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 June 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 Identification 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 August 6, 1997:
Common Stock
No Par Value (Stated Value: $1) 7,176,910
---------------------------------- ------------------------------
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 June 30, Six Months Ended June 30,
---------------------- -------------------------
1997 1996 1997 1996
---- ---- ---- ----
(In thousands, except share data)
<S> <C> <C> <C> <C>
Operating revenues $26,522 $23,013 $49,911 $44,006
------- ------- ------- -------
Costs and expenses:
Operating 7,415 5,770 13,549 10,871
General and administrative 3,892 4,054 8,012 8,362
Depreciation 2,959 2,710 5,938 5,447
Interest Expense 2,936 2,290 5,812 4,382
Taxes other than income taxes 3,189 3,057 6,419 6,091
------- ------- ------- -------
Total costs and expenses 20,391 17,881 39,730 35,153
------- ------- ------- -------
6,131 5,132 10,181 8,853
Allowance for funds used during
construction 214 286 451 563
------- ------- ------- -------
Income before income taxes 6,345 5,418 10,632 9,416
Income taxes 2,809 2,089 4,708 3,774
------- ------- ------- -------
Income before discontinued operations 3,536 3,329 5,924 5,642
Discontinued operations:
Loss from discontinued
operations, less applicable
income tax benefit of $15 and
$119 respectively, in 1996 - (164) - (403)
------ ------ ------ ------
Net income $3,536 $3,165 $5,924 $5,239
====== ====== ====== ======
Earnings (loss) per share:
Continuing operations $0.50 $0.48 $0.84 $0.82
Discontinued operations - (0.02) - (0.06)
----- ------ ------ -----
Earnings per share $0.50 $0.46 $0.84 $0.76
===== ===== ===== =====
Weighted average common shares
outstanding 7,094,729 6,906,680 7,065,837 6,889,800
========= ========= ========= =========
</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 June 30, Six Months Ended June 30,
---------------------- -------------------------
1997 1996 1997 1996
---- ---- ---- ----
(In thousands, except share data)
<S> <C> <C> <C> <C>
Beginning of period $15,852 $17,866 $16,324 $18,583
Net Income 3,536 3,165 5,924 5,239
------- ------- ------- -------
19,388 21,031 22,248 23,822
Deduct: Cash dividends declared on
common stock, $.405 per
share per quarter in 1997
and 1996 2,897 2,805 5,757 5,596
------- ------- ------- -------
End of period $16,491 $18,226 $16,491 $18,226
======= ======= ======= =======
</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>
June 30, December 31,
1997 1996
-------- ------------
(Unaudited)
(In thousands)
<S> <C> <C>
Property, plant and equipment $467,841 $454,716
Less: accumulated depreciation 137,389 131,328
-------- --------
Net property, plant and equipment 330,452 323,388
-------- --------
Current assets:
Cash and cash equivalents 484 470
-------- --------
Accounts receivable from customers 11,766 10,796
Less: allowance for doubtful accounts 1,405 1,253
-------- --------
10,361 9,543
Accrued revenues 10,559 9,893
Inventories 3,840 2,883
Prepaid expenses 9,495 8,732
Other current assets 2,054 18,101
-------- --------
Total current assets 36,793 49,622
-------- --------
Goodwill 955 977
Recoverable income taxes 44,938 44,938
Other assets 35,689 30,167
-------- --------
$448,827 $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>
June 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-7,154,239 shares in 1997 and
7,080,355 shared in 1996 7,154 7,080
Capital in excess of stated value 102,893 101,360
Retained earnings 16,491 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 126,434 122,951
-------- --------
Long-term debt and other obligations 156,380 148,487
-------- --------
Current liabilities
Short-term borrowings, unsecured 9,500 8,300
Current maturities of long-term debt - 15,000
Accounts payable and accrued liabilities 15,928 15,654
Dividends payable 2,897 2,843
Accrued interest 3,014 2,484
Taxes other than income taxes 1,768 1,927
Income taxes 630 1,555
-------- --------
Total current liabilities 33,737 47,763
-------- --------
Advances for construction 25,723 28,017
Contributions in aid of construction 27,922 24,354
Deferred land sale gains 438 471
Accrued postretirement benefit cost 5,123 4,125
Recoverable income taxes 6,346 6,346
Deferred taxes 66,724 66,578
-------- --------
$448,827 $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>
Six Months Ended June 30,
-------------------------
1997 1996
------ ------
(In thousands)
<S> <C> <C>
Cash flows from operating activities:
Net Income $ 5,924 $5,239
Adjustments reconciling net income to net cash
provided by operating activities:
Depreciation and amortization 6,380 6,866
Allowance for funds used during construction (451) (563)
Provision for losses on accounts receivable 175 (44)
Deferred and prepaid income taxes, net (4,743) (297)
Proceeds from sale of surplus land, net of
gains (164) 146
Change in assets and liabilities (Note 3) 6,307 (6,184)
------- -------
Net cash provided by operating activities 13,428 5,163
------- -------
Cash flows from investing activities:
Capital additions, excluding an allowance for
funds used during construction (12,761) (19,307)
Acquisition of business, less cash acquired - (2,525)
Advances and contributions in aid of
construction 1,464 1,527
Refunds on advances for construction (190) (288)
Proceeds from disposition of subsidiary 8,565 -
Other investing activities (208) (762)
------- -------
Net cash used in investing activities (3,130) (21,355)
Cash flows from financing activities:
Net proceeds from short-term borrowings 1,200 10,600
Proceeds from the issuance of common stock,
net 1,607 1,646
Principal payments on long-term debt (15,000) (31)
Proceeds from the issuance of long-term debt 7,893 9,411
Common dividends paid (5,703) (5,567)
Bond finance charges (281) -
------- -------
Net cash (used in) provided by financing
activities (10,284) 16,059
------- -------
Net increase (decrease) in cash and cash
equivalents 14 (133)
Cash and cash equivalents, beginning of period 470 635
------- -------
Cash and cash equivalents, end of period $ 484 $ 502
======= =======
</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 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 March 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 does not expect adoption of
this statement to have a material impact on the calculation of earnings per
share.
-7-
<PAGE>
<PAGE>
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>
June 30, December 31,
1997 1996
-------- ------------
(Unaudited)
<S> <C> <C>
Lumber and logs $2,485 $1,565
Materials and supplies 1,355 1,318
------ ------
$3,840 $2,883
====== ======
</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>
1997 1996
------- -------
(Unaudited)
<S> <C> <C>
Increase in accounts receivable $(1,659) $(2,800)
Increase in inventory (957) (53)
Increase in prepayments (763) (305)
Decrease (increase) in other current assets 7,482 (347)
Increase (decrease) in accounts payable and
accrued liabilities 274 (533)
Decrease in interest and taxes payable (554) (1,909)
Net changes in other noncurrent balance sheet
items 2,484 (237)
------- -------
$ 6,307 $(6,184)
======= =======
Supplemental cash flow information:
Cash paid for:
Interest $ 5,140 $ 4,463
Income taxes $ 3,350 $ 5,705
</TABLE>
NOTE 4 - SALE OF SURPLUS LAND
- -----------------------------
Aquarion Company 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 of application.
Trout Brook Valley consists of 640 acres owned by BHC and 90 acres
-8-
<PAGE>
<PAGE>
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 six months of 1997, the Company sold approximately seven
acres of surplus land for a total of $283,000. Total gains approximated
$113,000, or $0.02 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. The net loss from the discontinued
operations, including the amortization of goodwill, was $403,000 for the six
months ended June 30, 1996, and is shown separately on the consolidated
statements of income. 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 $12,761,000 in property, plant and equipment in the
first six months of 1997, compared with $19,307,000 for the same 1996 period.
The Utilities accounted for approximately $12,600,000 of plant additions
during the current six month period. This includes $4,700,000, as compared
with $11,200,000 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 $28,000,000 in 1997,
of which approximately $27,000,000 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 100 percent and 26 percent for the six months ended
June 30, 1997 and 1996, respectively. (See "Consolidated Financial
Statements-Consolidated Statements of Cash Flows.") In addition, the Company
obtained funds of $1,781,000 from issuances of Common Stock under its Dividend
Reinvestment and Common Stock Purchase Plan (the "Plan") for the six months
ended June 30, 1997. The Utilities also received $1,464,000 from advances and
contributions in aid of construction from developers and customers for the six
months ended June 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 six months and
- --------------------------------------------
three months ended June 30, 1997 and 1996
- -----------------------------------------
Net income for the six months ended June 30, 1997 was $5,924,000
compared with $5,239,000 for the same 1996 period. Net income for the three
months ended June 30, 1997 was $3,536,000 versus $3,165,000 for the comparable
period. 1997 net income is higher due to the negative impact on the prior
year results from the IEA operations, coupled with improved results from the
Utility operations.
Operating revenues increased $5,905,000 and $3,509,000 for the six
months and three months ended June 30, 1997 from the comparable 1996 period.
Revenues from the Utilities increased $2,996,000 and $1,860,000 due to the
increase in water service rates, the May 1996 acquisition of SCWC and the
continued increase in the CWIP rate surcharge. Timber processing experienced
an increase in revenues of $2,724,000 and, $1,341,000, due to increased sales
to a leading retailer in the home improvement industry.
Operating expenses increased $2,678,000 and $1,645,000 for the six
months and three months ended June 30, 1997 from the comparable 1996 period.
Timber processing experienced an increase in operating expenses of $2,402,000
and, $1,187,000, respectively, which was primarily the result of higher costs
associated with the increased sales volume.
General and administrative expenses decreased $350,000 and $162,000 for
the six months and three months ended June 30, 1997 from the comparable 1996
period due primarily to a decrease in corporate expenses of $355,000 and
$260,000, respectively.
Depreciation expense increased $491,000 and $249,000 for the six months
and three months ended June 30, 1997 from the 1996 comparable periods due to
higher composite annual depreciation rate for BHC's Eastern division,
effective August 1, 1996 and general plant additions at the Utilities.
Interest expense for the six months and three months ended June 30, 1997
was $1,430,000 and $643,000 higher than the 1996 comparable period due to
interest expense associated with the October 1996 debt issuance of $30,000,000
by BHC, as well as the conversion of the $30,000,000 note of BHC from a
variable to fixed rate.
Taxes other than income taxes for the six months and three months ended
June 30, 1997 increased $328,000 and $132,000 over the comparable 1996
periods. Increased property taxes of $286,000 and $16,000, respectively, as
well as increased payroll and gross earnings taxes of $42,000 and $116,000,
respectively, account for this variance.
-11-
<PAGE>
<PAGE>
Income taxes increased $934,000 and $678,000 for the six months and
three months ended June 30, 1997 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 six months ended June 30, 1997
- ---------------------------------------
The decrease of $16,047,000 in other current assets is largely the
result of the consummation of the sale of IEA.
The increase of $5,522,000 in other assets is principally due to the
reclassification of the tax refund expected from the disposition of IEA from
other current assets.
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 six months
ended June 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: August 13, 1997 By /s/JANET M. HANSEN
--------------------------- -----------------------------
Janet M. Hansen
Executive Vice President
Chief Financial Officer and
Treasurer
-19- <PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
JUNE 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> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 484
<SECURITIES> 0
<RECEIVABLES> 11766
<ALLOWANCES> 1405
<INVENTORY> 3840
<CURRENT-ASSETS> 36793
<PP&E> 467841
<DEPRECIATION> 137389
<TOTAL-ASSETS> 448827
<CURRENT-LIABILITIES> 33737
<BONDS> 156380
0
0
<COMMON> 7154
<OTHER-SE> 119280
<TOTAL-LIABILITY-AND-EQUITY> 448827
<SALES> 49911
<TOTAL-REVENUES> 49911
<CGS> 0
<TOTAL-COSTS> 33918
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 175
<INTEREST-EXPENSE> 5812
<INCOME-PRETAX> 10632
<INCOME-TAX> 4708
<INCOME-CONTINUING> 5924
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5924
<EPS-PRIMARY> .84
<EPS-DILUTED> .84
</TABLE>
