EPS grows 27 percent; Previously announced 5-for-4 stock split and 9
percent dividend increase effective September 1st
BRYN MAWR, Pa.--(BUSINESS WIRE)--
Aqua America, Inc. (NYSE: WTR) today reported results for the quarter
ending June 30, 2013. Revenues for the quarter were $195.7 million
compared to $191.7 million for the same period of 2012. Net income for
the quarter rose to $53.6 million from $41.4 million for the same period
in 2012. Corresponding diluted earnings per share for the quarter were
$0.38, compared to $0.30 for the same quarter in 2012, an increase of 27
percent.
For the first six months of 2013, net income increased to $100.2 million
from $79.3 million and corresponding diluted earnings per share
increased 25 percent to $0.71 from $0.57 for the same period in 2012.
Operating revenues for the first six months of 2013 totaled $375.7
million, an increase of $20.0 million from revenues of $355.7 million
for the six months ending June 30, 2012.
Aqua America Chairman and CEO Nicholas DeBenedictis said, "Our company
continued its strong performance in the second quarter. The benefits of
the company's long-term strategy of growth through acquisition, pruning
underperforming assets, operational efficiency, and investing in needed
infrastructure improvements, complemented by the benefit of the repair
tax accounting change delivered increased net income in the quarter."
The benefit of the repair tax accounting change announced in December
2012 allows the company to continue investing in needed infrastructure
improvements in excess of $200 million annually in Pennsylvania (more
than $300 million companywide annually) without seeking rate increases
from its customers in Pennsylvania. In essence the company, by adopting
the repair tax accounting change, has instituted a rate freeze in its
largest state, Pennsylvania, and replaced the foregone revenues from
rate increases with the flow-through accounting treatment of income tax
benefits permitted under the Pennsylvania Public Utility Commission
Order of June 2012.
Aqua America invested $134.9 million in regulated infrastructure
improvements in the first six months of 2013 as part of its capital
investment program. All of these investments were funded through
internally generated funds, which for the first six months of 2013
totaled $158.8 million. These investments include: pipe replacement to
improve distribution networks; plant upgrades to enhance water quality;
and other service reliability improvements for its customers.
In May, the Board of Directors declared a 9 percent increase to its
quarterly cash dividend from the current quarterly dividend rate of
$0.175 per share to $0.19 per share for the September 1, 2013 dividend.
The annualized dividend rate after this increase is equivalent to $0.76
per share, or $0.06 more than the current annualized dividend rate of
$0.70 per share. Additionally, for the seventh time in 17 years, the
Board approved a stock split to be effected September 1 in the form of a
5-for-4 (25 percent) stock distribution. Both the increased cash
dividend and the subsequent stock distribution will be effective on
September 1, 2013 for shareholders of record on August 16, 2013.
The increased September 1, 2013 dividend will be applied to the shares
prior to the stock split. The equivalent quarterly dividend rate after
the stock split would be $0.152 per share on the increased number of
shares resulting from the stock distribution or $0.608 per share on an
annualized basis. The stock split will be effected through a stock
distribution on September 1, 2013 of one share for each four shares
outstanding as of August 16, 2013.
DeBenedictis said, "We continue to strive to deliver strong total
returns through the reinvestment of capital to grow the business and
returning earnings in the form of dividends, while controlling costs for
our customers."
In 2013, the company has received rate awards and infrastructure
surcharges in New Jersey, Texas, Illinois, Ohio, and Virginia estimated
to increase annualized revenues by approximately $11.3 million. The
company has more than $11 million of rate proceedings pending in
Virginia, Ohio, North Carolina, and New Jersey. Additionally, Aqua
America's state subsidiaries are expected to seek rate relief by filing
rate requests or surcharges of approximately $7 million in the remainder
of 2013. 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 has completed the purchase of eight water and wastewater
utility systems in 2013, including four in Pennsylvania, three in North
Carolina, and one in Virginia. Two of the systems acquired were from
municipalities in Pennsylvania. Aqua Pennsylvania's acquisitions
included the water and wastewater system assets of Total Environmental
Solutions, Inc. (TESI), which serve approximately 6,000 people in the
Treasure Lake community in Sandy Township, Clearfield County for $11.8
million and the water distribution system assets that serve 500 people
in the Concord Park section of Bensalem Township from Bucks County Water
and Sewer Authority for $399,000. It also acquired the water assets of a
community water system from Bristol Township that serves approximately
1,800 residents in the Newportville-Ferguson area of the township for
$3.4 million. Aqua North Carolina purchased the water system assets of
Knob Creek, a subdivision with about 600 residents in the town of Pisgah
Forest, Transylvania County, for $40,000. Customer growth from
acquisitions and organic growth totaled 7,500 customers in the first six
months of 2013.
In March, Aqua America sold approximately two-thirds of its Florida
operations for $52.3 million and is in negotiations to complete the sale
of its profitable Sarasota, Florida operation in a separate transaction
for $36.8 million, which could close late in 2013 or in 2014. The
company has also signed a letter of intent with the City of Fort Wayne,
Indiana to sell the company's water operation in exchange for an
additional $50.1 million to the $16.9 million already paid by the City
and obtaining wastewater treatment flows from the City, contingent on
receiving regulatory approvals and signing of the necessary definitive
agreements. If this transaction is consummated, the company will expand
its wastewater customer base in Fort Wayne. This transaction is not
expected to close until 2014.
The company's non-regulated joint venture investment, Aqua — PVR Water
Services, LLC, was formed in 2011 by operating subsidiaries of Aqua
America and Penn Virginia Resource Partners, L.P. to construct and
operate a private pipeline system to supply raw water to certain natural
gas producers drilling in the Marcellus Shale in central Pennsylvania.
The latest phase of the construction, extending the pipeline another 20
miles into Tioga County, was completed in the first quarter of 2013.
With the completion of this phase of the construction, it is now capable
of providing water to gas drilling sites along 56 miles of pipeline. The
first half of 2013 has shown sluggish Marcellus well drilling activity
due to low gas prices and restrictive infrastructure for gas
transmission, which has resulted in low sales of water for the joint
venture. Water sales for gas drilling are expected to pick up in the
second half of 2013.
As of June 30, 2013, Aqua America's weighted average cost of fixed-rate
long-term debt was 5.02 percent, and the company had $173 million
available on its credit lines. In July, Standard & Poor's reiterated its
A+ credit rating for Aqua Pennsylvania. Of the 227 electric, gas, and
water utilities rated by Standard & Poor's, only one has a higher rating
than Aqua Pennsylvania.
The company's conference call with financial analysts will take place on
Wednesday, August 7, 2013 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 August 7, 2013 for 10
business days following the call. To access the audio replay in the
U.S., dial 888.203.1112 (pass code 5562389). International callers can
dial 719.457.0820 (pass code 5562389).
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, Virginia, Florida
and Georgia. Aqua America is listed on the New York Stock Exchange under
the ticker symbol WTR. Visit www.aquaamerica.com
for more information.
This release contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995, including, among
others: the benefits of the company's long-term strategy; management's
objective of delivering strong total returns to the shareholders through
reinvesting capital and returning earnings to shareholders; the
anticipated ongoing repair tax accounting change; the company's plan to
continue its capital investment program while not increasing rates in
Pennsylvania in 2013; the projected benefits from the company's capital
investment program; signs that the housing market could be recovering;
the estimated revenues from rate awards received; the company's plans to
file future rate increases and the timing of the impact of such cases;
the company's plans to sell its Sarasota, Florida operation; the
company's plan to sell its water operations and the anticipated
expansion of the company's sewer customer base in Fort Wayne, Indiana;
and the projected increase in income from the joint venture in 2013.
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, 2012, 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
|
|
Six Months Ended
|
|
|
|
June 30,
|
|
June 30,
|
|
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
|
Operating revenues
|
|
$
|
195,655
|
|
$
|
191,690
|
|
$
|
375,690
|
|
$
|
355,714
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to common shareholders
|
|
$
|
53,586
|
|
$
|
41,445
|
|
$
|
100,151
|
|
$
|
79,349
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income per common share
|
|
$
|
0.38
|
|
$
|
0.30
|
|
$
|
0.71
|
|
$
|
0.57
|
|
Diluted net income per common share
|
|
$
|
0.38
|
|
$
|
0.30
|
|
$
|
0.71
|
|
$
|
0.57
|
|
|
|
|
|
|
|
|
|
|
|
Basic average common shares outstanding
|
|
|
140,786
|
|
|
139,108
|
|
|
140,560
|
|
|
138,935
|
|
Diluted average common shares outstanding
|
|
|
141,662
|
|
|
139,843
|
|
|
141,278
|
|
|
139,577
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aqua America, Inc. and Subsidiaries
|
|
Consolidated Statement of Income
|
|
(In thousands, except per share amounts)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
Six Months Ended
|
|
|
|
June 30,
|
|
June 30,
|
|
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
|
Operating revenues
|
|
$
|
195,655
|
|
|
$
|
191,690
|
|
|
$
|
375,690
|
|
|
$
|
355,714
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost & expenses:
|
|
|
|
|
|
|
|
|
|
Operations and maintenance
|
|
|
70,858
|
|
|
|
63,571
|
|
|
|
139,169
|
|
|
|
128,396
|
|
|
Depreciation
|
|
|
29,524
|
|
|
|
27,739
|
|
|
|
58,783
|
|
|
|
54,485
|
|
|
Amortization
|
|
|
1,358
|
|
|
|
1,332
|
|
|
|
2,728
|
|
|
|
2,453
|
|
|
Taxes other than income taxes
|
|
|
13,250
|
|
|
|
12,016
|
|
|
|
26,784
|
|
|
|
21,509
|
|
|
Total
|
|
|
114,990
|
|
|
|
104,658
|
|
|
|
227,464
|
|
|
|
206,843
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
80,665
|
|
|
|
87,032
|
|
|
|
148,226
|
|
|
|
148,871
|
|
|
|
|
|
|
|
|
|
|
|
|
Other expense (income):
|
|
|
|
|
|
|
|
|
|
Interest expense, net
|
|
|
19,209
|
|
|
|
19,540
|
|
|
|
38,484
|
|
|
|
38,787
|
|
|
Allowance for funds used during construction
|
|
|
(490
|
)
|
|
|
(1,235
|
)
|
|
|
(1,042
|
)
|
|
|
(2,565
|
)
|
|
Loss (gain) on sale of other assets
|
|
|
109
|
|
|
|
(64
|
)
|
|
|
17
|
|
|
|
(506
|
)
|
|
Equity loss (earnings) in joint venture
|
|
|
1,154
|
|
|
|
(249
|
)
|
|
|
1,810
|
|
|
|
(249
|
)
|
|
Income from continuing operations before income taxes
|
|
|
60,683
|
|
|
|
69,040
|
|
|
|
108,957
|
|
|
|
113,404
|
|
|
Provision for income taxes
|
|
|
7,135
|
|
|
|
27,260
|
|
|
|
14,178
|
|
|
|
44,735
|
|
|
Income from continuing operations
|
|
|
53,548
|
|
|
|
41,780
|
|
|
|
94,779
|
|
|
|
68,669
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued operations:
|
|
|
|
|
|
|
|
|
|
Income (loss) from discontinued operations before income taxes
|
|
|
29
|
|
|
|
(176
|
)
|
|
|
8,331
|
|
|
|
17,994
|
|
|
Provision for income taxes
|
|
|
(9
|
)
|
|
|
159
|
|
|
|
2,959
|
|
|
|
7,314
|
|
|
Income (loss) from discontinued operations
|
|
|
38
|
|
|
|
(335
|
)
|
|
|
5,372
|
|
|
|
10,680
|
|
|
Net income attributable to common shareholders
|
|
$
|
53,586
|
|
|
$
|
41,445
|
|
|
$
|
100,151
|
|
|
$
|
79,349
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations per share:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.38
|
|
|
$
|
0.30
|
|
|
$
|
0.67
|
|
|
$
|
0.49
|
|
|
Diluted
|
|
$
|
0.38
|
|
|
$
|
0.30
|
|
|
$
|
0.67
|
|
|
$
|
0.49
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from discontinued operations per share:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.00
|
|
|
$
|
0.00
|
|
|
$
|
0.04
|
|
|
$
|
0.08
|
|
|
Diluted
|
|
$
|
0.00
|
|
|
$
|
0.00
|
|
|
$
|
0.04
|
|
|
$
|
0.08
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per common share:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.38
|
|
|
$
|
0.30
|
|
|
$
|
0.71
|
|
|
$
|
0.57
|
|
|
Diluted
|
|
$
|
0.38
|
|
|
$
|
0.30
|
|
|
$
|
0.71
|
|
|
$
|
0.57
|
|
|
|
|
|
|
|
|
|
|
|
|
Average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
140,786
|
|
|
|
139,108
|
|
|
|
140,560
|
|
|
|
138,935
|
|
|
Diluted
|
|
|
141,662
|
|
|
|
139,843
|
|
|
|
141,278
|
|
|
|
139,577
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aqua America, Inc. and Subsidiaries
|
|
Condensed Consolidated Balance Sheets
|
|
(In thousands of dollars)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
December 31,
|
|
|
|
2013
|
|
2012
|
|
|
|
|
|
|
|
Net property, plant and equipment
|
|
$
|
4,025,138
|
|
$
|
3,936,163
|
|
Current assets
|
|
|
221,586
|
|
|
260,894
|
|
Regulatory assets and other assets
|
|
|
711,593
|
|
|
661,460
|
|
|
|
$
|
4,958,317
|
|
$
|
4,858,517
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total equity
|
|
$
|
1,428,319
|
|
$
|
1,385,892
|
|
Long-term debt, excluding current portion
|
|
|
1,489,842
|
|
|
1,543,954
|
|
Current portion of long-term debt and loans payable
|
|
|
158,629
|
|
|
125,421
|
|
Other current liabilities
|
|
|
148,086
|
|
|
148,743
|
|
Deferred credits and other liabilities
|
|
|
1,733,441
|
|
|
1,654,507
|
|
|
|
$
|
4,958,317
|
|
$
|
4,858,517
|
|
|
|
|
|
|
Aqua America, Inc.
Brian Dingerdissen, 610-645-1191
Director,
Investor Relations
bjdingerdissen@aquaamerica.com
or
Donna
Alston, 610-645-1095
Manager, Communications
dpalston@aquaamerica.com
Source: Aqua America, Inc.
News Provided by Acquire Media
