Form 10-Q/A
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(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, 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 1-8060
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AQUARION COMPANY
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 06-0852232
- - ------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
835 Main Street, Bridgeport, Connecticut 06601
---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (203) 335-2333
--------------
---------------------------------------------------------------------------
(Former name, former 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 for 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
--- ---
Indicate the number of shares outstanding of each of the issuer's classes
of common stock as of July 22, 1994:
Common Stock
No Par Value (Stated Value: $1) 6,521,069
------------------------------- ------------------------
Class Number of Shares <PAGE>
<PAGE>
<TABLE>
PART I. FINANCIAL INFORMATION
ITEM 1. Consolidated Financial Statements
AQUARION COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
UNAUDITED
<CAPTION>
Quarter Ended June 30, Six Months Ended June 30,
1994 1993 1994 1993
------- ------- ------- -------
(In thousands, except share data)
<S> <C> <C> <C> <C>
Operating revenue $29,619 $26,189 $55,469 $50,876
------- ------- ------- -------
Costs and expenses:
Operating 11,013 9,984 20,410 19,363
General and administrative 4,622 4,210 8,722 8,416
Depreciation 2,980 2,495 5,962 4,992
Interest expense 2,029 2,417 4,173 4,767
Taxes other than income taxes 3,136 2,956 6,276 5,921
------ ------ ------ ------
Total costs and expenses 23,780 22,062 45,543 43,459
------ ------ ------ ------
5,839 4,127 9,926 7,417
Allowance for funds used during
construction 104 201 190 385
------ ------ ------ ------
Income before income taxes 5,943 4,328 10,116 7,802
Income taxes 2,371 1,634 3,970 2,946
------ ------ ------ ------
Net Income $ 3,572 $ 2,694 $ 6,146 $ 4,856
======= ======= ======= =======
Per share $ 0.55 $ 0.44 $ 0.95 $ 0.81
======= ======= ======= =======
Weighted average common shares
outstanding 6,509,710 6,015,668 6,497,919 5,989,517
========= ========= ========= =========
The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>
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<PAGE>
<TABLE>
AQUARION COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF RETAINED EARNINGS
UNAUDITED
<CAPTION>
Quarter Ended June 30, Six Months Ended June 30,
-------------------------- -------------------------
RETAINED EARNINGS 1994 1993 1994 1993
------ ------ ------ ------
(In thousands, except share data)
<S> <C> <C> <C> <C>
Beginning of period $14,923 $14,061 $15,015 $14,327
Net income 3,572 2,694 6,146 4,856
------- ------- ------- -------
18,495 16,755 21,161 19,183
Deduct: Cash dividends declared on
common stock, $.405 per share
per quarter in 1994 and 1993 2,606 2,622 5,272 5,050
------- ------- ------- -------
End of period $15,889 $14,133 $15,889 $14,133
======= ======= ======= =======
The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>
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<PAGE>
<TABLE>
AQUARION COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
UNAUDITED
<CAPTION>
June 30, December 31,
ASSETS 1994 1993
-------- -----------
(In thousands)
<S> <C> <C>
Property, plant and equipment $374,893 $367,564
Less: accumulated depreciation 123,116 117,191
-------- --------
Net property, plant and equipment 251,777 250,373
-------- --------
Current assets:
Cash and cash equivalents 610 90
------- -------
Accounts receivable:
Customers 15,761 14,422
Miscellaneous 1,922 2,439
------- -------
17,683 16,861
Less: allowance for doubtful accounts 3,511 2,935
------- -------
14,172 13,926
Accrued revenues 10,341 8,995
Inventories (NOTE 2) 2,517 2,885
Prepaid expenses 7,084 6,698
------- -------
Total current assets 34,724 32,594
------- -------
Goodwill 10,490 10,709
Recoverable income taxes 46,377 46,377
Other assets 24,387 22,819
-------- --------
$367,755 $362,872
======== ========
The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>
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<PAGE>
<TABLE>
AQUARION COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
UNAUDITED
<CAPTION>
LIABILITIES AND June 30, December 31,
SHAREHOLDERS' EQUITY 1994 1993
--------- ------------
(In thousands, except share data)
<S> <C> <C>
Shareholders' equity:
Preferred stock, no par value, authorized 2,500,000
shares not to exceed aggregate value of
$25,000,000, issuable in series-none issued $ - $ -
Common stock, stated value: $1
Authorized-16,000,000 shares
Issued-6,607,380 shares in 1994 and
6,564,533 shares in 1993 6,607 6,565
Capital in excess of stated value 92,374 91,441
Retained earnings 15,889 15,015
-------- -------
114,870 113,021
Less: cost of treasury stock, 86,311 shares in 1994
and 92,291 shared in 1993 2,368 2,540
-------- -------
Total shareholders' equity 112,502 110,481
-------- -------
Redeemable prefered stock of subsidiaries 375 375
-------- -------
Long-term debt and other obligations 115,504 115,591
-------- -------
Current liabilities:
Short-term borrowings, unsecured 6,200 5,500
Current maturities of long-term debt 70 62
Accounts payable and accrued liabilities 10,750 10,790
Dividends payable 2,641 2,621
Accrued interest 2,072 2,240
Taxes other than income taxes 1,446 1,354
Income taxes 1,090 976
-------- --------
Total current liabilities 24,269 23,543
-------- --------
Advances for construction 22,463 22,593
Contributions in aid of construction 21,512 20,883
Recoverable income taxes 6,123 6,123
Deferred taxes 65,007 63,283
-------- ---------
$367,755 $362,872
======== ========
The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>
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<PAGE>
<TABLE>
AQUARION COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
UNAUDITED
<CAPTION>
Six months ended June 30,
-------------------------
1994 1993
------ ------
(In thousands)
<S> <C> <C>
Cash flows from operating activities:
Net income $6,146 $4,856
Adjustments reconciling net income to net cash
provided by operating activities:
Depreciation and amortization 6,428 5,468
Allowance for funds used during construction (190) (385)
Provision for losses on accounts receivable 609 586
Deferred and prepaid income taxes, net 1,240 583
Proceeds from sale of surplus land, net of gains 1,063 288
Change in assets and liabilities (NOTE 3) (4,633) (2,557)
-------- -------
Net cash provided by operating activities 10,663 8,839
-------- -------
Cash flows from investing activities:
Capital additions, excluding an allowance
for funds used during construction (7,165) (9,581)
Advances and contributions in aid of
construction, net of refunds 499 379
Other investing activities 137 184
-------- -------
Net cash used in investing activities (6,529) (9,018)
-------- -------
Cash flows from financing activities:
Net proceeds from short-term borrowings 700 (13,800)
Proceeds from the issuance of common stock, net 975 11,939
Proceeds from the issuance of long-term debt - 10,000
Principal payments on long-term debt (36) (3,416)
Common dividends paid (5,253) (4,838)
-------- -------
Net cash used in investing activities (3,614) (115)
-------- -------
Net increase (decrease) in cash and cash equivalents 520 (294)
Cash and cash equivalents, beginning of period 90 319
-------- -------
Cash and cash equivalents, end of period $610 $25
======== =======
The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>
-6-<PAGE>
<PAGE>
AQUARION COMPANY
----------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
UNAUDITED
---------
Aquarion Company (Aquarion) is a holding company whose
subsidiaries are engaged both in the regulated utility business
of public water supply and in various nonutility businesses.
Aquarion's utility subsidiary, Bridgeport Hydraulic Company (BHC)
and BHC's subsidiary, Stamford Water Company (SWC),
(collectively, the Utilities) collect, treat and distribute water
for residential, commercial and industrial customers, to other
utilities for resale and for private and municipal fire
protection. The Utilities provide water to customers in 22
communities with a population of approximately 492,000 people in
Fairfield, New Haven, and Litchfield Counties in Connecticut,
including communities served by other utilities to which BHC
makes water available on a wholesale basis for back-up supply or
peak demand purposes through BHC's Southwest Regional Pipeline.
BHC is the largest investor-owned water company in Connecticut
and, with its SWC subsidiary, is among the ten largest investor-
owned water companies in the nation. The Utilities are regulated
by several Connecticut agencies, including the Connecticut
Department of Public Utility Control (DPUC). Aquarion and its
subsidiaries (collectively, the Company) are also engaged in
various nonutility activities. The Company conducts an
environmental testing laboratory business through its Industrial
and Environmental Analysts, Inc. group of laboratories which
analyze contaminants in hazardous waste, soil, air and water
(IEA). Additionally, the Company is engaged in various utility
management service businesses through Hydrocorp, Inc. (Hydrocorp)
and Aquarion Management Services, Inc. (AMS), owns a forest
products and electricity cogeneration business through Timco,
Inc. (Timco) and owns a real estate subsidiary, Main Street South
Corporation (MSSC).
NOTE 1 - BASIS OF PRESENTATION
- - ------------------------------
The accompanying consolidated financial statements of the
Company have been prepared in accordance with generally accepted
accounting principles for interim financial information, with the
instructions to Form 10-Q and Rule 10-01 of Regulation S-X and as
applied in the case of rate-regulated public utilities, comply
with the Uniform System of Accounts and rate making practices
prescribed by the DPUC. Accordingly, they do not include all of
the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the
opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation
have been included. The results of operations are not
necessarily indicative of the results of operations for the
calendar year. Water consumption is less in the first quarter of
the year than during the warmer months. The laboratory testing
business is seasonal as well with traditionally lower first
quarter revenues. Other factors affecting the comparability of
various accounting periods include the timing of rate increases
granted the Utilities and the timing and magnitude of property
sales. For further information, refer to the consolidated
financial statements and accompanying footnotes included in the
Company's annual report on Form 10-K for the year ended December
31, 1993.
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<PAGE>
NOTE 2 - INVENTORIES
- - --------------------
Inventories were comprised of the following (in thousands):
<TABLE>
<CAPTION>
June 30, December 31,
1994 1993
------- ------------
(Unaudited)
<S> <C> <C>
Lumber and logs $1,405 $1,314
Materials and supplies 1,112 1,571
------ ------
$2,517 $2,885
====== ======
</TABLE>
NOTE 3 - SUPPLEMENTAL DISCLOSURE FOR CONSOLIDATED STATEMENTS OF
- - ---------------------------------------------------------------
CASH FLOWS
- - ----------
Changes in assets and liabilities for the six month period
ended June 30, are set forth below (in thousands):
<TABLE>
<CAPTION>
1994 1993
------ ------
(Unaudited)
<S> <C> <C>
(Increase) decrease in accounts
receivable $(2,123) $ 776
Decrease in inventory 368 299
Increase in prepayments (386) (667)
Decrease in accounts payable and accrued liabilities (39) (2,003)
Increase (decrease) in interest and taxes payable 39 (398)
Net changes in other noncurrent balance sheet items (2,492) 564
------- ------
$(4,633) $(2,557)
====== ======
Supplemental cash flow information:
Cash paid for:
Interest $4,662 $4,905
Income taxes $3,030 $1,918
</TABLE>
NOTE 4 - SALE OF SURPLUS LAND
- - -----------------------------
During the first six months of 1994, the Company sold
approximately 38 acres of surplus land for a total of $1,755,000.
Sales include eight building lots at Waverly Woods in Shelton and
four lots at Deer Run Estates in Weston. Total gains
approximated $692,000 or $.11 per share. Under the terms of both
subdivisions, the DPUC gave approval for approximately two-thirds
of the net proceeds to be allocated to shareholders and the
remaining one-third allocated to ratepayers through amortization
into BHC's rate base over five years.
NOTE 5 - EMPLOYERS' ACCOUNTING FOR POSTEMPLOYMENT BENEFITS
- - ----------------------------------------------------------
On January 1, 1994, the Company was required to adopt
Financial Accounting Standards Board (FASB) Statement No. 112,
"Employers' Accounting for Postemployment Benefits" (SFAS 112).
This statement requires that employers accrue the cost of
providing future benefits to former or inactive employees after
employment but before retirement. Such benefits are to be
recognized over the employees' years of service or at the date
giving rise to such benefits. Adoption of SFAS 112 has no
material impact on the financial position or results of
operations of the Company.
-8-<PAGE>
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
-------------------------------------------------
Condition and Results of Operations
- - -----------------------------------
Management's Discussion and Analysis of the Results of
Operations and Financial Condition contained in Aquarion's Annual
Report on Form 10-K for the year ended December 31, 1993 (1993
Form 10-K) should be read in conjunction with the comments below.
Capital Resources and Liquidity
- - -------------------------------
Capital Expenditures
--------------------
The Company invested $7,165,000 in property, plant and
equipment in the first six months of 1994, compared with
$9,581,000 for the same 1993 period. The Utilities accounted for
approximately $6,031,000 of plant additions during the current
six month period, including $1,527,000 expended on SDWA mandated
filtration facilities, with the balance being invested primarily
in the Company's environmental testing laboratories and forest
products and electricity cogeneration operations. Management
estimates that capital expenditures will total $28,300,000 in
1994, of which approximately $26,000,000 will be for water
utility construction programs. Nonutility capital expenditures
will approximate $2,300,000 in 1994, primarily for laboratory
equipment at IEA.
Financing Activities
--------------------
Due to the magnitude of the Company's construction programs
and the capital-intensive nature of the public water supply
business, financing has been provided from both internal and
external sources. Historically, the Company's ability to
finance its capital expenditures has depended substantially
on rate relief. Effective August 1, 1993, the DPUC awarded BHC
a 21 percent water service rate increase designed to provide a
$10,400,000 annual increase in revenues and an 11.6 percent return
on common equity. There is no certainty that the rate increase
will produce the intended level of revenues or the allowed return
on equity.
The percentage of capital expenditures financed by net cash
from operating activities was 100 percent and 92 percent for the
six months ended June 30, 1994 and 1993, respectively. (See
"Consolidated Financial Statements-Consolidated Statements of
Cash Flows.") The remainder has been provided from external
financing sources.
Funds from external sources historically have been borrowed
on a short-term basis and periodically refinanced through long-
term debt or equity issues. On May 13, 1994, the Company renewed
unsecured revolving credit agreements with five banks. These
agreements, which are renewed annually, provide $50,000,000
($10,000,000 with each bank) of short-term credit availability on
a committed basis. At June 30, 1994, $6,200,000 of short-term
borrowings under the agreements was outstanding.
On June 29, 1993, the Company completed a common stock
offering of 460,000 shares at $25.875 per share. The proceeds of
the issue, after all expenses, amounted to $11,200,500. In
addition, BHC issued a 5.6 percent, $10,000,000 unsecured note
under a tax-exempt financing with the Connecticut Development
Authority. Proceeds from both transactions were used to reduce
short-term borrowings which had been incurred in connection with
the construction of BHC's Easton Lake Reservoir Water Treatment
Plant.
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<PAGE>
The Company obtained additional funds of $975,000 through
its Dividend Reinvestment and Common Stock Purchase Plan (the
Plan) and $499,000 from advances and contributions in aid of
construction from developers and customers in the first six
months of 1994. During April, 1994, the Company filed a Form S-3
registration statement with the Securities and Exchange
Commission to enhance the plan and include an additional 750,000
shares.
Future Financing Requirements
-----------------------------
The Company's ability to finance future utility construction
programs depends substantially on rate relief. Rate relief has
an impact on cash flow from operating activities and consequently
affects the Company's ability to obtain external financing, since
sufficient operating cash flows are necessary to maintain certain
debt coverage ratios to allow for the issuance of additional debt
securities. Additionally, rate relief will have an impact on the
Company's ability to generate sufficient cash flows to provide a
reasonable return in the form of dividends to Aquarion's
stockholders. In light of the Company's substantial need for
additional funds, the Company will need additional debt and
equity capital to finance future utility construction. The type,
amount and timing of new financings will be based on the
Company's general financial policies regarding capitalization, as
well as on market conditions and other economic factors.
Results of Operations for the six months
- - ----------------------------------------
ended June 30, 1994 and 1993
- - ----------------------------
Net income for the six months ended June 30, 1994 was
$6,146,000 compared with $4,856,000 for the same 1993 period.
Operating results during the first six months of 1994
reflect the impact of higher water rates for BHC due to a 21
percent rate increase, effective August 1, 1993 and the increase
in sales of surplus off-watershed land. Reflecting a common
stock offering of 460,000 shares in June 1993, per share amounts
were based on weighted average shares outstanding of 6,497,919
for the six months ended June 30, 1994 versus 5,989,517 for the
same 1993 period.
Operating revenues for the first six months of 1994
increased $4,593,000 from the comparable 1993 period. Revenues
from the Utilities increased $3,501,000. This increase was
principally due to a 21 percent water service rate increase which
became effective August 1, 1993. Revenues from property sales
increased by $1,210,000 due to the Company's continued commitment
to sell surplus land. Forest products experienced an increase in
revenues of $207,000 due to increased sales prices for lumber and
higher cogeneration output. Revenues from the laboratories
decreased $318,000 reflecting the impact of the sale of the Air
Services Division in the fourth quarter of 1993 as part of a
previously announced restructuring plan. The harsh winter
weather in the East, which hampered sampling efforts during the
first quarter of 1994 and continued competitive pricing also
contributed to this decline. These decreases were partially
offset by higher sampling receipts in the second quarter of 1994.
The Utility management services business accounts for the
remainder of the variance.
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<PAGE>
Operating expenses for the first six months of 1994
increased $1,047,000 from the comparable 1993 period. Operating
expenses at the Utilities increased approximately $841,000. This
increase was principally due to higher costs associated with the
operation of BHC's Easton Lake Reservoir Water Treatment Plant,
which was placed in service in June 1993 and higher costs which
were incurred due to the harsh weather in 1994 for main repairs,
service line repairs and snow removal. Operating expenses from
property sales increased by $576,000 due to the increased volume
in the Land Sales program. The Laboratories experienced a
decrease in operating expenses of $409,000 primarily due to costs
associated with the Air Services Division, which was sold in the
fourth quarter of 1993. Forest products and Utility management
service businesses account for the remainder of the variance.
General and administrative expenses for the first six months
of 1994 increased $306,000 from the comparable 1993 period.
Expenses from the Utilities increased $285,000 primarily due to
higher costs associated with BHC's adoption of FASB Statement No.
106, "Employers' Accounting for Post-Retirement Benefits Other
Than Pensions" partially offset by lower costs associated with
workers compensation insurance, outside services and
miscellaneous expenses. General and administrative expenses at
the Laboratories, Forest products, Real Estate and Corporate
account for the remainder of the variance.
Depreciation expense for the first six months of 1994 was
$970,000 higher than the 1993 comparable period. This increase
is primarily attributable to the addition of BHC's Easton Lake
Reservoir Water Treatment Plant, which was placed in service in
June 1993, a higher composite annual depreciation rate for BHC
effective August 1, 1993 and routine plant additions by both the
Utilities and the Laboratories.
Interest expense for the first six months of 1994 was
$594,000 lower than the 1993 comparable period. Lower long-term
borrowing rates due to the debt refinancing in 1993 coupled with
lower outstanding average total debt principally account for this
variance.
Taxes other than income taxes for the first six months of
1994 increased $355,000 over the comparable 1993 period. Gross
earnings taxes increased by $176,000 due to increased revenues
from Utility operations. Higher property taxes of $95,000
attributable to a higher property base in 1994, as well as
increased payroll taxes of $84,000, account for the variance.
Income taxes for the six months of 1994 were $1,024,000
higher than the comparable 1993 period primarily due to higher
taxable income in 1994.
Results of Operations for the three months
- - ------------------------------------------
ended June 30, 1994 and 1993
- - ----------------------------
Net income for the three-months ended June 30, 1994 was
$3,572,000 compared with $2,694,000 for the same 1993 period.
Operating results during the second quarter of 1994 reflect
the impact of higher water rates for BHC due to a 21 percent rate
increase, effective August 1, 1993 and the increase in sales of
surplus off-watershed land. Reflecting a common stock offering
of 460,000 shares in June 1993, per share amounts were based on
weighted average shares outstanding of 6,509,710 for the second
quarter of 1994 versus 6,015,668 for the same 1993 period.
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<PAGE>
Operating revenues during the second quarter of 1994
increased $3,430,000 from the comparable 1993 period. Revenues
from the Utilities increased $1,572,000 principally due to the
21 percent water service rate increase. Property sales revenues
increased by $1,310,000 due to the Company's continued commitment
to sell surplus land. Forest products experienced an increase in
revenues of $304,000 due to increased sales prices for lumber
and higher cogeneration output. Revenues from the Laboratories
increased $260,000 which was primarily the result of higher
sampling receipts, offset by the sale of the Air Services
Division in the fourth quarter of 1993. A decrease in revenues
from Utility management service businesses accounts for the
remainder of the variance.
Operating expenses during the second quarter of 1994
increased by $1,029,000 from the comparable 1993 period.
Increased efforts in the Company's land sale program resulted in
increased operating expenses of $514,000. Operating expenses at
the Utilities increased by $318,000 which was primarily
attributable to higher costs associated with the operation of
BHC's Easton Lake Reservoir Water Treatment Plant. Forest
products operating expenses increased by $127,000 due primarily
to higher production and raw material costs, offset by favorable
production costs for cogeneration. Laboratories and Utility
management service businesses account for the remainder of the
variance.
General and administrative expenses during the second
quarter of 1994 increased $412,000 from the comparable 1993
period. Expenses from the Utilities increased $454,000 due to
higher costs associated with BHC's adoption of FASB Statement No.
106, "Employers' Accounting for Post-Retirement Benefits Other
Than Pensions." Laboratories, Forest products and Utility
management service businesses make up the remainder of this
variance.
Depreciation expense for the second quarter 1994 was
$485,000 higher than the 1993 comparable period. This increase
is largely the result of the addition of BHC's Easton Lake
Reservoir Water Treatment Plant and higher depreciation rates for
BHC.
Interest expense for the second quarter of 1994 was $388,000
lower than the 1993 comparable period. This favorable variance
is the result of lower long-term borrowing rates due to the debt
refinancing in 1993 and lower outstanding average total debt.
Taxes other than income taxes for the second quarter of 1994
increased by $180,000 over the comparable 1993 period. Gross
earnings taxes increased by $75,000 due to increased revenues
from Utility operations. Increased property taxes of $53,000
attributable to a higher property base and mill rates, coupled
with higher payroll taxes of $52,000 account for the remainder of
this variance.
Income taxes for the second quarter of 1994 increased
$737,000 from the comparable 1993 period due primarily to higher
taxable income in 1994.
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PART II. OTHER INFORMATION
--------------------------
ITEM 1. - LEGAL PROCEEDINGS
- - ---------------------------
All legal proceedings have previously been reported on the
Annual Report on Form 10-K in Part I, Item 3 for the year ended
December 31, 1993.
ITEM 4. - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
- - -------------------------------------------------------------
All "Submission of Matters to a Vote of Security Holders"
have been previously reported on Form 10-Q in Part II, Item 4 for
the quarter ended March 31, 1994.
ITEM 5. - OTHER INFORMATION
- - ---------------------------
The Company's proposed acquisition of the New Canaan Water
Company and the Ridgefield Water Supply Company and a related
property exchange (see Item 1 of the Company's Report on
Form 10-K for the year ended December 31, 1993, "Business-Recent
Developments - Pending Utility Acquisition") are subject to
certain conditions and regulatory approvals, including a water
diversion permit (the "Diversion Permit") regarding the use of
the New Canaan Reservoir. On June 24, 1994, the Connecticut
Department of Environmental Protection (the "DEP") issued the
Diversion Permit, but a community resident has filed a
declaratory ruling petition with the DEP, asserting that the
Diversion Permit should not have been issued without a public
hearing. The extent of the delay this petition or any ruling
issued thereon may have on the closing of the intended
transactions is uncertain. It is anticipated, however, that the
parties to the acquisition and property exchange agreements will
execute further extensions of these agreements in order to permit
closing at any time until December 31, 1994.
ITEM 6. - EXHIBITS AND REPORTS ON FORM 8-K
- - ------------------------------------------
(a) The Company has nothing to report for this item.
(b) The Company did not file a report on Form 8-K for
the six months ended June 30, 1994.
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<PAGE>
SIGNATURE
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.
AQUARION COMPANY
Date: August 11, 1994 By s/s/JANET M. HANSEN
---------------- -----------------------------
Janet M. Hansen
Senior Vice President,
Chief Financial Officer and
Treasurer
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