Earnings per share increased 3.6 percent to
$0.29 vs. $0.28 in Q1 2018
Aqua America Inc. (NYSE: WTR) today reported results for the
first quarter ending March 31, 2018.
Operating results
For the first quarter 2018, net income was $50.8 million, a 3.6
percent increase compared to $49.1 million reported in the same
quarter of 2017. Earnings per diluted common share were $0.29 for
the quarter, an increase of 3.6 percent compared to $0.28 in 2017.
Rates, organic growth, lower income tax expenses and additional
water consumption benefited earnings and were offset by the impact
of increased expenses.
Revenues for the quarter were $194.3 million, an increase of 3.5
percent compared to $187.8 million in the first quarter of 2017.
Rates, organic growth and higher consumption contributed to revenue
growth. Infrastructure surcharges such as distribution system
improvement charges contributed $5.1 million of additional revenue
offset by a $2.5 million revenue reserve for savings from the Tax
Cuts and Jobs Act, which is expected to be returned to
customers.
Operations and maintenance expenses increased to $73.9 million
for the first quarter of 2018 compared to $67.9 million in the
first quarter of 2017. Higher employee costs, as well as overtime
and repair costs related to severe winter weather, were offset by
lower costs of production and market-based activities. On a
normalized basis, the O&M expense growth would have been
one-third of the reported increase and more in line with recent
historical trends.
“In the first quarter, we delivered solid earnings and revenue
growth, while also making targeted investments in infrastructure to
benefit the customers and communities we serve,” said Aqua America
Chairman and CEO Chris Franklin. “Our strong financial position
allows us to continue leading the way in providing a solution to
cities and towns across the country struggling to address the
problem of aging infrastructure.”
Acquisition growth in regulated operations
Aqua added three water and wastewater systems and approximately
448 customer connections through acquisitions in the first quarter.
Organic growth added another 1,811 customers.
Franklin added, “Focus on the company’s growth strategy
continues to provide a promising pipeline of opportunities. We
expect to close several acquisitions totaling approximately 16,000
new customers in 2018. Additionally, this year we expect to reach
over one million customers for the first time. We are proud to have
the opportunity to provide safe and reliable water and wastewater
services for our customers. This is an essential service that makes
an important contribution to the quality of life and prosperity in
the communities we serve across our eight states.”
Dividend
On April 25, 2018, 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 June 1, 2018 to shareholders of record
on May 18, 2018. Aqua has paid a consecutive quarterly dividend for
the last 73 years.
Capital expenditures
Aqua invested $105.1 million in the first three months of the
year to improve its infrastructure systems. The company expects to
invest more than $500 million in 2018 and more than $1.4 billion
through 2020. The capital investments made to rehabilitate and
expand the infrastructure of the communities Aqua serves are
paramount to helping it continue to protect and provide Earth’s
most essential resource.
Rate activity
To date in 2018, the company’s state subsidiaries in Illinois,
Indiana, New Jersey, North Carolina, Ohio, Pennsylvania and Texas
have received rate awards or infrastructure surcharges totaling an
estimated increase to annualized revenues of $23.6 million.
Additionally, the company currently has rate or surcharge
proceedings pending in Indiana, North Carolina, Ohio, and Virginia
collectively totaling $8.6 million.
On Dec. 22, 2017, the Tax Cuts and Jobs Act was signed into law,
which lowered the federal corporate tax rate from 35 percent to 21
percent and made other tax law changes. The rate activity described
above includes a reduction in revenues on an annualized basis of
$7.1 million for the reduced income tax rate in jurisdictions where
the regulator has determined there are income tax savings that are
to be refunded to customers.
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
$228.3 million available on its credit lines.
2018 guidance
Aqua America continues to affirm guidance for 2018, which
remains unchanged from last quarter:
- Earnings per diluted common share of
$1.37 to $1.42
- Approximately $500 million in
infrastructure improvements in 2018 for communities served by
Aqua
- Approximately $1.4 billion in
infrastructure improvements planned through 2020 in existing
operations to improve and strengthen systems
- Aqua Pennsylvania files a rate case in
2018 with resolution expected in 2019
- Total customer growth of between 2 and
3 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 Information
Date: May 9, 2018Time: 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:
2274551
The company’s conference call with financial analysts will take
place on Wed., May 9, 2018 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 9, 2018 for 10 business days following the call. To access the
audio replay in the U.S., dial 888.203.1112 (pass code 2274551).
International callers can dial +1 719.457.0820 (pass code
2274551).
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 2018; the projected total customer
growth for 2018; the anticipated amount of capital investment in
2018; the anticipated amount of capital investment from 2018
through 2020; 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
March 31,
2018
2017
Operating revenues $ 194,347 $ 187,787
Operations and maintenance expense
$ 73,946 $ 67,890 Net income $ 50,839
$ 49,072 Basic net income per common share $ 0.29 $
0.28 Diluted net income per common share $ 0.29 $
0.28 Basic average common shares outstanding 177,801 177,479
Diluted average common shares outstanding 178,238
177,969 Aqua
America, Inc. and Subsidiaries Consolidated Statement of Income (In
thousands, except per share amounts) (Unaudited) Quarter
Ended
March 31,
2018
2017
Operating revenues $ 194,347 $ 187,787 Cost &
expenses: Operations and maintenance 73,946 67,890 Depreciation
35,967 33,837 Amortization 130 189 Taxes other than income taxes
14,967 14,737 Total
125,010 116,653
Operating income 69,337 71,134 Other expense (income):
Interest expense, net 23,471 21,326 Allowance for funds used during
construction (2,867 ) (3,193 ) Gain on sale of other assets (196 )
(269 ) Equity (earnings) loss in joint venture (382 ) 30 Other
603 1,238 Income before
income taxes 48,708 52,002 Provision for income taxes (2,131
) 2,930 Net income $ 50,839
$ 49,072 Net income per common share:
Basic $ 0.29 $ 0.28 Diluted $ 0.29 $ 0.28 Average common
shares outstanding: Basic 177,801
177,479 Diluted 178,238
177,969 Aqua
America, Inc. and Subsidiaries Condensed Consolidated Balance
Sheets (In thousands of dollars) (Unaudited)
March 31, December 31,
2018
2017
Net property, plant and equipment $ 5,460,219 $ 5,399,860
Current assets 124,142 131,246 Regulatory assets and other assets
819,347 801,357 $ 6,403,708
$ 6,332,463 Total equity $ 1,972,159 $
1,957,621 Long-term debt, excluding current portion, net of debt
issuance costs 2,063,066 2,007,753 Current portion of long-term
debt and loans payable 124,174 117,419 Other current liabilities
134,961 167,069 Deferred credits and other liabilities
2,109,348 2,082,601 $ 6,403,708
$ 6,332,463
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version on businesswire.com: https://www.businesswire.com/news/home/20180508006769/en/
Aqua America Inc.Brian DingerdissenInvestor
Relations610-645-1191BJDingerdissen@AquaAmerica.comorStacey
HajdakMarketing &
Communications610-520-6309SMHajdak@AquaAmerica.com
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