- Earnings per share increased 7.4
percent to $0.29 vs. $0.27 in 2015
- Year-to-date acquisitions added
approximately 5,250 customer connections
Aqua America, Inc. (NYSE: WTR) today reported results for the
first quarter ended March 31, 2016.
First Quarter Operating Results
Revenues increased to $192.6 million, or 1.2 percent, in the
first quarter of 2016, compared to $190.3 million in the same
quarter of 2015. Rates, surcharges, regulated customer growth and
other factors increased revenues by approximately $7.3 million
compared to the first quarter of 2015. Reduced revenue from
market-based activities offset the increase by $3.2 million, with a
decline in consumption providing further reduction.
Operations and maintenance expenses were $73.5 million for the
first quarter of 2016, compared to $73.2 million in the first
quarter of 2015. Lower production costs, a decrease in expenses
tied to market-based activities and other factors collectively
decreased operating expenses by $3.9 million year-over-year for the
first quarter. Increased expenses tied to regulated acquisitions,
health insurance, and other employee costs offset the decrease by
$4.3 million.
Other factors driving the company’s results included
approximately $73 million in capital spending which generated a
$1.1 million increase in allowance for funds used during
construction compared to the first quarter of 2015. Additionally,
through additional tax deductions recognized for qualifying
infrastructure improvements by Aqua Pennsylvania, the company
reduced its effective tax rate year-over-year.
Net income for the first quarter was $51.7 million, which was a
6.6 percent increase compared to $48.5 million reported in the same
quarter of 2015. Earnings per diluted common share were $0.29 for
the quarter, an increase of 7.4 percent compared to $0.27 in the
same quarter of the previous year.
“The first quarter yielded strong financial results,
demonstrating management’s commitment to growing the company’s
regulated business by investing the necessary capital in the
communities we serve and generating economies of scale for our
customers by making disciplined acquisitions,” said Aqua America
President and Chief Executive Officer Christopher Franklin. “We
remain focused on capitalizing on our core capabilities of
deploying capital, earning a regulated return on our infrastructure
investments and operating the company at optimal efficiency to put
our customers, communities, employees and shareholders in a
position to succeed.”
Capital Expenditures
Through the first quarter of 2016, Aqua invested approximately
$73 million to improve its infrastructure systems. The company
expects to invest more than $350 million in 2016 and more than $1.1
billion through 2018. The capital investments made in the
infrastructure of the communities Aqua serves are paramount to
helping the company accomplish its mission of protecting and
providing Earth’s most essential resource.
Dividend
On April 15, 2016 Aqua America’s Board of Directors declared a
quarterly cash dividend of $0.178 per share of common stock. This
dividend will be payable on June 1, 2016 to shareholders of record
on May 13, 2016. Aqua has paid consecutive quarterly cash dividends
for 71 years and has increased the dividend 25 times in the last 24
years.
Rate Activity
To date in 2016, the company’s state subsidiaries in Illinois,
North Carolina, Ohio, Texas and Virginia have received rate awards
or infrastructure surcharges totaling an estimated increase to
annualized revenues of $4.5 million. This includes $1.1 million of
revenues collected under interim rates during 2015.
Additionally, the company currently has a combined $5.1 million
in rate or surcharge proceedings pending in New Jersey, Indiana and
Virginia.
Acquisition Growth in Regulated Operations
In addition to the closing of Superior Water Company in
Pennsylvania and Wastewater One LLC’s Galena wastewater system in
Indiana, which added more than 4,200 customer connections
collectively, Aqua has completed acquisitions in Illinois, North
Carolina and Virginia in 2016. Acquisitions alone have increased
the company’s customer base by approximately 0.5 percent thus far.
Coupled with organic customer growth, the company expects to
increase its total customer connections by 1.5 to 2 percent in
2016.
- Aqua Illinois purchased the assets of
the Eastwood Manor Water Company and the Nunda Utility Company in
McHenry County, Illinois. The systems collectively have 487
customer connections and serve approximately 1,500 people. The
Eastwood Manor and Nunda Utility systems were acquired under the
provisions of Illinois Water Systems Viability Act 98-0213, a law
that promotes the acquisition of smaller, often troubled utilities
by larger, more efficient utilities.
- Aqua Illinois acquired the water and
wastewater utility assets of Golf Greenwood Gardens Improvement
Association, each of which serves 72 customer connections located
in unincorporated Cook County within Aqua Illinois’ existing North
Maine Utility’s certificated area.
- Aqua Illinois purchased the assets of
the Crystal Clear Water Company, also under the Illinois Water
Systems Viability Act 98-0213. The company plans to invest nearly
$500,000 to bring the system, which serves 293 connections, into
compliance with the Illinois Environmental Protection Agency.
- Aqua North Carolina purchased the water
assets of the Clear Meadow water system in the Mint Hill area of
Mecklenburg County, which has 62 customer connections.
- Aqua Virginia acquired the water assets
of the Twin Cedars subdivision in Caroline County. The system
serves 30 customer connections and will be served by existing
nearby operations in the area.
“The management team is focused on our refined three-pronged
strategy to grow the regulated business by offering solutions to
mid-sized government owned utilities; seeking accretive M&A
opportunities in the U.S. regulated sector; and pursuing ventures
in the market-based business arena that provide supplementary and
complementary opportunities for the regulated business,” said
Franklin. “In the first half of 2016, we will finish divesting most
of our small market-based businesses that we have determined are
not scalable. Our current market-based activities contribute less
than one percent of the company’s net income. We remain excited
about the opportunities our corporate development group is pursuing
that could significantly build our company in the coming
years.”
Financial Information
At quarter-end, Aqua America’s weighted average cost of
fixed-rate long-term debt was 4.57 percent and the company had $249
million available on its credit lines.
2016 Guidance
- Earnings per diluted common share of
$1.30 to $1.35
- Total customer base growth of 1.5 to 2
percent
- Same-system operations and maintenance
expenses increase of 1 to 2 percent
- More than $350 million in capital
investments; more than $1.1 billion in 2016 through 2018
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: May 4, 2016Time: 11 a.m. ET (please dial in by 10:45
a.m.)Webcast and slide presentation link:
http://ir.aquaamerica.com/events.cfmReplay Dial-in #: 888.203.1112
(U.S.) & +1 719.457.0820 (International)Confirmation code:
4218511
The company’s conference call with financial analysts will take
place on Wednesday, May 4, 2016 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
May 4, 2016 for 10 business days following the call. To access the
audio replay in the U.S., dial 888.203.1112 (pass code 4218511).
International callers can dial +1 719.457.0820 (pass code
4218511).
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.
Caution Concerning 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 company’s ability to grow its
regulated business; the continuation of the company’s
growth-through-acquisition program and the expectations for
customer growth from this program; the anticipated amount of
capital investment through 2018; the company’s ability to manage
operations and maintenance expenses through economies of scale; the
company’s ability to pay a dividend; the company’s ability to
recover capital expenditures in rates; the expected increase in
customer base for the year; the guidance range of earnings per
share for the year; and the company’s continuation of investments
in strategic ventures. 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 due
to its financial position; 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; and other factors discussed
in our Annual Report on Form 10-K, which is on file 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
March 31,
2016
2015
Operating revenues $ 192,607 $ 190,326 Net income $
51,737 $ 48,545 Basic net income per common share $ 0.29 $
0.27 Diluted net income per common share $ 0.29 $ 0.27 Basic
average common shares outstanding 177,104 176,888 Diluted average
common shares outstanding 177,819 177,792
Aqua America, Inc. and Subsidiaries Condensed Consolidated
Balance Sheets (In thousands of dollars) (Unaudited)
March 31, December 31,
2016
2015
Net property, plant and equipment $ 4,752,881 $ 4,688,925
Current assets 122,733 128,370 Regulatory assets and other assets
939,829 900,578 $ 5,815,443 $ 5,717,873
Total equity $ 1,760,707 $ 1,725,930 Long-term debt, excluding
current portion, net of debt issuance costs 1,744,108 1,720,447
Current portion of long-term debt and loans payable 57,137 52,314
Other current liabilities 117,206 140,885 Deferred credits and
other liabilities 2,136,285 2,078,297 $ 5,815,443 $
5,717,873 Aqua America, Inc. and Subsidiaries
Consolidated Statement of Income (In thousands, except per share
amounts) (Unaudited) Quarter Ended
March 31,
2016
2015
Operating revenues $ 192,607 $ 190,326 Cost &
expenses: Operations and maintenance 73,541 73,189 Depreciation
32,145 30,500 Amortization 450 849 Taxes other than income taxes
14,140 14,621 Total 120,276 119,159
Operating income 72,331 71,167 Other expense
(income): Interest expense, net 19,853 18,665 Allowance for funds
used during construction (2,308) (1,182) (Gain) on sale of other
assets (207) (169) Equity loss in joint venture 249
714 Income before income taxes 54,744 53,139 Provision for income
taxes 3,007 4,594 Net income $ 51,737 $ 48,545
Net income per common share: Basic $ 0.29 $ 0.27 Diluted $ 0.29 $
0.27 Average common shares outstanding: Basic 177,104
176,888 Diluted 177,819 177,792
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version on businesswire.com: http://www.businesswire.com/news/home/20160503007143/en/
Aqua America, Inc.Brian DingerdissenInvestor RelationsO:
610-645-1191BJDingerdissen@AquaAmerica.comorGretchen TonerManager,
Strategic CommunicationsO: 610-645-1175M:
484-368-4816GMToner@AquaAmerica.com
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