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Previous: UNC INC, S-4, 1996-08-12 |
Next: CENTRAL FIDELITY BANKS INC, 10-Q, 1996-08-12 |
<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 June 30, 1996
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)
(860) 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.
3,010,073
Number of shares of common stock outstanding, June 30, 1996
<PAGE> 2
CONNECTICUT WATER SERVICE, INC.
Financial Report
June 30, 1996 and 1995
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PART I, ITEM 1: FINANCIAL STATEMENTS
<S> <C>
Consolidated Balance Sheets at June 30, 1996
and December 31, 1995 Page 3
Consolidated Statements of Capitalization at
June 30, 1996 and December 31, 1995 Page 4
Consolidated Statements of Income for Three Months
Ended June 30, 1996 and 1995 Page 5
Schedules of Operating Revenues, Taxes Other Than
Income and Other Income for Three Months
Ended June 30, 1996 and 1995 Page 6
Consolidated Statements of Income for Six Months
Ended June 30, 1996 and 1995 Page 7
Schedules of Operating Revenues, Taxes Other Than
Income and Other Income for Six Months
Ended June 30, 1996 and 1995 Page 8
Consolidated Statements of Income for Twelve Months
Ended June 30, 1996 and 1995 and for Twelve Months
Ended March 31, 1996 Page 9
Schedules of Operating Revenues, Taxes Other Than
Income and Other Income for Twelve Months
Ended June 30, 1996 and 1995 and for Twelve Months
Ended March 31, 1996 Page 10
Consolidated Statements of Retained Earnings for Three
Months Ended June 30, 1996 and 1995 Page 11
Consolidated Statements of Retained Earnings for Six
Months Ended June 30, 1996 and 1995 Page 11
Consolidated Statements of Retained Earnings for Twelve
Months Ended June 30, 1996 and 1995 Page 11
Consolidated Statements of Cash Flows for Six Months
Ended June 30, 1996 and 1995 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 JUNE 30, 1996 AND DECEMBER 31, 1995
<TABLE>
<CAPTION>
JUNE 30,
1996 DEC. 31,
ASSETS (UNAUDITED) 1995
- ------ ----------- ----
(THOUSANDS OF DOLLARS)
<S> <C> <C>
Utility Plant
Utility Plant $188,521 $186,907
Construction Work in Progress 7,368 6,399
Utility Plant Acquisition Adjustments (1,206) (1,206)
-------- --------
194,683 192,100
Accumulated Provision for Depreciation (47,264) (45,564)
-------- --------
Net Utility Plant 147,419 146,536
-------- --------
Investments 1,220 1,096
-------- --------
Current Assets
Cash 153 124
Accounts Receivable (Less Allowance, 1996- $173; 1995 - $164) 3,771 3,987
Accrued Unbilled Revenues 2,669 2,814
Prepayments and Other Current Assets 677 704
-------- --------
Total Current Assets 7,270 7,629
-------- --------
Deferred Charges
Unamortized Debt Issuance Expense 5,305 5,399
Taxes Recoverable Through Future Rates 9,000 9,000
Postretirement Benefits Other Than Pension Recoverable
Through Future Rates 932 932
Recoverable Contamination Clean-Up Costs 4,500 4,500
Prepaid Income Taxes on Contributions in Aid of Construction 578 530
Other Costs 916 837
-------- --------
Total Deferred Charges 21,231 21,198
-------- --------
TOTAL ASSETS $177,140 $176,459
======== ========
CAPITALIZATION AND LIABILITIES
- ------------------------------
Capitalization (See accompanying statements)
Common Stockholders' Equity $ 52,812 $ 51,788
Preferred Stock 772 772
Long-Term Debt 54,455 54,460
-------- --------
Total Capitalization 108,039 107,020
-------- --------
Current Liabilities
Interim Bank Loans Payable 3,104 2,646
Accounts Payable and Accrued Taxes and Interest 5,928 7,388
Accrued Recoverable Contamination Clean-Up Costs 450 450
Other 1,850 1,826
-------- --------
Total Current Liabilities 11,332 12,310
-------- --------
Long-Term Liabilities
Accrued Recoverable Contamination Clean-Up Costs 1,965 2,212
Advances for Construction 13,021 12,610
Contributions in Aid of Construction 18,557 18,551
Deferred Federal Income Taxes 12,107 11,608
Unfunded Future Income Taxes 9,000 9,000
Unfunded Postretirement Benefits Other Than Pension 932 932
Unamortized Investment Tax Credits 2,187 2,216
-------- --------
Total Long-Term Liabilities 57,769 57,129
-------- --------
TOTAL CAPITALIZATION AND LIABILITIES $177,140 $176,459
======== ========
</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 JUNE 30, 1996 AND DECEMBER 31, 1995
<TABLE>
<CAPTION>
JUNE 30,
1996 DEC. 31,
(UNAUDITED) 1995
----------- ----
(THOUSANDS OF DOLLARS)
<S> <C> <C>
Common Stockholders' Equity
Common Stock Without Par Value Authorized - 7,500,000 Shares;
Shares Issued and Outstanding: 1996 - 3,010,073; 1995 - 2,966,757 $ 43,671 $ 42,536
Stock Issuance Expense (1,216) (1,216)
Retained Earnings 10,357 10,468
-------- --------
Total Common Stockholders' Equity 52,812 51,788
-------- --------
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
-------- --------
Long-Term Debt
The Connecticut Water Company
First Mortgage Bonds
6.9% Series Q, due 2021 10,000 10,000
5 7/8% Series R, due 2022 14,855 14,860
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 12,050
-------- --------
Total Long-Term Debt 54,455 54,460
-------- --------
TOTAL CAPITALIZATION $108,039 $107,020
======== ========
</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 JUNE 30, 1996 AND 1995
<TABLE>
<CAPTION>
1996 1995 INCREASE
(UNAUDITED) (UNAUDITED) (DECREASE)
----------- ----------- ----------
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C>
Operating Revenues (See accompanying schedule) $9,276 $9,179 $ 97
------ ------ -----
Operating Expenses
Operation 3,367 3,251 116
Maintenance 396 432 (36)
Depreciation 824 812 12
Federal Income Taxes 975 929 46
Connecticut Corporation Business Taxes 241 248 (7)
Taxes Other Than Income Taxes
(See accompanying schedule) 1,388 1,418 (30)
------ ------ -----
Total Operating Expenses 7,191 7,090 101
------ ------ -----
Utility Operating Income 2,085 2,089 (4)
------ ------ -----
Other Income (Deductions)
Interest 24 34 (10)
Allowance for Funds Used During Construction 62 16 46
Other (See accompanying schedule) 17 9 8
Taxes on Other Income 7 9 (2)
------ ------ -----
Total Other Income (Deductions) 110 68 42
------ ------ -----
Interest and Debt Expense
Interest on Long-Term Debt 865 865 0
Other Interest Charges 59 69 (10)
Amortization of Debt Expense 47 47 0
------ ------ -----
Total Interest and Debt Expense 971 981 (10)
------ ------ -----
Net Income 1,224 1,176 48
Preferred Stock Dividend Requirement 9 9 0
------ ------ -----
Net Income Applicable to Common Stockholders $1,215 $1,167 $ 48
====== ====== =====
Weighted Average Common Shares Outstanding 2,994 2,909 85
====== ====== =====
Earnings Per Average Common Share $ 0.41 $ 0.40 $0.01
====== ====== =====
Dividends Per Common Share $ 0.42 $ 0.42 $0.00
====== ====== =====
</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 JUNE 30, 1996 AND 1995
<TABLE>
<CAPTION>
1996 1995 INCREASE
(UNAUDITED) (UNAUDITED) (DECREASE)
----------- ----------- ----------
(THOUSANDS OF DOLLARS)
<S> <C> <C> <C>
Operating Revenues:
Residential $5,668 $5,623 $ 45
Seasonal 132 132 0
Commercial 1,115 1,116 (1)
Industrial 453 457 (4)
Public Authority 242 255 (13)
Metered Sales - Temporary and Non-Recurring 9 11 (2)
Private Fire 227 218 9
Public Fire 1,329 1,312 17
Acquisition Surcharge and Unmetered Seasonal 45 0 45
Other 36 35 1
------ ------ ----
Revenues Billed 9,256 9,159 97
Change in Revenues Accrued 20 20 0
------ ------ ----
Total Operating Revenue $9,276 $9,179 $ 97
====== ====== ====
Taxes - Other Than Income Taxes
Municipal Taxes $ 804 $ 839 $(35)
Payroll Taxes 120 120 0
Connecticut Gross Earnings Tax 464 459 5
------ ------ ----
Total Other Taxes $1,388 $1,418 $(30)
====== ====== ====
Other Income
Merchandising, Jobbing and Contracting - Net $ 3 $ 3 $ 0
Income from Lease of Other Physical Property - Net 8 5 3
Miscellaneous Non-Operating Income 7 2 5
Miscellaneous Income Deductions (1) (1) 0
------ ------ ----
Total Other Income $ 17 $ 9 $ 8
====== ====== ====
</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 SIX MONTHS ENDED JUNE 30, 1996 AND 1995
<TABLE>
<CAPTION>
1996 1995 INCREASE
(UNAUDITED) (UNAUDITED) (DECREASE)
----------- ----------- ----------
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C>
Operating Revenues (See accompanying schedule) $18,363 $17,998 $ 365
------- ------- -----
Operating Expenses
Operation 6,710 6,307 403
Maintenance 842 851 (9)
Depreciation 1,644 1,625 19
Federal Income Taxes 1,745 1,696 49
Connecticut Corporation Business Taxes 430 448 (18)
Taxes Other Than Income Taxes
(See accompanying schedule) 2,837 2,897 (60)
------- ------- -----
Total Operating Expenses 14,208 13,824 384
------- ------- -----
Utility Operating Income 4,155 4,174 (19)
------- ------- -----
Other Income (Deductions)
Interest 48 76 (28)
Allowance for Funds Used During Construction 114 32 82
Other (See accompanying schedule) 47 8 39
Taxes on Other Income 6 10 (4)
------- ------- -----
Total Other Income (Deductions) 215 126 89
------- ------- -----
Interest and Debt Expense
Interest on Long-Term Debt 1,730 1,732 (2)
Other Interest Charges 134 151 (17)
Amortization of Debt Expense 94 94 0
------- ------- -----
Total Interest and Debt Expense 1,958 1,977 (19)
------- ------- -----
Net Income 2,412 2,323 89
Preferred Stock Dividend Requirement 19 19 0
------- ------- -----
Net Income Applicable to Common Stockholders $ 2,393 $ 2,304 $ 89
======= ======= =====
Weighted Average Common Shares Outstanding 2,984 2,894 90
======= ======= =====
Earnings Per Average Common Share $ 0.80 $ 0.80 $0.00
======= ======= =====
Dividends Per Common Share $ 0.84 $ 0.84 $0.00
======= ======= =====
</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 SIX MONTHS ENDED JUNE 30, 1996 AND 1995
<TABLE>
<CAPTION>
1996 1995 INCREASE
(UNAUDITED) (UNAUDITED) (DECREASE)
----------- ----------- ----------
(THOUSANDS OF DOLLARS)
<S> <C> <C> <C>
Operating Revenues:
Residential $11,440 $11,235 $205
Seasonal 264 264 0
Commercial 2,177 2,157 20
Industrial 883 898 (15)
Public Authority 466 468 (2)
Metered Sales - Temporary and Non-Recurring 9 11 (2)
Private Fire 453 436 17
Public Fire 2,658 2,623 35
Acquisition Surcharge and Unmetered Seasonal 96 0 96
Other 62 51 11
------- ------- ----
Revenues Billed 18,508 18,143 365
Change in Revenues Accrued (145) (145) 0
------- ------- ----
Total Operating Revenue $18,363 $17,998 $365
======= ======= ====
Taxes - Other Than Income Taxes
Municipal Taxes $ 1,610 $ 1,680 $(70)
Payroll Taxes 310 317 (7)
Connecticut Gross Earnings Tax 917 900 17
------- ------- ----
Total Other Taxes $ 2,837 $ 2,897 $(60)
======= ======= ====
Other Income
Merchandising, Jobbing and Contracting - Net $ (4) $ (13) $ 9
Income from Lease of Other Physical Property - Net 24 12 12
Miscellaneous Non-Operating Income 30 12 18
Miscellaneous Income Deductions (3) (3) 0
------- ------- ----
Total Other Income $ 47 $ 8 $ 39
======= ======= ====
</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 JUNE 30, 1996 AND 1995
AND FOR THE TWELVE MONTHS ENDED MARCH 31, 1996
<TABLE>
<CAPTION>
JUNE 30,
1996 1995 INCREASE MARCH 31, INCREASE
(UNAUDITED) (UNAUDITED) (DECREASE) 1996 (DECREASE)
----------- ----------- ---------- ---- ----------
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C>
Operating Revenues (See accompanying schedule) $39,715 $38,062 $1,653 $39,618 $ 97
------- ------- ------ ------- -----
Operating Expenses
Operation 13,807 12,683 1,124 13,691 116
Maintenance 2,017 1,934 83 2,053 (36)
Depreciation 3,177 3,171 6 3,165 12
Federal Income Taxes 3,974 3,848 126 3,928 46
Connecticut Corporation Business Taxes 1,007 994 13 1,014 (7)
Taxes Other Than Income Taxes
(See accompanying schedule) 5,730 5,722 8 5,760 (30)
------- ------- ------ ------- -----
Total Operating Expenses 29,712 28,352 1,360 29,611 101
------- ------- ------ ------- -----
Utility Operating Income 10,003 9,710 293 10,007 (4)
------- ------- ------ ------- -----
Other Income (Deductions)
Interest 128 128 0 138 (10)
Allowance for Funds Used During Construction 134 110 24 88 46
Preferred Stock Dividends of Subsidiary 0 (1) 1 0 0
Other (See accompanying schedule) 151 14 137 143 8
Taxes on Other Income (37) 17 (54) (35) (2)
------- ------- ------ ------- -----
Total Other Income (Deductions) 376 268 108 334 42
------- ------- ------ ------- -----
Interest and Debt Expense
Interest on Long-Term Debt 3,460 3,443 17 3,460 0
Other Interest Charges 279 338 (59) 289 (10)
Amortization of Debt Expense 188 189 (1) 188 0
------- ------- ------ ------- -----
Total Interest and Debt Expense 3,927 3,970 (43) 3,937 (10)
------- ------- ------ ------- -----
Net Income 6,452 6,008 444 6,404 48
Preferred Stock Dividend Requirement 38 38 0 38 0
------- ------- ------ ------- -----
Net Income Applicable to Common Stockholders $ 6,414 $ 5,970 $ 444 $ 6,366 $ 48
======= ======= ====== ======= =====
Weighted Average Common Shares Outstanding 2,971 2,860 111 2,950 21
======= ======= ====== ======= =====
Earnings Per Average Common Share $ 2.16 $ 2.09 $ 0.07 $ 2.16 $0.00
======= ======= ====== ======= =====
Dividends Per Common Share $ 1.68 $ 1.67 $ 0.01 $ 1.68 $0.00
======= ======= ====== ======= =====
</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 JUNE 30, 1996 AND 1995
AND FOR THE TWELVE MONTHS ENDED MARCH 31, 1996
<TABLE>
<CAPTION>
1996 1995 INCREASE MARCH 31, INCREASE
(UNAUDITED) (UNAUDITED) (DECREASE) 1996 (DECREASE)
----------- ----------- ---------- --------- ----------
(Thousands of dollars)
<S> <C> <C> <C> <C> <C>
Operating Revenues:
Residential $24,794 $23,806 $ 988 $24,749 $ 45
Seasonal 543 547 (4) 543 0
Commercial 4,781 4,674 107 4,782 (1)
Industrial 1,853 1,901 (48) 1,857 (4)
Public Authority 1,088 953 135 1,101 (13)
Metered Sales - Temporary and Non-Recurring 69 33 36 71 (2)
Private Fire 900 866 34 891 9
Public Fire 5,281 5,203 78 5,264 17
Acquisition Surcharge and Unmetered Seasonal 295 0 295 51 244
Other 97 79 18 295 (198)
------- ------- ------ ------- -----
Revenues Billed 39,701 38,062 1,639 39,604 97
Change in Revenues Accrued 14 0 14 14 0
------- ------- ------ ------- -----
Total Operating Revenue $39,715 $38,062 $1,653 $39,618 $ 97
======= ======= ====== ======= =====
Taxes - Other Than Income Taxes
Municipal Taxes $ 3,214 $ 3,300 $ (86) $ 3,249 $ (35)
Payroll Taxes 532 522 10 532 0
Connecticut Gross Earnings Tax 1,984 1,900 84 1,979 5
------- ------- ------ ------- -----
Total Other Taxes $ 5,730 $ 5,722 $ 8 $ 5,760 $ (30)
======= ======= ====== ======= =====
Other Income
Merchandising, Jobbing and Contracting - Net $ 40 $ (17) $ 57 $ 40 $ 0
Income from Lease of Other Physical Property - Net 47 22 25 44 3
Miscellaneous Non-Operating Income 75 17 58 70 5
Miscellaneous Income Deductions (11) (8) (3) (11) 0
-------- -------- ------ -------- -----
Total Other Income $ 151 $ 14 $ 137 $ 143 $ 8
======== ======== ====== ======== =====
</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 JUNE 30, 1996 AND 1995
<TABLE>
<CAPTION>
1996 1995
(Unaudited) (Unaudited)
----------- -----------
(Thousands of dollars)
<S> <C> <C>
Balance at Beginning of Period $10,398 $ 8,969
Net Income 1,224 1,176
------- -------
11,622 10,145
------- -------
Dividends Declared:
Cumulative Preferred, Class A, $.20 per share 3 3
Cumulative Preferred, Series $.90, $.225 per share 6 6
Common Stock - 1996 $.42 per share; 1995 $.42 per share 1,256 1,220
------- -------
1,265 1,229
------- -------
Balance at End of Period $10,357 $ 8,916
======= =======
For the Six Months Ended June 30, 1996 and 1995
Balance at Beginning of Period $10,468 $ 9,040
Net Income 2,412 2,323
------- -------
12,880 11,363
------- -------
Dividends Declared:
Cumulative Preferred, Class A, $.40 per share 6 6
Cumulative Preferred, Series $.90, $.45 per share 13 13
Common Stock - 1996 $.84 per share; 1995 $.84 per share 2,504 2,428
------- -------
2,523 2,447
------- -------
Balance at End of Period $10,357 $ 8,916
======= =======
For the Twelve Months Ended June 30, 1996 and 1995
Balance at Beginning of Period $ 8,916 $ 7,716
Net Income 6,452 6,008
------- -------
15,368 13,724
------- -------
Dividends Declared:
Cumulative Preferred, Class A, $.80 per share 12 12
Cumulative Preferred, Series $.90, $.90 per share 26 26
Common Stock - 1996 $1.68 per share; 1995 $1.67 per share 4,973 4,770
------- -------
5,011 4,808
------- -------
Balance at End of Period $10,357 $ 8,916
======= =======
</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 SIX MONTHS ENDED JUNE 30, 1996 AND 1995
<TABLE>
<CAPTION>
1996 1995
(UNAUDITED) (UNAUDITED)
----------- -----------
(Thousands of dollars)
<S> <C> <C>
Operating Activities:
Net Income Before Preferred Dividends of Parent $ 2,412 $ 2,323
------- -------
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities:
Depreciation (including $48 in 1996, $49 in 1995 charged to other accounts) 1,692 1,676
Change in Assets and Liabilities:
(Increase) Decrease in Accounts Receivable and Accrued Unbilled Revenues 362 222
(Increase) Decrease in Other Current Assets 27 275
(Increase) Decrease in Other Non-Current Items (405) (376)
Increase (Decrease) in Accounts Payable, Accrued Expenses and
Other Current Liabilities (1,436) (1,486)
Increase (Decrease) in Deferred Federal Income Taxes and
Investment Tax Credits, Net 470 471
------- -------
Total Adjustments 710 782
------- -------
Net Cash Provided by Operating Activities 3,122 3,105
------- -------
Investing Activities:
Gross Additions to Utility Plant (including Allowance for Funds
Used During Construction of $114 in 1996 and $32 in 1995) (2,686) (2,000)
------- -------
Financing Activities:
Proceeds from Interim Bank Loans 3,104 2,600
Repayment of Interim Bank Loans (2,646) (2,700)
Reduction of Long-Term Debt Including Current Portion (5) (130)
Proceeds from Issuance of Common Stock 1,135 1,322
Retirement of Preferred Stock 0 (30)
Advances, Contributions and Funds From Others for Construction, Net 528 743
Cash Dividends Paid (2,523) (2,447)
------- -------
Net Cash Provided by (Used in) Financing Activities (407) (642)
------- -------
Net Increase (Decrease) in Cash 29 463
Cash at Beginning of Year 124 18
------- -------
Cash at End of Year $ 153 $ 481
======= =======
Supplemental Disclosures of Cash Flow Information:
Cash Paid During the Year for:
Interest (Net of Amounts Capitalized) $ 1,864 $ 1,872
Income Taxes $ 1,690 $ 2,175
</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
------------------------ ----------------------------------------
6/30/96 6/30/95 6/30/96 6/30/95 12/31/95
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Common Shares Outstanding:
January 1, 1995 -- -- -- -- 2,870,559
July 1, 1995 & 1994
respectively -- -- 2,928,817 2,813,912 --
April 1, 1996 & 1995
respectively 2,991,038 2,940,827 -- -- --
Common Shares Issued:
To DRIP - Sept. 15, 1994 -- -- -- 15,397 --
To 401-K - Sept. 30, 1994 -- -- -- 620 --
To DRIP - Dec. 15, 1994 -- -- -- 39,980 --
To 401-K - Dec. 15, 1994 -- -- -- 650 --
To PSP - Jan. 6, 1995 -- -- -- 6,369 6,369
To DRIP - March 15, 1995 -- -- -- 27,213 27,213
To 401-K - March 30, 1995 -- -- -- 686 686
To DRIP - June 15, 1995 -- 23,328 -- 23,328 23,328
To 401-K - June 30, 1995 -- 662 -- 662 662
To DRIP - September 15, 1995 -- -- 18,906 -- 18,906
To 401-K - September 30, 1995 -- -- 674 -- 674
To DRIP - December 15, 1995 -- -- 18,360 -- 18,360
To 401-K - January 2, 1996 -- -- 703 -- --
To PSP- February 16, 1996 -- -- 4,220 -- --
To DRIP - March 15, 1996 -- -- 18,615 -- --
To 401-K - March 30, 1996 -- -- 743 -- --
To DRIP - June 15, 1996 18,281 -- 18,281 -- --
To 401-K - June 30, 1996 754 -- 754 -- --
--------- --------- --------- ---------
Common Shares Outstanding:
June 30, 1996 & 1995
respectively 3,010,073 2,964,817 3,010,073 2,928,817
========= ========= ========= =========
December 31, 1995 2,966,757
=========
Weighted Average Common Shares Outstanding:
Days outstanding basis 2,994,261 2,908,936 2,970,804 2,860,451 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 June 30, 1996 the Company had approximately $5,900,000 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 JUNE 30, 1996 AS COMPARED WITH THE NET INCOME
FOR THE SAME PERIOD LAST YEAR.
Net income applicable to common stock for the three months ended June
30, 1996 increased from that of June 30, 1995 by $48,000, or $.01, per average
common share on an increased number of common shares. The improvement in net
income resulted from a $97,000 increase in operating revenue, a $42,000 increase
in other income, and a $10,000 decrease in interest and debt expense, partially
offset by a $101,000 increase in operating expense.
The increase in operating revenues is due to a $25,000 increase in
metered revenues, primarily resulting from increased residential consumption of
1.5%, and a $72,000 increase in unmetered revenues, primarily resulting from the
400 new customers acquired in August 1995 with the purchase of the Sound View
system.
The increase in other income is primarily due to an increase in AFUDC
relating to the Subsidiary's investment in the Sound View system. The 1995 DPUC
decision approving the Subsidiary's acquisition of the Sound View system allows
the capitalization of financing costs incurred by the Company for the
acquisition and improvements to the system in a manner similar to AFUDC until
the Subsidiary's next change in permanent rates.
Operating expenses increased 1.4%. The increased expenses include
normal increases in wages and salary expense, higher income taxes due to higher
taxable income, and increased depreciation due to increased plant in service,
partially offset by lower maintenance and property tax expense.
THE FOLLOWING FACTORS HAD A SIGNIFICANT EFFECT UPON THE COMPANY'S NET
INCOME FOR THE SIX MONTHS ENDED JUNE 30, 1996 AS COMPARED WITH THE NET INCOME
FOR THE SAME PERIOD LAST YEAR.
Net income applicable to common stock for the six months ended June 30,
1996 increased from that of June 30, 1995 by $89,000 on an increased number of
common shares. The improvement in net income resulted from a $365,000 increase
in operating revenue, a $89,000 increase in other income, and a $19,000 decrease
in interest and debt expense, partially offset by a $384,000 increase in
operating expense.
The increase in operating revenues is due to a $206,000 increase in
metered revenues, primarily resulting from a 2.3% increase in residential
consumption, and a $159,000 increase in unmetered revenues, primarily resulting
from the 400 new customers acquired in August 1995 with the purchase of the
Sound View system.
The increase in other income is primarily due to an increase in AFUDC
relating to the Subsidiary's investment in the Sound View system. The 1995 DPUC
decision approving the Subsidiary's acquisition of the Sound View system allows
the capitalization of financing costs incurred by the Company for the
acquisition and improvements to the system in a manner similar to AFUDC until
the Subsidiary's next change in permanent rates.
Operating expenses increased 2.8%. The increased expenses include
normal increases in wages and employee fringe benefit costs, higher income taxes
due to higher taxable income, and increased depreciation due to increased plant
in service, partially offset by lower property tax expense.
<PAGE> 15
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.
Connecticut Water Service, Inc.
(Registrant)
Date: August 12, 1996 By /s/ David C. Benoit
David C. Benoit
Vice President - Finance
Date: August 12, 1996 By: /s/ Peter J. Bancroft
Peter J. Bancroft
Assistant Treasurer
<TABLE> <S> <C>
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<CURRENCY> US DOLLARS
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<TOTAL-ASSETS> 177,140
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<TOTAL-COMMON-STOCKHOLDERS-EQ> 52,812
0
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<LONG-TERM-DEBT-NET> 54,455
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<OTHER-OPERATING-EXPENSES> 12,033
<TOTAL-OPERATING-EXPENSES> 14,208
<OPERATING-INCOME-LOSS> 4,155
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<INCOME-BEFORE-INTEREST-EXPEN> 4,370
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<EARNINGS-AVAILABLE-FOR-COMM> 2,393
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