Philadelphia Suburban Corporation Reports Second Quarter 2002 Operating Results
PSC said its second quarter 2002 earnings were adversely affected by weather conditions.
Second quarter 2002 net income includes $0.01 per share for the net gain on the sale of other assets, consistent with the company's previously announced operating strategy to sell non-core assets and invest the proceeds in the company's infrastructure rehabilitation program.
Revenues for the quarter were down 0.8 percent to $76.6 million from $77.2 million for the second quarter of 2001 primarily due to drought restrictions on water use in Pennsylvania - the company's largest service territory - and New Jersey. The state-imposed restrictions prohibited non-essential water use such as lawn watering and car washing. In comparison, the company's second quarter 2001 operating results were enhanced by higher-than-normal water consumption as a result of favorable weather conditions.
PSC Chairman and President Nicholas DeBenedictis said, "When drought restrictions are in place, our customers' water usage is limited. However, higher than average rainfall in June has allowed the Commonwealth of Pennsylvania to reduce the previously declared drought emergency (mandatory water use restrictions) to a drought warning calling for voluntary conservation in two Southeastern Pennsylvania counties on June 14 and a third county in July 16. The relaxation of drought restrictions affects over two-thirds of PSC's Pennsylvania customers."
DeBenedictis went on to say, "The effects of the four percent decrease in our second quarter water sales were partially offset by customer growth and rate relief."
PSC has completed eight acquisitions and growth ventures through the first six months of 2002, four of which were completed during the second quarter. As of June 30, 2002 PSC serves approximately 615,000 customers in the six states in which the company operates.
On July 18, 2002 the Pennsylvania Public Utility Commission (PAPUC) voted to grant a $21.2 million (10.2 percent) base rate increase for PSC's Pennsylvania Suburban Water subsidiary. The award represents 75 percent of the company's November 9, 2001 rate request. New rates will become effective on or after the day that the July 18 order is officially entered by the PAPUC.
The company's quarterly conference call with analysts will be held today at 10:00 a.m. Eastern Daylight Time. Interested parties may listen to the conference call over the Internet by logging onto www.suburbanwater.com. The call will be recorded and an audio replay will be available from 12:00 noon Monday, July 22, 2002 through 12:00 noon Wednesday, July 24, 2002. The dial-in telephone number for the audio replay is (973) 341-3080 (pin number 3388647).
PSC is one of the nation's largest investor-owned water utilities serving nearly two million residents in Pennsylvania, Illinois, Ohio, New Jersey, Maine, and North Carolina. PSC is a publicly-traded company listed on both the New York and Philadelphia Stock Exchanges under the ticker symbol "PSC" and has been committed to the preservation and improvement of the environment throughout its history, which spans more than 100 years.
The following table shows selected operating data for the quarters ended June 30, 2002 and 2001 (in thousands, except per share data) for Philadelphia Suburban Corporation.
(Unaudited)
Quarter Ended Six Months Ended
June 30, June 30,
2002 2001 2002 2001
-------- -------- -------- --------
Operating revenues $ 76,615 $ 77,240 $148,284 $147,433
Net income available
to common stock $ 14,818 $ 15,432 $ 26,693 $ 28,517
Gain on sale of other
assets, net of tax 846 71 1,056 1,746
-----------------------------------------
Income exclusive of net
gain on sale of other
assets $ 13,972 $ 15,361 $ 25,637 $ 26,771
=========================================
Diluted net income per share $ 0.21 $ 0.22 $ 0.38 $ 0.42
Gain on sale of other assets,
net of tax 0.01 -- 0.01 0.03
-----------------------------------------
Income per share exclusive
of net gain on sale of
other assets $ 0.20 $ 0.22 $ 0.37 $ 0.39
=========================================
Average common shares
outstanding:
Basic 68,701 67,754 68,576 67,598
Diluted 69,461 68,587 69,408 68,403
This release contains certain forward-looking statements involving
risks and uncertainties and other factors that may cause actual
results to be materially different from any future results expressed
or implied by such forward-looking statements. These factors include,
among others, the following: general economic business conditions;
unfavorable weather conditions; the success of certain cost
containment initiatives; changes in regulations or regulatory
treatment; availability and cost of capital; and the success of growth
initiatives.
Philadelphia Suburban Corporation and Subsidiaries
Consolidated Statements of Income and Comprehensive Income
(In thousands, except per share amounts)
(Unaudited)
Quarter Ended Six Months Ended
June 30, June 30,
-------- --------
2002 2001 2002 2001
---- ---- ---- ----
Operating revenues $ 76,615 $ 77,240 $ 148,284 $ 147,433
Cost & expenses:
Operations and
maintenance 28,915 26,462 56,200 52,648
Depreciation 10,307 9,729 20,200 18,682
Amortization 669 623 1,209 1,145
Taxes other than
income taxes 4,621 5,350 9,935 10,938
--------- --------- --------- ---------
Total 44,512 42,164 87,544 83,413
--------- --------- --------- ---------
Operating income 32,103 35,076 60,740 64,020
Other expense
(income):
Interest expense, net 9,891 9,904 19,671 20,166
Allowance for funds used
during construction (546) (264) (932) (512)
Gain on sale of other
assets (1,409) (118) (1,758) (2,909)
--------- --------- --------- ---------
Income before income taxes 24,167 25,554 43,759 47,275
Provision for income taxes 9,337 10,096 17,039 18,705
--------- --------- --------- ---------
Net income 14,830 15,458 26,720 28,570
Dividends on
preferred stock 12 26 27 53
--------- --------- --------- ---------
--------- --------- --------- ---------
Net income available
to common stock $ 14,818 $ 15,432 $ 26,693 $ 28,517
========= ========= ========= =========
Net income $ 14,830 $ 15,458 $ 26,720 $ 28,570
Other comprehensive
income (loss), net
of tax:
Unrealized gain on
securities 217 605 345 48
Reclassification
adjustment for gains
reported in net income (466) (36) (693) (36)
--------- --------- --------- ---------
--------- --------- --------- ---------
Comprehensive income $ 14,581 $ 16,027 $ 26,372 $ 28,582
========= ========= ========= =========
Net income per common
share:
Basic $ 0.22 $ 0.23 $ 0.39 $ 0.42
Diluted $ 0.21 $ 0.22 $ 0.38 $ 0.42
Average shares
outstanding:
Basic 68,701 67,754 68,576 67,598
========= ========= ========= =========
Diluted 69,461 68,587 69,408 68,403
========= ========= ========= =========
CONTACT: Philadelphia Suburban Corporation:
Keya W. Epps,
Director, Investor Relations,
610/645-1084,
eppsk@suburbanwater.com,
or
Philadelphia Suburban Corporation:
Donna Alston,
Manager, Communications,
610/645-1095,
alstond@suburbanwater.com