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Previous: PUBLIC STORAGE PARTNERS II LTD, 10-Q, 1995-11-13 |
Next: CENTRAL FIDELITY BANKS INC, 10-Q, 1995-11-13 |
<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, 1995 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.
2,948,397
Number of shares of common stock outstanding September 30, 1995
<PAGE> 2
CONNECTICUT WATER SERVICE, INC.
Financial Report
September 30, 1995 and 1994
TABLE OF CONTENTS
PART I, ITEM 1: FINANCIAL STATEMENTS
<TABLE>
<S> <C>
Consolidated Balance Sheets at September 30, 1995
and December 31, 1994 Page 3
Consolidated Statements of Capitalization at
September 30, 1995 and December 31, 1994 Page 4
Consolidated Statements of Income for Three Months
Ended September 30, 1995 and 1994 Page 5
Schedules of Operating Revenues, Taxes Other Than
Income and Other Income for Three Months
Ended September 30, 1995 and 1994 Page 6
Consolidated Statements of Income for Nine Months
Ended September 30, 1995 and 1994 Page 7
Schedules of Operating Revenues, Taxes Other Than
Income and Other Income for Nine Months
Ended September 30, 1995 and 1994 Page 8
Consolidated Statements of Income for Twelve Months
Ended September 30, 1995 and 1994 and for Twelve Months
Ended June 30, 1995 Page 9
Schedules of Operating Revenues, Taxes Other Than
Income and Other Income for Twelve Months
Ended September 30, 1995 and 1994 and for Twelve Months
Ended June 30, 1995 Page 10
Consolidated Statements of Retained Earnings for Three
Months Ended September 30, 1995 and 1994 Page 11
Consolidated Statements of Retained Earnings for Nine
Months Ended September 30, 1995 and 1994 Page 11
Consolidated Statements of Retained Earnings for Twelve
Months Ended September 30, 1995 and 1994 Page 11
Consolidated Statements of Cash Flows for Nine Months
Ended September 30, 1995 and 1994 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 14-15
Signature Page Page 16
</TABLE>
<PAGE> 3
Page 3
Connecticut Water Service, Inc. and Subsidiary
CONSOLIDATED BALANCE SHEETS
At September 30, 1995 and December 31, 1994
<TABLE>
<CAPTION>
SEPT. 30,
1995 DEC. 31,
ASSETS (UNAUDITED) 1994
--------- ---------
(THOUSANDS OF DOLLARS)
<S> <C> <C>
Utility Plant
Utility Plant $ 184,771 $ 181,079
Construction Work in Progress 4,662 3,369
Utility Plant Acquisition Adjustments (1,206) (1,206)
--------- ---------
188,227 183,242
Accumulated Provision for Depreciation (44,873) (42,458)
--------- ---------
Net Utility Plant 143,354 140,784
--------- ---------
Investments 1,017 881
--------- ---------
Current Assets
Cash 134 18
Accounts Receivable (Less Allowance, 1995 - $150; 1994 - $149) 4,563 3,599
Accrued Unbilled Revenues 3,650 2,800
Prepayments and Other Current Assets 1,570 1,515
--------- ---------
Total Current Assets 9,917 7,932
--------- ---------
Deferred Charges
Unamortized Debt Issuance Expense 5,446 5,587
Taxes Recoverable Through Future Rates 9,200 9,200
Postretirement Benefits Other Than Pension Recoverable
Through Future Rates 830 757
Recoverable Contamination Clean-Up Costs 4,700 4,700
Prepaid Income Taxes on Contributions in Aid of Construction 531 450
Other Costs 857 950
--------- ---------
Total Deferred Charges 21,564 21,644
--------- ---------
TOTAL ASSETS $ 175,852 $ 171,241
========= =========
CAPITALIZATION AND LIABILITIES
Capitalization (See accompanying statements)
Common Stockholders' Equity $ 51,368 $ 47,983
Preferred Stock 772 772
Long-Term Debt 54,460 54,600
--------- ---------
Total Capitalization 106,600 103,355
--------- ---------
Current Liabilities
Interim Bank Loans Payable 3,244 2,700
Current Portion of Preferred Stock 0 30
Accounts Payable and Accrued Taxes and Interest 6,990 7,279
Accrued Recoverable Contamination Clean-Up Costs 500 500
Other 1,601 1,544
--------- ---------
Total Current Liabilities 12,335 12,053
--------- ---------
Long-Term Liabilities
Accrued Recoverable Contamination Clean-Up Costs 2,501 2,811
Advances for Construction 12,955 12,099
Contributions in Aid of Construction 18,153 18,145
Deferred Federal Income Taxes 11,047 10,547
Unfunded Future Income Taxes 9,200 9,200
Unfunded Postretirement Benefits Other Than Pension 830 757
Unamortized Investment Tax Credits 2,231 2,274
--------- ---------
Total Long-Term Liabilities 56,917 55,833
--------- ---------
TOTAL CAPITALIZATION AND LIABILITIES $ 175,852 $ 171,241
========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 4
Page 4
CONNECTICUT WATER SERVICE, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CAPITALIZATION
AT SEPTEMBER 30, 1995 AND DECEMBER 31, 1994
<TABLE>
<CAPTION>
SEPT. 30,
1995 DEC. 31,
(UNAUDITED) 1994
----------- --------
(THOUSANDS OF DOLLARS)
<S> <C> <C>
Common Stockholders' Equity
Common Stock Without Par Value Authorized - 7,500,000 Shares;
Shares Issued and Outstanding: 1995 - 2,948,397; 1994 - 2,870,559 $41,955 $40,126
Stock Issuance Expense (1,183) (1,183)
Retained Earnings 10,596 9,040
-------- --------
Total Common Stockholders' Equity 51,368 47,983
-------- --------
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:
4.75% Series: Shares - 1995 - 0; 1994 - 300 Shares 0 30
-------- --------
Current Portion of Preferred Stock 0 (30)
-------- --------
Total Preferred Stock of The Connecticut Water Company 0 0
-------- --------
Long-Term Debt
The Connecticut Water Company
First Mortgage Bonds
6.9% Series Q, due 2021 10,000 10,000
5.875% Series R, due 2022 14,860 15,000
6.65% Series S, due 2020 8,000 8,000
5.75% 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 12,050
-------- --------
Total Long-Term Debt 54,460 54,600
-------- --------
TOTAL CAPITALIZATION $106,600 $103,355
======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 5
Page 5
CONNECTICUT WATER SERVICE, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994
<TABLE>
<CAPTION>
1995 1994 INCREASE
(UNAUDITED) (UNAUDITED) (DECREASE)
----------- ----------- ----------
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C>
Operating Revenues (See accompanying schedule) $ 12,221 $ 11,022 $ 1,199
-------- -------- --------
Operating Expenses
Operation 3,470 3,161 309
Maintenance 482 405 77
Depreciation 813 771 42
Federal Income Taxes 1,694 1,443 251
Connecticut Corporation Business Taxes 430 348 82
Taxes Other Than Income Taxes
(See accompanying schedule) 1,534 1,427 107
-------- -------- --------
Total Operating Expenses 8,423 7,555 868
-------- -------- --------
Utility Operating Income 3,798 3,467 331
-------- -------- --------
Other Income (Deductions)
Interest 27 26 1
Allowance for Funds Used During Construction 6 30 (24)
Preferred Stock Dividends of Subsidiary 0 (1) 1
Other (See accompanying schedule) 65 6 59
Taxes on Other Income (1) 4 (5)
-------- -------- --------
Total Other Income (Deductions) 97 65 32
-------- -------- --------
Interest and Debt Expense
Interest on Long-Term Debt 865 854 11
Other Interest Charges 63 102 (39)
Amortization of Debt Expense 47 48 (1)
-------- -------- --------
Total Interest and Debt Expense 975 1,004 (29)
-------- -------- --------
Net Income 2,920 2,528 392
Preferred Stock Dividend Requirement 10 10 0
-------- -------- --------
Net Income Applicable to Common Stockholders $ 2,910 $ 2,518 $ 392
======== ======== ========
Weighted Average Common Shares Outstanding 2,932 2,817 115
======== ======== ========
Earnings Per Average Common Share $ 0.99 $ 0.89 $ 0.10
======== ======== ========
Dividends Per Common Share $ 0.42 $ 0.41 $ 0.01
======== ======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 6
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, 1995 AND 1994
<TABLE>
<CAPTION>
1995 1994 INCREASE
(UNAUDITED) (UNAUDITED) (DECREASE)
----------- ----------- ----------
(THOUSANDS OF DOLLARS)
<S> <C> <C> <C>
Operating Revenues:
Residential $ 7,063 $ 6,651 $ 412
Seasonal 140 140 0
Commercial 1,427 1,352 75
Industrial 519 544 (25)
Public Authority 347 252 95
Metered Sales - Temporary and Non-Recurring 35 18 17
Private Fire 222 214 8
Public Fire 1,311 1,292 19
Acquisition Surcharge 30 0 30
Unmetered Seasonal 118 0 118
Other 14 14 0
-------- -------- --------
Revenues Billed 11,226 10,477 749
Change in Revenues Accrued 995 545 450
-------- -------- --------
Total Operating Revenue $ 12,221 $ 11,022 $ 1,199
======== ======== ========
Taxes - Other Than Income Taxes
Municipal Taxes $ 802 $ 769 $ 33
Payroll Taxes 122 109 13
Connecticut Gross Earnings Tax 610 549 61
-------- -------- --------
Total Other Taxes $ 1,534 $ 1,427 $ 107
======== ======== ========
Other Income
Merchandising, Jobbing and Contracting - Net $ 52 $ 10 $ 42
Income from Lease of Other Physical Property - Net 8 5 3
Miscellaneous Non-Operating Income 8 (6) 14
Miscellaneous Income Deductions (3) (3) 0
-------- -------- --------
Total Other Income $ 65 $ 6 $ 59
======== ======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 7
Page 7
CONNECTICUT WATER SERVICE, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994
<TABLE>
<CAPTION>
1995 1994 INCREASE
(UNAUDITED) (UNAUDITED) (DECREASE)
----------- ----------- ----------
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C>
Operating Revenues (See accompanying schedule) $ 30,219 $ 29,087 $ 1,132
-------- -------- --------
Operating Expenses
Operation 9,777 9,714 63
Maintenance 1,333 1,292 41
Depreciation 2,438 2,311 127
Federal Income Taxes 3,390 3,060 330
Connecticut Corporation Business Taxes 878 789 89
Taxes Other Than Income Taxes
(See accompanying schedule) 4,431 4,335 96
-------- -------- --------
Total Operating Expenses 22,247 21,501 746
-------- -------- --------
Utility Operating Income 7,972 7,586 386
-------- -------- --------
Other Income (Deductions)
Interest 103 74 29
Allowance for Funds Used During Construction 38 41 (3)
Preferred Stock Dividends of Subsidiary 0 (73) 73
Other (See accompanying schedule) 73 23 50
Taxes on Other Income 9 23 (14)
-------- -------- --------
Total Other Income (Deductions) 223 88 135
-------- -------- --------
Interest and Debt Expense
Interest on Long-Term Debt 2,597 2,600 (3)
Other Interest Charges 214 210 4
Amortization of Debt Expense 141 141 0
-------- -------- --------
Total Interest and Debt Expense 2,952 2,951 1
-------- -------- --------
Net Income 5,243 4,723 520
Preferred Stock Dividend Requirement 29 29 0
-------- -------- --------
Net Income Applicable to Common Stockholders $ 5,214 $ 4,694 $ 520
======== ======== ========
Weighted Average Common Shares Outstanding 2,907 2,806 101
======== ======== ========
Earnings Per Average Common Share $ 1.79 $ 1.67 $ 0.12
======== ======== ========
Dividends Per Common Share $ 1.26 $ 1.23 $ 0.03
======== ======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 8
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, 1995 AND 1994
<TABLE>
<CAPTION>
1995 1994 INCREASE
(UNAUDITED) (UNAUDITED) (DECREASE)
----------- ----------- ----------
(THOUSANDS OF DOLLARS)
<S> <C> <C> <C>
Operating Revenues:
Residential $ 18,298 $ 18,021 $ 277
Seasonal 404 404 0
Commercial 3,584 3,531 53
Industrial 1,417 1,463 (46)
Public Authority 815 660 155
Metered Sales - Temporary and Non-Recurring 46 30 16
Private Fire 658 640 18
Public Fire 3,934 3,877 57
Acquisition Surcharge 30 0 30
Unmetered Seasonal 118 0 118
Other 65 61 4
-------- -------- --------
Revenues Billed 29,369 28,687 682
Change in Revenues Accrued 850 400 450
-------- -------- --------
Total Operating Revenue $ 30,219 $ 29,087 $ 1,132
======== ======== ========
Taxes - Other Than Income Taxes
Municipal Taxes $ 2,482 $ 2,480 $ 2
Payroll Taxes 439 400 39
Connecticut Gross Earnings Tax 1,510 1,455 55
-------- -------- --------
Total Other Taxes $ 4,431 $ 4,335 $ 96
======== ======== ========
Other Income
Merchandising, Jobbing and Contracting - Net $ 39 $ 7 $ 32
Income from Lease of Other Physical Property - Net 20 17 3
Miscellaneous Non-Operating Income 20 5 15
Miscellaneous Income Deductions (6) (6) 0
-------- -------- --------
Total Other Income $ 73 $ 23 $ 50
======== ======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 9
Page 9
CONNECTICUT WATER SERVICE, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
FOR THE TWELVE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994
AND FOR THE TWELVE MONTHS ENDED JUNE 30, 1995
<TABLE>
<CAPTION>
SEPTEMBER 30, JUNE 30,
1995 1994 INCREASE 1995 INCREASE
(UNAUDITED) (UNAUDITED) (DECREASE) (UNAUDITED) (DECREASE)
----------- ----------- ---------- ----------- ----------
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C>
Operating Revenues (See accompanying schedule) $ 39,261 $ 38,129 $ 1,132 $ 38,062 $ 1,199
-------- -------- -------- -------- --------
Operating Expenses
Operation 12,992 12,950 42 12,683 309
Maintenance 2,011 1,948 63 1,934 77
Depreciation 3,213 3,078 135 3,171 42
Federal Income Taxes 4,099 3,709 390 3,848 251
Connecticut Corporation Business Taxes 1,076 904 172 994 82
Taxes Other Than Income Taxes
(See accompanying schedule) 5,829 5,758 71 5,722 107
-------- -------- -------- -------- --------
Total Operating Expenses 29,220 28,347 873 28,352 868
-------- -------- -------- -------- --------
Utility Operating Income 10,041 9,782 259 9,710 331
-------- -------- -------- -------- --------
Other Income (Deductions)
Interest 129 104 25 128 1
Allowance for Funds Used During Construction 86 59 27 110 (24)
Preferred Stock Dividends of Subsidiary 0 (144) 144 (1) 1
Other (See accompanying schedule) 73 44 29 14 59
Taxes on Other Income 12 66 (54) 17 (5)
-------- -------- -------- -------- --------
Total Other Income (Deductions) 300 129 171 268 32
-------- -------- -------- -------- --------
Interest and Debt Expense
Interest on Long-Term Debt 3,454 3,544 (90) 3,443 11
Other Interest Charges 299 290 9 338 (39)
Amortization of Debt Expense 188 195 (7) 189 (1)
-------- -------- -------- -------- --------
Total Interest and Debt Expense 3,941 4,029 (88) 3,970 (29)
-------- -------- -------- -------- --------
Net Income 6,400 5,882 518 6,008 392
Preferred Stock Dividend Requirement 38 38 0 38 0
-------- -------- -------- -------- --------
Net Income Applicable to Common Stockholders $ 6,362 $ 5,844 $ 518 $ 5,970 $ 392
======== ======== ======== ======== ========
Weighted Average Common Shares Outstanding 2,890 2,800 90 2,860 30
======== ======== ======== ======== ========
Earnings Per Average Common Share $ 2.20 $ 2.09 $ 0.11 $ 2.09 $ 0.11
======== ======== ======== ======== ========
Dividends Per Common Share $ 1.68 $ 1.64 $ 0.04 $ 1.67 $ 0.01
======== ======== ======== ======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 10
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, 1995 AND 1994
AND FOR THE TWELVE MONTHS ENDED JUNE 30, 1995
<TABLE>
<CAPTION>
SEPTEMBER 30, JUNE 30,
1995 1994 INCREASE 1995 INCREASE
(UNAUDITED) (UNAUDITED) (DECREASE) (UNAUDITED) (DECREASE)
----------- ----------- ---------- ----------- ----------
(THOUSANDS OF DOLLARS)
<S> <C> <C> <C> <C> <C>
Operating Revenues:
Residential $ 24,218 $ 23,983 $ 235 $ 23,806 $ 412
Seasonal 547 560 (13) 547 0
Commercial 4,749 4,708 41 4,674 75
Industrial 1,876 1,917 (41) 1,901 (25)
Public Authority 1,048 882 166 953 95
Metered Sales - Temporary and Non-Recurring 45 32 13 33 12
Private Fire 874 853 21 866 8
Public Fire 5,222 5,160 62 5,203 19
Acquisition Surcharge 30 0 30 0 30
Unmetered Seasonal 118 0 118 0 118
Other 84 70 14 79 5
-------- -------- ------- -------- -------
Revenues Billed 38,811 38,165 646 38,062 749
Change in Revenues Accrued 450 (36) 486 0 450
-------- -------- ------- -------- -------
Total Operating Revenue $ 39,261 $ 38,129 $ 1,132 $ 38,062 $ 1,199
======== ======== ======= ======== =======
Taxes - Other Than Income Taxes
Municipal Taxes $ 3,333 $ 3,356 $ (23) $ 3,300 $ 33
Payroll Taxes 535 495 40 522 13
Connecticut Gross Earnings Tax 1,961 1,907 54 1,900 61
-------- -------- ------- -------- -------
Total Other Taxes $ 5,829 $ 5,758 $ 71 $ 5,722 $ 107
======== ======== ======= ======== =======
Other Income
Merchandising, Jobbing and Contracting - Net $ 25 $ 11 $ 14 $ (17) $ 42
Income from Lease of Other Physical Property - Net 25 19 6 22 3
Miscellaneous Non-Operating Income 32 26 6 17 15
Miscellaneous Income Deductions (9) (12) 3 (8) (1)
-------- -------- ------- -------- -------
Total Other Income $ 73 $ 44 $ 29 $ 14 $ 59
======== ======== ======= ======== =======
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 11
Page 11
Connecticut Water Service, Inc. and Subsidiary
CONSOLIDATED STATEMENTS OF RETAINED EARNINGS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994
<TABLE>
<CAPTION>
1995 1994
(UNAUDITED) (UNAUDITED)
----------- -----------
(THOUSANDS OF DOLLARS)
<S> <C> <C>
Balance at Beginning of Period $ 8,916 $ 7,716
Net Income 2,920 2,528
------- -------
11,836 10,244
------- -------
Dividends Declared:
Cumulative Preferred, Class A, $.20 per share 3 3
Cumulative Preferred, Series $.90, $.225 per share 7 7
Common Stock - 1995 $.42 per share; 1994 $.41 per share 1,230 1,154
------- -------
1,240 1,164
------- -------
Balance at End of Period $10,596 $ 9,080
======= =======
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994
Balance at Beginning of Period $ 9,040 $ 8,092
Net Income 5,243 4,723
------- -------
14,283 12,815
------- -------
Charges Related to Redemption of Subsidiary's 9.5% Series Preferred Stock 0 257
------- -------
Dividends Declared:
Cumulative Preferred, Class A, $.60 per share 9 9
Cumulative Preferred, Series $.90, $.675 per share 20 20
Common Stock - 1995 $1.26 per share; 1994 $1.23 per share 3,658 3,449
------- -------
3,687 3,478
------- -------
Balance at End of Period $10,596 $ 9,080
======= =======
FOR THE TWELVE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994
Balance at Beginning of Period $ 9,080 $ 8,082
Net Income 6,400 5,882
------- -------
15,480 13,964
------- -------
Charges Related to Redemption of Subsidiary's 9.5% Series Preferred Stock 0 257
------- -------
Dividends Declared:
Cumulative Preferred, Class A, $.80 per share 12 12
Cumulative Preferred, Series $.90, $.90 per share 26 26
Common Stock - 1995 $1.68 per share; 1994 $1.64 per share 4,846 4,589
------- -------
4,884 4,627
------- -------
Balance at End of Period $10,596 $ 9,080
======= =======
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 12
Page 12
Connecticut Water Service, Inc. and Subsidiary
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994
<TABLE>
<CAPTION>
1995 1994
(UNAUDITED) (UNAUDITED)
----------- -----------
(THOUSANDS OF DOLLARS)
<S> <C> <C>
Operating Activities:
Net Income Before Preferred Dividends of Parent $ 5,243 $ 4,723
------- --------
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities:
Depreciation (including $76 in 1995, $102 in 1994 charged to other accounts) 2,514 2,415
Change in Assets and Liabilities:
(Increase) Decrease in Accounts Receivable and Accrued Unbilled Revenues (1,814) (922)
(Increase) Decrease in Other Current Assets (55) (1,001)
(Increase) Decrease in Other Non-Current Items (293) (664)
Increase (Decrease) in Accounts Payable, Accrued Expenses and
Other Current Liabilities (232) 376
Increase (Decrease) in Deferred Federal Income Taxes and
Investment Tax Credits, Net 457 721
------- --------
Total Adjustments 577 925
------- --------
Net Cash Provided by Operating Activities 5,820 5,648
------- --------
Investing Activities:
Gross Additions to Utility Plant (including Allowance for Funds
Used During Construction of $38 in 1995 and $41 in 1994) (5,247) (3,290)
------- --------
Financing Activities:
Proceeds from Interim Bank Loans 3,244 4,689
Repayment of Interim Bank Loans (2,700) (3,950)
Proceeds from Issuance of Long-Term Debt 0 12,050
Reduction of Long-Term Debt Including Current Portion (140) (9,050)
Proceeds from Issuance of Common Stock 1,829 946
Retirement of Preferred Stock (30) (3,030)
Charges Related to Redemption of Subsidiary's 9.5% Series Preferred Stock 0 (257)
Advances, Contributions and Funds From Others for Construction, Net 1,027 444
Costs Incurred to Issue Long-Term Debt, Preferred Stock, and Common Stock 0 (665)
Cash Dividends Paid (3,687) (3,478)
------- --------
Net Cash Provided by (Used in) Financing Activities (457) (2,301)
------- --------
Net Increase (Decrease) in Cash 116 57
Cash at Beginning of Year 18 44
------- --------
Cash at End of Year $ 134 $ 101
======= ========
Supplemental Disclosures of Cash Flow Information:
Cash Paid During the Year for:
Interest (Net of Amounts Capitalized) $ 3,403 $ 3,343
Income Taxes $ 2,880 $ 2,555
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 13
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
----------------------- ----------------------------------
9/30/95 9/30/94 9/30/95 9/30/94 12/31/94
------- ------- ------- ------- --------
<S> <C> <C> <C> <C> <C>
Common Shares Outstanding:
January 1, 1994 -- -- -- -- 2,789,977
October 1, 1994 & 1993
respectively -- -- 2,829,929 2,781,330 --
July 1, 1995 & 1994
respectively 2,928,817 2,813,912 -- -- --
Common Shares Issued:
To DRIP - Dec. 15, 1993 -- -- -- 8,201 --
To 401-K - Dec. 31, 1993 -- -- -- 446 --
To PSP - Jan. 21, 1994 -- -- -- 4,061 4,061
To DRIP - March 15, 1994 -- -- -- 8,798 8,798
To 401-K - March 30, 1994 -- -- -- 561 561
To DRIP - June 15, 1994 -- -- -- 9,878 9,878
To 401-K - June 30, 1994 -- -- -- 637 637
To DRIP - Sept. 15, 1994 -- 15,397 -- 15,397 15,397
To 401-K - Sept. 30, 1994 -- 620 -- 620 620
To DRIP - Dec. 15, 1994 -- -- 39,980 -- 39,980
To 401-K - Dec. 31, 1994 -- -- 650 -- 650
To PSP - Jan. 6, 1995 -- -- 6,369 -- --
To DRIP - March 15, 1995 -- -- 27,213 -- --
To 401-K - March 30, 1995 -- -- 686 -- --
To DRIP - June 15, 1995 -- -- 23,328 -- --
To 401-K - June 30, 1995 -- -- 662 -- --
To DRIP - September 15, 1995 18,906 -- 18,906 -- --
To 401-K - September 30, 1995 674 -- 674 -- --
-------- --------- -------- --------- ---------
Common Shares Outstanding:
September 30, 1995 & 1994
respectively 2,948,397 2,829,929 2,948,397 2,829,929
========= ========= ========= =========
December 31, 1994 2,870,559
=========
Weighted Average Common Shares Outstanding:
Days outstanding basis 2,932,112 2,816,600 2,889,566 2,799,864 2,812,456
========= ========= ========= ========= =========
</TABLE>
DRIP = Dividend Reinvestment Plan
PSP = Performance Stock Program
401-K = Company contribution to employees' 401-K savings plan
<PAGE> 14
Page 14
CONNECTICUT WATER SERVICE, INC. AND SUBSIDIARY
PART I, ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Liquidity and Corporate Resources
At September 30, 1995 the Company had $5,756,000 of unused lines of
interim bank loan credit available.
Result of Operations
THE FOLLOWING FACTORS HAD A SIGNIFICANT EFFECT UPON THE COMPANY'S NET
INCOME FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1995 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, 1995 increased from that of September 30, 1994 by $392,000, or
$.10 per average common share, on an increased number of average common shares
as a result of a $331,000 increase in operating income, a $32,000 increase in
other income, and a $29,000 decrease in interest and debt expense.
Operating revenues increased $1,199,000, or 10.9%, primarily due to
higher residential, commercial and public authority consumption in 1995
reflecting a summer season that was much hotter and drier than the 1994 summer.
Due to the quarterly cycle meter reading and billing, approximately $450,000 of
this increase is unbilled to customers at September 30, 1995. The Subsidiary
acquired the Sound View Water System August 1, 1995. The 1995 seasonal billing
to these 300 unmetered customers increased revenues approximately $150,000.
Operating expenses increased $868,000 primarily due to higher income
and gross earnings taxes related to the higher taxable income, $394,000, higher
operations expense of $309,000, primarily consisting of recognizing $100,000 of
post-retirement benefits other than pension costs, $50,000 in operating costs
related to the higher level customer water consumption, $40,000 relating to the
amortization of Sound View acquisition costs, and $119,000 of increased medical
claims, stock performance benefits and other employee benefit costs. A large
portion of these increases represent timing differences as operation expense is
only $63,000 higher for the nine month period ending September 30, 1995 as
compared to 1994. Planned maintenance and non-critical repairs also increased
$77,000 during the quarter. Depreciation expense related to a higher level of
plant in service increased $42,000. Municipal property taxes and payroll taxes
increased $33,000 and $13,000, respectively.
The increase in other income is primarily due to increased profits on
merchandising and jobbing projects.
The decrease in interest and debt expense primarily reflects a
reduction in the average balance of interim bank borrowings.
THE FOLLOWING FACTORS HAD A SIGNIFICANT EFFECT UPON THE COMPANY'S NET
INCOME FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995 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, 1995 increased from that of September 30, 1994 by $520,000, or
$.12 per average common share, on an increased number of average common shares
as a result of a $1,132,000 increase in operating revenues, a $746 increase in
operating expense, a $135,000 increase in other income and deductions, and a
$1,000 increase in interest and debt expense.
<PAGE> 15
Page 15
Operating revenues increased primarily due to the higher residential,
commercial, and public authority consumption in 1995 reflecting the unusually
hot and dry summer.
Operating expenses increased primarily due to higher income and gross
earnings taxes related to the higher taxable income, $474,000, higher
depreciation expense related to increased plant in service, $127,000, higher
operation and maintenance expenses, $63,000 and $41,000, respectively, and
higher payroll and municipal taxes, $39,000 and $2,000, respectively.
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, higher interest
income related to a loan to the Sound View Water Company, and increased profits
on merchandising and jobbing projects.
<PAGE> 16
Page 16
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: November 13, 1995 By /s/ Bertram L. Lenz
--------------------------
Bertram L. Lenz
Vice President - Finance
Date: November 13, 1995 By: /s/ Peter J. Bancroft
--------------------------
Peter J. Bancroft
Assistant Treasurer
<TABLE> <S> <C>
<ARTICLE> OPUR1
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 143,354
<OTHER-PROPERTY-AND-INVEST> 1,017
<TOTAL-CURRENT-ASSETS> 9,917
<TOTAL-DEFERRED-CHARGES> 21,564
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 175,852
<COMMON> 40,772
<CAPITAL-SURPLUS-PAID-IN> 0
<RETAINED-EARNINGS> 10,596
<TOTAL-COMMON-STOCKHOLDERS-EQ> 51,368
0
772
<LONG-TERM-DEBT-NET> 54,460
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 0
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 69,252
<TOT-CAPITALIZATION-AND-LIAB> 175,852
<GROSS-OPERATING-REVENUE> 30,219
<INCOME-TAX-EXPENSE> 4,268
<OTHER-OPERATING-EXPENSES> 17,979
<TOTAL-OPERATING-EXPENSES> 22,247
<OPERATING-INCOME-LOSS> 7,972
<OTHER-INCOME-NET> 223
<INCOME-BEFORE-INTEREST-EXPEN> 8,195
<TOTAL-INTEREST-EXPENSE> 2,952
<NET-INCOME> 5,243
29
<EARNINGS-AVAILABLE-FOR-COMM> 5,214
<COMMON-STOCK-DIVIDENDS> 3,658
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> 5,820
<EPS-PRIMARY> 1.79
<EPS-DILUTED> 1.79
</TABLE>
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