American Water Works Co. reports record net income for the year 2000
American Water Works Company, Inc. (NYSE:AWK) today reported record net income to common stock of $157.4 million for the year 2000.
VOORHEES, N.J., Feb. 1, 2001 (BUSINESS WIRE)—American Water Works Company, Inc. (NYSE:AWK) today reported record net income to common stock of $157.4 million for the year 2000.
This financial result is a 6.4% increase above the former record of $147.9 million realized in 1999 after excluding more than $12.9 million in one-time, after-tax merger costs associated with the acquisition of National Enterprises Inc. (NEI).
"We are particularly encouraged by our financial achievements this year," said chief financial officer Ellen Wolf. "Continued customer growth and cost containment efforts served to offset both abnormal weather conditions experienced in many of our service areas this summer and one-time charges to income stemming from regulatory decisions," she added.
Earnings per share for the year increased 5.2% to $1.61 from the $1.53 reported last year after excluding the NEI charges. Last month the company reported its 26th consecutive annual increase in common dividends.
Revenues for the year increased 7% or almost $90 million, to $1.35 billion from the $1.26 billion recorded last year. Contract management revenues from American Water Services accounted for about 45% of this revenue increase. The remainder of the increase resulted from rate increases and the addition of approximately 200,000 people to the population served by the company.
These growth factors served to offset the sales volume losses caused by abnormal summer weather conditions.
Cost containment and increased economies of scale resulting from a growing customer base produced solid results for the year while the company maintained the high quality service its customers demand. During the year, two significant changes were initiated that focused on service enhancements and cost effective operation.
Nationwide cash and financial management activities for the company were consolidated mid-year into a new subsidiary. "Yesterday's announcement of the shelf registration of $1.6 billion in debt securities to fund acquisitions and other capital needs of American Water Works' subsidiaries positions the company to continue to grow and cost-effectively fund existing capital needs," Wolf stated.
Also during the year, the company announced the selection of a site for a new national call center in Alton, Illinois. That call center will begin operation during the second quarter of 2001.
The company noted that while it maintains a focus on cost, it does not lose focus of its service quality. As an example, American Water Works committed to participate in a voluntary program sponsored by the Environmental Protection Agency (EPA) that measures and recognizes the ability of participants to produce water that meets quality standards greater than those mandated by existing environmental conditions.
"We were pleased to have received recognition from the EPA during the year for the quality standards met as a result of our participation in this program," Wolf commented. "Such recognition demonstrates that our focus on cost containment has not compromised our commitment to high quality service," she continued.
Capital expenditures increased net plant by more than $260 million during the year 2000, resulting in increases in depreciation, general taxes, and interest expense.
Depending upon the date they were received, rate increases that became effective during the year 2000 will continue to contribute to revenue growth in 2001. Additionally, decisions are anticipated during 2001 for six pending rate cases requesting a combined $32 million in revenues.
The company's subsidiaries completed ten acquisitions during the year. Applications for fifteen acquisitions were awaiting regulatory approval at the end of the year. These are in addition to the pending acquisitions of SJW Corp. (SJW) and the water and wastewater assets of Citizens Communication Company (Citizens).
Since 1990 American Water Works' subsidiaries have completed more than 100 acquisitions adding more than 3.5 million people and 700 communities to the company's service areas.
Three state regulatory agencies have approved the Citizens acquisition. Applications for approval are still pending in three states, including California where the SJW application is also pending.
The company continues to support the applications, but has expressed concern about the protracted nature of the regulatory process in California while continuing to closely monitor the progress of all pending applications.
For the fourth quarter 2000, net income to common stock was $37.4 million compared to $31.6 million for the fourth quarter 1999 and resulted in fourth quarter 2000 earnings of 38 cents per share compared to 33 cents per share realized for the same quarter in the previous year.
As previously announced, a conference call to review American Water Works' financial results for the fourth quarter and the twelve months ended December 31, 2000 will be conducted at 3:00 PM (EST) today. The call will be simultaneously broadcast from the company's website.
Interested individuals may listen to the call by visiting http:www.amwater.com., or dialing (800) 406-7290 and providing reservation number 17496578. Replays of the call will be available after 5:00 PM (EST) today and until 5:00 PM (EST) February 8, 2001 by dialing (800) 633-8284 and providing the reservation number.
An archived copy of the webcast and the scripted portion of the conference call will remain on the company's website until February 8, 2001. The company also noted that additional historical financial information about American Water Works can be found on its website.
American Water Works Company is the largest and most geographically diverse investor-owned water utility enterprise in the nation. Its subsidiaries serve a population of approximately 10 million in 1300 communities in 23 states.