SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                   FORM 8-K/A

                                AMENDMENT NO. 2

                                 CURRENT REPORT

                       Pursuant To Section 13 or 15(d) of
                       The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): March 10, 1999
                                                  --------------


                        PHILADELPHIA SUBURBAN CORPORATION
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)


    Pennsylvania                   1-6659                      23-1702594
   ---------------              ------------                 --------------
   (State or other              (Commission                  (IRS Employer
   jurisdiction of              File Number)                 Identification
    incorporation)                                               Number)


      762 W. Lancaster Avenue, Bryn Mawr, Pennsylvania           19010
      ------------------------------------------------         ----------
         (Address of principal executive offices)              (Zip Code)


                                 (610) 527-8000
              ----------------------------------------------------
              (Registrant's telephone number, including area code)


                                 Not Applicable
         --------------------------------------------------------------
         (Former name or former address, if changed since last report.)





     As indicated in the Registrant's Form 8-K as filed with the Securities and
Exchange Commission on March 12, 1999 ("Form 8-K") and Amendment No. 1 to the
Form 8-K as filed with the Commission on May 5, 1999 ("Amendment No. 1"), the
financial and pro forma financial information required to be filed therewith
would be filed not later than 60 days after March 12, 1999. Accordingly, this
Amendment No. 2 to Form 8-K ("Amendment No. 2") amends and modifies Item 7 of
the Form 8-K to read in its entirety as follows:

Item 7. Financial Statements and Exhibits

     (a)  Financial Statements of Business Acquired

          The financial statements of Consumers Water Company for the period
          ended December 31, 1998 and the notes thereto, and the report of
          Arthur Andersen LLP, independent auditors, thereon were filed as
          Exhibit 7.1 to Amendment No. 1, and such Exhibit is incorporated
          herein by reference.

     (b)  Pro Forma Financial Information (Unaudited)

          The pro forma condensed combined balance sheet (unaudited) as of
          December 31, 1998  and the pro forma combined statement of income 
          (unaudited) for the three years ended December 31, 1998, 1997 and 1996
          and the notes thereto,are filed as Exhibit 7.2 to this Amendment No. 2
          and such Exhibit is incorporated herein by reference.

     (c)  Exhibits

          7.1  Financial Statements of Consumers Water Company as of and for the
               year ended December 31, 1998.

          7.2  Pro forma condensed combined balance sheet (unaudited) as of
               December 31, 1998  and the pro forma combined statement of income
               (unaudited) for the three years ended December 31, 1998, 1997 and
               1996 and the notes thereto.

          23.1 Consent of Arthur Andersen LLP


                                      -2-




                                    SIGNATURE


     Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                              PHILADELPHIA SUBURBAN CORPORATION


Date: May 11, 1999                            /s/  Roy H. Stahl
                                              --------------------------------
                                              Name:  Roy H. Stahl
                                              Title: Senior Vice President and
                                                     General Counsel


                                      -3-




                                  EXHIBIT INDEX


Exhibit                                                                    Page

     7.1  Financial Statements of Consumers Water Company as of and         --
          for the year ended December 31, 1998. (Filed as Exhibit 7.1
          to Current Report on Form 8-K/A, Amendment No. 1, dated 
          May 5, 1999.)

     7.2  Pro forma condensed combined balance sheet (unaudited) as of       5
          December 31, 1998  and the pro forma combined statementof 
          income (unaudited) for the three years ended December 31, 
          1998, 1997 and 1996 and the notes thereto

     23.1 Consent of Arthur Andersen LLP (Filed as Exhibit 23.1 to          --
          Current Report on Form 8-K/A, Amendment No. 1, dated 
          May 5, 1999.)


                                 -4-




                                                                     EXHIBIT 7.2

                        PHILADELPHIA SUBURBAN CORPORATION
                         PRO FORMA FINANCIAL INFORMATION


                                     SUMMARY

     On March 10, 1999, Philadelphia Suburban Corporation ("PSC"
or the "Company") and Consumers Water Company ("CWC") completed a
merger (the "Merger") whereby CWC was merged with and into a
wholly-owned subsidiary of the Company. The Merger was effected
pursuant to the June 27, 1998 merger agreement, which was amended and
restated by the parties effective August 5, 1998. The Merger was
completed after the transaction received the approvals from the state
utility commissions in each state in which the companies operate. The
shareholders of each company approved the Merger at special meetings
held on November 16, 1998. Pursuant to the merger agreement, the
Company issued 13,014,015 shares of common stock in exchange for all
of the outstanding stock of CWC. CWC common shareholders received
1.432 shares of the Company's Common Stock for each CWC common share
and CWC preferred shareholders received 5.649 shares of the Company's
Common Stock for each preferred share. The Merger has been accounted
for as a pooling-of-interests under Accounting Principles Board
Opinion No. 16. CWC serves approximately 226,000 customers in service
territories covering parts of Pennsylvania, Ohio, Illinois, New Jersey
and Maine.

              UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL DATA

     The following historical financial information of PSC and CWC for fiscal
years 1998, 1997 and 1996 presented herein has been derived from the audited
consolidated financial statements of PSC and CWC and includes pro forma
adjustments to give effect as if the Merger had been completed as of the
beginning of the earliest period presented. For purposes of financial reporting,
the Merger has been accounted for under the pooling-of-interests method of
accounting. Accordingly, the assets and liabilities of PSC and CWC have been
recorded at their historical amounts. This information is not necessarily
indicative of the financial results that would have occurred had the Merger been
consummated on the dates for which the Merger is being given effect, or the
merged companies' future financial results.


                                       1




                        PHILADELPHIA SUBURBAN CORPORATION
                   PRO FORMA CONDENSED COMBINED BALANCE SHEETS
                             AS OF DECEMBER 31, 1998
                             (Amounts in thousands)
                                   (Unaudited)

PSC CWC Pro Forma Pro Forma Historical Historical Adjustments Combined --------------------------------------- ---------- Assets Property, plant and equipment, at cost $745,532 $503,089 $ -- $1,248,621 Less accumulated depreciation 135,724 96,703 -- 232,427 ------------------------------------ ---------- Net property, plant and equipment 609,808 406,386 -- 1,016,194 Current assets: Cash 664 7,583 -- 8,247 Accounts receivable and unbilled revenue, net 27,231 13,537 -- 40,768 Inventory, materials and supplies 1,909 1,948 -- 3,857 Prepayments and other current assets 1,152 5,874 -- 7,026 ------------------------------------ ---------- Total current assets 30,956 28,942 -- 59,898 ------------------------------------ ---------- Regulatory assets 53,578 4,119 -- 57,697 Deferred charges and other assets, net 6,100 16,844 (3,368)(4) 19,576 ------------------------------------ ---------- $700,442 $456,291 $(3,368) $1,153,365 ==================================== ========== Liabilities and Stockholders' Equity Stockholders' equity: Cumulative preferred stock $ 3,220 $ 1,044 $(1,044)(1) $ 3,220 Common stock 14,130 9,020 (2,533)(2) 20,617 Capital in excess of par value 160,440 80,440 3,577 (3) 244,457 Retained earnings 66,447 25,236 (8,596)(4) 83,087 Minority interest -- 2,589 -- 2,589 Treasury stock (9,478) -- -- (9,478) ------------------------------------ ---------- Total stockholders' equity 234,759 118,329 (8,596) 344,492 ------------------------------------ ---------- Long--term debt, excluding current portion 261,826 151,483 -- 413,309 Current liabilities: Loans payable and current portion of long-term debt 7,757 19,839 -- 27,596 Accounts payable 16,694 8,554 -- 25,248 Other accrued liabilities 19,397 25,780 5,228 (4) 50,405 ------------------------------------ ---------- Total current liabilities 43,848 54,173 5,228 103,249 ------------------------------------ ---------- Deferred credits and other liabilities: Deferred income taxes and investment tax credits 91,128 35,681 -- 126,809 Customers' advances for construction and other 42,661 21,928 -- 64,589 ------------------------------------ ---------- Total deferred credits and other liabilities 133,789 57,609 -- 191,398 ------------------------------------ ---------- Contributions in aid of construction 26,220 74,697 -- 100,917 ------------------------------------ ---------- $700,442 $456,291 $(3,368) $1,153,365 ==================================== ========== See accompanying notes to Pro Forma Condensed Combined Financial Statements.
2 PHILADELPHIA SUBURBAN CORPORATION PRO FORMA CONDENSED COMBINED STATEMENTS OF INCOME FOR THE YEAR ENDED DECEMBER 31, 1998 (Amounts in thousands, except per share amounts) (Unaudited)
PSC CWC Pro Forma Pro Forma Historical Historical Adjustments Combined ------------------------------------- --------- Operating revenues $150,977 $99,741 $ -- $250,718 Costs and expenses: Operations and maintenance 58,174 41,965 -- 100,139 Depreciation 15,355 11,834 -- 27,189 Amortization 734 1,541 2,275 Taxes other than income taxes 10,035 11,895 -- 21,930 ------------------------------------ -------- Total costs and expenses 84,298 67,235 -- 151,533 Operating income 66,679 32,506 -- 99,185 Interest expense 18,976 12,826 -- 31,802 Gains on sales of properties -- (6,733) -- (6,733) Other (721) (296) -- (1,017) ------------------------------------ -------- Income from continuing operations before income taxes 48,424 26,709 -- 75,133 Provision for income taxes 19,605 10,513 -- 30,118 ------------------------------------ -------- Income from continuing operations $ 28,819 $16,196 $ -- $ 45,015 ==================================== ======== Income per share from continuing operations: Basic $ 1.04 $ 1.80 $ -- $ 1.11 ==================================== ======== Diluted $ 1.03 $ 1.80 $ -- $ 1.10 ==================================== ======== Average common shares outstanding during the period: Basic 27,408 9,005 3,949 40,362 ==================================== ======== Diluted 27,876 9,022 3,956 40,854 ==================================== ======== See accompanying notes to Pro Forma Condensed Combined Financial Statements.
3 PHILADELPHIA SUBURBAN CORPORATION PRO FORMA CONDENSED COMBINED STATEMENTS OF INCOME FOR THE YEAR ENDED DECEMBER 31, 1997 (Amounts in thousands, except per share amounts) (Unaudited)
PSC CWC Pro Forma Pro Forma Historical Historical Adjustments Combined --------------------------------------- --------- Operating revenues $136,171 $98,991 $ -- $235,162 Costs and expenses: Operations and maintenance 55,899 40,672 -- 96,571 Depreciation 14,311 11,270 -- 25,581 Amortization 269 2,127 2,396 Taxes other than income taxes 8,893 12,452 -- 21,345 ----------------------------------- -------- Total costs and expenses 79,372 66,521 -- 145,893 Operating income 56,799 32,470 -- 89,269 Interest expense 17,890 14,774 -- 32,664 Gains on sales of properties -- (690) (690) Other (152) (195) -- (347) ----------------------------------- -------- Income from continuing operations before income taxes 39,061 18,581 -- 57,642 Provision for income taxes 15,873 6,559 -- 22,432 ----------------------------------- -------- Income from continuing operations $ 23,188 $12,022 $ -- $ 35,210 =================================== ======== Income per share from continuing operations: Basic $ 0.89 $ 1.36 $ -- $ 0.91 =================================== ======== Diluted $ 0.88 $ 1.36 $ -- $ 0.90 =================================== ======== Average common shares outstanding during the period: Basic 25,908 8,857 3,885 38,650 =================================== ======== Diluted 26,273 8,859 3,886 39,018 =================================== ======== See accompanying notes to Pro Forma Condensed Combined Financial Statements.
4 PHILADELPHIA SUBURBAN CORPORATION PRO FORMA CONDENSED COMBINED STATEMENTS OF INCOME FOR THE YEAR ENDED DECEMBER 31, 1996 (Amounts in thousands, except per share amounts) (Unaudited)
PSC CWC Pro Forma Pro Forma Historical Historical Adjustments Combined -------------------------------------- --------- Operating revenues $122,503 $93,810 $ -- $216,313 Costs and expenses: Operations and maintenance 51,615 41,325 -- 92,940 Depreciation 13,068 10,128 -- 23,196 Amortization 265 1,816 2,081 Taxes other than income taxes 8,265 11,823 -- 20,088 ----------------------------------- -------- Total costs and expenses 73,213 65,092 -- 138,305 Operating income 49,290 28,718 -- 78,008 Interest expense 15,311 14,163 -- 29,474 Loss on sales of properties -- 342 342 Other 230 (592) -- (362) ----------------------------------- -------- Income from continuing operations before income taxes 33,749 14,805 -- 48,554 Provision for income taxes 13,971 5,379 -- 19,350 ----------------------------------- -------- Income from continuing operations $ 19,778 $ 9,426 $ -- $ 29,204 =================================== ======== Income per share from continuing operations: Basic $ 0.79 $ 1.09 $ -- $ 0.78 =================================== ======== Diluted $ 0.78 $ 1.09 $ -- $ 0.77 =================================== ======== Average common shares outstanding during the period: Basic 24,966 8,625 3,785 37,376 =================================== ======== Diluted 25,262 8,628 3,786 37,676 =================================== ======== See accompanying notes to Pro Forma Condensed Combined Financial Statements.
5 PHILADELPHIA SUBURBAN CORPORATION NOTES TO PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS (In thousands of dollars, except per share amounts) (Unaudited) Description of Transaction and Basis of Presentation On March 10, 1999, PSC and CWC completed a Merger whereby CWC was merged with and into a wholly-owned subsidiary of the Company. The Merger was effected pursuant to the June 27, 1998 merger agreement, which was amended and restated by the parties effective August 5, 1998. The Merger was completed after the transaction received the approvals from the state utility commissions in each state in which the companies operate. The shareholders of each company approved the Merger at special meetings held on November 16, 1998. Pursuant to the merger agreement, the Company issued 13,014,015 shares of common stock in exchange for all of the outstanding stock of CWC on March 10, 1999. CWC common shareholders received 1.432 shares of the Company's Common Stock for each CWC common share and CWC preferred shareholders received 5.649 shares of the Company's Common Stock for each preferred share. The Merger has been accounted for as a pooling-of-interests under Accounting Principles Board Opinion No. 16 and accordingly, PSC's historical consolidated financial statements subsequent to the Merger will be restated to include the accounts and results of CWC. Financial Statement Classifications As necessary for fair presentation of the pro forma financial statements, amounts previously reported by PSC and CWC have been reclassified for consistency of presentation. Pro Forma Adjustments (1) Redemption of CWC Preferred Stock (in exchange for PSC Common Stock). (2) The table below sets forth the pro forma adjustments to Common Stock: December 31, 1998 --------------------------- Number Dollars in of Shares Thousands ----------- ---------- Conversion of CWC Preferred Stock to PSC Common Stock 58,964 $ 29 Less: Redemption of outstanding CWC Common Stock (in exchange for PSC Common Stock) (9,020,037) (9,020) Amount of PSC Common Stock, par value $0.50 per share, to be issued for CWC Common Stock 12,916,693 6,458 ----------- ------ Pro forma adjustment to Common Stock 3,955,620 $(2,533) ======= Historical balance of PSC Common Stock outstanding, par value $0.50 per share 27,726,654 Historical balance of CWC Common Stock outstanding, par value $1.00 per share 9,020,037 ----------- Pro forma historical balance of PSC Common Stock outstanding, par value $0.50 per share 40,702,311 =========== 6 PHILADELPHIA SUBURBAN CORPORATION NOTES TO PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS (continued) (In thousands of dollars, except per share amounts) (Unaudited) The number of shares issued on the date of consummation of the Merger has been based on the number of shares of CWC Common Stock (9,046,824 shares) and CWC Preferred Stock (10,438 shares) outstanding on the date of consummation and the actual exchange ratio of 1.432 for the CWC common shares and 5.649 for the CWC preferred shares. (3) Reflects adjustment to capital in excess of par value resulting from the exchange of CWC Common Stock and CWC Preferred Stock for PSC Common Stock. (4) Reflects adjustment of $8,596, net of tax benefits of $1,525, for merger-related costs, consisting primarily of fees for investment bankers, attorneys, accountants, financial printing, other administrative charges and restructuring costs of $2,462, net of tax benefits of $1,325, that includes severance and other costs associated with the closing of CWC's corporate office. As of December 31, 1998, $3,368 was paid and deferred by PSC and CWC and $6,753 was incurred in the first quarter of 1999. The total merger transaction costs of $10,121, less tax benefits of $1,525, have been charged-off in the first quarter of 1999. Pro Forma Income Per Share from Continuing Operations Pro forma income per share from continuing operations gives effect to the exchange of CWC Common Stock and CWC Preferred Stock for PSC Common Stock based on the exchange ratio as described in the Description of Transaction and Basis of Presentation Footnote. 7