<HTML> <HEAD> <META NAME="Generator" CONTENT="Corel WordPerfect 8"> <TITLE></TITLE> </HEAD> <BODY TEXT="#000000" LINK="#0000ff" VLINK="#551a8b" ALINK="#ff0000" BGCOLOR="#c0c0c0"> <TABLE WIDTH="100%"> <TR VALIGN="TOP"><TD> <P ALIGN="CENTER"><FONT SIZE="-1"></FONT><FONT SIZE="-1"><STRONG>UNITED STATES</STRONG></FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"><STRONG> <P ALIGN="CENTER">SECURITIES AND EXCHANGE COMMISSION</STRONG></FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"><STRONG> <P ALIGN="CENTER">Washington, D.C. 20549</STRONG></FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"><STRONG></TD></TR> <TR VALIGN="TOP"><TD> <P ALIGN="CENTER"></STRONG></FONT><FONT SIZE="-1"><STRONG>FORM 10-Q</STRONG></FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD></TR> <TR VALIGN="TOP"><TD></TD></TR> <TR VALIGN="TOP"><TD></TD></TR> <TR VALIGN="TOP"><TD></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1">(Mark One)</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">EXCHANGE ACT OF 1934</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD></TR> <TR VALIGN="TOP"><TD></FONT><FONT SIZE="-1">For the quarterly period ended March 31, 2000</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD></TR> <TR VALIGN="TOP"><TD> <P ALIGN="CENTER"></FONT><FONT SIZE="-1">or</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD></TR> <TR VALIGN="TOP"><TD></FONT><FONT SIZE="-1"><U> </U> TRANSACTION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"> EXCHANGE ACT OF 1934</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD></TR> <TR VALIGN="TOP"><TD></FONT><FONT SIZE="-1"> For the transaction period from to</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">Commission file number 0-18516</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD></TR> <TR VALIGN="TOP"><TD></TD></TR> <TR VALIGN="TOP"><TD></TD></TR> <TR VALIGN="TOP"><TD> <P ALIGN="CENTER"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"><STRONG>ARTESIAN RESOURCES CORPORATION</STRONG></FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"> <P ALIGN="CENTER">(exact name of registrant as specified in its charter)</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD></TR> <TR VALIGN="TOP"><TD></TD></TR> <TR VALIGN="TOP"><TD></TD></TR> <TR VALIGN="TOP"><TD></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1">State or other jurisdiction of incorporation or organization: Delaware</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">I.R.S. Employer Identification Number: 51-0002090</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">Address of principal executive officers: 664 Churchmans Road, Newark, Delaware</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">Zip Code: 19702</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD></TR> <TR VALIGN="TOP"><TD></FONT><FONT SIZE="-1">Registrant's telephone number, including area code: (302) 453-6900</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD></TR> <TR VALIGN="TOP"><TD></TD></TR> <TR VALIGN="TOP"><TD></TD></TR> <TR VALIGN="TOP"><TD></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"> Indicate by check mark whether the registrant (1) has filed all reports</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">required to be filed by Section 13 or 15(d) of the Securities Exchange Act of</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">1934 during the preceding 12 months (or for such shorter period that the</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">registrant was required to file such reports), and (2) has been subject to</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">such filing requirements for the past 90 days. X Yes No</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD></TR> <TR VALIGN="TOP"><TD></TD></TR> <TR VALIGN="TOP"><TD></TD></TR> <TR VALIGN="TOP"><TD></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"> As of April 14, 2000, 1,611,762 shares and 391,824 shares of Class A</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">Non-Voting Common Stock and Class B Common Stock, respectively, were</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">outstanding.</FONT></TD></TR></TABLE> <P><FONT SIZE="-1"> </FONT></P> <TABLE WIDTH="100%"> <TR VALIGN="TOP"><TD COLSPAN="3"> <P ALIGN="CENTER"><FONT SIZE="-1"><STRONG>ARTESIAN RESOURCES CORPORATION</STRONG></FONT></TD></TR> <TR VALIGN="TOP"><TD COLSPAN="3"><FONT SIZE="-1"> <P ALIGN="CENTER">INDEX TO FORM 10-Q</FONT></TD></TR> <TR VALIGN="TOP"><TD COLSPAN="2"><FONT SIZE="-1"></TD> <TD></TD></TR> <TR VALIGN="TOP"><TD COLSPAN="2"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"><STRONG>Part I - Financial Information:</STRONG></FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="CENTER">Page(s)</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD></TD> <TD></TD></TR> <TR VALIGN="TOP"><TD> <P ALIGN="RIGHT"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"><STRONG>Item 1 -</STRONG></FONT></TD> <TD><FONT SIZE="-1"><STRONG>Financial Statements</STRONG></FONT></TD> <TD><FONT SIZE="-1"></TD></TR> <TR VALIGN="TOP"><TD></TD> <TD></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1">Consolidated Balance Sheet -</FONT></TD> <TD><FONT SIZE="-1"></TD></TR> <TR VALIGN="TOP"><TD></TD> <TD></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1">March 31, 2000 and December 31, 1999</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="CENTER">3-4</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD></TD> <TD></TD></TR> <TR VALIGN="TOP"><TD></TD> <TD></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1">Consolidated Statement of Income for</FONT></TD> <TD><FONT SIZE="-1"></TD></TR> <TR VALIGN="TOP"><TD></TD> <TD></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1">the quarters ended March 31, 2000 and 1999</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="CENTER">4</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD></TD> <TD></TD></TR> <TR VALIGN="TOP"><TD></TD> <TD></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1">Consolidated Statement of Retained Earnings</FONT></TD> <TD><FONT SIZE="-1"></TD></TR> <TR VALIGN="TOP"><TD></TD> <TD></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1">for the three months ended March 31, 2000 and 1999</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="CENTER">5</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD></TD> <TD></TD></TR> <TR VALIGN="TOP"><TD></TD> <TD></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1">Consolidated Statement of Cash Flows for the</FONT></TD> <TD><FONT SIZE="-1"></TD></TR> <TR VALIGN="TOP"><TD></TD> <TD></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1">three months ended March 31, 2000 and 1999</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="CENTER">5-6</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD></TD> <TD></TD></TR> <TR VALIGN="TOP"><TD></TD> <TD></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1">Notes to the Consolidated Financial Statements</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="CENTER">7-9</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD></TD> <TD></TD></TR> <TR VALIGN="TOP"><TD> <P ALIGN="RIGHT"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"><STRONG>Item 2 -</STRONG></FONT></TD> <TD><FONT SIZE="-1"><STRONG>Management's Discussion and Analysis of</STRONG></FONT></TD> <TD><FONT SIZE="-1"></TD></TR> <TR VALIGN="TOP"><TD></TD> <TD></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"><STRONG>Financial Condition</STRONG> <STRONG>and</STRONG> <STRONG>Results of Operations</STRONG></FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="CENTER">9-11</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD></TD> <TD></TD></TR> <TR VALIGN="TOP"><TD> <P ALIGN="RIGHT"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"><STRONG>Item 3 -</STRONG></FONT></TD> <TD><FONT SIZE="-1"><STRONG>Quantitative and Qualitative Disclosures about</STRONG></FONT></TD> <TD><FONT SIZE="-1"></TD></TR> <TR VALIGN="TOP"><TD></TD> <TD></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"><STRONG>Market Risk</STRONG></FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="CENTER">11</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD></TD> <TD></TD></TR> <TR VALIGN="TOP"><TD COLSPAN="2"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"><STRONG>Part II - Other Information:</STRONG></FONT></TD> <TD><FONT SIZE="-1"></TD></TR> <TR VALIGN="TOP"><TD></TD> <TD></TD> <TD></TD></TR> <TR VALIGN="TOP"><TD> <P ALIGN="RIGHT"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"><STRONG>Item 1 -</STRONG></FONT></TD> <TD><FONT SIZE="-1"><STRONG>Legal Proceedings</STRONG></FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="CENTER">11-12</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD></TD> <TD></TD></TR> <TR VALIGN="TOP"><TD> <P ALIGN="RIGHT"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"><STRONG>Item 2 -</STRONG></FONT></TD> <TD><FONT SIZE="-1"><STRONG>Changes in Securities</STRONG></FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="CENTER">12</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD></TD> <TD></TD></TR> <TR VALIGN="TOP"><TD> <P ALIGN="RIGHT"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"><STRONG>Item 3 -</STRONG></FONT></TD> <TD><FONT SIZE="-1"><STRONG>Defaults Upon Senior Securities</STRONG></FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="CENTER">12</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD></TD> <TD></TD></TR> <TR VALIGN="TOP"><TD> <P ALIGN="RIGHT"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"><STRONG>Item 4 -</STRONG></FONT></TD> <TD><FONT SIZE="-1"><STRONG>Submission of Matters to a Vote of</STRONG> <STRONG>Security Holders</STRONG></FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="CENTER">12</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD></TD> <TD></TD></TR> <TR VALIGN="TOP"><TD> <P ALIGN="RIGHT"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"><STRONG>Item 5 -</STRONG></FONT></TD> <TD><FONT SIZE="-1"><STRONG>Other Information</STRONG></FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="CENTER">12</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD></TD> <TD></TD></TR> <TR VALIGN="TOP"><TD> <P ALIGN="RIGHT"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"><STRONG>Item 6 -</STRONG></FONT></TD> <TD><FONT SIZE="-1"><STRONG>Exhibits and Reports on Form 8-K</STRONG></FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="CENTER">12-14</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD></TD> <TD></TD></TR> <TR VALIGN="TOP"><TD COLSPAN="2"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"><STRONG>Signatures</STRONG> </FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="CENTER">15</FONT></TD></TR></TABLE> <P><FONT SIZE="-1"> </FONT></P> <TABLE WIDTH="100%"> <TR VALIGN="TOP"><TD COLSPAN="3"><FONT SIZE="-1">Part I - Financial Information</FONT></TD></TR> <TR VALIGN="TOP"><TD COLSPAN="3"><FONT SIZE="-1">Item I - Financial Statements</FONT></TD></TR> <TR VALIGN="TOP"><TD COLSPAN="3"><FONT SIZE="-1"></TD></TR> <TR VALIGN="TOP"><TD COLSPAN="3"> <P ALIGN="CENTER"></FONT><FONT SIZE="-1"><STRONG>ARTESIAN RESOURCES CORPORATION</STRONG></FONT></TD></TR> <TR VALIGN="TOP"><TD COLSPAN="3"><FONT SIZE="-1"> <P ALIGN="CENTER"><STRONG>CONSOLIDATED BALANCE SHEET</STRONG></FONT></TD></TR> <TR VALIGN="TOP"><TD COLSPAN="3"><FONT SIZE="-1"> <P ALIGN="CENTER">(In thousands)</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD> <P ALIGN="CENTER"></FONT><FONT SIZE="-1">Unaudited</FONT></TD> <TD><FONT SIZE="-1"></TD></TR> <TR VALIGN="TOP"><TD></TD> <TD> <P ALIGN="CENTER"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1">March 31, 2000</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="CENTER">December 31, 1999</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD> <P ALIGN="CENTER"></FONT><FONT SIZE="-1">-----------------</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="CENTER">-----------------</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">ASSETS</FONT></TD> <TD><FONT SIZE="-1"></TD> <TD></TD></TR> <TR VALIGN="TOP"><TD></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1">Utility plant, at original cost</FONT></TD> <TD><FONT SIZE="-1"></TD> <TD></TD></TR> <TR VALIGN="TOP"><TD></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"> less accumulated depreciation</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">$124,940</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">$122,481</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">Current assets</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">-----------</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">-----------</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"> Cash and cash equivalents</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">614</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">122</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"> Accounts receivable, net</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">2,253</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">2,335</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"> Unbilled operating revenues</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">1,846</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">2,007</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"> Materials and supplies-at cost</FONT></TD> <TD><FONT SIZE="-1"></TD> <TD></TD></TR> <TR VALIGN="TOP"><TD></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"> on FIFO basis</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">658</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">710</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"> Deferred income taxes</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">307</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">---</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"> Prepaid property taxes</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">264</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">548</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"> Prepaid expenses and other</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">443</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">306</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD> <P ALIGN="RIGHT"></FONT><FONT SIZE="-1">-----------</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">-----------</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD> <P ALIGN="RIGHT"></FONT><FONT SIZE="-1">6,385</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">6,028</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">Other assets</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">-----------</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">-----------</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"> Non-utility property (less accumulated</FONT></TD> <TD><FONT SIZE="-1"></TD> <TD></TD></TR> <TR VALIGN="TOP"><TD></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"> depreciation 2000-$161;1999-$159)</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">271</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">273</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"> Other deferred assets</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">1,035</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">1,092</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD> <P ALIGN="RIGHT"></FONT><FONT SIZE="-1">-----------</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">-----------</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD> <P ALIGN="RIGHT"></FONT><FONT SIZE="-1">1,306</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">1,365</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">Regulatory assets, net</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">2,646</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">2,608</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD> <P ALIGN="RIGHT"></FONT><FONT SIZE="-1">-----------</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">-----------</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD> <P ALIGN="RIGHT"></FONT><FONT SIZE="-1">$135,277</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">$132,482</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD> <P ALIGN="RIGHT"></FONT><FONT SIZE="-1">=======</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">=======</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">LIABILITIES AND STOCKHOLDERS' EQUITY</FONT></TD> <TD><FONT SIZE="-1"></TD> <TD></TD></TR> <TR VALIGN="TOP"><TD></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1">Stockholders' equity</FONT></TD> <TD><FONT SIZE="-1"></TD> <TD></TD></TR> <TR VALIGN="TOP"><TD></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"> Common stock</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">$ 2,003</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">$ 1,998</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"> Additional paid-in capital</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">24,275</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">24,153</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"> Retained earnings</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">5,599</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">5,933</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"> Preferred stock</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">272</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">272</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD> <P ALIGN="RIGHT"></FONT><FONT SIZE="-1">-----------</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">-----------</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"> Total stockholders' equity</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">32,149</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">32,356</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">Preferred stock-mandatorily redeemable,</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">-----------</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">-----------</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"> net of current portion</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">300</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">400</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">Long-term debt, net of current portion</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">34,251</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">34,529</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD> <P ALIGN="RIGHT"></FONT><FONT SIZE="-1">-----------</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">-----------</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD> <P ALIGN="RIGHT"></FONT><FONT SIZE="-1">66,700</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">67,285</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">Current liabilities</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">-----------</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">-----------</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"> Notes payable</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">12,406</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">7,617</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"> Current portion of long-term debt</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">1,129</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">1,136</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"> Current portion of mandatorily</FONT></TD> <TD><FONT SIZE="-1"></TD> <TD></TD></TR> <TR VALIGN="TOP"><TD></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"> redeemable preferred stock</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">100</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">100</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"> Accounts payable</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">2,152</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">3,958</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"> Overdraft payable</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">838</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">581</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"> State and federal taxes</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">287</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">665</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"> Interest accrued</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">296</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">655</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"> Customer deposits</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">396</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">388</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"> Dividends payable</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">15</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">---</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"> Reserve for temporary rate increase</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">1,045</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">720</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"> Other</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">947</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">719</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD> <P ALIGN="RIGHT"></FONT><FONT SIZE="-1">-----------</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">-----------</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD> <P ALIGN="RIGHT"></FONT><FONT SIZE="-1">19,611</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">16,539</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">Deferred credits and other liabilities</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">-----------</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">-----------</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"> Net advances for construction</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">18,664</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">18,749</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"> Postretirement benefit obligation</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">1,517</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">1,538</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"> Deferred investment tax credits</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">956</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">964</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"> Deferred income taxes</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">2,912</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">2,776</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD> <P ALIGN="RIGHT"></FONT><FONT SIZE="-1">-----------</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">-----------</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD> <P ALIGN="RIGHT"></FONT><FONT SIZE="-1">24,049</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">24,027</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD> <P ALIGN="RIGHT"></FONT><FONT SIZE="-1">-----------</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">-----------</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">Net contributions in aid of construction</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">24,917</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">24,631</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD> <P ALIGN="RIGHT"></FONT><FONT SIZE="-1">-----------</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">-----------</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD> <P ALIGN="RIGHT"></FONT><FONT SIZE="-1">$135,277</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">$132,482</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD> <P ALIGN="RIGHT"></FONT><FONT SIZE="-1">=======</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">=======</FONT></TD></TR></TABLE> <P><FONT SIZE="-1">See notes to the consolidated financial statements.</FONT></P> <BR WP="BR1"><BR WP="BR2"> <TABLE WIDTH="100%"> <TR VALIGN="TOP"><TD COLSPAN="3"> <P ALIGN="CENTER"><FONT SIZE="-1"><STRONG>ARTESIAN RESOURCES CORPORATION</STRONG></FONT></TD></TR> <TR VALIGN="TOP"><TD COLSPAN="3"><FONT SIZE="-1"> <P ALIGN="CENTER"><STRONG>CONSOLIDATED STATEMENT OF INCOME</STRONG></FONT></TD></TR> <TR VALIGN="TOP"><TD COLSPAN="3"><FONT SIZE="-1"> <P ALIGN="CENTER">Unaudited</FONT></TD></TR> <TR VALIGN="TOP"><TD COLSPAN="3"><FONT SIZE="-1"> <P ALIGN="CENTER">(In thousands, except share and per share amounts)</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD COLSPAN="2"> <P ALIGN="CENTER"></FONT><FONT SIZE="-1"> For the Quarter</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD COLSPAN="2"> <P ALIGN="CENTER"></FONT><FONT SIZE="-1"> Ended March 31,</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD> <P ALIGN="RIGHT"></FONT><FONT SIZE="-1">2000</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">1999</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">OPERATING REVENUES</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">----</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">----</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"> Water sales</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">$ 6,232</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">$ 5,856</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"> Other utility operating revenue</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">106</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">82</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"> Non utility revenue</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">10</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">---</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD> <P ALIGN="RIGHT"></FONT><FONT SIZE="-1">---------</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">---------</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD> <P ALIGN="RIGHT"></FONT><FONT SIZE="-1">6,348</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">5,938</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD> <P ALIGN="RIGHT"></FONT><FONT SIZE="-1">---------</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">---------</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">OPERATING EXPENSES</FONT></TD> <TD><FONT SIZE="-1"></TD> <TD></TD></TR> <TR VALIGN="TOP"><TD></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"> Utility operating expenses</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">3,999</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">3,525</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"> Related party expenses</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">45</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">57</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"> Non-utility operating expenses</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">6</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">6</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"> Depreciation and amortization</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">636</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">532</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"> State and federal income taxes</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">174</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">264</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"> Property and other taxes</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">415</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">390</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD> <P ALIGN="RIGHT"></FONT><FONT SIZE="-1">---------</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">---------</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD> <P ALIGN="RIGHT"></FONT><FONT SIZE="-1">5,275</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">4,774</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD> <P ALIGN="RIGHT"></FONT><FONT SIZE="-1">---------</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">---------</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">OPERATING INCOME</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">1,073</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">1,164</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">ALLOWANCE FOR FUNDS USED DURING CONSTRUCTION</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">59</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">26</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">OTHER INCOME, NET</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">11</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">13</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD> <P ALIGN="RIGHT"></FONT><FONT SIZE="-1">---------</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">---------</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">INCOME BEFORE INTEREST CHARGES</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">1,143</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">1,203</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD> <P ALIGN="RIGHT"></FONT><FONT SIZE="-1">---------</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">---------</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">INTEREST CHARGES</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">891</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">808</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD> <P ALIGN="RIGHT"></FONT><FONT SIZE="-1">---------</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">---------</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">NET INCOME</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">252</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">395</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">DIVIDENDS ON PREFERRED STOCK</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">17</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">19</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD> <P ALIGN="RIGHT"></FONT><FONT SIZE="-1">---------</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">---------</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">NET INCOME APPLICABLE TO COMMON STOCK</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">$ 235</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">$ 376</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD> <P ALIGN="RIGHT"></FONT><FONT SIZE="-1">=========</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">=========</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">INCOME PER COMMON SHARE:</FONT></TD> <TD><FONT SIZE="-1"></TD> <TD></TD></TR> <TR VALIGN="TOP"><TD></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"> Basic</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">$ .12</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">$ .21</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD> <P ALIGN="RIGHT"></FONT><FONT SIZE="-1">=========</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">=========</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"> Diluted</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">$ .11</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">$ .20</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD> <P ALIGN="RIGHT"></FONT><FONT SIZE="-1">=========</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">=========</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">CASH DIVIDEND PER COMMON SHARE</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">$ .27</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">$ .26</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD> <P ALIGN="RIGHT"></FONT><FONT SIZE="-1">=========</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">=========</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">AVERAGE COMMON SHARES OUTSTANDING</FONT></TD> <TD><FONT SIZE="-1"></TD> <TD></TD></TR> <TR VALIGN="TOP"><TD></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"> Basic</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">2,001,227</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">1,810,280</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD> <P ALIGN="RIGHT"></FONT><FONT SIZE="-1">=========</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">=========</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"> Diluted</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">2,046,013</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">1,843,913</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD> <P ALIGN="RIGHT"></FONT><FONT SIZE="-1">=========</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">=========</FONT></TD></TR></TABLE> <P><FONT SIZE="-1"> </FONT></P> <TABLE WIDTH="100%"> <TR VALIGN="TOP"><TD COLSPAN="3"> <P ALIGN="CENTER"><FONT SIZE="-1"><STRONG>CONSOLIDATED STATEMENT OF RETAINED EARNINGS</STRONG></FONT></TD></TR> <TR VALIGN="TOP"><TD COLSPAN="3"><FONT SIZE="-1"> <P ALIGN="CENTER">Unaudited</FONT></TD></TR> <TR VALIGN="TOP"><TD COLSPAN="3"><FONT SIZE="-1"> <P ALIGN="CENTER">(In thousands)</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD COLSPAN="2"> <P ALIGN="CENTER"></FONT><FONT SIZE="-1"> For the Quarter</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD COLSPAN="2"> <P ALIGN="CENTER"></FONT><FONT SIZE="-1"> Ended March 31,</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD> <P ALIGN="RIGHT"></FONT><FONT SIZE="-1">2000</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">1999</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD> <P ALIGN="RIGHT"></FONT><FONT SIZE="-1">----</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">----</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">Balance, beginning of period</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">$ 5,933</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">$ 7,785</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">Net income</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">252</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">395</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD> <P ALIGN="RIGHT"></FONT><FONT SIZE="-1">-------</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">-------</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD> <P ALIGN="RIGHT"></FONT><FONT SIZE="-1">6,185</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">8,180</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">Less: Dividends</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">572</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">507</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"> Common stock-Acquisition Adjustment</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">14</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">---</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD> <P ALIGN="RIGHT"></FONT><FONT SIZE="-1">-------</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">-------</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">Balance, end of period</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">$ 5,599</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">$ 7,673</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD> <P ALIGN="RIGHT"></FONT><FONT SIZE="-1">=======</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">=======</FONT></TD></TR></TABLE> <P><FONT SIZE="-1"> See notes to the consolidated financial statements.</FONT></P> <P><FONT SIZE="-1"> </FONT></P> <P><FONT SIZE="-1"> </FONT></P> <TABLE WIDTH="100%"> <TR VALIGN="TOP"><TD COLSPAN="3"> <P ALIGN="CENTER"><FONT SIZE="-1"><STRONG>ARTESIAN RESOURCES CORPORATION</STRONG></FONT></TD></TR> <TR VALIGN="TOP"><TD COLSPAN="3"><FONT SIZE="-1"> <P ALIGN="CENTER"><STRONG>CONSOLIDATED STATEMENT OF CASH FLOWS</STRONG></FONT></TD></TR> <TR VALIGN="TOP"><TD COLSPAN="3"><FONT SIZE="-1"> <P ALIGN="CENTER">Unaudited</FONT></TD></TR> <TR VALIGN="TOP"><TD COLSPAN="3"><FONT SIZE="-1"> <P ALIGN="CENTER">(In thousands)</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD COLSPAN="2"> <P ALIGN="CENTER"></FONT><FONT SIZE="-1"> For the Quarter</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD COLSPAN="2"> <P ALIGN="CENTER"></FONT><FONT SIZE="-1"> Ended March 31,</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD> <P ALIGN="RIGHT"></FONT><FONT SIZE="-1">2000</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">1999</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">CASH FLOWS FROM OPERATING ACTIVITIES</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">----</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">----</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">NET INCOME</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">$ 252</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">$ 395</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">Adjustments to reconcile net income to net</FONT></TD> <TD><FONT SIZE="-1"></TD> <TD></TD></TR> <TR VALIGN="TOP"><TD></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"> cash provided by operating activities:</FONT></TD> <TD><FONT SIZE="-1"></TD> <TD></TD></TR> <TR VALIGN="TOP"><TD></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"> Depreciation and amortization</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">597</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">514</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"> Deferred income taxes, net</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">(179)</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">(1)</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"> Allowance for funds used during construction</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">(59)</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">(25)</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">Changes in Assets and Liabilities:</FONT></TD> <TD><FONT SIZE="-1"></TD> <TD></TD></TR> <TR VALIGN="TOP"><TD></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"> Accounts receivable</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">82</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">110</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"> Unbilled operating revenue</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">161</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">189</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"> Materials and supplies</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">52</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">(18)</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"> Accrued state and federal income taxes</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">(378)</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">267</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"> Prepaid property taxes</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">284</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">275</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"> Prepaid expenses and other</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">(137)</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">10</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"> Other deferred assets</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">57</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">(98)</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"> Regulatory assets</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">(38)</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">98</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"> Postretirement benefit obligation</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">(21)</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">(22)</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"> Accounts payable</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">(1,806)</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">(567)</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"> Interest accrued</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">(359)</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">(25)</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"> Customer deposits and other, net</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">576</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">162</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD> <P ALIGN="RIGHT"></FONT><FONT SIZE="-1">--------</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">--------</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">NET CASH PROVIDED BY OPERATING ACTIVITIES</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">(916)</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">1,264</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD> <P ALIGN="RIGHT"></FONT><FONT SIZE="-1">--------</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">--------</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">CASH FLOWS FROM INVESTING ACTIVITIES</FONT></TD> <TD><FONT SIZE="-1"></TD> <TD></TD></TR> <TR VALIGN="TOP"><TD></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"> Capital expenditures (net of AFUDC)</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">(3,124)</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">(3,470)</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"> Proceeds from sale of assets</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">6</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">5</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD> <P ALIGN="RIGHT"></FONT><FONT SIZE="-1">--------</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">--------</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">NET CASH USED IN INVESTING ACTIVITIES</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">(3,118)</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">(3,465)</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD> <P ALIGN="RIGHT"></FONT><FONT SIZE="-1">--------</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">--------</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">CASH FLOW FROM FINANCING ACTIVITIES</FONT></TD> <TD><FONT SIZE="-1"></TD> <TD></TD></TR> <TR VALIGN="TOP"><TD></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"> Net borrowings under line of credit agreement</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">4,789</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">2,764</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"> Overdraft payable</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">257</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">54</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"> Net advances and contributions in aid of construction</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">324</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">(173)</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"> Net proceeds from stock transactions</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">127</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">179</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"> Dividends</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">(572)</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">(489)</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"> Repayment of long-term debt</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">(292)</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">---</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"> Principal payments under capital lease obligations</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">(7)</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">(12)</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"> Retirement of preferred stock</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">(100)</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">(100)</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD> <P ALIGN="RIGHT"></FONT><FONT SIZE="-1">--------</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">--------</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">NET CASH PROVIDED BY FINANCING ACTIVITIES</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">4,526</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">2,223</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD> <P ALIGN="RIGHT"></FONT><FONT SIZE="-1">--------</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">--------</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">NET INCREASE IN CASH AND CASH EQUIVALENTS</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">492</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">22</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">122</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">114</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD> <P ALIGN="RIGHT"></FONT><FONT SIZE="-1">--------</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">--------</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">CASH AND CASH EQUIVALENTS AT END OF PERIOD</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">$ 614</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">$ 136</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD> <P ALIGN="RIGHT"></FONT><FONT SIZE="-1">========</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">========</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">Supplemental Disclosures of Cash Flow Information:</FONT></TD> <TD><FONT SIZE="-1"></TD> <TD></TD></TR> <TR VALIGN="TOP"><TD></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"> Interest paid</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">$ 1,228</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">$ 775</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD> <P ALIGN="RIGHT"></FONT><FONT SIZE="-1">========</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">========</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"> Income taxes paid</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">$ 550</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">$ 1</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD> <P ALIGN="RIGHT"></FONT><FONT SIZE="-1">========</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">========</FONT></TD></TR></TABLE> <P><FONT SIZE="-1">See Notes to the consolidated financial statements.</FONT></P> <BR WP="BR1"><BR WP="BR2"> <P><FONT SIZE="-1"> </FONT></P> <P><FONT SIZE="-1"><STRONG>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS</STRONG></FONT></P> <P><FONT SIZE="-1"> </FONT></P> <P><FONT SIZE="-1"><STRONG>NOTE 1 - GENERAL</STRONG></FONT></P> <P><FONT SIZE="-1"> </FONT></P> <P><FONT SIZE="-1"> The unaudited financial statements of Artesian Resources Corporation and its wholly-owned subsidiaries (the Company or Artesian Resources), including its principal operating company, Artesian Water Company, Inc. (Artesian Water), presented herein have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and note disclosures prescribed by generally accepted accounting principles. These statements should be read in conjunction with the consolidated financial statements and notes thereto for the year ended December 31, 1999 included in the Company's Annual Report on Form 10-K. The accompanying consolidated financial statements have not been audited by independent accountants in accordance with generally accepted auditing standards, but have been reviewed by independent accountants, and, in the opinion of management such consolidated financial statements include all adjustments, consisting only of normal recurring adjustments, necessary to fairly summarize the Company's financial position and results of operations. The results of operations for the interim periods may not be indicative of the results that may be expected for the entire year.</FONT></P> <P><FONT SIZE="-1"> </FONT></P> <P><FONT SIZE="-1"><STRONG>NOTE 2 - REGULATORY ASSETS</STRONG></FONT></P> <P><FONT SIZE="-1"> </FONT></P> <P><FONT SIZE="-1"> Certain expenses, which are recoverable through rates, without a return on investment, as permitted by the State of Delaware Public Service Commission (PSC), are deferred and amortized during future periods using various methods. Expenses related to rate proceedings are amortized on a straight-line basis over a period of two to five years. The post retirement benefit obligation, which is being amortized over twenty years is adjusted for the difference between the net periodic post retirement benefit costs and the cash payments. The deferred income taxes will be amortized over future years as the tax effects of temporary differences previously flowed through to the customer reverse. Regulatory assets, net of amortization, comprise:</FONT></P> <P><FONT SIZE="-1"> </FONT></P> <TABLE WIDTH="100%"> <TR VALIGN="TOP"><TD></TD> <TD> <P ALIGN="CENTER"><FONT SIZE="-1"></FONT><FONT SIZE="-1">March 31, 2000</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="CENTER">December 31, 1999</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD> <P ALIGN="CENTER"></FONT><FONT SIZE="-1">--------------</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="CENTER">-----------------</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD COLSPAN="2"> <P ALIGN="CENTER"></FONT><FONT SIZE="-1">(in thousands)</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">Postretirement benefit obligation</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">$ 1,517</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">$ 1,538</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">Deferred income taxes recoverable</FONT></TD> <TD><FONT SIZE="-1"></TD> <TD></TD></TR> <TR VALIGN="TOP"><TD></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"> in future rates</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">665</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">680</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">Expense of rate proceedings</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">464</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">390</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD> <P ALIGN="RIGHT"></FONT><FONT SIZE="-1">---------</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">---------</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD> <P ALIGN="RIGHT"></FONT><FONT SIZE="-1">$ 2,646</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">$ 2,608</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD> <P ALIGN="RIGHT"></FONT><FONT SIZE="-1">=========</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">=========</FONT></TD></TR></TABLE> <P><FONT SIZE="-1"> </FONT></P> <P><FONT SIZE="-1"><STRONG>NOTE 3 - DEBT</STRONG></FONT></P> <P><FONT SIZE="-1"> </FONT></P> <P><FONT SIZE="-1"> On May 4, 1999, Artesian repurchased 126,353 shares of Class B Common Stock and 24,165 shares of Class A Non-Voting Common Stock Ellis D. and Helena C. Taylor in exchange for a promissory note (the "Note") in the principal amount of $4,450,000 representing the purchase price of the stock, with a discounted present value of $4,307,000. The Note is payable quarterly, on a calendar basis, over a four year period and in sixteen equal principal installments of $278,125 commencing on June 30, 1999. The outstanding balance on the Note bears interest in an amount computed based on the quarterly dividend the Taylors would have received on the Stock transferred to Artesian but not yet paid for by Artesian. In addition, the principal installment is adjusted on a quarterly basis to reflect increases in the book value per common share of the Company as reported in its most recent quarterly financial statement distributed to stockholders prior to the quarterly payment. Such amounts, if any, represent contingent purchase price of the stock and will be charged to retained earnings. At March 31, 2000, Artesian had $3,337,500 outstanding under this promissory note.</FONT></P> <P><FONT SIZE="-1"><STRONG> </STRONG></FONT></P> <P><FONT SIZE="-1"><STRONG>NOTE 4 - NON-UTILITY OPERATING EXPENSES</STRONG></FONT></P> <P><FONT SIZE="-1"> </FONT></P> <P><FONT SIZE="-1"> Artesian Wastewater, began operating a small wastewater treatment spray irrigation facility owned by a municipality in Southern New Castle County Delaware in 1999. Artesian Wastewater is paid a lump sum fee to maintain operations at the facility. The expenses associated with the provision of this service are categorized as non-utility operating expenses, because the cost of wastewater service is not regulated by the PSC in Delaware.</FONT></P> <P><FONT SIZE="-1"> </FONT></P> <P><FONT SIZE="-1"><STRONG>NOTE 5 - RELATED PARTY TRANSACTIONS</STRONG></FONT></P> <P><FONT SIZE="-1"> </FONT></P> <P><FONT SIZE="-1"> The office building and shop complex utilized by Artesian Water are leased at an average annual rental of $180,000 from a partnership, White Clay Realty, in which Dian Taylor an officer and director of Artesian Resources' is a partner. The lease expires in December, 2002, with provisions for renewals for two five-year periods thereafter. Management believes that the payments made to White Clay Realty for the lease of its office building and shop complex are comparable to what Artesian Water would have to pay to unaffiliated parties for similar facilities.</FONT></P> <P><FONT SIZE="-1"> </FONT></P> <P><FONT SIZE="-1"> Artesian Water leased certain parcels of land for water production wells from Glendale Enterprises Limited, a company wholly-owned by Ellis D. Taylor, the father of William Taylor a director, at an annual rental of $44,000. Renewal of the lease has been automatic from year to year unless 60 days' written notice is given by either party before the end of the year's lease. Artesian Water received notice that Glendale Enterprises Limited desires to discontinue the lease for the well sites. Artesian Water is negotiating the purchase of the land rights for the well sites associated with the Glendale Lease. Artesian Water has received a claim from an unrelated third party with regard to lease payments made since 1986 in this matter and the current ownership of the easements, which the Company intends to vigorously contest. Artesian Water believes any claims or judgement paid is recoverable from Glendale Enterprises. However, if the claim is upheld, subject to the amount and timing of potential recoveries, if any, such amounts could be material to the Statement of Income.</FONT></P> <P><FONT SIZE="-1"> </FONT></P> <P><FONT SIZE="-1"> Expenses associated with related party transactions are as follows:</FONT></P> <P><FONT SIZE="-1"> </FONT></P> <TABLE WIDTH="100%"> <TR VALIGN="TOP"><TD></TD> <TD COLSPAN="2"> <P ALIGN="CENTER"><FONT SIZE="-1"></FONT><FONT SIZE="-1">For the Quarter</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD COLSPAN="2"> <P ALIGN="CENTER"></FONT><FONT SIZE="-1">Ended March 31,</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD> <P ALIGN="RIGHT"></FONT><FONT SIZE="-1">2000</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">1999</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD> <P ALIGN="RIGHT"></FONT><FONT SIZE="-1">----</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">----</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD COLSPAN="2"> <P ALIGN="CENTER"></FONT><FONT SIZE="-1">(in thousands)</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">White Clay Realty</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">$ 45</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">$ 46</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">Glendale Enterprises</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">$ --</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">$ 11</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD> <P ALIGN="RIGHT"></FONT><FONT SIZE="-1">------</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">------</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD> <P ALIGN="RIGHT"></FONT><FONT SIZE="-1">$ 45</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">$ 57</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD> <P ALIGN="RIGHT"></FONT><FONT SIZE="-1">======</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">======</FONT></TD></TR></TABLE> <P><FONT SIZE="-1"> </FONT></P> <P><FONT SIZE="-1"><STRONG>NOTE 6 - NET INCOME PER COMMON SHARE AND EQUITY PER COMMON SHARE</STRONG></FONT></P> <P><FONT SIZE="-1"> </FONT></P> <P><FONT SIZE="-1"> Basic net income per share is based on the weighted average number of common shares outstanding. Diluted net income per share is based on the weighted average number of common shares outstanding and potentially dilutive effect of employee stock options. The following table summarizes the shares used in computing basic and diluted net income per share: </FONT></P> <P><FONT SIZE="-1"> </FONT></P> <TABLE WIDTH="100%"> <TR VALIGN="TOP"><TD></TD> <TD COLSPAN="2"> <P ALIGN="CENTER"><FONT SIZE="-1"></FONT><FONT SIZE="-1">For the Quarter</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD COLSPAN="2"> <P ALIGN="CENTER"></FONT><FONT SIZE="-1">Ended March 31,</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD> <P ALIGN="RIGHT"></FONT><FONT SIZE="-1">2000</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">1999</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD> <P ALIGN="RIGHT"></FONT><FONT SIZE="-1">----</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">----</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD COLSPAN="2"> <P ALIGN="CENTER"></FONT><FONT SIZE="-1">(in thousands)</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">Average common shares outstanding during</FONT></TD> <TD><FONT SIZE="-1"></TD> <TD></TD></TR> <TR VALIGN="TOP"><TD></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"> the period for Basic computation</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">2,001</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">1,810</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">Dilutive effect of employee stock options</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">45</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">34</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD> <P ALIGN="RIGHT"></FONT><FONT SIZE="-1">-----</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">-----</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">Average common shares outstanding during</FONT></TD> <TD><FONT SIZE="-1"></TD> <TD></TD></TR> <TR VALIGN="TOP"><TD></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"> the period for Diluted computation</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">2,046</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">1,844</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD> <P ALIGN="RIGHT"></FONT><FONT SIZE="-1">=====</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="RIGHT">=====</FONT></TD></TR></TABLE> <P><FONT SIZE="-1"> </FONT></P> <P><FONT SIZE="-1"> Equity per common share was $15.93 and $15.30 at March 31, 2000 and 1999, respectively. These amounts were computed by dividing common stockholders' equity, excluding preferred stock, by the number of shares of common stock outstanding on March 31, 2000 and 1999, respectively.</FONT></P> <P><FONT SIZE="-1"><STRONG> </STRONG></FONT></P> <P><FONT SIZE="-1"><STRONG>NOTE 7 - IMPACT OF RECENT ACCOUNTING PRONOUNCEMENTS</STRONG></FONT></P> <P><FONT SIZE="-1"> </FONT></P> <P><FONT SIZE="-1"> In June 1998, FASB issued Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging Activities," which established accounting and reporting standards for derivative instruments and hedging activities. In June 1999, FASB issued Statement of Financial Accounting Standards No. 137, "Accounting for Derivative Instruments and Hedging Activities - Deferral of the Effective Date of FASB Statement No. 133," moving the effective date for this standard from fiscal years beginning after June 15, 1999 to fiscal years beginning after June 15, 2000. We plan to adopt this statement effective January 1, 2001. Our adoption of this statement will not have a material impact on our financial condition or results of operations.</FONT></P> <P><FONT SIZE="-1"> </FONT></P> <P><FONT SIZE="-1"><STRONG>NOTE 8 - RATE PROCEEDINGS</STRONG></FONT></P> <P><FONT SIZE="-1"> </FONT></P> <P><FONT SIZE="-1"> On April 30, 1999, Artesian Water filed a petition with the Delaware Public Service Commission to implement new rates to meet a requested increase in revenue of approximately 10.35%, or $2.7 million on an annualized basis. On September 30, 1999, Artesian Water filed a supplemental rate request which reduced the Company's increase from $2.7 million to approximately $2.5 million. Artesian Water is permitted to collect a temporary increase not in excess of $2.5 million on an annualized basis, under bond, until the level of permanent rates are decided by the Delaware Public Service Commission. The temporary rates became effective on July 1, 1999. Of the amount collected, $1,045,000 was reserved, pending the final outcome of the rate proceeding.</FONT></P> <P><FONT SIZE="-1"> </FONT></P> <P><FONT SIZE="-1"> </FONT></P> <P><FONT SIZE="-1"><STRONG>ITEM 2</STRONG></FONT></P> <TABLE WIDTH="100%"> <TR VALIGN="TOP"><TD><FONT SIZE="-1"><STRONG>ARTESIAN RESOURCES CORPORATION MANAGEMENT'S DISCUSSION AND ANALYSIS OF</STRONG></FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"><STRONG>FINANCIAL CONDITION AND RESULTS OF OPERATIONS FOR THE PERIOD ENDED</STRONG></FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"><STRONG>MARCH 31,2000</STRONG></FONT></TD></TR></TABLE> <P><FONT SIZE="-1"><STRONG> </STRONG></FONT></P> <P><FONT SIZE="-1"><STRONG>RESULTS OF OPERATIONS</STRONG></FONT></P> <P><FONT SIZE="-1"> </FONT></P> <P><FONT SIZE="-1"><U>Overview</U></FONT></P> <P><FONT SIZE="-1"> </FONT></P> <P><FONT SIZE="-1"> Artesian Water, our principal subsidiary, is the oldest and largest regulated public water utility in the State of Delaware and has been providing water within the state since 1905. We distribute and sell water to residential, commercial, industrial, governmental, municipal and utility customers throughout Delaware. As of March 31, 2000, we had approximately 63,000 metered customers and served a population of approximately 200,000, representing approximately 27% of Delaware's total population. We believe that we have a reputation for providing water and service of superior quality to our customers.</FONT></P> <P><FONT SIZE="-1"> </FONT></P> <P><FONT SIZE="-1"> </FONT></P> <P><FONT SIZE="-1"> The Delaware Public Service Commission regulates Artesian Water's rates charged for water service, the sale and issuance of securities, mergers and other matters. We periodically seek rate increases to cover the cost of increased operating expenses, increased financing expenses due to additional investments in utility plant and other costs of doing business. Increases in customers served by Artesian Water also contribute to increases in our operating revenues, although such increases have been offset slightly by reductions in customers' individual usage. We continue our efforts to contain expenses and improve efficiencies which contribute to increases in our operating income. Our business is also subject to seasonal fluctuations and the effects of weather.</FONT></P> <P><FONT SIZE="-1"> </FONT></P> <P><FONT SIZE="-1"><U>Operating Revenues</U></FONT></P> <P><FONT SIZE="-1"> </FONT></P> <P><FONT SIZE="-1"> We realized 98.2% of our total revenue in the three months of 2000 from the sale of water. Water sales revenue increased $376,000, or 6.4%, for the quarter ended March 31, 2000 compared to the first quarter of 1999. The increase was primarily due to growth in the number of customers served, and implementation of temporary rates related to a pending rate proceeding.</FONT></P> <P><FONT SIZE="-1"> </FONT></P> <P><FONT SIZE="-1"><U>Operating Expenses</U></FONT></P> <P><FONT SIZE="-1"> </FONT></P> <P><FONT SIZE="-1"> Operating and maintenance expenses increased $462,000 for the quarter ended March 31, 2000, over the quarter ended March 31, 1999, primarily due to increased purchased water expense of $252,000 due to the resting of the Hockessin field, water placed in storage as part of the Aquifer Storage and Recovery system now in service, and the timing of purchases in order to obtain beneficial pricing for required purchases. In addition, payroll and benefits increased $192,000 due to additional employees and wage increases. The ratio of operating and maintenance expense to total revenue was 63.8% for the three months ended March 31, 2000, as compared to 60.4% for the same period in 1999.</FONT></P> <P><FONT SIZE="-1"> </FONT></P> <P><FONT SIZE="-1"> Depreciation and amortization expense increased $104,000, or 19.5%, for the quarter ended March 31, 2000, compared to the comparable quarter of 1999, due to capital additions. Income tax expense decreased $90,000, or 34.1% for the quarter ended March 31, 2000, due to decreased profitability.</FONT></P> <P><FONT SIZE="-1"> </FONT></P> <P><FONT SIZE="-1"><U>Interest Charges</U></FONT></P> <P><FONT SIZE="-1"> </FONT></P> <P><FONT SIZE="-1"> Interest charges increased $83,000, or 10.3%, for the first quarter of 2000, compared to the first quarter of 1999 due to higher average borrowings on the lines of credit incurred to finance investment in utility plant. In addition, the first quarter of 2000 reflects interest on the note payable for the repurchase of stock that occurred in the second quarter of 1999.</FONT></P> <P><FONT SIZE="-1"> </FONT></P> <P><FONT SIZE="-1"><U>Net Income</U></FONT></P> <P><FONT SIZE="-1"> <U></U></FONT></P> <P><FONT SIZE="-1"> For the quarter ended March 31, 2000, Artesian Resources recorded net income of $252,000 which represents a $143,000, or a 36.2%, decrease as compared to earnings of $395,000 for the quarter ended March 31, 1999. This decrease was primarily due to increased purchased water expense.</FONT></P> <P><FONT SIZE="-1"><STRONG> </STRONG></FONT></P> <P><FONT SIZE="-1"><STRONG> </STRONG></FONT></P> <P><FONT SIZE="-1"><STRONG>LIQUIDITY AND CAPITAL RESOURCES</STRONG></FONT></P> <P><FONT SIZE="-1"> </FONT></P> <P><FONT SIZE="-1"> Our primary sources of liquidity for the first three months of 2000 were $4.8 million provided by borrowings on our line of credit. Cash flow from operating activities was primarily impacted by large payments made in the first quarter to contractors working on our system expansion in Southern Delaware and to an estimated income tax payment of $550,000.</FONT></P> <P><FONT SIZE="-1"> </FONT></P> <P><FONT SIZE="-1"> We rely on our sources of liquidity for investments in our utility plant and systems and to meet our various payment obligations. We currently estimate that our aggregate investments in our utility plant and systems for the remainder of 2000 will be approximately $12.2 million. These investments will be financed by our operations and short-term borrowings under our revolving credit agreements. Our total obligations related to dividend and sinking fund payments on preferred stock, interest payments on indebtedness, rental payments and water service interconnection agreements for the remainder of 2000 are anticipated to be approximately $5.3 million and will be financed with cashflow from our operating activities. </FONT></P> <P><FONT SIZE="-1"> </FONT></P> <P><FONT SIZE="-1"> Developer advances and contributions in aid of construction are used for the installation of mains and hydrants in new developments. In addition to the $12.2 million referred to above, $3.3 million of capital expenditures will be financed by developers during the remainder of 2000.</FONT></P> <P><FONT SIZE="-1"> </FONT></P> <P><FONT SIZE="-1"> At March 31, 2000, we had a working capital deficit of $13.2 million mainly due to borrowings on our lines of credit incurred to finance investment in utility plant.</FONT></P> <P><FONT SIZE="-1"> </FONT></P> <P><FONT SIZE="-1"> At March 31, 2000, Artesian Water had lines of credit with three separate financial institutions totaling $35.0 million to meet its temporary cash requirements. These revolving credit facilities are unsecured. As of March 31, 2000, we had $22.6 million of available funds under these lines. The interest rate for borrowings under each of these lines is the London Interbank Offering Rate plus 1.0% or, at our discretion, the bank's federal funds rate plus 1.0%. All the facilities are reviewed annually by each bank for renewal.</FONT></P> <P><FONT SIZE="-1"> </FONT></P> <P><FONT SIZE="-1"> On April 13, 1999, Artesian Resources issued 325,000 shares of Class A Non-Voting Common Stock at $25.00 per share in an underwritten public offering, and the net proceeds of approximately $7.5 million were used to reduce Artesian Water's borrowing on the lines of credit incurred to finance investment in utility plant.</FONT></P> <P><FONT SIZE="-1"> </FONT></P> <P><FONT SIZE="-1"><STRONG>YEAR 2000 COMPLIANCE</STRONG></FONT></P> <P><FONT SIZE="-1"> </FONT></P> <P><FONT SIZE="-1"> In 1999, our management completed an assessment of all our information and non-information technology systems and implemented a company-wide program which was designed to assure Year 2000 compliance. Since then, there have been no identified problems related to recognition of the year 2000. We do not anticipate any problems related to the Year 2000 issue, however, we continue to monitor all our systems to assure continued uninterrupted operations.</FONT></P> <P><FONT SIZE="-1"> </FONT></P> <P><FONT SIZE="-1"><STRONG>CAUTIONARY STATEMENT</STRONG></FONT></P> <P><FONT SIZE="-1"> </FONT></P> <P><FONT SIZE="-1"> Statements in this Quarterly Report on Form 10-Q which express our "belief", "anticipation" or "expectation", as well as other statements which are not historical fact, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and involve risks and uncertainties that could cause actual results to differ materially from those projected. Certain factors, such as developments in our current rate proceeding, competitive market pressures, material changes in demand from larger customers, changes in weather, availability of labor, failure of critical suppliers to meet Year 2000 compliance, changes in government policies and changes in economic conditions, could cause results to differ materially from those in the forward-looking statements.</FONT></P> <P><FONT SIZE="-1"> </FONT></P> <P><FONT SIZE="-1"> </FONT></P> <P><FONT SIZE="-1"><STRONG>ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK</STRONG></FONT></P> <P><FONT SIZE="-1"> </FONT></P> <P><FONT SIZE="-1"> None.</FONT></P> <P><FONT SIZE="-1"> </FONT></P> <P><FONT SIZE="-1"><STRONG>PART II - OTHER INFORMATION</STRONG></FONT></P> <P><FONT SIZE="-1"><STRONG> </STRONG></FONT></P> <P><FONT SIZE="-1"><STRONG>ITEM 1 - LEGAL PROCEEDINGS</STRONG></FONT></P> <P><FONT SIZE="-1"> </FONT></P> <P><FONT SIZE="-1"> On April 30, 1999, Artesian Water filed a petition with the PSC to implement new rates to meet an increased revenue requirement of approximately 10.35%, or $2.7 million on an annualized basis. On September 30, 1999, Artesian Water filed a supplemental rate request which reduced the Company's increase from $2.7 million to approximately $2.5 million. Artesian Water is permitted to collect a temporary increase not in excess of $2.5 million on an annualized basis, under bond, until </FONT></P> <P><FONT SIZE="-1">permanent rates are approved by the PSC. Such temporary rates were placed in effect by Artesian July 1, 1999.</FONT></P> <P><FONT SIZE="-1"> </FONT></P> <P><FONT SIZE="-1"> There are no other material legal proceedings pending at this date.<STRONG></STRONG></FONT></P> <P><FONT SIZE="-1"><STRONG> </STRONG></FONT></P> <P><FONT SIZE="-1"><STRONG>ITEM 2 - CHANGES IN SECURITIES</STRONG></FONT></P> <P><FONT SIZE="-1"> </FONT></P> <P><FONT SIZE="-1"> Not applicable. </FONT></P> <P><FONT SIZE="-1"> </FONT></P> <P><FONT SIZE="-1"><STRONG>ITEM 3 - DEFAULTS UPON SENIOR SECURITIES</STRONG></FONT></P> <P><FONT SIZE="-1"> </FONT></P> <P><FONT SIZE="-1"> Not applicable.</FONT></P> <P><FONT SIZE="-1"> </FONT></P> <P><FONT SIZE="-1"><STRONG>ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS</STRONG></FONT></P> <P><FONT SIZE="-1"> </FONT></P> <P><FONT SIZE="-1"> Not applicable.</FONT></P> <P><FONT SIZE="-1"><STRONG> </STRONG></FONT></P> <P><FONT SIZE="-1"><STRONG>ITEM 5 - OTHER INFORMATION</STRONG></FONT></P> <P><FONT SIZE="-1"> </FONT></P> <P><FONT SIZE="-1"> Not applicable.</FONT></P> <P><FONT SIZE="-1"> </FONT></P> <P><FONT SIZE="-1"><STRONG>ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K</STRONG></FONT></P> <P><FONT SIZE="-1"> </FONT></P> <P><FONT SIZE="-1"> No reports on Form 8-K were filed for the quarter ended March 31, 2000.</FONT></P> <BR WP="BR1"><BR WP="BR2"> <TABLE WIDTH="100%"> <TR VALIGN="TOP"><TD COLSPAN="2"> <P ALIGN="CENTER"><FONT SIZE="-1"><STRONG>INDEX TO EXHIBITS</STRONG></FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"><U>Exhibit Number</U></FONT></TD> <TD><FONT SIZE="-1"><U>Description</U></FONT></TD></TR> <TR VALIGN="TOP"><TD COLSPAN="2"><FONT SIZE="-1">3 Articles of Incorporation and By-Law</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"> <P ALIGN="CENTER">(3.1)</FONT></TD> <TD><FONT SIZE="-1">Restated Certificate of Incorporation of the Company effective</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD></FONT><FONT SIZE="-1">May 26, 1995, incorporated by reference to the exhibit filed</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD></FONT><FONT SIZE="-1">with Artesian Resources Corporation Form 10-Q for the quarter</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD></FONT><FONT SIZE="-1">ended June 30, 1995.</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD></TD></TR> <TR VALIGN="TOP"><TD> <P ALIGN="CENTER"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1">(3.2)</FONT></TD> <TD><FONT SIZE="-1">Restated Certificate of Incorporation of the Company effective</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD></FONT><FONT SIZE="-1">April 26, 1994, including Certificate of Correction incorporated</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD></FONT><FONT SIZE="-1">by reference to the exhibit filed with the Artesian Resources</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD></FONT><FONT SIZE="-1">Corporation Form 10-Q for the quarter ended March 31, 1994.</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD></TD></TR> <TR VALIGN="TOP"><TD> <P ALIGN="CENTER"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1">(3.3)</FONT></TD> <TD><FONT SIZE="-1">By-Laws of the Company effective April 27, 1993, incorporated by</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD></FONT><FONT SIZE="-1">reference to the exhibit filed with the Artesian Resources</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD></FONT><FONT SIZE="-1">Corporation Form 8-K filed April 27, 1993.</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD></TD></TR> <TR VALIGN="TOP"><TD COLSPAN="2"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1">4 Instruments Defining the Rights of Security Holders, Including Indentures</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD></TD></TR> <TR VALIGN="TOP"><TD> <P ALIGN="CENTER"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1">(4.1)</FONT></TD> <TD><FONT SIZE="-1">Thirteenth and Fourteenth Indentures dated as of June 17, 1997,</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD></FONT><FONT SIZE="-1">between Artesian Water Company, Inc., subsidiary of Artesian</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD></FONT><FONT SIZE="-1">Resources Corporation, and Wilmington Trust Company, as Trustee.</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD></FONT><FONT SIZE="-1">Incorporated by reference to the exhibits filed with Artesian</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD></FONT><FONT SIZE="-1">Resources Corporation Form 10-Q for the quarter ended June 30,</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD></FONT><FONT SIZE="-1">1997.</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD></TD></TR> <TR VALIGN="TOP"><TD> <P ALIGN="CENTER"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1">(4.2)</FONT></TD> <TD><FONT SIZE="-1">Twelfth Supplemental Indenture dated as of December 5, 1995,</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD></FONT><FONT SIZE="-1">between Artesian Water Company, Inc. subsidiary of Artesian</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD></FONT><FONT SIZE="-1">Resources Corporation, and Wilmington Trust Company, as Trustee.</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD></FONT><FONT SIZE="-1">Incorporated by reference to the exhibit filed with the Artesian</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD></FONT><FONT SIZE="-1">Resources Corporation Annual Report on Form 10-K for the year</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD></FONT><FONT SIZE="-1">ended December 31, 1995.</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD></TD></TR> <TR VALIGN="TOP"><TD> <P ALIGN="CENTER"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1">(4.3)</FONT></TD> <TD><FONT SIZE="-1">Eleventh Supplemental Indenture dated as of February 16, 1993,</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD></FONT><FONT SIZE="-1">between Artesian Water Company, Inc., subsidiary of Artesian</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD></FONT><FONT SIZE="-1">Resources Corporation, and Principal Mutual Life Insurance</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD></FONT><FONT SIZE="-1">Company. Incorporated by reference to the exhibit filed with</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD></FONT><FONT SIZE="-1">Artesian Resources Corporation Annual Report on Form 10-K for the</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD></FONT><FONT SIZE="-1">year ended December 31, 1992.</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD></TD></TR> <TR VALIGN="TOP"><TD> <P ALIGN="CENTER"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1">(4.4)</FONT></TD> <TD><FONT SIZE="-1">Tenth Supplemental Indenture dated as of April 1, 1989, between</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD></FONT><FONT SIZE="-1">Artesian Water Company, Inc., subsidiary of Artesian Resources</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD></FONT><FONT SIZE="-1">Corporation, and Wilmington Trust Company, as Trustee.</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD></FONT><FONT SIZE="-1">Incorporated by reference to the exhibit filed with Artesian</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD></FONT><FONT SIZE="-1">Resources Corporation Registration Statement on Form 10 filed</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD></FONT><FONT SIZE="-1">April 30, 1990, and as amended by Form 8 filed on June 19, 1990.</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD></TD></TR> <TR VALIGN="TOP"><TD> <P ALIGN="CENTER"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1">(4.5)</FONT></TD> <TD><FONT SIZE="-1">Other Supplemental Indentures with amounts authorized less than</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD></FONT><FONT SIZE="-1">ten percent of the total assets of the Company and its</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD></FONT><FONT SIZE="-1">subsidiaries on a consolidated basis will be furnished upon</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD></FONT><FONT SIZE="-1">request. Incorporated by reference to the exhibit filed with</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD></FONT><FONT SIZE="-1">Artesian Resources Corporation Registration Statement on Form 10</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD></FONT><FONT SIZE="-1">filed April 30, 1990, and as amended by Form 8 filed on June 19,</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD></FONT><FONT SIZE="-1">1990.</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD></TD></TR> <TR VALIGN="TOP"><TD COLSPAN="2"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1">10 Material Contracts</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD></TD></TR> <TR VALIGN="TOP"><TD> <P ALIGN="CENTER"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1">(10.1)</FONT></TD> <TD><FONT SIZE="-1">Amended and Restated Artesian Resources Corporation 1992</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD></FONT><FONT SIZE="-1">Non-Qualified Stock Option Plan, as amended, filed herewith.</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD></TD></TR> <TR VALIGN="TOP"><TD> <P ALIGN="CENTER"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1">(10.2)</FONT></TD> <TD><FONT SIZE="-1">Lease dated as of March 1, 1972, between White Clay Realty Company</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD></FONT><FONT SIZE="-1">and Artesian Water Company, Inc. incorporated by reference to the</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD></FONT><FONT SIZE="-1">exhibit filed with Artesian Resources Corporation Registration</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD></FONT><FONT SIZE="-1">Statement on Form 10 filed April 30, 1990, and as amended by</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD></FONT><FONT SIZE="-1">Form 8 filed on June 19, 1990.</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD></TD></TR> <TR VALIGN="TOP"><TD> <P ALIGN="CENTER"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1">(10.3)</FONT></TD> <TD><FONT SIZE="-1">Artesian Resources Corporation Cash and Stock Bonus Compensation</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD></FONT><FONT SIZE="-1">Plan for Officers incorporated by reference to the exhibit filed</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD></FONT><FONT SIZE="-1">with the Artesian Resources Corporation Form 10-K for the year</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD></FONT><FONT SIZE="-1">ended December 31, 1993.</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD></TD></TR> <TR VALIGN="TOP"><TD> <P ALIGN="CENTER"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1">(10.4)</FONT></TD> <TD><FONT SIZE="-1">Artesian Resources Corporation Incentive Stock Option Plan</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD></FONT><FONT SIZE="-1">incorporated by reference to the exhibit filed with the Artesian</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD></FONT><FONT SIZE="-1">Resources Corporation Annual Report on Form 10-K for the year</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD></FONT><FONT SIZE="-1">ended December 31, 1995.</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD></TD></TR> <TR VALIGN="TOP"><TD> <P ALIGN="CENTER"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1">(10.5)</FONT></TD> <TD><FONT SIZE="-1">Share Repurchase Agreement dated April 28, 1999, and related</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD></FONT><FONT SIZE="-1">Promissary Note dated May 4, 1999.</FONT></TD></TR></TABLE> </P> <BR WP="BR1"><BR WP="BR2"> <BR WP="BR1"><BR WP="BR2"> <P ALIGN="CENTER"><FONT SIZE="-1"><STRONG></STRONG></FONT><FONT SIZE="-1"><STRONG>SIGNATURES</STRONG></FONT></P> <BR WP="BR1"><BR WP="BR2"> <P><FONT SIZE="-1"> 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 thereunto duly authorized.</FONT></P> <BR WP="BR1"><BR WP="BR2"> <P ALIGN="CENTER"><FONT SIZE="-1"><STRONG>ARTESIAN RESOURCES CORPORATION</STRONG></FONT></P> <BR WP="BR1"><BR WP="BR2"> <TABLE WIDTH="100%"> <TR VALIGN="TOP"><TD><FONT SIZE="-1">04/25/00</FONT></TD> <TD><FONT SIZE="-1"><U>/s/ Dian C. Taylor</U></FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD></FONT><FONT SIZE="-1">Dian C. Taylor</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD></FONT><FONT SIZE="-1">President, CEO, and Chair of the Board</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD></FONT><FONT SIZE="-1">Artesian Resources Corporation and Subsidiaries</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD></TD></TR> <TR VALIGN="TOP"><TD></TD> <TD></TD></TR> <TR VALIGN="TOP"><TD></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1"></FONT><FONT SIZE="-1">04/25/00</FONT></TD> <TD><FONT SIZE="-1"><U>/s/ David B. Spacht</U></FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD></FONT><FONT SIZE="-1">David B. Spacht</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD></FONT><FONT SIZE="-1">Vice President, Chief Financial Officer, and Treasurer</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1"></TD> <TD></FONT><FONT SIZE="-1">Artesian Resources Corporation and Subsidiaries</FONT></TD></TR></TABLE> <BR WP="BR1"><BR WP="BR2"> <BR WP="BR1"><BR WP="BR2"> <P><FONT SIZE="-1"><STRONG>EXHIBIT 27 - FINANCIAL DATA SCHEDULE</STRONG></FONT></P> <P><FONT SIZE="-1"> </FONT></P> <P><FONT SIZE="-1"> This schedule contains summary financial information extracted from the consolidated balance sheets, consolidated statements of income and the consolidated statement of cash flows from the Company's March 31, 2000 Form 10-Q and is qualified in its entirety by reference to such financial statements.</FONT></P> <P><FONT SIZE="-1"> </FONT></P> <TABLE WIDTH="100%"> <TR VALIGN="TOP"><TD><FONT SIZE="-1">PERIOD TYPE</FONT></TD> <TD><FONT SIZE="-1"> <P ALIGN="CENTER">3-MOS</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">FISCAL YEAR END</FONT></TD> <TD ALIGN="RIGHT"><FONT SIZE="-1"> <P ALIGN="CENTER">DEC-31-2000</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">PERIOD END</FONT></TD> <TD ALIGN="RIGHT"><FONT SIZE="-1"> <P ALIGN="CENTER">MAR-31-2000</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">BOOK VALUE</FONT></TD> <TD ALIGN="RIGHT"><FONT SIZE="-1"> <P ALIGN="CENTER">PER-BOOK</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">TOTAL NET UTILITY PLANT</FONT></TD> <TD ALIGN="RIGHT"><FONT SIZE="-1">124,940,000</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">OTHER PROPERTY AND INVEST</FONT></TD> <TD ALIGN="RIGHT"><FONT SIZE="-1">271,000</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">TOTAL CURRENT ASSETS</FONT></TD> <TD ALIGN="RIGHT"><FONT SIZE="-1">6,385,000</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">TOTAL DEFERRED CHARGES</FONT></TD> <TD ALIGN="RIGHT"><FONT SIZE="-1">3,681,000</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">OTHER ASSETS</FONT></TD> <TD ALIGN="RIGHT"><FONT SIZE="-1">0</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">TOTAL ASSETS</FONT></TD> <TD ALIGN="RIGHT"><FONT SIZE="-1">135,277,000</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">COMMON</FONT></TD> <TD ALIGN="RIGHT"><FONT SIZE="-1">2,003,000</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">CAPITAL SURPLUS PAID IN</FONT></TD> <TD ALIGN="RIGHT"><FONT SIZE="-1">24,275,000</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">RETAINED EARNINGS</FONT></TD> <TD ALIGN="RIGHT"><FONT SIZE="-1">5,599,000</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">TOTAL COMMON STOCKHOLDERS EQ</FONT></TD> <TD ALIGN="RIGHT"><FONT SIZE="-1">31,877,000</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">PREFERRED MANDATORY</FONT></TD> <TD ALIGN="RIGHT"><FONT SIZE="-1">300,000</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">PREFERRED</FONT></TD> <TD ALIGN="RIGHT"><FONT SIZE="-1">272,000</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">LONG TERM DEBT NET</FONT></TD> <TD ALIGN="RIGHT"><FONT SIZE="-1">32,000,000</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">SHORT TERM NOTES</FONT></TD> <TD ALIGN="RIGHT"><FONT SIZE="-1">12,406,000</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">LONG TERM NOTES PAYABLE</FONT></TD> <TD ALIGN="RIGHT"><FONT SIZE="-1">2,225,000</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">COMMERCIAL PAPER OBLIGATIONS</FONT></TD> <TD ALIGN="RIGHT"><FONT SIZE="-1">0</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">LONG TERM DEBT CURRENT PORT</FONT></TD> <TD ALIGN="RIGHT"><FONT SIZE="-1">1,113,000</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">PREFERRED STOCK CURRENT</FONT></TD> <TD ALIGN="RIGHT"><FONT SIZE="-1">100,000</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">CAPITAL LEASE OBLIGATIONS</FONT></TD> <TD ALIGN="RIGHT"><FONT SIZE="-1">26,000</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">LEASES CURRENT</FONT></TD> <TD ALIGN="RIGHT"><FONT SIZE="-1">16,000</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">OTHER ITEMS CAPITAL AND LIAB</FONT></TD> <TD ALIGN="RIGHT"><FONT SIZE="-1">54,942,000</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">TOT CAPITALIZATION AND LIAB</FONT></TD> <TD ALIGN="RIGHT"><FONT SIZE="-1">135,277,000</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">GROSS OPERATING REVENUE</FONT></TD> <TD ALIGN="RIGHT"><FONT SIZE="-1">6,348,000</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">INCOME TAX EXPENSE</FONT></TD> <TD ALIGN="RIGHT"><FONT SIZE="-1">174,000</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">OTHER OPERATING EXPENSES</FONT></TD> <TD ALIGN="RIGHT"><FONT SIZE="-1">5,101,000</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">TOTAL OPERATING EXPENSES</FONT></TD> <TD ALIGN="RIGHT"><FONT SIZE="-1">5,275,000</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">OPERATING INCOME LOSS</FONT></TD> <TD ALIGN="RIGHT"><FONT SIZE="-1">1,073,000</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">OTHER NET INCOME</FONT></TD> <TD ALIGN="RIGHT"><FONT SIZE="-1">70,000</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">INCOME BEFORE INTEREST EXPEN</FONT></TD> <TD ALIGN="RIGHT"><FONT SIZE="-1">1,143,000</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">TOTAL INTEREST EXPENSE</FONT></TD> <TD ALIGN="RIGHT"><FONT SIZE="-1">891,000</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">NET INCOME</FONT></TD> <TD ALIGN="RIGHT"><FONT SIZE="-1">252,000</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">PREFERRED STOCK DIVIDENDS</FONT></TD> <TD ALIGN="RIGHT"><FONT SIZE="-1">17,000</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">EARNINGS AVAILABLE FOR COMM</FONT></TD> <TD ALIGN="RIGHT"><FONT SIZE="-1">235,000</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">COMMON STOCK DIVIDENDS</FONT></TD> <TD ALIGN="RIGHT"><FONT SIZE="-1">540,000</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">TOTAL ANNUAL INTEREST ON ALL BONDS</FONT></TD> <TD ALIGN="RIGHT"><FONT SIZE="-1">2,696,000</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">CASH FLOW-OPERATIONS</FONT></TD> <TD ALIGN="RIGHT"><FONT SIZE="-1">(916,000)</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">EPS BASIC</FONT></TD> <TD ALIGN="RIGHT"><FONT SIZE="-1">0.12</FONT></TD></TR> <TR VALIGN="TOP"><TD><FONT SIZE="-1">EPS DILUTED</FONT></TD> <TD ALIGN="RIGHT"><FONT SIZE="-1">0.11</FONT></TD></TR></TABLE> </P> </BODY> </HTML>