Aqua America, Inc. (NYSE: WTR) today reported results for the quarter and year ending December 31, 2012. For the full year 2012, diluted earnings per share were $1.40, compared to $1.03 in 2011, on 0.9 percent more shares outstanding. Revenue for the year was $757.8 million compared to $687.3 million in 2011, an increase of 10.3 percent. Net income for the full year 2012 rose to $196.6 million from $143.1 million in 2011, an increase of 37.4 percent.
For the fourth quarter of 2012, revenues increased 12.4 percent to $187.5 million from $166.8 million and corresponding diluted earnings per share increased to $0.47 from $0.24 for the same period in 2011. Net income for the quarter totaled $66.6 million, an increase of 95.7 percent from $34.0 million for the quarter ending December 31, 2011. Net income was positively impacted by the implementation of the repair tax accounting change for its Pennsylvania subsidiary. This change allows a tax deduction for 2012 infrastructure investments that were formerly capitalized for tax purposes and accounts for $31.0 million or approximately $0.22 in earnings per share for the year, all of which was recorded in the fourth quarter.
Aqua America Chairman and CEO Nicholas DeBenedictis said, “The fourth quarter was operationally strong. If you remove 2011’s one-time tax benefit from bonus depreciation and - although it is on-going, also remove the repair tax benefit from 2012 - adjusted income per common share (Non-GAAP financial measure) would be $0.25 vs. $0.22, an increase of more than 13 percent.”
The December 1, 2012 dividend was increased 6.1 percent to $0.175 per share and is the 22
increase in the last 21 years. The Board of Directors recently declared a quarterly cash dividend payment of $0.175 per share payable on March 1, 2013, to all shareholders of record on February 15, 2013. Aqua America has paid a consecutive quarterly dividend for more than 65 years.
In December 2012, the company announced that it adopted the repair tax accounting change, as permitted under IRS regulations, for its Pennsylvania subsidiary in Aqua America's 2012 federal income tax return to be filed in September 2013. This change allows a tax deduction for investments that were formerly capitalized for tax purposes. This mechanism is a frequently implemented tax benefit that has been used by numerous companies, including other utilities in recent years. Aqua America will use flow-through accounting for the tax benefits of the repair tax accounting change per its previously disclosed Pennsylvania rate order from June 2012.