-
Earnings per share increased 3.0 percent to $0.34 vs. $0.33 in 2016
-
Quarterly cash dividend increase of 7.0 percent, to $0.2047
BRYN MAWR, Pa.--(BUSINESS WIRE)--
Aqua America, Inc. (NYSE: WTR) today reported results for the second
quarter ending June 30, 2017.
Operating results
For the second quarter of 2017, Aqua America reported revenues of $203.4
million. Regulated segment revenues increased to $202.0 million, an
increase of 2.0 percent. Rates, surcharges, consumption, and customer
growth increased regulated revenue by approximately $4.3 million
compared to the same quarter of 2016.
Operations and maintenance expenses decreased 4.2 percent to $70.9
million for the second quarter of 2017 compared to $74.0 million in
2016. Divestitures in market-based activities, lower production expenses
and employee related expenses collectively reduced operating expenses by
$6.4 million in the quarter. Regulated operations and maintenance
expenses were $72.6 million, a 4.1 percent increase year over year
primarily due to two favorable 2016 items: a gain for the buyout of an
operating contract and a reduction in claim reserves associated with the
contract.
Net income for the second quarter was $61.0 million, a 2.3 percent
increase compared to $59.6 million reported in the same quarter of 2016.
Earnings per diluted common share were $0.34 for the quarter, an
increase of 3.0 percent compared to $0.33 in 2016.
"Management continues to deliver operational excellence with a focus on
delivering safe and reliable service to customers throughout our
eight-state footprint," said Aqua America President and CEO Christopher
Franklin. "We remain focused on prudently investing in infrastructure,
and maintaining our position as one of the most efficient utilities in
the nation which ultimately benefits our customers."
For the first half of 2017, the company reported revenues of $391.2
million compared to the $396.5 million in 2016, with the divestitures of
market-based activities accounting for the revenue decline. Year to date
regulated revenues increased to $388.3 million from $384.1 million in
the prior year. Operations and maintenance expenses for the first half
of 2017 decreased by 5.1 percent to $140.0 million compared to $147.5
million in 2016. Regulated operations and maintenance expenses were
$140.1 million in 2017, a 2.2 percent increase compared to 2016.
As of June 30, Aqua reported year to date net income of $110.0 million
compared to $111.4 million reported through the same time period of
2016. Earnings per diluted common share were $0.62 in 2017 compared to
$0.63 in the first half of 2016.
Dividend
On August 2, Aqua America's board of directors declared a quarterly cash
dividend of $0.2047 per share of common stock. This dividend will be
payable on Sept. 1, 2017 to shareholders of record on August 16, 2017
and represents an increase of 7.0 percent compared to the most recent
$0.1913 dividend paid on June 1, 2017. This marks the 27th
increase in the last 26 years, and the company has paid consecutive
quarterly cash dividends for more than 72 years.
"We have a long commitment to providing safe and reliable service to our
valued customers along with enhancing value for our shareholders through
consistent dividend increases over the past decade," said Franklin.
Market-based activities
Aqua has now completed the sale of those market-based activities that
were slated for divestiture. Going forward, the company expects
market-based activities to contribute revenue of approximately $4
million on an annual basis as it continues to place primary focus on
growing its regulated water and wastewater business.
Capital expenditures
Aqua invested $208.5 million in the first half of the year to improve
its infrastructure systems. The company expects to invest more than $450
million in 2017 and more than $1.2 billion through 2019. The capital
investments made to rehabilitate and expand the infrastructure of the
communities Aqua serves are paramount to helping the company continue to
protect and provide Earth's most essential resource.
Rate activity
To date in 2017, the company's state subsidiaries in Indiana, Illinois,
New Jersey, North Carolina, Pennsylvania, and Ohio have received rate
awards or infrastructure surcharges totaling an estimated increase to
annualized revenues of $11.1 million.
Additionally, the company currently has rate or surcharge proceedings
pending in Illinois and Virginia collectively totaling $14.0 million.
Acquisition growth in regulated operations
Aqua added approximately 1,000 customer connections through acquisitions
in Pennsylvania and Indiana during the first half of the year. In total,
acquisitions and organic customer growth have increased the company's
customer base by approximately 0.5 percent thus far in 2017.
"In June 2017, we acquired 740 wastewater customers in Tobyhanna,
Pennsylvania for a purchase price of $5.5 million. Tobyhanna is one of
the five municipal systems we had under contract and we are happy to
announce the closing of this acquisition. We expect to close our other
three previously announced municipalities under contract at year end,
and we have now added a fourth that we expect to close in 2018.
Combined, all five acquisitions represent a purchase price of $126
million and nearly 12,000 customers," noted Franklin.
"Our operational expertise and financial strength allows us to
competitively bid for water and wastewater systems in the highly
fragmented U.S. water and wastewater markets. Municipalities often turn
to us to leverage our resources and our institutional knowledge by
acquiring their water and wastewater systems, allowing the local
governments to focus on core municipal services in their jurisdictions,"
said Franklin.
Financial Information
At quarter-end, Aqua America's weighted average cost of fixed-rate
long-term debt was 4.38 percent and the company had $165.6 million
available on its credit lines.
2017 Guidance
Aqua America continues to affirm guidance for 2017, which remains
unchanged from last quarter:
-
Earnings per diluted common share of $1.34 to $1.39
-
Same-system operations and maintenance expenses increase of 1 to 2
percent
-
More than $450 million in infrastructure improvements in 2017 for
communities served by Aqua
-
More than $1.2 billion in infrastructure improvements planned through
2019 in existing operations to improve and strengthen systems
-
Aqua Pennsylvania expected to file distribution system improvement
charge in 2017 and rate case filing likely in 2018, with resolution
expected in 2019
-
Total customer growth of 1.5 to 2 percent
Aqua America does not guarantee future results of any kind. Guidance is
subject to risks and uncertainties, including, without limitation, those
factors outlined in the "Forward Looking Statements" of this release and
the "Risk Factors" section of the company's annual and quarterly reports
filed with the Securities and Exchange Commission (SEC).
Earnings Call Information
Date: Aug. 3, 2017
Time: 11
a.m. EDT (please dial in by 10:45 a.m.)
Webcast and slide
presentation link: http://ir.aquaamerica.com/events.cfm
Replay
Dial-in #: 888.203.1112 (U.S.) & +1 719.457.0820 (International)
Confirmation
code: 3938978
The company's conference call with financial analysts will take place on
Thursday, Aug. 3, 2017 at 11 a.m. Eastern Daylight Time. The call and
slide presentation will be webcast live so that interested parties may
listen over the Internet by logging on to AquaAmerica.com
and following the link for Investor Relations. The webcast 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 Aug. 3, 2017 for 10 business days
following the call. To access the audio replay in the U.S., dial
888.203.1112 (pass code 3938978). International callers can dial +1
719.457.0820 (pass code 3938978).
About Aqua America
Aqua America is one of the largest U.S.-based, publicly traded water
utilities and serves nearly 3 million people in Pennsylvania, Ohio,
North Carolina, Illinois, Texas, New Jersey, Indiana and Virginia. Aqua
America is listed on the New York Stock Exchange under the ticker symbol
WTR. Visit AquaAmerica.com
for more information.
Forward-Looking Statements
This release contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995, including, among
others: the guidance range of earnings per share for the fiscal year
ending in 2017; the continuation of the company's
growth-through-acquisition program and the expectations for customer
growth from this program; the expected increase in customer base for the
fiscal years ending in 2017; the company's expected same-system
operations and maintenance expense increase for the fiscal year ending
in 2017; the anticipated amount of capital investment from 2017 through
2019; the company's filing of a Pennsylvania DSIC case in 2017 and a
Pennsylvania rate case in 2018; the success of certain rate proceedings;
the closing of the four municipally owned systems presently under
agreement; and, the volume and pace of opportunities in the water and
wastewater field. There are important factors that could cause actual
results to differ materially from those expressed or implied by such
forward-looking statements including: the company's continued ability to
adapt itself for the future and build value by fully optimizing company
assets; general economic business conditions; the company's ability to
fund needed infrastructure; housing and customer growth trends;
unfavorable weather conditions; the success of certain cost containment
initiatives; changes in regulations or regulatory treatment;
availability and access to capital; the cost of capital; disruptions in
the credit markets; the success of growth initiatives; the company's
ability to continue to deliver strong results; the company's ability to
grow its dividend, add shareholder value and to grow earnings;
municipalities willingness to privatize its water and/or wastewater
utilities; the company's ability to control expenses and create and
maintain efficiencies; the company's success in its Pennsylvania DSIC
and rate filings; the company's ability to successfully complete its
Pennsylvania DSIC and rate filings in a timely manner; and other factors
discussed in our Annual Report on Form 10-K and our Quarterly Report on
Form 10-Q, which is filed with the Securities and Exchange Commission.
For more information regarding risks and uncertainties associated with
Aqua America's business, please refer to Aqua America's annual,
quarterly and other SEC filings. Aqua America is not under any
obligation - and expressly disclaims any such obligation - to update or
alter its forward-looking statements whether as a result of new
information, future events or otherwise.
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,
|
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
Operating revenues
|
|
$
|
203,418
|
|
$
|
203,876
|
|
$
|
391,205
|
|
$
|
396,483
|
|
Operations and maintenance expense
|
|
$
|
70,853
|
|
$
|
73,994
|
|
$
|
139,981
|
|
$
|
147,535
|
|
|
|
|
|
|
|
|
|
|
|
Regulated segment:
|
|
|
|
|
|
|
|
|
|
Operating revenues
|
|
$
|
201,960
|
|
$
|
198,086
|
|
$
|
388,309
|
|
$
|
384,092
|
|
Operations and maintenance expense
|
|
$
|
72,560
|
|
$
|
69,676
|
|
$
|
140,070
|
|
$
|
137,001
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
60,968
|
|
$
|
59,626
|
|
$
|
110,040
|
|
$
|
111,363
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income per common share
|
|
$
|
0.34
|
|
$
|
0.34
|
|
$
|
0.62
|
|
$
|
0.63
|
|
Diluted net income per common share
|
|
$
|
0.34
|
|
$
|
0.33
|
|
$
|
0.62
|
|
$
|
0.63
|
|
|
|
|
|
|
|
|
|
|
|
Basic average common shares outstanding
|
|
|
177,609
|
|
|
177,288
|
|
|
177,545
|
|
|
177,196
|
|
Diluted average common shares outstanding
|
|
|
178,045
|
|
|
178,084
|
|
|
178,042
|
|
|
177,920
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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,
|
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
Operating revenues
|
|
$
|
203,418
|
|
|
$
|
203,876
|
|
|
$
|
391,205
|
|
|
$
|
396,483
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost & expenses:
|
|
|
|
|
|
|
|
|
|
Operations and maintenance
|
|
|
70,853
|
|
|
|
73,994
|
|
|
|
139,981
|
|
|
|
147,535
|
|
|
Depreciation
|
|
|
33,407
|
|
|
|
31,619
|
|
|
|
67,244
|
|
|
|
63,764
|
|
|
Amortization
|
|
|
127
|
|
|
|
528
|
|
|
|
316
|
|
|
|
978
|
|
|
Taxes other than income taxes
|
|
|
14,419
|
|
|
|
14,242
|
|
|
|
29,156
|
|
|
|
28,382
|
|
|
Total
|
|
|
118,806
|
|
|
|
120,383
|
|
|
|
236,697
|
|
|
|
240,659
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
84,612
|
|
|
|
83,493
|
|
|
|
154,508
|
|
|
|
155,824
|
|
|
|
|
|
|
|
|
|
|
|
|
Other expense (income):
|
|
|
|
|
|
|
|
|
|
Interest expense, net
|
|
|
21,387
|
|
|
|
20,115
|
|
|
|
42,713
|
|
|
|
39,968
|
|
|
Allowance for funds used during construction
|
|
|
(3,463
|
)
|
|
|
(1,871
|
)
|
|
|
(6,656
|
)
|
|
|
(4,179
|
)
|
|
Gain on sale of other assets
|
|
|
(10
|
)
|
|
|
(121
|
)
|
|
|
(279
|
)
|
|
|
(328
|
)
|
|
Equity loss in joint venture
|
|
|
161
|
|
|
|
229
|
|
|
|
191
|
|
|
|
478
|
|
|
Income before income taxes
|
|
|
66,537
|
|
|
|
65,141
|
|
|
|
118,539
|
|
|
|
119,885
|
|
|
Provision for income taxes
|
|
|
5,569
|
|
|
|
5,515
|
|
|
|
8,499
|
|
|
|
8,522
|
|
|
Net income
|
|
$
|
60,968
|
|
|
$
|
59,626
|
|
|
$
|
110,040
|
|
|
$
|
111,363
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per common share:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.34
|
|
|
$
|
0.34
|
|
|
$
|
0.62
|
|
|
$
|
0.63
|
|
|
Diluted
|
|
$
|
0.34
|
|
|
$
|
0.33
|
|
|
$
|
0.62
|
|
|
$
|
0.63
|
|
|
|
|
|
|
|
|
|
|
|
|
Average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
177,609
|
|
|
|
177,288
|
|
|
|
177,545
|
|
|
|
177,196
|
|
|
Diluted
|
|
|
178,045
|
|
|
|
178,084
|
|
|
|
178,042
|
|
|
|
177,920
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aqua America, Inc. and Subsidiaries
|
|
Condensed Consolidated Balance Sheets
|
|
(In thousands of dollars)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
December 31,
|
|
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
Net property, plant and equipment
|
|
$
|
5,159,151
|
|
$
|
5,001,615
|
|
Current assets
|
|
|
138,091
|
|
|
128,650
|
|
Regulatory assets and other assets
|
|
|
1,086,457
|
|
|
1,028,726
|
|
Total assets
|
|
$
|
6,383,699
|
|
$
|
6,158,991
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total equity
|
|
$
|
1,896,530
|
|
$
|
1,850,068
|
|
Long-term debt, excluding current portion, net of debt issuance costs
|
|
|
1,822,581
|
|
|
1,737,605
|
|
Current portion of long-term debt and loans payable
|
|
|
211,023
|
|
|
157,206
|
|
Other current liabilities
|
|
|
121,524
|
|
|
144,330
|
|
Deferred credits and other liabilities
|
|
|
2,332,041
|
|
|
2,269,782
|
|
Total liabilities and equity
|
|
$
|
6,383,699
|
|
$
|
6,158,991
|
|
|
|
|
|
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20170802006439/en/
Aqua America, Inc.
Brian Dingerdissen
Investor Relations
610-645-1191
BJDingerdissen@AquaAmerica.com
or
Stacey
Hajdak
Marketing & Communications
610-520-6309
SMHajdak@AquaAmerica.com
Source: Aqua America, Inc.
News Provided by Acquire Media
