![American Water Logo](/resources/images/logo.png)
American Water Reports Third Quarter 2012 Results, Demonstrating Strong Year-Over-Year Growth
Dateline City:
VOORHEES, N.J.
- Net income and diluted earnings per share from continuing operations increased approximately 20 percent quarter over quarter to $154.1 million or $0.87 per share
- Revenues increased approximately 9 percent, or $70.9 million, over third quarter of previous year to $831.8 million
- Operations sustained, employees committed to providing service throughout Hurricane Sandy
- Company reaffirmed 2012 earnings guidance range of $2.12 to $2.22 per share for continuing operations
VOORHEES, N.J.--(BUSINESS WIRE)--American Water Works Company, Inc. (NYSE: AWK), the largest publicly
traded U.S. water and wastewater utility company, today reported
increases in revenues, net income and earnings per share for the third
quarter ended Sept. 30, 2012, as compared to the third quarter of 2011.
“We are pleased with the results American Water delivered this quarter,”
said Jeff Sterba, president and CEO of American Water. “We continued to
successfully deliver on our strategies for operational excellence,
growth, and customer and shareholder value. From cash management and
customer satisfaction to leveraging technology and best practices, to
implementing the first phase of our business transformation project to
new IT platforms, our year-to-date results demonstrate a business
focused on continuous improvement. Most recently, our employees’ efforts
to maintain service in states hit hard by Hurricane Sandy showed our
ability to properly prepare and execute during an exceptionally
difficult time that affected many people’s lives.”
For the three months ended Sept. 30, 2012, the company reported income
from continuing operations of $154.1 million or diluted earnings per
share of $0.87, compared with $128.5 million, or $0.73 per share, for
the comparable period in 2011.
The company’s revenues increased $70.9 million to $831.8 million in the
third quarter of 2012, a 9.3 percent increase over the comparable
quarter in 2011. The company’s revenues increased $169.5 million to $2.2
billion for the first nine months of 2012, an 8.4 percent increase over
the comparable period in 2011. A portion of the increase in revenues is
associated with higher demand due to the hot, dry weather in the summer
of 2012, particularly in the Eastern and Midwest portions of the
company’s regulated footprint. The company believes the estimated impact
continued to be approximately $0.13 to $0.16 per share for the nine
months ended Sept. 30, 2012, of which $0.06 to $0.09 represents the
impact during the first six months of 2012.
Total operation and maintenance (O&M) expenses for the three months
ended Sept. 30, 2012, were $355.1 million, an increase of $14.8 million,
or 4.3 percent, compared to the same period in 2011. Total O&M expenses
for the nine months ended Sept. 30, 2012, were $992.7 million, an
increase of $14.4 million, or 1.5 percent, over the comparable period in
2011.
Net cash provided by operating activities for the nine months ended
Sept. 30, 2012, was $735.0 million, compared to $576.0 million for the
same period in 2011, which was primarily driven by the increase in
operating revenues and changes in working capital.
American Water anticipates investing approximately $925 million in
construction and other capital projects in 2012 to help ensure reliable
water and wastewater services. The company’s capital expenditures for
the nine months ended Sept. 30, 2012, were $680.4 million, compared to
$621.9 million for the same period in the prior year. The increase was
mainly attributable to increased spending on infrastructure replacement
projects in the first quarter due to the milder winter weather,
expenditures associated with the company’s business transformation
project to new IT platforms, the replacement of a 1920s era water
treatment facility in Milburn, N.J., and a $101 million capital project
in Pittsburgh, Pa.
Regulated Operations
American Water’s Regulated Businesses’ revenues in the third quarter
increased by $68.4 million, or 10.0 percent, over the prior year’s
period, mainly driven by new rates needed to deliver reliable services,
increased consumption in the company’s Eastern and Midwestern states,
and additional revenues associated with its acquisition of seven water
systems in New York.
The Regulated Businesses’ O&M expenses increased $11.6 million, or 4.0
percent, over the prior year’s period, which is primarily attributed to
increased consumption and incremental operating costs associated with
the phase one launch period of the company’s business transformation
project. The company’s continued focus on cost management and
improving operational efficiency was also reflected in the third quarter
results. The Regulated Businesses’ O&M efficiency ratio (a non-GAAP
measure), improved to 40.9 percent from 44.9 percent for the 12 months
ended Sept. 30, 2012.
American Water’s Regulated Businesses continued to prudently invest
dollars to upgrade and maintain their water systems. During the third
quarter, the company received a general rate case authorization in
Illinois for additional annualized revenues of $17.9 million. Also
during the third quarter, a regulatory decision was received in
California American Water’s cost of capital application, generating an
additional $4.4 million in annualized revenue. Subsequent to the
quarter, a settlement agreement was approved for the company’s Tennessee
general rate case, which allows for an additional $5.2 million in
annualized revenues.
As of Oct. 31, the company was awaiting a final order for a general rate
case in Virginia, requesting an additional $6.0 million in annual
revenues, including a $0.3 million nonjurisdictional component. A
proposed settlement of $2.3 million is currently pending approval by the
Commission, which when combined with the $0.3 million, would provide a
net increase of $2.6 million in revenues for the company. The extent to
which requested rate increases will be granted by the applicable
regulatory agencies will vary. The primary driver of the company’s rate
requests is capital investments made to ensure reliable service to
customers.
“Making efficient use of capital to invest in our water systems is core
to our business. The improvements we have made over the years to
successfully manage through major weather events, like last week's
hurricane, is just one example. That is why we are working with
regulators to adopt mechanisms that accelerate needed improvements while
being mindful of changes in rates,” said Sterba. “The recent approval of
distribution surcharges in New Jersey will have a significant positive
impact on the long-term reliability of water systems in the state with
the added benefit of creating hundreds of jobs annually.”
American Water also continued to execute its growth strategy. During the
quarter, the company acquired the water and wastewater systems serving
customers in a home development near Branson, Mo. In October, the
company completed two tuck-ins in Fayette County, Pa. In addition,
Pennsylvania American Water entered into two agreements with XTO Energy
to construct pipelines for supplying water to support shale gas drilling
operations, as well as provide public water service to adjacent
residential areas. Both projects are in partnership with XTO Energy and
are located in Butler County. These projects will expand the critical
infrastructure needed to support the region’s energy industry and help
create jobs, while also bringing reliable public water service to
residential communities where it doesn’t currently exist.
Market-Based Operations
American Water’s Market-Based Operations’ revenues and O&M expenses
during the third quarter of 2012 both remained flat as compared to the
comparable quarter in 2011.
During the quarter, American Water announced that its homeowner services
business, American Water Resources, Inc., has been selected by the New
York City Water Board as the official service line protection provider
to homeowners. American Water Resources’ Water and Sewer Line Protection
Programs will be available beginning in the first quarter of 2013 to an
estimated 600,000 homeowners throughout the city’s five boroughs, making
it the largest municipal partnered water and sewer line protection
contract in the U.S.
Quarterly Dividend
On Sept. 3, 2012, the company made cash dividend payments of $0.25 per
share to all shareholders of record as July 6, 2012. On Sept. 20, 2012,
in recognition of the company’s performance, American Water’s Board of
Directors declared a quarterly cash dividend of $0.25 per common share,
payable on Dec. 3, 2012, to all shareholders of record as of Nov. 16,
2012.
Earnings Guidance
The company reaffirmed its 2012 earnings to be in the range of $2.12 to
$2.22 per share for continuing operations, assuming normal weather
patterns for the balance of the year. The company has included in this
range $0.13 to $0.16 per share driven by the increased water sales
experienced through the end of the third quarter.
The company’s earnings forecasts are subject to numerous risks,
including those described under “Forward-Looking Statements” below and
under “Risk Factors” in its Annual Report on Form 10-K for the fiscal
year ended Dec. 31, 2011.
Non-GAAP Financial Measures
This press release includes a presentation of O&M efficiency ratio,
which excludes from its calculation estimated purchased water revenues
and purchased water expenses. This item is derived from American Water’s
consolidated financial information but is not presented in its financial
statements prepared in accordance with U.S. generally accepted
accounting principles (GAAP). The item constitutes a “non-GAAP financial
measure” under Securities and Exchange Commission (SEC) rules. This
non-GAAP financial measure supplements the company’s GAAP disclosures
and should not be considered an alternative to the GAAP measure.
Management believes that the presentation of this measure is useful to
investors because it provides a means of evaluating the company’s
operating performance without giving effect to estimated purchased water
revenues and purchased water expenses, which involve items that are not
reflective of management's ability to increase efficiency of the
company’s regulated operations. In preparing operating plans, budgets
and forecasts, and in assessing historical performance, management
relies, in part, on trends in the company’s historical results,
exclusive of estimated revenues and expenses related to purchased water.
Set forth below is a table that reconciles the non-GAAP financial
measure to the most directly comparable GAAP financial measure.
Third Quarter 2012 Earnings Conference Call
The third quarter 2012 earnings conference call will take place
Thursday, Nov. 8, 2012, at 9 a.m. Eastern Time. Interested parties may
listen over the Internet by logging on to the Investor
Relations page of the company’s website at www.amwater.com.
Following the earnings conference call, an audio archive of the call
will be available through Nov. 15, 2012, by dialing 303-590-3030 for
U.S. and international callers. The access code for replay is 4567592.
The online archive of the webcast will be available through Dec. 10,
2012, by accessing the Investor Relations page of the company’s website
located at www.amwater.com.
About American Water
Founded in 1886, American Water is the largest publicly traded U.S.
water and wastewater utility company. With headquarters in Voorhees,
N.J., the company employs approximately 7,000 dedicated professionals
who provide drinking water, wastewater and other related services to an
estimated 15 million people in more than 30 states and parts of Canada.
More information can be found at www.amwater.com.
Cautionary Statement Concerning Forward-Looking Statements
Certain statements in this press release are forward-looking statements
within the meaning of the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. These forward-looking
statements are predictions based on American Water’s current
expectations and assumptions regarding future events and may relate to,
among other things, its future financial performance, including
earnings, growth and portfolio optimization strategies, its ability to
finance current operations and growth initiatives, trends in its
industry, regulatory or legal developments, capital projects and rate
adjustments. Actual results could differ materially because of factors
such as the decisions of governmental and regulatory bodies, including
decisions to raise or lower rates; the timeliness of regulatory
commissions’ actions concerning rates; changes in laws, governmental
regulations and policies, including environmental, health and water
quality, and public utility regulations and policies; weather
conditions, patterns or events, including drought or abnormally high
rainfall; changes in customer demand for, and patterns of use of, water,
such as may result from conservation efforts; the company’s ability to
effect significant changes to its business processes and corresponding
technology; its ability to appropriately maintain current infrastructure
and manage the expansion of its business; its ability to obtain permits
and other approvals for projects; delays in project completion; changes
in its capital requirements; its ability to control operating expenses
and to achieve efficiencies in its operations; its ability to obtain
adequate and cost-effective supplies of chemicals, electricity, fuel,
water and other raw materials that are needed for its operations; its
ability to successfully acquire and integrate water and wastewater
systems that are complementary to its operations and the growth of its
business or dispose of assets or regulatory systems that the company
determined should no longer be part of its portfolio; cost overruns
relating to improvements or the expansion of its operations; changes in
general economic, business and financial market conditions; access to
sufficient capital on satisfactory terms; fluctuations in interest
rates; restrictive covenants in or changes to the credit ratings on the
company’s current or future debt that could increase its financing costs
or affect its ability to borrow, make payments on debt or pay dividends;
fluctuations in the value of benefit plan assets and liabilities that
could increase its cost and funding requirements; migration of customers
into or out of its service territories; difficulty in obtaining
insurance on acceptable terms and conditions; its ability to retain and
attract qualified employees; the incurrence of impairment charges; labor
actions including work stoppages and strikes; and civil disturbance,
terrorist threats or acts, or public apprehension about future
disturbances or terrorist threats or acts.
For further information regarding risks and uncertainties associated
with American Water’s business, please refer to American Water’s annual,
quarterly and other SEC filings. The company undertakes no duty to
update any forward-looking statement.
American Water Works Company, Inc. and Subsidiary Companies
Consolidated Statements of Income (Unaudited)
In thousands except per share data
Three Months Ended
Nine Months Ended
September 30,
September 30,
2012
2011
2012
2011
Operating revenues
$
831,815
$
760,869
$
2,195,976
$
2,026,457
Operating expenses
Operation and maintenance
355,126
340,339
992,707
978,317
Depreciation and amortization
96,219
88,323
280,652
262,543
General taxes
52,861
52,433
165,264
160,882
(Gain) loss on sale of assets
(31
)
(1,635
)
(657
)
(1,339
)
Total operating expenses, net
504,175
479,460
1,437,966
1,400,403
Operating income
327,640
281,409
758,010
626,054
Other income (expenses)
Interest, net
(76,616
)
(78,562
)
(236,000
)
(233,222
)
Allowance for other funds used during construction
3,735
3,696
13,173
9,059
Allowance for borrowed funds used during construction
1,548
1,586
5,942
3,988
Amortization of debt expense
(1,322
)
(1,251
)
(3,949
)
(3,798
)
Other, net
39
12
(242
)
(463
)
Total other income (expenses)
(72,616
)
(74,519
)
(221,076
)
(224,436
)
Income from continuing operations before income taxes
255,024
206,890
536,934
401,618
Provision for income taxes
100,913
78,395
216,908
157,607
Income from continuing operations
154,111
128,495
320,026
244,011
Income (loss) from discontinued operations, net of tax
(299
)
8,927
(17,434
)
754
Net income
$
153,812
$
137,422
$
302,592
$
244,765
Basic earnings per common share: (1)
Income from continuing operations
$
0.87
$
0.73
$
1.81
$
1.39
Income (loss) from discontinued operations, net of tax
-
0.05
(0.10
)
-
Net income
$
0.87
$
0.78
$
1.72
$
1.39
Diluted earnings per common share: (1)
Income from continuing operations
$
0.87
$
0.73
$
1.80
$
1.38
Income (loss) from discontinued operations, net of tax
-
0.05
(0.10
)
-
Net income
$
0.86
$
0.78
$
1.70
$
1.39
Average common shares outstanding during the period:
Basic
176,621
175,547
176,290
175,426
Diluted
177,841
176,593
177,486
176,422
Dividends per common share
$
0.25
$
0.23
$
0.73
$
0.90
(1) Amounts may not sum due to rounding
American Water Works Company, Inc. and Subsidiary Companies
Condensed Consolidated Balance Sheet Information (Unaudited)
In thousands
September 30,
December 31,
2012
2011
Cash and cash equivalents
$
18,531
$
14,207
Other current assets
623,994
453,594
Total property, plant and equipment
11,534,327
11,021,098
Total regulatory and other long-term assets
2,422,683
2,357,634
Assets of discontinued operations
-
929,858
Total Assets
$
14,599,535
$
14,776,391
Short-term debt
$
297,859
$
515,050
Current portion of long-term debt
34,964
28,858
Other current liabilities
673,051
562,979
Long-term debt
5,203,867
5,361,084
Total regulatory and other long-term liabilities
2,946,441
2,719,070
Contributions in aid of construction
994,013
966,748
Liabilities of discontinued operations
-
382,218
Total stockholders' equity
4,449,340
4,240,384
Total Capitalization and Liabilities
$
14,599,535
$
14,776,391
Regulated Operations and Maintenance Efficiency Ratio (A
Non-GAAP, unaudited measure)
In thousands
Twelve Months Ended
September 30,
2012
2011
Total Operation and Maintenance Expenses
$
1,316,184
$
1,320,513
Less:
Operation and maintenance expenses- Market-Based Operations
280,366
271,308
Operation and maintenance expenses- Other
(60,023
)
(64,499
)
Total Regulated Operation and Maintenance Expense
1,095,841
1,113,704
Less: Regulated purchase water expense (a)
107,218
97,901
Adjusted Regulated Operation and Maintenance Expenses
$
988,623
$
1,015,803
Total Operating Revenues
$
2,835,755
$
2,652,230
Less:
Operating revenues - Market-Based Operations
333,216
321,044
Operating revenues - Other
(21,485
)
(29,011
)
Total Regulated operating revenues
2,524,024
2,360,197
Less: Regulated purchase water revenues (a)
107,218
97,901
Adjusted Regulated Operating Revenues
$
2,416,806
$
2,262,296
Regulated Operations and Maintenance Efficiency Ratio
40.9
%
44.9
%
(a) Calculation assumes purchased water revenues approximate
purchased water expenses.
Click
here to subscribe to Mobile Alerts for American Water.
![](//cts.businesswire.com/ct/CT?id=bwnews&sty=20121107006585r1&sid=web04&distro=nx)
Language:
English
Contact:
American Water Works Company, Inc.
Edward Vallejo
Vice President, Investor Relations
856-566-4005
edward.vallejo@amwater.com
or
Maureen Duffy
Vice President, Communications
856-309-4546
maureen.duffy@amwater.com
Ticker Slug:
Ticker: AWK Exchange: NYSE
- Net income and diluted earnings per share from continuing operations increased approximately 20 percent quarter over quarter to $154.1 million or $0.87 per share
- Revenues increased approximately 9 percent, or $70.9 million, over third quarter of previous year to $831.8 million
- Operations sustained, employees committed to providing service throughout Hurricane Sandy
- Company reaffirmed 2012 earnings guidance range of $2.12 to $2.22 per share for continuing operations
VOORHEES, N.J.--(BUSINESS WIRE)--American Water Works Company, Inc. (NYSE: AWK), the largest publicly traded U.S. water and wastewater utility company, today reported increases in revenues, net income and earnings per share for the third quarter ended Sept. 30, 2012, as compared to the third quarter of 2011.
“We are pleased with the results American Water delivered this quarter,” said Jeff Sterba, president and CEO of American Water. “We continued to successfully deliver on our strategies for operational excellence, growth, and customer and shareholder value. From cash management and customer satisfaction to leveraging technology and best practices, to implementing the first phase of our business transformation project to new IT platforms, our year-to-date results demonstrate a business focused on continuous improvement. Most recently, our employees’ efforts to maintain service in states hit hard by Hurricane Sandy showed our ability to properly prepare and execute during an exceptionally difficult time that affected many people’s lives.”
For the three months ended Sept. 30, 2012, the company reported income from continuing operations of $154.1 million or diluted earnings per share of $0.87, compared with $128.5 million, or $0.73 per share, for the comparable period in 2011.
The company’s revenues increased $70.9 million to $831.8 million in the third quarter of 2012, a 9.3 percent increase over the comparable quarter in 2011. The company’s revenues increased $169.5 million to $2.2 billion for the first nine months of 2012, an 8.4 percent increase over the comparable period in 2011. A portion of the increase in revenues is associated with higher demand due to the hot, dry weather in the summer of 2012, particularly in the Eastern and Midwest portions of the company’s regulated footprint. The company believes the estimated impact continued to be approximately $0.13 to $0.16 per share for the nine months ended Sept. 30, 2012, of which $0.06 to $0.09 represents the impact during the first six months of 2012.
Total operation and maintenance (O&M) expenses for the three months ended Sept. 30, 2012, were $355.1 million, an increase of $14.8 million, or 4.3 percent, compared to the same period in 2011. Total O&M expenses for the nine months ended Sept. 30, 2012, were $992.7 million, an increase of $14.4 million, or 1.5 percent, over the comparable period in 2011.
Net cash provided by operating activities for the nine months ended Sept. 30, 2012, was $735.0 million, compared to $576.0 million for the same period in 2011, which was primarily driven by the increase in operating revenues and changes in working capital.
American Water anticipates investing approximately $925 million in construction and other capital projects in 2012 to help ensure reliable water and wastewater services. The company’s capital expenditures for the nine months ended Sept. 30, 2012, were $680.4 million, compared to $621.9 million for the same period in the prior year. The increase was mainly attributable to increased spending on infrastructure replacement projects in the first quarter due to the milder winter weather, expenditures associated with the company’s business transformation project to new IT platforms, the replacement of a 1920s era water treatment facility in Milburn, N.J., and a $101 million capital project in Pittsburgh, Pa.
Regulated Operations
American Water’s Regulated Businesses’ revenues in the third quarter increased by $68.4 million, or 10.0 percent, over the prior year’s period, mainly driven by new rates needed to deliver reliable services, increased consumption in the company’s Eastern and Midwestern states, and additional revenues associated with its acquisition of seven water systems in New York.
The Regulated Businesses’ O&M expenses increased $11.6 million, or 4.0 percent, over the prior year’s period, which is primarily attributed to increased consumption and incremental operating costs associated with the phase one launch period of the company’s business transformation project. The company’s continued focus on cost management and improving operational efficiency was also reflected in the third quarter results. The Regulated Businesses’ O&M efficiency ratio (a non-GAAP measure), improved to 40.9 percent from 44.9 percent for the 12 months ended Sept. 30, 2012.
American Water’s Regulated Businesses continued to prudently invest dollars to upgrade and maintain their water systems. During the third quarter, the company received a general rate case authorization in Illinois for additional annualized revenues of $17.9 million. Also during the third quarter, a regulatory decision was received in California American Water’s cost of capital application, generating an additional $4.4 million in annualized revenue. Subsequent to the quarter, a settlement agreement was approved for the company’s Tennessee general rate case, which allows for an additional $5.2 million in annualized revenues.
As of Oct. 31, the company was awaiting a final order for a general rate case in Virginia, requesting an additional $6.0 million in annual revenues, including a $0.3 million nonjurisdictional component. A proposed settlement of $2.3 million is currently pending approval by the Commission, which when combined with the $0.3 million, would provide a net increase of $2.6 million in revenues for the company. The extent to which requested rate increases will be granted by the applicable regulatory agencies will vary. The primary driver of the company’s rate requests is capital investments made to ensure reliable service to customers.
“Making efficient use of capital to invest in our water systems is core to our business. The improvements we have made over the years to successfully manage through major weather events, like last week's hurricane, is just one example. That is why we are working with regulators to adopt mechanisms that accelerate needed improvements while being mindful of changes in rates,” said Sterba. “The recent approval of distribution surcharges in New Jersey will have a significant positive impact on the long-term reliability of water systems in the state with the added benefit of creating hundreds of jobs annually.”
American Water also continued to execute its growth strategy. During the quarter, the company acquired the water and wastewater systems serving customers in a home development near Branson, Mo. In October, the company completed two tuck-ins in Fayette County, Pa. In addition, Pennsylvania American Water entered into two agreements with XTO Energy to construct pipelines for supplying water to support shale gas drilling operations, as well as provide public water service to adjacent residential areas. Both projects are in partnership with XTO Energy and are located in Butler County. These projects will expand the critical infrastructure needed to support the region’s energy industry and help create jobs, while also bringing reliable public water service to residential communities where it doesn’t currently exist.
Market-Based Operations
American Water’s Market-Based Operations’ revenues and O&M expenses during the third quarter of 2012 both remained flat as compared to the comparable quarter in 2011.
During the quarter, American Water announced that its homeowner services business, American Water Resources, Inc., has been selected by the New York City Water Board as the official service line protection provider to homeowners. American Water Resources’ Water and Sewer Line Protection Programs will be available beginning in the first quarter of 2013 to an estimated 600,000 homeowners throughout the city’s five boroughs, making it the largest municipal partnered water and sewer line protection contract in the U.S.
Quarterly Dividend
On Sept. 3, 2012, the company made cash dividend payments of $0.25 per share to all shareholders of record as July 6, 2012. On Sept. 20, 2012, in recognition of the company’s performance, American Water’s Board of Directors declared a quarterly cash dividend of $0.25 per common share, payable on Dec. 3, 2012, to all shareholders of record as of Nov. 16, 2012.
Earnings Guidance
The company reaffirmed its 2012 earnings to be in the range of $2.12 to $2.22 per share for continuing operations, assuming normal weather patterns for the balance of the year. The company has included in this range $0.13 to $0.16 per share driven by the increased water sales experienced through the end of the third quarter.
The company’s earnings forecasts are subject to numerous risks, including those described under “Forward-Looking Statements” below and under “Risk Factors” in its Annual Report on Form 10-K for the fiscal year ended Dec. 31, 2011.
Non-GAAP Financial Measures
This press release includes a presentation of O&M efficiency ratio, which excludes from its calculation estimated purchased water revenues and purchased water expenses. This item is derived from American Water’s consolidated financial information but is not presented in its financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP). The item constitutes a “non-GAAP financial measure” under Securities and Exchange Commission (SEC) rules. This non-GAAP financial measure supplements the company’s GAAP disclosures and should not be considered an alternative to the GAAP measure.
Management believes that the presentation of this measure is useful to investors because it provides a means of evaluating the company’s operating performance without giving effect to estimated purchased water revenues and purchased water expenses, which involve items that are not reflective of management's ability to increase efficiency of the company’s regulated operations. In preparing operating plans, budgets and forecasts, and in assessing historical performance, management relies, in part, on trends in the company’s historical results, exclusive of estimated revenues and expenses related to purchased water.
Set forth below is a table that reconciles the non-GAAP financial measure to the most directly comparable GAAP financial measure.
Third Quarter 2012 Earnings Conference Call
The third quarter 2012 earnings conference call will take place Thursday, Nov. 8, 2012, at 9 a.m. Eastern Time. Interested parties may listen over the Internet by logging on to the Investor Relations page of the company’s website at www.amwater.com.
Following the earnings conference call, an audio archive of the call will be available through Nov. 15, 2012, by dialing 303-590-3030 for U.S. and international callers. The access code for replay is 4567592. The online archive of the webcast will be available through Dec. 10, 2012, by accessing the Investor Relations page of the company’s website located at www.amwater.com.
About American Water
Founded in 1886, American Water is the largest publicly traded U.S. water and wastewater utility company. With headquarters in Voorhees, N.J., the company employs approximately 7,000 dedicated professionals who provide drinking water, wastewater and other related services to an estimated 15 million people in more than 30 states and parts of Canada. More information can be found at www.amwater.com.
Cautionary Statement Concerning Forward-Looking Statements
Certain statements in this press release are forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are predictions based on American Water’s current expectations and assumptions regarding future events and may relate to, among other things, its future financial performance, including earnings, growth and portfolio optimization strategies, its ability to finance current operations and growth initiatives, trends in its industry, regulatory or legal developments, capital projects and rate adjustments. Actual results could differ materially because of factors such as the decisions of governmental and regulatory bodies, including decisions to raise or lower rates; the timeliness of regulatory commissions’ actions concerning rates; changes in laws, governmental regulations and policies, including environmental, health and water quality, and public utility regulations and policies; weather conditions, patterns or events, including drought or abnormally high rainfall; changes in customer demand for, and patterns of use of, water, such as may result from conservation efforts; the company’s ability to effect significant changes to its business processes and corresponding technology; its ability to appropriately maintain current infrastructure and manage the expansion of its business; its ability to obtain permits and other approvals for projects; delays in project completion; changes in its capital requirements; its ability to control operating expenses and to achieve efficiencies in its operations; its ability to obtain adequate and cost-effective supplies of chemicals, electricity, fuel, water and other raw materials that are needed for its operations; its ability to successfully acquire and integrate water and wastewater systems that are complementary to its operations and the growth of its business or dispose of assets or regulatory systems that the company determined should no longer be part of its portfolio; cost overruns relating to improvements or the expansion of its operations; changes in general economic, business and financial market conditions; access to sufficient capital on satisfactory terms; fluctuations in interest rates; restrictive covenants in or changes to the credit ratings on the company’s current or future debt that could increase its financing costs or affect its ability to borrow, make payments on debt or pay dividends; fluctuations in the value of benefit plan assets and liabilities that could increase its cost and funding requirements; migration of customers into or out of its service territories; difficulty in obtaining insurance on acceptable terms and conditions; its ability to retain and attract qualified employees; the incurrence of impairment charges; labor actions including work stoppages and strikes; and civil disturbance, terrorist threats or acts, or public apprehension about future disturbances or terrorist threats or acts.
For further information regarding risks and uncertainties associated with American Water’s business, please refer to American Water’s annual, quarterly and other SEC filings. The company undertakes no duty to update any forward-looking statement.
American Water Works Company, Inc. and Subsidiary Companies | |||||||||||||||||
Consolidated Statements of Income (Unaudited) | |||||||||||||||||
In thousands except per share data | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||||
Operating revenues | $ | 831,815 | $ | 760,869 | $ | 2,195,976 | $ | 2,026,457 | |||||||||
Operating expenses | |||||||||||||||||
Operation and maintenance | 355,126 | 340,339 | 992,707 | 978,317 | |||||||||||||
Depreciation and amortization | 96,219 | 88,323 | 280,652 | 262,543 | |||||||||||||
General taxes | 52,861 | 52,433 | 165,264 | 160,882 | |||||||||||||
(Gain) loss on sale of assets | (31 | ) | (1,635 | ) | (657 | ) | (1,339 | ) | |||||||||
Total operating expenses, net | 504,175 | 479,460 | 1,437,966 | 1,400,403 | |||||||||||||
Operating income | 327,640 | 281,409 | 758,010 | 626,054 | |||||||||||||
Other income (expenses) | |||||||||||||||||
Interest, net | (76,616 | ) | (78,562 | ) | (236,000 | ) | (233,222 | ) | |||||||||
Allowance for other funds used during construction | 3,735 | 3,696 | 13,173 | 9,059 | |||||||||||||
Allowance for borrowed funds used during construction | 1,548 | 1,586 | 5,942 | 3,988 | |||||||||||||
Amortization of debt expense | (1,322 | ) | (1,251 | ) | (3,949 | ) | (3,798 | ) | |||||||||
Other, net | 39 | 12 | (242 | ) | (463 | ) | |||||||||||
Total other income (expenses) | (72,616 | ) | (74,519 | ) | (221,076 | ) | (224,436 | ) | |||||||||
Income from continuing operations before income taxes | 255,024 | 206,890 | 536,934 | 401,618 | |||||||||||||
Provision for income taxes | 100,913 | 78,395 | 216,908 | 157,607 | |||||||||||||
Income from continuing operations | 154,111 | 128,495 | 320,026 | 244,011 | |||||||||||||
Income (loss) from discontinued operations, net of tax | (299 | ) | 8,927 | (17,434 | ) | 754 | |||||||||||
Net income | $ | 153,812 | $ | 137,422 | $ | 302,592 | $ | 244,765 | |||||||||
Basic earnings per common share: (1) | |||||||||||||||||
Income from continuing operations | $ | 0.87 | $ | 0.73 | $ | 1.81 | $ | 1.39 | |||||||||
Income (loss) from discontinued operations, net of tax | - | 0.05 | (0.10 | ) | - | ||||||||||||
Net income | $ | 0.87 | $ | 0.78 | $ | 1.72 | $ | 1.39 | |||||||||
Diluted earnings per common share: (1) | |||||||||||||||||
Income from continuing operations | $ | 0.87 | $ | 0.73 | $ | 1.80 | $ | 1.38 | |||||||||
Income (loss) from discontinued operations, net of tax | - | 0.05 | (0.10 | ) | - | ||||||||||||
Net income | $ | 0.86 | $ | 0.78 | $ | 1.70 | $ | 1.39 | |||||||||
Average common shares outstanding during the period: | |||||||||||||||||
Basic |
176,621 |
175,547 | 176,290 | 175,426 | |||||||||||||
Diluted | 177,841 | 176,593 | 177,486 | 176,422 | |||||||||||||
Dividends per common share | $ | 0.25 | $ | 0.23 | $ | 0.73 | $ | 0.90 | |||||||||
(1) Amounts may not sum due to rounding | |||||||||||||||||
American Water Works Company, Inc. and Subsidiary Companies | ||||||
Condensed Consolidated Balance Sheet Information (Unaudited) | ||||||
In thousands | ||||||
September 30, | December 31, | |||||
2012 | 2011 | |||||
Cash and cash equivalents | $ | 18,531 | $ | 14,207 | ||
Other current assets | 623,994 | 453,594 | ||||
Total property, plant and equipment | 11,534,327 | 11,021,098 | ||||
Total regulatory and other long-term assets | 2,422,683 | 2,357,634 | ||||
Assets of discontinued operations |
- |
929,858 | ||||
Total Assets |
$ | 14,599,535 | $ | 14,776,391 | ||
Short-term debt | $ | 297,859 | $ | 515,050 | ||
Current portion of long-term debt | 34,964 | 28,858 | ||||
Other current liabilities | 673,051 | 562,979 | ||||
Long-term debt | 5,203,867 | 5,361,084 | ||||
Total regulatory and other long-term liabilities | 2,946,441 | 2,719,070 | ||||
Contributions in aid of construction | 994,013 | 966,748 | ||||
Liabilities of discontinued operations | - | 382,218 | ||||
Total stockholders' equity | 4,449,340 | 4,240,384 | ||||
Total Capitalization and Liabilities | $ | 14,599,535 | $ | 14,776,391 | ||
Regulated Operations and Maintenance Efficiency Ratio (A Non-GAAP, unaudited measure) | ||||||||
In thousands | ||||||||
Twelve Months Ended | ||||||||
September 30, | ||||||||
2012 | 2011 | |||||||
Total Operation and Maintenance Expenses | $ | 1,316,184 | $ | 1,320,513 | ||||
Less: | ||||||||
Operation and maintenance expenses- Market-Based Operations | 280,366 | 271,308 | ||||||
Operation and maintenance expenses- Other |
(60,023 | ) | (64,499 | ) | ||||
Total Regulated Operation and Maintenance Expense | 1,095,841 | 1,113,704 | ||||||
Less: Regulated purchase water expense (a) | 107,218 | 97,901 | ||||||
Adjusted Regulated Operation and Maintenance Expenses | $ | 988,623 | $ | 1,015,803 | ||||
Total Operating Revenues | $ | 2,835,755 | $ | 2,652,230 | ||||
Less: | ||||||||
Operating revenues - Market-Based Operations | 333,216 | 321,044 | ||||||
Operating revenues - Other | (21,485 | ) | (29,011 | ) | ||||
Total Regulated operating revenues | 2,524,024 | 2,360,197 | ||||||
Less: Regulated purchase water revenues (a) | 107,218 | 97,901 | ||||||
Adjusted Regulated Operating Revenues | $ | 2,416,806 | $ | 2,262,296 | ||||
Regulated Operations and Maintenance Efficiency Ratio | 40.9 | % | 44.9 | % | ||||
(a) Calculation assumes purchased water revenues approximate purchased water expenses. | ||||||||
Click here to subscribe to Mobile Alerts for American Water.
American Water Works Company, Inc.
Edward Vallejo
Vice President, Investor Relations
856-566-4005
edward.vallejo@amwater.com
or
Maureen Duffy
Vice President, Communications
856-309-4546
maureen.duffy@amwater.com