- Earnings per share increased 4.9
percent to $0.43 vs. $0.41 in 2016
- Signs agreement to acquire
3,800-connection municipal wastewater system
Aqua America, Inc. (NYSE: WTR) today reported results for the
third quarter ending September 30, 2017.
Operating results
For the third quarter 2017, Aqua America reported net income of
$76.2 million, a 4.2 percent increase compared to $73.2 million
reported in the same quarter of 2016. Earnings per diluted common
share were $0.43 for the quarter, an increase of 4.9 percent
compared to $0.41 in 2016.
Revenues for the quarter were $215 million, a decrease of 5.1
percent compared to $226.6 million in the third quarter of 2016.
Revenues decreased due to lower water consumption in the third
quarter and a decrease in market-based activities revenue of $3.4
million due to the sales of business units. Regulated segment
revenues decreased 3.7 percent to $214 million from $222.2 million,
reflecting lower water consumption due to wet weather experienced
in more than half the company’s operating divisions, offset by an
increase in water rates and customer growth.
Operations and maintenance expenses decreased $11.8 million or
14.8 percent to $68 million for the third quarter of 2017 compared
to $79.8 million in the third quarter of 2016. Divestitures in
market-based activities, lower production expenses and
employee-related expenses collectively reduced operating expenses
by $11.4 million in the quarter.
“Management continues to deliver solid results by maintaining
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 continue
to prudently invest in infrastructure, while maintaining our
position as one of the most efficient utilities in the nation,
which ultimately benefits the customers and communities we are
privileged to serve.”
For the nine months ending September 30, 2017, the company
reported net income of $186.3 million. Earnings per diluted common
share were $1.05 in 2017 compared to $1.04 in the first nine months
of 2016. Year to date, the company reported revenues of $606.2
million compared to $623.1 million in 2016, with the divestitures
of market-based activities accounting for the majority of the
revenue decline. Year to date regulated revenues decreased to
$602.3 million from $606.3 million in the prior year. Operations
and maintenance expenses for the first nine months of 2017
decreased by 8.5 percent to $208.0 million compared to $227.3
million in 2016. Regulated operations and maintenance expenses were
$210.8 million in 2017, a 0.4 percent decrease compared to
2016.
Acquisition growth in regulated operations
Aqua added approximately 1,000 customer connections through
acquisitions in Pennsylvania and Indiana so far in 2017. In total,
acquisitions and organic customer growth have increased the
company’s customer base by approximately 0.8 percent thus far in
2017.
“We added a fifth municipal acquisition to the four we
previously announced as being under contract,” noted Franklin.
“This municipal wastewater system has roughly 3,800 customers and
is expected to close in 2018. Combined with Tobyhanna, a municipal
wastewater system in Pennsylvania that closed earlier this year,
these six municipal acquisitions represent a purchase price of
approximately $150 million and nearly 15,700 customers that we will
welcome into the Aqua family.”
Franklin underscored the role Aqua can play in being a solution
for the nation’s infrastructure challenges. “The municipal
transactions we have under agreement demonstrate the value our
financial strength and operational excellence can bring to smaller
and mid-sized municipalities that may have infrastructure
challenges, lack the operational expertise to continue operating
the system, or simply want to consolidate their system with a
larger more qualified provider. While some of these deals may not
close until 2018, we are experiencing an increased interest in
consolidation in working together with municipal partners,” said
Franklin.
Dividend
On October 26, 2017, 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 December 1, 2017 to shareholders
of record on November 17, 2017. Aqua has paid a consecutive
quarterly dividend for the last 72 years.
Capital expenditures
Aqua invested $337.7 million in the first nine months 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 $21.4 million.
Additionally, the company currently has rate or surcharge
proceedings pending in Illinois, North Carolina and Virginia
collectively totaling $14.1 million.
Financial information
At quarter-end, Aqua America’s weighted average cost of
fixed-rate long-term debt was 4.36 percent and the company had
$298.1 million available on its credit lines.
2017 guidance
Aqua America's current guidance for 2017:
- Earnings per diluted common share of
$1.34 to $1.39
- Same-system operations and maintenance
expenses increase less than 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, as expected, filed
and initiated a distribution system improvement charge effective
October 1, 2017 and a rate case filing remains 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.
Earnings Call InformationDate: November 1, 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: 9598365
The company’s conference call with financial analysts will take
place on Wednesday, November 1, 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
November 1, 2017 for 10 business days following the call. To access
the audio replay in the U.S., dial 888.203.1112 (pass code
9598365). International callers can dial +1 719.457.0820 (pass code
9598365).
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 projected total customer
growth for 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 in 2017; the
anticipated amount of capital investment from 2017 through 2019;
and, the company’s expected filing of a Pennsylvania rate case in
2018. There are important factors that could cause actual results
to differ materially from those expressed or implied by such
forward-looking statements including: the continuation of the
company's growth-through-acquisition program, 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
successfully close the five municipally owned systems presently
under agreement; 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 rate filing; the
company’s ability to successfully complete its Pennsylvania rate
filing 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 Nine Months Ended
September
30,
September
30,
2017
2016
2017
2016
Operating revenues $ 215,008 $ 226,593 $ 606,213
$ 623,076 Operations and maintenance expense $ 67,982
$ 79,812 $ 207,963 $ 227,347 Regulated segment:
Operating revenues $ 214,032 $ 222,231 $ 602,341 $
606,323 Operations and maintenance expense $ 70,772 $ 73,013
$ 210,842 $ 210,014 Net income $ 76,225 $
73,170 $ 186,265 $ 184,533 Basic net income per
common share $ 0.43 $ 0.41 $ 1.05 $ 1.04 Diluted net income per
common share $ 0.43 $ 0.41 $ 1.05 $ 1.04 Basic
average common shares outstanding 177,660 177,336 177,583 177,243
Diluted average common shares outstanding 178,124
177,817 178,103 177,781
Aqua America, Inc. and Subsidiaries Consolidated Statement of
Income (In thousands, except per share amounts) (Unaudited)
Quarter Ended Nine Months Ended
September
30,
September
30,
2017
2016
2017
2016
Operating revenues $ 215,008 $ 226,593 $ 606,213 $ 623,076
Cost & expenses: Operations and maintenance 67,982
79,812 207,963 227,347 Depreciation 34,264 33,881 101,508 97,645
Amortization 42 389 358 1,367 Taxes other than income taxes
15,234 14,712 44,390
43,094 Total 117,522
128,794 354,219 369,453
Operating income 97,486 97,799 251,994 253,623
Other expense (income): Interest expense, net 22,411 20,168 65,124
60,136 Allowance for funds used during construction (3,914 ) (2,267
) (10,570 ) (6,446 ) Gain on sale of other assets (43 ) (62 ) (322
) (390 ) Equity earnings in joint venture (593 )
(1,621 ) (402 ) (1,143 ) Income before
income taxes 79,625 81,581 198,164 201,466 Provision for income
taxes 3,400 8,411 11,899
16,933 Net income $ 76,225
$ 73,170 $ 186,265 $ 184,533
Net income per common share: Basic $ 0.43 $ 0.41 $ 1.05 $
1.04 Diluted $ 0.43 $ 0.41 $ 1.05 $ 1.04 Average common
shares outstanding: Basic 177,660
177,336 177,583 177,243
Diluted 178,124 177,817
178,103 177,781 Aqua
America, Inc. and Subsidiaries Condensed Consolidated Balance
Sheets (In thousands of dollars) (Unaudited)
September 30, December 31,
2017
2016
Net property, plant and equipment $ 5,276,474 $ 5,001,615
Current assets 138,342 128,650 Regulatory assets and other assets
1,130,565 1,028,726 Total assets $ 6,545,381
$ 6,158,991 Total equity $ 1,938,265 $
1,850,068 Long-term debt, excluding current portion, net of debt
issuance costs 1,952,473 1,737,605 Current portion of long-term
debt and loans payable 105,694 157,206 Other current liabilities
147,256 144,330 Deferred credits and other liabilities
2,401,693 2,269,782 Total liabilities and equity $
6,545,381 $ 6,158,991
View source
version on businesswire.com: http://www.businesswire.com/news/home/20171031006508/en/
Aqua America, Inc.Brian DingerdissenInvestor
Relations610-645-1191BJDingerdissen@AquaAmerica.comorStacey
HajdakMarketing &
Communications610-520-6309SMHajdak@AquaAmerica.com
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