PR Newswire
CLINTON, Conn., March 15, 2018
CLINTON, Conn., March 15, 2018 /PRNewswire/ -- Connecticut Water Service, Inc. (Nasdaq: CTWS) announced net income of $25.1 million, or earnings per basic average share (EPS) of $2.17, including a $0.13 per share negative impact from the Tax Cuts and Jobs Act passed in December of 2017, on total revenues of $113.8 million in 2017. Total revenues include revenues generated by the Company's three business segments: Water Operations, Service and Rentals, and Real Estate. In 2016, the Company had net income of $23.4 million, or $2.12 EPS, on total revenues of $105.3 million.
Net income in the Company's core business, the Water Operations segment, was $23.9 million, on revenues of $108.5 million. In 2016, net income from the segment totaled $22.2 million, on revenues of $100.0 million. The increase in revenues was related to the acquisitions of the Heritage Village Water Company (Heritage Village Water) in February 2017 and the Avon Water Company (Avon Water) in July 2017, as well as the recovery of costs for completed infrastructure replacement projects through the Water Infrastructure and Conservation Adjustment (WICA) in Connecticut and the Water Infrastructure Charge (WISC) in Maine. Also contributing was a general rate increase implemented in the Maine Water Company's (Maine Water) Biddeford Saco division in December 2017.
"CTWS delivered on its long-term growth strategy of prudent acquisitions and infrastructure investment in 2017," stated David C. Benoit, President and CEO of CTWS. Mr. Benoit added, "CTWS grew the number of customers it serves by 10 percent through acquisitions in 2017, and entered the publicly regulated wastewater space. Our completed acquisitions of Heritage Village Water and Avon Water generated nearly $5.9 million in total revenues. System-wide, we invested $51.5 million in infrastructure to serve customers through increased service reliability, enhanced water treatment and improved public safety. We also continue to invest in physical and cyber-security to protect our customers, employees, facilities and information technology systems."
Year-to-date comparisons of net income between 2016 and 2017 were impacted by different factors. In 2016, an out-of-period adjustment of approximately $1.6 million lowered expenses associated with mark-to-market costs. In 2017, net income was affected by the following:
Including the completed acquisitions in 2017, the Company has grown its customer base an industry-pacing customer growth of more than 45 percent over the past decade.
Tax Cuts and Jobs Act
The Tax Cuts and Jobs Act, which was signed into law in December 2017, included a reduction to the corporate federal income tax rate from the existing maximum rate of 35 percent to 21 percent effective January 1, 2018. In accordance with accounting standards, CTWS revalued its deferred income tax assets and liabilities at the new 21 percent federal income tax rate. This revaluation resulted in the recognition of both regulatory liabilities, to the extent that the tax savings over time will be returned to customers in utility customer rates, and a non-cash adjustment was recognized to record additional income tax expense of $1.5 million (non-cash), to the extent revalued deferred income taxes are not believed to be recoverable in utility customer rates.
Definitive Merger Agreement with SJW Group
In a separate news release issued this morning, CTWS and SJW Group (NYSE: SJW) announced that both companies' boards of directors have unanimously approved the definitive agreement to combine through a merger of equals to create the 3rd largest investor-owned water and wastewater utility in the United States, based on pro forma enterprise value and combined rate base. The increased scale and more diverse geographic footprint of the new organization provide the opportunity for investments in service and reliability that can enhance value for shareholders as well as for customers and communities. The news release is available at http://ir.ctwater.com and additional information regarding the transaction will be available at www.sjw-ctws.com.
A joint conference call and webcast will be held by CTWS and SJW Group today at 8:30 a.m. ET (5:30 a.m. PT) to discuss the merger.
The conference call can be accessed by dialing (866) 610-1072 for callers from the U.S. and (973) 935-2840 for international callers. The confirmation code is 8499635.
A live webcast of the conference call will be available at www.sjw-ctws.com.
A replay of the conference call will be available for two weeks, from March 15, 2018 through March 28, 2018, and can be accessed by dialing (800) 585-8367 and providing the 8499635 confirmation code. The webcast will also be archived at www.sjw-ctws.com.
Maine Water Rate Decision
On December 5, 2017, the Maine Public Utilities Commission (MPUC) approved a water rate increase for customers of Maine Water's Biddeford Saco division. Maine Water had requested an increase in annual revenues of $1.57 million. The MPUC approved an increase of $1.56 million, which was effective with customer bills issued on or after December 1, 2017.
Dividend Increase
On May 11, 2017, CTWS's Board of Directors approved an increase of 5.3 percent in its annualized cash dividend, raising the quarterly amount to $0.2975 per share on the Company's common stock, for an annualized dividend of $1.19. Over the past three years, the Company has increased dividend payments on its common shares by nearly 15 percent.
Settlement Agreement
On February 7, 2018, the Connecticut Water Company (Connecticut Water) filed a motion with the Connecticut Public Utilities Regulatory Authority (PURA) to reopen its last rate decision for the purpose of considering a Settlement Agreement negotiated with the Office of Consumer Counsel. Under the term of the Settlement Agreement,
PURA has agreed to the request to reopen the last rate proceeding. Connecticut Water expects a decision by the end of the second quarter, with provisions of the Settlement Agreement becoming effective soon thereafter.
WICA and WISC
Maine Water files for WISC increases with the MPUC on a system-by-system basis. Five WISC applications filed in the fourth quarter of 2017 have been approved in 2018, and the WISC surcharge in the Biddeford Saco division has been reset to zero with the approval of the general rate case in December 2017. The current overall approved cumulative WISC surcharge for all divisions of Maine Water is 6.9 percent. The maximum WISC surcharge allowed in Maine ranges from 10 percent to 20 percent, depending on the size of the water system.
The current WICA charge for Connecticut Water is 9.81 percent and 8.09 percent for Avon Water. Heritage Village Water has not filed for a WICA surcharge.
WICA and WISC allow for recovery of eligible infrastructure replacements on a semi-annual basis. Since the adoption of WICA in 2007, Connecticut Water has replaced more than 120 miles of aging water main with an average age of 75 years. WISC became available in Maine in 2013 and has been used to replace 12 miles of aging water mains and pump stations, construct storage tanks, and fund treatment improvements.
Other Developments
The Company's 2017 Customer Satisfaction Index, as measured by an independent research firm, was measured at 93.3 percent. The CSI was 92.2 percent in 2016.
About CTWS
CTWS is one of the 10 largest U.S.-based publicly traded water utilities, and is listed on the Nasdaq Global Select Market under the ticker symbol CTWS. Through its regulated utility subsidiaries, CTWS serves more than 135,000 water customers, or more than 425,000 people in 80 communities across Connecticut and Maine, and more than 3,000 wastewater customers in Southbury, Connecticut.
Since January 2012, CTWS has grown its customer base by more than 45 percent, or more than 44,000 customers, primarily through large acquisitions in Maine in 2012 and the acquisitions of Heritage Village Water Company and Avon Water Company in Connecticut in 2017.
Additional information regarding results, performance or achievements noted in this news release is available in CTWS's Form 10-K that will be filed with the SEC today. A link to the 10-K filing can be found at http://ir.ctwater.com.
Connecticut Water Service, Inc. & Subsidiaries | |||
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Condensed Consolidated Selected Financial Data (unaudited) | |||
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(In thousands except per share amounts) | December 31, 2017 | | December 31, 2016 |
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Operating Revenues | $107,054 | | $98,667 |
Other Water Activities Revenues | 1,471 | | 1,334 |
Real Estate Revenues | 212 | | 8 |
Service and Rentals Revenues | 5,112 | | 5,307 |
Total Revenues | $113,849 | | $105,316 |
Total Operating Expenses | $73,649 | | $70,462 |
Other Utility Income, Net of Taxes | $824 | | $744 |
Total Utility Operating Income | $34,229 | | $28,949 |
Gain (Loss) on Property Transactions, Net of Taxes | $33 | | $(54) |
Non-Water Sales Earnings (Services and Rentals), Net of Taxes | $1,167 | | $1,219 |
Net Income | $25,054 | | $23,387 |
Net Income Applicable to Common Shareholders | $25,016 | | $23,349 |
Basic Earnings Per Average Common Share | $2.17 | | $2.12 |
Diluted Earnings Per Average Common Share | $2.13 | | $2.08 |
Basic Weighted Average Common Shares Outstanding | 11,540 | | 11,009 |
Diluted Weighted Average Common Shares Outstanding | 11,762 | | 11,228 |
Book Value Per Share | $24.34 | | $20.98 |
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Condensed Consolidated Balance Sheets (unaudited) | ||
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(In thousands) | December 31, 2017 | December 31, 2016 |
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ASSETS | | |
Net Utility Plant | $697,723 | $601,396 |
Current Assets | 35,678 | 29,364 Werbung Mehr Nachrichten zur Connecticut Water Service Aktie kostenlos abonnieren
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