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Aqua America Management Discusses Q2 2012 Results - Earnings Call Transcript

And if we just stay with the same length of maturity, which should be 20 year maturity, we think we might be able to do as well as 75 to 100 pips saving on those – on that 100 million. So you can see, we continue to do financial engineering, but in the very positive way because of the solid financial foundation of the company and its strong S&P rating and timing is everything and where some of these notes are coming due or callable and we are taking advantage of today’s historic low interest rates.

On the O&M front, for the trailing 12 months ending 6/30/2012, we posted a O&M to revenue what we call our efficiency ratio of 37.3 versus 37.8 in the year prior period. Just to refresh you, we had a nice run of tightening margins, improving margins and actually lowering the efficiency ratio, which is the inverse, we just reached some numbers and you can see the trend line these are yearend numbers.

But for yearend 2007, our O&M to revenue or efficiency ratio was 42.2, in 2008 it dropped to 41.8, in 2009 it dropped to 40.2, in 2010 it dropped to 38.7, in 2011, we achieved 38.

And we’re hopeful with these six months in the bag now already we’re hopeful to squeeze another 50 basis points to maybe 75 basis points or more in the margin out of this benchmark for yearend 2012, there was some confusion after my last call, we measure our efficiency ratio slightly different than the other large water company American Water who is also giving these kind of tracking results and they are doing very good with their net results also.

If we use the same metrics as American, which is the regulated division O&M, not all O&M including are unregulated. And we just purchased water, which as they do and that’s a legitimate thing to do. Our trailing 12 months 6/30/2012 number would not be 37.3, it would be 34.3. And I think, whichever we want to use, I believe it’s the best in the entire utility industry.

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