Form 10-Q
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 March 31, 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 1-8060
---------------
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 changes 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 May 2, 1996:
Common Stock
No Par Value (Stated Value: $1) 6,911,201
------------------------------- ------------------------
Class Number of Shares
<PAGE>
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. Consolidated Financial Statements
AQUARION COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
UNAUDITED
<TABLE>
<CAPTION>
Three Months Ended March 31,
---------------------------
1996 1995
---- ----
<S> <C> <C>
(In thousands, except share data)
Operating revenues $26,143 $25,602
------- -------
Costs and expenses:
Operating 9,321 9,346
General and administrative 4,587 3,953
Depreciation 3,190 2,909
Interest expense 2,286 2,050
Taxes other than income taxes 3,381 3,220
------- -------
Total costs and expenses 22,765 21,478
------- -------
3,378 4,124
Allowance for funds used during
construction 277 112
------- -------
Income before income taxes 3,655 4,236
Income taxes 1,581 1,845
------- -------
Net income $ 2,074 $ 2,391
======= =======
Per share $ 0.30 $ 0.35
======= =======
Weighted average common shares
outstanding 6,872,921 6,744,999
========= =========
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
-2-
<PAGE>
<PAGE>
AQUARION COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF RETAINED EARNINGS
UNAUDITED
<TABLE>
<CAPTION>
Three Months Ended March 31,
----------------------------
1996 1995
-------- --------
<S> <C> <C>
(In thousands, except share data)
Beginning of period $18,583 $16,628
Net income 2,074 2,391
------- -------
20,657 19,019
Deduct: Cash dividends declared
on common stock, $.405
per share per quarter
in 1996 and 1995 2,791 2,688
------- -------
End of period $17,866 $16,331
======= =======
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
-3-
<PAGE>
<PAGE>
AQUARION COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, December 31,
ASSETS 1996 1995
-------- -----------
(Unaudited)
<S> <C> <C>
(In thousands)
Property, plant and equipment $439,877 $432,480
Less: accumulated depreciation 139,147 136,726
-------- -------
Net property, plant and
equipment 300,730 295,754
-------- --------
Current assets:
Cash and cash equivalents 539 635
-------- --------
Accounts receivable:
Customers 16,727 15,859
Miscellaneous 1,304 1,263
-------- --------
18,031 17,122
Less: allowance for doubtful
accounts 2,962 2,916
-------- --------
15,069 14,206
Accrued revenues 8,450 9,108
Inventories 4,323 4,105
Prepaid expenses 8,957 7,737
-------- --------
Total current assets 37,338 35,791
-------- --------
Goodwill 10,162 10,270
Recoverable income taxes 44,922 44,922
Other assets 27,496 27,243
-------- --------
$420,648 $413,980
======== ========
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
-4-
<PAGE>
<PAGE>
AQUARION COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
LIABILITIES AND
SHAREHOLDERS' EQUITY March 31, December 31,
1996 1995
--------- -----------
(Unaudited)
<S> <C> <C>
(In thousands, except share data)
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- 6,970,681 shares in
1996 and 6,936,574 shares in
1995 6,971 6,937
Capital in excess of stated value 98,988 98,213
Retained earnings 17,866 18,583
-------- --------
123,825 123,733
Less: cost of treasury stock,
80,434 shares in 1996 and
81,291 shares in 1995 2,208 2,231
-------- --------
Total shareholders' equity 121,617 121,502
-------- --------
Redeemable preferred stock of
subsidiaries 285 285
-------- --------
Long-term debt and other obligations 138,026 131,991
-------- --------
Current liabilities:
Short-term borrowings, unsecured 13,400 11,600
Current maturities of long-term
debt 53 62
Accounts payable and accrued
liabilities 13,421 15,221
Dividends payable 2,790 2,776
Accrued interest 1,994 2,023
Taxes other than income taxes 1,506 1,713
Income taxes 1,549 1,805
-------- --------
Total current liabilities 34,713 35,200
-------- --------
Advances for construction 26,741 26,264
Contributions in aid of
construction 23,959 23,959
Deferred land sale gains 515 620
Accrued postretirement benefit
cost 3,444 3,065
Recoverable income taxes 5,945 5,944
Deferred taxes 65,403 65,150
-------- --------
$420,648 $413,980
======== ========
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
-5-
<PAGE>
<PAGE>
AQUARION COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
UNAUDITED
<TABLE>
<CAPTION>
Three Months Ended March 31,
----------------------------
1996 1995
-------- --------
<S> <C> <C>
(In thousands)
Cash flows from operating activities:
Net income $2,074 $2,391
Adjustments reconciling net income to net
cash provided by operating activities:
Depreciation and amortization 3,431 3,157
Allowance for funds used during
construction (277) (112)
Provision for losses on accounts
receivable 57 223
Deferred and prepaid income taxes, net 252 310
Proceeds from sale of surplus land,
net of gains 109 264
Change in assets and liabilities (Note 3) (3,898) (4,659)
------ ------
Net cash provided by operating
activities 1,748 1,574
------ ------
Cash flows from investing activities:
Capital additions, excluding an
allowance for funds used during
construction (7,691) (9,153)
Advances and contributions in aid of
construction 721 485
Refunds on advances for construction (244) (74)
Other investing activities (488) (357)
------ ------
Net cash used in investing activities (7,702) (9,099)
------ ------
Cash flows from financing activities:
Net proceeds from short-term
borrowings 1,800 8,800
Proceeds from the issuance of common
stock, net 809 612
Principal payments on long-term debt (20) (20)
Proceeds from the issuance of long-
term debt 6,045 -
Common dividends paid (2,776) (2,675)
------- -------
Net cash provided by financing
activities 5,858 6,717
------- -------
Net decrease in cash and cash equivalents (96) (808)
Cash and cash equivalents, beginning of 635 1,335
------- -------
Cash and cash equivalents, end of period $ 539 $ 527
======= =======
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
-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 subsidiaries, Stamford Water
Company (SWC), New Canaan Water Company (NCWC) and Ridgefield
Water Supply Company (RWSC) (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 24 communities with a
population of approximately 500,000 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 subsidiaries, 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. (IEA) group of
laboratories which analyze contaminants in hazardous waste,
soil, air and water. Additionally, the Company is engaged in
various utility management service businesses through
Hydrocorp, Inc. (Hydrocorp) and Aquarion Management Services,
Inc. (AMS), owns a timber processing 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, 1995.
-7-
<PAGE>
<PAGE>
NOTE 2 - INVENTORIES
- --------------------
Inventories were comprised of the following (in thousands):
<TABLE>
<CAPTION>
March 31, December 31,
1996 1995
--------- ------------
(Unaudited)
<S> <C> <C>
Lumber and logs $2,267 $2,180
Materials and supplies 2,056 1,925
------ ------
$4,323 $4,105
====== ======
</TABLE>
NOTE 3 - SUPPLEMENTAL DISCLOSURE FOR CONSOLIDATED STATEMENTS
OF CASH FLOWS
- --------------------------------------------------------------
Changes in assets and liabilities for the three month
period ended March 31, are set forth below (in thousands):
<TABLE>
<CAPTION>
1996 1995
------ ------
<S> <C> <C>
(Unaudited)
(Increase) decrease in accounts receivable $ (262) $1,502
Increase in inventory (218) (176)
Increase in prepayments (1,220) (1,324)
Decrease in accounts payable and accrued liabilities (1,269) (1,607)
Decrease in interest and taxes payable (492) (2,895)
Net changes in other noncurrent balance sheet items (437) (159)
------ ------
$(3,898) $(4,659)
======= =======
Supplemental cash flow information:
Cash paid for:
Interest $2,295 $2,111
Income taxes $1,635 $4,205
</TABLE>
NOTE 4 - SALE OF SURPLUS LAND
- -----------------------------
For the first three months of 1996, the Company sold
approximately three acres of surplus land in one transaction
for a total of $215,000. Total gains approximated $106,000,
or $.02 per share.
-8-
<PAGE>
<PAGE>
NOTE 5 - ACQUISITIONS
- ---------------------
On February 29, 1996, the Company signed a stock purchase
agreement to purchase all of the outstanding shares of the
common stock of Sea Cliff Water Company (SCWC), a subsidiary
of Emcor Group, Inc., for approximately $2,600,000 in cash,
which is subject to adjustment at the closing. SCWC, which
has approximately 4,300 customers, serves a portion of Nassau
County in Long Island, New York, and has approximate annual
revenues of $2,000,000. The proposed acquisition requires the
approval of the New York Public Service Commission.
On October 12, 1995, the Company completed the acquisition
of NCWC and RWSC for 123,053 shares of Aquarion common stock
with a market value of $2,828,692 and the repayment of certain
indebtedness of The New Canaan Company (NCC) in the amount of
$100,000. Immediately after the acquisition closed, the
parties completed a property exchange whereby the Monroe
Environmental Leasing Partnership (MELP) transferred to NCWC a
commercial building and the property on which it is situated,
NCWC transferred a reservoir and related property to the
Second Taxing District of Norwalk (STD) and STD in turn paid
$2,200,000 to MELP, which also received $214,157 from
Aquarion. The property exchange resulted in net income to
Aquarion of approximately $1,100,000, or 16 cents per share in
1995. The acquisition was accounted for as a pooling of
interests, and the Company did not restate the previous year's
financial statements due to the limited impact on consolidated
operating results in 1995.
NOTE 6 - RATE MATTERS
- ---------------------
On April 20, 1996, BHC filed an application with the DPUC
for a Construction-Work-in-Progress (CWIP) water rate
surcharge of 6.37 percent of current revenues to recover
90 percent of the carrying costs, through March 31, 1996, of
capital used in the construction of a filter plant at its
Hemlocks Reservoir in Fairfield, Connecticut. This plant,
mandated by the Federal Safe Drinking Water Act of 1974
(SDWA), as amended, is estimated to cost approximately
$50,000,000. This application updated the CWIP rate surcharge
of 5.52 percent granted in March 1996. BHC will continue to
file quarterly applications for increases in the CWIP rate
surcharge as construction continues through 1997, at which
time the filtration facilities are expected to be operational
and subject to general ratemaking regulations.
On March 18, 1996, BHC filed a rate application with the
DPUC for a 12 percent water service rate increase designed to
provide a $7,100,000 increase in annual water service
revenues. As part of the application, BHC will request an
opportunity to re-open the application in 1997 to include the
cost of the Hemlocks filtration plant. If approved, water
service rates at that time will increase by approximately an
additional 11 percent, plus a cumulative CWIP rate surcharge,
which is estimated to be 10 percent at that time.
On April 3, 1996, SWC, NCWC and RWSC collectively,
received a final decision from the DPUC, which will become
effective on April 25, 1996, allowing for a 5.1 percent
increase, designed to provide a $782,000 increase, in annual
water service revenues. As part of the decision, the DPUC
approved SWC's proposal to equalize the meter rates and
service charges of all three companies.
-9-
<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,
1995 (1995 Form 10-K) should be read in conjunction with the
comments below.
Capital Resources and Liquidity
- -------------------------------
Capital Expenditures
--------------------
The Company invested $7,691,000 in property, plant and
equipment in the first three months of 1996, compared with
$9,153,000 for the same 1995 period. The Utilities accounted
for approximately $7,339,000 of plant additions during the
current three month period, including $4,413,000 expended on
SDWA mandated filtration facilities, with the balance of
$352,000 being invested primarily in the Company's
environmental testing laboratories and forest products
operations. Management estimates that capital expenditures
will total $42,000,000 in 1996, of which approximately
$40,000,000 will be for water utility construction programs.
Nonutility capital expenditures will approximate $2,000,000 in
1996, 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. Pursuant to DPUC regulations,
BHC is deriving additional revenues through the implementation
of a CWIP rate surcharge in conjunction with the construction
of its Hemlocks Reservoir filtration plant. The current
surcharge of 5.52 percent is designed to increase the
Company's revenues by $3,341,000 on an annual basis. This
surcharge, however, is expected to increase quarterly as BHC
continues to file quarterly applications during the
construction period.
On May 11, 1995, BHC issued a $30,000,000 unsecured note
in consideration for a loan of the proceeds from the issuance
by the Connecticut Development Authority (CDA) of an equal
amount of tax-exempt Water Facilities Revenue Bonds. The tax-
exempt CDA bonds have a 40-year maturity and initially bear
interest at a weekly rate. For the three-months ended March 31,
1996, this rate has ranged between 2.8 percent and 4.8 percent
with a weighted average interest rate of 2.9 percent.
The weighted average annual interest rate on these bonds was
3.3 percent through March 31, 1996. At the option of the
Company, the bonds may be converted or reconverted from time
to time to or from a daily, weekly or flexible rate mode and
with the consent of the CDA to a multiannual (fixed for
periods of one year or multiples thereof) rate mode. In
addition, the bonds, with the consent of the CDA, may be
converted for their remaining term to bear interest at a fixed
rate. While the bonds are in the daily, weekly or flexible rate
-10-
<PAGE>
<PAGE>
modes, a letter of credit facility or substitute credit
facility will be maintained. The proceeds of this bond
issuance are to be used to finance costs incurred in the
construction of the Hemlocks Reservoir Filtration Project and
the filtration facilities at BHC's Lakeville and Norfolk
Reservoirs. Under the terms of the CDA bonds, proceeds are to
be requisitioned from a construction fund held by a trustee
for planned capital improvements. At March 31, 1996, the
Company had requisitioned approximately $27,326,000 for the
filtration projects.
The percentage of capital expenditures financed by net
cash from operating activities was 23 percent and 17 percent
for the three months ended March 31, 1996 and 1995,
respectively. (See "Consolidated Financial Statements-
Consolidated Statements of Cash Flows.") The remainder has
been provided from external financing sources. The Company
obtained funds of $721,000 from advances and contributions in
aid of construction from developers and customers for the
three months ended March 31, 1996.
The Company obtained funds of $824,000 from issuances of
Common Stock under its Dividend Reinvestment and Common Stock
purchase plan (the "Plan") for the three months ended March 31, 1996.
Funds from external sources historically have been
borrowed on a short-term basis and periodically refinanced
through long-term debt or equity issues. In May 1995,
Aquarion 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 March 31, 1996,
$13,400,000 of short-term borrowings under the agreements was
outstanding.
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. 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 three months
- ------------------------------------------
ended March 31, 1996 and 1995
- -----------------------------
Net income for the three months ended March 31, 1996 was
$2,074,000 compared with $2,391,000 for the same 1995 period.
Operating results during the first three months of 1996 are
slightly lower due to the impact of a one-time credit in the
first quarter of 1995 of approximately $300,000 from an
insurance rebate combined with slightly lower gains from
property sales in 1996.
-11-
<PAGE>
<PAGE>
Operating revenues for the first three months of 1996
increased $541,000 from the comparable 1995 period. Revenues
from the Utilities increased $1,514,000, due to the
acquisition of NCWC and RWSC and additional CWIP rate
surcharge revenues in 1996. Revenues from the Laboratories
decreased $579,000, reflecting the impact of lower sampling
receipts in the first quarter of 1996 combined with continued
industry pricing pressures. Timber Processing experienced a
decrease in revenues of $159,000, due to lower sales volume
and softer lumber prices.
Operating expenses for the first three months of 1996
decreased $25,000 from the comparable 1995 period. The
Laboratories experienced a decrease in operating expenses of
$266,000 which was largely attributable to lower operating
costs associated with the decreased sampling receipts. Timber
Processing experienced a decrease in operating expenses of
$153,000 which was primarily the result of lower production
costs. These decreases were partially offset by the increase
in operating expenses at the Utilities of $409,000 which was
largely the result of higher costs associated with treatment
and distribution expenses.
General and administrative expenses for the first three
months of 1996 increased $634,000 from the comparable 1995
period. Expenses from the Utilities increased $761,000
primarily due to a one-time credit in 1995 of approximately
$300,000 from an insurance rebate and increased costs for
health insurance and employee benefits.
Depreciation expense for the first three months of 1996
was $281,000 higher than the 1995 comparable period due to
general plant additions at the Utilities.
Interest expense for the first three months of 1996 was
$236,000 higher than the 1995 comparable period due to
interest expense associated with the May 1995 debt issuance of
$30,000,000 by BHC and higher outstanding average short-term
debt partially offset by lower short-term borrowing rates.
Taxes other than income taxes for the first three months
of 1996 increased $161,000 over the comparable 1995 period.
Increased payroll and gross earnings taxes of $85,000 as well
as increased property taxes of $76,000 account for this
variance.
Income taxes for the three months of 1996 were $264,000
lower than the comparable 1995 period due to lower taxable
income in 1996.
Significant changes in balance sheet accounts
- ---------------------------------------------
for the three months ended March 31, 1996
- -----------------------------------------
The increase of $1,220,000 in prepaid expenses is largely
the result of prepaid property taxes that were paid in January
1996 and will be expensed over the first half of the year.
The decrease of $1,800,000 in accounts payable and accrued
liabilities is principally due to lower general accounts
payable and accrued payroll costs.
-12-
<PAGE>
<PAGE>
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, 1995.
ITEM 4. - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
- -------------------------------------------------------------
At the Annual Meeting of shareholders of the Company held
on April 23, 1996, three directors were elected to a three-
year term. The shareholders elected Janet D. Greenwood with
5,173,811 affirmative votes cast and 324,193 withheld, Donald
M. Halsted, Jr. with 5,226,184 affirmative votes cast and
271,820 withheld and John A. Urquhart with 5,201,926 votes
cast and 296,078 withheld.
Shareholders ratified the selection of Price Waterhouse as
independent accountants for 1996 with 5,417,795 affirmative
votes cast, 36,847 negative votes and 43,362 abstentions.
In addition, the shareholders rejected a shareholder
proposal that all future non-employee directors not be granted
pension benefits and current non-employee directors
voluntarily relinquish their pension benefits with 2,403,903
negative votes cast, 1,309,888 affirmative votes, 198,749
abstentions and 1,585,464 broker nonvotes.
ITEM 6. - EXHIBITS AND REPORTS ON FORM 8-K
- ------------------------------------------
(a) Exhibits.
27 Financial Data Schedule (filed herewith).
(b) The Company did not file a report on Form 8-K
for the three months ended March 31, 1996.
-13-
<PAGE>
<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: May 9, 1996 By /s/JANET M. HANSEN
------------------------------
Janet M. Hansen
Executive Vice President,
Chief Financial Officer and
Treasurer
-14-
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE MARCH
31, 1996, AQUARION COMPANY FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 539
<SECURITIES> 0
<RECEIVABLES> 16727
<ALLOWANCES> 2962
<INVENTORY> 4323
<CURRENT-ASSETS> 37338
<PP&E> 439877
<DEPRECIATION> 139147
<TOTAL-ASSETS> 420648
<CURRENT-LIABILITIES> 34713
<BONDS> 138026
285
0
<COMMON> 6971
<OTHER-SE> 114646
<TOTAL-LIABILITY-AND-EQUITY> 420648
<SALES> 26143
<TOTAL-REVENUES> 26143
<CGS> 0
<TOTAL-COSTS> 20479
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 57
<INTEREST-EXPENSE> 2286
<INCOME-PRETAX> 3655
<INCOME-TAX> 1581
<INCOME-CONTINUING> 2074
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2074
<EPS-PRIMARY> .30
<EPS-DILUTED> .30
</TABLE>
