SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File
For Quarter Ended: June 30, 1995 No. 0-422
MIDDLESEX WATER COMPANY
(Exact name of registrant as specified in its charter)
INCORPORATED IN NEW JERSEY 22-1114430
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1500 RONSON ROAD, ISELIN, NJ 08830
(Address of principal executive offices) (Zip Code)
(908) 634-1500
(Registrant's telephone number, including area code)
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 and Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that this registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 30 days.
YES [X] NO [ ]
Indicate the number of shares outstanding of each of the
Issuer's classes of common stock, as of the latest practicable
date:.
Class: Outstanding at June 30, 1995:
Common Stock, No Par Value 4,071,703
PART I. - FINANCIAL INFORMATION
MIDDLESEX WATER COMPANY
CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
Three Months Six Months
Ended June 30, Ended June 30,
1995 1994 1995 1994
__________ __________ __________ __________
Operating Revenues $ 9,607,771 $ 9,196,257 $18,347,644 $17,765,689
__________ __________ __________ __________
Operating Expenses:
Operation and Maintenance 4,453,994 4,170,211 8,622,002 8,274,262
Depreciation 694,522 655,311 1,371,388 1,304,761
Taxes,other than Income Taxes 1,415,438 1,353,582 2,716,988 2,642,135
Federal Income Taxes 759,096 779,581 1,382,309 1,356,722
__________ __________ __________ __________
Total Operating Expenses 7,323,050 6,958,685 14,092,687 13,577,880
__________ __________ __________ __________
Utility Operating Income 2,284,721 2,237,572 4,254,957 4,187,809
Other Income(Expense)-Net (7,931) 42,318 (9,194) 42,728
__________ __________ __________ __________
Income before Interest Charges 2,276,790 2,279,890 4,245,763 4,230,537
Interest Charges 770,163 760,278 1,526,136 1,502,733
__________ __________ __________ __________
Net Income 1,506,627 1,519,612 2,719,627 2,727,804
Preferred Stock Dividend
Requirements 39,732 42,327 79,469 103,846
__________ __________ __________ __________
Earnings Applicable to
Common Stock $ 1,466,895 $ 1,477,285 2,640,158 2,623,958
__________ __________ __________ __________
Earnings per Share of
Common Stock $0.36 $0.37 $0.65 $0.66
__________ __________ __________ __________
Average Number of Common
Shares Outstanding 4,056,551 3,994,077 4,046,903 3,988,830
Cash Dividends Paid per
Common Share $0.27 $0.26 $0.54 $0.52
See Notes to Consolidated Financial Statements
MIDDLESEX WATER COMPANY
CONSOLIDATED BALANCE SHEETS
ASSETS AND OTHER DEBITS
June 30, December 31,
1995 1994
___________ ___________
(Unaudited)
UTILITY PLANT:
Water Production $ 27,253,219 $ 25,612,023
Transmission and Distribution 95,506,877 93,334,300
General 17,961,061 11,202,947
Construction Work in Progress 657,465 262,249
___________ ___________
TOTAL 141,378,622 130,411,519
Less Accumulated Depreciation 25,735,587 21,668,506
___________ ___________
UTILITY PLANT-NET 115,643,035 108,743,013
___________ ___________
NONUTILITY ASSETS-NET 1,733,059 400,209
___________ ___________
CURRENT ASSETS:
Cash and Cash Equivalents 1,124,390 3,854,186
Marketable Securities 970,826 933,298
Accounts Receivable(net of allowance
for doubtful accounts) 3,666,143 4,236,800
Unbilled Revenues 2,624,963 2,143,795
Materials and Supplies(at average cost) 1,049,484 991,116
Prepayments 542,996 503,808
___________ ___________
TOTAL CURRENT ASSETS 9,978,802 12,663,003
___________ ___________
DEFERRED CHARGES:
Regulatory Assets 5,968,531 5,818,530
Unamortized Debt Expense 3,029,746 3,082,420
Preliminary Survey and Investigation Charges 658,128 653,328
Other 1,075,590 1,052,255
___________ ___________
TOTAL DEFFERED CHARGES 10,731,995 10,606,533
___________ ___________
TOTAL $138,086,891 $132,412,758
___________ ___________
See Notes to Consolidated Financial Statements
MIDDLESEX WATER COMPANY
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND OTHER CREDITS
June 30, December 31,
1995 1994
___________ ___________
(Unaudited)
CAPITALIZATION(see accompanying statements) $ 99,116,475 $ 97,141,200
CURRENT LIABILITIES:
Accounts Payable 1,412,271 1,616,945
Notes Payable 240,000 0
Customer Deposits 330,520 308,174
Taxes Accrued 4,736,465 4,444,372
Interest Accrued 1,153,213 1,134,223
Other 852,763 877,283
___________ ___________
TOTAL CURRENT LIABILITIES 8,725,232 8,380,997
___________ ___________
DEFERRED CREDITS:
Customer Advances for Construction 8,942,560 9,199,363
Accumulated Deferred Investment Tax Credits 2,416,254 2,452,096
Accumulated Deferred Federal Income Taxes 9,878,464 9,767,241
Other 1,707,883 1,312,961
___________ ___________
TOTAL DEFERRED CREDITS 22,945,161 22,731,661
___________ ___________
CONTRIBUTIONS IN AID OF CONSTRUCTION 7,300,023 4,158,900
___________ ___________
TOTAL $138,086,891 $132,412,758
___________ ___________
See Notes to Consolidated Financial Statements
MIDDLESEX WATER COMPANY
CONSOLIDATED STATEMENTS OF CAPITALIZATION AND RETAINED EARNINGS
June 30, December 31,
1995 1994
___________ ___________
(Unaudited)
CAPITALIZATION:
Common Stock,No Par Value
Authorizied,6,000,000 Shares
Outstanding Shares-1995,4,071,703
1994,4,030,834 $ 27,833,389 $ 27,151,673
Retained Earnings 18,156,781 17,699,422
___________ ___________
TOTAL COMMON EQUITY 45,990,170 44,851,095
___________ ___________
Cumulative Preference Stock,No Par Value
Authorized,100,000 Shares;Outstanding,None.
Cumulative Preferred Stock,No Par Value,
Authorized,69,418 Shares
Convertible:
Outstanding,$7 Series-14,901 Shares 1,564,605 1,564,605
Nonredeemable:
Outstanding,$7 Series-1995,1,017 Shares
1994,2,255 Shares 101,700 225,500
Outstanding,$4.75 Series-10,000 Shares 1,000,000 1,000,000
___________ ___________
TOTAL CUMULATIVE PREFERRED STOCK 2,666,305 2,790,105
___________ ___________
Long-term Debt:
First Mortgage Bonds:
7.25%,Series R,due July 1,2021 6,000,000 6,000,000
5.20%,Series S,due October 1,2022 12,000,000 12,000,000
5.25%,Series T,due October 1,2023 6,500,000 6,500,000
6.40%,Series U,due February 1,2009 15,000,000 15,000,000
5.25%,Series V,due February 1,2029 10,000,000 10,000,000
7% Promissory Notes,due April 21,1996-2000 1,200,000 0
___________ ___________
SUB-TOTAL LONG-TERM DEBT 50,700,000 49,500,000
Less: Current Portion of Long-Term Debt 240,000 0
___________ ___________
TOTAL LONG-TERM DEBT 50,460,000 49,500,000
___________ ___________
TOTAL CAPITALIZATION $ 99,116,475 $ 97,141,200
___________ ___________
Six Months Ended Year Ended
June 30, December 31,
1995 1994
___________ ___________
(Unaudited)
RETAINED EARNINGS:
BALANCE AT BEGINNING OF PERIOD $ 17,699,422 $ 16,615,466
Net Income 2,719,627 5,495,372
___________ ___________
TOTAL 20,419,049 22,110,838
___________ ___________
Cash Dividends:
Cumulative Preferred Stock 79,034 180,006
Common Stock 2,183,234 4,231,410
___________ ___________
TOTAL DEDUCTIONS 2,262,268 4,411,416
___________ ___________
BALANCE AT END OF PERIOD $ 18,156,781 $ 17,699,422
___________ ___________
See Notes to Consolidated Financial Statements
MIDDLESEX WATER COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended June 30,
1995 1994
___________ ___________
CASH FLOW FROM OPERATING ACTIVITIES:
Net Income $ 2,719,627 $ 2,727,804
Adjustments To Reconcile Net Income to
Net Cash Provided by Operating Activities:
Depreciation 1,371,388 1,304,761
Amortization of Deferred Charges 92,398 197,505
Provision for Deferred Income Taxes 111,223 315,389
Amortization of Investment Tax Credit (35,842) (35,842)
Allowance for Funds Used During Construction (13,707) 0
Changes in Current Assets and Liabilities:
Accounts Receivables 570,657 120,968
Materials and Supplies (58,368) (26,971)
Accounts Payable (204,674) 37,715
Accrued Income Taxes 292,093 162,144
Accrued Interest 18,990 207,096
Unbilled Revenues (481,168) (378,200)
Other-Net 19,876 (311,796)
___________ ___________
NET CASH PROVIDED BY OPERATING ACTIVITIES 4,402,493 4,320,573
___________ ___________
CASH FLOWS FROM INVESTING ACTIVITIES:
Utility Plant Expenditures (5,271,018)(1,816,417)
Marketable Securities (37,528) 0
Note Receivable (1,250,000) 0
Preliminary Survey and Investigation Charges (4,800) (34,803)
Other-Net 46,807 (243,560)
___________ ___________
NET CASH USED IN INVESTING ACTIVITIES (6,516,539) (2,094,780)
___________ ___________
CASH FLOW FROM FINANCING ACTIVITIES:
Redemption of Long-term Debt 0 (12,500,000)
Issuance of Long-term Debt 1,200,000 25,000,000
Short-term Bank Borrowings(Repayments) 0 (8,500,000)
Long-term Debt Issuance Expense (8,000) (1,162,604)
Temporary Cash Investments-Restricted (2,123) 1,673,376
Proceeds from Issuance of Common Stock 681,716 465,009
Payment of Preferred Dividends (79,034) (96,893)
Payment of Common Dividends (2,183,234) (2,092,675)
Customer Advances-Net (101,275) 23,215
Redemption of Preferred Stock (123,800) (1,224,000)
___________ ___________
NET CASH PROVIDED FROM FINANCING ACTIVITIES (615,750) 1,585,428
___________ ___________
NET CHANGE IN CASH AND CASH EQUIVALENTS (2,729,796) 3,811,221
___________ ___________
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 3,854,186 1,146,245
___________ ___________
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 1,124,390 $ 4,957,466
___________ ___________
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION:
Cash Paid During the Period for:
Interest $ 1,428,917 $ 1,233,204
Income Taxes $ 1,386,000 $ 1,371,000
Excludes Allowance for funds Used During Construction
See Notes to Consolidated Financial Statements
MIDDLESEX WATER COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1 - Summary of Significant Accounting Policies
Consolidation - Middlesex Water Company (Middlesex or the Company) is the
parent company and sole shareholder of Tidewater Utilities, Inc. (Tidewater or
Delaware), Pinelands Water Company, Pinelands Wastewater Company, and Utility
Service Affiliates, Inc. (USA) . White Marsh Environmental Systems, Inc. is a
wholly-owned subsidiary of Tidewater. The financial statements for Middlesex
and its wholly-owned subsidiaries are reported on a consolidated basis.
The consolidated notes accompanying the 1994 Form 10-K are applicable to this
report and, in the opinion of the Company, the accompanying unaudited
consolidated financial statements contain all adjustments (consisting of only
normal recurring accruals) necessary to present fairly the financial position
as of June 30, 1995 and the results of operations and its cash flows for the
periods ended June 30, 1995 and 1994. Information included in the Balance
Sheet as of December 31, 1994 has been derived from the Company's audited
financial statements included in its annual report on Form 10-K for the year
ended December 31, 1994.
Note 2 - Regulatory Matters
On February 2, 1995, the Company filed a petition with the New Jersey Board of
Public Utilities (BPU) seeking approval for a Purchased Water Adjustment
Clause (PWAC). A PWAC is a regulatory vehicle that allows New Jersey water
utilities to pass along to, or credit, customers' account changes in the cost
of purchasing water, without the need for filing a full base rate case. On
July 13, 1995, the BPU approved the recovery in rates of approximately $0.1
million of increased purchased water costs.
Note 3 - Capitalization
Preferred Stock - During the first quarter, the Company purchased and retired
1,238 shares of the nonredeemable $7.00 Series at the stated purchase price of
$100 per share.
Common Stock - During the second quarter, 26,871 common shares ($0.4 million)
were issued under the Company's Dividend Reinvestment and Common Stock
Purchase Plan.
Note 4 - Commitments
On April 21, 1995, the Company completed the asset purchase of a 2,200
customer water utility and a 2,200 customer wastewater utility in Burlington
County, New Jersey. The newly acquired systems are called Pinelands Water
Company and Pinelands Wastewater Company. These systems will not have a
material impact on the Company's revenues and will require substantial rate
increases to attain profitability.
On May 19, 1995, Middlesex and USA, jointly entered into a five-year contract
with the City of South Amboy to operate and maintain the City's 2,800 customer
water system. The Contract, which is subject to renewal for three future
five-year periods, is expected to produce approximately $1.5 million in
revenues during the first five years with only a minimal impact on earnings.
MIDDLESEX WATER COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FOR THE THREE
AND SIX MONTHS ENDED JUNE 30, 1995 COMPARED TO JUNE 30, 1994
Revenues increased by 4.5% for the second quarter and 3.3% for the first half
of 1995 due to increased consumption, increased customer connection fees from
Tidewater operations, and the inclusion of revenues from the operations of
Pinelands Water Company and Pinelands Wastewater Company.
Operation and Maintenance expenses increased by 6.8% for the second quarter
and 4.2% for the first half of 1995 due to increased chemicals, labor,
insurance, normal maintenance, and the inclusion of expenses from Pinelands
Water and Wastewater Companies. These higher expenses were partially offset
by lower purchased water costs.
Depreciation expense increased by 6.0% for the second quarter and 5.1% for the
first half of 1995 reflecting depreciable plant additions of almost $10.0
million since March 31, 1994.
Taxes, other than Income Taxes increased by 4.6% for the quarter and 2.8%
year-to-date due mainly to revenue-related taxes.
Federal Income Taxes decreased by 2.6% for the quarter and increased 1.9% for
the six month period due to a changing level of taxable income.
Capital Resources: The consolidated capital program for 1995, estimated at
$7.2 million, includes $5.0 million for routine plant additions and $2.2
million for special plant additions. The $5.0 million for routine items
includes $1.6 million for mains, $0.6 million for service lines, $0.5 million
for meters and $2.3 million for various other items. The $2.2 million for
special plant additions includes $1.1 million for water production facilities
in Delaware, $0.3 million for treatment of well supplies, $0.2 million for
treatment plant expansion, $0.1 million for Robinson's Branch Dam Project,
and $0.5 million for South River Basin Regional Supply Project.
Liquidity: To finance the 1995 capital program, the Company will utilize
internally-generated cash and cash balances on hand at December 31, 1994.
Capital expenditures of $3.0 million have been incurred through June 30, 1995.
MIDDLESEX WATER COMPANY
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities
None.
Item 3. Defaults upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
Exhibits - 27 Financial Data Schedule
Reports on Form 8-K - None.
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 thereto duly authorized.
MIDDLESEX WATER COMPANY
(Registrant)
Date: August 9, 1995 /Ernest C. Gere/
Ernest C. Gere
Senior Vice President and
Chief Financial Officer
UT
0000066004
MIDDLESEX WATER COMPANY
6-MOS
DEC-31-1995
JUN-30-1995
PER-BOOK
115,643,035
1,733,059
9,978,802
10,731,995
0
138,086,891
27,833,389
0
18,156,781
45,990,170
0
2,666,305
50,460,000
0
0
0
240,000
0
0
0
38,730,416
138,086,891
18,347,644
1,382,309
12,710,378
14,092,687
4,254,957
(9,194)
4,245,763
1,526,136
2,719,627
79,469
2,640,158
2,183,234
2,885,250
4,402,493
.65
.65
