company. The investment dates for the DRIP
is the 15th day of each calendar quarter. Approximately 50% of the
Subsidiary's customers had received a prospectus by September 15, 1994.
Approximately $125,000 was received from the issuance of 5,000 new shares of
common stock. All customers will have received the prospectus by the end of
October or the first week in November.
RESULT OF OPERATIONS
- - --------------------
THE FOLLOWING FACTORS HAD A SIGNIFICANT EFFECT UPON THE COMPANY'S NET
INCOME FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1994 AS COMPARED WITH THE NET
INCOME FOR THE SAME PERIOD LAST YEAR.
Net income applicable to common stock for the three months ended
September 30, 1994 increased from that of September 30, 1993 by $146,000, or
$.03 per average common share, on an increased number of average common shares.
The $208,000 decrease in operating revenues during this quarter was more than
offset by a $174,000 decrease in operating expense (primarily income taxes), a
$128,000 increase in other income and a $52,000 decrease in interest and debt
expense.
Operating revenues decreased primarily due to lower residential
consumption in 1994 reflecting a more normal summer season than the 1993 summer
season which was hotter and drier.
The increase in other income is due to a reduction in preferred stock
dividends, reflecting the refinancing of the 9.5% Series Cumulative Preferred
Stock of the Subsidiary in March, 1994.
The decrease in interest and debt expense reflects the reduction in
the long-term debt interest cost achieved through the 1993 and 1994 long-term
debt refinancings.
THE FOLLOWING FACTORS HAD A SIGNIFICANT EFFECT UPON THE COMPANY'S NET
INCOME FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1994 AS COMPARED WITH THE NET
INCOME FOR THE SAME PERIOD LAST YEAR.
Net income applicable to common stock for the nine months ended
September 30, 1994 increased from that of September 30, 1993 by $315,000, or
$.09 per average common share, on an increased number of average common shares
as a result of a $2,000 decrease in operating revenues, a $199,000 increase in
operating expense (primarily maintenance expense), a $207,000 increase in other
income and deductions, and a $309,000 decrease in interest and debt expense.
The increase in other income is primarily due to a reduction in
preferred stock dividends reflecting the refinancing of the 9.5% Series
Cumulative Preferred Stock of the Subsidiary in March, 1994.
The decrease in interest and debt expense reflects the reduction in
the long-term debt interest cost achieved through the 1993 and 1994 long-term
debt refinancings.
<PAGE> 16
Page 15
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
<TABLE>
<S> <C>
Connecticut Water Service, Inc.
(Registrant)
Date: November 10, 1994 By: s/s Bertram L. Lenz
Bertram L. Lenz
Vice President - Finance
Date: November 10, 1994 By: s/s Peter J. Bancroft
Peter J. Bancroft
Assistant Treasurer
</TABLE>
<TABLE> <S> <C>
<ARTICLE> OPUR1
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> SEP-30-1994
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 138,406
<OTHER-PROPERTY-AND-INVEST> 789
<TOTAL-CURRENT-ASSETS> 9,183
<TOTAL-DEFERRED-CHARGES> 18,313
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 166,691
<COMMON> 38,014
<CAPITAL-SURPLUS-PAID-IN> 0
<RETAINED-EARNINGS> 9,080
<TOTAL-COMMON-STOCKHOLDERS-EQ> 47,094
0
772
<LONG-TERM-DEBT-NET> 54,600
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 0
30
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 64,195
<TOT-CAPITALIZATION-AND-LIAB> 166,691
<GROSS-OPERATING-REVENUE> 29,087
<INCOME-TAX-EXPENSE> 3,849
<OTHER-OPERATING-EXPENSES> 17,652
<TOTAL-OPERATING-EXPENSES> 21,501
<OPERATING-INCOME-LOSS> 7,586
<OTHER-INCOME-NET> 88
<INCOME-BEFORE-INTEREST-EXPEN> 7,674
<TOTAL-INTEREST-EXPENSE> 2,951
<NET-INCOME> 4,723
29
<EARNINGS-AVAILABLE-FOR-COMM> 4,694
<COMMON-STOCK-DIVIDENDS> 3,449
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> 5,648
<EPS-PRIMARY> 1.67
<EPS-DILUTED> 1.67
</TABLE>
