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Actionable news in AWK: AMERICAN WATER WORKS COMPANY INC,

American Water: Vice President, Investor Relations

The following excerpt is from the company's SEC filing.

(Only correction is the years in Income Statement table as follows:

856-566-4005

gregory.panagos@amwater.com

Maureen Duffy

Vice President, Communications

856-309-4546

maureen.duffy@amwater.com

AMERICAN WATER REPORTS STRONG THIRD QUARTER 2015 RESULTS

Diluted earnings per share from continuing operations increased 10.3 percent over the third quarter 2014.

Revenue increased 5.9 percent to $896.2 million compared to the same period last year.

Company narrows 2015 earnings guidance from continuin g operations to a range of $2.60 to $2.65 per diluted share.

VOORHEES, N.J., Nov. 4, 2015

– American Water Works Company, Inc. (NYSE: AWK) today reported results for the three months ended Sept. 30, 2015.

“We continued to execute our strategies during the first nine months of 2015,” said Susan Story, president and CEO of American Water. “We invested in our water and wastewater systems to provide safe, clean and reliable service to our customers. We balanced that investment with improved efficiencies to keep our services affordable, and increased our customer base through regulated acquisitions and organic growth.

“In our Market-Based Businesses, we added our 12

military installation, continued to grow our homeowner services’ business and completed our acquisition of Keystone Clearwater Solutions, a water services provider to the Marcellus and Utica Shale in the Appalachian basin.

“These efforts resulted in increases to earnings per share and revenues for the third quarter, and demonstrate our progress toward achieving our long-term plan of growing earnings per share by seven to 10 percent through 2019,” said Story.

For the third quarter 2015, the company reported income from continuing operations of $173.9 million, or 96 cents per diluted common share (“diluted share”), compared to 87 cents per diluted share in the third quarter of 2014, a 10.3 percent increase. For the first nine months of 2015, the company reported income from continuing operations of $377.0 million, or $2.09 per diluted share, compared to $1.87 per diluted share for the first nine months of 2014, an 11.8 percent increase. Diluted earnings per share (EPS) from continuing operations, excluding costs related to the Freedom Industries chemical spill in 2014 (a non-GAAP financial measure), increased 9.4 percent compared to $1.91 for the nine months ended Sept. 30, 2014.

The Regulated Businesses continue to be the major contributor to earnings and experienced strong growth for the quarter and year-to-date through September, driven by infrastructure investment coupled with lower operating and maintenance expenses from the company’s continued focus on operational efficiencies. The Market-Based Businesses also reported higher earnings growth for the quarter and year-to-date through September as it continued growth through its Military Services and Homeowner Services lines of business.

Net income including discontinued operations was 96 cents per diluted share for the quarter and $2.09 per diluted share year-to-date Sept. 30, 2015, compared to 85 cents per diluted share for the third quarter 2014, and $1.83 per diluted share for the nine months ended Sept. 30, 2014. Revenues were $896.2 million for the third quarter 2015, and $2,376.4 million year-to-date Sept. 30, 2015, compared to $846.2 million for the third quarter 2014, and $2,280.0 million for the nine months ended Sept. 30, 2014.

Year-to-date Sept. 30, 2015, the company made capital investments of approximately $970 million, including $793 million to replace and improve infrastructure for continued reliable service to customers, $44 million for regulated acquisitions and $133 million to acquire Keystone

PRESS RELEASE

www.amwater.com

Clearwater Solutions (“Keystone”)

. American Water plans to invest

$1.3 to $1.4

billion in 2015, with

almost

billion of this total to improve water and wastewater systems

For the third quarter, revenues for the Regulated Businesses segment totaled $780.7 million, an increase of $27.0 million, or 3.6 percent, compared to the same period last year. For the nine months ended Sept. 30, 2015, revenues totaled $2.1 billion, an increase of $43.5 million, or 2.1 percent, compared to the same period last year. The increases for both periods were primarily due to mild weather in 2014, as well as 2015 rate increases and surcharges in recognition of system improvements to better serve customers.

The operations and maintenance (O&M) expense decreased $1.2 million, or 0.4 percent, for the quarter and $26.6 million, or 3.2 percent, for the nine months ended Sept. 30, 2015 compared to same periods last year. The decrease for nine months ended Sept. 30, 2015, was mainly due to incremental costs in 2014 associated with the Freedom Industries chemical spill in West Virginia, and the company’s continued cost management efforts.

For the 12-month period ended Sept. 30, 2015, the adjusted O&M efficiency ratio (a non-GAAP measure) improved to 35.8 percent, compared to 36.8 percent for the 12-month period ended Sept. 30, 2014. By reducing O&M expense as a proportion of revenue, American Water is able to make investments in needed capital improvements without significantly impacting customer bills.

As of Sept. 30, 2015, the company was awarded approximately $58.5 million in additional annualized revenues from general rate cases and infrastructure charges for the year. American Water is currently awaiting final orders and/or proposed settlements for general rate cases in three jurisdictions, requesting $69.5 million in total additional revenues. The extent to which requested rate increases will be granted by the applicable regulatory agencies will vary.

American Water’s Regulated Businesses completed several acquisitions during the quarter adding 846 customers to its existing footprint. Year-to-date the company added

19,167 customers from acquisitions and currently has

pending acquisition agreements in several jurisdictions that if approved and completed will add approximately 13,326 customers to the company’s customer base.

For the third quarter of 2015, the Market-Based Businesses revenues totaled $120.4 million, an increase of $23.4 million, or 24.1 percent, compared to the same period last year. For the nine months ended Sept. 30, 2015, Market-Based revenues totaled $307.8 million, an increase of $54.0 million, or 21.3

percent, compared to the same period in 2014. The increases in both periods were primarily due to additional revenues in Military Services from increased construction activity and the addition of two bases in the second half of 2014, higher revenues in Homeowner Services from contract growth, primarily in New York City, and the Keystone acquisition.

The O&M expense increased by $21.0 million, or 27.1 percent, for the quarter and $48.0...


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