================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR QUARTERLY PERIOD ENDED JUNE 30, 2003 COMMISSION FILE NUMBER 1-31374 BIW LIMITED (Exact name of registrant as specified in its charter) CONNECTICUT 04-3617838 ----------- ---------- (State of Incorporation of Organization) (I.R.S Employer I.D. No.) 230 BEAVER STREET, ANSONIA, CT 06401 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (203) 735-1888 Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. YES [X] NO [ ] Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). YES [X] NO [X] Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Class Outstanding at July 31, 2003 ----- ---------------------------- COMMON STOCK, NO PAR VALUE 1,637,076 ================================================================================ PART I. FINANCIAL INFORMATION ----------------------------- ITEM 1. FINANCIAL STATEMENTS BIW Limited ----------- CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS ------------------------------------------------------- (UNAUDITED) ----------- Three Months Ended Six Months Ended June 30, June 30, 2003 2002 2003 2002 ----------- ----------- ----------- ----------- Operating revenue $ 1,295,983 $ 1,220,901 $ 2,412,175 $ 2,287,674 ----------- ----------- ----------- ----------- Operating expenses: Operating expenses 733,569 702,037 1,463,538 1,392,080 Maintenance expenses 86,562 66,528 160,722 135,948 Depreciation 145,000 137,500 290,000 274,998 Taxes other than income taxes 100,939 89,757 206,528 177,921 Taxes on income 35,119 33,009 36,031 37,418 ----------- ----------- ----------- ----------- Total operating expenses 1,101,189 1,028,831 2,156,819 2,018,365 ----------- ----------- ----------- ----------- Utility operating income 194,794 192,070 255,356 269,309 Amortization of prior years' deferred income on land dispositions (net of income taxes) 44,793 98,694 89,586 197,388 Other income, net (including allowance for funds used during construction of $46,451 in 2003 and $20,387 in 2002) 5,320 10,205 60,694 55,666 ----------- ----------- ----------- ----------- Income before interest expense 244,907 300,969 405,636 522,363 Interest and amortization of debt discount 103,738 106,581 207,479 213,166 ----------- ----------- ----------- ----------- Net income 141,169 194,388 198,157 309,197 Retained earnings, beginning 9,795,495 10,016,709 9,984,068 10,146,829 Dividends 245,561 245,035 491,122 489,964 ----------- ----------- ----------- ----------- Retained earnings, ending $ 9,691,103 $ 9,966,062 $ 9,691,103 $ 9,966,062 =========== =========== =========== =========== Earnings per share - basic $ .09 $ .12 $ .12 $ .19 Earnings per share - diluted $ .09 $ .12 $ .12 $ .19 Dividends per share $ .15 $ .15 $ .30 $ .30 The accompanying notes are an integral part of these consolidated financial statements. 2 BIW Limited ----------- CONSOLIDATED BALANCE SHEETS --------------------------- (Unaudited) June 30, Dec. 31, 2003 2002 ------------ ------------ ASSETS: - ------- Utility plant $ 27,741,571 $ 27,049,864 Accumulated depreciation (8,310,485) (8,013,941) ------------ ------------ Net utility plant 19,431,086 19,035,923 ------------ ------------ Current Assets: Cash and cash equivalents 320,961 663,060 Investments 737,141 Accounts receivable, net of allowance for doubtful accounts 451,132 457,932 Accrued utility revenue 466,164 434,312 Materials & supplies 141,540 115,568 Prepayments 120,806 16,106 ------------ ------------ Total current assets 1,500,603 2,424,119 ------------ ------------ Deferred charges 264,811 120,050 Unamortized debt expense 97,367 105,491 Regulatory asset - income taxes recoverable 342,257 342,257 Other assets 375,804 293,449 ------------ ------------ 1,080,239 861,247 ------------ ------------ $ 22,011,928 $ 22,321,289 ============ ============ STOCKHOLDERS' EQUITY AND LIABILITIES - ------------------------------------ Stockholders' Equity: Common Stock, no par value, authorized 5,000,000 shares; issued and outstanding at 6/30/03 and 12/31/02, 1,637,076 shares $ 2,905,190 $ 2,905,190 Retained earnings 9,691,103 9,984,068 ------------ ------------ 12,596,293 12,889,258 ------------ ------------ Long-term debt 4,042,000 4,042,000 ------------ ------------ Current Liabilities: Current portion of long-term debt 94,000 94,000 Accounts payable and accrued liabilities 689,954 631,340 ------------ ------------ Total current liabilities 783,954 725,340 ------------ ------------ Customers' advances for construction 450,609 428,684 Contributions in aid of construction 2,013,522 2,013,522 Regulatory liability-income taxes refundable 142,059 142,059 Deferred income taxes 1,827,610 1,797,075 Deferred income on disposition of land 155,881 283,351 ------------ ------------ 4,589,681 4,664,691 ------------ ------------ $ 22,011,928 $ 22,321,289 ============ ============ The accompanying notes are an integral part of these consolidated financial statements. 3 BIW Limited ----------- CONSOLIDATED STATEMENTS OF CASH FLOWS ------------------------------------- (UNAUDITED) ----------- Six Months Ended June 30, Cash flows from operating activities 2003 2002 ----------- ----------- Net income $ 198,157 $ 309,197 ----------- ----------- Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 311,490 303,154 Amortization of deferred income, net of tax (89,586) (197,388) Deferred income taxes (7,350) (7,350) Increases and decreases in assets and liabilities: Accounts receivable and accrued utility revenue (25,052) (36,247) Materials and supplies (25,972) (29,962) Prepayments (104,700) (84,800) Accounts payable and accrued expenses 58,613 (53,038) ----------- ----------- Total adjustments 117,443 (105,631) ----------- ----------- Net cash flows provided by operating activities 315,600 203,566 ----------- ----------- Cash flows from investing activities: Net construction expenditures (669,782) (667,487) Sale of investments 737,141 -- Customer refunds -- (4,880) Other assets and deferred charges, net (233,936) (39,726) ----------- ----------- Net cash flows used in investing activities (166,577) (712,093) ----------- ----------- Cash flows from financing activities: Dividends paid - net (491,122) (454,450) ----------- ----------- Net cash flows used in financing activities: (491,122) (454,450) ----------- ----------- Net decrease in cash & cash equivalents (342,099) (962,977) Cash and cash equivalents, beginning 663,060 3,039,640 ----------- ----------- Cash and cash equivalents, ending $ 320,961 $ 2,076,663 =========== =========== Supplemental disclosure of cash flow information: Cash paid for Interest $ 199,355 $ 203,886 Income taxes $ 9,000 $ 108,000 Supplemental disclosure of non-cash investing activities: Birmingham Utilities receives contributions of plant from builders and developers. These contributions of plant are reported in utility plant and in customers' advances for construction. The contributions are deducted from construction expenditures by BUI Gross plant, additions 691,707 667,487 Customers' advances for construction (21,925) -- ----------- ----------- Capital expenditures, net $ 669,782 $ 667,487 =========== =========== The accompanying notes are an integral part of these consolidated financial statements. 4 BIW Limited NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) BIW Limited (the Company), formed in March 2002, is a non-operating holding company whose income is derived from Birmingham Utilities, Inc. (BUI or Birmingham Utilities), a specially chartered public service corporation in the business of collecting and distributing water for domestic, commercial and industrial uses and fire protection and Birmingham H2O Services, Inc. (BHS or Birmingham H2O Services), which provides water related services to other water utilities, contractors and individuals throughout Connecticut. Birmingham Utilities provides water to Ansonia and Derby, Connecticut and in small parts of the contiguous Town of Seymour with a population of approximately 31,000 people. BIW Limited became the holding company for Birmingham Utilities, Inc. pursuant to an Agreement and Plan of Merger and Share Exchange effective June 28, 2002 (See Note 9). Birmingham Utilities is subject to the jurisdiction of the Connecticut Department of Public Utility Control (DPUC) as to accounting, financing, ratemaking, disposal of property, the issuance of long-term securities and other matters affecting its operations. The Connecticut Department of Public Health (the Health Department or DPH) has regulatory powers over BUI under state law with respect to water quality, sources of supply, and the use of watershed land. The Connecticut Department of Environmental Protection (DEP) is authorized to regulate BUI's operations with regard to water pollution abatement, diversion of water from streams and rivers, safety of dams and the location, construction and alteration of certain water facilities. BUI's activities are also subject to regulation with regard to environmental and other operational matters by federal, state and local authorities, including, without limitation, zoning authorities. Birmingham Utilities is subject to regulation of its water quality under the Federal Safe Drinking Water Act (SDWA). The United States Environmental Protection Agency has granted to the Health Department the primary enforcement responsibility in Connecticut under the SDWA. The Health Department has established regulations containing maximum limits on contaminants, which have or may have an adverse effect on health. NOTE 1 - QUARTERLY FINANCIAL DATA - --------------------------------- The accompanying consolidated financial statements of BIW Limited have been prepared in accordance with accounting principles generally accepted in the United States of America, without audit, except for the Balance Sheet for the year ended December 31, 2002, which has been audited. The interim financial information conforms to the instructions to Form 10-Q and Rule 10-01 of Regulation S-X and, as applied in the case of rate-regulated public utilities, complies with the Uniform System of Accounts and ratemaking practices prescribed by the DPUC. In management's opinion, these consolidated financial statements include all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of the results of operations for the 5 interim periods presented. Certain information and footnote disclosures required by accounting principles generally accepted in the United States of America have been omitted, pursuant to such rules and regulations; although the Company believes that the disclosures are adequate to make the information presented not misleading. The Company applies Statement of Financial Accounting Standards No. 123, "Accounting for Stock Based Compensation" (SFAS 123) to account for its stock option plans. As permitted by SFAS 123, the Company has chosen to continue to apply Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees" (APB 25) and, accordingly, no compensation cost has been recognized for stock options in the financial statements. For further information, refer to the financial statements and accompanying footnotes included in the Company's Annual Report on Form 10-K for the year ended December 31, 2002. Birmingham Utilities' business of selling water is to a certain extent seasonal because water consumption normally increases during the warmer summer months. Another factor affecting the comparability of various accounting periods includes the timing of rate increases. BUI has filed an application with the DPUC to increase its rates and charges in 2003 (See Note 6). In addition, Birmingham H2O Services' business activities will essentially begin as the winter period ends. Accordingly, annualization of the results of operations for the six months ended June 30, 2003 and 2002 would not necessarily accurately forecast the annual results of each year. NOTE 2 - PRINCIPLES OF CONSOLIDATION - ------------------------------------ The consolidated financial statements include the accounts of BIW Limited and its wholly owned subsidiaries Birmingham Utilities, Inc. and Birmingham H2O Services, Inc. All significant intercompany balances and transactions have been eliminated in consolidation. NOTE 3 - RECLASSIFICATIONS - -------------------------- Certain June 30, 2002 balances have been reclassified to conform to the June 30, 2003 presentation. 6 NOTE 4 - CALCULATION OF WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED - --------------------------------------------------------------------- The following table summarizes the number of common shares used in the calculation of earnings per share. Three Months Ended Six Months Ended 6/30/03 6/30/02 6/30/03 6/30/02 --------- --------- --------- --------- Weighted average shares outstanding for earnings per share, basic 1,637,076 1,632,880 1,637,076 1,632,880 Incremental shares from assumed conversion of stock options 31,044 37,026 31,805 36,479 --------- --------- --------- --------- Weighted average shares outstanding for earnings per share, diluted 1,668,120 1,669,906 1,668,881 1,669,359 ========= ========= ========= ========= NOTE 5 - PURCHASE AND SALE AGREEMENT - ------------------------------------ As of May 19, 2003 BIW Limited's wholly-owned subsidiaries Birmingham Utilities, Inc. (BUI) and Birmingham H2O Services, Inc. (BHS) entered into a Purchase Agreement (the Purchase Agreement) with Philadelphia Suburban Corporation (PSC). The Purchase Agreement provides for the acquisition by BUI of all of the issued and outstanding shares of common stock of Eastern Connecticut Regional Water Company, Inc., as well as certain assets used in regulated water utility operations in Connecticut. BUI will also acquire all of the issued and outstanding stock of five regulated water companies located in and operating in the State of New York. Pursuant to the Purchase Agreement, BHS will purchase certain non-regulated assets that consist largely of operating and maintenance agreements with respect to various unregulated water supply systems located in eastern and central Connecticut. The aggregate purchase price for the regulated and unregulated Connecticut operations and the New York operations to be purchased by Birmingham Utilities and Birmingham H2O Services pursuant to the Purchase Agreement is $5,000,000. The purchase price is subject to certain adjustments based on changes in the rate base and working capital of the Connecticut and New York regulated companies. These adjustments may not increase the purchase price by more than $1,200,000 in the aggregate. On July 31, 2003, PSC purchased the Aqua Source utility and non-utility systems, which include the Connecticut and New York operations from Aqua Source, Inc., pursuant to a previously announced purchase agreement among PSC, Aqua Source and DQE Inc. The sale of the Connecticut and New York regulated operations to Birmingham Utilities is subject to Connecticut and New York regulatory approval. Applications for approval were filed with the Connecticut DPUC on July 3, 2003. On August 1, 2003 PSC and Birmingham H2O Services signed a professional service agreement whereby BHS will operate the Connecticut operations for PSC until such time that the transaction is approved by the Connecticut and New York Commissions. A closing will be scheduled shortly after the transactions are approved. 7 NOTE 6 - WATER SERVICES RATE APPLICATION - ---------------------------------------- On February 11, 2003, Birmingham Utilities filed an application with the DPUC for a 34.55 percent water service rate increase designed to provide a $1,576,183 increase in annual water service revenues. On August 7, 2003, the DPUC granted the company a 27.74 percent water service rate increase designed to provide a $1,264,178 annual increase in revenues and a 10.5 percent return on common equity. NOTE 7 - FORMATION OF BIRMINGHAM H2O SERVICES, INC. - --------------------------------------------------- On November 22, 2002, Birmingham H2O Services, Inc., a non-regulated subsidiary of BIW Limited, was formed. This company provides water related services to other water utilities, developers and individuals. NOTE 8 - LAND SALES - ------------------- On September 27, 2002, Birmingham Utilities sold 27 acres of unimproved land in Seymour, Connecticut to the State of Connecticut, Department of Environmental Protection (DEP) for $537,500. The after tax gain on this transaction amounted to $311,092, of which 16% or $49,775, was allocated by the DPUC to an account stipulated as an offset to rate base for a period of 40 years. The rate base offset account does not represent a claim by ratepayers on any asset of BUI. Rather, at the time of BUI's next rate case, the rate base offset account will be utilized in calculating rate base. NOTE 9 - CORPORATE RESTRUCTURING - -------------------------------- On January 17, 2002, Birmingham Utilities, Inc., in accordance with Section 16-47 of the Connecticut General Statutes, filed an application with the DPUC requesting approval for the establishment of a holding company. The Company believes the holding company structure will better support business opportunities that exist in the marketplace and separate these activities from regulated company activities. On May 8, 2002 the DPUC issued a decision granting approval of the holding company structure. Shareholders subsequently approved the holding company structure on June 25, 2002 at BUI's Annual Meeting and on June 28, 2002 a Certificate of Merger was filed with the Secretary of the State of Connecticut and became effective. In order to implement the plan of merger and share exchange, Birmingham Utilities, Inc. formed BIW Limited as Birmingham Utilities, Inc.'s wholly-owned subsidiary. BIW Limited, in turn, formed its own wholly-owned subsidiary, Birmingham Mergings, Inc. The plan of merger and share exchange was unanimously approved by the boards of directors of Birmingham Utilities, Inc., BIW Limited and Birmingham Mergings, Inc., by Birmingham Utilities, Inc. as the sole stockholder of BIW Limited, and by BIW Limited as the sole stockholder of Birmingham Mergings, Inc. On June 28, 2002, the following events ocurred: o Birmingham Mergings, Inc. merged with and into Birmingham Utilities, Inc. with Birmingham Utilities, Inc. being the surviving corporation; 8 o Each outstanding share of Birmingham Mergings common stock was automatically converted into one share of Birmingham Utilities, Inc. common stock; o Each previously outstanding share of Birmingham Utilities, Inc. common stock was automatically converted into one share of BIW Limited common stock; and o Each share of BIW Limited common stock owned by Birmingham Utilities, Inc. was automatically cancelled. Neither the certificate of incorporation of Birmingham Utilities, Inc., nor Birmingham Utilities, Inc.'s bylaws, was affected by the plan of merger and share exchange. BIW Limited is governed by its own separate certificate of incorporation that was filed with the Secretary of State of the State of Connecticut on March 13, 2002 and by its own separate bylaws. Upon effectiveness of the merger, each of the directors and officers of Birmingham Utilities, Inc. also became the directors and officers of BIW Limited. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS - ------------------------------------------------------------------------------- OF OPERATIONS - ------------- Management's Discussion and Analysis of the Financial Condition and Results of Operations contained in the Company's Annual Report on Form 10K for the year ended December 31, 2002 should be read in conjunction with the comments below. CAPITAL RESOURCES AND LIQUIDITY Completion of Birmingham Utilities' Long Term Capital Improvement Program will be funded from the proceeds available from the 2001 and 2002 land sales, the internal generation of funds, including rate relief, as well as the Company's ability to raise capital from external sources. For the six months ended June 30, 2003 and 2002, BUI's additions to utility plant, net of customer advances, were $669,782 and $667,487, respectively (See Statement of Cash Flows). These additions were financed primarily from proceeds of land sales. Birmingham Utilities has outstanding $4,136,000 principal amount of Mortgage Bonds, due September 1, 2011, issued under its Mortgage Indenture. The Mortgage Indenture limits the issuing of additional First Mortgage Bonds and the payment of dividends. It does not, however, restrict the issuance of either long term or short-term debt, which is either unsecured or secured with liens subordinate to the lien of the Mortgage Indenture. Birmingham Utilities also maintains a $5,000,000 one-year, unsecured revolving line of credit that expires in October 2003. During the revolving period, BUI can choose between variable rate options of 30, 60, 90 or 180-day LIBOR plus 100 basis points or prime. BUI is required to pay interest only during the revolving period. The loan is 9 payable in full at maturity. There were no outstanding borrowings on the revolving line of credit on June 30, 2003. Results of Operations for the six months ended and three months ended June 30, - ------------------------------------------------------------------------------ 2003 and 2002 - ------------- Net Income - ---------- Net income for the six months ended June 30, 2003 was $198,157 compared with $309,197 for the same 2002 period. Operating income for the six months ended June 30, 2003 has decreased $111,040 from the comparable 2002 period. Deferred income from land sales for the six months ended June 30, 2003 which decreased $107,802 from the comparable 2002 period principally accounts for the decline. Net income for the three months ended June 30, 2003 was $141,169 compared with $194,388 for the comparable 2002 period. Operating income for the second quarter of 2003 is $53,219 below the comparable 2002 period due to the same reason noted above for the six month period. Operating Revenues - ------------------ Operating revenues for the first six months of 2003 of $2,412,175 are $124,501 above the comparable 2002 period. Increased revenues from Birmingham Utilities accounts for $44,819 of the increase due to higher consumption, while the remaining increase of $79,682 is attributable to higher revenue from Birmingham H2O Services. Operating revenues for the three month period ended June 30, 2003 were $75,082 above the comparable 2002 quarter. Birmingham Utilities accounts for $2,690 of the increase, while the remaining $72,392 is attributable to Birmingham H2O Services. Operating and Maintenance Expenses - ---------------------------------- Operating and Maintenance expenses for the first six months of 2003 of $1,624,260 are $96,232 higher than operating and maintenance expenses of $1,528,028 recorded in the first six months of 2002. Increased property, liability and workers' compensation insurance costs for Birmingham Utilities as well as the higher operating costs relating to Birmingham H2O Services accounts for this increase. Somewhat offsetting these increases are lower shareholder expenses as the Company had incurred higher expenses in 2002 associated with the formation of BIW Limited. Increases in these expenses, also offset by the decrease in shareholder expenses, caused operating and maintenance expenses for the three month period ending June 30, 2003 to exceed the comparable 2002 period. Depreciation - ------------ Depreciation for the first six months of 2003 and for the three month period ended June 30, 2003 were $15,002 and $7,500, higher than the comparable 2002 periods due to depreciation relating to plant additions that have continued throughout 2002 and into the first half of 2003. 10 Taxes Other Than Income Taxes - ----------------------------- Taxes other than income taxes for the six month period ended June 30, 2003 were $28,607 higher than the comparable 2002 period. Increased payroll taxes and property taxes due to new additions to utility plant account for this increase. Taxes other than income taxes for the three month period ended June 30, 2003 were $11,182 higher than the comparable 2002 period. Increased payroll taxes and property taxes also account for this variance. Other Income - ------------ Other income for the first six months of 2003 was $5,028 higher than the comparable period in 2002. An increase in allowance for funds used during construction partially offset by lower investment interest income accounts for this slight increase. Other income for the three month period ended June 30, 2003 was $4,885 lower than the second quarter of 2003. Decreases in investment interest income also accounts for this decrease. Interest Expense - ---------------- Interest Expense of $207,479 recorded in the six month period ended June 30, 2003 is $5,687 lower than the comparable 2002 period due to the annual sinking fund payment relating to Birmingham Utilities' Mortgage Bonds. The interest expense for the three month period ended June 30, 2003 is $2,843 lower also because of the sinking fund payment. Land Dispositions - ----------------- When Birmingham Utilities disposes of land, any gain recognized, net of tax, is shared between ratepayers and stockholders based upon a formula approved by the DPUC. The portion of land disposition income applicable to stockholders is recognized in the year of disposition. There were no land sales in the second quarter of 2003 and 2002. Land disposition income applicable to ratepayers is recognized in the financial statements as a component of operating income on the line entitled "Amortization of Deferred Income on Dispositions of Land". These amounts represent the recognition of income deferred on land dispositions, which occurred in prior years. The amortization of deferred income on land dispositions, net of tax, was $89,586 and $197,388 for the six months ended June 30, 2003 and 2002, and $44,793 and $98,694 for the three months ended June 30, 2003 and 2002. 11 Recognition of deferred income will continue over time periods ranging from three to fifteen years, depending upon the amortization period ordered by the DPUC for each particular disposition except for the 2002 sale in which the deferred portion will remain as an offset to rate base for a period of 40 years. ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK - ------------------------------------------------------------------- The Company has certain exposures to market risk related to changes in interest rates. There have been no material changes in market risk since the filing of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2002. ITEM 4 - CONTROLS AND PROCEDURES - -------------------------------- The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company's Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to the Company's management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure based on the definition of "disclosure controls and procedures" in Rule 13a-15(e). In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. The Company carried out an evaluation, under the supervision and with the participation of the Company's management, including the Company's Chief Executive Officer and the Company's Chief Financial Officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures as of June 30, 2003. Based on the foregoing, the Company's Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures were effective. There have been no changes in the Company's internal controls that have materially affected, or are reasonably likely to materially affect the internal controls over financial reporting during the quarter ended June 30, 2003. 12 PART II. OTHER INFORMATION -------------------------- ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS - ------------------------------------------------------------ During the quarter ended June 30, 2003, the only matters submitted to a vote of the holders of the Company's common stock, its only class of voting stock, were submitted at the Company's Annual Meeting of Shareholders held on May 7, 2003, as set forth below. There were no broker non-votes on the listed matters. (a) Election of Directors - All nominees for Director were elected, as follows: Votes % O/S Votes Director For Shares Against Michael J. Adanti 1,349,581 82 7,772 Mary Jane Burt 1,348,269 82 9,084 James E. Cohen 1,347,980 82 9,373 Alvaro da Silva 1,351,181 82 6,172 Betsy Henley-Cohn 1,348,269 82 9,084 Themis Klarides 1,350,748 82 6,605 Aldore J. Rivers, Jr. 1,351,956 82 5,397 B. Lance Sauerteig 1,351,981 82 5,372 Kenneth E. Schaible 1,351,692 82 5,661 John S. Tomac 1,351,981 82 5,372 (b) Approval of Auditors Dworken, Hillman, LaMorte & Sterczala, P.C. were approved as independent auditors for the Company for 2003. Total votes cast were 1,357,353, representing 83% of all outstanding shares. 1,342,208, representing 82% of all outstanding shares, were cast in favor of the appointment of Dworken, Hillman, LaMorte & Sterczala, P.C. ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K - ----------------------------------------- (a) Exhibits 2.1 Purchase Agreement dated May 19, 2003 by and among Birmingham Utilities, Inc., Birmingham H2O Services, Inc. and Philadelphia Suburban Corporation (incorporated by reference to Exhibit 99.1 to the Company's Form 8-K filed May 28, 2003) 31.1 Certification of CEO pursuant to Section 302 of Sarbanes Oxley Act. 31.2 Certification of CFO pursuant to Section 302 of Sarbanes Oxley Act. 32.1 Certification of CEO and CFO pursuant to Section 906 of Sarbanes Oxley Act. (b) Reports on Form 8-K The Company filed a Form 8-K on May 28, 2003 reporting pursuant to Item 5 thereof that it entered into an agreement with Philadelphia Suburban Corporation ("PSC") to purchase certain subsidiaries of PSC and related assets. 13 SIGNATURES 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. BIW Limited Registrant Date: August 13, 2003 By: /s/ John S. Tomac ----------------------------- John S. Tomac, President (Duly authorized officer, and chief financial and accounting officer) 14