United Water 2nd Quarter Report
Dear Fellow Shareholders:
I am pleased to
report that for the second quarter of 1997, United Water's
earnings per share increased by 45 percent over the same
period in 1996, from 22 cents per share to 32 cents per
share. This increase reflects the continued strength of our
core utility investments, which include our investment in
Northumbrian Water Group in the United Kingdom. Utility
investments contributed 40 cents per share in the second
quarter of 1997, compared with 28 cents per share in the
same period a year ago.
As expected,
United Water is beginning to receive incentive revenues from
our public-private partnerships for such initiatives as
increased collections. We anticipate that contract
incentives will contribute to our revenue flow on an ongoing
basis. This is in addition to the revenues we receive for
operating and managing water and wastewater systems through
our public-private partnerships with municipalities.
Third quarter
earnings will be negatively impacted by approximately 35
cents per share due to the one-time "windfall profits" tax
to be imposed on privatized United Kingdom utilities. This
one-time tax will not have an effect on United Water's cash
flow or our ability to pay dividends. We had factored the
possible imposition of the tax in our financial analysis at
the time of our investment in Northumbrian Water Group, and
had considered it in determining the purchase price. The tax
should not affect the long-term benefit United Water derives
from our investment in Northumbrian.
Visit our web
site
We are
pleased to announce the launching of United Water's web
site. Visit us at www.unitedwater.com for a wide range of
current information on your company. Be sure to revisit us
during the year as we update and expand our site.
Dividend
payable September 1
Maintaining our long-standing
dividend record, United Water will pay a regular quarterly
dividend of 23 cents per share on September 1, 1997, to
shareholders of record on August 15, 1997. Thank you for
your continuing support of our company.
Donald L.
Correll
Chairman and Chief Executive Officer
July 21, 1997
Statement of Consolidated Income
|
Three Months
Ended June 30,
|
|
Six Months
Ended June 30,
|
|
Twelve Months
Ended June 30,
|
In
thousands of dollars except per share data
(unaudited)
|
1997
|
1996
|
1997
|
1996
|
1997
|
1996
|

Operating revenues
|
$ 87,761
|
$82,581
|
|
$167,767
|
$152,340
|
|
$347,472
|
$321,011
|

Operating expenses
|
|
|
|
|
|
|
|
|
Operations and
maintenance
|
41,278
|
37,959
|
85,340
|
73,916
|
167,303
|
160,025
|
Depreciation and
amortization
|
8,740
|
7,810
|
17,368
|
15,352
|
32,866
|
29,710
|
General
taxes
|
12,752
|
12,397
|
25,424
|
24,565
|
50,476
|
49,162
|

Total
operating expenses
|
62,770
|
58,166
|
|
128,132
|
113,833
|
|
250,645
|
238,897
|

Operating income
|
24,991
|
24,415
|
|
39,635
|
38,507
|
|
96,827
|
82,114
|
Interest
and other expenses
|
6,875
|
10,082
|
14,397
|
10,183
|
31,015
|
30,973
|

Income
from continuing operations before income
taxes
|
18,116
|
14,333
|
|
25,238
|
28,324
|
|
65,812
|
51,141
|
Provision for income
taxes
|
5,801
|
5,506
|
7,686
|
13,118
|
20,446
|
22,087
|

Income
from continuing operations
|
12,315
|
8,827
|
|
17,552
|
15,206
|
|
45,366
|
29,054
|
Preferred & preference
stock dividends
|
1,071
|
1,140
|
2,206
|
2,340
|
4,479
|
4,739
|

Net
income applicable to common stock from continuing
operations
|
$ 11,244
|
$ 7,687
|
|
$ 15,346
|
$ 12,866
|
|
$ 40,887
|
$ 24,315
|
Loss from discontinued operations
|
|
(324)
|
|
(622)
|
(3,775)
|
(3,130)
|

Net
income applicable to common stock
|
$ 11,244
|
$ 7,363
|
|
$ 15,346
|
$ 12,244
|
|
$ 37,112
|
$ 21,185
|

Average
common shares outstanding
(in thousands)
|
35,562
|
33,550
|
|
35,203
|
33,281
|
|
34,738
|
32,835
|
Net income (loss) per common share
|
|
|
|
|
|
|
Continuing operations
|
$.32
|
$.23
|
$.44
|
$.39
|
$1.18
|
$.74
|
Discontinued operations
|
|
($.01)
|
|
($.02)
|
($.11)
|
($.09)
|

TOTAL
|
$ .32
|
$ .22
|
|
$ .44
|
$.37
|
|
$ 1.07
|
$ .65
|
Stock Price Data
1997 STOCK PRICE
|
Quarter
|
High
|
Low
|
Dividend
|
1
|
$18.500
|
$15.000
|
.23
|
2
|
19.375
|
16.375
|
.23
|
1996 STOCK PRICE
|
Quarter
|
High
|
Low
|
Dividend
|
1
|
$13.250
|
$12.000
|
.23
|
2
|
13.500
|
12.000
|
.23
|
3
|
17.500
|
12.750
|
.23
|
4
|
16.625
|
14.625
|
.23
|
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