AWK reports solid earnings

VOORHEES, N.J.–(BUSINESS WIRE)– American Water Works Company, Inc. (NYSE:AWK – News), the largest publicly traded U.S. water and wastewater utility company, today reported results for the second quarter ended June 30, 2011. For the quarter, the company earned net income of $84.6 million and earnings per share of $0.48. Included in net income and earnings per share are $3.2 million and $0.02, respectively, related to the cessation of depreciation on assets under agreement for sale or sold in Arizona, New Mexico and Texas, classified as discontinued operations. Including the effect of depreciation expense related to these assets, adjusted net income for the second quarter 2011 was $81.4 million and adjusted earnings per share was $0.46 (non-GAAP financial measures). This is a more than 9.5 percent increase over the net income of $72.8 million and $0.42 per share in the comparable period in 2010.

“American Water’s continued execution of its strategies has resulted in another solid quarter,” said Jeff Sterba, president and CEO of American Water. “We increased revenues, net income and earnings per share. In addition, we are expanding our business in key states while improving our operating efficiency ratio. By driving operational excellence, we benefit our customers by providing reliable service at about a penny per gallon and investing needed dollars to maintain our pipes and plants.”

During the quarter, the company’s revenues increased 6.2 percent or $39.3 million quarter-over-quarter to $674.2 million. Operating expenses for the three months ended June 30, 2011, totaled $473.1 million, an increase of $26.5 million, or 5.9 percent, compared to the same period in 2010. Net cash provided by operating activities for the six months ended June 30, 2011, was $262.4 million compared to $297.5 million for the six months ended June 30, 2010. The decrease in cash flows was primarily driven by additional pension contributions and the receipt of a tax refund in the first half of 2010 that did not reoccur in 2011. The company’s capital expenditures for the six months ended June 30, 2011, were $391.8 million compared to $327.3 million for the same period in the prior year.