<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
March 31, 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.
2,803,397
- - --------------------------------------------------------------------------------
Number of shares of common stock outstanding, March 31, 1994
<PAGE> 2
CONNECTICUT WATER SERVICE, INC.
Financial Report
March 31, 1994 and 1993
TABLE OF CONTENTS
PART I, ITEM 1: Financial Statements
<TABLE>
<S> <C>
Consolidated Balance Sheets at March 31, 1994 Page 3
and December 31, 1993 Page 3a
Consolidated Statements of Capitalization at
March 31, 1994 and December 31, 1993 Page 4
Consolidated Statements of Income for Three Months
Ended March 31, 1994 and 1993 Page 5
Schedules of Operating Revenues, Taxes Other Than
Income and Other Income for Three Months
Ended March 31, 1994 and 1993 Page 6
Consolidated Statements of Income for Twelve Months
Ended March 31, 1994 and 1993 and for Twelve Months
Ended December 31, 1993 Page 7
Schedules of Operating Revenues, Taxes Other Than
Income and Other Income for Twelve Months
Ended March 31, 1994 and 1993 and for Twelve Months
Ended December 31, 1993 Page 8
Consolidated Statements of Retained Earnings for Three
Months Ended March 31, 1994 and 1993 Page 9
Consolidated Statements of Retained Earnings for Twelve
Months Ended March 31, 1994 and 1993 Page 9
Consolidated Statements of Cash Flows for Three Months
Ended March 31, 1994 and 1993 Page 10
Notes to Consolidated Financial Statements Page 11
PART I, ITEM 2: Management's Discussion and Analysis of
Financial Condition and Results of Operations Page 12
PART II, ITEM 4: Submission of Matters to a Vote
of Security Holders Page 13
Signature Page Page 14
</TABLE>
<PAGE> 3
Page 3
CONNECTICUT WATER SERVICE, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
AT MARCH 31, 1994 AND DECEMBER 31, 1993
<TABLE>
<CAPTION>
MARCH 31,
1994 DEC. 31,
(UNAUDITED) 1993
----------- --------
ASSETS
- - ------
(THOUSANDS OF DOLLARS)
<S> <C> <C>
Utility Plant
Utility Plant.............................................. $175,829 $176,308
Construction Work in Progress.............................. 2,715 2,596
Utility Plant Acquisition Adjustments...................... (1,206) (1,206)
--------- ---------
177,338 177,698
Accumulated Provision for Depreciation..................... (40,331) (40,130)
--------- ---------
Net Utility Plant........................................ 137,007 137,568
--------- ---------
Investments
Unconsolidated Subsidiary at Underlying Equity............. 36 35
Other...................................................... 757 727
--------- ---------
Total Investments........................................ 793 762
--------- ---------
Current Assets
Cash....................................................... 32 44
Accounts Receivable (Less Allowance, 1994 - $226;
1993 - $256)........................................... 3,293 3,423
Accrued Unbilled Revenues.................................. 2,635 2,800
Materials and Supplies, at Average Cost.................... 652 681
Prepayments and Other Current Assets....................... 1,335 255
--------- ---------
Total Current Assets..................................... 7,947 7,203
--------- ---------
Deferred Charges
Unamortized Debt Issuance Expense......................... 5,371 5,111
Receivables from Customers for Unrecovered Future Income
Taxes.................................................. 10,000 10,000
Receivables from Customers for Unrecovered SFAS 106
Postretirement Medical and Dental Benefits............. 800 640
Reynolds Bridge Well Field Contamination Clean Up Costs... 1,022 912
Prepaid Income Taxes on Contributions in Aid of
Construction........................................... 463 439
Other Costs............................................... 492 445
--------- ---------
Total Deferred Charges................................... 18,148 17,547
--------- ---------
Total Assets........................................... $163,895 $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 MARCH 31, 1994 AND DECEMBER 31, 1993
<TABLE>
<CAPTION>
MARCH 31,
1994 DEC. 31,
(UNAUDITED) 1993
----------- --------
CAPITALIZATION AND LIABILITIES
- - ------------------------------ (THOUSANDS OF DOLLARS)
<S> <C> <C>
Capitalization (See accompanying statements)
Common Stockholders' Equity................................ $45,171 $45,160
Preferred Stock............................................ 772 772
Preferred Stock with Mandatory Redemption Provisions....... 0 2,976
Long-Term Debt ............................................ 54,600 51,600
-------- --------
Total Capitalization..................................... 100,543 100,508
-------- --------
Current Liabilities
Interim Bank Loans Payable................................. 5,274 3,950
Current Portion of Long-Term Debt.......................... 0 0
Current Portion of Preferred Stock......................... 30 30
Accounts Payable........................................... 1,632 2,574
Accrued Taxes.............................................. 1,904 1,466
Accrued Interest........................................... 856 1,196
Other...................................................... 1,153 1,263
-------- --------
Total Current Liabilities................................ 10,849 10,479
-------- --------
Advances for Construction.................................... 11,595 11,584
-------- --------
Contributions in Aid of Construction......................... 18,126 18,128
-------- --------
Deferred Federal Income Taxes................................ 9,663 9,408
-------- --------
Unfunded Future Income Taxes................................. 10,000 10,000
-------- --------
Unfunded SFAS 106 Postretirement Medical and Dental Benefits. 800 640
-------- --------
Unamortized Investment Tax Credits........................... 2,319 2,333
-------- --------
Total Capitalization and Liabilities................... $163,895 $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 MARCH 31, 1994 AND DECEMBER 31, 1993
<TABLE>
<CAPTION>
MARCH 31,
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 - 2,803,397;
1993 - 2,789,977........................................................... $38,531 $38,218
Stock Issuance Expense........................................................ (1,150) (1,150)
Retained Earnings............................................................. 7,790 8,092
--------- ---------
Total Common Stockholders' Equity......................................... 45,171 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 $16,000
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:
</TABLE>
<TABLE>
<CAPTION>
Shares
-------------
Series 1994 1993
- - -------- ---- ----
<S> <C> <C> <C> <C>
4 3/4% 300 600 ............................................... 30 60
9 1/2% 0 30,000 ............................................... 0 3,000
Stock Issuance Expense........................................................ 0 (54)
--------- ---------
</TABLE>
<TABLE>
<S> <C> <C>
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.................................................. 5,000 5,000
Security Investment Held in Trust........................................... (5,000) 0
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.................................................... $100,543 $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 MARCH 31, 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). $8,864 $8,760 $104
------- ------- ------
Operating Expenses
Operation.................................... 3,117 3,184 (67)
Maintenance.................................. 430 373 57
Depreciation................................. 770 750 20
Federal Income Taxes......................... 786 702 84
Connecticut Corporation Business Taxes....... 211 202 9
Taxes Other Than Income Taxes
(See accompanying schedule)................ 1,439 1,417 22
------- ------- ------
Total Operating Expenses................ 6,753 6,628 125
------- ------- ------
Utility Operating Income....................... 2,111 2,132 (21)
------- ------- ------
Other Income (Deductions)
Interest..................................... 24 24 0
Allowance for Funds Used During Construction. 1 21 (20)
Preferred Stock Dividends of Subsidiary...... (72) (73) 1
Other (See accompanying schedule)............ 0 1 (1)
Taxes on Other Income........................ 9 2 7
------- ------- ------
Total Other Income (Deductions)......... (38) (25) (13)
------- ------- ------
Interest and Debt Expense
Interest on Long-Term Debt................... 859 976 (117)
Other Interest Charges....................... 58 57 1
Amortization of Debt Expense................. 47 52 (5)
------- ------- ------
Total Interest and Debt Expense......... 964 1,085 (121)
------- ------- ------
Net Income..................................... 1,109 1,022 87
Preferred Stock Dividend Requirement........... 10 10 0
------- ------- ------
Net Income Applicable to Common Stockholders... $1,099 $1,012 $87
======= ======= ======
Weighted Average Common Shares Outstanding..... 2,795 2,755 40
======= ======= ======
Earnings Per Average Common Share.............. $0.39 $0.37 $0.02
======= ======= ======
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 MARCH 31, 1994 AND 1993
<TABLE>
<CAPTION>
1994 1993 INCREASE
(UNAUDITED) (UNAUDITED) DECREASE
----------- ----------- --------
(THOUSANDS OF DOLLARS)
<S> <C> <C> <C>
Operating Revenues:
Residential............................... $5,708 $5,550 $158
Seasonal.................................. 132 161 (29)
Commercial................................ 1,052 1,064 (12)
Industrial................................ 424 414 10
Public Authority.......................... 190 181 9
Metered Sales - Temporary and
Non-Recurring........................... 0 0 0
Private Fire.............................. 213 207 6
Public Fire............................... 1,293 1,278 15
CWIP Surcharge............................ 0 0 0
Other..................................... 17 14 3
------- ------- ------
Revenues Billed........................... 9,029 8,869 160
Change in Revenues Accrued................ (165) (109) (56)
------- ------- ------
Total Operating Revenue.............. $8,864 $8,760 $104
======= ======= ======
Taxes - Other Than Income Taxes
Muncipal Taxes............................ $818 $828 ($10)
Payroll Taxes............................. 177 151 26
Connecticut Gross Earnings Tax............ 444 438 6
------- ------- ------
Total Other Taxes.................... $1,439 $1,417 $22
======= ======= ======
Other Income
Merchandising, Jobbing and Contracting -
Net..................................... ($8) $3 ($11)
Income from Lease of Other Physical
Property - Net.......................... 6 5 1
Miscellaneous Non-Operating Income........ 4 (5) 9
Miscellaneous Income Deductions........... (2) (2) 0
------- ------- ------
Total Other Income................... $0 $1 ($1)
======= ======= ======
</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 TWELVE MONTHS ENDED MARCH 31, 1994 AND 1993
AND FOR THE TWLEVE MONTHS ENDED DECEMBER 31, 1993
<TABLE>
<CAPTION>
MARCH 31,
1994 1993 INCREASE DEC. 31 INCREASE
(UNAUDITED) (UNAUDITED) DECREASE 1993 DECREASE
----------- ----------- -------- ------- --------
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C>
Operating Revenues (See accompanying schedule).............. $38,235 $37,371 $864 $38,131 $104
-------- -------- ----- -------- ------
Operating Expenses
Operation................................................. 12,797 12,892 (95) 12,864 (67)
Maintenance............................................... 1,850 1,434 416 1,793 57
Depreciation.............................................. 3,057 2,927 130 3,037 20
Federal Income Taxes...................................... 3,794 3,315 479 3,710 84
Connecticut Corporation Business Taxes.................... 972 915 57 963 9
Taxes Other Than Income Taxes
(See accompanying schedule)............................. 5,803 5,760 43 5,781 22
-------- -------- ----- -------- ------
Total Operating Expenses............................. 28,273 27,243 1,030 28,148 125
-------- -------- ----- -------- ------
Utility Operating Income.................................... 9,962 10,128 (166) 9,983 (21)
-------- -------- ----- -------- ------
Other Income (Deductions)
Interest.................................................. 105 108 (3) 105 0
Allowance for Funds Used During Construction.............. 51 129 (78) 71 (20)
Preferred Stock Dividends of Subsidiary................... (289) (294) 5 (290) 1
Other (See accompanying schedule)......................... (30) 71 (101) (29) (1)
Taxes on Other Income..................................... 72 (14) 86 65 7
-------- -------- ----- -------- ------
Total Other Income (Deductions)...................... (91) 0 (91) (78) (13)
-------- -------- ----- -------- ------
Interest and Debt Expense
Interest on Long-Term Debt................................ 3,738 4,201 (463) 3,855 (117)
Other Interest Charges.................................... 274 268 6 273 1
Amortization of Debt Expense.............................. 205 192 13 210 (5)
-------- -------- ----- -------- ------
Total Interest and Debt Expense...................... 4,217 4,661 (444) 4,338 (121)
-------- -------- ----- -------- ------
Net Income.................................................. 5,654 5,467 187 5,567 87
Preferred Stock Dividend Requirement........................ 38 38 0 38 0
-------- -------- ----- -------- ------
Net Income Applicable to Common Stockholders................ $5,616 $5,429 $187 $5,529 $87
========= ======== ===== ======== ======
Weighted Average Common Shares Outstanding.................. 2,779 2,739 40 2,769 10
========= ======== ===== ======== ======
Earnings Per Average Common Share........................... $2.02 $1.98 $0.04 $2.00 $0.02
========= ======== ===== ======== ======
Dividends Per Common Share.................................. $1.64 $1.62 $0.02 $1.64 $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 TWELVE MONTHS ENDED MARCH 31, 1994 AND 1993
AND FOR THE TWLEVE MONTHS ENDED DECEMBER 31, 1993
<TABLE>
<CAPTION>
1994 1993 INCREASE DEC. 31 INCREASE
(UNAUDITED) (UNAUDITED) DECREASE 1993 DECREASE
----------- ----------- -------- ------- --------
(THOUSANDS OF DOLLARS)
<S> <C> <C> <C> <C> <C>
Operating Revenues:
Residential............................... $24,204 $23,216 $988 $24,046 $158
Seasonal.................................. 531 540 (9) 560 (29)
Commercial................................ 4,740 4,732 8 4,752 (12)
Industrial................................ 1,861 2,000 (139) 1,851 10
Public Authority.......................... 914 871 43 905 9
Metered Sales - Temporary and
Non-Recurring........................... 25 21 4 25 0
Private Fire.............................. 847 815 32 841 6
Public Fire............................... 5,141 5,085 56 5,126 15
CWIP Surcharge............................ 0 0 0 0 0
Other..................................... 69 82 (13) 66 3
-------- -------- ------ -------- -----
Revenues Billed........................... 38,332 37,362 970 38,172 160
Change in Revenues Accrued................ (97) 9 (106) (41) (56)
-------- -------- ------ -------- -----
Total Operating Revenue.............. $38,235 $37,371 $864 $38,131 $104
======== ======== ====== ======== =====
Taxes - Other Than Income Taxes
Muncipal Taxes............................ $3,392 $3,425 ($33) $3,402 ($10)
Payroll Taxes............................. 499 466 33 473 26
Connecticut Gross Earnings Tax............ 1,912 1,869 43 1,906 6
-------- -------- ------ -------- -----
Total Other Taxes.................... $5,803 $5,760 $43 $5,781 $22
======== ======== ====== ======== =====
Other Income
Merchandising, Jobbing and Contracting -
Net..................................... ($2) $6 ($8) $9 ($11)
Income from Lease of Other Physical
Property - Net............................ 17 20 (3) 16 1
Miscellaneous Non-Operating Income........ 9 68 (59) 0 9
Miscellaneous Income Deductions........... (54) (23) (31) (54) 0
-------- -------- ------ -------- -----
Total Other Income................... ($30) $71 ($101) ($29) ($1)
======== ======== ====== ======== =====
</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 RETAINED EARNINGS
FOR THE THREE MONTHS ENDED MARCH 31, 1994 AND 1993
<TABLE>
<CAPTION>
1994 1993
(UNAUDITED) (UNAUDITED)
----------- -----------
(THOUSANDS OF DOLLARS)
<S> <C> <C>
Balance at Beginning of Period.................................................... $8,092 $7,102
Net Income........................................................................ 1,109 1,022
------ ------
9,201 8,124
------ ------
Charges Related to Redemption of Subsidiary's 9 1/2% Series Preferred Stock....... 257 0
------ ------
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 $.40 per share...................... 1,144 1,129
------ ------
1,154 1,139
------ ------
Balance at End of Period.......................................................... $7,790 $6,985
====== ======
</TABLE>
FOR THE TWELVE MONTHS ENDED MARCH 31, 1994 AND 1993
<TABLE>
<S> <C> <C>
Balance at Beginning of Period.................................................... $6,985 $5,992
Net Income........................................................................ 5,654 5,467
------ ------
12,639 11,459
------ ------
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 $1.62 per share; 1993 $1.60 per share.................... 4,554 4,436
------ ------
4,592 4,474
------ ------
Balance at End of Period.......................................................... $7,790 $6,985
====== ======
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 11
Page 10
CONNECTICUT WATER SERVICE, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1994 AND 1993
<TABLE>
<CAPTION>
1994 1993
(UNAUDITED) (UNAUDITED)
----------- -----------
(THOUSANDS OF DOLLARS)
<S> <C> <C>
Operating Activities:
Net Income Before Preferred Dividends of Parent............ $1,109 $1,022
------- -------
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities:
Depreciation (including $34 in 1994, $54 in 1993 charged
to other accounts)..................................... 805 804
Change in Assets and Liabilities:
(Increase) Decrease in Accounts Receivable and Accrued
Unbilled Revenues.................................... 295 644
(Increase) Decrease in Other Current Assets............ (1,051) (1,266)
(Increase) Decrease in Other Non-Current Items......... (111) 5
Increase (Decrease) in Accounts Payable, Accrued
Expenses and Other Current Liabilities............... (954) (714)
Increase (Decrease) in Deferred Federal Income Taxes
and Investment Tax Credits, Net...................... 241 261
------- -------
Total Adjustments.................................. (775) (266)
------- -------
Net Cash Provided by Operating Activities.......... 334 756
------- -------
Investing Activities:
Gross Additions to Utility Plant (including Allowance
for Funds Used During Construction of $1 in 1994 and $21
in 1993)................................................. (254) (885)
------- -------
Financing Activities:
Proceeds from Interim Bank Loans........................... 5,274 5,530
Repayment of Interim Bank Loans............................ (3,950) (4,983)
Proceeds from Issuance of Long-Term Debt................... 12,050 0
Reduction of Long-Term Debt Including Current Portion...... (9,050) (75)
Proceeds from Issuance of Common Stock..................... 313 301
Retirement of Preferred Stock.............................. (3,030) (70)
Charges Related to Redemption of Subsidiary's 9 1/2% Series
Preferred Stock.......................................... (257) 0
Advances, Contributions and Funds From Others for
Construction, Net........................................ (307) 558
Costs Incurred to Issue Long-Term Debt, Preferred Stock,
and Common Stock......................................... 19 0
Cash Dividends Paid........................................ (1,154) (1,139)
------- -------
Net Cash Provided by (Used in) Financing Activities... (92) 122
------- -------
Net Increase (Decrease) in Cash.............................. (12) (7)
Cash at Beginning of Year.................................... 44 60
------- -------
Cash at End of Year.......................................... $32 $53
======= =======
Supplemental Disclosures of Cash Flow Information:
Cash Paid During the Year for:
Interest (Net of Amounts Capitalized).................... $1,257 $1,254
Income Taxes............................................. $320 $615
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 12
Page 11
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
---------------------- ---------------------------------------
3/31/94 3/31/93 3/31/94 3/31/93 12/31/93
------- ------- ------- ------- --------
<S> <C> <C> <C> <C> <C>
Common Shares Outstanding:
January 1, 1993 -- -- -- -- 2,751,331
April 1, 1993 & 1992 respectively -- -- 2,763,302 2,720,942 --
January 1, 1994 & 1993 respectively 2,789,977 2,751,331 -- -- --
Common Shares Issued:
To DRIP - June 15, 1992 -- -- -- 10,268 --
To PSP - July 12, 1992 -- -- -- 2,338 --
To DRIP - Sept. 15, 1992 -- -- -- 8,176 --
To DRIP - December 15, 1992 -- -- -- 9,607 --
To PSP - Feb. 2, 1993 -- 3,074 -- 3,074 3,074
To DRIP - March 15, 1993 -- 8,451 -- 8,451 8,451
To 401-K - March 30, 1993 -- 446 -- 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
To 401-K - Sept. 30, 1993 -- -- 421 -- 421
To DRIP - Dec. 15, 1993 -- -- 8,647 -- 8,647
To PSP - Jan. 21, 1994 4,061 -- 4,061 -- --
To DRIP - March 15, 1994 8,798 -- 8,798 -- --
To 401-K - March 15, 1994 561 -- 561 -- --
--------- --------- --------- --------- ---------
Common Shares Outstanding:
March 31, 1994 & 1993 respectively 2,803,397 2,763,302 2,803,397 2,763,302
========= ========= ========= =========
December 31, 1993 2,789,977
=========
Weighted Average Common Shares Outstanding:
Days outstanding basis 2,794,810 2,754,879 2,779,183 2,738,905 2,769,347
========= ========= ========= ========= =========
</TABLE>
DRIP = Dividend Reinvestment Plan
PSP = Performance Stock Program
401-K = Company contribution to employees' 401-K savings plan
<PAGE> 13
Page 12
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 March 31, 1994 the Company had $6,726,000 of unused lines of
interim bank loan credit available.
On January 4, 1994, the Subsidiary issued a $4,050,000, 6.94%, Series
V, First Mortgage Bond, maturing January, 2029, the proceeds of which were used
to redeem the 9 3/8%, Series L, and 8 1/2%, Series O, First Mortgage Bonds. An
additional $8,000,000, 6.94%, Series V, First Mortgage Bond was issued on March
15, 1994. The 30,000 shares of $100 par, 9 1/2% Preferred Stock, with an
outstanding balance of $3,000,000, was redeemed with a portion of the proceeds
of this transaction. The remaining $5,000,000 was invested in treasury
securities until the Series P, First Mortgage Bond is redeemed on May 1, 1994.
RESULT OF OPERATIONS
THE FOLLOWING FACTORS HAD A SIGNIFICANT EFFECT UPON THE COMPANY'S NET
INCOME FOR THE THREE MONTHS ENDED MARCH 31, 1994 AS COMPARED WITH THE NET
INCOME FOR THE SAME PERIOD LAST YEAR.
Net income applicable to common stock for the three months ended March
31, 1994 increased from that of March 31, 1993 by $87,000, or $.02 per average
common share, on an increased number of average common shares. This
improvement resulted from a $121,000 decrease in interest and debt expense
partially offset by a $21,000 decrease in operating income and a $13,000
decrease in other income and deductions.
The decrease in interest and debt expense reflects the reduction in
the long-term debt interest cost achieved by 1993 and 1994 long- term debt
refinancings.
Operating revenues increased $104,000, or 1.2%, reflecting greater
residential water consumption in 1994 as compared to last year.
The $125,000 increase in operating expenses is primarily attributable
to increased income taxes related to greater taxable income, $93,000, increased
maintenance expense primarily due to an increase in weather related main and
service breaks, $57,000, increased depreciation expense, $20,000, and a $22,000
increase in taxes other than income taxes. These increases were partially
offset by a $67,000 reduction in operation expenses due primarily to a
reduction in employee benefit costs.
The decrease in other income (deduction) is primarily due to a
decrease in the allowance for funds used during construction.
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CONNECTICUT WATER SERVICE, INC. AND SUBSIDIARY
PART II, ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On April 22, 1994, at its annual meeting, the stockholders of
Connecticut Water Service, Inc. elected the following directors for a three
year term until 1997:
<TABLE>
<CAPTION>
Number of Common Shares Cast
-----------------------------
Abstentions
Affirmative Negative and Non-Votes
----------- -------- -------------
<S> <C> <C> <C>
Francis E. Baker 2,370,830 -- 45,332
William F. Emswiller 2,382,781 -- 33,380
Rudolph E. Luginbuhl 2,365,129 -- 51,033
Harvey G. Moger 2,381,941 -- 34,221
Warren C. Packard 2,376,623 -- 39,539
</TABLE>
Preferred Series A stockholders cast 8,428 affirmative votes for each
of the Directors listed above and 350 abstentions.
Directors whose term of office continue until 1995 are Marshall T.
Chiaraluce, William F. Guillaume, Marcia L. Hincks, William C. Lichtenfels,
and Robert F. Neal.
Directors whose term of office continue until 1996 are Harold E.
Bigler, Jr., Astrid T. Hanzalek, Frederick E. Hennick, Bertram L. Lenz, and
Donald B. Wilbur.
Other matters voted on at the annual meeting was the appointment of
Arthur Andersen & Co. as independent auditor:
<TABLE>
<CAPTION>
Number of Shares Cast
---------------------
Abstentions
Affirmative Negative and Non-Votes
----------- -------- -------------
<S> <C> <C> <C>
Common Stock 2,345,115 32,574 38,473
Preferred Series A Stock 8,328 300 150
</TABLE>
Each share of common stock is entitled to three votes and each share
of Cumulative Preferred Stock, Series A, is entitled to one vote.
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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.
Connecticut Water Service, Inc.
(Registrant)
Date: May 11, 1994 By: /s/ BERTRAM L. LENZ
-------------------
Bertram L. Lenz
Vice President - Finance
Date: May 11, 1994 By: /s/ PETER J. BANCROFT
---------------------
Peter J. Bancroft
Assistant Treasurer
