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Aquarion Reports Record Net Income and Earnings for the Third Quarter and First Nine Months of 1999.

BRIDGEPORT, Conn.--(BUSINESS WIRE)--Oct. 21, 1999--

Largely due to the biggest land sale in the history of its BHC Company water utility subsidiary, Aquarion Company (NYSE:WTR) today announced record net income for the quarter ended September 30, 1999, of $11,688,000, or $1.02 per share, an increase of 90.8 percent from $6,125,000, or $0.55 per share, in the 1998 third quarter. For the nine-month period ended September 30, 1999, net income also reached a record high of $19,606,000, or $1.73 per share, an increase of 48.9 percent from $13,168,000, or $1.19 per share, in the same period of 1998.

Aquarion President and Chief Executive Officer Richard K. Schmidt noted that the rise in earnings is mostly due to BHC's September 2, 1999 sale of its Trout Brook Valley parcel in Fairfield County, as well as improved results from water sales. BHC sold the 640-acre parcel to the Aspetuck Land Trust, Inc. and the Town of Weston for approximately $12 million. The total after-tax gain from the sale will be approximately $6 million, to be recognized over a three-year amortization period.

For the third quarter of 1999, the net after-tax gain from the sale of BHC's surplus, off-watershed land was $4,991,000, or $0.44 per share, versus $250,000 or $0.02 per share during the comparable 1998 period. For the nine months ended September 30, 1999, land sales contributed earnings of $5,407,000, or $0.48 per share, compared with $763,000, or $0.07 per share, in the comparable 1998 period.

Consolidated revenues for the 1999 third quarter amounted to $43,899,000 versus $29,968,000 in the same period of 1998, an increase of 46.5 percent. For the first nine months of 1999, consolidated revenues were $97,185,000, versus $82,178,000 in the comparable 1998 period, an increase of 18.3 percent. The 1999 rise in revenues is due to land sales, improved water sales due to a prolonged, hot, dry summer, Timco lumber sales, the March 17, 1999 increase in BHC's Western division water rates and increased revenue from the Aquarion Management Services contract management division.

Operating expenses were $23,359,000 in the 1999 third quarter versus $16,333,000 in the comparable 1998 quarter, an increase of 43 percent. For the first nine months of 1999, operating expenses of $58,583,000 increased 15.9 percent from $50,527,000 in the comparable 1998 period. Schmidt noted that the rise in expenses was due to increased costs associated with the Trout Brook Valley land sale and higher production costs at Timco and BHC.

The Boards of Directors of Aquarion Company and Kelda Group plc, of Leeds, England, jointly announced on June 1, 1999, that they had approved an agreement whereby Kelda would acquire all of the outstanding shares of Aquarion Company for $37.05 per share. As a result, Aquarion will be merged with a subsidiary of Kelda Group. After the merger, Aquarion will maintain its corporate identity.

The merger was approved by Aquarion shareholders on September 21, 1999. The transaction is subject to approval by the Connecticut Department of Public Utility Control and the New York Public Utility Commission. The merger is expected to close in early 2000.

Aquarion Company's principal business is the protection, treatment and supply of public water. Through its BHC and Sea Cliff Water Company subsidiaries, it is one of the 10 largest investor-owned water utilities in the U.S. and serves a population of more than 500,000 in 30 Connecticut and Long Island, NY communities. Other businesses include real estate through the sale of surplus water company land, and contract management of municipal water systems. Aquarion also owns a small timber processing company. -0-

 Aquarion Company and Subsidiaries
 Condensed Consolidated Statements of Income
 Quarter Ended September 30,
 (In thousands, except share data)
 Unaudited


 1999 1998


Operating revenues $ 43,899 $ 29,968
Operating expenses 23,359 16,333
 ----------- -----------
Operating income 20,540 13,635

Interest expense 2,452 2,619

 ----------- -----------
Income before
income taxes 18,088 11,016
Income taxes 6,400 4,891
 ----------- -----------

Net income 11,688 6,125
 =========== ===========

Basic earnings per share (1) $ 1.02 $ 0.55
 =========== ===========

Weighted average
common shares outstanding 11,418,795 11,162,457
 =========== ===========


Diluted earnings per share (1) $ 0.97 $ 0.54
 =========== ===========

Weighted average
 common shares outstanding 11,991,663 11,431,407
 =========== ===========

(1) Quarterly earnings per share are based on weighted average shares
 outstanding during each quarter and the sum of the quarters may
 not equal annual earnings per share.


 Aquarion Company and Subsidiaries
 Condensed Consolidated Statements of Income
 Nine Months Ended September 30,
 (In thousands, except share data)

 Unaudited


 1999 1998


Operating revenues $ 97,185 $ 82,178
Operating expenses 58,583 50,527
 ----------- -----------
Operating income 38,602 31,651

Interest expense 7,456 7,963

 ----------- -----------
Income before
income taxes 31,146 23,688
Income taxes 11,540 10,520
 ----------- -----------

Net income 19,606 13,168
 =========== ===========

Basic earnings per share (1) $ 1.73 $ 1.19
 =========== ===========

Weighted average
common shares outstanding 11,352,124 11,108,552
 =========== ===========


Diluted earnings per share (1) $ 1.66 $ 1.16
 =========== ===========

Weighted average
common shares outstanding 11,836,923 11,368,818
 =========== ===========


(1) Quarterly earnings per share are based on weighted average shares
 outstanding during each quarter and the sum of the quarters may
 not equal annual earnings per share.

Note to Reporters and Editors:
For more information on Aquarion Company and its subsidiaries,
please contact us on the Internet at www.aquarion.com or
www.bhcco.com.


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No portion of this article can be reproduced without the express written permission from the copyright holder.
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Publication:Business Wire
Geographic Code:1USA
Date:Oct 21, 1999
Words:933
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