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8-K - FORM 8-K - Essential Utilities, Inc. | c13154e8vk.htm |
EXHIBIT 99.1
FOR RELEASE: February 23, 2011
Contact: Brian Dingerdissen
Director, Investor Relations
610.645.1191
bjdingerdissen@aquaamerica.com
Director, Investor Relations
610.645.1191
bjdingerdissen@aquaamerica.com
Gretchen Toner
Manager, Strategic Communications
610.645.1175
gmtoner@aquaamerica.com
Manager, Strategic Communications
610.645.1175
gmtoner@aquaamerica.com
AQUA AMERICA REPORTS FOURTH-QUARTER AND YEAR-END EARNINGS
Posts 11th straight year of net income growth up 19 percent for 2010
BRYN MAWR, PA, February 23, 2011 Aqua America, Inc. (NYSE: WTR) today reported results for the
quarter and year ending December 31, 2010. Net income for the full year 2010 rose 18.8 percent to
$124.0 million from $104.4 million in 2009. Operating revenues for 2010 totaled $726.1 million, an
increase of 8.3 percent from revenues of $670.5 million in 2009. Diluted earnings per share for the
year were $0.90 compared to $0.77 for 2009 on 0.9 percent more shares outstanding.
Revenues for the fourth quarter were $179.3 million compared to $167.9 million in the same period
of 2009. Net income for the quarter rose to $28.9 million from $26.7 million in the same quarter of
2009, and diluted earnings per share were $0.21, compared to $0.20 for 2009.
Aqua America Chairman and CEO Nicholas DeBenedictis said, 2010 was one of the most successful
financial years of my 19 years with the company. We invested a record amount of capital to improve
our systems infrastructure and completed 23 acquisitions to help grow our customer base by 1
percent in spite of the slow economy. A return to normal weather patterns coupled with the timely
recovery of capital investments through rate cases, and managements ability to execute its growth
strategy while controlling costs, enabled the company to post significant increases in both net
income and revenues.
The December 1, 2010 dividend was increased 6.9 percent to $0.155 per share. This was the
20th increase in the last 19 years. The Board of Directors recently declared a quarterly
cash dividend payment of $0.155 per share payable on March 1, 2011, to all shareholders of record
on February 17, 2011. Aqua has paid a consecutive quarterly dividend for 65 years.
During 2010, the company received rate awards in Pennsylvania, New Jersey, New York, North
Carolina, Missouri, Ohio, Indiana, Florida, Maine and Virginia and infrastructure surcharges or
other pass-through charges in various states estimated to increase annualized revenues by $53.9
million. So far in 2011, Aqua America subsidiaries have already received rate awards estimated to
increase annualized revenues by $6.8 million. Other state subsidiaries currently have $26.6 million
of rate cases pending before state regulatory bodies. We are also expecting to seek rate relief
later this year in our largest state subsidiaries, which is expected to positively impact 2011 and
2012 results, said DeBenedictis. These rate filings are needed to
recover capital (infrastructure) investments and increased operating expenses since previous rate
filings. The timing and extent to which these rate requests might be granted by the applicable
regulatory agencies will vary by state.
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Aqua held operations and maintenance expenses to a 3.7 percent increase during 2010 compared to the
same period in 2009. DeBenedictis added, Management remains focused on continuing to limit expense
growth. Aquas operations and maintenance expense-to-revenue ratio was lowered to 38.6 percent for
2010 comparing favorably to 40.3 percent for 2009. This was made possible by managements execution
of our strategic plan, including the successful implementation of the companys information systems
(IS) upgrades in recent years.
The company invested a record $327 million in infrastructure improvements as part of its capital
investment program. Capital expenditures in 2010 focused on improvements to our distribution
network (primarily pipe replacements) and upgrading our major water and wastewater plants to
state-of-the-art status. Our rebuilding program not only provides enhanced water quality and
service reliability to our customers for decades to come, but also generates immediate economic and
job growth in the areas in which we operate, DeBenedictis said. Our capital investment program
will continue at similar levels in 2011, as the company plans to again invest more than $300
million for utility system improvements. Aquas capital investment program has been prioritized to
address all major environmental compliance issues, which now make up less than 10 percent of the
overall capital budget.
In 2010, the company worked diligently to access the capital markets at favorable interest rates,
borrowing $70 million at 4.98 percent interest in June through a private placement, and issuing
$141 million of 30-year weighted average life tax-exempt bonds at a yield of 4.75 percent at its
largest subsidiary, Aqua Pennsylvania. In 2010, S&P reiterated its A+ corporate credit rating for
Aqua Pennsylvania. Aqua was also able to renew various lines of credit at more favorable rates than
before. At year-end 2010, the company had reduced its embedded cost of fixed-rate long-term debt to
5.36 percent.
I am pleased our 2010 financing plan enabled the company to limit its interest expense growth. The
ability to access low-cost financing to fund infrastructure improvements is a reflection of the
companys financial strength, DeBenedictis said. In 2011, Aqua hopes recently passed federal tax
policies and growing internal cash will enable the company to conduct its utility capital
investment program without any equity offering or borrowing not already committed, while lowering
its embedded cost of fixed-rate long-term debt for the 12th consecutive year.
Aqua continued to expand its operations, completing 23 acquisitions of water or wastewater systems
in 2010. The companys industry-leading growth-through-acquisition strategy in 2010 was
concentrated in its faster-growing states such as Texas, where it completed 10 acquisitions during
2010. In December 2010, Aqua America announced that, in a unique transaction, it agreed to purchase
American Water Works Company, Inc.s regulated Texas operations and to simultaneously sell its
regulated Missouri operations to American Water. Aquas sale will conclude its regulated operations
in that state. In a separate transaction, Aqua also announced that it entered into an agreement to
sell a small wastewater system in South Carolina a transaction it closed on December 31, 2010,
terminating operations in South Carolina. Overall customer growth for Aqua America in 2010 was
approximately 1 percent. Organic growth remains well below historical norms at 0.4 percent due to
the housing slowdown.
In 2011, Aqua celebrates the 125th anniversary of our operations and our
40th anniversary on the New York Stock Exchange. Going forward, we look to continue to
implement our long-term strategy, which has provided the basis for our earnings growth,
DeBenedictis said.
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Aquas conference call with financial analysts will take place on Thursday, February 24, 2011 at 11
a.m. Eastern Standard Time. The call will be webcast live so that interested parties can 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 companys
Web site for 90 days following the call. Additionally, the call will be recorded and made available
for replay at 2 p.m. on February 24, 2011 for 10 business days following the call. To access the
audio replay in the U.S., dial 888.203.1112 (pass code 6054803). For international callers, dial
719.457.0820 (pass code 6054803).
Aqua America, Inc. is a U.S.-based publicly traded water and wastewater utility holding company
that serves approximately 3 million people in Pennsylvania, New York, Ohio, North Carolina,
Illinois, Texas, Florida, New Jersey, Indiana, Virginia, Maine, Missouri, 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 timing and impact of pending and
planned rate cases and the amount of such increases, the amount of future capital investments by
the company, and the companys expectation to lower its cost of debt in 2011. 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, which is on file with the SEC. We undertake no obligation to publicly update
or revise any forward-looking statement.
# # #
WTRF
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The companys results stated here are unaudited. The final audited financial statements will be
filed with the companys annual report on Form 10-K. The following table shows selected operating
data for the quarter and year ended December 31, 2010 and 2009 (in thousands, except per share
data) for Aqua America, Inc. and subsidiaries.
Aqua America, Inc. and Subsidiaries
Selected Operating Data
(In thousands, except per share amounts)
(Unaudited)
Selected Operating Data
(In thousands, except per share amounts)
(Unaudited)
Quarter Ended | Twelve Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Operating revenues |
$ | 179,314 | $ | 167,893 | $ | 726,072 | $ | 670,539 | ||||||||
Net income attributable to common shareholders |
$ | 28,858 | $ | 26,659 | $ | 123,975 | $ | 104,353 | ||||||||
Basic net income per common share |
$ | 0.21 | $ | 0.20 | $ | 0.91 | $ | 0.77 | ||||||||
Diluted net income per common share |
$ | 0.21 | $ | 0.20 | $ | 0.90 | $ | 0.77 | ||||||||
Basic average common shares outstanding |
137,386 | 136,240 | 136,948 | 135,816 | ||||||||||||
Diluted average common shares outstanding |
137,904 | 136,510 | 137,296 | 136,129 | ||||||||||||
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Aqua America, Inc. and Subsidiaries
Consolidated Statements of Income and Comprehensive Income
(In thousands, except per share amounts)
(Unaudited)
Consolidated Statements of Income and Comprehensive Income
(In thousands, except per share amounts)
(Unaudited)
Quarter Ended | Twelve Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Operating revenues |
$ | 179,314 | $ | 167,893 | $ | 726,072 | $ | 670,539 | ||||||||
Cost & expenses: |
||||||||||||||||
Operations and maintenance |
70,083 | 66,034 | 279,962 | 270,060 | ||||||||||||
Depreciation |
27,628 | 26,206 | 108,061 | 103,001 | ||||||||||||
Amortization |
2,891 | 3,090 | 13,006 | 11,938 | ||||||||||||
Taxes other than income taxes |
12,982 | 12,189 | 52,967 | 48,081 | ||||||||||||
Total |
113,584 | 107,519 | 453,996 | 433,080 | ||||||||||||
Operating income |
65,730 | 60,374 | 272,076 | 237,459 | ||||||||||||
Other expense (income): |
||||||||||||||||
Interest expense, net |
19,568 | 17,914 | 75,652 | 68,607 | ||||||||||||
Allowance for funds used during construction |
(983 | ) | (931 | ) | (5,062 | ) | (2,871 | ) | ||||||||
Gain on sale of other assets |
(253 | ) | (97 | ) | (2,583 | ) | (472 | ) | ||||||||
Income before income taxes |
47,398 | 43,488 | 204,069 | 172,195 | ||||||||||||
Provision for income taxes |
18,540 | 16,829 | 80,094 | 67,842 | ||||||||||||
Net income attributable to common shareholders |
$ | 28,858 | $ | 26,659 | $ | 123,975 | $ | 104,353 | ||||||||
Net income attributable to common shareholders |
$ | 28,858 | $ | 26,659 | $ | 123,975 | $ | 104,353 | ||||||||
Other comprehensive income, net of tax: |
||||||||||||||||
Unrealized holding gains on investments |
414 | 162 | 1,588 | 289 | ||||||||||||
Reclassification adjustment for (gains) losses reported in net income |
(39 | ) | | (1,369 | ) | 5 | ||||||||||
Comprehensive income |
$ | 29,233 | $ | 26,821 | $ | 124,194 | $ | 104,647 | ||||||||
Net income per common share: |
||||||||||||||||
Basic |
$ | 0.21 | $ | 0.20 | $ | 0.91 | $ | 0.77 | ||||||||
Diluted |
$ | 0.21 | $ | 0.20 | $ | 0.90 | $ | 0.77 | ||||||||
Average common shares outstanding: |
||||||||||||||||
Basic |
137,386 | 136,240 | 136,948 | 135,816 | ||||||||||||
Diluted |
137,904 | 136,510 | 137,296 | 136,129 | ||||||||||||
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Aqua America, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands of dollars)
(Unaudited)
Condensed Consolidated Balance Sheets
(In thousands of dollars)
(Unaudited)
December 31, | December 31, | |||||||
2010 | 2009 | |||||||
Net property, plant and equipment |
$ | 3,469,258 | $ | 3,214,559 | ||||
Current assets |
145,419 | 121,571 | ||||||
Regulatory assets and other assets |
457,789 | 413,732 | ||||||
$ | 4,072,466 | $ | 3,749,862 | |||||
Total equity |
$ | 1,174,826 | $ | 1,109,464 | ||||
Long-term debt, excluding current portion |
1,531,976 | 1,386,557 | ||||||
Current portion of long-term debt and loans payable |
118,081 | 87,064 | ||||||
Other current liabilities |
105,634 | 113,943 | ||||||
Deferred credits and other liabilities |
1,141,949 | 1,052,834 | ||||||
$ | 4,072,466 | $ | 3,749,862 | |||||
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