Philadelphia Suburban Corporation Announces Significantly Increased Fourth Quarter and Full Year 2002 Operating Results; Fourth Quarter 2002 Earnings up 50 Percent
BRYN MAWR, Pa., Feb 5, 2003 (BUSINESS WIRE) -- Philadelphia Suburban Corporation (NYSE:PSC) - the largest U.S. based investor-owned water utility -- today reported a 50 percent increase in diluted net income per share for the quarter ended December 31, 2002 to $0.27, versus $0.18 for the same period in 2001.
Diluted net income per share for the full year 2002 increased 11.5 percent to $0.97, versus $0.87 in 2001.
Highlights of fourth quarter and full year 2002 results: -- Fourth quarter operating revenues were $81.8 million, up 8.9 percent over 2001 revenues of $75.1 million. Revenue growth was driven by rate relief in the company's various operating divisions aided by continued customer growth. Revenues for the full year were $322.0 million, versus $307.3 million for 2001, an increase of 4.8 percent. Full year revenues were adversely impacted by an extended drought in the company's largest operating division. -- The growth in PSC's fourth quarter net income available to common stock to $18.6 million, or $0.27 per share, is partially attributed to the sale of a portion of its Ashtabula County, Ohio water system. The net gain on the sale of Ashtabula was approximately $3.7 million or $0.05 per share. The portion of the system sold represents less than one percent of PSC's total assets, and represented an even smaller portion of the company's net income. Excluding the $0.05 per share net gain on the sale of water system assets, income from operations for the fourth quarter of 2002 increased 22.2 percent to $0.22, versus $0.18 for the same period the prior year; and increased 5.7 percent to $0.92 for the full year 2002, versus $0.87 the prior year, a year with above average sales due to warm dry weather. -- Operations and maintenance expenses as a percentage of revenue (O&M ratio) for the quarter improved to 37.1 percent, versus 40.3 percent for the fourth quarter of 2001. The company's ability to stabilize expenses despite rising costs associated with health care, insurance and pension contributions, allowed PSC to keep its O&M ratio at 36.6 percent for the year, in line with 2001's ratio of 36.4 percent. -- PSC ended the year with an after tax return on revenue - also referred to as net income as a percentage of revenue -- of approximately 21 percent (or nearly 20 percent excluding the net gain on sale of water system assets), one of the best ratios in the water utility industry.
PSC completed 25 acquisitions or other growth ventures during 2002, adding approximately 24,000 customers to its base. As of December 31, 2002 PSC serves over 625,000 customers in six states extending from Maine to North Carolina, and from Pennsylvania to Illinois.
Commenting on the fourth quarter and the year, PSC Chairman and President Nicholas DeBenedictis said, "2002 has been a watershed year. In addition to producing the type of record results that have allowed us to reward our shareholders in the form of increased dividends over the last 11 years, we successfully redistributed nearly 10 million of our outstanding common shares previously held by Vivendi to a broader U.S. shareholder base through a major public equity offering. With the recently completed sale of American Water Works, we are beginning 2003 as the largest publicly traded water company based in the U.S."
2002 marks the 57th consecutive year that PSC has paid dividends. PSC increased its dividend 5.7 percent in 2002, representing the company's 12th dividend increase in the last 11 years.
As previously announced, PSC will provide more detail regarding fourth quarter and full year 2002 operating results on a conference call and Webcast to be held at 11:00 a.m. Eastern Standard Time today. Interested parties may listen to the conference call over the Internet by logging onto www.suburbanwater.com.
The call will be recorded and replayed beginning 12:00 p.m. today, and will run until 12:00 p.m., Friday, February 7, 2003. The dial-in telephone number for the audio replay is (973) 341-3080 (pin number 3708827).
PSC is the largest U.S. based investor-owned water utility, serving approximately two million residents in Pennsylvania, Illinois, Ohio, New Jersey, Maine, and North Carolina. PSC is a publicly-traded company listed on both the New York and Philadelphia Stock Exchanges under the ticker symbol "PSC" and has been committed to the preservation and improvement of the environment throughout its history, which spans more than 100 years.
The following table shows selected operating data for the quarters and years ended December 31, 2002 and 2001 (in thousands, except per share data).
(Unaudited)
Quarter Ended Year Ended
December 31, December 31,
2002 2001 2002 2001
---- ---- ---- ----
Operating revenues $ 81,826 $ 75,121 $322,028 $307,280
Net income available to common
stock $ 18,646 $ 12,209 $ 67,154 $ 60,005
Gain on sale of water system,
net of tax $ (3,690) $ - $ (3,690) $ -
-------- -------- -------- --------
Income exclusive of net gain
on sale of water system
assets $ 14,956 $ 12,209 $ 63,464 $ 60,005
======== ======== ======== ========
Basic net income per share $ 0.27 $ 0.18 $ 0.98 $ 0.88
Diluted net income per share $ 0.27 $ 0.18 $ 0.97 $ 0.87
Gain on sale of water system,
net of tax $ (0.05) $ - $ (0.05) $ -
-------- -------- -------- --------
Income per share exclusive of
net gain on sale of water
system assets $ 0.22 $ 0.18 $ 0.92 $ 0.87
======== ======== ======== ========
Average common shares
outstanding:
Basic 68,129 68,284 68,539 67,873
Diluted 68,741 69,159 69,231 68,755
This release contains certain forward-looking statements involving risks and uncertainties and other factors that may cause actual results to be materially different from any future results expressed or implied by such forward-looking statements. These factors include, among others, the following: general economic business conditions; unfavorable weather conditions; the success of certain cost containment initiatives; changes in regulations or regulatory treatment; availability and cost of capital; and the success of growth initiatives, including pending acquisitions.
Philadelphia Suburban Corporation and Subsidiaries
Consolidated Statements of Income and Comprehensive Income
(In thousands, except per share amounts)
(Unaudited)
Quarter Ended Year Ended
December 31, December 31,
------------ ------------
2002 2001 2002 2001
---- ---- ---- ----
Operating revenues $ 81,826 $ 75,121 $322,028 $307,280
Cost & expenses:
Operations and maintenance 30,392 30,243 117,735 111,885
Depreciation 10,949 9,618 41,424 37,979
Amortization 965 547 2,898 2,189
Taxes other than income
taxes 4,795 5,399 19,467 20,887
-------- -------- -------- --------
Total 47,101 45,807 181,524 172,940
-------- -------- -------- --------
Operating income 34,725 29,314 140,504 134,340
Other expense (income):
Interest expense, net 10,139 9,832 40,396 39,859
Allowance for funds used
during construction (191) (357) (1,389) (1,222)
Gain on sale of
water system (5,676) - (5,676) -
Gain on sale of
other assets - (287) (2,079) (3,384)
-------- -------- -------- --------
Income before income taxes 30,453 20,126 109,252 99,087
Provision for income taxes 11,794 7,891 42,046 38,976
-------- -------- -------- --------
Net income 18,659 12,235 67,206 60,111
Dividends on preferred stock 13 26 52 106
-------- -------- -------- --------
Net income available to common
stock $ 18,646 $ 12,209 $ 67,154 $ 60,005
======== ======== ======== ========
Net income $ 18,659 $ 12,235 $ 67,206 $ 60,111
Other comprehensive income
(loss), net of tax:
Unrealized gain (loss) on
securities (63) 137 104 39
Reclassification adjustment
for gains reported in
net income - (137) (767) (239)
-------- -------- -------- --------
Comprehensive income $ 18,596 $ 12,235 $ 66,543 $ 59,911
======== ======== ======== ========
Net income per common share:
Basic $ 0.27 $ 0.18 $ 0.98 $ 0.88
Diluted $ 0.27 $ 0.18 $ 0.97 $ 0.87
Average common shares
outstanding:
Basic 68,129 68,284 68,539 67,873
======== ======== ======== ========
Diluted 68,741 69,159 69,231 68,755
======== ======== ======== ========
Philadelphia Suburban Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands of dollars)
(Unaudited)
December 31, December 31,
2002 2001
---- ----
Net property, plant and equipment $1,490,841 $1,368,115
Current assets 70,908 64,641
Regulatory assets and other assets 154,540 122,352
---------- ----------
$1,716,289 $1,555,108
========== ==========
Stockholders' equity $ 492,313 $ 472,717
Long-term debt, excluding current portion 582,910 516,520
Current portion of long-term debt and loans
payable 149,378 124,603
Other current liabilities 77,157 72,801
Deferred credits and other liabilities 414,531 368,467
---------- ----------
$1,716,289 $1,555,108
========== ==========
CONTACT: Philadelphia Suburban CorporationKeya Epps, 610/645-1084
or
Barbara Cummings, 610/645-1196
or
Donna Alston, 610/645-1095