Aqua America Reports Net Income Increased 24 Percent for Second Quarter 2005; Board of Directors Increase Dividend by 10 Percent and Announce Four-for-Three Stock Split.BRYN MAWR Bryn Mawr (brĭn mär), uninc. town (1990 est. pop. 10,000), Montgomery co., SE Pa., a residential suburb of Philadelphia. It is the seat of Bryn Mawr College (for women), opened in 1885 by the Society of Friends. , Pa. -- Aqua America, Inc. (NYSE NYSE See: New York Stock Exchange :WTR WTR Water WTR Writer WTR Wait To Restore WTR Wireless Technology Research WTR Walker, Texas Ranger (TV show) WTR Western Test Range WTR With-The-Rule Astigmatism WTR Working Time Regulation (UK) ) today reported net income for the quarter ended June 30, 2005 grew to $22.2 million, a 24 percent increase from $17.9 million in the second quarter of 2004. Diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of for the quarter increased to $0.23, up 21 percent from $0.19 for the same period in 2004, on 3 percent more shares outstanding. Operating revenues operating revenue Revenue from any regular source. Revenue from sales is adjusted for discounts and returns when calculating operating revenue. Compare other revenue. increased 16 percent to $123.1 million for the second quarter 2005 from $106.5 million in the same period in the year prior. The revenue increase is a result of rate awards received in 2004 and 2005 as well as customer growth, particularly from the mid- mid- pref. Middle: midbrain. 2004 acquisitions of Heater Utilities in North Carolina North Carolina, state in the SE United States. It is bordered by the Atlantic Ocean (E), South Carolina and Georgia (S), Tennessee (W), and Virginia (N). Facts and Figures Area, 52,586 sq mi (136,198 sq km). Pop. and 63 systems from Florida Water Services in Florida. For the six months ending June 30, 2005, net income increased 23 percent to $41.1 million from $33.4 million and corresponding diluted earnings per share increased 17 percent to $0.42 from $0.36 for the same period last year. Operating revenues for the first half of 2005 totaled $237.1 million, an increase of 15 percent from revenues of $206.3 million for the six months ending June 30, 2004. At its regularly scheduled meeting on August 2, 2005, the Board of Directors voted to increase the common stock cash dividend to shareholders by 10 percent with the December 1, 2005 dividend, which is equivalent to a $0.05 increase above its current annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. dividend rate of $0.52 to $0.57 per share. Additionally, the Board approved for the sixth time in nine years a stock split, to be effected in the form of a four-for-three or a 33.3 percent stock distribution. The increased quarterly cash dividend of $0.1425 per share, from $0.13 per share, and the subsequent stock split will be effected with the December 1, 2005 cash dividend payment and is available to shareholders of record as of November 17, 2005. As a result of the stock split, the new quarterly cash dividend rate will be $0.1069 per share on the increased number of shares resulting from the stock distribution, or $0.4276 per share on an annualized basis. Aqua America Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. Nicholas DeBenedictis said, "Continuing to reward our shareholders with increasing dividends is a top priority for the Aqua America Board. We are pleased to be able to increase the dividend above our targeted five percent increase for the seventh year in a row. These increases allow our shareholders to benefit from Aqua America's financial success as we continue to focus on increasing shareholder value. Additionally, in years when we split the stock, we typically boost the dividend to an above-average increase." This increase is the company's 15th in 14 years. The Board also declared a $0.13 per share quarterly common stock cash dividend to be paid on September 1, 2005 to shareholders of record on August 18, 2005. This dividend is eight percent higher than the corresponding dividend paid one year prior on September 1, 2004 as a result of the increase in the company's cash dividend on December 1, 2004. The company's ratio of operating and maintenance expenses to revenues (efficiency ratio) for the quarter ending June 30, 2005 was 41.3 percent, including the higher expense ratio from the newly-acquired Heater Utilities and Florida Water Services operations, an improvement from 41.8 percent for second quarter 2004 and from 41.5 percent in the first quarter of this year. DeBenedictis said, "We are pleased with the progress we are making with the improvement in our efficiency ratio. Capitalizing on opportunities to gain efficiencies through economies of scale is a key focus for the company. Our goal remains to continue to improve our efficiency ratio, which is an important performance benchmark for us." Consistent with Aqua America's long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. growth-through-acquisition strategy, the company has completed 16 acquisitions in 2005 in the states in which it operates. DeBenedictis said, "Making immediately-accretive acquisitions to facilitate growth continues to be an integral part of our strategy. These small system acquisitions help us fill in our service territories, generating economies of scale and lay the foundation for future growth. Many of the systems we buy are troubled, so they provide opportunities, not only to improve service for the customers of these systems, but also for additional investment." In May, the company's Pennsylvania Pennsylvania (pĕnsəlvā`nyə), one of the Middle Atlantic states of the United States. It is bordered by New Jersey, across the Delaware River (E), Delaware (SE), Maryland (S), West Virginia (SW), Ohio (W), and Lake Erie and New York subsidiary issued $72.0 million in tax exempt debt at an average effective yield of 4.88 percent. The proceeds will be used to refinance Refinance 1. When a business or person revises their payment schedule for repaying debt. 2. Replacing an older loan with a new loan offering better terms. Notes: When a business refinances they typically extend the maturity date. $22.0 million in higher cost debt - saving an estimated $32.0 million in interest expense over the life of the loan - and the balance will be used for infrastructure improvement projects in Pennsylvania. Since 1999, the company has reduced its system-wide long-term interest rate from 7.4 percent to the current 5.8 percent on approximately $890.0 million of outstanding debt (as of June 30, 2005). The savings in interest expense has allowed the company to accelerate the pace of its capital spending capital spending Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. and continue to provide its growing customer base with quality water at a reasonable cost. The company's conference call with analysts will take place on Wednesday, August 3, 2005 at 10:00 a.m. Eastern Daylight Time. The call will be web cast so that interested parties may listen over the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the by logging on to www.aquaamerica.com. The conference call will be archived in the investor relations Investor relations The process by which the corporation communicates with its investors. section of the company's Web site for 90 days following the call. Additionally, the call will be recorded and made available for replay for 10 business days after the call, beginning at 12:00 p.m. Wednesday, August 3, 2005 through Wednesday, August 17, 2005. The dial-in telephone number for the audio replay is (888) - 203 - 1112 (PIN number 1245746). Aqua America, Inc. is the largest U.S.-based publicly-traded water utility, serving more than 2.5 million residents in Pennsylvania, Ohio, North Carolina, Illinois Illinois, river, United States Illinois, river, 273 mi (439 km) long, formed by the confluence of the Des Plaines and Kankakee rivers, NE Ill., and flowing SW to the Mississippi at Grafton, Ill. It is an important commercial and recreational waterway. , Texas, Florida, New Jersey, Indiana Indiana, state, United States Indiana, midwestern state in the N central United States. It is bordered by Lake Michigan and the state of Michigan (N), Ohio (E), Kentucky, across the Ohio R. (S), and Illinois (W). , Virginia Virginia, state, United States Virginia, state of the south-central United States. It is bordered by the Atlantic Ocean (E), North Carolina and Tennessee (S), Kentucky and West Virginia (W), and Maryland and the District of Columbia (N and NE). , Maine Maine, ship Maine, U.S. battleship destroyed (Feb. 15, 1898) in Havana harbor by an explosion that killed 260 men. The incident helped precipitate the Spanish-American War (Apr., 1898). Commanded by Capt. Charles Sigsbee, the ship had been sent (Jan. , Missouri Missouri, state, United States Missouri (mĭz  r`ē, –ə), one of the midwestern states of the United States. , New York New York, state, United StatesNew York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of , and South Carolina South Carolina, state of the SE United States. It is bordered by North Carolina (N), the Atlantic Ocean (SE), and Georgia (SW). Facts and Figures Area, 31,055 sq mi (80,432 sq km). Pop. (2000) 4,012,012, a 15. . Aqua America is listed on both the New York and Philadelphia Stock Exchanges Philadelphia Stock Exchange (PHLX) A securities exchange trading American and European foreign currency options on spot exchange rates. under the ticker symbol Ticker Symbol An arrangement of characters (usually letters) representing a particular security listed on an exchange or otherwise traded publicly. When a company issues securities to the public marketplace, it selects an available ticker symbol for its securities which investors WTR. This release contains forward looking statements within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995, including, among others, the impact of customer growth and rate increases on revenues and earnings, increased opportunities from acquisitions to invest and earn on infrastructure improvements, opportunities to reduce expenses, the growth prospects and the effect on operating expense Operating Expense The essential things that a company must purchase in order to maintain business. Notes: For example, the payment of employees wages are an operating expense. Also known as OPEX. levels associated with acquired operations. There are important factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. including: general economic business conditions, unfavorable weather conditions, the success of certain cost containment cost containment, n the features of a dental benefits program or of the administration of the program designed to reduce or eliminate certain charges to the plan. initiatives, changes in regulations or regulatory treatment, availability and the cost of capital, the success of growth initiatives, and other factors discussed in our filings with the Securities and Exchange Commission.
The following table shows selected operating data for the quarters and
six months ended June 30, 2005 and 2004 (in thousands, except per
share data) for Aqua America, Inc.
(Unaudited)
Quarter Ended Six Months Ended
June 30, June 30,
2005 2004 2005 2004
---- ---- ---- ----
Operating revenues $ 123,100 $106,524 $237,088 $206,292
===================== ===================
Net income $ 22,218 $ 17,871 $ 41,089 $ 33,446
===================== ===================
Basic net income per share $ 0.23 $ 0.19 $ 0.43 $ 0.36
===================== ===================
Diluted net income per share $ 0.23 $ 0.19 $ 0.42 $ 0.36
===================== ===================
Average common shares
outstanding:
Basic 95,889 92,889 95,701 92,793
===================== ===================
Diluted 97,123 93,848 96,911 93,828
===================== ===================
Aqua America, Inc. and Subsidiaries
Consolidated Statements of Income and Comprehensive Income
(In thousands, except per share amounts)
(Unaudited)
Quarter Ended Six Months Ended
June 30, June 30,
-------- --------
2005 2004 2005 2004
---- ---- ---- ----
Operating revenues $123,100 $106,524 $237,088 $206,292
Cost & expenses:
Operations and maintenance 50,891 44,483 98,200 86,314
Depreciation 14,629 13,506 29,312 27,180
Amortization 1,227 1,249 2,455 1,919
Taxes other than income
taxes 7,760 6,813 15,757 13,962
--------- --------- --------- ---------
Total 74,507 66,051 145,724 129,375
--------- --------- --------- ---------
Operating income 48,593 40,473 91,364 76,917
Other expense (income):
Interest expense, net 12,541 11,436 25,336 23,238
Allowance for funds used
during construction (700) (724) (1,064) (1,333)
Gain on sale of other
assets (24) (26) (505) (476)
--------- --------- --------- ---------
Income before income taxes 36,776 29,787 67,597 55,488
Provision for income taxes 14,558 11,916 26,508 22,042
--------- --------- --------- ---------
Net income $ 22,218 $ 17,871 $ 41,089 $ 33,446
========= ========= ========= =========
Net income $ 22,218 $ 17,871 $ 41,089 $ 33,446
Other comprehensive income
(loss), net of tax:
Unrealized gain on
securities - - - 59
Reclassification
adjustment for gains
reported in net income - - - (230)
--------- --------- --------- ---------
Comprehensive income $ 22,218 $ 17,871 $ 41,089 $ 33,275
========= ========= ========= =========
Net income per common share:
Basic $ 0.23 $ 0.19 $ 0.43 $ 0.36
Diluted $ 0.23 $ 0.19 $ 0.42 $ 0.36
Average common shares
outstanding:
Basic 95,889 92,899 95,701 92,793
========= ========= ========= =========
Diluted 97,123 93,848 96,911 93,828
========= ========= ========= =========
Aqua America, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands of dollars)
(Unaudited)
June 30, December 31,
2005 2004
---- ----
Net property, plant and equipment $ 2,134,320 $ 2,069,812
Current assets 82,828 90,127
Regulatory assets and other assets 250,481 192,251
------------ ------------
$ 2,467,629 $ 2,352,190
============ ============
Common stockholders' equity $ 773,357 $ 747,231
Long-term debt, excluding current portion 844,539 784,461
Current portion of long-term debt and loans
payable 158,876 135,310
Other current liabilities 71,745 82,072
Deferred credits and other liabilities 619,112 603,116
------------ ------------
$ 2,467,629 $ 2,352,190
============ ============
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