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 September 30, 1997
----------------------
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 Identfication No)
Incorporation or organization)
835 Main Street, Bridgeport, Connecticut 06604-4995
- --------------------------------------- --------------
(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 require 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 share outstanding of each of the issuer's
classes of common stock as of November 5, 1997:
Common Stock
No Par Value (Stated Value: $1) 7,218,224
--------------------------------- -------------------------
Class Number of Shares
<PAGE>
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. Consolidated Financial Statements
<TABLE>
AQUARION COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
UNAUDITED
<CAPTION>
Quarter Ended Nine Months Ended
September 30, September 30,
------------------------------------
1997 1996 1997 1996
------- --------- -------- ---------
(in thousands, except share data)
<S> <C> <C> <C> <C>
Operating revenues $29,226 $25,499 $79,137 $69,505
------ ------ ------ ------
Costs and expenses:
Operating 7,857 6,559 21,406 17,430
General and administrative 3,199 3,826 11,211 12,188
Depreciation 3,247 2,701 9,185 8,148
Interest Expense 3,025 2,335 8,837 6,717
Taxes other than income taxes 1,905 3,069 8,324 9,160
------ ------ ------ ------
Total costs and expenses 19,233 18,490 58,963 53,643
------ ------ ------ ------
9,993 7,009 20,174 15,862
Allowance for funds used during
construction 237 364 688 927
------ ------ ------ ------
Income before income taxes 10,230 7,373 20,862 16,789
Income taxes 4,498 2,979 9,206 6,753
------ ------ ------ ------
Income before discontinued
operations 5,732 4,394 11,656 10,036
Discontinued operations:
Loss from discontinued
operations, less
applicable income tax
benefit of $95 and $214
for the three and nine
months ended September 30,
1996, respectively - (258) - (661)
------ ------ ------- ------
Net income $5,732 $4,136 $11,656 $9,375
====== ====== ======= ======
Earnings (loss) per share:
Continuing operations $0.80 $0.63 $1.64 $1.46
Discontinued operations - (0.03) - (0.10)
----- ----- ----- -----
Earnings per share $0.80 $0.60 $1.64 $1.36
Weighted average common
shares outstanding 7,171,520 6,950,889 7,101,451 6,910,312
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
-2-
<PAGE>
<PAGE>
<TABLE>
AQUARION COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF RETAINED EARNINGS
UNAUDITED
<CAPTION>
Quarter Ended Nine Months Ended
September 30, September 30,
----------------------------------
1997 1996 1997 1996
------ -------- --------- ---------
(In thousands, except share data)
<S> <C> <C> <C> <C>
Beginning of period $16,491 $18,226 $16,324 $18,583
Net Income 5,732 4,136 11,656 9,375
------ ------ ------ ------
22,223 22,362 27,980 27,958
Deduct: Cash dividends
declared on
common stock,
$.41 per share
for the third
quarter 1997
and $.405 per
share for
all other quart
ers in 1997
and all quarters
in 1996 2,948 2,823 8,705 8,419
------ ------ ------ ------
End of period $19,275 $19,539 $19,275 $19,539
====== ====== ====== ======
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
-3-
<PAGE>
<PAGE>
<TABLE>
AQUARION COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<CAPTION>
September 30, December 31,
1997 1996
------------- -----------
(Unaudited)
<S> <C> <C>
(In thousands)
Property, plant and equipment $477,910 $454,716
Less: accumulated depreciation 140,412 131,328
------- -------
Net property, plant and
equipment 337,498 323,388
------- -------
Current assets:
Cash and cash equivalents 656 470
------- -------
Accounts receivable from customers 11,516 10,796
Less: allowance for doubtful
accounts 1,706 1,253
------ ------
9,810 9,543
Accrued revenues 11,401 9,893
Inventories 3,992 2,883
Prepaid expenses 11,567 8,732
Other current assets 2,007 18,101
------ ------
Total current assets 39,433 49,622
------ ------
Goodwill 944 977
Recoverable income taxes 44,938 44,938
Other assets 35,809 30,167
------- -------
$458,622 $449,092
======= =======
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
-4-
<PAGE>
<PAGE>
<TABLE>
AQUARION COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<CAPTION>
September 30, December 31,
1997 1996
------------ -----------
(Unaudited)
(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-7,189,086 shares in 1997
and 7,080,355 shares in 1996 7,189 7,080
Capital in excess of stated value 103,743 101,360
Retained earnings 19,275 16,324
Less: cost of treasury stock, zero
shares in 1997 and 61,498
shares in 1996 - 1,709
Less: minimum pension liability
adjustment 104 104
------- -------
Total shareholders' equity 130,103 122,951
------- -------
Long-term debt and other obligations 156,380 148,487
------- -------
Current liabilities
Short-term borrowings, unsecured 12,300 8,300
Current maturities of long-term debt - 15,000
Accounts payable and accrued
liabilities 16,613 15,654
Dividends payable 2,948 2,843
Accrued interest 2,937 2,484
Taxes other than income taxes 611 1,927
Income taxes 3,649 1,555
------- -------
Total current liabilities 39,058 47,763
------- -------
Advances for construction 26,403 28,017
Contributions in aid of construction 28,001 24,354
Deferred land sale gains 369 471
Accrued postretirement benefit cost 4,943 4,125
Recoverable income taxes 6,346 6,346
Deferred taxes 67,019 66,578
------- -------
$458,622 $449,092
======= =======
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
-5-
<PAGE>
<PAGE>
<TABLE>
AQUARION COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
UNAUDITED
<CAPTION>
Nine Months Ended
September 30,
-----------------
1997 1996
---- ----
(In thousands)
<S> <C> <C>
Cash flows from operating activities:
Net Income $11,656 $9,375
Adjustments reconciling net income to
net cash provided by operating
activities:
Depreciation and amortization 9,600 10,259
Allowance for funds used during
construction (688) (927)
Provision for losses on accounts
receivable 482 (318)
Deferred and prepaid income taxes, net (4,447) (531)
Proceeds from sale of surplus land,
net of gains 533 297
Change in assets and liabilities (Note 3) 5,131 (7,060)
------ ------
Net cash provided by operating
activities 22,267 11,095
------ ------
Cash flows from investing activities:
Capital additions, excluding an
allowance for funds used during
construction (22,749) (29,375)
Acquisition of business, less cash
acquired - (2,558)
Advances and contributions in aid of
construction 2,328 1,985
Refunds on advances for construction (295) (539)
Proceeds from disposition of
subsidiary 8,631 -
Other investing activities (482) (526)
------ ------
Net cash used in investing activities (12,567) (31,013)
------ ------
Cash flows from financing activities:
Net proceeds from short-term
borrowings 4,000 15,900
Proceeds from the issuance of common
stock, net 2,492 2,460
Principal payments on long-term debt (15,000) (39)
Proceeds from the issuance of long-
term debt 7,893 9,411
Common dividends paid (8,601) (8,373)
Bond finance charges (298) -
------ ------
Net cash (used in) provided by
financing activities (9,514) 19,359
------ ------
Net increase (decrease) in cash and cash
equivalents 186 (559)
Cash and cash equivalents, beginning of
period 470 635
------ ------
Cash and cash equivalents, end of period $ 656 $ 76
====== ======
</TABLE>
-6-
The accompanying notes are an integral part of these consolidated financial
statements.
<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 subsidiaries, BHC Company (BHC) which consists
of an Eastern division, formerly Bridgeport Hydraulic Company and
a Western division, formerly Stamford Water Company, New Canaan
Water Company and Ridgefield Water Supply Company, and Sea Cliff
Water Company (SCWC) (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 30 communities with a population of approximately
500,000 people in Connecticut and Long Island, New York,
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 SCWC, is among the ten largest investor-owned water
companies in the nation. The Utilities are regulated by several
Connecticut and New York agencies, including the Connecticut
Department of Public Utility Control (DPUC) and the New York
Public Service Commission (PSC). Aquarion and its subsidiaries
(collectively, the Company) are also engaged in various
nonutility activities. The Company conducts a timber processing
business through Timco, Inc. (Timco), owns a real estate
subsidiary, Main Street South Corporation (MSSC) and provides
utility management services through Hydrocorp, Inc. (Hydrocorp)
and Aquarion Management Services, Inc. (AMS).
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 ratemaking practices
prescribed by the authorities. 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. 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, 1996.
In February 1997, the Financial Accounting Standards Board
(FASB) issued SFAS No. 128, "Earnings Per Share" (SFAS 128),
which establishes new standards for computing and presenting
earnings per share. SFAS 128 is effective for financial
statements issued for periods ending after December 15, 1997, and
earlier adoption is not permitted. The Company
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<PAGE>
<PAGE>
does not expect adoption of this statement to have a material
impact on the calculation of earnings per share.
In June 1997, the FASB issued SFAS No. 130, "Reporting
Comprehensive Income" (SFAS 130), which establishes standards for
reporting and display of comprehensive income and its components
in a full set of general-purpose financial statements. This
statement is effective for fiscal years beginning after December
15, 1997. The Company does not expect adoption of this statement
to have a significant impact on the financial statements.
In June 1997, the FASB issued SFAS No. 131, "Disclosures
about Segments of an Enterprise and Related Information" (SFAS
131), which establishes standards for the method of reporting
information about operating segments in annual financial
statements and in interim reports issued to shareholders. This
statement is effective for financial statements for periods
beginning after December 15, 1997. The Company does not expect
adoption of this statement to have a significant impact on future
disclosures of segment related information.
NOTE 2 - INVENTORY
- ------------------
<TABLE>
<CAPTION>
September 30, December 31,
1997 1996
------------ -----------
(Unaudited)
<S> <C> <C>
Lumber and logs $2,685 $1,565
Materials and supplies 1,307 1,318
----- -----
$3,992 $2,883
===== =====
</TABLE>
NOTE 3 - SUPPLEMENTAL DISCLOSURE FOR CONSOLIDATED STATEMENTS OF
- ---------------------------------------------------------------
CASH FLOWS
- ----------
Changes in assets and liabilities for the nine-month period
ended September 30, are set forth below (in thousands):
<TABLE>
<CAPTION>
1997 1996
----- ------
(Unaudited)
<S> <C> <C>
Increase in accounts receivable $(2,257) $(4,086)
(Increase) decrease in inventory (1,109) 215
Increase in prepayments (2,835) (2,243)
Decrease in other current assets 7,463 268
Increase (decrease) in accounts payable and
accrued liabilities 959 (454)
Increase (decrease) in interest and taxes
payable 1,231 (776)
Net changes in other noncurrent balance
sheet items 1,679 16
------ ------
$5,131 $(7,060)
====== ======
Supplemental cash flow information:
Cash paid for:
Interest $8,190 $7,137
Income taxes $4,700 $7,527
</TABLE>
NOTE 4 - SALE OF SURPLUS LAND
- -----------------------------
Aquarion and its BHC subsidiary entered into a contract to
sell its 730-acre Trout Brook Valley property for $14,000,000,
contingent on the buyer's receipt of the required permits to
develop the property. The buyer hopes to obtain the necessary
project permits within one year
-8-
<PAGE>
<PAGE>
of application. Trout Brook Valley consists of 640 acres owned
by BHC and 90 acres owned by Aquarion. Because BHC property is
included, the sale must also be approved by the DPUC.
The anticipated closing date is expected to be late 1998 or
early 1999. The Company anticipates that the gain from this
transaction will range from approximately $6,000,000 to
$6,500,000 over an applicable amortization period,
assuming similar treatment is allowed by the DPUC as in the past
with regard to the sharing of proceeds between the shareholder
and the ratepayer.
The Company has also entered into a non-binding letter of
intent with the City of Shelton, Connecticut to sell six parcels
of land located in Shelton for approximately $6,984,500. The
purchase is contingent upon the execution of a contract of sale,
regulatory and board approvals and approval of a city referendum.
The anticipated closing date is expected to be late 1998. The
Company anticipates that the gain from this transaction will
range from approximately $2,500,000 to $3,000,000 over an
applicable amortization period, assuming similar treatment is
allowed by the DPUC as in the past with regard to the sharing of
proceeds between the shareholder and the ratepayer.
For the first nine months of 1997, the Company sold
approximately 18 acres of surplus land for a total of
$1,122,000.Total gains approximated $353,000 or $0.05 per share.
NOTE 5 - SALE AND DISCONTINUED OPERATIONS
- -----------------------------------------
On March 25, 1997, the Company executed the stock purchase
agreement, effective December 31, 1996, completing the stock sale
of Industrial and Environmental Analysts, Inc. (IEA), its
environmental testing laboratory business for approximately
$10,000,000, with approximately $7,600,000 paid in cash at
closing and the balance paid with the assignment of IEA accounts
receivable. Accordingly, IEA's results were recorded as a
discontinued operation for the year ended December 31, 1996. The
Company recorded an after tax loss of $4,255,000, or $0.61 per
share, from the sale of the discontinued operations in the fourth
quarter of 1996. For the period January 1, 1997 through March
25, 1997, operating revenues from discontinued operations were
approximately $4,984,000 and the pre-tax operating loss was
approximately $86,000 compared to a pre-tax operating loss of
$49,000 for the period ended March 31, 1996. Losses for the
period from January 1, 1997 through March 25, 1997, were fully
reimbursed by the purchaser in conjunction with the terms of the
stock purchase agreement.
NOTE 6 - RATE MATTERS
- ---------------------
Rates. On July 31, 1997, BHC's Eastern division received a
decision from the DPUC approving a 12.7 percent water service
rate increase, which became effective on August 1, 1997, designed
to provide an $8,300,000 increase in annual water service
revenues. This increase, replaced the Construction-Work-In-
Progress (CWIP) rate surcharge, which was 9.49 percent, prior to
July 1, 1997, resulting in a 3.2 percent marginal increase. This
decision also reflects the repeal of the Connecticut gross
earnings tax for services rendered after July 1, 1997, which
resulted in a 5.0 percent reduction in rates and expenses. At
the time that the new rates became effective, the CWIP surcharge
was terminated.
-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, 1996 should
be read in conjunction with the comments below.
Capital Resources and Liquidity
- -------------------------------
Capital Expenditures
--------------------
The Company invested $22,749,000 in property, plant and
equipment in the first nine months of 1997, compared with
$29,375,000 for the same 1996 period. The Utilities accounted
for approximately $22,069,000 of plant additions during the
current nine month period. This includes $7,200,000 as compared
with $16,882,000 for the comparable 1996 period, expended on
SDWA-mandated filtration facilities. On July 2, 1997, the
William S. Warner Water Treatment Plant at Hemlocks Reservoir was
fully operational and put into service. Management estimates that
capital expenditures will total $29,000,000 in 1997, of which
approximately $28,000,000 will be for water utility construction
programs.
Financing Activities
--------------------
The Company's capital expenditures have historically been
financed from several sources including internally generated
funds, rate relief, proceeds from debt financings, sale of common
stock, and short-term borrowings under the Company's revolving
credit agreements.
Annually, the Company's unsecured revolving credit
agreements are subject to renewal. The agreements provide that
the Company may select among a variety of interest rates,
including a negotiated rate. The Company pays a commitment fee
of 0.125 of 1 percent on the average daily unused portion of the
commitment for each day during which any unused portion exists.
The lines of credit provide for automatic renewal on an annual
basis, but may be terminated at the option of the banks or the
Company upon 90 days notice by either party prior to the annual
anniversary of the agreements.
The percentage of capital expenditures financed by net cash
from operating activities was 98 percent and 38 percent for the
nine months ended September 30, 1997 and 1996, respectively.
(See "Consolidated Financial Statements-Consolidated Statements
of Cash Flows.") In addition, the Company obtained funds of
$2,653,000 from issuances of Common Stock under its Dividend
Reinvestment and Common Stock Purchase Plan (the "Plan") for the
nine months ended September 30, 1997. The Utilities also
received $2,328,000 from advances and contributions in aid of
construction from developers and customers for the nine months
ended September 30, 1997.
On February 3, 1997, BHC converted the interest rate on its
$30,000,000 unsecured note, issued in 1995 in consideration for a
loan of the proceeds from the issuance by the Connecticut
Development Authority of an equal amount of tax-exempt Water
Facilities Revenue Bonds, from a variable rate to a fixed rate of
6.15 percent, for a term of 38 years.
-10-
<PAGE>
<PAGE>
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 the Company's shareholders.
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 nine months and
three months ended September 30, 1997 and 1996
- -----------------------------------------------
Net income for the nine months ended September 30, 1997 was
$11,656,000 compared with $9,375,000 for the same 1996 period.
Net income for the three months ended September 30, 1997 was
$5,732,000 versus $4,136,000 for the comparable 1996 period. The
increase in net income is primarily due to improved results from
the Company's water utility segment and the elimination of losses
at the Company's former IEA subsidiary.
Operating revenues increased $9,632,000 and $3,727,000 for
the nine months and three months ended September 30, 1997,
respectively, from the comparable 1996 periods. Revenues from
the Utilities increased $5,199,000 and $2,203,000 for the nine
months and three months ended September 30, 1997, respectively,
due to the increase in water service rates, dryer weather in
1997, and the May 1996 acquisition of SCWC. Timber processing
experienced an increase in revenues of $4,005,000 and, $1,281,000
for the nine months and three months ended September 30, 1997,
respectively, due to increased sales to a leading retailer in the
home improvement industry.
Operating expenses increased $3,976,000 and $1,298,000 for
the nine months and three months ended September 30, 1997,
respectively, from the comparable 1996 periods. Timber
processing operating expenses increased $3,497,000 and,
$1,095,000, for the nine months and three months ended
September 30, 1997, respectively, which was primarily the result
of higher costs associated with increased sales volume.
General and administrative expenses decreased $977,000 and
$627,000 for the nine months and three months ended September
30, 1997, respectively, from the comparable 1996 periods. This
decrease was the result of lower expenses in the utility segment
of $927,000 and $878,000, for the nine months and three months
ended September 30, 1997, respectively, due to lower pension and
healthcare costs partially offset by an increased bad debt
expense.
Depreciation expense increased $1,037,000 and $546,000 for
the nine months and three months ended September 30, 1997,
respectively, from the 1996 comparable periods due to The William
S. Warner Filtration Facility being placed into service on
July 1, 1997 and a higher composite annual depreciation rate for
BHC's Eastern division, effective August 1, 1996.
Interest expense for the nine months and three months ended
September 30, 1997 was $2,120,000 and $690,000 higher than the
1996 comparable periods due to the October 1996 debt issuance of
$30,000,000 by BHC, as well as the interest rate conversion on
the 1995 $30,000,000 unsecured note of BHC from a variable rate
to fixed rate of 6.15 percent.
-11-
<PAGE>
<PAGE>
Taxes other than income taxes for the nine months and three
months ended September 30, 1997 decreased $836,000 and
$1,164,000, respectively, from the comparable 1996 periods, due
primarily to the repeal of the Connecticut gross earnings tax for
services rendered after July 1, 1997.
Income taxes increased $2,453,000 and $1,519,000 for the
nine months and three months ended September 30, 1997,
respectively, from the comparable 1996 periods due to higher
taxable income as well as a higher effective tax rate in 1997.
Significant changes in balance sheet accounts
for the nine months ended September 30, 1997
- --------------------------------------------
The decrease of $16,094,000 in other current assets is
largely the result of the proceeds received from the sale of IEA
in March 1997 and the reclassification of the tax refund expected
from the disposition of IEA to other assets.
The increase of $5,642,000 in other assets is principally
due to the reclassification of the tax refund expected from the
disposition of IEA from other current assets.
Forward looking information
- ---------------------------
In addition to the historical information contained herein,
this report contains a number of "forward-looking statements,"
within the meaning of the Securities and Exchange Act of 1934.
Such statements address future events and conditions concerning
capital expenditures, liquidity and capital resources, gains
recorded from land sales and accounting matters. Actual results
in each case could differ materially from those projected in such
statements.
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, 1996.
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, 1997.
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
nine months ended September 30, 1997.
-12-
<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: November 13, 1997 By /s/JANET M. HANSEN
---------------- --------------------------
Janet M. Hansen
Executive Vice President
Chief Financial Officer and
Treasurer
-13-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
SEPTEMBER 30, 1997 AQUARION COMPANY FORM 10-Q AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 656
<SECURITIES> 0
<RECEIVABLES> 11516
<ALLOWANCES> 1706
<INVENTORY> 3992
<CURRENT-ASSETS> 39433
<PP&E> 477910
<DEPRECIATION> 140412
<TOTAL-ASSETS> 458622
<CURRENT-LIABILITIES> 39058
<BONDS> 156380
0
0
<COMMON> 7189
<OTHER-SE> 122914
<TOTAL-LIABILITY-AND-EQUITY> 458622
<SALES> 79137
<TOTAL-REVENUES> 79137
<CGS> 0
<TOTAL-COSTS> 50126
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 482
<INTEREST-EXPENSE> 8837
<INCOME-PRETAX> 20862
<INCOME-TAX> 9206
<INCOME-CONTINUING> 11656
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<NET-INCOME> 11656
<EPS-PRIMARY> 1.64
<EPS-DILUTED> 1.64
</TABLE>
