Earnings per share $0.27 vs. $0.22
BRYN MAWR, Pa.--(BUSINESS WIRE)--
Aqua America, Inc. (NYSE: WTR) today reported results for the quarter
ending March 31, 2012. Revenues for the quarter were $170.2 million
compared to $163.6 million for the same period of 2011, an increase of 4
percent. Net income for the quarter rose to $37.9 million from $30.4
million in 2011, an increase of 25 percent. Corresponding diluted
earnings per share for the quarter were $0.27, compared to $0.22 for the
same quarter in 2011, an increase of 23 percent, on less than one
percent more shares outstanding.
The Board of Directors declared a quarterly cash dividend payment of
$0.165 per share payable on June 1, 2012 to all shareholders of record
on May 17, 2012. The June dividend payment reflects the 6.5 percent
increase from the June 2011 dividend. The company has increased its
dividend 21 times in the last 20 years, and has paid a consecutive
quarterly dividend for more than 65 years.
First quarter net income and cash generation in 2012 were positively
impacted by income from discontinued operations of $10.2 million,
primarily a result of the gain from the sale of Aqua America's Maine
subsidiary. Income from continuing operations was positively impacted in
2011 by $4.3 million of net state income tax benefit. Income from
continuing operations (GAAP financial measure) were $27.7 million
compared to $30.6 million for the same period in 2011. The corresponding
earnings per diluted share were $0.20, compared to $0.22 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 5 percent in the first quarter of
2012 to $27.7 million from $26.3 million for the same period in 2011.
The corresponding earnings per diluted share were $0.20, compared to
$0.19 for the same quarter in 2011, an increase of 5 percent.
Aqua America Chairman and CEO Nicholas DeBenedictis said, "The solid
financial results in the first quarter of 2012 reflect management's
ability to successfully continue to control operating costs while
completing the portfolio transformation program begun in 2011 and
minimizing regulatory lag as we await the completion of major rate cases
later this year. The company was able to increase revenues and net
income, while continuing to make prudent investments in infrastructure
and environmental improvements."
DeBenedictis added, "Management remains focused on controlling expenses
as evidenced by its operations and maintenance expense-to-revenue ratio
(efficiency ratio), which at 38 percent makes Aqua America one of the
nation's most efficient utilities."
The company continues to follow its portfolio rationalization of
expansion in areas where it has critical mass and pruning operations
that do not fit into the company's future growth plans. In January 2012,
Aqua America completed the sale of its Maine operations to Connecticut
Water Service, Inc. (NASDAQ: CTWS), which serves 16,000 customers in 17
communities throughout Maine. On May 1, 2012, Aqua America completed the
sale of its New York operations (51,000 customers) to American Water
Works which was announced in July 2011. With the close of the sale of
New York on May 1, Aqua America also finalized the acquisition of all of
American Water's regulated operations in Ohio, which include eight water
systems and one wastewater system that serve approximately 57,280 water
and wastewater customers, bringing Aqua America's new total in that
state to approximately 145,000 customers. With the sales this year of
Maine and New York, Missouri (2011) and South Carolina (2010) and the
purchase of American Water's operations in Texas (2011), Aqua America
has concentrated its regulated operations in nine states (Pennsylvania,
Ohio, North Carolina, Illinois, Texas, New Jersey, Florida, Indiana and
Virginia), along with an unregulated operation in Georgia. "Transactions
such as the Ohio for New York and Texas for Missouri, allow the company
to be better positioned for future growth in energy-rich states while
the critical mass in these states allows the company to have efficient
operations," said DeBenedictis.
Aqua America remains committed to expanding its operations with its
growth-through-acquisition program and has announced three acquisitions
to date in 2012 including the municipal water system assets of Mifflin
Township Water Authority in Mifflin Township, Pennsylvania, which serves
approximately 1,500 people. "The Mifflin Township acquisition
demonstrates the ability of private water utilities, like Aqua
Pennsylvania, to work with municipal authorities to find solutions to
the challenging situation municipally owned utility systems are facing
due to increasing capital needs and more stringent environmental
regulations. It is just one example of how the sale of a municipal
system to a private utility like Aqua America can benefit both parties,"
explained DeBenedictis.
To date in 2012, the company has received rate awards in New Jersey,
Ohio, Illinois, and Florida and infrastructure surcharges in various
states estimated to increase annualized revenues by approximately $13.6
million. The company has $53.9 million of rate cases pending before
three state regulatory bodies in Pennsylvania, Texas and Virginia.
Additionally, the company expects to seek rate relief by filing rate
cases in three states later in 2012 that are expected to impact 2012 and
2013 results. The primary driver of these filings is the recovery of
capital (infrastructure) investments and increased expenses since Aqua's
previous rate filings. The timing and extent to which rate increases
might be granted by the applicable regulatory agencies will vary by
state.
During the first quarter of 2012, the company invested $81 million in
infrastructure improvements as part of its capital investment program,
and expects to invest more than $300 million for utility system
improvements for its customers throughout 2012. "As part of the
company's efforts to be environmental stewards, we continue to look for
new opportunities to invest capital at our treatment facilities and
infrastructure improvements in ways that benefit the environment, our
customers and our shareholders," said DeBenedictis.
Aqua America's weighted average cost of fixed-rate long-term debt was
5.28 percent as of March 31, 2012 and the company has $90.7 million
available on its credit lines as of May 1, 2012. In April, Standard and
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. DeBenedictis said, "The ability to access low-cost
financing is a reflection of the company's credit ratings and balance
sheet. The company is proud of the continued improvement in its weighted
average cost of fixed-rate long-term debt which has helped to reduce the
customer rate impact of its investments in infrastructure improvements."
In late 2011, Aqua America entered into a joint venture of certain Aqua
America and Penn Virginia operating subsidiaries, to form Aqua — PVR
Water Services, LLC. During the second quarter of 2012, Phase 1 of the
joint venture's water pipeline project became operational. The newly
constructed 18-mile private pipeline is now supplying fresh water daily
needed by certain natural gas producers drilling in the Marcellus Shale
region of north-central Pennsylvania. By the end of 2012, Phase II of
the project is scheduled to be completed and will increase supply by 3
million gallons per day. This water supply pipeline has already
effectively eliminated the need for more than 2,000 truck trips from
Pennsylvania roads and bridges.
The company's conference call with financial analysts will take place on
Thursday, May 3, 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 May 3, 2012 for 10 business
days following the call. To access the audio replay in the U.S., dial
888.203.1112 (pass code 7406722). International callers can dial
719.457.0820 (pass code 7406722).
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, management's ability to control operating costs and minimize
regulatory lag, the company's commitment to its
growth-through-acquisition program, the ability of private water
utilities to find solutions to challenges faced by municipal systems,
the continuation of the company's portfolio rationalization and pruning
program and the projected impact of this program, the estimated revenues
from rate awards received, the completion of major rate cases later in
2012, the anticipated completion of the next phase of the Marcellus
Shale water pipeline project, the company's plans to file future rate
increases and the timing of the impact of such cases, the expectation
for expense control and improvement in the operations and maintenance
expense to revenue ratio, the continuation of the company's capital
investment program and the amount of capital investment by the company
planned for 2012 the company's ability to access the capital markets,
and the continued improvement in the company's weighted average cost of
fixed rate long-term debt. 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
|
|
|
|
March 31,
|
|
|
|
2012
|
|
2011
|
|
|
|
|
|
|
|
Operating revenues
|
|
$
|
170,244
|
|
$
|
163,615
|
|
|
|
|
|
|
|
|
Income from continuing operations
|
|
$
|
27,658
|
|
$
|
30,646
|
|
|
Income (loss) from discontinued operations
|
|
|
10,246
|
|
|
(295
|
)
|
|
Net income attributable to common shareholders
|
|
$
|
37,904
|
|
$
|
30,351
|
|
|
|
|
|
|
|
|
Income from continuing operations per share:
|
|
|
|
|
|
Basic
|
|
$
|
0.20
|
|
$
|
0.22
|
|
|
Diluted
|
|
$
|
0.20
|
|
$
|
0.22
|
|
|
|
|
|
|
|
|
Income from discontinued operations per share:
|
|
|
|
|
|
Basic
|
|
$
|
0.07
|
|
$
|
0.00
|
|
|
Diluted
|
|
$
|
0.07
|
|
$
|
0.00
|
|
|
|
|
|
|
|
|
Net income per common share:
|
|
|
|
|
|
Basic
|
|
$
|
0.27
|
|
$
|
0.22
|
|
|
Diluted
|
|
$
|
0.27
|
|
$
|
0.22
|
|
|
|
|
|
|
|
|
Basic average common shares outstanding
|
|
|
138,762
|
|
|
137,825
|
|
|
Diluted average common shares outstanding
|
|
|
139,456
|
|
|
138,384
|
|
|
|
|
|
|
|
|
|
|
Aqua America, Inc. and Subsidiaries
|
|
Consolidated Statement of Income
|
|
(In thousands, except per share amounts)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
|
|
March 31,
|
|
|
|
2012
|
|
2011
|
|
|
|
|
|
|
|
Operating revenues
|
|
$
|
170,244
|
|
|
$
|
163,615
|
|
|
|
|
|
|
|
|
Cost & expenses:
|
|
|
|
|
|
Operations and maintenance
|
|
|
68,265
|
|
|
|
63,731
|
|
|
Depreciation
|
|
|
27,595
|
|
|
|
26,276
|
|
|
Amortization
|
|
|
1,215
|
|
|
|
1,637
|
|
|
Taxes other than income taxes
|
|
|
10,090
|
|
|
|
11,051
|
|
|
Total
|
|
|
107,165
|
|
|
|
102,695
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
63,079
|
|
|
|
60,920
|
|
|
|
|
|
|
|
|
Other expense (income):
|
|
|
|
|
|
Interest expense, net
|
|
|
19,248
|
|
|
|
19,356
|
|
|
Allowance for funds used during construction
|
|
|
(1,344
|
)
|
|
|
(1,977
|
)
|
|
Gain on sale of other assets
|
|
|
(442
|
)
|
|
|
(121
|
)
|
|
Income from continuing operations before income taxes
|
|
|
45,617
|
|
|
|
43,662
|
|
|
Provision for income taxes
|
|
|
17,959
|
|
|
|
13,016
|
|
|
Income from continuing operations
|
|
|
27,658
|
|
|
|
30,646
|
|
|
|
|
|
|
|
|
Discontinued operations:
|
|
|
|
|
|
Income (loss) from discontinued operations before income taxes
|
|
|
16,917
|
|
|
|
(522
|
)
|
|
Provision for income taxes
|
|
|
6,671
|
|
|
|
(227
|
)
|
|
Income (loss) from discontinued operations
|
|
|
10,246
|
|
|
|
(295
|
)
|
|
Net income attributable to common shareholders
|
|
$
|
37,904
|
|
|
$
|
30,351
|
|
|
|
|
|
|
|
|
Income from continuing operations per share:
|
|
|
|
|
|
Basic
|
|
$
|
0.20
|
|
|
$
|
0.22
|
|
|
Diluted
|
|
$
|
0.20
|
|
|
$
|
0.22
|
|
|
|
|
|
|
|
|
Income from discontinued operations per share:
|
|
|
|
|
|
Basic
|
|
$
|
0.07
|
|
|
$
|
0.00
|
|
|
Diluted
|
|
$
|
0.07
|
|
|
$
|
0.00
|
|
|
|
|
|
|
|
|
Net income per common share:
|
|
|
|
|
|
Basic
|
|
$
|
0.27
|
|
|
$
|
0.22
|
|
|
Diluted
|
|
$
|
0.27
|
|
|
$
|
0.22
|
|
|
|
|
|
|
|
|
Average common shares outstanding:
|
|
|
|
|
|
Basic
|
|
|
138,762
|
|
|
|
137,825
|
|
|
Diluted
|
|
|
139,456
|
|
|
|
138,384
|
|
|
|
|
|
|
|
|
|
|
|
Aqua America, Inc. and Subsidiaries
Reconciliation of GAAP to
Non-GAAP Financial Measure
(In thousands, except per share amounts)
(Unaudited)
This press release includes a presentation of "income from continuing
operations before net state income tax benefit associated with 100
percent bonus depreciation" and "diluted income from continuing
operations per common share before net state income tax benefit
associated with 100 percent bonus depreciation" (net state income tax
benefit associated with 100 percent bonus depreciation is referred to
herein as the "special item"). These financial measures are measures of
the Company's operating performance that do not comply with U.S.
generally accepted accounting principles (GAAP), and are thus considered
to be "non-GAAP financial measures" under applicable SEC regulations.
These non-GAAP financial measures are derived from our consolidated
financial information, and should only be used as a supplement to our
GAAP disclosures.
The Company is providing disclosure of the reconciliation of these
non-GAAP financial measures to the most comparable GAAP financial
measures. The Company believes that the non-GAAP financial measures
provide investors the ability to measure the Company's financial
operating performance excluding the special item, which is more
indicative of the Company's ongoing performance and is more comparable
to measures reported by other companies. The Company further believes
that the presentation of these non-GAAP financial measures is useful to
investors as a more meaningful way to compare the Company's operating
performance against its historical financial results and to assess the
underlying profitability of our core business. 100 percent bonus
depreciation was in effect for qualifying capital additions placed in
service from September 8, 2010 through December 31, 2011.
The reconciliation of the non-GAAP financial measures to the comparable
U.S. GAAP results provided for each period are presented below:
|
|
|
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
|
|
|
|
March 31,
|
|
|
|
2012
|
|
2011
|
|
|
|
|
|
|
|
Income from continuing operations (GAAP financial measure)
|
|
$
|
27,658
|
|
$
|
30,646
|
|
Less: Net state income tax benefit associated with 100% bonus
depreciation
|
|
|
-
|
|
|
4,328
|
|
Income from continuing operations before net state income tax
benefit associated with 100% bonus depreciation (Non-GAAP
financial measure)
|
|
$
|
27,658
|
|
$
|
26,318
|
|
|
|
|
|
|
|
Income from continuing operations per common share (GAAP financial
measure):
|
|
|
|
|
|
Basic
|
|
$
|
0.20
|
|
$
|
0.22
|
|
Diluted
|
|
$
|
0.20
|
|
$
|
0.22
|
|
|
|
|
|
|
|
Income from continuing operations per common share before net
state income tax benefit associated with 100% bonus depreciation
(Non-GAAP financial measure):
|
|
|
|
|
|
Basic
|
|
$
|
0.20
|
|
$
|
0.19
|
|
Diluted
|
|
$
|
0.20
|
|
$
|
0.19
|
|
|
|
|
|
|
|
Average common shares outstanding:
|
|
|
|
|
|
Basic
|
|
|
138,762
|
|
|
137,825
|
|
Diluted
|
|
|
139,456
|
|
|
138,384
|
|
|
|
|
|
|
|
|
|
Aqua America, Inc. and Subsidiaries
|
|
Condensed Consolidated Balance Sheets
|
|
(In thousands of dollars)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
|
|
December 31,
|
|
|
|
2012
|
|
2011
|
|
|
|
|
|
|
|
Net property, plant and equipment
|
|
$
|
3,657,562
|
|
$
|
3,612,926
|
|
Current assets
|
|
|
243,524
|
|
|
320,453
|
|
Regulatory assets and other assets
|
|
|
418,256
|
|
|
415,041
|
|
|
|
$
|
4,319,342
|
|
$
|
4,348,420
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total equity
|
|
$
|
1,273,446
|
|
$
|
1,251,817
|
|
Long-term debt, excluding current portion
|
|
|
1,437,138
|
|
|
1,395,457
|
|
Current portion of long-term debt and loans payable
|
|
|
151,444
|
|
|
188,200
|
|
Other current liabilities
|
|
|
172,698
|
|
|
237,473
|
|
Deferred credits and other liabilities
|
|
|
1,284,616
|
|
|
1,275,473
|
|
|
|
$
|
4,319,342
|
|
$
|
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
