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Previous: OPTELECOM INC, 10-Q, EX-27, 2000-08-14 |
Next: CONNECTICUT WATER SERVICE INC / CT, 10-Q, EX-27, 2000-08-14 |
<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, 2000
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 06413-1600
(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.
4,844,133
Number of shares of common stock outstanding, June 30, 2000
<PAGE> 2
CONNECTICUT WATER SERVICE, INC. AND SUBSIDIARIES
Financial Report
June 30, 2000 and 1999
TABLE OF CONTENTS
<TABLE>
<S> <C>
PART I, ITEM 1: FINANCIAL STATEMENTS
Consolidated Balance Sheets at June 30, 2000
and December 31, 1999 Page 3
Consolidated Statements of Capitalization at
June 30, 2000 and December 31, 1999 Page 4
Consolidated Statements of Income for Three Months
Ended June 30, 2000 and 1999 Page 5
Consolidated Statements of Income for Six Months
Ended June 30, 2000 and 1999 Page 6
Consolidated Statements of Income for Twelve Months
Ended June 30, 2000 and 1999 Page 7
Consolidated Statements of Retained Earnings for Three
Months Ended June 30, 2000 and 1999 Page 8
Consolidated Statements of Retained Earnings for Six
Months Ended June 30, 2000 and 1999 Page 8
Consolidated Statements of Retained Earnings for Twelve
Months Ended June 30, 2000 and 1999 Page 8
Consolidated Statements of Cash Flows for Six Months
Ended June 30, 2000 and 1999 Page 9
Notes to Consolidated Financial Statements Page 10
PART I, ITEM 2: Management's Discussion and Analysis of
Financial Condition and Results of Operations Page 11-12
Signature Page Page 13
</TABLE>
<PAGE> 3
Page 3
CONNECTICUT WATER SERVICE, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AT JUNE 30, 2000 AND DECEMBER 31, 1999
(IN THOUSANDS)
<TABLE>
<CAPTION>
JUNE 30,
2000 DEC. 31,
ASSETS (UNAUDITED) 1999
------ ----------- ----
<S> <C> <C>
Utility Plant
Utility Plant $ 243,022 $ 240,122
Construction Work in Progress 5,392 5,804
Utility Plant Acquisition Adjustments (1,256) (1,273)
--------- ---------
247,158 244,653
Accumulated Provision for Depreciation (65,728) (63,311)
--------- ---------
Net Utility Plant 181,430 181,342
--------- ---------
Investments 2,754 2,747
--------- ---------
Current Assets
Cash 40 1,013
Accounts Receivable (Less Allowance, 2000 - $194; 1999 - $455) 5,421 5,301
Accrued Unbilled Revenues 2,900 2,805
Materials and Supplies at Average Cost 798 761
Prepayments and Other Current Assets 155 237
--------- ---------
Total Current Assets 9,314 10,117
--------- ---------
Deferred Charges and Regulatory Assets
Unamortized Debt Issuance Expense 5,612 5,722
Unrecovered Income Taxes 8,886 8,843
Postretirement Benefits Other Than Pension 1,083 1,083
Other Costs 1,128 1,031
--------- ---------
Total Deferred Charges and Regulatory Assets 16,709 16,679
--------- ---------
TOTAL ASSETS $ 210,207 $ 210,885
========= =========
CAPITALIZATION AND LIABILITIES
Capitalization (See accompanying statements)
Common Stockholders' Equity $ 63,056 $ 62,495
Preferred Stock 772 772
Long-Term Debt 65,069 65,399
--------- ---------
Total Capitalization 128,897 128,666
--------- ---------
Current Liabilities
Current Portion Long Term Debt 195 194
Interim Bank Loans Payable 2,431 2,411
Accounts Payable and Accrued Taxes and Interest 6,056 8,405
Other 2,953 2,864
--------- ---------
Total Current Liabilities 11,635 13,874
--------- ---------
Long-Term Liabilities
Advances for Construction 16,869 15,994
Contributions in Aid of Construction 24,148 24,165
Deferred Federal Income Taxes 17,243 16,743
Unfunded Future Income Taxes 8,349 8,349
Unfunded Postretirement Benefits Other Than Pension 1,083 1,083
Unamortized Investment Tax Credits 1,983 2,011
Commitments and Contingencies
--------- ---------
Total Long-Term Liabilities 69,675 68,345
--------- ---------
TOTAL CAPITALIZATION AND LIABILITIES $ 210,207 $ 210,885
========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 4
Page 4
CONNECTICUT WATER SERVICE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CAPITALIZATION
AT JUNE 30, 2000 AND DECEMBER 31, 1999
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
JUNE 30,
2000 DEC. 31,
(UNAUDITED) 1999
----------- ----
<S> <C> <C>
Common Stockholders' Equity
Common Stock Without Par Value; Authorized - 7,500,000 Shares;
Shares Issued and Outstanding: 2000 - 4,844,133; 1999 - 4,838,563 $ 46,083 $ 46,039
Stock Issuance Expense (1,385) (1,385)
Retained Earnings 18,358 17,841
--------- ---------
Total Common Stockholders' Equity 63,056 62,495
--------- ---------
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
5.875% Series R, due 2022 14,745 14,800
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
--------- ---------
44,345 44,400
--------- ---------
Unsecured Water Facilities Revenue Refinancing Bonds
5.05% 1998 Series A, due 2028 9,865 10,000
5.125% 1998 Series B, due 2028 7,965 8,000
--------- ---------
17,830 18,000
--------- ---------
Other
5.5% Unsecured Promissory Note 84 103
--------- ---------
Total Connecticut Water Company 62,259 62,503
--------- ---------
Crystal Water Utilities Corporation
8.0% New London Trust, Due 2017 132 133
--------- ---------
132 133
--------- ---------
Crystal Water Company of Danielson
7.82% Connecticut Development Authority, Due 2020 513 518
8.0% New London Trust, Due 2011 2,235 2,298
--------- ---------
Total Crystal Water Company 2,748 2,816
--------- ---------
Chester Realty
6% Note Payable Due 2006 125 141
--------- ---------
125 141
--------- ---------
TOTAL CONNECTICUT WATER SERVICE, INC. 65,264 65,593
--------- ---------
Less Current Portion of Long-Term Debt (195) (194)
--------- ---------
Total Long-Term Debt 65,069 65,399
--------- ---------
TOTAL CAPITALIZATION $ 128,897 $ 128,666
========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 5
Page 5
CONNECTICUT WATER SERVICE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED JUNE 30, 2000 AND 1999
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
2000 1999
(UNAUDITED) (UNAUDITED)
<S> <C> <C>
Operating Revenues $ 10,213 $ 10,233
-------- --------
Operating Expenses
Operation and Maintenance 4,189 4,294
Depreciation 1,127 1,090
Federal and State Income Taxes 1,110 1,100
Other Taxes 1,015 1,009
-------- --------
Total Operating Expenses 7,441 7,493
-------- --------
Utility Operating Income 2,772 2,740
-------- --------
Other Income (Deductions)
Interest 23 25
Allowance for Funds Used During Construction 104 113
Gain on Sale of Property 65 36
Non-Water Sales Earnings 75 82
Miscellaneous Income (Deductions) (17) (2)
Taxes on Other Income (42) (33)
-------- --------
Total Other Income (Deductions) 208 221
-------- --------
Interest and Debt Expense
Interest on Long-Term Debt 984 991
Other Interest Charges 82 69
Amortization of Debt Expense 55 80
-------- --------
Total Interest and Debt Expense 1,121 1,140
-------- --------
Net Income Before Preferred Dividends 1,859 1,821
Preferred Stock Dividend Requirement 10 10
-------- --------
Net Income Applicable to Common Stockholders $ 1,849 $ 1,811
======== ========
Weighted Average Common Shares Outstanding 4,844 4,838
======== ========
Basic and Fully Diluted Earnings Per Average Common
Share $ 0.38 $ 0.37
======== ========
Dividends Per Common Share $ 0.30 $ 0.29
======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 6
Page 6
CONNECTICUT WATER SERVICE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE SIX MONTHS ENDED JUNE 30, 2000 AND 1999
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
2000 1999
(UNAUDITED) (UNAUDITED)
----------- -----------
<S> <C> <C>
Operating Revenues $ 19,941 $ 19,683
-------- --------
Operating Expenses
Operation and Maintenance 8,354 8,400
Depreciation 2,268 2,189
Federal and State Income Taxes 1,998 1,829
Other Taxes 2,102 2,071
-------- --------
Total Operating Expenses 14,722 14,489
-------- --------
Utility Operating Income 5,219 5,194
-------- --------
Other Income (Deductions)
Interest 45 47
Allowance for Funds Used During Construction 204 232
Gain on Sale of Property 99 41
Non-Water Sales Earnings 153 132
Miscellaneous Income (Deductions) (20) (5)
Taxes on Other Income (76) (50)
-------- --------
Total Other Income (Deductions) 405 397
-------- --------
Interest and Debt Expense
Interest on Long-Term Debt 1,969 1,978
Other Interest Charges 145 137
Amortization of Debt Expense 110 136
-------- --------
Total Interest and Debt Expense 2,224 2,251
-------- --------
Net Income Before Preferred Dividends 3,400 3,340
Preferred Stock Dividend Requirement 19 19
-------- --------
Net Income Applicable to Common Stockholders $ 3,381 $ 3,321
======== ========
Weighted Average Common Shares Outstanding 4,845 4,835
======== ========
Basic and Fully Diluted Earnings Per Average Common
Share $ 0.70 $ 0.69
======== ========
Dividends Per Common Share $ 0.59 $ 0.57
======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 7
Page 7
CONNECTICUT WATER SERVICE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE TWELVE MONTHS ENDED JUNE 30, 2000 AND 1999
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
2000 1999
(UNAUDITED) (UNAUDITED)
<S> <C> <C>
Operating Revenues $ 42,882 $ 41,363
-------- --------
Operating Expenses
Operation and Maintenance 17,783 17,331
Depreciation 4,469 4,312
Federal and State Income Taxes 5,177 4,471
Other Taxes 4,218 4,103
-------- --------
Total Operating Expenses 31,647 30,217
-------- --------
Utility Operating Income 11,235 11,146
-------- --------
Other Income (Deductions)
Interest 150 138
Allowance for Funds Used During Construction 426 459
Gain on Sale of Property 219 309
Non-Water Sales Earnings 191 260
Miscellaneous Income (Deductions) (85) (35)
Taxes on Other Income (83) (203)
-------- --------
Total Other Income (Deductions) 818 928
-------- --------
Interest and Debt Expense
Interest on Long-Term Debt 3,934 3,962
Other Interest Charges 345 320
Amortization of Debt Expense 220 247
-------- --------
Total Interest and Debt Expense 4,499 4,529
-------- --------
Net Income Before Preferred Dividend 7,554 7,545
Preferred Stock Dividend Requirement 38 38
-------- --------
Net Income Applicable to Common Stockholders $ 7,516 $ 7,507
======== ========
Weighted Average Common Shares Outstanding 4,842 4,832
======== ========
Basic and Fully Diluted Earnings Per Average Common Share $ 1.55 $ 1.55
======== ========
Dividends Per Common Share $ 1.17 $ 1.13
======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 8
Page 8
CONNECTICUT WATER SERVICE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF RETAINED EARNINGS
(IN THOUSANDS, EXCEPT SHARE DATA)
FOR THE THREE MONTHS ENDED JUNE 30, 2000 AND 1999
<TABLE>
<CAPTION>
2000 1999
(UNAUDITED) (UNAUDITED)
----------- -----------
<S> <C> <C>
Balance at Beginning of Period $17,940 $16,103
Net Income 1,859 1,821
----------- -----------
19,799 17,924
----------- -----------
Dividends Declared:
Cumulative Preferred, Class A, $.20 per share 3 3
Cumulative Preferred, Series $.90, $.225 per share 6 6
Common Stock - 2000 $0.30 per share; 1999 $0.29 per share 1,432 1,418
----------- -----------
1,441 1,427
----------- -----------
Balance at End of Period $18,358 $16,497
=========== ===========
FOR THE SIX MONTHS ENDED JUNE 30, 2000 AND 1999
Balance at Beginning of Period $17,841 $15,923
Net Income 3,400 3,340
----------- -----------
21,241 19,263
----------- -----------
Dividends Declared:
Cumulative Preferred, Class A, $.40 per share 6 6
Cumulative Preferred, Series $.90, $.45 per share 13 13
Common Stock - 2000 $0.59 per share; 1999 $0.57 per share 2,864 2,747
----------- -----------
2,883 2,766
----------- -----------
Balance at End of Period $18,358 $16,497
=========== ===========
FOR THE TWELVE MONTHS ENDED JUNE 30, 2000 AND 1999
Balance at Beginning of Period $16,497 $14,452
Net Income 7,554 7,545
----------- -----------
24,051 21,997
----------- -----------
Dividends Declared:
Cumulative Preferred, Class A, $.80 per share 12 12
Cumulative Preferred, Series $.90, $.90 per share 26 26
Common Stock - 2000 $1.17 per share; 1999 $1.13 per share 5,655 5,462
----------- -----------
5,693 5,500
----------- -----------
Balance at End of Period $18,358 $16,497
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 9
Page 9
CONNECTICUT WATER SERVICE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2000 AND 1999
(IN THOUSANDS)
<TABLE>
<CAPTION>
2000 1999
(UNAUDITED) (UNAUDITED)
<S> <C> <C>
Operating Activities:
Net Income Before Preferred Dividends $ 3,400 $ 3,340
------- -------
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities:
Depreciation (including $75 in 2000, $61 in 1999 charged to other accounts) 2,343 2,251
Change in Assets and Liabilities:
(Increase) Decrease in Accounts Receivable and Accrued Unbilled Revenues (215) 309
(Increase) Decrease in Other Current Assets 45 9
(Increase) Decrease in Other Non-Current Items (37) (144)
Increase (Decrease) in Accounts Payable, Accrued Expenses and
Other Current Liabilities (2,260) (1,822)
Increase (Decrease) in Deferred Federal Income Taxes and
Investment Tax Credits, Net 472 455
------- -------
Total Adjustments 348 1,058
------- -------
Net Cash Provided by (Used for) Operating Activities 3,748 4,398
------- -------
Investing Activities:
Gross Additions to Utility Plant (including Allowance for Funds
Used During Construction of $204 in 2000 and $232 in 1999) (2,431) (3,250)
------- -------
Financing Activities:
Proceeds from Interim Bank Loans 2,431 4,546
Repayment of Interim Bank Loans (2,411) (1,895)
Proceeds from Issuance of Common Stock 44 79
Repayment of Long-Term Debt (329) (362)
Advances, Contributions and Funds From Others for Construction, Net 858 317
Cash Dividends Paid (2,883) (2,766)
------- -------
Net Cash Provided by (Used for) Financing Activities (2,290) (81)
------- -------
Net Increase (Decrease) in Cash (973) 1,067
Cash at Beginning of Year 1,013 372
------- -------
$ 40 $ 1,439
======= =======
Cash at End of Period
Supplemental Disclosures of Cash Flow Information:
Cash Paid During the Year for:
Interest (Net of Amounts Capitalized) $ 2,368 $ 2,243
Income Taxes $ 2,075 $ 1,770
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 10
Page 10
CONNECTICUT WATER SERVICE, INC. AND SUBSIDIARIES
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 Form 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 below:
<TABLE>
<CAPTION>
3 Months Ended 12 Months Ended
-------------- ---------------
6/30/00 6/30/99 6/30/00 6/30/99 12/31/99
------- ------- ------- ------- --------
<S> <C> <C> <C> <C> <C>
Common Shares Outstanding:
January 1, 1999 -- -- -- -- 4,828,619
July 1, 1999 & 1998
respectively -- -- 4,838,563 4,828,124 --
April 1, 2000 & 1999
respectively 4,843,968 4,838,424 -- -- --
Common Shares Issued:
Liquidation of Fractional Shares -- -- -- (587) --
To CSE - September 15, 1998 -- -- -- 82 --
To 401K - September 30, 1998 -- -- -- 528 --
To CSE - December 15, 1998 -- -- -- 81 --
To 401K - December 31, 1998 -- -- -- 391 --
To PSP - March 1, 1999 -- -- -- 9,658 9,658
To CSE - March 15, 1999 -- -- -- 147 147
To CSE - June 15, 1999 -- 139 -- 139 139
To CSE - September 15, 1999 -- -- 125 -- 125
To CSE - December 15, 1999 -- -- 106 -- 106
To PSP - January 13, 2000 -- -- 10,099 -- --
To PSP - February 17, 2000 -- -- (5,070) -- --
To CSE - March 15, 2000 -- -- 145 -- --
To CSE - June 15, 2000 165 -- 165 -- --
--------- --------- --------- --------- ---------
Common Shares Outstanding:
June 30, 2000 & 1999
respectively 4,844,133 4,838,563 4,844,133 4,838,563
========= ========= ========= =========
December 31, 1999 4,838,794
=========
Weighted Average Common Shares Outstanding:
Days outstanding basis* 4,843,997 4,838,448 4,841,590 4,831,641 4,836,951
========= ========= ========= ========= =========
</TABLE>
*Basic and Fully diluted are the same
PSP = Performance Stock Program
401-K = Company contribution to employees' 401-K savings plan
CSE = Common Stock Equivalents
<PAGE> 11
Page 11
CONNECTICUT WATER SERVICE, INC. AND SUBSIDIARIES
PART I, ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
LIQUIDITY AND CORPORATE RESOURCES
The Company has a total of $9,000,000 in lines of credit provided by
two banks. The available lines of credit as of June 30, 2000 was $6,314,582. In
addition to the $2,431,418 of interim borrowing against these lines of credit,
an additional $254,000 has been allocated to secure a Letter of Credit for one
of the Company's real estate development projects.
RESULT OF OPERATIONS
THE FOLLOWING FACTORS HAD A SIGNIFICANT EFFECT UPON THE COMPANY'S NET
INCOME FOR THE THREE MONTHS ENDED JUNE 30, 2000 AS COMPARED TO THE NET INCOME
FOR THE SAME PERIOD LAST YEAR.
Net income applicable to common stock for the three months ended June
30, 2000 increased from that of June 30, 1999 by $38,000, or $.01, per average
common share. The increase in net income resulted from a $32,000 increase in
operating income and a $19,000 decrease in interest and debt expense, partially
offset by a $13,000 decrease in other income.
The increase in operating income is primarily due to a $52,000
reduction in operating expenses partially offset by a $20,000 reduction in
operating revenues. The decrease in operating expenses is primarily due to our
cost containment efforts in operation and maintenance expense. The revenue
decline is primarily due to the hot, dry weather last year which caused last
year's operating revenues to be unusually high.
The decrease in interest and debt expense is primarily due to the
write-off of unamortized debt expense related to the early redemption of Gallup
Water Service's long term debt that occurred when we acquired this company in
April 1999.
The decrease in other income is primarily due to a gain on property
sales during 2000 being offset by a decrease in the Allowance for Funds Used
During Construction and slightly lower Non-water Sales Earnings due to the
startup costs related to new non-utility services the Company is beginning to
offer.
THE FOLLOWING FACTORS HAD A SIGNIFICANT EFFECT UPON THE COMPANY'S NET
INCOME FOR THE SIX MONTHS ENDED JUNE 30, 2000 AS COMPARED TO THE NET INCOME FOR
THE SAME PERIOD LAST YEAR.
Net income applicable to common stock for the six months ended June 30,
2000 increased from that of June 30, 1999 by 60,000 or $.01, per average common
share. The increase in net income resulted from a $25,000 increase in operating
income, a $8,000 increase in other income and a $27,000 decrease in interest and
debt expense.
The increase in operating income is primarily due to a decrease in
operation and maintenance expenses as a result of our cost containment efforts.
The increase in other income is primarily due to increases in real
estate sales and non-water sales earnings in 2000 as compared to 1999.
<PAGE> 12
Page 12
CONNECTICUT WATER SERVICE, INC. AND SUBSIDIARIES
The decrease in interest and debt expense is primarily due to the
write-off of unamortized debt expense related to the early redemption of Gallup
Water Service's long term debt that occurred when we acquired this company in
April 1999.
FORWARD LOOKING INFORMATION
This report, including management's discussion and analysis, contains
certain forward looking statements regarding the Company's results of operations
and financial position. These forward looking statements are based on current
information and expectations, and are subject to risks and uncertainties, which
could cause the Company's actual results to differ materially from expected
results.
<PAGE> 13
Page 13
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 8, 2000 By /s/ David C. Benoit
-------------------------------
David C. Benoit
Vice President - Finance
Date: August 8, 2000 By: /s/ Peter J. Bancroft
-------------------------------
Peter J. Bancroft
Assistant Treasurer
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