UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): January 17, 2017
Aqua America, Inc.
(Exact name of registrant as specified in its charter)
| Pennsylvania | 001-06659 | 23-1702594 | ||
| (State or other jurisdiction | (Commission | (I.R.S. Employer | ||
| of incorporation) | File Number) | Identification No.) |
| 762 West Lancaster Avenue, Bryn Mawr, Pennsylvania |
19010-3489 | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: 610-527-8000
Not Applicable
Former name or former address, if changed since last report
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Item 7.01 | Regulation FD Disclosure. |
On January 17, 2017, Aqua America, Inc. (the “Company”) is holding an Earnings Guidance Call via phone and webcast. As disclosed in its press release, dated January 17, 2017, the Analyst Guidance Call will begin at 10 a.m. on January 17, 2017. The presentation to be used during the Earnings Guidance Call, and a related press release, are attached as exhibits to this Form 8-K.
The information in this Form 8-K and the exhibits attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits
| Exhibit |
Description | |
| 99.1 | Corporation Presentation of Aqua America, Inc., January 2017 | |
| 99.2 | Press Release issued by Aqua America, Inc., January 17, 2017 | |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Aqua America, Inc. | ||||||||
| January 17, 2017 | By: | /s/ Christopher P. Luning | ||||||
| Name: | Christopher P. Luning | |||||||
| Title: | Senior Vice President, General Counsel and Secretary | |||||||
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Exhibit 99.1
2017 Earnings
Guidance
Call
AQUASM
NYSE: WTR
January 17, 2017
Forward Looking Statement
This presentation contains in addition to historical information, forward looking statements based on assumptions made by management regarding future circumstances
over which the company may have little or no control, that involve risks, 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 and business conditions; weather conditions affecting customers’ water usage or the company’s cost of operations; costs arising from changes in regulations; regulatory
treatment of rate increase requests; changes in the valuation of our investment in our joint venture in the Marcellus shale region; availability and cost of capital; the success of growth initiatives, including pending acquisitions; the ability to
generate earnings from capital investment; and other factors discussed in our Form 10-K for the fiscal year ended December 31, 2015, which is on file with the SEC. We undertake no obligation to publicly
update or revise any forward-looking statement.
Non-GAAP Reconciliation
For reconciliation of non-GAAP financial measures, see the Investor Relations section of the company’s Web site at www.aquaamerica.com
NYSE: WTR AQUASM 2
Today’s Presenters
Christopher Franklin
President & Chief Executive Officer
Dave Smeltzer
Executive Vice President & Chief Financial Officer
Brian Dingerdissen
Vice President, Chief of Staff & Investor Relations
NYSE: WTR AQUASM 3
Introduction
Christopher
Franklin
President and Chief Executive Officer
AQUASM
NYSE: WTR
Today’s Agenda
• 2016 Guidance
• Corporate Update
• Introduce 2017 Guidance
• Q&A Session
NYSE: WTR AQUASM 5
2016 Guidance
Dave
Smeltzer
Executive Vice President & Chief Financial Officer
AQUASM
NYSE: WTR
2016 Guidance
Earnings
Customer Growth
Capex
Operations and Maintenance Expense
• Full-year earnings per share between $1.30 –
$1.35
• 1.5 – 2% year-over-year customer growth
• More than
$350 million
• More than $1.1 billion through 2018
•
Ongoing rate base growth of approximately 6 – 7%
• Same-system O&M increase of 1 – 2% for full year
NYSE: WTR AQUASM 7
Potential Tax Reform Implications
Policy Changes
Tax Rate Reduction
Excess Deferred Taxes
Reduced Repair Tax Deduction
Increased Tax Deductions
Potential Impacts
Benefit likely deferred for return to customers absent immediate rate adjustment
Expect
re-class to Regulatory Liability for return to customers
Reduced PA Income; possible acceleration of PA rate filing
Could slow long-term rate base growth
NYSE: WTR AQUASM 8
Corporate Update
Christopher Franklin
President and Chief Executive Officer
AQUASM
NYSE: WTR
Current Market-Based Activities
Decisions by Segment
Segment
Transportation Services
Construction
Tri-State Grouting
Field Services
Cross-connection
Consulting/Training
Limited O&M
Home Services
Outcome
Divested
Contract Ended
Divested
Exiting in 2017
Divesting in February 2017
Divesting in February 2017
Maintain
Maintain
$35M of Revenue in 2015 vs. $4M Expected in 2017, with a Positive Contribution to Net
Income
NYSE: WTR AQUASM 10
2016 Acquisitions
as-of December 31, 2016
State
Acquisitions Closed
Total Customers
Total Collective Purchase Price
PA 4 4,716 $17,397,188
IL 5 924 $2,322,000
NJ 3 222 $1,627,685
IN 3 334 $773,500
TX 1 210 $50,000
NC 1 62 $32,709
OH 1 60 $25,000
VA 1 30 $20,177
Total 19 6,558 $22,248,258
1.6% Total Customer Growth
14% of Acquired Customers from Wastewater Systems
NYSE: WTR AQUASM 11
2017 Guidance
Christopher
Franklin
President and Chief Executive Officer
AQUASM NYSE: WTR
2017 Guidance
Earnings
Full-year earnings per share between $1.34 – $1.39
Operations and
Maintenance Expense
Same-system O&M increase of 1 – 2% for full year
Capex
More than $450 million
More than $1.2 billion through 2019
Rate base growth of approximately 6 – 7%
Aqua PA expected to file infrastructure investment charge in 2017
Rate
Activity
Pennsylvania rate case filing likely in 2018, with resolution expected in 2019
Customer Growth
1.5 – 2% year-over-year customer growth
NYSE: WTR AQUASM 13
Pending Acquisition Activity
2017 Anticipated Closings System Type Customers Purchase Price ($thousands)
System A
Muni 5,364 $75,100
System B Muni 2,100 $29,500
System C Muni 727 $5,500
System D Muni 570 $3,600
Total 8,761 $113,700
Top 70 Municipal Acquisition Prospects Represent Approximately 390,000 Customers
NYSE: WTR
AQUASM 14
Top 70 Municipal Prospects
92% of Prospective Customers from Systems Serving more than 2,500 Customers
Cumulative Customer Connections
140,000
120,000
100,000
80,000
60,000
40,000
20,000
0
<2,500 2,500 - 4,999 5,000 - 9,999 10,000 - 14,999 15,000 - 24,999 ³25,000
System Size (# of connections)
NYSE: WTR AQUASM 15
Q&A Session
AQUASM
NYSE: WTR
Thank You for Attending Aqua America’s 2017 Earnings Guidance Call
2016 Full-year and Fourth Quarter Earnings
Conference Call and Webcast
Thursday, February 23, 2017
For more information contact:
Brian Dingerdissen
Vice President, Chief of Staff and Investor Relations
610.645.1191
NYSE: WTR AQUASM 17
Appendix
AQUASM
NYSE: WTR
Rates and Infrastructure Surcharges Completed
as-of December 31, 2016
Rates or Surcharges
Received in 2016
State Docket Number Type
Awarded Annualized
Revenue Increase
($thousands)
Illinois N/A Surcharge (w) $711
15-0017 Surcharge
(w/ww) 242
New Jersey WR16010089 Rate Case (w) 200
North Carolina W-215-Sub-363A Surcharges (w/ww) 1,045
Ohio
Ordinance # 22-2013 Rate Case (w) 777
Ordinance # 14-041 Rate Case (w) 598
Texas 44470 Rate Case (w) 225
Virginia1
PUE-2014-00045 Rate Case (w/ww) 1,490
N/A Rate Case (w/ww) 155
N/A Rate Case (w/ww) 144
Total $5,587
1. Including $1.1 million of revenues recognized under interim rates during 2015
Rates
and Surcharges differentiated by water (w) and wastewater (ww) systems
NYSE: WTR AQUASM 19
Rates and Infrastructure Surcharges Completed
as-of January 16, 2017
Rates or Surcharges
Received in 2017
State Docket Number Type
Awarded Annualized
Revenue Increase
($thousands)
North Carolina W-215-Sub-363A Surcharges (w/ww) $564
Ohio Ordinance # 22-2013 Rate Case (w) 731
Ordinance # 14-041 Rate Case (w) 534
Total $1,829
Rates and Surcharges differentiated by water (w) and wastewater (ww) systems
NYSE: WTR AQUASM 20
Rates Pending
as-of January 16, 2017
Rates Pending in 2017
State Docket Number Type
Requested Annualized
Revenue Increase
($thousands)
Indiana 44752 Rate Case (ww) $2,372
Ohio 16-0907-WW-AIR Rate Case (w) 5,604
Total $7,976
Rates differentiated by water (w) and wastewater (ww) systems
NYSE: WTR AQUASM 21
Capital Investment Spending
Regulated Operations
2017 to 2019 Capital Investment Breakdown
Tanks & Boosters 4.9%
Vehicles 1.5%
Other 0.6%
IS 4.5%
Meters 4.5%
Source Treatment & Facilities 30.8%
Mains & Services 53.2%
3 Year Total = +$1.2 Billion
NYSE: WTR AQUASM 22
Exhibit 99.2
| Released: January 17, 2017 |
Contact: Brian Dingerdissen Investor Relations O: 610.645.1191 BJDingerdissen@AquaAmerica.com
Donna Alston Manager, Communications O: 610.645.1095 M: 484.368.4720 DPAlston@AquaAmerica.com |
AQUA AMERICA PROVIDES 2017 EARNINGS GUIDANCE
| • | 2017 earnings per diluted common share estimated at $1.34 to $1.39 |
| • | Company expects to invest record amount in infrastructure in 2017 |
BRYN MAWR, PA – Aqua America, Inc. (NYSE: WTR), one of the largest U.S.-based, publicly traded water and wastewater utilities, today announced its earnings guidance for 2017, and reaffirmed its guidance for the year ended December 31, 2016.
2017 Guidance Highlights
| • | Earnings per diluted common share of $1.34 to $1.39 |
| • | Same-system operations and maintenance expenses increase of 1 to 2 percent |
| • | More than $450 million in infrastructure improvements in 2017 for communities served by Aqua; more than $1.2 billion planned through 2019 in existing operations to improve and strengthen systems |
| • | Aqua Pennsylvania expected to file infrastructure investment charge in 2017 and rate case filing likely in 2018, with resolution expected in 2019 |
| • | Total customer growth of 1.5 to 2 percent |
“Our confidence in our ability to deliver long-term value for our stakeholders is reflected in our 2017 guidance,” said President and Chief Executive Officer of Aqua America Christopher Franklin. “Growing our customer base through acquisitions, prudently investing to renew our aging infrastructure, and creating efficiencies across the organization remain among our highest priorities.”
“We will continue our ongoing commitment to maintaining a sustainable business by capitalizing on our core capabilities,” Franklin added. “We are optimistic about the increasing volume of opportunities we see in the water and wastewater markets, which should allow us to bring our world-class service to more customers.”
Aqua America does not guarantee future results of any kind. Guidance is subject to risks and uncertainties, including, without limitation, those factors outlined in the “Forward Looking Statements” of this release and the “Risk Factors” section of the company’s annual and quarterly reports filed with the Securities and Exchange Commission (SEC).
Earnings Guidance Call Information
Date: January 17, 2017
Time: 10 a.m. EST (please dial in by 9:45 a.m.)
Webcast and slide presentation link: http://ir.aquaamerica.com/events.cfm
Replay Dial-in #: 888.203.1112 (U.S.) & +1 719.457.0820 (International)
Confirmation code: 6198268
The company’s conference call with financial analysts will take place on Tuesday, January 17, 2017 at 10 a.m. Eastern Standard Time. The call and presentation will be webcast live so that interested parties may listen over the Internet by logging on to AquaAmerica.com and following the link for Investor Relations. The conference call will be archived in the investor relations section of the company’s website for 90 days following the call. Additionally, the call will be recorded and made available for replay at 1 p.m. on Jan. 17, 2017 for 10 business days following the call. To access the audio replay in the U.S., dial 888.203.1112 (pass code 6198268). International callers can dial +1 719.457.0820 (pass code 6198268).
About Aqua America
Aqua America is one of the largest U.S.-based, publicly traded water and wastewater utilities and serves nearly 3 million people in Pennsylvania, Ohio, North Carolina, Illinois, Texas, New Jersey, Indiana and Virginia. Aqua America is listed on the New York Stock Exchange under the ticker symbol WTR. Visit AquaAmerica.com for more information.
Caution Concerning Forward-Looking Statements
This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, among others: the guidance range of earnings per share for the fiscal years ending in 2016 and 2017; the continuation of the company’s growth-through-acquisition program and the expectations for customer growth from this program; the expected increase in customer base for the fiscal years ending in 2016 and 2017; the company’s expected same-system operations and maintenance expense increase for the fiscal years ending in 2016 and 2017; the company’s ability to control expenses and create and maintain efficiencies; the anticipated amount of capital investment from 2016 through 2019; the company’s filing of a Pennsylvania DSIC case in 2017 and a Pennsylvania rate case in 2018; and, the volume and pace of opportunities in the water and wastewater field. There are important factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements including: the company’s continued ability to adapt itself for the future and build value by fully optimizing company assets; general economic business conditions; the company’s ability to fund needed infrastructure; housing and customer growth trends; unfavorable weather conditions; the success of certain cost containment initiatives; changes in regulations or regulatory treatment; availability and access to capital; the cost of capital; disruptions in the credit markets; the success of growth initiatives; the company’s ability to continue to deliver strong results; the company’s ability to grow its dividend, add shareholder value and to grow earnings; municipalities willingness to privatize its water and/or wastewater utilities; the company’s success in its Pennsylvania DSIC and rate filings; and other factors discussed in our Annual Report on Form 10-K, which is on filed annually with the Securities and Exchange Commission. For more information regarding risks and uncertainties associated with Aqua America’s business, please refer to Aqua America’s annual, quarterly and other SEC
filings. Aqua America is not under any obligation - and expressly disclaims any such obligation - to update or alter its forward-looking statements whether as a result of new information, future events or otherwise.
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