VOORHEES, N. J., October 29, 2001 — American Water Works Company, Inc. today announced earnings per share were 63 cents and net income to common stock was $62.6 million for the quarter ended September 30, 2001 prior to one-time transactions. This represents a 24% increase in earnings per share above the 51 cents per share reported for the third quarter last year.
A ten-cents per share charge resulted from expenses incurred for the RWE/AG transaction announced September 17, 2001 and a three-cent per share net gain was recorded for the sale of water assets serving the city of Salisbury, Massachusetts. After these one-time transactions, per share earnings were 56 cents and net income to common stock was $55.6 million.
"Increased revenues from more than 40,000 new customers, authorized increases in rates charged for service, and modest weather pattern improvements were contributing factors to the improvement in results from on-going operations," said Ellen Wolf the company's chief financial officer. Cooler temperatures and frequent rainfall negatively impacted the company's revenues during the third quarter last year. "Even though we did not return to historical sales levels in all states during the quarter, our geographical diversity helped to mitigate this year's weather impacts," added Ms. Wolf.
Compared with revenues for the third quarter last year, revenues increased $31 million, or 8.5 % to $395 million.
Total operation and maintenance (O&M) expenses increased 8.1% compared to O&M expenses for the third quarter last year. However, as a result of continued growth, per customer O&M expenses on a twelve-month basis were up only 3.5 % from per customer expense levels one year ago. Operating margins for comparative twelve-month periods were unchanged.
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Depreciation expense increased 12.4% as a result of capital investments that increased net utility plant more than $244 million.
Approval of the company's purchase of the water and wastewater assets of Citizens Communication Company in California was received from the California Public Utilities Commission in September. The company now has approval from state regulatory agencies in all six states covered by the purchase agreement and pending resolution of appeals from the California decision, anticipates completing that transaction by the end of this year.
Closing on the acquisition of Azurix-North America is anticipated in November.
The company stated that approval of the agreement with RWE/AG will be required in fourteen states and filings of the agreement must be made in five other states. It is anticipated that those filings will be made by the end of this year.
As announced earlier this month, a conference call with analysts regarding this earnings announcement will be available today on the company's website (http://www.amwater.com) at 3:00 PM (EST).
With annual revenues of $1.4 billion, American Water Works Company, Inc. is the nation's largest publicly traded enterprise devoted exclusively to water and wastewater business opportunities.
