================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR QUARTER ENDED MARCH 31, 2001 COMMISSION FILE NUMBER 0-6028 BIRMINGHAM UTILITIES, INC. -------------------------- (Exact name of registrant as specified in its charter) CONNECTICUT 06-0878647 ----------- ---------- (State of Incorporation) (IRS Employer I.D. No.) 230 BEAVER STREET, ANSONIA, CT 06401 ------------------------------ ----- (Address of principal executive office) (Zip Code) Registrant's Telephone Number, Including Area Code: (203) 735-1888 -------------- 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 the latest practicable date. Class Outstanding at May 1, 2001 ------------------------------------- -------------------------- COMMON STOCK, NO PAR VALUE 1,624,298 ================================================================================ PART I. FINANCIAL INFORMATION ITEM 1 FINANCIAL STATEMENTS BIRMINGHAM UTILITIES, INC. STATEMENTS OF INCOME AND RETAINED EARNINGS (Unaudited) Three Months Ended March 31, 2001 2000 ---------- ---------- Operating Revenue $1,092,352 $1,063,515 ---------- ---------- Operating Expenses: Operating Expenses 615,983 627,328 Maintenance Expenses 69,597 71,498 Depreciation 130,002 131,250 Taxes Other Than Income Taxes 86,226 84,324 Taxes on Income 16,760 14,202 ---------- ---------- Total Operating Expense 918,568 928,602 ---------- ---------- Utility Operating Income 173,784 134,913 Amortization of Prior Years' Deferred Income on Land Dispositions (Net of income taxes of $ 9,607 in 2001 and $27,123 in 2000) 16,131 46,137 Other income, net (See Note 4) 33,151 22,288 ---------- ---------- Income before interest expense 223,066 203,338 Interest and Amortization of Debt Discount 142,196 117,885 Income from dispositions of land -0- -0- ---------- ---------- Net income $80,870 $85,453 Retained earnings, beginning 5,435,602 5,511,802 Dividends 235,839 198,953 ---------- ---------- Retained earnings, ending $5,280,633 $5,398,302 ========== ========== Earnings per share - basic $.05 $.05 ========== ========== Earnings per share - diluted $.05 $.05 ========== ========== Dividends per share $.145 $.125 ========== ========== The accompanying notes are an integral part of these financial statements. -2- BIRMINGHAM UTILITIES, INC. BALANCE SHEETS (Unaudited) March 31, Dec. 31, ASSETS: 2001 2000 ------- ----------- ----------- Utility Plant $24,556,422 $24,302,917 Accumulated depreciation (7,091,482) (6,985,983) ----------- ----------- Net Utility Plant 17,464,940 17,316,934 ----------- ----------- Current Assets: Cash and cash equivalent 29,999 41,477 Accounts receivable, net of allowance for doubtful accounts 458,644 447,945 Accrued utility revenue 417,493 445,141 Materials & supplies 124,964 84,082 Prepayments 96,184 26,972 ----------- ----------- Total current assets 1,127,284 1,045,617 ----------- ----------- Deferred Charges 787,487 728,432 Unamortized debt expense 137,064 141,125 Income taxes recoverable 359,042 359,042 Other assets 361,856 366,924 ----------- ----------- 1,645,449 1,595,523 ----------- ----------- $20,237,673 $19,958,074 =========== =========== STOCKHOLDERS' EQUITY AND LIABILITIES ------------------------------------ Stockholders' Equity: Common Stock, no par value, authorized 2,000,000 shares; issued and outstanding 3/31/01- 1,624,298 shares; 12/31/00- 1,623,071 $2,858,774 $2,841,759 Retained earnings 5,280,633 5,435,602 ----------- ----------- 8,139,407 8,277,361 ----------- ----------- Long-term debt 4,230,000 4,230,000 ----------- ----------- Current Liabilities: Current portion of long term debt 94,000 94,000 Note Payable 2,781,714 2,236,714 Accounts payable and accrued liabilities 520,771 628,411 ----------- ----------- Total current liabilities 3,396,485 2,959,125 ----------- ----------- Customers' advances for construction 1,192,057 1,192,057 Contributions in aid of construction 1,195,934 1,195,934 Regulatory liability-income taxes refundable 157,210 157,210 Deferred income taxes 1,735,178 1,729,248 Deferred income on disposition of land 191,402 217,139 ----------- ----------- 4,471,781 4,491,588 ----------- ----------- $20,237,673 $19,958,074 =========== =========== The accompanying notes are an integral part of these financial statements. -3- BIRMINGHAM UTILITIES, INC. STATEMENTS OF CASH FLOWS (UNAUDITED)

Three Months Ended ~~Nine~~March ~~Months Ended September 30~~31, ~~September~~2001 ~~30,~~ 2000 ~~1999 2000 1999~~ ---------- -~~---------~~ ---------- -~~---------~~ Cash Flows From Operating ~~Revenue~~Activities ~~$1,154,036~~Net ~~$1,294,363~~Income $380,~~408,939~~870 $385,~~535,441~~453 ---------- -~~---------~~ ---------- -~~---------~~ ~~Operating~~Adjustments ~~Expenses~~to reconcile net income to net cash used in operating activities: ~~Operating~~Depreciation ~~Expenses~~and ~~598,689~~amortization ~~638~~143,~~733~~061 1145,~~840,097~~126 ~~1,823,542~~Amortization ~~Maintenance~~of ~~Expense~~deferred 46income,~~208~~ ~~36,733~~net ~~161~~of tax (16,~~216~~131) ~~134~~(46,~~899~~137) ~~Depreciation~~Increases ~~131,250~~and ~~134,001~~decreases ~~393,750~~in ~~402,003~~assets ~~Taxes~~and ~~Other~~liabilities: ~~Than~~Accounts ~~Income~~receivable ~~Taxes~~and 94accrued utility revenue 16,~~139~~950 8237,~~001~~610 ~~258~~Materials and supplies (40,~~887~~882) ~~242~~(18,~~837~~589) ~~Taxes~~Prepayments on(69,461) ~~Income~~(22,623) 49Accounts payable and accrued expenses (128,~~066~~077) ~~121~~(212,~~730~~946) ~~118~~Deferred income taxes (3,~~229~~675) ~~224~~(3,~~457~~675) ----------- ----------- Total Adjustments (98,215) (121,234) ----------- ----------- ~~Total~~Net ~~Operating~~cash ~~Expense~~flows ~~919,352~~used ~~1,012,888~~in 2operating activities (17,~~772,279~~345) 2(35,~~827,738~~781) ---------- -~~---------~~ ---------- -~~---------~~ ~~Utility~~Cash ~~Operating~~flows ~~Income~~from ~~234,684~~investing ~~281,475~~activities: ~~636,660 707,703 Amortization of Prior Years' Deferred Income on Land Dispositions (~~Net ofconstruction ~~income~~expenditures ~~taxes~~(292,109) 46(81,~~137~~023) ~~85,740~~Other ~~138,411~~assets ~~257,220~~and ~~Other~~deferred ~~Income~~charges, net 25(29,~~005~~218) 112,~~221~~760 ~~56,831 42,270~~ ----------- ----------- Net Cash flows used in investing activities (321,327) (68,263) ----------- ----------- ~~Income~~Cash ~~before~~flows ~~interest~~from ~~expense~~financing ~~305,826~~activities: ~~368,436~~Increase ~~831,902~~in ~~1,007,193~~current ~~Interest~~note ~~and~~payable ~~Amortization of Debt Discount 140~~545,~~207~~000 ~~112~~295,~~045~~000 ~~382,658~~Dividends ~~337,648~~paid ~~Income~~- ~~from dispositions of land (~~net ~~of income taxes~~(218,055) ~~-- 7~~(184,~~057~~202) -- ~~9,152~~ ---------- ----------- Net Cash flows provided by financing activities: 326,945 110,798 ----------- ----------- Net ~~income~~increase $(decrease) ~~165,619~~in $cash ~~263,448~~and $cash ~~449,244~~equivalents ~~$ 678~~(11,~~697~~727) ~~Retained earnings~~6,754 ~~beginning~~Cash ~~$5,396,354~~and ~~$5,323,600~~cash $5equivalents,~~511,802~~ ~~$5,219,875~~beginning ~~Dividends 200~~41,~~089~~726 ~~158~~44,~~195~~471 ~~599,162 469,719~~ ---------- -~~---------~~ ---------- -~~---------~~ ~~Retained~~Cash ~~earnings,~~and ~~ending~~cash $5equivalents,~~361,884~~ ~~$5,428,853~~ending $529,~~361,884~~999 $551,~~428,853~~225 ========== =~~=========~~ ========== =~~=========~~ ~~Earnings~~Supplemental ~~per~~disclosure ~~share~~of -cash ~~basic~~flow $information: ~~.10~~Cash $paid ~~.17~~for Interest $248,680 ~~.28~~$220,295 Income Taxes -- $94,000 ~~.43~~Supplemental ~~==========~~disclosure ~~==========~~of ~~==========~~non-cash ~~==========~~flow ~~Earnings~~information: ~~per~~The ~~share~~Company -receives ~~diluted~~contributions $of ~~.10~~plant $from ~~.16~~builders $and developers.27 $These ~~.41~~contributions ~~==========~~of ~~==========~~plant ~~==========~~are ~~==========~~reported ~~Dividends~~in ~~per~~utility ~~share~~plant $and in customers' advances for construction.~~125~~ $The contributions are deducted from construction expenditures by the Company.10 Gross Plant, additions $292,109 ~~.375~~$96,983 Customers' advances for construction -- 15,960 ----------- ----------- Capital expenditures, net $292,109 ~~.30~~$81,023 ========== =~~=========~~ ========== =~~=========~~

The accompanying notes are an integral part of these financial statements. -4- BIRMINGHAM UTILITIES, INC. NOTES TO FINANCIAL STATEMENTS (UNAUDITED) Birmingham Utilities, Inc. is a specially chartered public service corporation in the business of collecting and distributing water for domestic, commercial and industrial uses and fire protection. The Company provides water to Ansonia and Derby, Connecticut and in small parts of the contiguous Town of Seymour, with an aggregate population of approximately 31,000 people. The Company is subject to the jurisdiction of the Connecticut Department of Public Utility Control ("DPUC") as to accounting, financing, ratemaking, disposal of property, the issuance of long-term securities and other matters affecting its operations. The Connecticut Department of Public Health (The "Health Department" or "DPH") has regulatory powers over the Company under state law with respect to water quality, sources of supply, and the use of watershed land. The Connecticut Department of Environmental Protection "DEP") is authorized to regulate the Company's operations with regard to water pollution abatement, diversion of water from streams and rivers, safety of dams and the location, construction and alteration of certain water facilities. The Company's activities are also subject to regulation with regard to environmental and other operational matters by federal, state and local authorities, including, without limitation, zoning authorities. The Company is subject to regulation of its water quality under the Federal Safe Drinking Water Act ("SDWA"). The United States Environmental Protection Agency has granted to the Health Department the primary enforcement responsibility in Connecticut under the SDWA. The Health Department has established regulations containing maximum limits on contaminants, which have or may have an adverse effect on health. NOTE 1 - QUARTERLY FINANCIAL DATA ---------------------------------- The accompanying financial statements of Birmingham Utilities, Inc. (the "Company") have been prepared in accordance with generally accepted accounting principles, without audit, except for the Balance Sheet for the period ending December 31, 2000, which has been audited. The interim financial information conforms to 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, complies with the Uniform System of Accounts and ratemaking practices prescribed by the authorities. Certain information and footnote disclosures required by generally accepted accounting principles have been omitted, pursuant to such rules and regulations; although the Company believes that the disclosures are adequate to make the information presented not misleading. For further information, refer to the financial statements and accompanying footnotes included in the Company's Annual Report on Form 10-K for the year ended December 31, 2000. The Company's business of selling water is to a certain extent seasonal because water consumption normally increases during the warmer summer months. Other factors affecting the comparability of various accounting periods include the timing of rate increases and the timing and magnitude of property sales. Accordingly, annualization of the results of operations for the three months ended March 31, 2001 and March 31, 2000 would not necessarily accurately forecast the annual results of each year. -5- NOTE 2 - CALCULATION OF WEIGHTED AVERAGE SHARES OUTSTANDING-DILUTED The following table summarizes the number of common shares used in the calculation of earnings per share. Three Months Ended 3/31/01 3/31/00 --------- --------- Weighted average shares outstanding for earnings per share, basic 1,623,071 1,586,067 Incremental shares from assumed conversion of stock options 30,755 64,555 --------- --------- Weighted average shares outstanding for earnings per share, diluted 1,653,826 1,650,622 ========= ========= NOTE 3 - LAND SALES ------------------- On March 21, 2000, the Company executed a Purchase and Sale Agreement with Toll Brothers, Inc. ("Toll Bros.") for the sale by the Company and purchase by Toll Bros. of 322 acres of unimproved property in the Town of Seymour, Connecticut. The property consists of two parcels of 245 acres and 77 acres. The purchase price of the parcels is $3,294,000 and $1,026,000, respectively. An application for approval was filed with the DPUC on July 14, 2000 and final approval for the sale was given on November 8, 2000 for a sale price of no less than $4,270,000 for both parcels. On February 13, 2001, the Connecticut Department of Environmental Protection ("DEP") notified the Company and the DPUC of the DEP's intent to acquire the 322 acres in accordance with Section 16-50d of the Connecticut General Statutes. The purchase price of the property will be $4,338,000, matching the purchase price of Toll Bros., which exceeded the minimum price set by the DPUC. The Company did ask the DPUC to reopen Docket 00-07-15, to review the DEP's request under Section 16-50d to determine the legal rights, duties and privileges of the DEP and Toll Bros. The DPUC did reopen Docket 00-07-15 and hearings on this matter will take place in May 2001. Provided the DPUC approves this transaction, a closing before the end of August 2001 is expected. On September 13, 1999, the Company executed two purchase and sale agreements with The Trust for Public Land, Inc., ("TPL") for the sale by the Company and purchase by TPL of 570 and 42.5 acres of unimproved property in the City of Ansonia and the Towns of Seymour and Woodbridge, CT, subject to TPL's arranging for the availability of public financing for the purchases. The purchase price of the parcels is $6,050,000 and $200,000, respectively. The DPUC approved these transactions on March 1, 2000. On October 4, 2000, the Company sold the 42.5-acre parcel to the City of Ansonia for $200,000. The total gain on the sale amounted to $145,216, of which $12,318 was deferred and will be recognized over a 3-year period as approved by the DPUC. On February 16, 2001, the DEP notified the Company that it would purchase the 570-acre parcel for $5,250,000. As part of the transaction, the City of Ansonia will contribute an -6- additional $250,000 toward the purchase price. The Company will ask the DPUC to reopen Docket 99-11-05 to approve the new purchase price of $5,500,000 and a change in the order of transfer, eliminating TPL as an intermediate owner between the Company and the DEP. The Company does not believe the reduction in the sales price will materially affect the transaction, principally due to the availability of additional tax credits and a reduction in the service fee associated with the sale. The closing of this transaction is expected to take place before August 31, 2001. NOTE 4 - OTHER -------------- On April 18, 2001, the company sold a small parcel of property, approximately one quarter of an acre, in Ansonia CT to Giaimo Associates for $30,000. The net gain on this transaction will approximate $20,000. The DPUC did not approve this transaction, as the sales price was less than the required $50,000. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Management's Discussion and Analysis of Financial Condition and Results of Operations contained in the Company's Annual Report on Form 10K for the year ended December 31, 2000, should be read in conjunction with the discussion below. CAPITAL RESOURCES AND LIQUIDITY Completion of the Company's Long Term Capital Improvement Program is dependent upon the Company's ability to raise capital from external sources, including, for the purpose of this analysis, proceeds from the sale of the Company's holdings of excess land. For the three months ended March 31, 2001 and 2000, the Company's additions to utility plant, net of customer advances, cost $292,109 and $81,023, respectively. (see Statement of Cash Flows). These additions were financed primarily from external sources, namely proceeds from land sales. The Company has outstanding $4,324,000 principal amount of Mortgage Bonds, due September 1, 2011, issued under its Mortgage Indenture. The Mortgage Indenture limits the issuing of additional First Mortgage Bonds and the payment of dividends. It does not, however, restrict the issuance of either long term or short-term debt, which is either unsecured or secured with liens subordinate to the lien of the Mortgage Indenture. The Company also maintains a $5,000,000 two-year, unsecured revolving line of credit. During the revolving period, the Company can choose between variable rate options of 30, 60, 90 or 180-day LIBOR plus 100 basis points or the Prime plus 0%. The Company is required to pay interest only during the revolving period. The loan is payable in full at maturity. The DPUC approved this transaction on July 26, 2000. This $5,000,000 two-year, unsecured revolving line replaced the Company's $2,100,000 secured line of credit, which expired on July 31, 2000. Borrowings of $2,871,714 were outstanding on the revolving line of credit on March 31, 2001. -7- The Company's 2001 Capital Budget of $1,820,000 is two-tiered. The first tier, which consists of typical capital improvements made each year for services, hydrants and meters, is budgeted for $600,000 in 2001, and is expected to be financed primarily with internally generated funds. The second tier of the 2001 Capital Budget consists of replacements and betterments, which are part of the Company's Long Term Capital Improvement Program, and includes $1,220,000 of budgeted plant additions. Plant additions from this part of the 2001 budget will require use of the Company's line of credit and the proceeds from expected land sales. Second tier plant additions can be, and portions of it are expected to be, deferred to future years if funds are not available for their construction in 2001. As of March 31, 2001, the Company has approximately 960 acres of excess land available for sale, all of which is currently under contract, consisting of land currently classified as Class III, non-watershed land under the statutory classification system for water company lands. The Company believes that by selling these excess lands it can generate sufficient equity capital to support its 5-year capital budget, currently estimated at $7,200,000. Such land dispositions are subject to approval by the DPUC. Proceeds from the sale of land are recorded as revenue at the time of closing and portions of the gains are deferred and amortized over various times as stipulated by the DPUC. All sales of excess land are expected to close by August 31, 2001. (See Note 3 to Financial Statements). RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2001 AND 2000. ------------------------------------------------------------------------- Net income for the three months ended March 31, 2001 was $80,870 compared with $85,453 for the same 2000 period. Increased interest expense and a reduction in the amortization of prior year land sales offset increased operating revenues and lower operating and maintenance expenses. OPERATING REVENUES ------------------ Operating revenues for the first three months of 2001 of $1,092,352 are $28,837 higher than operating revenues of $1,063,515, for the first three months of 2000. Increased water consumption in 2001 from all classes of customers accounts for this increase. OPERATING AND MAINTENANCE EXPENSES ---------------------------------- Operating and Maintenance Expenses for the first three months of 2001 are $13,246 below the comparable 2000 period. Lower purchased water costs and a reduction in pumping maintenance costs principally account for this variance. DEPRECIATION EXPENSE -------------------- Depreciation expense for the first three months of 2001 is $1,248 lower than comparable 2000 period due to a slight overaccrual in 2000. -8- TAXES OTHER THAN INCOME TAXES ----------------------------- Taxes Other Than Income Taxes for the three-month period ended March 31, 2001 is $1,902 higher than the comparable 2000 period. Increased payroll taxes in 2001 as a result of higher wages and an increase in municipal property taxes, as a result of new property additions, accounts for this increase. OTHER INCOME ------------ Other Income for the first three months of 2001 is $10,863 greater than the comparable 2000 period. Increased AFUDC and higher income from the Company's managed system account for this increase. LAND DISPOSITIONS When the Company disposes of land, any gain recognized, net of tax, is shared between ratepayers and stockholders based upon a formula approved by the DPUC. The impact of land dispositions is recognized in two places on the statement of income. The statement of income will reflect income from the disposition of Land (net of taxes) if land sales do occur. Since there were no land sales in the first quarters of 2001 and 2000, the statement of income reflects zero in both years. If land sales occur, the stockholders' immediate share of income will be booked in the year of the sale based on a formula approved by the DPUC. Land disposition income is also recognized in the financial statements as a component of operating income on the line entitled "Amortization of Deferred Income on Dispositions of Land". These amounts represent the recognition of income deferred on land dispositions which occurred in prior years. The amortization of deferred income on land dispositions net of tax, was $16,131 and $46,137 for the three months ended March 31, 2001 and 2000, respectively. Recognition of deferred income will continue over time periods ranging from three to fifteen years, depending upon the amortization period ordered by the DPUC for each particular disposition. -9- PART II. OTHER INFORMATION -------------------------- ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K ----------------------------------------- (a) Exhibits - None (b) Report on Form 8-K. None filed during the first quarter of 2001. -10- SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. BIRMINGHAM UTILITIES, INC. -------------------------- Registrant Date: May 3, 2001 ----------- /s/ John S. Tomac ------------------------------------- John S. Tomac, President (Duly Authorized signatory and Principal Financial Officer) -11-

(Unaudited) September 30, Dec. 31, 2000 1999 ------------ ------------ ASSETS: Utility Plant $ 23,857,623 $ 22,265,530 Accumulated depreciation (6,917,877) (6,543,747) ------------ ------------ Net Utility Plant 16,939,746 15,721,783 ------------ ------------ Current Assets: Cash and cash equivalent 279,233 44,471 Accounts receivable, net of allowance for doubtful accounts 471,070 415,330 Accrued utility revenue 480,487 429,127 Materials & supplies 105,603 87,042 Prepayments 58,292 55,154 ------------ ------------ Total current assets 1,394,685 1,031,124 ------------ ------------ Deferred Charges 739,021 595,263 Unamortized debt expense 142,049 154,234 Income taxes recoverable 360,812 360,812 Other assets 402,882 418,055 ------------ ------------ 1,644,764 1,528,364 ------------ ------------ $ 19,979,195 18,281,271 ============ ============ STOCKHOLDERS' EQUITY AND LIABILITIES Stockholders' Equity: Common Stock, no par value, authorized 2,000,000 shares; issued and outstanding 9/30/00 1,602,894 shares; 12/31/99- 1,583,025 $ 2,729,998 $ 2,634,762 Retained earnings 5,361,875 5,511,802 ------------ ------------ 8,091,873 8,146,564 ------------ ------------ Long-term debt 4,230,000 4,324,000 ------------ ------------ Current Liabilities: Note Payable 2,256,715 360,000 Current portion of note payable and long term debt 94,000 94,000 Accounts payable and accrued liabilities 765,804 691,142 ------------ ------------ Total current liabilities 3,116,519 1,145,142 ------------ ------------ Customers' advances for construction 1,199,887 1,182,216 Contributions in aid of construction 1,195,935 1,188,934 Regulatory liability-income taxes refundable 164,772 164,772 Deferred income taxes 1,701,322 1,630,976 Deferred income on disposition of land 278,887 498,667 ------------ ------------ 4,540,803 4,665,565 ------------ ------------ $ 19,979,195 $ 18,281,271 ============ ============

Nine Months Ended September 30, Cash Flows From Operating Activities 2000 1999 ----------- ----------- Net Income $ 449,244 $ 678,697 ----------- ----------- Adjustments to reconcile net income to net cash provided by operating activities: -- (9,152) Income from land dispositions 435,386 443,640 Depreciation and amortization (138,411) (257,220) Amortization of deferred income, net of tax Increases and decreases in assets and liabilities: Accounts receivable and accrued utility revenue (107,100) (68,809) Materials and supplies (18,561) (76,798) Prepayments (3,138) (2,325) Accounts payable and accrued expenses 74,662 (1,764,264) Deferred income taxes (11,025) (11,025) ----------- ----------- Total Adjustments 231,813 (1,745,953) ----------- ----------- Net cash flows provided by (used in) operating activities 681,057 (1,067,256) ----------- ----------- Cash flows from investing activities: Proceeds from land dispositions -- 18,000 Net construction expenditures (1,603,136) (913,341) Other assets and deferred charges, net (91,861) (61,770) ----------- ----------- Net Cash flows from used in investing activities (1,694,997) (957,111) ----------- ----------- Cash flows from financing activities: Increase in note payable 1,896,715 (Decrease) in long-term debt (94,000) (94,000) Dividends paid - net (554,013) (414,535) ----------- ----------- Net Cash flows provided by (used in) financing activities: 1,248,702 (508,535) ----------- ----------- Net (decrease) increase in cash & cash equivalents 234,762 (2,532,902) Cash & cash equivalents, beginning 44,471 2,696,706 ----------- ----------- Cash, ending $ 279,233 $ 163,804 =========== =========== Supplemental disclosure of cash flow information: Cash paid for Interest $ 477,702 $ 434,957 Income Taxes 200,695 1,822,000 Supplemental disclosure of non-cash flow information: The Company receives contributions of plant from builders and developers. These contributions of plant are reported in utility plant and in customers' advances for construction. The contributions are deducted from construction expenditures by the Company Gross Plant, additions $ 1,630,306 $ 983,532 Customers' advances for construction (27,170) (70,191) ----------- ----------- Capital expenditures, net $ 1,603,136 $ 913,341 =========== ===========

Three Months Ended Nine Months Ended 9/30/00 9/30/99 9/30/00 9/30/99 --------- --------- --------- --------- Weighted average shares outstanding for earnings per share, basic 1,600,073 1,577,245 1,594,341 1,562,740 Incremental shares from assumed conversion of stock options 43,833 78,001 51,781 73,801 --------- --------- --------- --------- Weighted average shares outstanding for earnings per share, diluted 1,643,906 1,655,246 1,646,122 1,636,541 ========= ========= ========= =========

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