<SUBMISSION>
<ACCESSION-NUMBER>0000863110-01-500018
<TYPE>10-Q
<PUBLIC-DOCUMENT-COUNT>1
<PERIOD>20010331
<FILING-DATE>20010511
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>ARTESIAN RESOURCES CORP
<CIK>0000863110
<ASSIGNED-SIC>4941
<IRS-NUMBER>510002090
<STATE-OF-INCORPORATION>DE
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>10-Q
<ACT>34
<FILE-NUMBER>000-18516
<FILM-NUMBER>1630093
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>664 CHURCHMANS RD
<CITY>NEWARK
<STATE>DE
<ZIP>19702
<PHONE>3024536900
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>664 CHURCHMANS RD
<CITY>NEWARK
<STATE>DE
<ZIP>19702
</MAIL-ADDRESS>
</FILER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>q3_2001.htm
<DESCRIPTION>FIRST QUARTER FILING
<TEXT>

<HTML>
<HEAD>
<META charset=windows-1252">
<META NAME="Generator" CONTENT="Microsoft Word 97">
<TITLE>UNITED STATES</TITLE>
</HEAD>
<BODY LINK="#0000ff" VLINK="#800080">

<B><FONT SIZE=2><P ALIGN="CENTER">UNITED STATES<BR>
SECURITIES AND EXCHANGE COMMISION<BR>
Washington, D.C. 20549</P>
<P ALIGN="CENTER">FORM 10-Q</P>
</B><P>&nbsp;</P>
<P>(Mark One)<BR>
X&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934</P>
<P>For the quarterly period ended March 31, 2001</P>
<P>or</P>
<P>__&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;TRANSACTION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For the transaction period from&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to</P>
<P ALIGN="CENTER">Commission file number 0-18516</P>
<P>&nbsp;</P>
<P>&nbsp;</P>
<B><P ALIGN="CENTER">ARTESIAN RESOURCES CORPORATION<BR>
</B>(exact name of registrant as specified in its charter)</P></FONT>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=667>
<TR><TD WIDTH="51%" VALIGN="TOP">
<P><FONT SIZE=2>State or other jurisdiction of incorporation or organization:</FONT></TD>
<TD WIDTH="49%" VALIGN="TOP">
<FONT SIZE=2><P>Delaware</FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="TOP">
<FONT SIZE=2><P>I.R.S. Employer Identification Number:</FONT></TD>
<TD WIDTH="49%" VALIGN="TOP">
<FONT SIZE=2><P>51-0002090</FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="TOP">
<FONT SIZE=2><P>Address of principal executive officers:</FONT></TD>
<TD WIDTH="49%" VALIGN="TOP">
<FONT SIZE=2><P>664 Churchmans Road, Newark, Delaware</FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="49%" VALIGN="TOP">
<FONT SIZE=2><P>19702</FONT></TD>
</TR>
<TR><TD WIDTH="51%" VALIGN="TOP">
<FONT SIZE=2><P>Registrant's telephone number, including area code</FONT></TD>
<TD WIDTH="49%" VALIGN="TOP">
<FONT SIZE=2><P>(302) 453 - 6900</FONT></TD>
</TR>
</TABLE>

<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;X&nbsp;&nbsp;Yes&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of April 30, 2001, 1,627,328, shares and 391,824 shares of Class A Non-Voting Common Stock and Class B Common Stock, respectively, were outstanding.</P></FONT>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=601>
<TR><TD VALIGN="TOP" COLSPAN=5>
<P ALIGN="CENTER"><B><FONT SIZE=2>ARTESIAN RESOURCES CORPORATION</B></FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=5 HEIGHT=10>
<FONT SIZE=2><P ALIGN="CENTER">INDEX TO FORM 10-Q</FONT></TD>
</TR>
<TR><TD WIDTH="15%" VALIGN="TOP">
<B><FONT SIZE=2><P>Part I</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">-</FONT></TD>
<TD WIDTH="65%" VALIGN="TOP">
<B><FONT SIZE=2><P>Financial Information:</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="15%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="65%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="15%" VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="RIGHT">Item 1</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="CENTER">-</B></FONT></TD>
<TD WIDTH="65%" VALIGN="TOP">
<B><FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Financial Statements</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">Page(s)</FONT></TD>
</TR>
<TR><TD WIDTH="15%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="65%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="15%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="65%" VALIGN="TOP">
<B><FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;</B>Consolidated Balance Sheet</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="15%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="65%" VALIGN="TOP">
<B><FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;</B>March 31, 2001 and December 31, 2000</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">3</FONT></TD>
</TR>
<TR><TD WIDTH="15%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="65%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="15%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="65%" VALIGN="TOP">
<B><FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;</B>Consolidated Statement of Income for</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="15%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="65%" VALIGN="TOP">
<B><FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;</B>the quarters ended March 31, 2001 and 2000</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">4</FONT></TD>
</TR>
<TR><TD WIDTH="15%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="65%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="15%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="65%" VALIGN="TOP">
<B><FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;</B>Consolidated Statement of Retained Earnings</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="15%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="65%" VALIGN="TOP">
<B><FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;</B>for the three months ended March 31, 2001 and 2000</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">5</FONT></TD>
</TR>
<TR><TD WIDTH="15%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="65%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="15%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="65%" VALIGN="TOP">
<B><FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;</B>Consolidated Statement of Cash Flows for the</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="15%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="65%" VALIGN="TOP">
<B><FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;</B>three months ended March 31, 2001 and 2000</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">5 - 6</FONT></TD>
</TR>
<TR><TD WIDTH="15%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="65%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="15%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="65%" VALIGN="TOP">
<B><FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;</B>Notes to the Consolidated Financial Statements</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">7 - 9</FONT></TD>
</TR>
<TR><TD WIDTH="15%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="65%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="15%" VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="RIGHT">Item 2</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">-</FONT></TD>
<TD WIDTH="65%" VALIGN="TOP">
<B><FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Management's Discussion and Analysis of</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="15%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="65%" VALIGN="TOP">
<B><FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Financial Condition</B> <B>and</B> <B>Results of Operations</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">9 - 11</FONT></TD>
</TR>
<TR><TD WIDTH="15%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="65%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="15%" VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="RIGHT">Item 3</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="CENTER">-</B></FONT></TD>
<TD WIDTH="65%" VALIGN="TOP">
<B><FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Quantitative and Qualitative Disclosures about Market Risk</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">11</FONT></TD>
</TR>
<TR><TD WIDTH="15%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="65%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="15%" VALIGN="TOP">
<B><FONT SIZE=2><P>Part II</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">-</FONT></TD>
<TD WIDTH="65%" VALIGN="TOP">
<B><FONT SIZE=2><P>Other Information:</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="15%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="65%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="15%" VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="RIGHT">Item 1</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="65%" VALIGN="TOP">
<B><FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Legal Proceedings</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">11</FONT></TD>
</TR>
<TR><TD WIDTH="15%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="65%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="15%" VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="RIGHT">Item 2</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="65%" VALIGN="TOP">
<B><FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Changes in Securities</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">11</FONT></TD>
</TR>
<TR><TD WIDTH="15%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="65%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="15%" VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="RIGHT">Item 3</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="65%" VALIGN="TOP">
<B><FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Defaults Upon Senior Securities</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">12</FONT></TD>
</TR>
<TR><TD WIDTH="15%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="65%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="15%" VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="RIGHT">Item 4</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="65%" VALIGN="TOP">
<B><FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Submission of Matters to a Vote of Security Holders </B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">12</FONT></TD>
</TR>
<TR><TD WIDTH="15%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="65%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="15%" VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="RIGHT">Item 5</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="65%" VALIGN="TOP">
<B><FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Other Information</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">12</FONT></TD>
</TR>
<TR><TD WIDTH="15%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="65%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="15%" VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="RIGHT">Item 6</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="65%" VALIGN="TOP">
<B><FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Exhibits and Reports on Form 8-K</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">12</FONT></TD>
</TR>
<TR><TD WIDTH="15%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="65%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="15%" VALIGN="TOP">
<B><FONT SIZE=2><P ALIGN="JUSTIFY">Signatures</B></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="65%" VALIGN="TOP">
<B><FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;</B></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
</TABLE>

<FONT SIZE=2><P>&nbsp;</P>
<P>&nbsp;</P>
<P>Part I - Financial Information<BR>
Item I - Financial Statements</P></FONT>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=663>
<TR><TD VALIGN="TOP" COLSPAN=14 HEIGHT=10>
<P ALIGN="CENTER"><B><FONT SIZE=2>ARTESIAN RESOURCES CORPORATION<BR>
<U>CONSOLIDATED BALANCE SHEET<BR>
</B></U>(In thousands)</FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="33%" VALIGN="TOP" COLSPAN=12 HEIGHT=14>
<U><FONT SIZE=2><P ALIGN="CENTER">(unaudited)</U></FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" COLSPAN=5 HEIGHT=14>
<U><FONT SIZE=2><P ALIGN="RIGHT">March 31, 2001</U></FONT></TD>
<TD WIDTH="15%" VALIGN="TOP" COLSPAN=7 HEIGHT=14>
<U><FONT SIZE=2><P ALIGN="RIGHT">December 31, 2000</U></FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP" COLSPAN=2 HEIGHT=14>
<FONT SIZE=2><P>ASSETS</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=6 HEIGHT=14><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=4 HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=14><P></P></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP" COLSPAN=2 HEIGHT=14>
<FONT SIZE=2><P>Utility plant, at original cost less accumulated depreciation</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=6 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">138,911</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=4 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">134,038&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP" COLSPAN=2 HEIGHT=14>
<FONT SIZE=2><P>Current assets</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=6 HEIGHT=14><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=4 HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=14><P></P></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP" COLSPAN=2 HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;Cash and cash equivalents</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=6 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">473</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=4 HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">392&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP" COLSPAN=2 HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;Accounts receivable, net</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=6 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">2,043</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=4 HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">1,967&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP" COLSPAN=2 HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;Unbilled operating revenues</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=6 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">1,917</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=4 HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">2,102&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP" COLSPAN=2 HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;Materials and supplies-at cost on FIFO basis</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=6 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">704</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=4 HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">730&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP" COLSPAN=2 HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;Prepaid property taxes</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=6 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">295</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=4 HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">591&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP" COLSPAN=2 HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;Prepaid expenses and other</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=6 HEIGHT=14>
<U><FONT SIZE=2><P ALIGN="RIGHT">&nbsp;&nbsp;&nbsp;&nbsp;529</U></FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=4 HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=14>
<U><FONT SIZE=2><P ALIGN="RIGHT">&nbsp;&nbsp;&nbsp;&nbsp;620&nbsp;</U></FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=6 HEIGHT=14>
<U><FONT SIZE=2><P ALIGN="RIGHT">&nbsp;&nbsp;5,961</U></FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=4 HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=14>
<U><FONT SIZE=2><P ALIGN="RIGHT">&nbsp;&nbsp;6,402&nbsp;</U></FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP" COLSPAN=2 HEIGHT=14>
<FONT SIZE=2><P>Other assets</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=6 HEIGHT=14><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=4 HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=14><P></P></TD>
</TR>
<TR><TD WIDTH="77%" VALIGN="TOP" COLSPAN=3 HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;Non-utility property (less accumulated depreciation 2001-$168;2000-$166)</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=6 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">267</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=4 HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">268&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;Other deferred assets</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=6 HEIGHT=14>
<U><FONT SIZE=2><P ALIGN="RIGHT">&nbsp;&nbsp;1,314</U></FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=4 HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=14>
<U><FONT SIZE=2><P ALIGN="RIGHT">&nbsp;&nbsp;1,335&nbsp;</U></FONT></TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=6 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">1,581</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=4 HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">1,603&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P>Regulatory assets, net</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=6 HEIGHT=14>
<U><FONT SIZE=2><P ALIGN="RIGHT">&nbsp;&nbsp;2,233</U></FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=4 HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=14>
<U><FONT SIZE=2><P ALIGN="RIGHT">&nbsp;&nbsp;2,364&nbsp;</U></FONT></TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" COLSPAN=2 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=6 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">148,686</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=4 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">144,407&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=6 HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">======</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=4 HEIGHT=16><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">======</FONT></TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P>LIABILITIES AND STOCKHOLDERS' EQUITY</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=6 HEIGHT=14><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=4 HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=14><P></P></TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P>Stockholders' equity</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=6 HEIGHT=14><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=4 HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=14><P></P></TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;Common stock</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" COLSPAN=2 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=6 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">2,019</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=4 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">2,013&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;Additional paid-in capital</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=6 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">24,592</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=4 HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">24,474&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;Retained earnings</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=6 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">5,742</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=4 HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">6,070&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;Preferred stock</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=6 HEIGHT=14>
<U><FONT SIZE=2><P ALIGN="RIGHT">&nbsp;&nbsp;&nbsp;&nbsp;272</U></FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=4 HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=14>
<U><FONT SIZE=2><P ALIGN="RIGHT">&nbsp;&nbsp;&nbsp;&nbsp;272&nbsp;</U></FONT></TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;Total stockholders' equity</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=6 HEIGHT=14>
<U><FONT SIZE=2><P ALIGN="RIGHT">&nbsp;32,625</U></FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=4 HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=14>
<U><FONT SIZE=2><P ALIGN="RIGHT">&nbsp;32,829&nbsp;</U></FONT></TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P>Preferred stock-mandatorily redeemable,</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=6 HEIGHT=14><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=4 HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=14><P></P></TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;net of current portion</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=6 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">200</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=4 HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">300&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P>Long-term debt, net of current portion</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=6 HEIGHT=14>
<U><FONT SIZE=2><P ALIGN="RIGHT">&nbsp;50,439</U></FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=4 HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=14>
<U><FONT SIZE=2><P ALIGN="RIGHT">&nbsp;50,717&nbsp;</U></FONT></TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=6 HEIGHT=14>
<U><FONT SIZE=2><P ALIGN="RIGHT">&nbsp;83,264</U></FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=4 HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=14>
<U><FONT SIZE=2><P ALIGN="RIGHT">&nbsp;83,846&nbsp;</U></FONT></TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P>Current liabilities</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=6 HEIGHT=14><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=4 HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=14><P></P></TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;Notes payable</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=6 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">7,095</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=4 HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">2,000&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;Current portion of long-term debt</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=6 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">1,119</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=4 HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">1,119&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;Current portion of mandatorily redeemable preferred stock</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=6 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">100</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=4 HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">100&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;Accounts payable</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=6 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">3,174</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=4 HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">3,168&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;Overdraft payable</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=6 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">798</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=4 HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">1,224&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;Income taxes payable</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=6 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">23</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=4 HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">-----&nbsp;&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;Interest accrued</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=6 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">584</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=4 HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">530&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;Customer deposits</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=6 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">400</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=4 HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">419&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;Other</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=6 HEIGHT=14>
<U><FONT SIZE=2><P ALIGN="RIGHT">&nbsp;&nbsp;1,089</U></FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=4 HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=14>
<U><FONT SIZE=2><P ALIGN="RIGHT">&nbsp;&nbsp;&nbsp;&nbsp;938&nbsp;</U></FONT></TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=6 HEIGHT=14>
<U><FONT SIZE=2><P ALIGN="RIGHT">&nbsp;14,382</U></FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=4 HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=14>
<U><FONT SIZE=2><P ALIGN="RIGHT">&nbsp;&nbsp;9,498&nbsp;</U></FONT></TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P>Deferred credits and other liabilities</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=6 HEIGHT=14><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=4 HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=14><P></P></TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;Net advances for construction</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=6 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">18,698</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=4 HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">18,780&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;Postretirement benefit obligation</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=6 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">1,431</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=4 HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">1,455&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;Deferred investment tax credits</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=6 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">924</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=4 HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">934&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="59%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P>&nbsp;&nbsp;Deferred income taxes</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=6 HEIGHT=14>
<U><FONT SIZE=2><P ALIGN="RIGHT">&nbsp;&nbsp;4,249</U></FONT></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=4 HEIGHT=14><P></P></TD>
<TD WIDTH="2%" VALIGN="TOP" HEIGHT=14>
<U><FONT SIZE=2><P ALIGN="RIGHT">&nbsp;&nbsp;4,231&nbsp;</U></FONT></TD>
</TR>
<TR><TD WIDTH="77%" VALIGN="TOP" COLSPAN=3 HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=6 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">25,302</FONT></TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=5 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">25,400&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="77%" VALIGN="TOP" COLSPAN=3 HEIGHT=14>
<FONT SIZE=2><P>Commitments and contingencies </FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=6 HEIGHT=14><P></P></TD>
<TD WIDTH="11%" VALIGN="TOP" COLSPAN=5 HEIGHT=14><P></P></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP" COLSPAN=2 HEIGHT=14>
<FONT SIZE=2><P>Net contributions in aid of construction</FONT></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=6 HEIGHT=14>
<U><FONT SIZE=2><P ALIGN="RIGHT">25,738</U></FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" COLSPAN=3 HEIGHT=14><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=14>
<U><FONT SIZE=2><P ALIGN="RIGHT">25,663&nbsp;</U></FONT></TD>
</TR>
<TR><TD WIDTH="67%" VALIGN="TOP" COLSPAN=2 HEIGHT=14><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=6 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">148,686</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" COLSPAN=3 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=14>
<FONT SIZE=2><P ALIGN="RIGHT">144,407&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="77%" VALIGN="TOP" COLSPAN=3 HEIGHT=15><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=6 HEIGHT=15>
<FONT SIZE=2><P ALIGN="RIGHT">======</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" COLSPAN=3 HEIGHT=15><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=15>
<FONT SIZE=2><P ALIGN="RIGHT">======</FONT></TD>
</TR>
<TR><TD WIDTH="77%" VALIGN="TOP" COLSPAN=3 HEIGHT=14>
<I><FONT SIZE=2><P>See notes to the consolidated financial statements.</I></FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" COLSPAN=6 HEIGHT=14><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" COLSPAN=3 HEIGHT=14><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" COLSPAN=2 HEIGHT=14><P></P></TD>
</TR>
</TABLE>

<FONT SIZE=2><P ALIGN="CENTER">&nbsp;</P>
<P>&nbsp;</P></FONT>
<P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=0 BORDER=0 CELLPADDING=8 WIDTH=615>
<TR><TD VALIGN="TOP" COLSPAN=5 HEIGHT=16>
<P ALIGN="CENTER"><B><FONT SIZE=2>ARTESIAN RESOURCES CORPORATION</B></FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=5 HEIGHT=16>
<B><FONT SIZE=2><P ALIGN="CENTER">CONSOLIDATED STATEMENT OF INCOME</B></FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=5 HEIGHT=16>
<FONT SIZE=2><P ALIGN="CENTER">Unaudited</FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=5 HEIGHT=16>
<FONT SIZE=2><P ALIGN="CENTER">(In thousands, except share and per share amounts)</FONT></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="34%" VALIGN="TOP" COLSPAN=3 HEIGHT=16>
<FONT SIZE=2><P ALIGN="CENTER">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For the Quarter</FONT></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="34%" VALIGN="TOP" COLSPAN=3 HEIGHT=16>
<FONT SIZE=2><P ALIGN="CENTER">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Ended March 31,</FONT></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">2001</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">2000</FONT></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>OPERATING REVENUES</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Water sales</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">6,835</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">6,232&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Other utility operating revenue</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">112</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">106&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Non utility revenue</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=16>
<U><FONT SIZE=2><P ALIGN="RIGHT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13</U></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=16>
<U><FONT SIZE=2><P ALIGN="RIGHT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10&nbsp;</U></FONT></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=16>
<U><FONT SIZE=2><P ALIGN="RIGHT">&nbsp;&nbsp;&nbsp;6,960</U></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=16>
<U><FONT SIZE=2><P ALIGN="RIGHT">&nbsp;&nbsp;&nbsp;6,348&nbsp;</U></FONT></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>OPERATING EXPENSES</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Utility operating expenses</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">4,302</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">3,999&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Related party expenses</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">44</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">45&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Non-utility operating expenses</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">14</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">6&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Depreciation and amortization</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">708</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">636&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;State and federal income taxes</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">169</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">174&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Property and other taxes</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=16>
<U><FONT SIZE=2><P ALIGN="RIGHT">&nbsp;&nbsp;&nbsp;&nbsp;453</U></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=16>
<U><FONT SIZE=2><P ALIGN="RIGHT">&nbsp;&nbsp;&nbsp;&nbsp;415&nbsp;</U></FONT></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">5,690</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">&nbsp;&nbsp;5,275&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>OPERATING INCOME</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">1,270</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">1,073&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>ALLOWANCE FOR FUNDS USED DURING CONSTRUCTION</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">76</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">59&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>OTHER INCOME (EXPENSE), NET</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=16>
<U><FONT SIZE=2><P ALIGN="RIGHT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10</U></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=16>
<U><FONT SIZE=2><P ALIGN="RIGHT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11&nbsp;</U></FONT></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>INCOME BEFORE INTEREST CHARGES</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=16>
<U><FONT SIZE=2><P ALIGN="RIGHT">&nbsp;&nbsp;1,356</U></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=16>
<U><FONT SIZE=2><P ALIGN="RIGHT">&nbsp;&nbsp;1,143&nbsp;</U></FONT></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>INTEREST CHARGES</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=16>
<U><FONT SIZE=2><P ALIGN="RIGHT">&nbsp;&nbsp;1,085</U></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=16>
<U><FONT SIZE=2><P ALIGN="RIGHT">&nbsp;&nbsp;&nbsp;&nbsp;891&nbsp;</U></FONT></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>NET INCOME</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">271</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">252&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>DIVIDENDS ON PREFERRED STOCK</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=16>
<U><FONT SIZE=2><P ALIGN="RIGHT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15</U></FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=16>
<U><FONT SIZE=2><P ALIGN="RIGHT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17&nbsp;</U></FONT></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>NET INCOME APPLICABLE TO COMMON STOCK</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>$</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">256</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>$</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">235&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">======</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">======</FONT></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>INCOME PER COMMON SHARE:</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Basic</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>$</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">.13</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>$</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">.12&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">======</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">======</FONT></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Diluted</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>$</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">.12</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>$</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">.11&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">======</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">======</FONT></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>CASH DIVIDEND PER COMMON SHARE</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>$</FONT></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">.275</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>$</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">.27&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">======</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">======</FONT></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>AVERAGE COMMON SHARES OUTSTANDING</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Basic</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">2,017,295</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">2,001,227&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">========</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">========</FONT></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Diluted</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">2,057,518</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">2,046,013&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="62%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">========</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="16%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">========</FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=5 HEIGHT=14>
<I><FONT SIZE=2><P>See notes to the consolidated financial statements.</I></FONT></TD>
</TR>
</TABLE>
</CENTER></P>

<FONT SIZE=2><P ALIGN="CENTER">&nbsp;</P>
<P>&nbsp;</P></FONT>
<P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=0 BORDER=0 CELLPADDING=8 WIDTH=616>
<TR><TD VALIGN="TOP" COLSPAN=6 HEIGHT=16>
<P ALIGN="CENTER"><B><FONT SIZE=2>CONSOLIDATED STATEMENT OF RETAINED EARNINGS</B></FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=6 HEIGHT=16>
<FONT SIZE=2><P ALIGN="CENTER">Unaudited</FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=6 HEIGHT=16>
<FONT SIZE=2><P ALIGN="CENTER">(In thousands)</FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="32%" VALIGN="TOP" COLSPAN=3 HEIGHT=16>
<FONT SIZE=2><P ALIGN="CENTER">For the Quarter</FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="32%" VALIGN="TOP" COLSPAN=3 HEIGHT=16>
<FONT SIZE=2><P ALIGN="CENTER">Ended March 31,</FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="CENTER">2001</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="CENTER">2000</FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>Balance, beginning of period</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>$</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">6,070</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">5,933&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>Net income</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=16>
<U><FONT SIZE=2><P ALIGN="RIGHT">&nbsp;&nbsp;&nbsp;&nbsp;271</U></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=16>
<U><FONT SIZE=2><P ALIGN="RIGHT">&nbsp;&nbsp;&nbsp;&nbsp;252&nbsp;</U></FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">6,341</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">6,185&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>Less: Dividends</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">583</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">572&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Common stock-repurchase</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=16>
<U><FONT SIZE=2><P ALIGN="RIGHT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16</U></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=16>
<U><FONT SIZE=2><P ALIGN="RIGHT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14&nbsp;</U></FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>Balance, end of period</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>$</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">5,742</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">5,599&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="63%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">======</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">======</FONT></TD>
</TR>
</TABLE>
</CENTER></P>

<I><FONT SIZE=2><P ALIGN="CENTER">See notes to the consolidated financial statements.</P></I></FONT>
<P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=0 BORDER=0 CELLPADDING=8 WIDTH=615>
<TR><TD VALIGN="TOP" COLSPAN=5 HEIGHT=16>
<P ALIGN="CENTER"><B><FONT SIZE=2>ARTESIAN RESOURCES CORPORATION</B></FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=5 HEIGHT=16>
<B><FONT SIZE=2><P ALIGN="CENTER">CONSOLIDATED STATEMENT OF CASH FLOWS</B></FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=5 HEIGHT=16>
<FONT SIZE=2><P ALIGN="CENTER">Unaudited</FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=5 HEIGHT=16>
<FONT SIZE=2><P ALIGN="CENTER">(In thousands)</FONT></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="36%" VALIGN="TOP" COLSPAN=3 HEIGHT=16>
<FONT SIZE=2><P ALIGN="CENTER">For the Quarter</FONT></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="36%" VALIGN="TOP" COLSPAN=3 HEIGHT=16>
<FONT SIZE=2><P ALIGN="CENTER">Ended March 31,</FONT></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="CENTER">2001</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="CENTER">2000</FONT></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>CASH FLOWS FROM OPERATING ACTIVITIES</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>NET INCOME</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>$</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">271</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">252&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>Adjustments to reconcile net income to net</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;cash provided by operating activities:</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Depreciation and amortization</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">671</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">597&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Deferred income taxes, net</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">8</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(179)</FONT></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Allowance for funds used during construction</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(76)</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(59)</FONT></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>Changes in assets and liabilities:</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Accounts receivable</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(76)</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">82&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Unbilled operating revenue</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">185</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">161&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Materials and supplies</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">26</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">52&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Accrued state and federal income taxes</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">23</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(378)</FONT></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Prepaid property taxes</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">296</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">284&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Prepaid expenses and other</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">91</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(137)</FONT></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Other deferred assets</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">21</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">57&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Regulatory assets</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">131</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(38)</FONT></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Postretirement benefit obligation</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(24)</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(21)</FONT></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Accounts payable</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">6</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(1,806)</FONT></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Interest accrued</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">54</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(359)</FONT></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Customer deposits and other, net</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=16>
<U><FONT SIZE=2><P ALIGN="RIGHT">&nbsp;&nbsp;&nbsp;&nbsp;132</U></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=16>
<U><FONT SIZE=2><P ALIGN="RIGHT">&nbsp;&nbsp;&nbsp;&nbsp;576&nbsp;</U></FONT></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>NET CASH PROVIDED BY OPERATING ACTIVITIES</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=16>
<U><FONT SIZE=2><P ALIGN="RIGHT">&nbsp;&nbsp;1,739</U></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=16>
<U><FONT SIZE=2><P ALIGN="RIGHT">&nbsp;&nbsp;(916)</U></FONT></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>CASH FLOWS FROM INVESTING ACTIVITIES</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Capital expenditures (net of AFUDC)</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(5,601)</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(3,124)</FONT></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Proceeds from sale of assets</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=16>
<U><FONT SIZE=2><P ALIGN="RIGHT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7</U></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=16>
<U><FONT SIZE=2><P ALIGN="RIGHT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6&nbsp;</U></FONT></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>NET CASH USED IN INVESTING ACTIVITIES</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=16>
<U><FONT SIZE=2><P ALIGN="RIGHT">&nbsp;(5,594)</U></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=16>
<U><FONT SIZE=2><P ALIGN="RIGHT">&nbsp;(3,118)</U></FONT></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>CASH FLOW FROM FINANCING ACTIVITIES</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Net borrowings (repayments) under line of credit agreement</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">5,095</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">4,789&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Overdraft payable</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(426)</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">257&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Net advances and contributions in aid of construction</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">120</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">324&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Net proceeds from stock transactions</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">108</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">127&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Dividends</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(583)</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(572)</FONT></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Repayment of long-term debt</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(278)</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(292)</FONT></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Principal payments under capital lease obligations</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">---</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">(7)</FONT></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Retirement of preferred stock</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=16>
<U><FONT SIZE=2><P ALIGN="RIGHT">(100)</U></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=16>
<U><FONT SIZE=2><P ALIGN="RIGHT">&nbsp;&nbsp;&nbsp;(100)</U></FONT></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>NET CASH PROVIDED BY FINANCING ACTIVITIES</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=16>
<U><FONT SIZE=2><P ALIGN="RIGHT">3,936</U></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=16>
<U><FONT SIZE=2><P ALIGN="RIGHT">&nbsp;&nbsp;4,526&nbsp;</U></FONT></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>NET INCREASE IN CASH AND CASH EQUIVALENTS</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">81</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">492&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="65%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P>CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=16>
<U><FONT SIZE=2><P ALIGN="RIGHT">&nbsp;&nbsp;&nbsp;392</U></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=16>
<U><FONT SIZE=2><P ALIGN="RIGHT">&nbsp;&nbsp;&nbsp;&nbsp;122&nbsp;</U></FONT></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>CASH AND CASH EQUIVALENTS AT END OF PERIOD</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>$</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">473</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">614&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">=====</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">======</FONT></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>Supplemental Disclosures of Cash Flow Information:</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Interest paid</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>$</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">1,010</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>$</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">1,228&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">=====</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">======</FONT></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;&nbsp;Income taxes paid</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>$</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">---&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>$</FONT></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">550&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="61%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">=====</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">======</FONT></TD>
</TR>
</TABLE>
</CENTER></P>

<I><FONT SIZE=2><P ALIGN="CENTER">See notes to the consolidated financial statements.</P>
</I><P>&nbsp;</P>
<B><P>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS</P>
</B><P><BR>
<B>NOTE 1 - GENERAL</P>
</B></FONT><P>&nbsp;&nbsp;&nbsp;<FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The unaudited consolidated 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 accounting principles
generally accepted in the United States of America. These statements should be read in conjunction with the consolidated financial statements and notes thereto for the year ended December 31, 2000, 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.</P>
<P><BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<BR>
<B>NOTE 2 - REGULATORY ASSETS</P>
</B><P><BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Certain expenses, which are recoverable through rates 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 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: </P></FONT>
<P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=0 BORDER=0 CELLPADDING=8 WIDTH=574>
<TR><TD WIDTH="52%" VALIGN="TOP" HEIGHT=16>
<P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="22%" VALIGN="TOP" HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="52%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="CENTER">March 31, 2001</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="22%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="CENTER">December 31, 2000</FONT></TD>
</TR>
<TR><TD WIDTH="52%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="45%" VALIGN="TOP" COLSPAN=3 HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="52%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>Postretirement benefit obligation</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>$</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">1,432</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>$</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">1,455&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="52%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>Deferred income taxes recoverable in future rates</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">661</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="22%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">665&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="52%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>Expense of rate proceedings</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=16>
<U><FONT SIZE=2><P ALIGN="RIGHT">&nbsp;&nbsp;&nbsp;140</U></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="22%" VALIGN="TOP" HEIGHT=16>
<U><FONT SIZE=2><P ALIGN="RIGHT">&nbsp;&nbsp;&nbsp;244&nbsp;</U></FONT></TD>
</TR>
<TR><TD WIDTH="52%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="22%" VALIGN="TOP" HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="52%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>$</FONT></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">2,233</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>$</FONT></TD>
<TD WIDTH="22%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">2,364&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="52%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">=====</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="22%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">======</FONT></TD>
</TR>
</TABLE>
</CENTER></P>

<FONT SIZE=2><P ALIGN="CENTER">&nbsp;</P>
<B><P>NOTE 3 - DEBT</P>
<P><BR>
</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 from Helena C. Taylor and Ellis D. 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 Taylor's 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 changes 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, 2001, Artesian had $2,225,000 outstanding under this promissory note.</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On December 29, 2000, Artesian Water issued a $20.0 million, 8.17%, twenty year Series O First Mortgage Bond to redeem the Series K $7.0 million First Mortgage Bond and to pay down the lines
of credit. On December 29, 2020 the Series O First Mortgage Bond matures.</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On January 31, 2001, Artesian Water Company, Inc. entered into a financing agreement with the Delaware Department of Health and Social Services to borrow funds totaling not more than
$4,307,144 from the State's Revolving Loan Fund under an unsecured General Obligation Note. The note bears interest of 4.48%, and is payable ratably over twenty years. The effective rate of the loan, including expenses related to the closing, is 4.57%.
The Company intends to use the proceeds of this revolving loan to repay outstanding short-term debt. As such, at March 31, 2001 and December 31, 2000 the Company has reclassified $4,307,144 from notes payable to long-term debt on the balance sheet.</P>
<P>&nbsp;&nbsp;</P>
<B><P>NOTE 4 - NON-UTILITY OPERATING EXPENSES</P>
</B><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Artesian Wastewater Management, Inc. ("Artesian Wastewater") is an additional non-regulated subsidiary of Artesian Resources, which provides wastewater treatment services in Delaware. On
March 12, 1997 Artesian Wastewater became a one-third owner in AquaStructure Delaware, L.L.C. which markets proposals to design and construct wastewater treatment facilities. Artesian Wastewater operates a small wastewater treatment spray irrigation
facility owned by a municipality in Southern New Castle County Delaware. Artesian Wastewater is paid a lump sum fee to maintain operations at the facility.</P>
<B><P>NOTE 5 - RELATED PARTY TRANSACTIONS</P>
</B><P><BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 certain of Artesian Resources' officers and directors are
partners. 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.</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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. During 2000, Artesian was notified by Glendale Enterprises
Limited that it desired to discontinue the lease for the well sites. In its attempt to acquire the property from the lessor, Artesian received a claim from an unrelated third party with regard to lease payments made since 1986. In March 2001, the parties
agreed to settle the ownership dispute, the third party withdrew its claim, and Artesian acquired the property.</P>
<P><BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Expenses associated with related party transactions are as follows:</P></FONT>
<P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=575>
<TR><TD WIDTH="46%" VALIGN="TOP" HEIGHT=16>
<P></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="46%" VALIGN="TOP" COLSPAN=7 HEIGHT=16>
<FONT SIZE=2><P ALIGN="CENTER">For the Quarter Ended March 31,</FONT></TD>
</TR>
<TR><TD WIDTH="46%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" COLSPAN=3 HEIGHT=16>
<FONT SIZE=2><P ALIGN="CENTER">2001</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="22%" VALIGN="TOP" COLSPAN=3 HEIGHT=16>
<FONT SIZE=2><P ALIGN="CENTER">2000</FONT></TD>
</TR>
<TR><TD WIDTH="46%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" COLSPAN=3 HEIGHT=16>
<FONT SIZE=2><P ALIGN="CENTER">(in thousands)</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="22%" VALIGN="TOP" COLSPAN=3 HEIGHT=16>
<FONT SIZE=2><P ALIGN="CENTER">(in thousands)</FONT></TD>
</TR>
<TR><TD WIDTH="46%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>White Clay Realty</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="8%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="CENTER">44</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="10%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">$</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="CENTER">45</FONT></TD>
</TR>
</TABLE>
</CENTER></P>

<B><FONT SIZE=2><P ALIGN="RIGHT">&nbsp;</P>
<P>NOTE 6 - NET INCOME PER COMMON SHARE AND EQUITY PER COMMON SHARE</P>
</B><P>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:</P>
<P>&nbsp;</P></FONT>
<P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=0 BORDER=0 CELLPADDING=8 WIDTH=569>
<TR><TD WIDTH="49%" VALIGN="TOP" HEIGHT=16>
<P></TD>
<TD WIDTH="52%" VALIGN="TOP" COLSPAN=4 HEIGHT=16>
<FONT SIZE=2><P ALIGN="CENTER">For the Quarter Ended March 31, </FONT></TD>
</TR>
<TR><TD WIDTH="49%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="25%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="CENTER">2001</FONT></TD>
<TD WIDTH="27%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="CENTER">2000</FONT></TD>
</TR>
<TR><TD WIDTH="49%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="25%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="CENTER">(in thousands)</FONT></TD>
<TD WIDTH="27%" VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P ALIGN="CENTER">(in thousands)</FONT></TD>
</TR>
<TR><TD WIDTH="49%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>Average common shares outstanding during</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="49%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;the period for Basic computation</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">2,017</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">2,001&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="49%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>Dilutive effect of employee stock options</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=16>
<U><FONT SIZE=2><P ALIGN="RIGHT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;41</U></FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=16>
<U><FONT SIZE=2><P ALIGN="RIGHT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;45&nbsp;</U></FONT></TD>
</TR>
<TR><TD WIDTH="49%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="49%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>Average common shares outstanding during</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="49%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>&nbsp;&nbsp;the period for Diluted computation</FONT></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">2,058</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">2,046&nbsp;</FONT></TD>
</TR>
<TR><TD WIDTH="49%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">======</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="15%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="RIGHT">======</FONT></TD>
</TR>
</TABLE>
</CENTER></P>

<FONT SIZE=2><P ALIGN="CENTER">&nbsp;</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Equity per common share was $16.04 and $15.93 at March 31, 2001 and 2000, 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, 2001 and 2000, respectively.</P>
<B><P>NOTE 7 - IMPACT OF RECENT ACCOUNTING PRONOUNCEMENTS</P>
</B><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In June 1998, the FASB issued Statement of Financial Accounting Standard No. 133 "Accounting for Derivative Instruments and Hedging Activities" which establishes accounting and reporting
standards for derivative instruments and hedging activities. In June 1999, the FASB issued Statement of Financial Accounting Standards No. 137, "Accounting for Derivative Instruments and the Hedging Activities-Deferral of the Effective Date of FASB
Statement No. 133-an amendment of FASB 133," which deferred the effective date of this standard to financial years beginning after June 15, 2000. In June 2000, the FASB issued Statement of Financial Accounting Standards No. 138, "Accounting for Certain
Derivative Instruments and Certain Hedging Activities," which addresses and amends SFAS No. 133 for a limited number of issues causing implementation difficulties for entities applying SFAS No. 133. The Company adopted SFAS No. 133 incorporating SFAS No.
138 amendments effective January 1, 2001. The adoption of this statement did not have a material impact on the Company's financial condition or results of operations.</P>
<B><P>NOTE 8 - RATE PROCEEDINGS</P>
</B><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On December 5, 2000, Artesian Water filed a petition with the PSC to implement new rates to meet an increased revenue requirement of approximately 22.57% or $6.4 million on an annualized
basis. Effective February 3, 2001, Artesian Water was permitted to collect a temporary increase of $2.5 million on an annualized basis, subject to refund, until permanent rates are approved by the PSC. We cannot predict whether the PSC will approve the
requested increase, a smaller increase or any such request.</P>
<B><P>ITEM 2 - ARTESIAN RESOURCES CORPORATION MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FOR THE PERIOD ENDED MARCH 31, 2001</P>
<P>RESULTS OF OPERATIONS</P>
</B><U><P>Overview</P>
</U><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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, 2001, we had approximately 65,000 metered customers and served a population of approximately 214,000, representing approximately 28% of
Delaware's total population. We believe that we have a reputation for providing water and service of superior quality to our customers.</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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. </P>
<U><P>Operating Revenues</P>
</U><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We realized 98.2% of our total revenue in the first three months of 2001 from the sale of water. Water sales revenue increased $603,000, or 9.7%, for the quarter ended March 31, 2001 compared to the first quarter of
2000. The increase was primarily due to a 3.8% growth in the number of customers served, and implementation of temporary rates related to a pending rate proceeding.</P>
<U><P>Operating Expenses</P>
</U><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating and maintenance expenses increased $310,000, or 7.7%, for the quarter ended March 31, 2001, over the quarter ended March 31, 2000, primarily due to a payroll and benefits increase of $269,000 due to
additional positions and wage increases. The ratio of operating and maintenance expense to total revenue was 62.6% for the three months ended March 31, 2001 as compared to 63.8% for the same period in 2000. </P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization expense increased $72,000, or 11.3%, for the quarter ended March 31, 2001, compared to the comparable quarter of 2000, due to capital additions. Income tax expense decreased $5,000, or 2.9%
for the quarter ended March 31, 2000.</P>
<U><P>Interest Charges</P>
</U><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest charges increased $194,000 or 21.8% for the first quarter of 2001, compared to the first quarter of 2000 due to higher levels of debt due to the issuance of the $20 million series O bond in December 2000,
partially offset by the payoff of the $7 million series K bond.</P>
<U><P>Net Income</P>
</U><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For the quarter ended March 31, 2001, Artesian Resources recorded net income applicable to common stock of $256,000 which represents a $21,000, or a 8.9%, increase as compared to earnings of $235,000 for the quarter
ended March 31, 2000.</P>
<B><P>&nbsp;</P>
<P>LIQUIDITY AND CAPITAL RESOURCES</P>
</B><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our primary sources of liquidity for the first three months of 2001 were $5.1 million provided by borrowings on our line of credit and cash flow from operating activities which provided $1.7 million.</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 2001 will be approximately $14.9 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 2001 are anticipated to be approximately $6.1 million and will be financed with cash flow from our operating activities
and short term borrowings. </P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Developer advances and contributions in aid of construction are used for the installation of mains and hydrants in new developments. An additional $2.7 million of capital expenditures will be financed by developers during
the remainder of 2001.</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At March 31, 2001, we had a working capital deficit of $8.4 million mainly due to borrowings on our lines of credit incurred to finance investment in utility plant. </P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At March 31, 2001, 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, 2001, we had $23.6 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.</P>
<B><P>CAUTIONARY STATEMENT</P>
</B><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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, changes in government policies and changes in economic conditions, could cause results to differ materially from those in the
forward-looking statements. </P>
<B><P>ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK</P>
</B><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;None</P>
<B><P>PART II - OTHER INFORMATION</P>
<P>ITEM 1 - LEGAL PROCEEDINGS</P>
</B><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On December 5, 2000, Artesian Water filed a petition with the PSC to implement new rates to meet an increased revenue requirement of approximately 22.57% or $6.4 million on an annualized
basis. Effective February 3, 2001, Artesian Water was permitted to collect a temporary increase of $2.5 million on an annualized basis, subject to refund, until permanent rates are approved by the PSC. We cannot predict whether the PSC will approve the
requested increase, a smaller increase or any such request.</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There are no other material legal proceedings pending at this date.</P>
<B><P>ITEM 2 - CHANGES IN SECURITIES</P>
</B><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Not applicable.</P>
<P>&nbsp;</P>
<B><P>ITEM 3 - DEFAULTS UPON SENIOR SECURITIES</P>
</B><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Not applicable.</P>
<B><P>ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS</P>
</B><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Not applicable.</P>
<B><P>ITEM 5 - OTHER INFORMATION</P>
</B><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Not applicable.</P>
<B><P>ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K</P>
</B><P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No reports on Form 8-K were filed for the quarter ended March 31, 2001.</P>
<P>&nbsp;</P>
<B><P ALIGN="CENTER">INDEX TO EXHIBITS</P></B></FONT>
<P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=0 BORDER=0 CELLPADDING=8 WIDTH=624>
<TR><TD WIDTH="20%" VALIGN="TOP" HEIGHT=16>
<P><U><FONT SIZE=2>Exhibit Number</U></FONT></TD>
<TD WIDTH="80%" VALIGN="TOP" HEIGHT=16>
<U><FONT SIZE=2><P>Description</U></FONT></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=2 HEIGHT=16><P></P></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P>3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Articles of Incorporation and By-Law</FONT></TD>
</TR>
<TR><TD WIDTH="20%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="80%" VALIGN="TOP" HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="20%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="CENTER">(3.1)</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>Restated Certificate of Incorporation of the Company effective</FONT></TD>
</TR>
<TR><TD WIDTH="20%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="80%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>May 26, 1995, incorporated by reference to the exhibit filed</FONT></TD>
</TR>
<TR><TD WIDTH="20%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="80%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>with Artesian Resources Corporation Form 10-Q for the quarter</FONT></TD>
</TR>
<TR><TD WIDTH="20%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="80%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>ended June 30, 1995.</FONT></TD>
</TR>
<TR><TD WIDTH="20%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="80%" VALIGN="TOP" HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="20%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="CENTER">(3.2)</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>Restated Certificate of Incorporation of the Company effective</FONT></TD>
</TR>
<TR><TD WIDTH="20%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="80%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>April 26, 1994, including Certificate of Correction incorporated</FONT></TD>
</TR>
<TR><TD WIDTH="20%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="80%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>by reference to the exhibit filed with the Artesian Resources</FONT></TD>
</TR>
<TR><TD WIDTH="20%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="80%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>Corporation Form 10-Q for the quarter ended March 31, 1994.</FONT></TD>
</TR>
<TR><TD WIDTH="20%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="80%" VALIGN="TOP" HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="20%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="CENTER">(3.3)</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>By-Laws of the Company effective April 27, 1993, incorporated by</FONT></TD>
</TR>
<TR><TD WIDTH="20%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="80%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>reference to the exhibit filed with the Artesian Resources</FONT></TD>
</TR>
<TR><TD WIDTH="20%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="80%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>Corporation Form 8-K filed April 27, 1993.</FONT></TD>
</TR>
<TR><TD WIDTH="20%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="80%" VALIGN="TOP" HEIGHT=16><P></P></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=2 HEIGHT=16>
<FONT SIZE=2><P>4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Instruments Defining the Rights of Security Holders, Including Indentures</FONT></TD>
</TR>
<TR><TD WIDTH="20%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="80%" VALIGN="TOP" HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="20%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="CENTER">(4.1)</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>Fifteenth Indenture dated as of December 1, 2000 between Artesian Water Company Inc., </FONT></TD>
</TR>
<TR><TD WIDTH="20%" VALIGN="TOP" HEIGHT=14><P></P></TD>
<TD WIDTH="80%" VALIGN="TOP" HEIGHT=14>
<FONT SIZE=2><P>Subsidiary of Artesian Resources Corporation, and Wilmington Ttrust Company, as </FONT></TD>
</TR>
<TR><TD WIDTH="20%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="80%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>Trustee. </FONT></TD>
</TR>
<TR><TD WIDTH="20%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="80%" VALIGN="TOP" HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="20%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="CENTER">(4.2)</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>Thirteenth and Fourteenth Indentures dated as of June 17, 1997, between Artesian </FONT></TD>
</TR>
<TR><TD WIDTH="20%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="80%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>Water Company, Inc., subsidiary of Artesian Resources Corporation, and Wilmington </FONT></TD>
</TR>
<TR><TD WIDTH="20%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="80%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>Trust Company, as Trustee. Incorporated by reference to the exhibits filed with Artesian</FONT></TD>
</TR>
<TR><TD WIDTH="20%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="80%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>Resources Corporation Form 10-Q for the quarter ended June 30, 1997.</FONT></TD>
</TR>
<TR><TD WIDTH="20%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="80%" VALIGN="TOP" HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="20%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="CENTER">(4.3)</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>Twelfth Supplemental Indenture dated as of December 5, 1995, between Artesian Water</FONT></TD>
</TR>
<TR><TD WIDTH="20%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="80%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>Company, Inc. subsidiary of Artesian Resources Corporation, and Wilmington Trust</FONT></TD>
</TR>
<TR><TD WIDTH="20%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="80%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>Company, as Trustee. Incorporated by reference to the exhibit filed with the Artesian</FONT></TD>
</TR>
<TR><TD WIDTH="20%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="80%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>Resources Corporation Annual Report on Form 10-K for the year ended December 31, 1995</FONT></TD>
</TR>
<TR><TD WIDTH="20%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="80%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>ended December 31, 1995.</FONT></TD>
</TR>
<TR><TD WIDTH="20%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="80%" VALIGN="TOP" HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="20%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="CENTER">(4.4)</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>Eleventh Supplemental Indenture dated as of February 16, 1993, between Artesian Water</FONT></TD>
</TR>
<TR><TD WIDTH="20%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="80%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>Company, Inc., subsidiary of Artesian Resources Corporation, and Principal Mutual </FONT></TD>
</TR>
<TR><TD WIDTH="20%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="80%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>Life Insurance Company. Incorporated by reference to the exhibit filed with</FONT></TD>
</TR>
<TR><TD WIDTH="20%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="80%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>Artesian Resources Corporation Annual Report on Form 10-K for the year</FONT></TD>
</TR>
<TR><TD WIDTH="20%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="80%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>ended December 31, 1992.</FONT></TD>
</TR>
<TR><TD WIDTH="20%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="80%" VALIGN="TOP" HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="20%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P ALIGN="CENTER">(4.5)</FONT></TD>
<TD WIDTH="80%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>Tenth Supplemental Indenture dated as of April 1, 1989, between Artesian Water</FONT></TD>
</TR>
<TR><TD WIDTH="20%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="80%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>Company, Inc., subsidiary of Artesian Resources Corporation, and Wilmington Trust</FONT></TD>
</TR>
<TR><TD WIDTH="20%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="80%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>Company, as Trustee. Incorporated by reference to the exhibit filed with Artesian</FONT></TD>
</TR>
<TR><TD WIDTH="20%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="80%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>Resources Corporation Registration Statement on Form 10 filed April 30, 1990, and as</FONT></TD>
</TR>
<TR><TD WIDTH="20%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="80%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>amended by Form 8 filed on June 19, 1990.</FONT></TD>
</TR>
<TR><TD WIDTH="20%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="80%" VALIGN="TOP" HEIGHT=16><P></P></TD>
</TR>
<TR><TD WIDTH="20%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="80%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>Other Supplemental Indentures with amounts authorized less than ten percent of the total</FONT></TD>
</TR>
<TR><TD WIDTH="20%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="80%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>assets of the Company and its subsidiaries on a consolidated basis will be furnished upon</FONT></TD>
</TR>
<TR><TD WIDTH="20%" VALIGN="TOP" HEIGHT=16><P></P></TD>
<TD WIDTH="80%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>request. </FONT></TD>
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<FONT SIZE=2><P>10&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Material </FONT></TD>
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<FONT SIZE=2><P>Contracts </FONT></TD>
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<FONT SIZE=2><P ALIGN="CENTER">(10.1)</FONT></TD>
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<FONT SIZE=2><P>Amended and Restated Artesian Resources Corporation 1992 Non-Qualified Stock </FONT></TD>
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<FONT SIZE=2><P>Option Plan, as amended, filed with the Artesian Resources Corporation Form 10-K for </FONT></TD>
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<FONT SIZE=2><P>year ended Decmber 31, 1998.</FONT></TD>
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<FONT SIZE=2><P ALIGN="CENTER">(10.2)</FONT></TD>
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<FONT SIZE=2><P>Lease dated as of March 1, 1972, between White Clay Realty Company and Artesian</FONT></TD>
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<FONT SIZE=2><P>Water Company, Inc. incorporated by reference to the exhibit filed with Artesian </FONT></TD>
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<FONT SIZE=2><P>Resources Corporation Registration Statement on Form 10 Filed April 30, 1990, and as </FONT></TD>
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<FONT SIZE=2><P>amended by Form 8 filed June 19, 1990.</FONT></TD>
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<FONT SIZE=2><P ALIGN="CENTER">(10.3)</FONT></TD>
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<FONT SIZE=2><P>Plan for Officers incorporated by reference to the exhibit filed with the Artesian </FONT></TD>
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<FONT SIZE=2><P>Resources Corporation Form 10-K for the year ended December 31, 1993.</FONT></TD>
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<FONT SIZE=2><P ALIGN="CENTER">(10.4)</FONT></TD>
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<FONT SIZE=2><P>Artesian Resources Corporation Incentive Stock Option Plan incorporated by reference</FONT></TD>
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<FONT SIZE=2><P>to the exhibit filed with the Artesian Resources Corporation Annual Report on Form 10-K</FONT></TD>
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<FONT SIZE=2><P>for the year ended December 31, 1995.</FONT></TD>
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<FONT SIZE=2><P ALIGN="CENTER">(10.5)</FONT></TD>
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<FONT SIZE=2><P>Share Repurchase Agreement dated April 28, 1999, and related Promissary Note dated</FONT></TD>
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<FONT SIZE=2><P>May 4, 1999.</FONT></TD>
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<FONT SIZE=2><P ALIGN="CENTER">&nbsp;</P>
<B><P>SIGNATURES</P>
</B><P>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 there unto duly authorized.</P>
<B><P ALIGN="CENTER">ARTESIAN RESOURCES CORPORATION</P></B></FONT>
<P ALIGN="CENTER"><CENTER><TABLE CELLSPACING=0 BORDER=0 CELLPADDING=8 WIDTH=624>
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<P><FONT SIZE=2>5/11/01</FONT></TD>
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<U><FONT SIZE=2><P>___/s/Dian C. Taylor___</U></FONT></TD>
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<TD WIDTH="77%" VALIGN="TOP" HEIGHT=16>
<FONT SIZE=2><P>Dian C. Taylor</FONT></TD>
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<FONT SIZE=2><P>President, CEO, and Chair of the Board</FONT></TD>
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<FONT SIZE=2><P>Artesian Resources Corporation and Subsidiaries</FONT></TD>
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<FONT SIZE=2><P>5/11/01</FONT></TD>
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<U><FONT SIZE=2><P>/s/David B. Spacht</U></FONT></TD>
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<FONT SIZE=2><P>David B. Spacht</FONT></TD>
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<FONT SIZE=2><P>Vice President, Chief Financial Officer, and Treasurer</FONT></TD>
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<FONT SIZE=2><P>Artesian Resources Corporation and Subsidiaries</FONT></TD>
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<FONT SIZE=2><P>Form 10Q <BR>
March 2001</FONT></TD>
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