Net income increases 23 percent on strong revenue growth
BRYN MAWR, Pa.--(BUSINESS WIRE)--
Aqua America, Inc. (NYSE: WTR) today reported results for the quarter
ending September 30, 2012. Diluted earnings per share for the quarter
were $0.36, compared to $0.30 for the corresponding quarter in 2011, on
1 percent more shares outstanding. Revenue for the quarter was $214.6
million compared to $191.1 million in the same period of 2011, an
increase of 12.3 percent. Net income for the quarter rose to $50.7
million from $41.1 million in the same quarter of 2011, an increase of
23.2 percent.
For the first three quarters of 2012, net income increased 19.2 percent
to $130 million from $109.1 million and corresponding diluted earnings
per share increased 17.7 percent to $0.93 from $0.79 for the same period
in 2011. Operating revenues for the first nine months of 2012 totaled
$570.3 million, an increase of 9.6 percent from revenue of $520.5
million for the nine months ending September 30, 2011.
Aqua America Chairman and CEO Nicholas DeBenedictis said, "The company
posted solid third quarter financial results despite lower sendout due
to weather in some of our state operations including our largest, Aqua
Pennsylvania. These results reflect management's focus on investing the
capital needed for infrastructure improvements and receiving timely rate
relief, while simultaneously working to control operating costs. I am
also pleased to report the successful integration and accretive results
of the 57,000 new customers recently acquired from Ohio American."
The Board of Directors has declared a 6.1 percent increase of $0.01 per
share quarterly from $0.165 to $0.175 per share, effective December 1,
2012 payable to shareholders of record on November 16, 2012. On an
annualized basis, this increases the dividend to $0.70 per share or
$0.04 above the current annualized dividend rate of $0.66 per share.
This is the 22nd dividend increase in 21 years. Aqua has paid
a consecutive quarterly dividend for more than 65 years.
DeBenedictis added, "Through the first nine months of 2012, management
continued to excel in controlling operating costs. Operations and
maintenance expenses for the quarter were nearly flat compared to the
same quarter last year, adjusted for the additional expenses
specifically related to our new Ohio operations."
Income from continuing operations (GAAP financial measure) for the
quarter were $50.3 million compared to $44.9 million for the same period
in 2011, an increase of 12.1 percent. Income from continuing operations
in the third quarter of 2011 was positively impacted by $3.4 million of
net state income tax benefits that did not occur in 2012. The
corresponding earnings per diluted share from continuing operations for
the quarter were $0.36, compared to $0.32 for the same quarter in 2011.
Income from continuing operations before net state income tax benefit
associated with 100 percent bonus depreciation (Non-GAAP financial
measure) increased 21.2 percent in the third quarter of 2012 to $50.3
million from $41.5 million for the same period in 2011. The
corresponding (Non-GAAP) earnings per diluted share for the quarter were
$0.36, compared to $0.30 for the same quarter in 2011, an increase of 20
percent. A reconciliation of non-GAAP to GAAP financial measures is
provided in the accompanying financial tables.
To date in 2012, the company has received rate awards in New Jersey,
Pennsylvania, Ohio, Illinois, Texas, and Florida, and infrastructure
surcharges in various states estimated to increase annualized revenues
by approximately $44.3 million. The company still has $9.2 million of
rate cases pending before two state regulatory bodies in Texas and
Virginia. Additionally, Aqua's state subsidiaries are expected to seek
rate relief by filing rate requests or surcharges of approximately $7
million later in 2012. The primary driver of these filings is the
recovery of capital (infrastructure) investments and increased expenses
since the companies' previous rate filings in those states. The timing
and extent to which rate increases might be granted by the applicable
regulatory agencies will vary by state.
Aqua America continues to expand its operations through its
growth-through-acquisition program and has completed 12 acquisitions to
date in 2012. The most recently announced acquisition is that of the
Kidder Township wastewater system, formerly a municipally owned system
operated by Aqua Pennsylvania, serving approximately 3,000 people in
Carbon County, Pennsylvania.
DeBenedictis said, "After operating and managing the Kidder Township
wastewater system for more than five years, we were certainly pleased to
have won the bid to acquire the assets. This system is relatively new
with much of it constructed in 2002. The five years we spent managing
its operations and getting to know the community has led to a seamless
transition for customers and an assurance that their wastewater system
will continue to be operated and managed by professionals."
In the first nine months of the year we added 3,724 customers through
organic growth, which is consistent with of the U.S. Commerce
Department's recent report on national housing statistics showing an
increase in housing starts.
On September 25, Aqua America announced that it had offered to sell all
of its Florida operations to the Florida Governmental Utility Authority
(FGUA) for $95 million. The sale of its Florida water and wastewater
systems would conclude Aqua America's operations in Florida. The FGUA
has until November 30 to accept or decline the offer, and does not have
an exclusivity agreement with Aqua America to purchase the systems.
Aqua Pennsylvania has priced $80 million in privately placed first
mortgage bonds at an average rate of 3.81%. Proceeds from this
transaction will be used to refinance higher coupon first mortgage bonds
and pay down its revolving credit facility. Closing is scheduled for
early November. As of September 30, 2012, Aqua America's weighted
average cost of fixed-rate long-term debt was 5.2 percent, and the
company had $111.6 million available on its credit lines. In September,
Standard & Poor's reiterated its A+ credit rating for Aqua Pennsylvania,
Inc., Aqua America's largest subsidiary. Of the 227 electric, gas and
water utilities rated by Standard & Poor's, only one has a higher rating
than Aqua Pennsylvania.
In late 2011, operating subsidiaries of Aqua America and Penn Virginia
entered into a joint venture to form Aqua — PVR Water Services, LLC to
construct and operate a private pipeline system to supply fresh water to
certain natural gas producers drilling in the Marcellus Shale. The
18-mile steel pipeline began servicing certain drillers in North-central
Pennsylvania on an as-needed basis in April this year. Phase II
construction of a second 18-mile stretch began in June and is expected
to be completed by the end of the year. To date, it is estimated that
the pipeline has eliminated the need for more than 15,000 water truck
trips over rural Pennsylvania roads.
In the first nine months of 2012, the company invested $262.8 million in
regulated infrastructure improvements as part of its capital investment
program, compared to $222.4 million in the same period of 2011. "The
company remains on track to invest more than $300 million in 2012. Our
capital expenditures are focused on pipe replacement projects to improve
our distribution network and plant upgrades to enhance water quality and
service reliability for our customers," said DeBenedictis.
Aqua Pennsylvania's, Ingram's Mill Water Treatment Plant was recently
notified that it will soon receive the "Phase III Directors Award of
Recognition" from the Partnership for Safe Water, a national
volunteer initiative developed by the Environmental Protection Agency
(EPA) and other water organizations representing water suppliers
striving to provide their communities with drinking water quality that
surpasses the required federal standards. Aqua's Ingram's Mill Plant is
among 116 surface water treatment plants in Pennsylvania to be presented
the award for successfully completing the Self-Assessment and Peer
Review phase of the Partnership program, a phase which consists
of identifying factors that limit treatment plant performance and taking
corrective actions to address any needs to assure the highest quality of
water.
Aqua's efforts to reduce its carbon emissions have led to the
construction of four solar farms in the past two years. These solar
farms reduce the power needs of treatment facilities, therefore
shrinking the company's carbon footprint and reducing the need for the
construction of new power generation facilities. Collectively, the solar
farms are expected to reduce Aqua's grid-tied usage, resulting in a
direct economic benefit to Aqua's ratepayers of approximately $500,000
in avoided energy costs in 2012.
The company's conference call with financial analysts will take place on
Friday, November 2, 2012 at 11 a.m. Eastern Daylight Time. The call will
be webcast live so that interested parties may listen over the Internet
by logging on to www.aquaamerica.com
and following the link for Investor Relations. The conference call will
be archived in the investor relations section of the company's website
for 90 days following the call. Additionally, the call will be recorded
and made available for replay at 2 p.m. on November 2, 2012 for 10
business days following the call. To access the audio replay in the
U.S., dial 888.203.1112 (pass code 7456917). International callers can
dial 719.457.0820 (pass code 7456917).
Aqua America is one of the largest U.S.-based, publicly-traded water
utilities and serves almost 3 million residents in Pennsylvania, Ohio,
North Carolina, Illinois, Texas, New Jersey, Indiana, Florida, Virginia,
and Georgia. Aqua America is listed on the New York Stock Exchange under
the ticker symbol WTR.
This release contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995, including, among
others, the estimated revenues from rate awards received, the completion
of major rate cases later in 2012, the company's plans to file future
rate increases and the timing of the impact of such cases, the company's
commitment to its growth-through-acquisition program, the company's
ability to reach an agreement of sale with FGUA and whether the sale
occurs, the expected closing on the $80 million financing, the
anticipated completion of the next phase of the Marcellus Shale water
pipeline project, the continuation of the company's capital investment
program and the amount of capital investment by the company planned for
2012 and the projected benefits from the company's solar farms. There
are important factors that could cause actual results to differ
materially from those expressed or implied by such forward-looking
statements including: general economic business conditions; housing and
customer growth trends; unfavorable weather conditions; the success of
certain cost containment initiatives; the extent to which rate increase
requests are granted and the timing of rate awards; changes in
regulations or regulatory treatment; availability and the cost of
capital; disruptions in the credit markets; the success of growth
initiatives; and other factors discussed in our Annual Report on Form
10-K for the period ending December 31, 2011, which is on file with the
SEC. We undertake no obligation to publicly update or revise any
forward-looking statement.
WTRF
|
|
|
Aqua America, Inc. and Subsidiaries
|
|
Selected Operating Data
|
|
(In thousands, except per share amounts)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
Nine Months Ended
|
|
|
|
September 30,
|
|
September 30,
|
|
|
|
|
2012
|
|
|
2011
|
|
|
|
2012
|
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating revenues
|
|
$
|
214,565
|
|
$
|
191,083
|
|
|
$
|
570,279
|
|
$
|
520,498
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations
|
|
$
|
50,284
|
|
$
|
44,861
|
|
|
$
|
118,953
|
|
$
|
110,177
|
|
|
Income (loss) from discontinued operations
|
|
|
375
|
|
|
(3,738
|
)
|
|
|
11,055
|
|
|
(1,113
|
)
|
|
Net income attributable to common shareholders
|
|
$
|
50,659
|
|
$
|
41,123
|
|
|
$
|
130,008
|
|
$
|
109,064
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations per share:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.36
|
|
$
|
0.32
|
|
|
$
|
0.85
|
|
$
|
0.80
|
|
|
Diluted
|
|
$
|
0.36
|
|
$
|
0.32
|
|
|
$
|
0.85
|
|
$
|
0.79
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from discontinued operations per share:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.00
|
|
$
|
(0.03
|
)
|
|
$
|
0.08
|
|
$
|
(0.01
|
)
|
|
Diluted
|
|
$
|
0.00
|
|
$
|
(0.03
|
)
|
|
$
|
0.08
|
|
$
|
(0.01
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Net income per common share:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.36
|
|
$
|
0.30
|
|
|
$
|
0.93
|
|
$
|
0.79
|
|
|
Diluted
|
|
$
|
0.36
|
|
$
|
0.30
|
|
|
$
|
0.93
|
|
$
|
0.79
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic average common shares outstanding
|
|
|
139,676
|
|
|
138,297
|
|
|
|
139,185
|
|
|
138,081
|
|
|
Diluted average common shares outstanding
|
|
|
140,487
|
|
|
138,951
|
|
|
|
139,751
|
|
|
138,625
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aqua America, Inc. and Subsidiaries
|
|
Consolidated Statement of Income
|
|
(In thousands, except per share amounts)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
Nine Months Ended
|
|
|
|
September 30,
|
|
September 30,
|
|
|
|
|
2012
|
|
|
|
2011
|
|
|
|
2012
|
|
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating revenues
|
|
$
|
214,565
|
|
|
$
|
191,083
|
|
|
$
|
570,279
|
|
|
$
|
520,498
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost & expenses:
|
|
|
|
|
|
|
|
|
|
Operations and maintenance
|
|
|
71,268
|
|
|
|
66,502
|
|
|
|
199,664
|
|
|
|
190,241
|
|
|
Depreciation
|
|
|
28,251
|
|
|
|
26,129
|
|
|
|
82,736
|
|
|
|
77,645
|
|
|
Amortization
|
|
|
1,320
|
|
|
|
979
|
|
|
|
3,773
|
|
|
|
4,041
|
|
|
Taxes other than income taxes
|
|
|
13,191
|
|
|
|
10,771
|
|
|
|
34,700
|
|
|
|
31,431
|
|
|
Total
|
|
|
114,030
|
|
|
|
104,381
|
|
|
|
320,873
|
|
|
|
303,358
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
100,535
|
|
|
|
86,702
|
|
|
|
249,406
|
|
|
|
217,140
|
|
|
|
|
|
|
|
|
|
|
|
|
Other expense (income):
|
|
|
|
|
|
|
|
|
|
Interest expense, net
|
|
|
19,597
|
|
|
|
19,561
|
|
|
|
58,384
|
|
|
|
58,460
|
|
|
Allowance for funds used during construction
|
|
|
(919
|
)
|
|
|
(1,794
|
)
|
|
|
(3,484
|
)
|
|
|
(5,689
|
)
|
|
Gain on sale of other assets
|
|
|
(320
|
)
|
|
|
(216
|
)
|
|
|
(826
|
)
|
|
|
(475
|
)
|
|
Equity earnings in joint venture
|
|
|
(682
|
)
|
|
|
-
|
|
|
|
(931
|
)
|
|
|
-
|
|
|
Income from continuing operations before income taxes
|
|
|
82,859
|
|
|
|
69,151
|
|
|
|
196,263
|
|
|
|
164,844
|
|
|
Provision for income taxes
|
|
|
32,575
|
|
|
|
24,290
|
|
|
|
77,310
|
|
|
|
54,667
|
|
|
Income from continuing operations
|
|
|
50,284
|
|
|
|
44,861
|
|
|
|
118,953
|
|
|
|
110,177
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued operations:
|
|
|
|
|
|
|
|
|
|
Income from discontinued operations before income taxes
|
|
|
819
|
|
|
|
6,206
|
|
|
|
18,813
|
|
|
|
10,454
|
|
|
Provision for income taxes
|
|
|
444
|
|
|
|
9,944
|
|
|
|
7,758
|
|
|
|
11,567
|
|
|
Income (loss) from discontinued operations
|
|
|
375
|
|
|
|
(3,738
|
)
|
|
|
11,055
|
|
|
|
(1,113
|
)
|
|
Net income attributable to common shareholders
|
|
$
|
50,659
|
|
|
$
|
41,123
|
|
|
$
|
130,008
|
|
|
$
|
109,064
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations per share:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.36
|
|
|
$
|
0.32
|
|
|
$
|
0.85
|
|
|
$
|
0.80
|
|
|
Diluted
|
|
$
|
0.36
|
|
|
$
|
0.32
|
|
|
$
|
0.85
|
|
|
$
|
0.79
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from discontinued operations per share:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.00
|
|
|
$
|
(0.03
|
)
|
|
$
|
0.08
|
|
|
$
|
(0.01
|
)
|
|
Diluted
|
|
$
|
0.00
|
|
|
$
|
(0.03
|
)
|
|
$
|
0.08
|
|
|
$
|
(0.01
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Net income per common share:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.36
|
|
|
$
|
0.30
|
|
|
$
|
0.93
|
|
|
$
|
0.79
|
|
|
Diluted
|
|
$
|
0.36
|
|
|
$
|
0.30
|
|
|
$
|
0.93
|
|
|
$
|
0.79
|
|
|
|
|
|
|
|
|
|
|
|
|
Average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
139,676
|
|
|
|
138,297
|
|
|
|
139,185
|
|
|
|
138,081
|
|
|
Diluted
|
|
|
140,487
|
|
|
|
138,951
|
|
|
|
139,751
|
|
|
|
138,625
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aqua America, Inc. and Subsidiaries
|
|
Income Excluding Net State Income Tax Benefit Associated with 100%
Bonus Depreciation
|
|
(In thousands, except per share amounts)
|
|
(A Non-GAAP, Unaudited Number)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
Nine Months Ended
|
|
|
|
September 30,
|
|
September 30,
|
|
|
|
|
2012
|
|
|
2011
|
|
|
2012
|
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations (GAAP financial measure)
|
|
$
|
50,284
|
|
$
|
44,861
|
|
$
|
118,953
|
|
$
|
110,177
|
|
Less: Net state income tax benefit associated with 100% bonus
depreciation
|
|
|
-
|
|
|
3,382
|
|
|
-
|
|
|
11,193
|
|
Income from continuing operations before net state income tax
benefit associated with 100% bonus depreciation (Non-GAAP
financial measure)
|
|
$
|
50,284
|
|
$
|
41,479
|
|
$
|
118,953
|
|
$
|
98,984
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations per common share (GAAP financial
measure):
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.36
|
|
$
|
0.32
|
|
$
|
0.85
|
|
$
|
0.80
|
|
Diluted
|
|
$
|
0.36
|
|
$
|
0.32
|
|
$
|
0.85
|
|
$
|
0.79
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations per common share before net
state income tax benefit associated with 100% bonus depreciation
(Non-GAAP financial measure):
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.36
|
|
$
|
0.30
|
|
$
|
0.85
|
|
$
|
0.72
|
|
Diluted
|
|
$
|
0.36
|
|
$
|
0.30
|
|
$
|
0.85
|
|
$
|
0.71
|
|
|
|
|
|
|
|
|
|
|
|
Average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
139,676
|
|
|
138,297
|
|
|
139,185
|
|
|
138,081
|
|
Diluted
|
|
|
140,487
|
|
|
138,951
|
|
|
139,751
|
|
|
138,625
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aqua America, Inc. and Subsidiaries
|
|
Condensed Consolidated Balance Sheets
|
|
(In thousands of dollars)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
|
|
December 31,
|
|
|
|
2012
|
|
2011
|
|
|
|
|
|
|
|
Net property, plant and equipment
|
|
$ 3,863,365 |
|
$ 3,530,942 |
|
Current assets
|
|
230,985
|
|
405,358
|
|
Regulatory assets and other assets
|
|
392,804
|
|
412,120
|
|
|
|
$ 4,487,154 |
|
$ 4,348,420 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total equity
|
|
$ 1,314,925 |
|
$ 1,251,817 |
|
Long-term debt, excluding current portion
|
|
1,519,694
|
|
1,395,457
|
|
Current portion of long-term debt and loans payable
|
|
138,547
|
|
188,200
|
|
Other current liabilities
|
|
176,563
|
|
258,618
|
|
Deferred credits and other liabilities
|
|
1,337,425
|
|
1,254,328
|
|
|
|
$ 4,487,154 |
|
$ 4,348,420 |
|
|
|
|
|
|
Aqua America, Inc.
Brian Dingerdissen
Director, Investor
Relations
610-645-1191
bjdingerdissen@aquaamerica.com
or
Donna
Alston
Director, Communications
610-645-1095
dpalston@aquaamerica.com
Source: Aqua America, Inc.
News Provided by Acquire Media
