- 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
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 InformationDate: Aug. 3, 2017Time: 11 a.m.
EDT (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: 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
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version on businesswire.com: http://www.businesswire.com/news/home/20170802006439/en/
Aqua America, Inc.Brian DingerdissenInvestor
Relations610-645-1191BJDingerdissen@AquaAmerica.comorStacey
HajdakMarketing &
Communications610-520-6309SMHajdak@AquaAmerica.com
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