Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - American Water Works Company, Inc. | d8k.htm |
 Institutional Investor Meetings
May 2011
Exhibit 99.1 |
 May 2011
2
Cautionary Statement Concerning
Forward-Looking Statements
Certain statements in this presentation 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 our current expectations and assumptions
regarding future events and may relate to, among other things, our future financial performance,
including return on equity performance, our growth and portfolio optimization strategies, our projected
capital expenditures and related funding requirements, our ability to repay debt, our ability to
finance current operations and growth initiatives, the impact of legal proceedings and potential
fines and penalties, business process and technology improvement initiatives, trends in our
industry, regulatory or legal developments or rate adjustments. Actual results could differ materially
because of factors 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; significant changes to our business processes and corresponding technology;
our ability to appropriately maintain current infrastructure; our ability to obtain permits and
other approvals for projects; changes in our capital requirements; our ability to control operating
expenses and to achieve efficiencies in our operations; our ability to obtain adequate and
cost-effective supplies of chemicals, electricity, fuel, water and other raw materials that
are needed for our operations; our ability to successfully acquire and integrate water and
wastewater systems that are complementary to our operations and the growth of our business or dispose of assets or
lines of business that are not complementary to our operations and the growth of our business; cost
overruns relating to improvements or the expansion of our 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 our current or future debt that could increase our financing costs or affect our ability to borrow, make payments on
debt or pay dividends; fluctuations in the value of benefit plan assets and liabilities that could
increase our cost and funding requirements; our ability to utilize our U.S. and state net
operating loss carryforwards; migration of customers into or out of our service territories;
difficulty in obtaining insurance at acceptable rates and on acceptable terms and conditions; the incurrence of
impairment charges ability to retain and attract qualified employees; and civil disturbance, or
terrorist threats or acts or public apprehension about future disturbances or terrorist threats
or acts.
Any forward-looking statements we make, speak only as of the date of this presentation. Except as
required by law, we do not have any obligation, and we specifically disclaim any undertaking or
intention, to publicly update or revise any forward-looking statements, whether as a result
of new information, future events, changed circumstances or otherwise. |
 May 2011
American Water: The Premier Water Services Provider in
North America
Geographic Diversity
(1)
Business Diversity
(1)
Market Cap: $5.2 Billion
Enterprise Value: $10.8 Billion
Average Volume Traded: 1.1 Million shares
(1)
2010 Revenues
(2)
Market data as of 4/29/11
(3)
Market-Based includes Other
3 |
 The
US Water Industry |
 May 2011
The U.S. Water Industry
5
Aging
Infrastructure
Fragmented
Industry
Increasing
Environmental
Requirements
Capital
Availability
Technology
Key
Water
Sector
Themes |
 May 2011
6
Water Industry Has a Favorable Utility Profile
Water Utility
Characteristics
Implications
•
Capital projects focused on maintaining
public health & safety standards
•
Regulators supportive of prudent projects
•
Water bills low portion of household budget
•
Essential product –
no substitutes
•
Demand is more price inelastic than
electric or gas
•
Raw input costs (i.e. water and chemicals)
less volatile than other utility commodity
costs (i.e. coal and natural gas)
•
More stable rates for customers
•
Cost forecasting and regulatory lag is more
manageable
•
M&A primarily small tuck-ins enabling
targets to meet health & safety standards
•
Regulators generally support the
strengthening of water systems via M&A
•
Water storage more feasible and cheaper
than electricity or gas storage
•
Water utilities can be more cost efficient
and responsive to demand fluctuations
•
Large water utilities diversified across
multiple geographies
•
Mitigates impact of localized severe
weather conditions / regulatory outcomes |
 May 2011
Aging US Infrastructure Investment Remains Critical
*Source: U.S. Environmental Protection Agency’s 2007 Drinking Water
Infrastructure Needs Survey and Assessment. In billions, adjusted to January
2007 dollars. US EPA Estimated 20 Year Total Needs
of US Public Water Systems*
American Society of Civil Engineers
(ASCE) grades US infrastructure
•
2009: $335 billion
•
2005: $277 billion
•
2002: $154 billion
•
2009 Grade: D-
•
2005 Grade: D-
•
2001 Grade: D
Transmission &
Distribution:
$200.8
Treatment:
$75.1
Storage:
$36.9
Source:
$19.8
Other:
$2.3
Total: $334.8 Billion
US EPA estimates upwards to $1 trillion needed for public
water and wastewater systems**
7
**Source: 2002 U.S. Environmental Protection Agency Clean Water and Drinking Water
Gap analysis |
 Without renewal or replacement of existing systems, pipe classified
as
poor,
very
poor
or
life
elapsed
will
increase
from
10%
to
44%
by
2020
Aging Pipe Infrastructure Network Propels Need for
Capital Expenditures
Percentage of Pipes by Classification
Source: American Water Works Association, Dawn of the Replacement Era:
Reinvesting in Drinking Water Infrastructure, May 2001
8
May 2011 |
 May 2011
9
Water and wastewater rates in U.S. vs. other countries
(cents per gallon)
(1) Source: 2008-2009 Bureau of Labor Statistics; Assumes four person
household. (2) Canadian government data, using standard business
conversions Domestically: % of Annual
Household Budget
(1)
Internationally: Cost comparison vs other
countries (cents per gallon
(2)
) |
 American Water |
 May 2011
11
Total = 3,335,518
Regulated
Market Based
Both
Corporate headquarters
2010 EBIT
Total = $748 million
Total = $11.1 billion
American Water’s Regulated Portfolio
Net Utility Plant
Regulated Customers
American Water’s Geographic Presence
Regulated operations in AZ, NM and TX are subject to agreement of sale.
|
 May 2011
12
American Water: Providing Value to
Customers, Employees and Shareholders
Operational
Excellence
Employer of
Choice
Sustainability
Customer
Focus
Regulatory &
Public Policy
Targeted
Growth
American Water provides value-added products
and
services
that
address
customers’
needs
Investor Driven
Customer Driven
Value
Price
Cost |
 May 2011
•
Earn appropriate
return
on investments
•
Promote constructive
regulatory frameworks
•
Grow Regulated
Businesses
through focused
acquisitions
•
Pursue “regulated-like”
opportunities
•
Focus on Operations
Efficiencies
Goals
Actions
Regulated Operations & Support
•
Invest in states where we can
add
value
to
customers
and
generate
an appropriate return
•
Move
from
“Rate
Case
Catchup”
to
“Regulatory Strategy”
•
Drive Operational Excellence
Market Based Operations
•
Regulated-Like
•
Value-Added Services
Future Pursuits
•
Disciplined pursuit of growth through
acquisitions and applying technological
expertise
Strategy Specifics
13 |
 May 2011
American Water’s Portfolio Optimization Initiatives
Continue to Lower Costs
Focus on
Value Drivers
Optimizing
Long-term Value
Through
Proactive
Management
Redeploy Value Into Core
Growth Markets
•
Balanced Portfolio Analysis
•
Focus Achieving Authorized Rates
of Return
•
Monetize Non-Producing Assets
•
Focused Capital Resources
•
Selective Acquisition Opportunities
•
Leverage Internal Growth
Explore Opportunities for
Long-Term Success
Drive Profitability and
Returns
14 |
 May 2011
May 2011
15
Strategy Specifics: Regulated Operations -
Invest in
states where we can add value
American Water Regulated Operations: Population Served
States we are in process of exiting thru Portfolio Optimization
32,000
* 2009 Data |
 May 2011
16
Our Market-Based Operations:
A Portfolio of Water Resource Services
For 2010, American Water reported $311.8 million of Market-Based Operations
revenues Contract Operations
Over 200 contracts**
Serving 3.1m people
Clarksville, IN
Seattle, WA
Warren Township, NJ
25 industrial contracts
Design, Build and Operate
20 current projects*
Lake Pleasant Plant, AZ
Fillmore, CA
Carnegie Abbey, RI
Seattle, WA
*Includes 16 AWM projects
**Includes 137 AWM and 48 EMC projects
Military Bases Privatization
Fort Bragg, NC
Fort Sill, OK
Fort Rucker, AL
Fort AP Hill, VA
Scott AFB, IL
Fort Polk, LA
Fort Hood, TX
Fort Belvoir, VA
Fort Meade, MD
Fort Leavenworth, KS
Biosolids Management
Canada
Halton, ON
Niagara, ON
Hamilton, ON
Emerging Water Technologies
Desalination plant
Tampa Bay Seawater, FL
Water Reuse; 22 Projects; 7 States
Gillette Stadium, MA
Battery Park, NY
Butterball Turkey, NC
Homeowner Services
Over 870,000 contracts
17 States |
 May 2011
May 2011
17
Strategy Specifics: Homeowner Services Growth |
 May 2011
May 2011
18
Strategy Specifics: Market Size of Military Utility
Privatizations
2011-13
2014-16
Major Water/Wastewater Contracts
to be Awarded
Contracts Awarded to American Water
Contracts Awarded to Competitors
Contracts Programmed by Dept. of Defense for Award
2002
2005-07
2008-10
Major Water/Wastewater Awards to Date
7
12
4
Over $2 Billion in Revenues Backlog
Market Opportunity
represents approximately
$11Bn in Total Revenues
3
3
4 |
 May 2011
May 2011
19
•
Shorter Term Contracts
•
Heavy Competition
•
High Risk
•
Low Margin
•
Resource Intensive
•
Minimal Scalability
Strategy Specifics –
Municipal Contract Operations
The Current Model
•
Longer Term Contracts
•
Form of Public Private
Partnership
•
Shared Risk
•
Performance Metrics
•
Price Redetermination
•
Priority of Payment
Our Value Model |
 Financial Update |
 May 2011
Price as a percent of base (May14, 2010 = 100%)
Source: Thomson Reuters
Total Shareholder Return : American Water vs. Indices
(May 14, 2010 –
May 13, 2011)
21
Shareholder Return
YTD
American Water
S&P 500
Dow Jones Utilities
+41.1%
+20.2%
+19.5% |
 May 2011
American Water: A Solid First Quarter
*Adjusted Net Income includes the cessation of depreciation would have been $4.7
million after tax, or $0.3 per share on assets under agreement for sale -
Non-GAAP measure. See table in Appendix.
22
Cash Flow From Operations
(in millions)
Net Income*
(in millions)
Operating Revenues
(in millions)
Earnings Per Share* |
 May 2011
23
Adjusted O & M Efficiency Ratio
49.4%
48.2%
30%
35%
40%
45%
50%
55%
3/31/2010
3/31/2011
Regulated O&M Efficiency Ratio Continues to Improve
O&M Efficiency Ratio (A Non-GAAP, unaudited measure) = operating and
maintenance expenses / revenues, adjusted for purchased water .
March
31,
2011
quarterly
data
reflects
the
effect
of
discontinued
operations.
(See
table
in
Appendix). |
  May
2011 24
Rate Cases Awarded That Will Have an Impact on 2011 Results
(As of May 24)
Annualized
($ in millions)
Effective Date
ROE
Increase to
for new rates
Granted
Revenue
General Rate Cases:
Illinois
4/23/2010
10.38%
$41.4
New Mexico (Edgewood)
5/10/2010
10.00%
0.5
Indiana
5/3/2010
10.00%
31.5
Virginia (Eastern)
5/8/2010
10.50%
0.6
Ohio
5/19/2010
9.34%
2.6
Missouri
7/1/2010
10.00%
28.0
California (Sac, LA, Lark)
7/1/2010
10.20%
14.6
Michigan
7/1/2010
10.50%
0.2
Kentucky
10/1/2010
9.70%
18.8
New Jersey
1/1/2011
10.30%
39.9
Pennsylvania Wastewater
1/1/2011
10.60%
8.4
Arizona (Anthem, etc.)
1/1/2011
9.50%
14.7
Tennessee
4/5/2011
10.00%
5.6
West Virginia
4/19/2011
9.75%
5.1
Subtotal - General Rate Cases
$211.9
Infrastructure Charges:
Pennsylvania
16.2
Indiana
5.4
Illinois
1.7
Missouri
3.6
Other
0.5
Subtotal - Infrastructure Charges
$27.4
Total $239.3 |
 May 2011
General Rate Cases Awaiting Final Order as of May 18, 2011
Docket /
Revenue Increase
ROE
Rate Base
Filing
Case Number
Date Filed
Filed
Requested
(Filed)
Status
Virginia*
Case No. PUE 2010-00001
03/08/10
6.9
$
11.50%
99.1
$
5
California
Case No. A 10-07-007
07/01/10
37.3
10.20%
409.6
3
Arizona
W-01303A-10-0448
11/03/10
20.8
11.50%
148.9
2
Hawaii
Case No. 2010-0313
02/22/11
1.8
11.85%
25.2
1
Pennsylvania
Case No. R-2011-2232243
04/29/11
70.7
11.50%
2,096.2
1
New York
Case No. 11-W-0200
04/29/11
9.6
11.50%
126.9
1
Iowa
Case No. RPU-2011-0001
04/29/11
5.1
11.35%
88.9
1
Indiana
Case No. 44022
05/02/11
20.4
11.50%
733.4
2
New Mexico
Case No. 11-00196-UT
05/18/11
2.6
11.75%
33.6
1
Total
175.2
$
3,761.8
$
* Final Order not yet issued. Interim rates are in effect
Note: Above excludes rate case file in 2007 for Hawaii for which interim
rates have been in effect since October 2008
Index of Rate Case Status 1 - Case Filed
2 - Discovery (Data Requests, Investigation)
3 - Negotiations / Evidentiary Hearings / Briefings
4 - Recommended order issued / settlement reached, without interim
rates 5 - Interim rates in effect, awaiting final order
6 - Final order issued
Rate Cases Awaiting Final Order
25 |
 May 2011
May 2011
Capital Expenditure Plan, by Asset Type: 2011-2013
* includes Business Transformation capital spend
•
$800 -
$1 Billion in Capex
to be spent each year for
the foreseeable future
•
20% of Capital
Expenditures qualify for
an Infrastructure
Surcharge mechanism
26 |
 May 2011
May 2011
27
On May 24, 2011 American Water Affirms Earnings
Per Share Guidance Expectations
10 % -
10.5 %
ROE
(3)
6.8% -
7.2%
1.1%
Parent Co.
Debt
Opportunity
American Water continues to close ROE Gap
(2)
1. ROE calculation
excludes impairment , SOX, divestiture
and other
2. Adjusted for cessation of depreciation associated
with
assets of
discontinued operations
3. Range of allowed ROE
4. 2011 forecast ROE corresponds
to
current
2011 earnings per share guidance
5. Parent company debt as of March 31, 2011
Note: Changes in events, or circumstances beyond the Company’s control or that it cannot
anticipate could materially impact the EPS guidance and could result in actual results being
significantly above or below this outlook. Investors are advised to review the risk
factors in the Company’s 10-K and other filed financial documents when making investment decisions
|
 May 2011
Earnings Per Share
*2008 and 2009 EPS have been adjusted for goodwill impairment charge,
Non-GAAP numbers. See reconciliation table in the Appendix.
On May 24, 2011 American Water Reaffirms 2011
Annual EPS Guidance
Guidance (Represented in
Blue) Excludes Estimated
$0.08 Benefit Related to the
Cessation of Depreciation for
Discontinued Operations
28
Note: Changes in events, or circumstances beyond the Company’s control or that
it cannot anticipate could materially impact the EPS guidance and could result in actual results being
significantly
above
or
below
this
outlook.
Investors
are
advised
to
review
the
risk
factors
in
the
Company’s
10-K
and
other
filed
financial
documents
when
making
investment
decisions
7% -
10%
Long –Term
EPS Growth
Target |
 May 2011
May 2011
125 years Investing in Water Infrastructure and paying
Dividends to Shareholders
Dividend
paid to
private
holders
American Water
Listed on NYSE –
Dividend paid to
common
shareholders
RWE takes
AWK private.
Dividend
paid to
shareholder
AWK IPO
Lists on
NYSE. Pays
dividends to
common
shareholders
Watermain
work in Pennsylvania. in the early 1900’s
Infrastructure improvement in New Jersey in 2009
29
1886
1947
2003
2008 |
 May 2011
May 2011
Recent Dividend History
•
Key component of American
Water’s total shareholder return
proposition
•
Dividend Growth –
Board of
Directors increased dividend 5%
to $0.22 or $0.88 annualized
•
Dividend Yield –
3.0% at
5/13/11
•
Growth in Dividend reflects
growth in Net Income
30
Quarterly Dividend Rate as of Year-end |
 May 2011
May 2011
*Data from Bloomberg Data Systems . Close price 5/13/11 unless otherwise indicated;
trailing twelve months diluted GAAP EPS as of 3/31/2011 American Water
– A Compelling Value
31
AW Stock Price at Average PE: $32.23
AW Stock Price at Highest PE: $38.36
AW Stock Price at Average EV/Net PP&E: $33.15
AW Stock Price at Highest EV/Net PP&E: $50.66
Average
Average
P/E Ratio
Enterprise Value* / Net PP&E* |
 May 2011
What to Expect from American Water -
2011
Accomplishments
Start execution of Portfolio Optimization Initiative
Resolve Rate Cases worth $93 MM of filed Annualized Revenues by
December 31, 2011
Initiate state specific efforts to address declining usage
Continue reduction in Operating Efficiency Ratio
Increase Earned return on equity
Expand Market Based businesses with focus on Homeowner Services & Military
Contract Operations
Optimize Municipal Contract Operations Business Model
32
Missouri acquisition closed May 17, Texas sale expected to close by June-July 2011 Filed for
regulatory approvals for transactions in NM and AZ Finalized Tennessee and West Virginia Rate
Cases Addressed in rate cases filed in Iowa, Long Island, Pennsylvania, and Indiana
Operating Efficiency Ratio improved 120 bps in the first quarter 2011 vs. first quarter 2010, an
improvement of 2.5%
ROE increased 39 bps or 6% over comparable last twelve months ending March 31, 2011
Homeowner Services entered into the Commercial Market |
 May 2011
American Water –
A Compelling Value
Value Proposition
Market
Leader
Strong Visible
Growth
Proven
Management
Trades at
Discount to Peers
Sound Regulatory
Framework
33 |
 May 2011
Investor
Relations
Contacts:
Ed Vallejo
Vice
President
–
Investor
Relations
Edward.vallejo@amwater.com
Muriel Lange
Manager
–
Investor
Relations
Muriel.lange@amwater.com
Tel: 856-566-4005
Fax: 856-782-2782
34 |
 Appendix |
 May 2011
Our Values
•
Honesty and Integrity
•
Communication
•Teamwork
•
Excellence
•
Engagement
Our Mission
Our Vision
To be the trusted steward of
your precious resource –
water
What We Stand For
36
•
Providing safe, reliable water services
to our customers and communities •
Driving Operational Excellence •
Enabling employees to innovate •
Ensuring long-term stewardship of all
resources
•
Engaging customers, regulators and other
constituencies in solving critical water issues •
Earning a fair return for our shareholders |
 May 2011
37
Investment Thesis: Sustained 7-10% EPS Growth
Future Growth
New Services
Regulated Investments
Acquisitions
Operational Excellence/
Efficiencies
ROE improvement
Long Term Growth
Conceptual Representation |
 May 2011
Issue Name
Issue Type
Call Feature
Borrower
Type
Underwriter
Coupon
Maturity
Issue Date
$25.0M Tax-Exempt Unsecured Bonds
Tax-exempt (Non AMT)
Callable 10 Year
AWCC/IL
New
Stifel Nicolaus &
Blaylock Robert
Van
5.25%
30 Years
27-May
$26.0M Tax-Exempt Unsecured Bonds
Tax-exempt (Non AMT)
Callable 10 Year
AWCC/KY
New
Goldman Sachs
5.375%
30 years
24-Jun
$15.3M Tax-Exempt Secured Bonds
Tax-exempt (Non AMT)
Callable 10 Year
NJ-AM
*Refinance
Morgan Stanley &
Sturdivant
4.45%
13 Years
9-Jul
$110.0M Tax-Exempt Secured Bonds
Tax-exempt (AMT)
Callable 10 Year
NJ-AM
*Refinance
Morgan Stanley &
Sturdivant
5.60%
24 Years
9-Jul
$24.7M Tax-Exempt Secured Bonds
Tax-exempt (AMT)
Callable 10 Year
NJ-AM
*Refinance
Morgan Stanley &
Sturdivant
5.10%
13 Years
9-Jul
$10.6M Tax-Exempt Unsecured Bonds
Tax-exempt (AMT)
Callable 5 Year
AWCC/AZ
Refinance to Fixed
Edward Jones
5.250%
18 Years
27-Jul
$35.0M Tax-Exempt Unsecured Bonds
Tax-exempt (Non AMT)
Callable 10 Year
AWCC/CA
New
Goldman Sachs &
SL Hare
5.250%
30 Years
18-Aug
$25.0M Tax-Exempt Unsecured Bonds
Tax-exempt (Non AMT)
Callable 5 Year
AWCC/IN
New
Edward Jones
4.85%
30 Years
16-Sep
$35.0M Tax-Exempt Secured Bonds
Tax-exempt (AMT)
Callable 10 Year
NJ-AM
*Refinance
Morgan Stanley &
Sturdivant
4.875%
19 Years
1-Nov
$40.0M Tax-Exempt Secured Bonds
Tax-exempt (AMT)
Callable 10 Year
NJ-AM
*Refinance
Morgan Stanley &
Sturdivant
4.700%
15 Years
1-Nov
$30.0M Unsecured Bonds
Taxable
Callable 5 Year
AWCC
New
Edward Jones
6.000%
30 Years
15-Dec
38
Completed Debt Financings During 2010
* Refinance of existing NJ bonds
|
 May 2011
Weighted Average Interest Rates
Debt Maturities at March 31, 2011
(in millions)
Parent Company Debt
$100 million of Parent Company debt swapped from 6.085% to 6 month LIBOR + 3.422%,
to mature with fixed-rate debt in 2017
* Amount excludes Preferred Stock with Mandatory Redemptions
39 |
 May 2011
Comparison of Water Sales Volumes
Water
sales
volumes
for
the
three
months ended March
31,
2011
decreased
over
the
same period in the prior year due to continuing, 10-year trend of lower usage
and conservation
Customer Class
Water Sales Volumes
(In Millions of Gallons)
March
31
-
Year
to
Date
2011
2010
Change
Percentage
Residential
39,642
39,898
(256)
(0.6)
%
Commercial
17,540
17,833
(293)
(1.6) %
Industrial
9,419
9,214
205
2.2 %
Public & Other
12,066
12,374
(308)
(2.5)
%
Total
78,667
79,319
(652)
(0.8)
%
40 |
 May 2011
41
Adjusted EBIT
(A Non-GAAP Unaudited Number)
($ in thousands, except per share data)
2008
2009
2010
Adjusted EBIT
$558,081
$612,870
$748,196
Add:
Allowance for other funds used during construction
14,497
11,486
10,003
Allowance for borrowed funds used during construction
8,171
7,224
6,284
Less:
Interest, net
(224,426)
(228,853)
(247,469)
Amortization of debt expense
(5,346)
(6,089
(4,001)
Segment income before income taxes
350,977
396,638
513,013
Impairment charge
(750,000)
(450,000)
0
Interest, net
(60,729)
(67,692)
(67,574)
Other
9,158
9,389
3,997
Income (loss) before income taxes
$(450,594)
$(111,665)
$449,436
Reconciliation Tables
Net
Income
(Loss)
–
Earnings
per
Share
Excluding Impairment Charge
(A Non-GAAP Unaudited Number)
Historical
($ in thousands, except per share data)
2008
2009
2010
LTM
3/31/11
Net income (loss)
($562,42)
($233,083)
$267,827
$284,351
Add: Impairment
750,000
450,000
0
0
Net income excluding impairment charge before associated tax benefit
187,579
216,917
267,827
284,351
Less: Income tax benefit relating to impairment charge
11,525
6,976
0
0
Net income excluding impairment charge
$176,054
$209,941
$267,827
$284,351
Net Income (loss) per common share:
Basic
($3.52)
($1.39)
$1.53
Diluted
($3.52)
($1.39)
$1.53
Net income per common share excluding impairment charge:
Basic
$1.10
$1.25
$1.53
Diluted
$1.10
$1.25
$1.53 |
 May 2011
Adjusted Return on Equity
(A Non-GAAP Unaudited Number)
Historical
($ in thousands )
2008
2009
2010
LTM
3/31/11
Net income (Loss)
($562,421)
($233,083)
$267,827
$284,351
Adjustments
Impairment charges
738,475
443,024
0
0
SOX Implementation Costs
8,678
0
0
0
Divestiture/Sale Expenses
5,200
1,126
0
0
Other (Condemnation/Regulatory Approvals)
4,116
0
0
0
Cessation of depreciation associated with assets of
discontinued operations
0
0
0
(4,729)
Adjusted Net Income
$194,048
$211,067
$267,827
$279,622
Year End Stockholders’
Equity
$4,102,001
$4,000,859
$4,127,725
$4,146,107
ROE Percentage
4.73%
5.28%
6.49%
6.74%
Rate Base as of March 31, 2011
(1)
($ in Thousands)
Net Utility Plant
$10,421,125
Less
Advances for Construction
408,701
CIAC –
Contributions in Aid of Construction
932,355
Deferred income taxes
1,136,432
Deferred investment tax credits
30,588
Sub Total
$2,508,076
Rate Base
TOTAL
$7,913,049
(1)
An
approximation
of
rate
base,
which
includes
Net
Utility
Plant
not
yet
included
in
rate
base
pending
rate
case filings/outcomes
42
Reconciliation Tables |
  May
2011 First Quarter 2011 Reconciliation Tables
In thousands
2011
2010
Total Regulated Operation and Maintenance Expenses
270,157
$
256,312
$
Less: Regulated Purchased Water Expenses
21,100
20,633
Adjusted Regulated Operation and Maintenance Expenses (a)
249,057
$
235,679
$
Total Regulated Operating Revenues
537,395
$
498,197
$
Less: Regulated Purchased Water Revenues
21,100
20,633
Adjusted Regulated Operating Revenues (b)
516,295
$
477,564
$
Regulated Operations and Maintenance Efficiency Ratio (a)/(b)
48.2%
49.4%
In thousands except per share data
Three Months Ended
March 31,
2011
Net income
47,332
$
Less: Cessation of depreciation, net of tax
4,729
Adjusted net income, exclusive of the cessation of depreciation
associated with assets of discontinued operations
42,603
$
Basic earnings per common share:
Adjusted net income
0.24
$
Diluted earnings per common share:
Adjusted net income
0.24
$
with assets of discontinued operations (a Non-GAAP, unaudited number)
Three Months Ended
March 31,
Regulated Operations and Maintenance Efficiency Ratio (A Non-GAAP, unaudited measure)
Adjusted net income and earnings per share, exclusive of the cessation of depreciation associated
43 |
 May 2011
Income Statement
44
($ in Thousands, except per share data)
Three Months Ended
March
31,
2011
2010
Operating revenues
$
610,936
$
566,762
Operating expenses
Operation and maintenance
320,571
305,642
Depreciation and amortization
88,019
82,056
General taxes
57,205
54,486
Loss (gain) on sale of assets
268
(71)
Total operating expenses, net
466,063
442,113
Operating income
144,873
124,649
Other income (expenses)
Interest, net
(76,482)
(78,696)
Allowance for other funds used during construction
2,916
2,146
Allowance for borrowed funds used during construction
1,242
1,382
Amortization of debt expense
(1,295)
(1,201)
Other, net
(1,141)
69
Total other income (expenses)
(74,760)
(76,300)
Income from continuing operations before income taxes
70,113
48,349
Provision for income taxes
28,649
18,669
Income from continuing operations
41,464
29,680
Income from discontinued operations, net of tax
5,868
1,128
Net income
$
47,332
$
30,808
Basic and diluted earnings per common share:
Income from continuing operations
$
0.24
$
0.17
Income from discontinued operations, net of tax
$
0.03
$
0.01
Net income
$
0.27
$
0.18
Average common shares outstanding during the period:
Basic
175,259
174,720
Diluted
176,048
174,796
Dividends per common share
$
0.22
$
0.21 |
 |