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: March 31, 1996 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 March 31, 1996
Common Stock, No Par Value 4,150,898
PART I. - FINANCIAL INFORMATION
MIDDLESEX WATER COMPANY
CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
Three Months
Ended March 31,
1996 1995
__________ __________
Operating Revenues $ 9,246,949 $ 8,739,873
__________ __________
Operating Expenses:
Operation and Maintenance 4,625,478 4,168,008
Depreciation 722,020 676,866
Taxes,other than Income Taxes 1,384,751 1,301,550
Federal Income Taxes 546,360 623,213
__________ __________
Total Operating Expenses 7,278,609 6,769,637
__________ __________
Utility Operating Income 1,968,340 1,970,236
Other Income(Expense)-Net 9,585 (1,263)
__________ __________
Income Before Interest Charges 1,977,925 1,968,973
Interest Charges 824,662 755,973
__________ __________
Net Income 1,153,263 1,213,000
Preferred Stock Dividend
Requirements 39,732 39,737
__________ __________
Earnings Applicable to
Common Stock $ 1,113,531 $ 1,173,263
__________ __________
Earnings per Share of
Common Stock $0.27 $0.29
__________ __________
Average Number of Common
Shares Outstanding 4,143,181 4,037,147
Cash Dividends Paid per
Common Share $0.27 1/2 $0.27
See Notes to Consolidated Financial Statements.
MIDDLESEX WATER COMPANY
CONSOLIDATED BALANCE SHEETS
ASSETS AND OTHER DEBITS
March 31, December 31,
1996 1995
___________ ___________
(Unaudited)
UTILITY PLANT:
Water Production $ 27,764,487 $ 27,598,613
Transmission and Distribution 98,863,064 97,359,802
General 18,052,947 18,169,056
Construction Work in Progress 292,496 1,207,538
___________ ___________
TOTAL 144,972,994 144,335,009
Less Accumulated Depreciation 27,010,524 26,402,377
___________ ___________
UTILITY PLANT-NET 117,962,470 117,932,632
___________ ___________
NONUTILITY ASSETS-NET 1,732,866 1,735,048
___________ ___________
CURRENT ASSETS:
Cash and Cash Equivalents 6,352,425 4,900,640
Marketable Securities 1,548 1,548
Accounts Receivable(net of allowance
for doubtful accounts) 4,072,834 4,224,653
Unbilled Revenues 2,155,843 2,170,143
Materials and Supplies(at average cost) 1,022,634 1,030,801
Prepayments 588,259 584,124
___________ ___________
TOTAL CURRENT ASSETS 14,193,543 12,911,909
___________ ___________
DEFERRED CHARGES:
Regulatory Assets 7,251,533 7,160,533
Unamortized Debt Expense 2,939,049 2,969,281
Preliminary Survey and Investigation Charges 863,221 833,869
Other 1,361,189 1,278,935
___________ ___________
TOTAL DEFERRED CHARGES 12,414,992 12,242,618
___________ ___________
TOTAL $146,303,871 $144,822,207
___________ ___________
See Notes to Consolidated Financial Statements.
MIDDLESEX WATER COMPANY
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND OTHER CREDITS
March 31, December 31,
1996 1995
___________ ___________
(Unaudited)
CAPITALIZATION(see accompanying statements) $103,530,691 $103,269,966
CURRENT LIABILITIES:
Accounts Payable 1,654,722 1,521,515
Current Portion of Long-term Debt 240,000 240,000
Customer Deposits 351,538 348,631
Taxes Accrued 5,823,697 4,321,919
Interest Accrued 519,102 1,216,851
Other 1,175,058 1,161,630
___________ ___________
TOTAL CURRENT LIABILITIES 9,764,117 8,810,546
___________ ___________
DEFERRED CREDITS:
Customer Advances for Construction 9,103,562 9,207,565
Accumulated Deferred Investment Tax Credits 2,362,493 2,380,416
Accumulated Deferred Federal Income Taxes 11,297,118 11,147,627
Other 2,048,934 1,985,654
___________ ___________
TOTAL DEFERRED CREDITS 24,812,107 24,721,262
___________ ___________
CONTRIBUTIONS IN AID OF CONSTRUCTION 8,196,956 8,020,433
___________ ___________
TOTAL $146,303,871 $144,822,207
___________ ___________
See Notes to Consolidated Financial Statements.
MIDDLESEX WATER COMPANY
CONSOLIDATED STATEMENTS OF CAPITALIZATION AND RETAINED EARNINGS
March 31, December 31,
1996 1995
___________ ___________
(Unaudited)
CAPITALIZATION:
Common Stock,No Par Value
Authorizied,6,000,000 Shares
Outstanding Shares-1996,4,150,898
1995,4,136,972 $ 29,106,624 $ 28,820,844
Retained Earnings 18,797,762 18,822,817
___________ ___________
TOTAL COMMON EQUITY 47,904,386 47,643,661
___________ ___________
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-1,017 Shares 101,700 101,700
Outstanding,$4.75 Series-10,000 Shares 1,000,000 1,000,000
___________ ___________
TOTAL CUMULATIVE PREFERRED STOCK 2,666,305 2,666,305
___________ ___________
Long-term Debt:
8.02% Amortizing Secured Note,
due December 20,2021 2,500,000 2,500,000
7.00% Promissory Notes,due April 21,2000 1,200,000 1,200,000
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
___________ ___________
SUBTOTAL LONG-TERM DEBT 53,200,000 53,200,000
Less: Current Portion of Long-term Debt (240,000) (240,000)
___________ ___________
TOTAL LONG-TERM DEBT 52,960,000 52,960,000
___________ ___________
TOTAL CAPITALIZATION $103,530,691 $103,269,966
___________ ___________
Three Months Ended Year Ended
March 31, December 31,
1996 1995
___________ ___________
(Unaudited)
RETAINED EARNINGS:
BALANCE AT BEGINNING OF PERIOD $ 18,822,817 $ 17,699,422
Net Income 1,153,263 5,703,744
___________ ___________
TOTAL 19,976,080 23,403,166
___________ ___________
Cash Dividends:
Cumulative Preferred Stock 39,732 158,497
Common Stock 1,138,586 4,421,852
___________ ___________
TOTAL DEDUCTIONS 1,178,318 4,580,349
___________ ___________
BALANCE AT END OF PERIOD $ 18,797,762 $ 18,822,817
___________ ___________
See Notes to Consolidated Financial Statements.
MIDDLESEX WATER COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended March 31,
1996 1995
___________ ___________
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 1,153,263 $ 1,213,000
Adjustments To Reconcile Net Income to
Net Cash Provided by Operating Activities:
Depreciation and Amortization 749,840 704,924
Provision for Deferred Income Taxes 149,491 12,974
Allowance for Funds Used During Construction (5,895) 0
Changes in Current Assets and Liabilities:
Accounts Receivables 151,819 993,134
Materials and Supplies 8,167 (55,569)
Accounts Payable 133,207 (125,940)
Accrued Income Taxes 1,501,778 1,623,122
Accrued Interest (697,749) (720,701)
Unbilled Revenues 14,300 34,301
Other-Net (59,605) 207,339
___________ ___________
NET CASH PROVIDED BY OPERATING ACTIVITIES 3,098,616 3,886,584
___________ ___________
CASH FLOWS FROM INVESTING ACTIVITIES:
Utility Plant Expenditures (744,739)(1,207,850)
Marketable Securities 0 (20,788)
Preliminary Survey and Investigation Charges (29,352) (2,259)
Other-Net (51,875) 83,327
___________ ___________
NET CASH USED IN INVESTING ACTIVITIES (825,966) (1,147,570)
___________ ___________
CASH FLOWS FROM FINANCING ACTIVITIES:
Deferred Debt Issuance Expenses (116) (8,000)
Temporary Cash Investments-Restricted (731) 216,384
Proceeds from Issuance of Common Stock-Net 285,780 253,970
Payment of Preferred Dividends (39,732) (39,303)
Payment of Common Dividends (1,138,586) (1,089,306)
Customer Advances and Contributions-Net 72,520 (191,679)
Redemption of Preferred Stock 0 (123,800)
___________ ___________
NET CASH USED IN FINANCING ACTIVITIES (820,865) (981,734)
___________ ___________
NET CHANGE IN CASH AND CASH EQUIVALENTS 1,451,785 1,757,280
___________ ___________
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 4,900,640 3,854,186
___________ ___________
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 6,352,425 $ 5,611,466
___________ ___________
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION:
Cash Paid During the Period for:
Interest(net of amounts capitalized) $ 1,487,412 $ 1,442,625
Income Taxes $ 25,000 $ 61,000
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
Organization - Middlesex Water Company (Middlesex or the
Company) is the parent company and sole shareholder of Tidewater
Utilities, Inc. (Tidewater), 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 (Consolidated Group) are
reported on a consolidated basis.
The consolidated notes accompanying the 1995 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 March 31, 1996 and the results of operations and its cash
flows for the periods ended March 31, 1996 and 1995.
Information included in the Balance Sheet as of December 31,
1995 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, 1995.
Note 2 - Regulatory Matters
On February 21, 1996, Pinelands Water and Wastewater Companies
filed petitions with the New Jersey Board of Public Utilities
(BPU) for increases in rates seeking overall increases in
revenues of approximately $0.6 million. The Pinelands Companies
have requested phasing in the proposed rate increase over a
three-year period to minimize the impact on customers. The
increase is required to allow proper maintenance, development
and improvement of the utility plant and to cover the additional
costs of power, chemicals, insurance, labor, benefits,
depreciation and taxes.
On April 16, 1996, the Company filed a petition with the 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 changes in the
cost of purchasing water, without the need for filing a full
base rate case. The Company is seeking recovery of
approximately $0.3 million of increased costs. A decision on
this matter is expected to be rendered during the third quarter
of 1996.
Note 3 - Capitalization
Common Stock - During the three months ended March 31, 1996,
13,926 common shares ($0.3 million) were issued under the
Company's Dividend Reinvestment and Common Stock Purchase Plan.
MIDDLESEX WATER COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FOR THE THREE
MONTHS ENDED MARCH 31, 1996, COMPARED TO MARCH 31, 1995
Revenues increased by $0.5 million or 5.8%. Of that amount,
$0.2 million is due to the inclusion of the Pinelands Companies
and USA. The remainder is due to increased consumption in New
Jersey and an increased customer base in Delaware.
Operations and Maintenance expenses increased by $0.5 million or
11%. Of this increase, $0.3 million relates to the inclusion of
the Pinelands Companies. Additionally, there were increases in
purchased water and power expenses, chemicals, employee pension
and benefits costs and labor. These increases were partially
offset by lower insurance and system maintenance costs.
Depreciation expense rose by 6.7%, half of which is attributable
to the fixed assets acquired by the Pinelands Companies in April
1995. The remainder of the increase reflects plant additions of
$4.3 million since March 31, 1995.
Taxes, other than Income Taxes increased by 6.4% due to revenue
related taxes, employment taxes and the inclusion of the
Pinelands Companies.
Federal Income Taxes decreased by 12.3% largely due to a lower
level of taxable income.
Capital Resources: The consolidated capital program for 1996 is
estimated at $12.9 million, inclusive of $5.0 million for
routine capital expenditures and $7.9 million for special plant
additions. The $5.0 million for routine plant items is
comprised of $1.8 million for mains, $1.0 million for cleaning
and lining, $0.7 million for service lines, $0.6 million for
meters, and $0.9 million for various other items. The $7.9
million for special plant additions includes $2.6 million for
water systems additions and improvements in Delaware, $3.5
million for treatment of well supplies, $1.0 million for plant
modifications and improvements, $0.2 million for the South River
Basin regional supply, $0.2 million for improvements to the
Pinelands Companies' systems, and $0.4 million for miscellaneous
items.
Liquidity: To finance the 1996 Capital Program, the Company will
utilize internally-generated cash and cash balances on hand at
December 31, 1995, the balance available under the amortizing
secured term note and possibly short-term borrowings through
available lines of credit. For the three months ended March 31,
1996, $0.7 million of capital expenditures have been incurred.
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: May 10, 1996 /A. Bruce O'Connor/
A. Bruce O'Connor
Vice President and Controller
UT
0000066004
MIDDLESEX WATER COMPANY
3-MOS
DEC-31-1996
MAR-31-1996
PER-BOOK
117,962,470
1,732,866
14,193,543
12,414,992
0
146,303,871
29,106,624
0
18,797,762
47,904,386
0
2,666,305
52,960,000
0
0
0
240,000
0
0
0
42,533,180
146,303,871
9,246,949
546,360
6,732,249
7,278,609
1,968,340
9,585
1,977,925
824,662
1,153,263
39,732
1,113,531
1,138,586
2,885,250
3,098,616
.27
.27
