Financial Statement Analysis
MARKET
| APPENDIX A - POPULATION GROWTH | |||||||||
| AQUA AMERICA, INC. AND SUBSIDIARIES | |||||||||
| POPULATION GROWTH | |||||||||
| POPULATION | 1950 | 1960 | 1970 | 1980 | 1990 | 2000 | 2010 | 2020 | 2030 |
| Massachusetts | 4,690,514 | 5,148,578 | 5,689,170 | 5,737,093 | 6,016,425 | 6,349,097 | 6,649,441 | 6,855,546 | 7,012,009 |
| Pennsylvania | 10,498,012 | 11,319,366 | 11,800,766 | 11,864,720 | 11,881,643 | 12,281,054 | 12,584,487 | 12,787,354 | 12,768,184 |
| New Jersey | 4,835,329 | 6,066,782 | 7,171,112 | 7,365,011 | 7,730,188 | 8,414,350 | 9,018,231 | 9,461,635 | 9,802,440 |
| Ohio | 7,946,627 | 9,706,397 | 10,657,423 | 10,797,603 | 10,847,115 | 11,353,140 | 11,576,181 | 11,644,058 | 11,550,528 |
| Indiana | 3,934,224 | 4,662,498 | 5,195,392 | 5,490,210 | 5,544,159 | 6,080,485 | 6,392,139 | 6,627,008 | 6,810,108 |
| Illinois | 8,712,176 | 10,081,158 | 11,110,285 | 11,427,409 | 11,430,602 | 12,419,293 | 12,916,894 | 13,236,720 | 13,432,892 |
| Virginia | 3,318,680 | 3,966,949 | 4,651,448 | 5,346,797 | 6,187,358 | 7,078,515 | 8,010,245 | 8,917,395 | 9,825,019 |
| North Carolina | 4,061,929 | 4,556,155 | 5,084,411 | 5,880,095 | 6,628,637 | 8,049,313 | 9,345,823 | 10,709,289 | 12,227,739 |
| Texas | 7,711,194 | 9,579,677 | 11,198,655 | 14,225,513 | 16,986,510 | 20,851,820 | 24,648,888 | 28,634,896 | 33,317,744 |
| Florida | 2,771,305 | 4,951,560 | 6,791,418 | 9,746,961 | 12,937,926 | 15,982,378 | 19,251,691 | 23,406,525 | 28,685,769 |
| POPULATION GROWTH | 1950 | 1960 | 1970 | 1980 | 1990 | 2000 | 2010 | 2020 | 2030 |
| Massachusetts | 9.77% | 10.50% | 0.84% | 4.87% | 5.53% | 4.73% | 3.10% | 2.28% | |
| Pennsylvania | 7.82% | 4.25% | 0.54% | 0.14% | 3.36% | 2.47% | 1.61% | -0.15% | |
| New Jersey | 25.47% | 18.20% | 2.70% | 4.96% | 8.85% | 7.18% | 4.92% | 3.60% | |
| Ohio | 22.14% | 9.80% | 1.32% | 0.46% | 4.67% | 1.96% | 0.59% | -0.80% | |
| Indiana | 18.51% | 11.43% | 5.67% | 0.98% | 9.67% | 5.13% | 3.67% | 2.76% | |
| Illinois | 15.71% | 10.21% | 2.85% | 0.03% | 8.65% | 4.01% | 2.48% | 1.48% | |
| Virginia | 19.53% | 17.26% | 14.95% | 15.72% | 14.40% | 13.16% | 11.32% | 10.18% | |
| North Carolina | 12.17% | 11.59% | 15.65% | 12.73% | 21.43% | 16.11% | 14.59% | 14.18% | |
| Texas | 24.23% | 16.90% | 27.03% | 19.41% | 22.76% | 18.21% | 16.17% | 16.35% | |
| Florida | 78.67% | 37.16% | 43.52% | 32.74% | 23.53% | 20.46% | 21.58% | 22.55% | |
| AVERAGE | 9.20% | 12.29% | 9.34% | 8.00% | 7.24% | ||||
| Source: U.S. Census Bureau |
GROWTH PROJECTION
| APPENDIX B - OPERATING REVENUE GROWTH | ||||||||||||||
| AQUA AMERICA, INC. AND SUBSIDIARIES | ||||||||||||||
| OPERATING REVENUE GROWTH | ||||||||||||||
| (In thousands of dollars, except per share amounts) | ||||||||||||||
| 31-Dec | 31-Dec | 31-Dec | 31-Dec | 31-Dec | 31-Dec | 31-Dec | 31-Dec | |||||||
| 1998 | 1999 | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | PF 2006 | PF 2007 | PF 2008 | PF 2009 | PF 2010 | PF 2011 | |
| Operating Revenue | 250,771 | 257,326 | 274,014 | 307,280 | 322,028 | 367,233 | 442,039 | 496,779 | 556,392 | 617,596 | 679,355 | 740,497 | 799,737 | 847,721 |
| Growth | 3% | 6% | 12% | 5% | 14% | 20% | 12% | 12% | 11% | 10% | 9% | 8% | 6% | |
| HISTORICAL AVERAGE NET SALES GROWTH | 10% | |||||||||||||
| PROJECTED AVERAGE NET SALES GROWTH (2006 - 2011) | 9% | |||||||||||||
| APPENDIX C - HISTORICAL TAX RATE | ||||||||||||||
| AQUA AMERICA, INC. AND SUBSIDIARIES | ||||||||||||||
| HISTORICAL TAX RATE | ||||||||||||||
| HISTORICAL WTR EFFECTIVE TAX RATE | ||||||||||||||
| 31-Dec | 31-Dec | 31-Dec | 31-Dec | 31-Dec | 31-Dec | 31-Dec | 31-Dec | HISTORICAL | ||||||
| 1998 | 1999 | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | AVERAGE | ||||||
| INCOME BEFORE INCOME TAXES | 75,133 | 62,915 | 87,098 | 99,087 | 109,252 | 116,718 | 132,131 | 148,069 | ||||||
| Provision of Income Taxes | 30,118 | 26,531 | 34,105 | 38,976 | 42,046 | 45,923 | 52,124 | 56,913 | ||||||
| EFFECTIVE TAX RATE | 40.09% | 42.17% | 39.16% | 39.34% | 38.49% | 39.35% | 39.45% | 38.44% | 39.56% | |||||
| HISTORICAL DEFERRED TAX | ||||||||||||||
| 31-Dec | 31-Dec | 31-Dec | 31-Dec | 31-Dec | 31-Dec | 31-Dec | 31-Dec | |||||||
| 1998 | 1999 | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | |||||||
| Deferred income taxes and investment tax credits | 126,809 | 136,528 | 151,718 | 167,577 | 187,300 | 190,395 | 223,887 | 250,346 | ||||||
| Provision for income taxes | 30,118 | 26,531 | 34,105 | 38,976 | 42,046 | 45,923 | 52,124 | 56,913 | ||||||
| 31-Dec | 31-Dec | 31-Dec | 31-Dec | 31-Dec | 31-Dec | 31-Dec | 31-Dec | |||||||
| As % of provision for income taxes | 1998 | 1999 | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | ||||||
| Deferred income taxes and investment tax credits | 421% | 515% | 445% | 430% | 445% | 415% | 430% | 440% | ||||||
| As % of provision for income taxes | ||||||||||||||
| AVERAGE DEF. TAXES AND INV. TAX CREDITS | 442% |
HEURISTIC EPS
| APPENDIX D - HISTORICAL EPS | |||||
| AQUA AMERICA, INC. AND SUBSIDIARIES | |||||
| HISTORICAL EPS | |||||
| EPS Quarter | EPS Annual | ||||
| Q1 | Q2 | Q3 | Q4 | TOTAL | |
| 1998 | $ 0.077 | $ 0.138 | $ 0.131 | $ 0.088 | $ 0.434 |
| 1999 | $ 0.004 | $ 0.111 | $ 0.134 | $ 0.092 | $ 0.341 |
| 2000 | $ 0.096 | $ 0.127 | $ 0.154 | $ 0.110 | $ 0.487 |
| 2001 | $ 0.115 | $ 0.134 | $ 0.168 | $ 0.108 | $ 0.525 |
| 2002 | $ 0.102 | $ 0.132 | $ 0.192 | $ 0.162 | $ 0.588 |
| 2003 | $ 0.120 | $ 0.132 | $ 0.198 | $ 0.150 | $ 0.600 |
| 2004 | $ 0.128 | $ 0.143 | $ 0.195 | $ 0.180 | $ 0.646 |
| 2005 | $ 0.170 | $ 0.218 | $ 0.173 | $ 0.150 | $ 0.711 |
| 2006 HEURISTIC PRO FORMA | $ 0.780 | ||||
| EPS Quarter | EPS Annual | ||||
| Q1 | Q2 | Q3 | Q4 | TOTAL | |
| 1998 | 17.74% | 31.80% | 30.18% | 20.28% | 100.00% |
| 1999 | 1.17% | 32.55% | 39.30% | 26.98% | 100.00% |
| 2000 | 19.71% | 26.08% | 31.62% | 22.59% | 100.00% |
| 2001 | 21.90% | 25.52% | 32.00% | 20.57% | 100.00% |
| 2002 | 17.35% | 22.45% | 32.65% | 27.55% | 100.00% |
| 2003 | 20.00% | 22.00% | 33.00% | 25.00% | 100.00% |
| 2004 | 19.81% | 22.14% | 30.19% | 27.86% | 100.00% |
| 2005 | 23.91% | 30.66% | 24.33% | 21.10% | 100.00% |
| AVERAGE | 17.70% | 26.65% | 31.66% | 23.99% | 100.00% |
| 2006 FINANCIAL PRO FORMA EPS | $ 0.14 | $ 0.22 | $ 0.26 | $ 0.19 | $ 0.81 |
| 2006 FINANCIAL PRO FORMA NI | $ 18,697 | $ 28,150 | $ 33,441 | $ 25,341 | $ 105,628 |
| Source: Bloomberg | |||||
| Note: Number of shares outstanding is adjusted to allow for period-to-period comparison. |
HEURISTIC EPS
Q1
Q2
Q3
Q4
Quarterly EPS by Year
STREET EPS
1998
1999
2000
2001
2002
2003
2004
2005
Yearly EPS by Quarter
VALUATION ANALYSIS
EPS Annual
HEURISTIC EPS ANNUAL
CAPITALIZED LEASES
| APPENDIX E - EPS PROJECTION & SURPRISE | ||
| AQUA AMERICA, INC. AND SUBSIDIARIES | ||
| EPS PROJECTION & SURPRISE | ||
| PROJECTION | ||
| 2006 EPS | 2006 Q1 EPS | |
| Argus Research | $ 0.83 | |
| Hilliard Lyons | $ 0.74 | |
| A.G. Edwards | $ 0.79 | |
| HSBC | $ 1.06 | |
| Stanford Financial | $ 0.81 | $ 0.17 |
| Janney Montgomery | $ 0.76 | $ 0.15 |
| Thomas Weisel | $ 0.74 | $ 0.15 |
| Stifel Nicolaus | $ 0.75 | $ 0.15 |
| Yahoo Finance | $ 0.77 | $ 0.15 |
| MSN Money | $ 0.76 | $ 0.15 |
| AIM | $ 0.81 | $ 0.14 |
PE MULTIPLE
| APPENDIX F - VALUATION | |||||||
| AQUA AMERICA, INC. AND SUBSIDIARIES | |||||||
| VALUATION | |||||||
| (In thousands of dollars, except per share amounts) | |||||||
| WEIGHTED AVERAGE COST OF CAPITAL (WACC) | |||||||
| DEBT | Actual 2005 | ||||||
| Short-term debt | 163,150 | ||||||
| Long-term debt | 878,438 | ||||||
| Capitalized leases | 20,693 | ||||||
| Total debt | 1,062,281 | ||||||
| Marginal tax rate | 39.56% | ||||||
| Kd | 6.00% | ||||||
| Note: Cost of debt is comparatively low as WTR is issuing bonds through municipalities (tax-free and tax-exempt bonds). | |||||||
| EQUITY | Actual 2005 | ||||||
| 10 yr T-bond (2/17/06) | 4.98% | ||||||
| Risk premium | 5.00% | ||||||
| Market Cap (4/9/2006) | 3,440,000 | ||||||
| Beta | 0.5 | ||||||
| Ke | 7.4800% | ||||||
| WACC | 6.57% | ||||||
| CONTINUING VALUE | |||||||
| Assume WACC = ROIC due to competition. | |||||||
| 2011 NOPLAT | 204,327 | ||||||
| CV | 3,109,619 | ||||||
| FREE CASH FLOW PER SHARE | |||||||
| Actual 2005 | PF 2006 | PF 2007 | PF 2008 | PF 2009 | PF 2010 | Perpetuity | |
| FCF | (110,920) | (150,113) | (138,094) | (128,259) | (107,193) | (82,099) | |
| CV | 3,109,619 | ||||||
| Year to Present | 0 | 1 | 2 | 3 | 4 | 5 | 5 |
| PV of FCF AND CV | (110,920) | (140,857) | (121,590) | (105,968) | (83,103) | (59,724) | 2,262,122 |
| SUM of DISCOUNTED FCF AND CV | 1,639,959 | ||||||
| Excess cash and marketable securities | 1,936 | ||||||
| Total debt | 1,062,281 | ||||||
| EQUITY VALUE | 579,615 | ||||||
| ACTUAL 2005 # OF SHARES OUTSTANDING | 129,031,405 | ||||||
| FCF VALUE PER SHARE | $ 4.49 | ||||||
| BOOK VALUE PER SHARE (12/31/2005) | |||||||
| 2005 Total Asset BV | 2,626,725,000 | ||||||
| 2005 Total Liabilities BV | 1,813,251,000 | ||||||
| BV VALUE PER SHARE | $ 6.30 | ||||||
| RESIDUAL EARNINGS PER SHARE | |||||||
| Actual 2005 | PF 2006 | PF 2007 | PF 2008 | PF 2009 | PF 2010 | Perpetuity | |
| BV | 353,088 | ||||||
| RE | 44,134 | 51,918 | 58,312 | 63,932 | 69,031 | ||
| CV | 952,360 | ||||||
| Year to Present | 0 | 1 | 2 | 3 | 4 | 5 | 5 |
| PV of FCF AND CV | 41,063 | 44,943 | 46,965 | 47,908 | 48,129 | 663,992 | |
| SUM of BV, DISCOUNTED RE AND CV | 1,246,088 | ||||||
| Excess cash and marketable securities | 1,936 | ||||||
| EQUITY VALUE | 1,248,025 | ||||||
| ACTUAL 2005 # OF SHARES OUTSTANDING | 129,031,405 | ||||||
| RE VALUE PER SHARE | $ 9.67 | ||||||
| EARNINGS GROWTH PER SHARE | |||||||
| Actual 2005 | PF 2006 | PF 2007 | PF 2008 | PF 2009 | PF 2010 | Perpetuity | |
| EARNINGS | 105,628 | 114,058 | 124,247 | 133,915 | 143,416 | ||
| AEG | 8,802 | 7,320 | 5,854 | 5,019 | 4,449 | ||
| CV | 20,174 | ||||||
| Year to Present | 0 | 1 | 2 | 3 | 4 | 5 | |
| PV of FCF AND CV | 8,802 | 6,811 | 5,068 | 4,042 | 3,334 | 14,066 | |
| SUM of CAPITALIZED (BV, DISCOUNTED RE AND CV) | 563,127 | ||||||
| Excess cash and marketable securities | 353,088 | ||||||
| EQUITY VALUE | 916,215 | ||||||
| ACTUAL 2005 # OF SHARES OUTSTANDING | 129,031,405 | ||||||
| AEG VALUE PER SHARE | $ 7.10 | ||||||
| FINAL VALUATION | |||||||
| VALUE | WEIGHT | ||||||
| FREE CASH FLOW | $ 4.49 | 5% | $ 0.22 | ||||
| RESIDUAL EARNINGS | $ 9.67 | 5% | $ 0.48 | ||||
| EARNINGS GROWTH | $ 7.10 | 5% | $ 0.36 | ||||
| BOOK VALUE (12/31/05) | $ 6.30 | 0% | $ - 0 | ||||
| P/E MULTIPLIER | $ 26.60 | 85% | $ 22.61 | ||||
| $ 23.67 | |||||||
| WTR SHARE PRICE (04/09/2006) | $ 26.60 | ||||||
| OTHERS TARGET PRICE | |||||||
| Yahoo Finance | $ 28.00 | ||||||
| Janney Montgomery | $ 36.00 | ||||||
| HSBC | $ 28.00 |
RATIO
| APPENDIX F - VALUATION (CONT.) | ||||||||
| AQUA AMERICA, INC. AND SUBSIDIARIES | ||||||||
| VALUATION (CONT.) | ||||||||
| (In thousands of dollars, except per share amounts) | ||||||||
| CAPITALIZED LEASES | ||||||||
| Years | Operating Leases | |||||||
| 2005 | 3,390 | |||||||
| 2006 | 3,482 | |||||||
| 2007 | 3,033 | |||||||
| 2008 | 2,559 | |||||||
| 2009 | 1,218 | |||||||
| 2010 | 969 | |||||||
| Thereafter | 15,264 | |||||||
| TOTAL | 29,915 | |||||||
| Years | Operating Leases | Year to Present | PV | |||||
| 2005 | 3,390 | 0 | $3,390.00 | |||||
| 2006 | 3,482 | 1 | $3,292.98 | |||||
| 2007 | 3,033 | 2 | $2,712.65 | |||||
| 2008 | 2,559 | 3 | $2,164.47 | |||||
| 2009 | 1,218 | 4 | $974.29 | |||||
| 2010 | 969 | 5 | $733.04 | |||||
| 2011 | 954 | 6 | $682.52 | |||||
| 2012 | 954 | 7 | $645.47 | |||||
| 2013 | 954 | 8 | $610.43 | |||||
| 2014 | 954 | 9 | $577.29 | |||||
| 2015 | 954 | 10 | $545.95 | |||||
| 2016 | 954 | 11 | $516.32 | |||||
| 2017 | 954 | 12 | $488.29 | |||||
| 2018 | 954 | 13 | $461.78 | |||||
| 2019 | 954 | 14 | $436.71 | |||||
| 2020 | 954 | 15 | $413.01 | |||||
| 2021 | 954 | 16 | $390.59 | |||||
| 2022 | 954 | 17 | $369.39 | |||||
| 2023 | 954 | 18 | $349.33 | |||||
| 2024 | 954 | 19 | $330.37 | |||||
| 2025 | 954 | 20 | $312.44 | |||||
| 2026 | 954 | 21 | $295.48 | |||||
| PV at rate based on L.T. Debt rate is | ||||||||
| 5.74% | $20,692.80 | |||||||
| Implied interest expense | $ 1,187.77 | |||||||
| 2005 Lease (Rent) Expense | $ 3,390 | |||||||
| Fair Value | ||||||||
| Long-Term Debt (fixed rate) | 2006 | 2007 | 2008 | 2009 | 2010 | Thereafter | Total | December 31, 2005 |
| Weighted average interest rate | 24,645 | 30,959 | 23,651 | 6,672 | 53,884 | 763,272 | 903,083 | 950,479 |
| 5.74% | 5.64% | 5.63% | 5.72% | 5.44% | 5.35% | 5.74% |
SE ACTIVITY
| APPENDIX F - VALUATION (CONT.) | ||||||
| AQUA AMERICA, INC. AND SUBSIDIARIES | ||||||
| VALUATION | ||||||
| FORWARD P/E ESTIMATION | ||||||
| EPS Quarter | Q1 | Forward | ||||
| Q1 | Q2 | Q3 | Q4 | Price | P/E | |
| 1998 | $ 0.077 | $ 0.138 | $ 0.131 | $ 0.088 | 28.24 | 65.07 |
| 1999 | $ 0.004 | $ 0.111 | $ 0.134 | $ 0.092 | 27.92 | 81.88 |
| 2000 | $ 0.096 | $ 0.127 | $ 0.154 | $ 0.110 | 19.93 | 40.92 |
| 2001 | $ 0.115 | $ 0.134 | $ 0.168 | $ 0.108 | 22.87 | 43.56 |
| 2002 | $ 0.102 | $ 0.132 | $ 0.192 | $ 0.162 | 22.72 | 38.64 |
| 2003 | $ 0.120 | $ 0.132 | $ 0.198 | $ 0.150 | 20.68 | 34.47 |
| 2004 | $ 0.128 | $ 0.143 | $ 0.195 | $ 0.180 | 22.12 | 34.24 |
| 2005 | $ 0.170 | $ 0.218 | $ 0.173 | $ 0.150 | 24.19 | 34.02 |
| 2006 | $ 0.143 | $ 0.216 | $ 0.256 | $ 0.194 | 26.60 | 32.84 |
SE ACTIVITY ANALYSIS
| APPENDIX G - RATIO | ||||||||||||||||
| AQUA AMERICA, INC. AND SUBSIDIARIES | ||||||||||||||||
| RATIO | ||||||||||||||||
| 31-Dec | 31-Dec | 31-Dec | 31-Dec | 31-Dec | 31-Dec | 31-Dec | 31-Dec | 2006 | 2006 | |||||||
| 1998 | 1999 | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | PF 2006 | PF 2007 | PF 2008 | PF 2009 | PF 2010 | PF2011 | INDUSTRY | SECTOR | |
| LIQUIDITY/SOLVENCY | ||||||||||||||||
| Current Ratio (1) | 0.444 | 0.324 | 0.380 | 0.345 | 0.313 | 0.362 | 0.425 | 0.342 | 0.248 | 0.187 | 0.157 | 0.139 | 0.127 | 0.120 | 0.990 | 0.970 |
| Quick Ratio | 0.363 | 0.267 | 0.314 | 0.283 | 0.281 | 0.315 | 0.367 | 0.283 | 0.699 | 0.699 | 0.699 | 0.699 | 0.699 | 0.699 | 0.410 | 0.510 |
| Receivables Turnover | 5.889 | 5.438 | 5.142 | 5.390 | 5.367 | 5.790 | 6.949 | 7.195 | 6.365 | 6.338 | 6.310 | 6.282 | 6.226 | 9.780 | 7.880 | |
| Inventory Turnover | 25.306 | 24.516 | 25.434 | 26.160 | 27.049 | 27.989 | 27.168 | 26.205 | 26.413 | 26.300 | 26.186 | 26.070 | 25.836 | 10.010 | 15.010 | |
| Payables Turnover | 3.987 | 4.530 | 4.633 | 4.010 | 4.437 | 5.305 | 4.420 | 4.010 | 4.397 | 4.379 | 4.360 | 4.340 | 4.301 | |||
| # Days Receivables | 62 | 67 | 71 | 68 | 68 | 63 | 53 | 51 | 57 | 58 | 58 | 58 | 59 | 37 | 46 | |
| # Days Inventory | 14 | 15 | 14 | 14 | 13 | 13 | 13 | 14 | 14 | 14 | 14 | 14 | 14 | 36 | 24 | |
| # Days Payables | 92 | 81 | 79 | 91 | 82 | 69 | 83 | 91 | 83 | 83 | 84 | 84 | 85 | |||
| Cash Conversion Cycle | -15.132 | 1.431 | 6.544 | -9.363 | -0.765 | 7.282 | -16.625 | -26.363 | -11.839 | -11.890 | -11.942 | -11.995 | -12.104 | |||
| FINANCIAL RISK | ||||||||||||||||
| Debt/Equity Ratio | 1.069 | 1.155 | 1.093 | 1.122 | 1.251 | 1.117 | 1.115 | 1.136 | 1.343 | 1.265 | 1.195 | 1.127 | 1.064 | 1.001 | 1.140 | 2.440 |
| Total Debt Ratio | 0.695 | 0.712 | 0.694 | 0.696 | 0.713 | 0.682 | 0.682 | 0.693 | 0.736 | 0.750 | 0.759 | 0.766 | 0.771 | 0.771 | ||
| Interest Coverage Ratio | 3.361 | 2.893 | 3.158 | 3.486 | 3.705 | 3.613 | 3.714 | 3.781 | 3.428 | 3.276 | 3.201 | 3.139 | 3.097 | 3.067 | 3.570 | 4.000 |
| Leverage | 2.894 | 2.974 | 2.870 | 2.865 | 3.022 | 2.789 | 2.860 | 2.931 | 3.195 | 3.338 | 3.452 | 3.538 | 3.596 | 3.601 | ||
| OPERATING PERFORMANCE | ||||||||||||||||
| Capital Turnover | 0.245 | 0.235 | 0.221 | 0.226 | 0.216 | 0.200 | 0.206 | 0.208 | 0.202 | 0.202 | 0.202 | 0.202 | 0.202 | 0.202 | ||
| Total Asset Turnover | 0.211 | 0.203 | 0.207 | 0.197 | 0.194 | 0.200 | 0.199 | 0.202 | 0.202 | 0.202 | 0.201 | 0.200 | 0.198 | |||
| Net Fixed Asset Turnover | 0.239 | 0.230 | 0.235 | 0.226 | 0.222 | 0.227 | 0.228 | 0.231 | 0.231 | 0.230 | 0.229 | 0.228 | 0.226 | |||
| Gross Profit Margin | 0.601 | 0.616 | 0.629 | 0.636 | 0.634 | 0.617 | 0.597 | 0.598 | 0.616 | 0.616 | 0.616 | 0.616 | 0.616 | 0.616 | 0.261 | 0.325 |
| Operating Profit Margin | 0.396 | 0.393 | 0.426 | 0.437 | 0.436 | 0.418 | 0.401 | 0.398 | 0.435 | 0.431 | 0.431 | 0.430 | 0.429 | 0.426 | 0.124 | 0.150 |
| Net Profit Margin | 0.180 | 0.145 | 0.193 | 0.196 | 0.209 | 0.193 | 0.181 | 0.183 | 0.190 | 0.185 | 0.183 | 0.181 | 0.179 | 0.177 | 0.055 | 0.074 |
| Industry information source: Factiva, Yahoo Finance, MSN Finance | ||||||||||||||||
| APPENDIX H - DUPONT MODEL | ||||||||||||||||
| AQUA AMERICA, INC. AND SUBSIDIARIES | ||||||||||||||||
| DUPONT MODEL | ||||||||||||||||
| 31-Dec | 31-Dec | 31-Dec | 31-Dec | 31-Dec | 31-Dec | 31-Dec | 31-Dec | 2006 | 2006 | |||||||
| 1998 | 1999 | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | PF 2006 | PF 2007 | PF 2008 | PF 2009 | PF 2010 | PF2011 | INDUSTRY | SECTOR | |
| Return on Capital | 4.42% | 3.40% | 4.27% | 4.43% | 4.51% | 3.85% | 3.74% | 3.82% | 3.83% | 3.73% | 3.69% | 3.65% | 3.63% | 3.59% | ||
| Return on Equity | 12.79% | 10.10% | 12.26% | 12.69% | 13.62% | 10.74% | 10.69% | 11.21% | 12.23% | 12.44% | 12.75% | 12.93% | 13.04% | 12.91% | 10.000 | 10.970 |
| Retention rate | 44% | 44% | 44% | 44% | 44% | 44% | 44% | 44% | 47% | 47% | 47% | 46% | 45% | 43% | ||
| Sustainable Growth Rate | 5.63% | 4.44% | 5.39% | 5.58% | 5.99% | 4.73% | 4.70% | 4.93% | 5.78% | 5.80% | 5.94% | 5.93% | 5.85% | 5.50% | ||
| Industry information source: Factiva, Yahoo Finance, MSN Finance | ||||||||||||||||
| NOTE: | ||||||||||||||||
| (1) Current ratio is skewed and reliable estimation on the pro forma schedule as all the debt is added into plug of short-term debt. |
FS CAPITAL
| APPENDIX I - ACTIVITY OF COMMON STOCKHOLDERS' EQUITY | ||||||
| AQUA AMERICA, INC. AND SUBSIDIARIES | ||||||
| ACTIVITY OF COMMON STOCKHOLDERS' EQUITY | ||||||
| (In thousands of dollars, except per share amounts) | ||||||
| Common | Treasury | Capital in excess | Retained | Accumulated Other | Total | |
| Stock | Stock | of par value | earnings | Comprehensive Income | ||
| BALANCE AT DECEMBER 31, 1997 | 19,744 | (5,970) | 211,182 | 76,270 | - 0 | 301,226 |
| Net Income | - 0 | - 0 | - 0 | 44,820 | - 0 | 44,820 |
| Other comprehensive income | - 0 | - 0 | - 0 | - 0 | - 0 | - 0 |
| Dividends | - 0 | - 0 | - 0 | (29,407) | - 0 | (29,407) |
| Sale of stock | 761 | 293 | 30,495 | - 0 | - 0 | 31,549 |
| Repurchase of stock | - 0 | (3,801) | - 0 | - 0 | - 0 | (3,801) |
| Equity compensation plan | 12 | - 0 | 491 | - 0 | - 0 | 503 |
| Exercise of stock options | 100 | - 0 | 2,289 | - 0 | - 0 | 2,389 |
| BALANCE AT DECEMBER 31, 1998 | 20,617 | (9,478) | 244,457 | 91,683 | - 0 | 347,279 |
| Net Income | - 0 | - 0 | - 0 | 36,275 | - 0 | 36,275 |
| Other comprehensive income | - 0 | - 0 | - 0 | - 0 | 2,020 | 2,020 |
| Dividends | - 0 | - 0 | - 0 | (26,425) | - 0 | (26,425) |
| Sale of stock | 114 | 354 | 4,807 | - 0 | - 0 | 5,275 |
| Repurchase of stock | - 0 | (2,146) | - 0 | - 0 | - 0 | (2,146) |
| Equity compensation plan | 2 | - 0 | 98 | - 0 | - 0 | 100 |
| Exercise of stock options | 81 | - 0 | 2,078 | - 0 | - 0 | 2,159 |
| BALANCE AT DECEMBER 31, 1999 | 20,814 | (11,270) | 251,440 | 101,533 | 2,020 | 364,537 |
| Net Income | - 0 | - 0 | - 0 | 52,784 | - 0 | 52,784 |
| Other comprehensive income | - 0 | - 0 | - 0 | - 0 | 908 | 908 |
| Reclassification adjustment for gains reported in net income | - 0 | - 0 | - 0 | - 0 | (2,002) | (2,002) |
| Dividends | - 0 | - 0 | - 0 | (30,406) | - 0 | (30,406) |
| Stock split | 5,319 | - 0 | (5,319) | - 0 | - 0 | - 0 |
| Stock issued for acquisition | 228 | - 0 | 8,067 | - 0 | - 0 | 8,295 |
| Sale of stock | 803 | 307 | 34,318 | - 0 | - 0 | 35,428 |
| Repurchase of stock | - 0 | (4,383) | - 0 | - 0 | - 0 | (4,383) |
| Equity compensation plan | 12 | - 0 | 545 | - 0 | - 0 | 557 |
| Exercise of stock options | 84 | - 0 | 1,962 | - 0 | - 0 | 2,046 |
| BALANCE AT DECEMBER 31, 2000 | 27,260 | (15,346) | 291,013 | 123,911 | 926 | 427,764 |
| Net Income | - 0 | - 0 | - 0 | 60,005 | - 0 | 60,005 |
| Other comprehensive income | - 0 | - 0 | - 0 | - 0 | 39 | 39 |
| Reclassification adjustment for gains reported in net income | - 0 | - 0 | - 0 | - 0 | (239) | (239) |
| Dividends | - 0 | - 0 | - 0 | (34,234) | - 0 | (34,234) |
| Stock split | 6,829 | - 0 | (6,829) | - 0 | - 0 | - 0 |
| Stock issued for acquisition (414,638 shares) | 133 | - 0 | 5,228 | - 0 | - 0 | 5,361 |
| Sale of stock | 128 | 672 | 5,783 | - 0 | - 0 | 6,583 |
| Repurchase of stock | - 0 | (2,493) | - 0 | - 0 | - 0 | (2,493) |
| Equity compensation plan | 3 | - 0 | 141 | - 0 | - 0 | 144 |
| Exercise of stock options | 297 | - 0 | 6,642 | - 0 | - 0 | 6,939 |
| Employee stock plans tax benefit | - 0 | - 0 | 2,061 | - 0 | - 0 | 2,061 |
| BALANCE AT DECEMBER 31, 2001 | 34,650 | (17,167) | 304,039 | 149,682 | 726 | 471,930 |
| Net Income | - 0 | - 0 | - 0 | 67,154 | - 0 | 67,154 |
| Other comprehensive income | - 0 | - 0 | - 0 | - 0 | 104 | 104 |
| Reclassification adjustment for gains reported in net income | - 0 | - 0 | - 0 | - 0 | (767) | (767) |
| Dividends | - 0 | - 0 | - 0 | (36,789) | - 0 | (36,789) |
| Stock split | - 0 | - 0 | - 0 | - 0 | - 0 | - 0 |
| Stock issued for acquisition (238,219 shares) | 71 | - 0 | 2,674 | - 0 | - 0 | 2,745 |
| Sale of stock (448,593 shares) | 161 | 855 | 6,220 | - 0 | - 0 | 7,236 |
| Repurchase of stock (1,274,680 shares) | - 0 | (24,109) | - 0 | - 0 | - 0 | (24,109) |
| Equity compensation plan (37,031 shares) | 15 | - 0 | 598 | - 0 | - 0 | 613 |
| Exercise of stock options (339,178 shares) | 137 | - 0 | - 0 | 3,237 | - 0 | 3,374 |
| Employee stock plans tax benefit | - 0 | - 0 | 1,103 | - 0 | - 0 | 1,103 |
| BALANCE AT DECEMBER 31, 2002 | 35,034 | (40,421) | 314,634 | 183,284 | 63 | 492,594 |
| Net Income | - 0 | - 0 | - 0 | 70,785 | - 0 | 70,785 |
| Other comprehensive income | - 0 | - 0 | - 0 | - 0 | 455 | 455 |
| Reclassification adjustment for gains reported in net income | - 0 | - 0 | - 0 | - 0 | (347) | (347) |
| Dividends | - 0 | - 0 | - 0 | (39,917) | - | (39,917) |
| Stock split | 9,244 | - 0 | (9,244) | - 0 | - 0 | - 0 |
| Stock issued for acquisition | - 0 | - 0 | - 0 | - 0 | - 0 | - 0 |
| Sale of stock (9,745,160 shares) | 2,168 | 29,163 | 99,031 | - 0 | - 0 | 130,362 |
| Repurchase of stock (60,646 shares) | - 0 | (1,353) | - 0 | - 0 | - 0 | (1,353) |
| Equity compensation plan (26,875 shares) | 8 | - 0 | 344 | - 0 | - 0 | 352 |
| Exercise of stock options (579,777 shares) | 181 | - 0 | 4,283 | - 0 | - 0 | 4,464 |
| Employee stock plans tax benefit | - 0 | - 0 | 723 | - 0 | - 0 | 723 |
| BALANCE AT DECEMBER 31, 2003 | 46,635 | (12,611) | 409,771 | 214,152 | 171 | 658,118 |
| Net Income | - 0 | - 0 | - 0 | 80,007 | - 0 | 80,007 |
| Other comprehensive income | - 0 | - 0 | - 0 | - 0 | (1,683) | (1,683) |
| Reclassification adjustment for gains reported in net income | - 0 | - 0 | - 0 | - 0 | (230) | (230) |
| Dividends | - 0 | - 0 | - 0 | (45,807) | - 0 | (45,807) |
| Stock split | - 0 | - 0 | - 0 | - 0 | - 0 | - 0 |
| Stock issued for acquisition | - 0 | - 0 | - 0 | - 0 | - 0 | - 0 |
| Sale of stock (3,181,203 shares) | 1,170 | 991 | 48,971 | - 0 | - 0 | 51,132 |
| Repurchase of stock (51,808 shares) | - 0 | (1,082) | - 0 | - 0 | - 0 | (1,082) |
| Equity compensation plan (45,535 shares) | 17 | - 0 | 692 | - 0 | - 0 | 709 |
| Exercise of stock options (570,064 shares) | 214 | - 0 | 4,847 | - 0 | - 0 | 5,061 |
| Employee stock plans tax benefit | - 0 | - 0 | 1,006 | 1,006 | ||
| BALANCE AT DECEMBER 31, 2004 | 48,036 | (12,702) | 465,287 | 248,352 | (1,742) | 747,231 |
| Net Income | - 0 | - 0 | - 0 | 91,156 | - 0 | 91,156 |
| Other comprehensive income | - 0 | - 0 | - 0 | - 0 | (1,340) | (1,340) |
| Reclassification adjustment for gains reported in net income | - 0 | - 0 | - 0 | - 0 | - 0 | - 0 |
| Dividends | - 0 | - 0 | - 0 | (51,139) | - 0 | (51,139) |
| Stock split | 16,095 | - 0 | (16,095) | - 0 | - 0 | - 0 |
| Stock issued for acquisition (24,684 shares) | 12 | - 0 | 663 | - 0 | - 0 | 675 |
| Sale of stock (471,682 shares) | 161 | 1,537 | 7,943 | - 0 | - 0 | 9,641 |
| Repurchase of stock (56,930 shares) | - 0 | (1,749) | - 0 | - 0 | - 0 | (1,749) |
| Equity compensation plan (37,751 shares) | 14 | - 0 | 708 | - 0 | (722) | - 0 |
| Exercise of stock options (1,327,717 shares) | 511 | - 0 | 11,264 | - 0 | - 0 | 11,775 |
| Employee stock plans tax benefit | - 0 | - 0 | 5,501 | - 0 | - 0 | 5,501 |
| Amortization of unearned compensation | - 0 | - 0 | - 0 | - 0 | 172 | 172 |
| BALANCE AT DECEMBER 31, 2005 | 64,829 | (12,914) | 475,271 | 288,369 | (3,632) | 811,923 |
PF 2006
| APPENDIX J - NUMBER OF SHARES ANALYSIS | ||||||||||||||
| AQUA AMERICA, INC. AND SUBSIDIARIES | ||||||||||||||
| NUMBER OF SHARES ANALYSIS | ||||||||||||||
| (in thousands of shares) | ||||||||||||||
| 31-Dec | 31-Dec | 31-Dec | 31-Dec | 31-Dec | 31-Dec | 31-Dec | 31-Dec | |||||||
| 1998 | 1999 | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | PF 2006 | PF 2007 | PF 2008 | PF 2009 | PF 2010 | PF 2011 | |
| Beg. # Shares outstanding | 105,990 | 106,800 | 111,830 | 113,980 | 113,190 | 113,190 | 123,482 | 127,227 | 129,031 | 130,401 | 131,771 | 133,141 | 134,511 | 135,881 |
| Stock issued for acquisition | 238 | - 0 | - 0 | 25 | - 0 | - 0 | - 0 | - 0 | - 0 | - 0 | ||||
| Sale of stock | 449 | 9,745 | 3,181 | 472 | 700 | 700 | 700 | 700 | 700 | 700 | ||||
| Repurchase of stock | (1,275) | (61) | (52) | (57) | (50) | (50) | (50) | (50) | (50) | (50) | ||||
| Equity compensation plan | 37 | 27 | 46 | 38 | 40 | 40 | 40 | 40 | 40 | 40 | ||||
| Exercise of stock options | 339 | 580 | 570 | 1,328 | 700 | 700 | 700 | 700 | 700 | 700 | ||||
| Others | 212 | (31) | (15) | (15) | (20) | (20) | (20) | (20) | (20) | (20) | ||||
| End # Shares outstanding | 105,990 | 106,800 | 111,830 | 113,980 | 113,190 | 123,482 | 127,227 | 129,031 | 130,401 | 131,771 | 133,141 | 134,511 | 135,881 | 137,251 |
| Note: The end # of shares will be used in proforma calculations. A comparison is made with Bloomberg. A higher number of shares will be used between 2002 and 2005 period to arrive at conservative figures. | ||||||||||||||
| Prior to 2002, share activities figures (repurchase, sale, etc.) are not available. Number of shares are adjusted to reflect stock splits. | ||||||||||||||
| APPENDIX K - DIVIDEND PER SHARE | ||||||||||||||
| AQUA AMERICA, INC. AND SUBSIDIARIES | ||||||||||||||
| DIVIDEND PER SHARE | ||||||||||||||
| (In thousands of shares except of per share figure) | ||||||||||||||
| 31-Dec | 31-Dec | 31-Dec | 31-Dec | 31-Dec | 31-Dec | 31-Dec | 31-Dec | |||||||
| 1998 | 1999 | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | PF 2006 | PF 2007 | PF 2008 | PF 2009 | PF 2010 | PF 2011 | |
| Dividend per share (adjusted for stock splits) | $ 0.2775 | $ 0.2474 | $ 0.2719 | $ 0.3004 | $ 0.3250 | $ 0.3233 | $ 0.3600 | $ 0.3963 | $ 0.4276 | $ 0.4618 | $ 0.4988 | $ 0.5387 | $ 0.5817 | $ 0.6283 |
| # Shares (adjusted for stock split, in thousands of share, source: Bloomberg) | 105,990 | 106,800 | 111,830 | 113,980 | 113,190 | 123,482 | 127,227 | 129,031 | 130,401 | 131,771 | 133,141 | 134,511 | 135,881 | 137,251 |
| DIVIDEND GROWTH | -10.82% | 9.89% | 10.47% | 8.21% | -0.54% | 11.38% | 10.08% | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | |
| SHARES OUTSTANDING GROWTH | 0.76% | 4.71% | 1.92% | -0.69% | 9.09% | 3.03% | 1.42% | 1.06% | 1.05% | 1.04% | 1.03% | 1.02% | 1.01% | |
| Note: Effective December 2005, WTR annual dividend rate will be increased to $0.4276 per share. We will assume an annual dividend growth of 8% and an annual outstanding shareholder's growth of 2.89%. | ||||||||||||||
| APPENDIX L - NEW SHARES AND REPURCHASED SHARES | ||||||||||||||
| AQUA AMERICA, INC. AND SUBSIDIARIES | ||||||||||||||
| NEW SHARES AND REPURCHASE SHARES | ||||||||||||||
| (In thousands of dollars) | ||||||||||||||
| 31-Dec | 31-Dec | 31-Dec | 31-Dec | 31-Dec | 31-Dec | 31-Dec | 31-Dec | |||||||
| 1998 | 1999 | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | PF 2006 | PF 2007 | PF 2008 | PF 2009 | PF 2010 | PF 2011 | |
| Stock price (closing price, source: Yahoo Finance) | $ 28.40 | $ 20.49 | $ 24.50 | $ 22.55 | $ 20.60 | $ 22.10 | $ 24.59 | $ 27.30 | $ 28.00 | $ 28.50 | $ 29.00 | $ 29.50 | $ 30.00 | $ 30.05 |
| Stock issued for acquisition @ stock price | 4,907 | - 0 | - 0 | 674 | - 0 | - 0 | - 0 | - 0 | - 0 | - 0 | ||||
| Sale of stock @ stock price | 9,241 | 215,368 | 78,226 | 12,877 | 19,600 | 19,950 | 20,300 | 20,650 | 21,000 | 21,035 | ||||
| Repurchase of stock @ stock price | (26,258) | (1,340) | (1,274) | (1,554) | (1,400) | (1,425) | (1,450) | (1,475) | (1,500) | (1,503) | ||||
| Equity compensation plan @ $11 per share | 763 | 594 | 1,120 | 1,031 | 1,120 | 1,140 | 1,160 | 1,180 | 1,200 | 1,202 | ||||
| Exercise of stock options @ $11 per share | 6,987 | 12,813 | 14,018 | 36,247 | 19,600 | 19,950 | 20,300 | 20,650 | 21,000 | 21,035 | ||||
| Others @ stock price | 4,367 | (685) | (369) | (410) | (560) | (570) | (580) | (590) | (600) | (601) | ||||
| Net SE Change | 7 | 226,750 | 91,721 | 48,864 | 38,360 | 39,045 | 39,730 | 40,415 | 41,100 | 41,169 |
PF 2007
| APPENDIX M - CONSOLIDATED HISTORICAL FINANCIAL STATEMENTS | ||||||||||||||
| AQUA AMERICA, INC. AND SUBSIDIARIES | ||||||||||||||
| CONSOLIDATED HISTORICAL FINANCIAL STATEMENTS | ||||||||||||||
| (In thousands of dollars, except per share amounts) | ||||||||||||||
| 31-Dec | 31-Dec | 31-Dec | 31-Dec | 31-Dec | 31-Dec | 31-Dec | 31-Dec | |||||||
| STATEMENTS OF INCOME | 1998 | 1999 | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | PF 2006 | PF 2007 | PF 2008 | PF 2009 | PF 2010 | PF 2011 |
| OPERATING REVENUES | 250,771 | 257,326 | 274,014 | 307,280 | 322,028 | 367,233 | 442,039 | 496,779 | 556,392 | 617,596 | 679,355 | 740,497 | 799,737 | 847,721 |
| COST AND EXPENSES | ||||||||||||||
| Operations and maintenance | 100,139 | 98,758 | 101,741 | 111,885 | 117,735 | 140,602 | 178,345 | 203,088 | 213,710 | 237,218 | 260,940 | 284,425 | 307,179 | 325,610 |
| Depreciation | 27,189 | 30,612 | 32,271 | 37,979 | 41,424 | 48,522 | 54,564 | 60,747 | 61,559 | 68,290 | 75,802 | 83,382 | 90,887 | 98,158 |
| Amortization | 2,275 | 1,291 | 1,829 | 2,189 | 2,898 | 2,941 | 4,300 | 4,741 | 4,073 | 4,454 | 4,944 | 5,438 | 5,928 | 6,402 |
| Taxes other than income taxes | 21,930 | 21,833 | 22,520 | 20,887 | 19,467 | 21,607 | 27,596 | 31,696 | 34,959 | 41,261 | 44,554 | 48,534 | 52,310 | 56,021 |
| Restructuring costs (recovery) | - 0 | 3,787 | (1,136) | - 0 | - 0 | - 0 | - 0 | - 0 | - 0 | - 0 | - 0 | - 0 | - 0 | - 0 |
| OPERATING INCOME | 99,238 | 101,045 | 116,789 | 134,340 | 140,504 | 153,561 | 177,234 | 196,507 | 242,092 | 266,372 | 293,115 | 318,718 | 343,433 | 361,530 |
| OTHER EXPENSE (INCOME) | ||||||||||||||
| Interest expense, net | 31,888 | 33,698 | 40,360 | 39,859 | 40,396 | 44,662 | 48,679 | 52,062 | 70,620 | 81,315 | 91,565 | 101,534 | 110,881 | 117,878 |
| Allowance for funds used during construction | (1,103) | (1,902) | (2,688) | (1,222) | (1,389) | (2,127) | (2,304) | (2,447) | (3,288) | (3,650) | (4,015) | (4,376) | (4,726) | (5,010) |
| Gain on sale of water systems | (6,680) | - 0 | - 0 | - 0 | (5,676) | - 0 | - 0 | - 0 | - 0 | - 0 | - 0 | - 0 | - 0 | - 0 |
| Gain on sale of other assets | - 0 | - 0 | (5,076) | (3,384) | (2,079) | (5,692) | (1,272) | (1,177) | - 0 | - 0 | - 0 | - 0 | - 0 | - 0 |
| Merger transaction costs (recovery) | - 0 | 6,334 | (2,905) | - 0 | - 0 | - 0 | - 0 | - 0 | - 0 | - 0 | - 0 | - 0 | - 0 | - 0 |
| INCOME BEFORE INCOME TAXES | 75,133 | 62,915 | 87,098 | 99,087 | 109,252 | 116,718 | 132,131 | 148,069 | 174,760 | 188,707 | 205,565 | 221,559 | 237,279 | 248,662 |
| Provision for income taxes | 30,118 | 26,531 | 34,105 | 38,976 | 42,046 | 45,923 | 52,124 | 56,913 | 69,132 | 74,649 | 81,317 | 87,645 | 93,863 | 98,366 |
| NET INCOME | 45,015 | 36,384 | 52,993 | 60,111 | 67,206 | 70,795 | 80,007 | 91,156 | 105,628 | 114,058 | 124,247 | 133,915 | 143,416 | 150,296 |
| Dividends on preferred stock | 195 | 109 | 209 | 106 | 52 | 10 | - 0 | - 0 | - 0 | - 0 | - 0 | - 0 | - 0 | - 0 |
| NET INCOME AVAILABLE FOR COMMON SHAREHOLDERS | 44,820 | 36,275 | 52,784 | 60,005 | 67,154 | 70,785 | 80,007 | 91,156 | 105,628 | 114,058 | 124,247 | 133,915 | 143,416 | 150,296 |
| Dividends on common stock | 29,407 | 26,425 | 30,406 | 34,234 | 36,789 | 39,917 | 45,807 | 51,139 | 55,760 | 60,853 | 66,405 | 72,455 | 79,048 | 86,233 |
| RETAINED EARNINGS | 15,413 | 9,850 | 22,378 | 25,771 | 30,365 | 30,868 | 34,200 | 40,017 | 49,869 | 53,205 | 57,843 | 61,460 | 64,368 | 64,063 |
| BALANCE SHEET | ||||||||||||||
| Excess cash | 3,232 | - 0 | - 0 | - 0 | - 0 | 3,412 | 5,351 | 1,936 | - 0 | - 0 | - 0 | - 0 | - 0 | - 0 |
| 2% | ||||||||||||||
| Cash and cash equivalents | 5,015 | 4,658 | 4,087 | 1,010 | 5,915 | 7,345 | 8,841 | 9,936 | 2,671 | 2,964 | 3,261 | 3,554 | 3,839 | 4,069 |
| Account receivables and unbilled revenues, net | 40,768 | 44,399 | 50,242 | 56,331 | 57,680 | 62,320 | 64,538 | 62,690 | 91,972 | 102,089 | 112,297 | 122,404 | 132,197 | 140,128 |
| Inventory, materials and supplies | 3,857 | 3,948 | 4,352 | 4,446 | 4,555 | 5,841 | 6,903 | 7,798 | 8,513 | 9,449 | 10,394 | 11,330 | 12,236 | 12,970 |
| Prepayments and other current assets | 7,026 | 6,520 | 7,054 | 8,085 | 2,758 | 5,051 | 5,570 | 7,596 | 10,905 | 12,105 | 13,315 | 14,514 | 15,675 | 16,615 |
| TOTAL CURRENT ASSETS | 56,666 | 59,525 | 65,735 | 69,872 | 70,908 | 80,557 | 85,852 | 88,020 | 114,060 | 126,607 | 139,268 | 151,802 | 163,946 | 173,783 |
| Accounts payable | 25,248 | 24,286 | 20,635 | 27,667 | 31,058 | 32,321 | 34,915 | 55,455 | 51,132 | 56,757 | 62,433 | 68,052 | 73,496 | 77,906 |
| Accrued interest | 8,406 | 8,994 | 10,199 | 10,199 | 9,269 | 11,126 | 12,029 | 13,052 | 17,471 | 19,393 | 21,332 | 23,252 | 25,112 | 26,618 |
| Accrued taxes | 14,382 | 12,689 | 15,815 | 22,865 | 14,500 | 16,779 | 8,975 | 1,111 | 24,481 | 27,174 | 29,892 | 32,582 | 35,188 | 37,300 |
| Other accrued liabilities | 20,462 | 22,581 | 21,310 | 17,301 | 22,326 | 35,930 | 33,506 | 30,571 | 42,286 | 46,937 | 51,631 | 56,278 | 60,780 | 64,427 |
| TOTAL CURRENT LIABILITIES | 68,498 | 68,550 | 67,959 | 78,032 | 77,153 | 96,156 | 89,425 | 100,189 | 135,370 | 150,261 | 165,287 | 180,163 | 194,576 | 206,251 |
| WORKING CAPITAL | (11,832) | (9,025) | (2,224) | (8,160) | (6,245) | (15,599) | (3,573) | (12,169) | (21,310) | (23,654) | (26,019) | (28,361) | (30,630) | (32,468) |
| Property, plant and equipment, at cost | 1,248,621 | 1,393,027 | 1,536,162 | 1,677,061 | 1,836,892 | 2,302,304 | 2,626,151 | 2,900,585 | 3,144,285 | 3,490,157 | 3,839,172 | 4,184,698 | 4,519,474 | 4,790,642 |
| Less: Accumulated Depreciation | 232,427 | 257,663 | 284,735 | 308,946 | 350,189 | 478,013 | 556,339 | 620,635 | 615,022 | 682,675 | 750,942 | 818,527 | 884,009 | 937,050 |
| TOTAL FIXED ASSETS | 1,016,194 | 1,135,364 | 1,251,427 | 1,368,115 | 1,486,703 | 1,824,291 | 2,069,812 | 2,279,950 | 2,529,263 | 2,807,482 | 3,088,230 | 3,366,171 | 3,635,465 | 3,853,592 |
| Regulatory assets | 57,697 | 58,287 | 67,470 | 79,669 | 92,313 | 98,761 | 122,935 | 130,953 | 143,215 | 158,969 | 174,866 | 190,604 | 205,852 | 218,203 |
| Deferred charges an other assets, net | 22,944 | 27,629 | 25,129 | 22,915 | 23,391 | 34,277 | 34,106 | 37,061 | 47,516 | 52,743 | 58,017 | 63,238 | 68,298 | 72,395 |
| Funds restricted to construction activity | - 0 | - 0 | 3,962 | 19,768 | 43,754 | 28,438 | 17,196 | 68,625 | 39,618 | 43,976 | 48,374 | 52,727 | 56,945 | 60,362 |
| Goodwill | - 0 | - 0 | - 0 | - 0 | - 0 | - 0 | 20,122 | 20,180 | 20,180 | 20,180 | 20,180 | 20,180 | 20,180 | 20,180 |
| TOTAL OTHER ASSETS | 80,641 | 85,916 | 96,561 | 122,352 | 159,458 | 161,476 | 194,359 | 256,819 | 250,529 | 275,868 | 301,437 | 326,750 | 351,275 | 371,141 |
| CAPITAL | 1,088,235 | 1,212,255 | 1,345,764 | 1,482,307 | 1,639,916 | 1,973,580 | 2,265,949 | 2,526,536 | 2,758,483 | 3,059,696 | 3,363,647 | 3,664,559 | 3,956,110 | 4,192,266 |
| Current portion of long-term debt (short term debt) | 2,981 | 12,194 | 3,943 | 14,935 | 34,265 | 39,386 | 50,195 | 24,645 | - 0 | - 0 | - 0 | - 0 | - 0 | - 0 |
| SHORT TERM DEBT (Loans Payable) | 63,550 | 103,069 | 100,994 | 109,668 | 115,113 | 96,459 | 74,810 | 138,505 | 324,539 | 527,578 | 723,214 | 914,159 | 1,094,723 | 1,236,096 |
| Long-term debt, excluding current portion | 374,374 | 413,752 | 468,769 | 516,520 | 582,910 | 696,666 | 784,461 | 878,438 | 853,793 | 829,148 | 804,503 | 779,858 | 755,213 | 730,568 |
| Deferred income taxes and investment tax credits | 126,809 | 136,528 | 151,718 | 167,577 | 187,300 | 190,395 | 223,887 | 250,346 | 305,899 | 330,313 | 359,820 | 387,817 | 415,331 | 435,258 |
| Customers' advances for construction | 57,781 | 59,494 | 58,718 | 59,886 | 69,790 | 72,500 | 73,095 | 74,828 | 111,334 | 123,581 | 135,939 | 148,173 | 160,027 | 169,629 |
| Regulatory liabilities | - 0 | - 0 | - 0 | - 0 | - 0 | - 0 | 11,942 | 11,751 | 3,351 | 3,720 | 4,092 | 4,460 | 4,817 | 5,106 |
| Other | 8,735 | 8,434 | 9,109 | 9,204 | 13,330 | 9,419 | 21,283 | 31,969 | 21,588 | 23,963 | 26,359 | 28,731 | 31,030 | 32,892 |
| Contributions in aid of construction | 100,917 | 109,883 | 120,166 | 130,684 | 143,939 | 209,725 | 277,808 | 302,580 | 274,635 | 304,845 | 335,330 | 365,509 | 394,750 | 418,435 |
| TOTAL OTHER LIABILITIES | 668,616 | 728,091 | 808,480 | 883,871 | 997,269 | 1,178,705 | 1,392,476 | 1,549,912 | 1,570,601 | 1,615,569 | 1,666,042 | 1,714,549 | 1,761,169 | 1,791,887 |
| STOCKHOLDER'S EQUITY | ||||||||||||||
| Common stock at $0.50 par value | 20,617 | 20,814 | 27,260 | 34,650 | 35,034 | 46,635 | 48,036 | 64,829 | ||||||
| Capital in excess of par value | 244,457 | 251,440 | 291,013 | 304,039 | 317,871 | 413,008 | 468,524 | 478,508 | ||||||
| Retained earnings | 91,683 | 101,533 | 123,911 | 149,682 | 180,047 | 210,915 | 245,115 | 285,132 | ||||||
| Treasury stock at cost | (9,478) | (11,270) | (15,346) | (17,167) | (40,421) | (12,611) | (12,702) | (12,914) | ||||||
| Accumulated other comprehensive income | - 0 | 2,020 | 926 | 726 | 63 | 171 | (1,742) | (3,082) | ||||||
| Unearned compensation | - 0 | - 0 | - 0 | - 0 | - 0 | - 0 | - 0 | (550) | ||||||
| 6.05% Series B Preferred Stock | 3,220 | 1,760 | 1,760 | 1,116 | 172 | - 0 | - 0 | - 0 | ||||||
| Minority interest | 2,589 | 2,604 | 2,823 | 787 | 503 | 912 | 1,237 | 1,551 | ||||||
| TOTAL SHAREHOLDER'S EQUITY | 353,088 | 368,901 | 432,347 | 473,833 | 493,269 | 659,030 | 748,468 | 813,474 | 863,343 | 916,548 | 974,391 | 1,035,851 | 1,100,218 | 1,164,282 |
| CAPITAL | 1,088,235 | 1,212,255 | 1,345,764 | 1,482,307 | 1,639,916 | 1,973,580 | 2,265,949 | 2,526,536 | 2,758,483 | 3,059,696 | 3,363,647 | 3,664,559 | 3,956,110 | 4,192,266 |
PF 2008
| APPENDIX N - 2006 PRO FORMA FINANCIAL STATEMENT | |||||||
| AQUA AMERICA, INC. AND SUBSIDIARIES | |||||||
| 2006 PRO FORMA FINANCIAL STATEMENT | |||||||
| (In thousands of dollars, except per share amounts) | |||||||
| INCOME STATEMENT | |||||||
| 1st Pass | Final | ||||||
| Actual | Historic Analysis | Used in Pro Forma | F'cast | F'cast | |||
| 2005 | % | Explanation | % | Explanation | 2006 | 2006 | |
| OPERATING REVENUES | 496,779 | 12.00% | Est. growth | 556,392 | 556,392 | ||
| COST AND EXPENSES | |||||||
| Operations and maintenance | 203,088 | % of opr. Rev. | 38.41% | Historic 8 yrs % of opr. Rev. | 213,710 | 213,710 | |
| Depreciation (1) | 60,747 | 2.66% | % of NPPE | 2.70% | Historic 8 yrs % of NPPE | 61,559 | 61,559 |
| Amortization (2) | 4,741 | 3.62% | % reg. assets | 3.11% | Historic 8 yrs % of reg. assets | 4,073 | 4,073 |
| Taxes other than income taxes (3) | 31,696 | 21.41% | % of taxable income | 23.61% | Historic 8 yrs % of taxable income | 34,959 | 34,959 |
| OPERATING INCOME | 196,507 | Computation | Computation | 242,092 | 242,092 | ||
| OTHER EXPENSE (INCOME) | |||||||
| Interest expense, net (4) | 52,062 | Based on fin. Stmt. | 6.00% | 6% debt - 3% cash | 59,458 | 70,620 | |
| Allowance for funds used during construction (5) + others | (3,624) | -0.16% | % of NPPE | -0.13% | Historic 8 yrs % of NPPE | (3,288) | (3,288) |
| INCOME BEFORE INCOME TAXES | 148,069 | Computation | Computation | 185,922 | 174,760 | ||
| Provision for income taxes | 56,913 | 38.44% | % of taxable income | 39.56% | Historic 8 yrs effective tax rate | 73,547 | 69,132 |
| NET INCOME | 91,156 | Computation | Computation | 112,375 | 105,628 | ||
| Dividends on common stock | 51,139 | Based on fin. Stmt. | $ 0.4276 | Use dividends per share | 55,760 | 55,760 | |
| RETAINED EARNINGS | 40,017 | Computation | Computation | 56,615 | 49,869 | ||
| BALANCE SHEET | |||||||
| EXCESS CASH | 1,936 | Plug | Balance Bal. Sheet | Plug | Balance Bal. Sheet | - 0 | - 0 |
| Cash and cash equivalents | 9,936 | Based on fin. Stmt. | 0.48% | Historic 8 yrs % of opr. Rev. | 2,671 | 2,671 | |
| Account receivables and unbilled revenues, net | 62,690 | 12.62% | % of opr. Rev. | 16.53% | Historic 8 yrs % of opr. Rev. | 91,972 | 91,972 |
| Inventory, materials and supplies | 7,798 | 1.57% | % of opr. Rev. | 1.53% | Historic 8 yrs % of opr. Rev. | 8,513 | 8,513 |
| Prepayments and other current assets | 7,596 | 1.53% | % of opr. Rev. | 1.96% | Historic 8 yrs % of opr. Rev. | 10,905 | 10,905 |
| TOTAL CURRENT ASSETS | 88,020 | Computation | Computation | 114,060 | 114,060 | ||
| Accounts payable | 55,455 | 11.16% | % of opr. Rev. | 9.19% | Historic 8 yrs % of opr. Rev. | 51,132 | 51,132 |
| Accrued interest | 13,052 | 2.63% | % of opr. Rev. | 3.14% | Historic 8 yrs % of opr. Rev. | 17,471 | 17,471 |
| Accrued taxes | 1,111 | 0.22% | % of opr. Rev. | 4.40% | Historic 8 yrs % of opr. Rev. | 24,481 | 24,481 |
| Other accrued liabilities | 30,571 | 6.15% | % of opr. Rev. | 7.60% | Historic 8 yrs % of opr. Rev. | 42,286 | 42,286 |
| TOTAL CURRENT LIABILITIES | 100,189 | Computation | Computation | 135,370 | 135,370 | ||
| WORKING CAPITAL | (12,169) | Computation | Computation | (21,310) | (21,310) | ||
| Property, plant and equipment, at cost | 2,900,585 | 583.88% | % of opr. Rev. | 565.12% | Historic 8 yrs % of opr. Rev. | 3,144,285 | 3,144,285 |
| Less: Accumulated Depreciation | 620,635 | 21.40% | % of NPPE | 19.56% | Historic 8 yrs % of NPPE | 615,022 | 615,022 |
| TOTAL FIXED ASSETS | 2,279,950 | Computation | Computation | 2,529,263 | 2,529,263 | ||
| Regulatory assets (6) | 130,953 | 26.36% | % of opr. Rev. | 25.74% | Historic 8 yrs % of opr. Rev. | 143,215 | 143,215 |
| Deferred charges an other assets, net (7) | 37,061 | 7.46% | % of opr. Rev. | 8.54% | Historic 8 yrs % of opr. Rev. | 47,516 | 47,516 |
| Funds restricted to construction activity (8) | 68,625 | 2.37% | % of NPPE | 1.26% | Historic 8 yrs % of NPPE | 39,618 | 39,618 |
| Goodwill | 20,180 | Constant | Constant | 20,180 | 20,180 | ||
| TOTAL OTHER ASSETS | 256,819 | Computation | Computation | 250,529 | 250,529 | ||
| CAPITAL | 2,526,536 | Computation | Computation | 2,758,483 | 2,758,483 | ||
| SHORT TERM DEBT | 138,505 | Plug | Balance Bal. Sheet | Plug | Balance Bal. Sheet | 138,505 | 324,539 |
| Long-term debt, excluding current portion (9) | 878,438 | Constant | Constant | 853,793 | 853,793 | ||
| Deferred income taxes and investment tax credits | 250,346 | 439.87% | % of inc. tax. | 442.49% | Historic 8 yrs % of inc. tax. | 325,437 | 305,899 |
| Customers' advances for construction | 74,828 | 15.06% | % of opr. Rev. | 20.01% | Historic 8 yrs % of opr. Rev. | 111,334 | 111,334 |
| Regulatory liabilities | 11,751 | 8.97% | % of reg. assets | 2.34% | Historic 8 yrs % of reg. assets | 3,351 | 3,351 |
| Other | 31,969 | 6.44% | % of opr. Rev. | 3.88% | Historic 8 yrs % of opr. Rev. | 21,588 | 21,588 |
| Contributions in aid of construction | 302,580 | 60.91% | % of opr. Rev. | 49.36% | Historic 8 yrs % of opr. Rev. | 274,635 | 274,635 |
| TOTAL OTHER LIABILITIES | 1,549,912 | Computation | Computation | 1,590,139 | 1,570,601 | ||
| Prev. SE | 813,474 | 813,474 | |||||
| Net SE change (10) | 38,360 | 38,360 | |||||
| TOTAL SHAREHOLDER'S EQUITY | 813,474 | Computation | Prev. SE + RE + Net SE Change | 870,089 | 863,343 | ||
| CAPITAL | 2,501,891 | Computation | Computation | 2,598,733 | 2,758,483 | ||
| Assets | 2,893,853 | 2,893,853 | |||||
| Liab + SE | 2,734,104 | 2,893,853 | |||||
| Diff | 159,749 | 0.00 | |||||
| # OF SHARES OUTSTANDING | 129,031,405 | 1.06% | % of last year | 130,401,405 | 130,401,405 | ||
| 2005 EPS | $ 0.71 | PRO FORMA EPS | $ 0.86 | $ 0.81 | |||
| INCREASE SHARES OUTSTA. | 1,370,000 | ||||||
| NOTE: | |||||||
| (1) Depreciation expense is a result of capital expenditures and acquisitions of water systems. | |||||||
| (2) Amortization expense is a result of various rate fillings. | |||||||
| (3) Additional taxes associated with acquisitions in addition to increases in state and local taxes. | |||||||
| (4) Cost of debt is comparatively low as WTR is issuing bonds through municipalities (tax-free and tax-exempt bonds). | |||||||
| (5) A non cash credit to income. This non cash income results from construction work in progress and is expected to be converted into cash income at a future date. | |||||||
| (6) The regulatory assets represent costs that are expected to be fully recovered from customers in future rates while regulatory liabilities represent amounts | |||||||
| that are expected to be refunded to customers in future rates or amounts recovered from customers in advance of incurring the costs. | |||||||
| In accordance with SFAS No. 71, WTR defer costs and credits on the balance sheet as regulatory assets and liabilities when it is probable that these costs and credits will be | |||||||
| recognized in the rate-making process in a period different from when the costs and credits were incurred. These deferred amounts, both assets and liabilities, | |||||||
| are then recognized in the income statement in the same period that they are reflected in WTR rates charged for water and wastewater service. In the event | |||||||
| that WTR assessment as to the probability of the inclusion in the rate-making process is incorrect, the associated regulatory asset or liability would be | |||||||
| adjusted to reflect the change in WTR assessment or change in regulatory approval. | |||||||
| (7) Deferred charges and other assets consist of financing expenses, other costs and marketable securities. | |||||||
| (8) Some bond proceeds are restricted to funding certain capital projects. | |||||||
| (9) Long-term debt will be reduced annually by $24,645,000 as per historical balance sheet. | |||||||
| (10) Please refer to Appendix L - New Shares and Repurchased Shares |
PF 2009
| APPENDIX O - 2007 PRO FORMA FINANCIAL STATEMENT | |||||||
| AQUA AMERICA, INC. AND SUBSIDIARIES | |||||||
| 2007 PRO FORMA FINANCIAL STATEMENT | |||||||
| (In thousands of dollars, except per share amounts) | |||||||
| INCOME STATEMENT | |||||||
| 1st Pass | Final | ||||||
| PF | Historic Analysis | Used in Pro Forma | F'cast | F'cast | |||
| 2006 | % | Explanation | % | Explanation | 2007 | 2007 | |
| OPERATING REVENUES | 556,392 | 11.00% | Est. growth | 617,596 | 617,596 | ||
| COST AND EXPENSES | |||||||
| Operations and maintenance | 213,710 | % of opr. Rev. | 38.41% | Historic 8 yrs % of opr. Rev. | 237,218 | 237,218 | |
| Depreciation | 61,559 | 2.43% | % of NPPE | 2.70% | Historic 8 yrs % of NPPE | 68,290 | 68,290 |
| Amortization | 4,073 | 2.84% | % reg. assets | 3.11% | Historic 8 yrs % of reg. assets | 4,454 | 4,454 |
| Taxes other than income taxes | 34,959 | 20.00% | % of taxable income | 23.61% | Historic 8 yrs % of taxable income | 41,261 | 41,261 |
| OPERATING INCOME | 242,092 | Computation | Computation | 266,372 | 266,372 | ||
| OTHER EXPENSE (INCOME) | |||||||
| Interest expense, net | 70,620 | Based on fin. Stmt. | 6.00% | 6% debt - 3% cash | 69,132 | 81,315 | |
| Allowance for funds used during construction + others | (3,288) | -0.13% | % of NPPE | -0.13% | Historic 8 yrs % of NPPE | (3,650) | (3,650) |
| INCOME BEFORE INCOME TAXES | 174,760 | Computation | Computation | 200,890 | 188,707 | ||
| Provision for income taxes | 69,132 | 39.56% | % of taxable income | 39.56% | Historic 8 yrs effective tax rate | 79,468 | 74,649 |
| NET INCOME | 105,628 | Computation | Computation | 121,422 | 114,058 | ||
| Dividends on common stock | 55,760 | Based on fin. Stmt. | $ 0.4618 | Use dividends per share | 60,853 | 60,853 | |
| RETAINED EARNINGS | 49,869 | Computation | Computation | 60,569 | 53,205 | ||
| BALANCE SHEET | |||||||
| EXCESS CASH | - 0 | Plug | Balance Bal. Sheet | Plug | Balance Bal. Sheet | - 0 | - 0 |
| Cash and cash equivalents | 2,671 | Based on fin. Stmt. | 0.48% | Historic 8 yrs % of opr. Rev. | 2,964 | 2,964 | |
| Account receivables and unbilled revenues, net | 91,972 | 16.53% | % of opr. Rev. | 16.53% | Historic 8 yrs % of opr. Rev. | 102,089 | 102,089 |
| Inventory, materials and supplies | 8,513 | 1.53% | % of opr. Rev. | 1.53% | Historic 8 yrs % of opr. Rev. | 9,449 | 9,449 |
| Prepayments and other current assets | 10,905 | 1.96% | % of opr. Rev. | 1.96% | Historic 8 yrs % of opr. Rev. | 12,105 | 12,105 |
| TOTAL CURRENT ASSETS | 114,060 | Computation | Computation | 126,607 | 126,607 | ||
| Accounts payable | 51,132 | 9.19% | % of opr. Rev. | 9.19% | Historic 8 yrs % of opr. Rev. | 56,757 | 56,757 |
| Accrued interest | 17,471 | 3.14% | % of opr. Rev. | 3.14% | Historic 8 yrs % of opr. Rev. | 19,393 | 19,393 |
| Accrued taxes | 24,481 | 4.40% | % of opr. Rev. | 4.40% | Historic 8 yrs % of opr. Rev. | 27,174 | 27,174 |
| Other accrued liabilities | 42,286 | 7.60% | % of opr. Rev. | 7.60% | Historic 8 yrs % of opr. Rev. | 46,937 | 46,937 |
| TOTAL CURRENT LIABILITIES | 135,370 | Computation | Computation | 150,261 | 150,261 | ||
| WORKING CAPITAL | (21,310) | Computation | Computation | (23,654) | (23,654) | ||
| Property, plant and equipment, at cost | 3,144,285 | 565.12% | % of opr. Rev. | 565.12% | Historic 8 yrs % of opr. Rev. | 3,490,157 | 3,490,157 |
| Less: Accumulated Depreciation | 615,022 | 19.56% | % of NPPE | 19.56% | Historic 8 yrs % of NPPE | 682,675 | 682,675 |
| TOTAL FIXED ASSETS | 2,529,263 | Computation | Computation | 2,807,482 | 2,807,482 | ||
| Regulatory assets | 143,215 | 25.74% | % of opr. Rev. | 25.74% | Historic 8 yrs % of opr. Rev. | 158,969 | 158,969 |
| Deferred charges an other assets, net | 47,516 | 8.54% | % of opr. Rev. | 8.54% | Historic 8 yrs % of opr. Rev. | 52,743 | 52,743 |
| Funds restricted to construction activity | 39,618 | 1.26% | % of NPPE | 1.26% | Historic 8 yrs % of NPPE | 43,976 | 43,976 |
| Goodwill | 20,180 | Constant | Constant | 20,180 | 20,180 | ||
| TOTAL OTHER ASSETS | 250,529 | Computation | Computation | 275,868 | 275,868 | ||
| CAPITAL | 2,758,483 | Computation | Computation | 3,059,696 | 3,059,696 | ||
| SHORT TERM DEBT | 324,539 | Plug | Balance Bal. Sheet | Plug | Balance Bal. Sheet | 324,539 | 527,578 |
| Long-term debt, excluding current portion | 853,793 | Constant | Constant | 829,148 | 829,148 | ||
| Deferred income taxes and investment tax credits | 305,899 | 442.49% | % of inc. tax. | 442.49% | Historic 8 yrs % of inc. tax. | 351,637 | 330,313 |
| Customers' advances for construction | 111,334 | 20.01% | % of opr. Rev. | 20.01% | Historic 8 yrs % of opr. Rev. | 123,581 | 123,581 |
| Regulatory liabilities | 3,351 | 2.34% | % of reg. assets | 2.34% | Historic 8 yrs % of reg. assets | 3,720 | 3,720 |
| Other | 21,588 | 3.88% | % of opr. Rev. | 3.88% | Historic 8 yrs % of opr. Rev. | 23,963 | 23,963 |
| Contributions in aid of construction | 274,635 | 49.36% | % of opr. Rev. | 49.36% | Historic 8 yrs % of opr. Rev. | 304,845 | 304,845 |
| TOTAL OTHER LIABILITIES | 1,570,601 | Computation | Computation | 1,636,893 | 1,615,569 | ||
| Prev. SE | 863,343 | 863,343 | |||||
| Net SE change | 39,045 | 39,045 | |||||
| TOTAL SHAREHOLDER'S EQUITY | 863,343 | Computation | Prev. SE + RE + Net SE Change | 923,911 | 916,548 | ||
| CAPITAL | 2,758,483 | Computation | Computation | 2,885,343 | 3,059,696 | ||
| Assets | 3,209,957 | 3,209,957 | |||||
| Liab + SE | 3,035,604 | 3,209,957 | |||||
| Diff | 174,352 | 0.00 | |||||
| # OF SHARES OUTSTANDING | 130,401,405 | 1.05% | % of last year | 131,771,405 | 131,771,405 | ||
| 2005 EPS | $ 0.81 | PRO FORMA EPS | $ 0.92 | $ 0.87 | |||
| INCREASE SHARES OUTSTA. | 1,370,000 | ||||||
| NOTE: | |||||||
| Please refer to APPENDIX N - 2006 PRO FORMA FINANCIAL STATEMENT |
PF 2010
| APPENDIX P - 2008 PRO FORMA FINANCIAL STATEMENT | |||||||
| AQUA AMERICA, INC. AND SUBSIDIARIES | |||||||
| 2008 PRO FORMA FINANCIAL STATEMENT | |||||||
| (In thousands of dollars, except per share amounts) | |||||||
| INCOME STATEMENT | |||||||
| 1st Pass | Final | ||||||
| PF | Historic Analysis | Used in Pro Forma | F'cast | F'cast | |||
| 2007 | % | Explanation | % | Explanation | 2008 | 2008 | |
| OPERATING REVENUES | 617,596 | 10.00% | Est. growth | 679,355 | 679,355 | ||
| COST AND EXPENSES | |||||||
| Operations and maintenance | 237,218 | % of opr. Rev. | 38.41% | Historic 8 yrs % of opr. Rev. | 260,940 | 260,940 | |
| Depreciation | 68,290 | 2.43% | % of NPPE | 2.70% | Historic 8 yrs % of NPPE | 75,802 | 75,802 |
| Amortization | 4,454 | 2.80% | % reg. assets | 3.11% | Historic 8 yrs % of reg. assets | 4,944 | 4,944 |
| Taxes other than income taxes | 41,261 | 21.86% | % of taxable income | 23.61% | Historic 8 yrs % of taxable income | 44,554 | 44,554 |
| OPERATING INCOME | 266,372 | Computation | Computation | 293,115 | 293,115 | ||
| OTHER EXPENSE (INCOME) | |||||||
| Interest expense, net | 81,315 | Based on fin. Stmt. | 6.00% | 6% debt - 3% cash | 79,827 | 91,565 | |
| Allowance for funds used during construction + others | (3,650) | -0.13% | % of NPPE | -0.13% | Historic 8 yrs % of NPPE | (4,015) | (4,015) |
| INCOME BEFORE INCOME TAXES | 188,707 | Computation | Computation | 217,303 | 205,565 | ||
| Provision for income taxes | 74,649 | 39.56% | % of taxable income | 39.56% | Historic 8 yrs effective tax rate | 85,961 | 81,317 |
| NET INCOME | 114,058 | Computation | Computation | 131,342 | 124,247 | ||
| Dividends on common stock | 60,853 | Based on fin. Stmt. | $ 0.4988 | Use dividends per share | 66,405 | 66,405 | |
| RETAINED EARNINGS | 53,205 | Computation | Computation | 64,937 | 57,843 | ||
| BALANCE SHEET | |||||||
| EXCESS CASH | - 0 | Plug | Balance Bal. Sheet | Plug | Balance Bal. Sheet | - 0 | - 0 |
| Cash and cash equivalents | 2,964 | Based on fin. Stmt. | 0.48% | Historic 8 yrs % of opr. Rev. | 3,261 | 3,261 | |
| Account receivables and unbilled revenues, net | 102,089 | 16.53% | % of opr. Rev. | 16.53% | Historic 8 yrs % of opr. Rev. | 112,297 | 112,297 |
| Inventory, materials and supplies | 9,449 | 1.53% | % of opr. Rev. | 1.53% | Historic 8 yrs % of opr. Rev. | 10,394 | 10,394 |
| Prepayments and other current assets | 12,105 | 1.96% | % of opr. Rev. | 1.96% | Historic 8 yrs % of opr. Rev. | 13,315 | 13,315 |
| TOTAL CURRENT ASSETS | 126,607 | Computation | Computation | 139,268 | 139,268 | ||
| Accounts payable | 56,757 | 9.19% | % of opr. Rev. | 9.19% | Historic 8 yrs % of opr. Rev. | 62,433 | 62,433 |
| Accrued interest | 19,393 | 3.14% | % of opr. Rev. | 3.14% | Historic 8 yrs % of opr. Rev. | 21,332 | 21,332 |
| Accrued taxes | 27,174 | 4.40% | % of opr. Rev. | 4.40% | Historic 8 yrs % of opr. Rev. | 29,892 | 29,892 |
| Other accrued liabilities | 46,937 | 7.60% | % of opr. Rev. | 7.60% | Historic 8 yrs % of opr. Rev. | 51,631 | 51,631 |
| TOTAL CURRENT LIABILITIES | 150,261 | Computation | Computation | 165,287 | 165,287 | ||
| WORKING CAPITAL | (23,654) | Computation | Computation | (26,019) | (26,019) | ||
| Property, plant and equipment, at cost | 3,490,157 | 565.12% | % of opr. Rev. | 565.12% | Historic 8 yrs % of opr. Rev. | 3,839,172 | 3,839,172 |
| Less: Accumulated Depreciation | 682,675 | 19.56% | % of NPPE | 19.56% | Historic 8 yrs % of NPPE | 750,942 | 750,942 |
| TOTAL FIXED ASSETS | 2,807,482 | Computation | Computation | 3,088,230 | 3,088,230 | ||
| Regulatory assets | 158,969 | 25.74% | % of opr. Rev. | 25.74% | Historic 8 yrs % of opr. Rev. | 174,866 | 174,866 |
| Deferred charges an other assets, net | 52,743 | 8.54% | % of opr. Rev. | 8.54% | Historic 8 yrs % of opr. Rev. | 58,017 | 58,017 |
| Funds restricted to construction activity | 43,976 | 1.26% | % of NPPE | 1.26% | Historic 8 yrs % of NPPE | 48,374 | 48,374 |
| Goodwill | 20,180 | Constant | Constant | 20,180 | 20,180 | ||
| TOTAL OTHER ASSETS | 275,868 | Computation | Computation | 301,437 | 301,437 | ||
| CAPITAL | 3,059,696 | Computation | Computation | 3,363,647 | 3,363,647 | ||
| SHORT TERM DEBT | 527,578 | Plug | Balance Bal. Sheet | Plug | Balance Bal. Sheet | 527,578 | 723,214 |
| Long-term debt, excluding current portion | 829,148 | Constant | Constant | 804,503 | 804,503 | ||
| Deferred income taxes and investment tax credits | 330,313 | 442.49% | % of inc. tax. | 442.49% | Historic 8 yrs % of inc. tax. | 380,366 | 359,820 |
| Customers' advances for construction | 123,581 | 20.01% | % of opr. Rev. | 20.01% | Historic 8 yrs % of opr. Rev. | 135,939 | 135,939 |
| Regulatory liabilities | 3,720 | 2.34% | % of reg. assets | 2.34% | Historic 8 yrs % of reg. assets | 4,092 | 4,092 |
| Other | 23,963 | 3.88% | % of opr. Rev. | 3.88% | Historic 8 yrs % of opr. Rev. | 26,359 | 26,359 |
| Contributions in aid of construction | 304,845 | 49.36% | % of opr. Rev. | 49.36% | Historic 8 yrs % of opr. Rev. | 335,330 | 335,330 |
| TOTAL OTHER LIABILITIES | 1,615,569 | Computation | Computation | 1,686,588 | 1,666,042 | ||
| Prev. SE | 916,548 | 916,548 | |||||
| Net SE change | 39,730 | 39,730 | |||||
| TOTAL SHAREHOLDER'S EQUITY | 916,548 | Computation | Prev. SE + RE + Net SE Change | 981,486 | 974,391 | ||
| CAPITAL | 3,059,696 | Computation | Computation | 3,195,653 | 3,363,647 | ||
| Assets | 3,528,934 | 3,528,934 | |||||
| Liab + SE | 3,360,940 | 3,528,934 | |||||
| Diff | 167,995 | (0.00) | |||||
| # OF SHARES OUTSTANDING | 131,771,405 | 1.04% | % of last year | 133,141,405 | 133,141,405 | ||
| 2005 EPS | $ 0.87 | PRO FORMA EPS | $ 0.99 | $ 0.93 | |||
| INCREASE SHARES OUTSTA. | 1,370,000 | ||||||
| NOTE: | |||||||
| Please refer to APPENDIX N - 2006 PRO FORMA FINANCIAL STATEMENT |
PF 2011
| APPENDIX Q - 2009 PRO FORMA FINANCIAL STATEMENT | |||||||
| AQUA AMERICA, INC. AND SUBSIDIARIES | |||||||
| 2009 PRO FORMA FINANCIAL STATEMENT | |||||||
| (In thousands of dollars, except per share amounts) | |||||||
| INCOME STATEMENT | |||||||
| 1st Pass | Final | ||||||
| PF | Historic Analysis | Used in Pro Forma | F'cast | F'cast | |||
| 2008 | % | Explanation | % | Explanation | 2009 | 2009 | |
| OPERATING REVENUES | 679,355 | 9.00% | Est. growth | 740,497 | 740,497 | ||
| COST AND EXPENSES | |||||||
| Operations and maintenance | 260,940 | % of opr. Rev. | 38.41% | Historic 8 yrs % of opr. Rev. | 284,425 | 284,425 | |
| Depreciation | 75,802 | 2.45% | % of NPPE | 2.70% | Historic 8 yrs % of NPPE | 83,382 | 83,382 |
| Amortization | 4,944 | 2.83% | % reg. assets | 3.11% | Historic 8 yrs % of reg. assets | 5,438 | 5,438 |
| Taxes other than income taxes | 44,554 | 21.67% | % of taxable income | 23.61% | Historic 8 yrs % of taxable income | 48,534 | 48,534 |
| OPERATING INCOME | 293,115 | Computation | Computation | 318,718 | 318,718 | ||
| OTHER EXPENSE (INCOME) | |||||||
| Interest expense, net | 91,565 | Based on fin. Stmt. | 6.00% | 6% debt - 3% cash | 90,078 | 101,534 | |
| Allowance for funds used during construction + others | (4,015) | -0.13% | % of NPPE | -0.13% | Historic 8 yrs % of NPPE | (4,376) | (4,376) |
| INCOME BEFORE INCOME TAXES | 205,565 | Computation | Computation | 233,016 | 221,559 | ||
| Provision for income taxes | 81,317 | 39.56% | % of taxable income | 39.56% | Historic 8 yrs effective tax rate | 92,177 | 87,645 |
| NET INCOME | 124,247 | Computation | Computation | 140,840 | 133,915 | ||
| Dividends on common stock | 66,405 | Based on fin. Stmt. | $ 0.5387 | Use dividends per share | 72,455 | 72,455 | |
| RETAINED EARNINGS | 57,843 | Computation | Computation | 68,385 | 61,460 | ||
| BALANCE SHEET | |||||||
| EXCESS CASH | - 0 | Plug | Balance Bal. Sheet | Plug | Balance Bal. Sheet | - 0 | - 0 |
| Cash and cash equivalents | 3,261 | Based on fin. Stmt. | 0.48% | Historic 8 yrs % of opr. Rev. | 3,554 | 3,554 | |
| Account receivables and unbilled revenues, net | 112,297 | 16.53% | % of opr. Rev. | 16.53% | Historic 8 yrs % of opr. Rev. | 122,404 | 122,404 |
| Inventory, materials and supplies | 10,394 | 1.53% | % of opr. Rev. | 1.53% | Historic 8 yrs % of opr. Rev. | 11,330 | 11,330 |
| Prepayments and other current assets | 13,315 | 1.96% | % of opr. Rev. | 1.96% | Historic 8 yrs % of opr. Rev. | 14,514 | 14,514 |
| TOTAL CURRENT ASSETS | 139,268 | Computation | Computation | 151,802 | 151,802 | ||
| Accounts payable | 62,433 | 9.19% | % of opr. Rev. | 9.19% | Historic 8 yrs % of opr. Rev. | 68,052 | 68,052 |
| Accrued interest | 21,332 | 3.14% | % of opr. Rev. | 3.14% | Historic 8 yrs % of opr. Rev. | 23,252 | 23,252 |
| Accrued taxes | 29,892 | 4.40% | % of opr. Rev. | 4.40% | Historic 8 yrs % of opr. Rev. | 32,582 | 32,582 |
| Other accrued liabilities | 51,631 | 7.60% | % of opr. Rev. | 7.60% | Historic 8 yrs % of opr. Rev. | 56,278 | 56,278 |
| TOTAL CURRENT LIABILITIES | 165,287 | Computation | Computation | 180,163 | 180,163 | ||
| WORKING CAPITAL | (26,019) | Computation | Computation | (28,361) | (28,361) | ||
| Property, plant and equipment, at cost | 3,839,172 | 565.12% | % of opr. Rev. | 565.12% | Historic 8 yrs % of opr. Rev. | 4,184,698 | 4,184,698 |
| Less: Accumulated Depreciation | 750,942 | 19.56% | % of NPPE | 19.56% | Historic 8 yrs % of NPPE | 818,527 | 818,527 |
| TOTAL FIXED ASSETS | 3,088,230 | Computation | Computation | 3,366,171 | 3,366,171 | ||
| Regulatory assets | 174,866 | 25.74% | % of opr. Rev. | 25.74% | Historic 8 yrs % of opr. Rev. | 190,604 | 190,604 |
| Deferred charges an other assets, net | 58,017 | 8.54% | % of opr. Rev. | 8.54% | Historic 8 yrs % of opr. Rev. | 63,238 | 63,238 |
| Funds restricted to construction activity | 48,374 | 1.26% | % of NPPE | 1.26% | Historic 8 yrs % of NPPE | 52,727 | 52,727 |
| Goodwill | 20,180 | Constant | Constant | 20,180 | 20,180 | ||
| TOTAL OTHER ASSETS | 301,437 | Computation | Computation | 326,750 | 326,750 | ||
| CAPITAL | 3,363,647 | Computation | Computation | 3,664,559 | 3,664,559 | ||
| SHORT TERM DEBT | 723,214 | Plug | Balance Bal. Sheet | Plug | Balance Bal. Sheet | 723,214 | 914,159 |
| Long-term debt, excluding current portion | 804,503 | Constant | Constant | 779,858 | 779,858 | ||
| Deferred income taxes and investment tax credits | 359,820 | 442.49% | % of inc. tax. | 442.49% | Historic 8 yrs % of inc. tax. | 407,871 | 387,817 |
| Customers' advances for construction | 135,939 | 20.01% | % of opr. Rev. | 20.01% | Historic 8 yrs % of opr. Rev. | 148,173 | 148,173 |
| Regulatory liabilities | 4,092 | 2.34% | % of reg. assets | 2.34% | Historic 8 yrs % of reg. assets | 4,460 | 4,460 |
| Other | 26,359 | 3.88% | % of opr. Rev. | 3.88% | Historic 8 yrs % of opr. Rev. | 28,731 | 28,731 |
| Contributions in aid of construction | 335,330 | 49.36% | % of opr. Rev. | 49.36% | Historic 8 yrs % of opr. Rev. | 365,509 | 365,509 |
| TOTAL OTHER LIABILITIES | 1,666,042 | Computation | Computation | 1,734,603 | 1,714,549 | ||
| Prev. SE | 974,391 | 974,391 | |||||
| Net SE change | 40,415 | 40,415 | |||||
| TOTAL SHAREHOLDER'S EQUITY | 974,391 | Computation | Prev. SE + RE + Net SE Change | 1,042,775 | 1,035,851 | ||
| CAPITAL | 3,363,647 | Computation | Computation | 3,500,593 | 3,664,559 | ||
| Assets | 3,844,722 | 3,844,722 | |||||
| Liab + SE | 3,680,756 | 3,844,722 | |||||
| Diff | 163,967 | 0.00 | |||||
| # OF SHARES OUTSTANDING | 133,141,405 | 1.03% | % of last year | 134,511,405 | 134,511,405 | ||
| 2005 EPS | $ 0.93 | PRO FORMA EPS | $ 1.05 | $ 1.00 | |||
| INCREASE SHARES OUTSTA. | 1,370,000 | ||||||
| NOTE: | |||||||
| Please refer to APPENDIX N - 2006 PRO FORMA FINANCIAL STATEMENT |
NOPLAT
| APPENDIX R - 2010 PRO FORMA FINANCIAL STATEMENT | |||||||
| AQUA AMERICA, INC. AND SUBSIDIARIES | |||||||
| 2010 PRO FORMA FINANCIAL STATEMENT | |||||||
| (In thousands of dollars, except per share amounts) | |||||||
| INCOME STATEMENT | |||||||
| 1st Pass | Final | ||||||
| PF | Historic Analysis | Used in Pro Forma | F'cast | F'cast | |||
| 2009 | % | Explanation | % | Explanation | 2010 | 2010 | |
| OPERATING REVENUES | 740,497 | 8.00% | Est. growth | 799,737 | 799,737 | ||
| COST AND EXPENSES | |||||||
| Operations and maintenance | 284,425 | % of opr. Rev. | 38.41% | Historic 8 yrs % of opr. Rev. | 307,179 | 307,179 | |
| Depreciation | 83,382 | 2.48% | % of NPPE | 2.70% | Historic 8 yrs % of NPPE | 90,887 | 90,887 |
| Amortization | 5,438 | 2.85% | % reg. assets | 3.11% | Historic 8 yrs % of reg. assets | 5,928 | 5,928 |
| Taxes other than income taxes | 48,534 | 21.91% | % of taxable income | 23.61% | Historic 8 yrs % of taxable income | 52,310 | 52,310 |
| OPERATING INCOME | 318,718 | Computation | Computation | 343,433 | 343,433 | ||
| OTHER EXPENSE (INCOME) | |||||||
| Interest expense, net | 101,534 | Based on fin. Stmt. | 6.00% | 6% debt - 3% cash | 100,047 | 110,881 | |
| Allowance for funds used during construction + others | (4,376) | -0.13% | % of NPPE | -0.13% | Historic 8 yrs % of NPPE | (4,726) | (4,726) |
| INCOME BEFORE INCOME TAXES | 221,559 | Computation | Computation | 248,112 | 237,279 | ||
| Provision for income taxes | 87,645 | 39.56% | % of taxable income | 39.56% | Historic 8 yrs effective tax rate | 98,148 | 93,863 |
| NET INCOME | 133,915 | Computation | Computation | 149,964 | 143,416 | ||
| Dividends on common stock | 72,455 | Based on fin. Stmt. | $ 0.5817 | Use dividends per share | 79,048 | 79,048 | |
| RETAINED EARNINGS | 61,460 | Computation | Computation | 70,916 | 64,368 | ||
| BALANCE SHEET | |||||||
| EXCESS CASH | - 0 | Plug | Balance Bal. Sheet | Plug | Balance Bal. Sheet | - 0 | - 0 |
| Cash and cash equivalents | 3,554 | Based on fin. Stmt. | 0.48% | Historic 8 yrs % of opr. Rev. | 3,839 | 3,839 | |
| Account receivables and unbilled revenues, net | 122,404 | 16.53% | % of opr. Rev. | 16.53% | Historic 8 yrs % of opr. Rev. | 132,197 | 132,197 |
| Inventory, materials and supplies | 11,330 | 1.53% | % of opr. Rev. | 1.53% | Historic 8 yrs % of opr. Rev. | 12,236 | 12,236 |
| Prepayments and other current assets | 14,514 | 1.96% | % of opr. Rev. | 1.96% | Historic 8 yrs % of opr. Rev. | 15,675 | 15,675 |
| TOTAL CURRENT ASSETS | 151,802 | Computation | Computation | 163,946 | 163,946 | ||
| Accounts payable | 68,052 | 9.19% | % of opr. Rev. | 9.19% | Historic 8 yrs % of opr. Rev. | 73,496 | 73,496 |
| Accrued interest | 23,252 | 3.14% | % of opr. Rev. | 3.14% | Historic 8 yrs % of opr. Rev. | 25,112 | 25,112 |
| Accrued taxes | 32,582 | 4.40% | % of opr. Rev. | 4.40% | Historic 8 yrs % of opr. Rev. | 35,188 | 35,188 |
| Other accrued liabilities | 56,278 | 7.60% | % of opr. Rev. | 7.60% | Historic 8 yrs % of opr. Rev. | 60,780 | 60,780 |
| TOTAL CURRENT LIABILITIES | 180,163 | Computation | Computation | 194,576 | 194,576 | ||
| WORKING CAPITAL | (28,361) | Computation | Computation | (30,630) | (30,630) | ||
| Property, plant and equipment, at cost | 4,184,698 | 565.12% | % of opr. Rev. | 565.12% | Historic 8 yrs % of opr. Rev. | 4,519,474 | 4,519,474 |
| Less: Accumulated Depreciation | 818,527 | 19.56% | % of NPPE | 19.56% | Historic 8 yrs % of NPPE | 884,009 | 884,009 |
| TOTAL FIXED ASSETS | 3,366,171 | Computation | Computation | 3,635,465 | 3,635,465 | ||
| Regulatory assets | 190,604 | 25.74% | % of opr. Rev. | 25.74% | Historic 8 yrs % of opr. Rev. | 205,852 | 205,852 |
| Deferred charges an other assets, net | 63,238 | 8.54% | % of opr. Rev. | 8.54% | Historic 8 yrs % of opr. Rev. | 68,298 | 68,298 |
| Funds restricted to construction activity | 52,727 | 1.26% | % of NPPE | 1.26% | Historic 8 yrs % of NPPE | 56,945 | 56,945 |
| Goodwill | 20,180 | Constant | Constant | 20,180 | 20,180 | ||
| TOTAL OTHER ASSETS | 326,750 | Computation | Computation | 351,275 | 351,275 | ||
| CAPITAL | 3,664,559 | Computation | Computation | 3,956,110 | 3,956,110 | ||
| SHORT TERM DEBT | 914,159 | Plug | Balance Bal. Sheet | Plug | Balance Bal. Sheet | 914,159 | 1,094,723 |
| Long-term debt, excluding current portion | 779,858 | Constant | Constant | 755,213 | 755,213 | ||
| Deferred income taxes and investment tax credits | 387,817 | 442.49% | % of inc. tax. | 442.49% | Historic 8 yrs % of inc. tax. | 434,295 | 415,331 |
| Customers' advances for construction | 148,173 | 20.01% | % of opr. Rev. | 20.01% | Historic 8 yrs % of opr. Rev. | 160,027 | 160,027 |
| Regulatory liabilities | 4,460 | 2.34% | % of reg. assets | 2.34% | Historic 8 yrs % of reg. assets | 4,817 | 4,817 |
| Other | 28,731 | 3.88% | % of opr. Rev. | 3.88% | Historic 8 yrs % of opr. Rev. | 31,030 | 31,030 |
| Contributions in aid of construction | 365,509 | 49.36% | % of opr. Rev. | 49.36% | Historic 8 yrs % of opr. Rev. | 394,750 | 394,750 |
| TOTAL OTHER LIABILITIES | 1,714,549 | Computation | Computation | 1,780,132 | 1,761,169 | ||
| Prev. SE | 1,035,851 | 1,035,851 | |||||
| Net SE change | 41,100 | 41,100 | |||||
| TOTAL SHAREHOLDER'S EQUITY | 1,035,851 | Computation | Prev. SE + RE + Net SE Change | 1,106,766 | 1,100,218 | ||
| CAPITAL | 3,664,559 | Computation | Computation | 3,801,058 | 3,956,110 | ||
| Assets | 4,150,686 | 4,150,686 | |||||
| Liab + SE | 3,995,634 | 4,150,686 | |||||
| Diff | 155,052 | 0.00 | |||||
| # OF SHARES OUTSTANDING | 134,511,405 | 1.02% | % of last year | 135,881,405 | 135,881,405 | ||
| 2005 EPS | $ 1.00 | PRO FORMA EPS | $ 1.10 | $ 1.06 | |||
| INCREASE SHARES OUTSTA. | 1,370,000 | ||||||
| NOTE: | |||||||
| Please refer to APPENDIX N - 2006 PRO FORMA FINANCIAL STATEMENT |
RESIDUAL EARNINGS ANALYSIS
| APPENDIX S - 2011 PRO FORMA FINANCIAL STATEMENT | |||||||
| AQUA AMERICA, INC. AND SUBSIDIARIES | |||||||
| 2011 PRO FORMA FINANCIAL STATEMENT | |||||||
| (In thousands of dollars, except per share amounts) | |||||||
| INCOME STATEMENT | |||||||
| 1st Pass | Final | ||||||
| PF | Historic Analysis | Used in Pro Forma | F'cast | F'cast | |||
| 2010 | % | Explanation | % | Explanation | 2011 | 2011 | |
| OPERATING REVENUES | 799,737 | 6.00% | Est. growth | 847,721 | 847,721 | ||
| COST AND EXPENSES | |||||||
| Operations and maintenance | 307,179 | % of opr. Rev. | 38.41% | Historic 8 yrs % of opr. Rev. | 325,610 | 325,610 | |
| Depreciation | 90,887 | 2.50% | % of NPPE | 2.70% | Historic 8 yrs % of NPPE | 98,158 | 98,158 |
| Amortization | 5,928 | 2.88% | % reg. assets | 3.11% | Historic 8 yrs % of reg. assets | 6,402 | 6,402 |
| Taxes other than income taxes | 52,310 | 22.05% | % of taxable income | 23.61% | Historic 8 yrs % of taxable income | 56,021 | 56,021 |
| OPERATING INCOME | 343,433 | Computation | Computation | 361,530 | 361,530 | ||
| OTHER EXPENSE (INCOME) | |||||||
| Interest expense, net | 110,881 | Based on fin. Stmt. | 6.00% | 6% debt - 3% cash | 109,395 | 117,878 | |
| Allowance for funds used during construction + others | (4,726) | -0.13% | % of NPPE | -0.13% | Historic 8 yrs % of NPPE | (5,010) | (5,010) |
| INCOME BEFORE INCOME TAXES | 237,279 | Computation | Computation | 257,145 | 248,662 | ||
| Provision for income taxes | 93,863 | 39.56% | % of taxable income | 39.56% | Historic 8 yrs effective tax rate | 101,721 | 98,366 |
| NET INCOME | 143,416 | Computation | Computation | 155,423 | 150,296 | ||
| Dividends on common stock | 79,048 | Based on fin. Stmt. | $ 0.6283 | Use dividends per share | 86,233 | 86,233 | |
| RETAINED EARNINGS | 64,368 | Computation | Computation | 69,190 | 64,063 | ||
| BALANCE SHEET | |||||||
| EXCESS CASH | - 0 | Plug | Balance Bal. Sheet | Plug | Balance Bal. Sheet | - 0 | - 0 |
| Cash and cash equivalents | 3,839 | Based on fin. Stmt. | 0.48% | Historic 8 yrs % of opr. Rev. | 4,069 | 4,069 | |
| Account receivables and unbilled revenues, net | 132,197 | 16.53% | % of opr. Rev. | 16.53% | Historic 8 yrs % of opr. Rev. | 140,128 | 140,128 |
| Inventory, materials and supplies | 12,236 | 1.53% | % of opr. Rev. | 1.53% | Historic 8 yrs % of opr. Rev. | 12,970 | 12,970 |
| Prepayments and other current assets | 15,675 | 1.96% | % of opr. Rev. | 1.96% | Historic 8 yrs % of opr. Rev. | 16,615 | 16,615 |
| TOTAL CURRENT ASSETS | 163,946 | Computation | Computation | 173,783 | 173,783 | ||
| Accounts payable | 73,496 | 9.19% | % of opr. Rev. | 9.19% | Historic 8 yrs % of opr. Rev. | 77,906 | 77,906 |
| Accrued interest | 25,112 | 3.14% | % of opr. Rev. | 3.14% | Historic 8 yrs % of opr. Rev. | 26,618 | 26,618 |
| Accrued taxes | 35,188 | 4.40% | % of opr. Rev. | 4.40% | Historic 8 yrs % of opr. Rev. | 37,300 | 37,300 |
| Other accrued liabilities | 60,780 | 7.60% | % of opr. Rev. | 7.60% | Historic 8 yrs % of opr. Rev. | 64,427 | 64,427 |
| TOTAL CURRENT LIABILITIES | 194,576 | Computation | Computation | 206,251 | 206,251 | ||
| WORKING CAPITAL | (30,630) | Computation | Computation | (32,468) | (32,468) | ||
| Property, plant and equipment, at cost | 4,519,474 | 565.12% | % of opr. Rev. | 565.12% | Historic 8 yrs % of opr. Rev. | 4,790,642 | 4,790,642 |
| Less: Accumulated Depreciation | 884,009 | 19.56% | % of NPPE | 19.56% | Historic 8 yrs % of NPPE | 937,050 | 937,050 |
| TOTAL FIXED ASSETS | 3,635,465 | Computation | Computation | 3,853,592 | 3,853,592 | ||
| Regulatory assets | 205,852 | 25.74% | % of opr. Rev. | 25.74% | Historic 8 yrs % of opr. Rev. | 218,203 | 218,203 |
| Deferred charges an other assets, net | 68,298 | 8.54% | % of opr. Rev. | 8.54% | Historic 8 yrs % of opr. Rev. | 72,395 | 72,395 |
| Funds restricted to construction activity | 56,945 | 1.26% | % of NPPE | 1.26% | Historic 8 yrs % of NPPE | 60,362 | 60,362 |
| Goodwill | 20,180 | Constant | Constant | 20,180 | 20,180 | ||
| TOTAL OTHER ASSETS | 351,275 | Computation | Computation | 371,141 | 371,141 | ||
| CAPITAL | 3,956,110 | Computation | Computation | 4,192,266 | 4,192,266 | ||
| SHORT TERM DEBT | 1,094,723 | Plug | Balance Bal. Sheet | Plug | Balance Bal. Sheet | 1,094,723 | 1,236,096 |
| Long-term debt, excluding current portion | 755,213 | Constant | Constant | 730,568 | 730,568 | ||
| Deferred income taxes and investment tax credits | 415,331 | 442.49% | % of inc. tax. | 442.49% | Historic 8 yrs % of inc. tax. | 450,105 | 435,258 |
| Customers' advances for construction | 160,027 | 20.01% | % of opr. Rev. | 20.01% | Historic 8 yrs % of opr. Rev. | 169,629 | 169,629 |
| Regulatory liabilities | 4,817 | 2.34% | % of reg. assets | 2.34% | Historic 8 yrs % of reg. assets | 5,106 | 5,106 |
| Other | 31,030 | 3.88% | % of opr. Rev. | 3.88% | Historic 8 yrs % of opr. Rev. | 32,892 | 32,892 |
| Contributions in aid of construction | 394,750 | 49.36% | % of opr. Rev. | 49.36% | Historic 8 yrs % of opr. Rev. | 418,435 | 418,435 |
| TOTAL OTHER LIABILITIES | 1,761,169 | Computation | Computation | 1,806,735 | 1,791,887 | ||
| Prev. SE | 1,100,218 | 1,100,218 | |||||
| Net SE change | 41,169 | 41,169 | |||||
| TOTAL SHAREHOLDER'S EQUITY | 1,100,218 | Computation | Prev. SE + RE + Net SE Change | 1,169,409 | 1,164,282 | ||
| CAPITAL | 3,956,110 | Computation | Computation | 4,070,866 | 4,192,266 | ||
| Assets | 4,398,516 | 4,398,516 | |||||
| Liab + SE | 4,277,117 | 4,398,516 | |||||
| Diff | 121,399 | 0.00 | |||||
| # OF SHARES OUTSTANDING | 135,881,405 | 1.01% | % of last year | 137,251,405 | 137,251,405 | ||
| 2005 EPS | $ 1.06 | PRO FORMA EPS | $ 1.13 | $ 1.10 | |||
| INCREASE SHARES OUTSTA. | 1,370,000 | ||||||
| NOTE: | |||||||
| Please refer to APPENDIX N - 2006 PRO FORMA FINANCIAL STATEMENT |
EARNINGS GROWTH ANALYSIS
| APPENDIX T - NOPLAT, FREE CASH FLOW, AND ROIC | ||||||||||||||
| AQUA AMERICA, INC. AND SUBSIDIARIES | ||||||||||||||
| NOPLAT, FREE CASH FLOW, AND ROIC | ||||||||||||||
| (In thousands of dollars, except per share amounts) | ||||||||||||||
| INVESTED CAPITAL CALCULATION | ||||||||||||||
| 31-Dec | 31-Dec | 31-Dec | 31-Dec | 31-Dec | 31-Dec | 31-Dec | 31-Dec | |||||||
| 1998 | 1999 | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | PF 2006 | PF 2007 | PF 2008 | PF 2009 | PF 2010 | PF 2011 | |
| Curr. Assets (excl. excess cash and mktbl. Sec.) | 56,666 | 59,525 | 65,735 | 69,872 | 70,908 | 80,557 | 85,852 | 88,020 | 114,060 | 126,607 | 139,268 | 151,802 | 163,946 | 173,783 |
| Non-interest bearing curr. Liabl. | 68,498 | 68,550 | 67,959 | 78,032 | 77,153 | 96,156 | 89,425 | 100,189 | 135,370 | 150,261 | 165,287 | 180,163 | 194,576 | 206,251 |
| OPERATING WORKING CAPITAL | (11,832) | (9,025) | (2,224) | (8,160) | (6,245) | (15,599) | (3,573) | (12,169) | (21,310) | (23,654) | (26,019) | (28,361) | (30,630) | (32,468) |
| NET PROPERTY, PLANT, EQUIPMENT | 1,016,194 | 1,135,364 | 1,251,427 | 1,368,115 | 1,486,703 | 1,824,291 | 2,069,812 | 2,279,950 | 2,529,263 | 2,807,482 | 3,088,230 | 3,366,171 | 3,635,465 | 3,853,592 |
| OTHER ASSETS | 80,641 | 85,916 | 96,561 | 122,352 | 159,458 | 161,476 | 194,359 | 256,819 | 250,529 | 275,868 | 301,437 | 326,750 | 351,275 | 371,141 |
| INVESTED CAPITAL (WITH GOODWILL) | 1,085,003 | 1,212,255 | 1,345,764 | 1,482,307 | 1,639,916 | 1,970,168 | 2,260,598 | 2,524,600 | 2,758,483 | 3,059,696 | 3,363,647 | 3,664,559 | 3,956,110 | 4,192,266 |
| INVESTED CAPITAL (WITHOUT GOODWILL) | 1,085,003 | 1,212,255 | 1,345,764 | 1,482,307 | 1,639,916 | 1,970,168 | 2,240,476 | 2,504,420 | 2,738,303 | 3,039,516 | 3,343,467 | 3,644,379 | 3,935,930 | 4,172,086 |
| Equity | 353,088 | 368,901 | 432,347 | 473,833 | 493,269 | 659,030 | 748,468 | 813,474 | 863,343 | 916,548 | 974,391 | 1,035,851 | 1,100,218 | 1,164,282 |
| Deferred income taxes | 126,809 | 136,528 | 151,718 | 167,577 | 187,300 | 190,395 | 223,887 | 250,346 | 305,899 | 330,313 | 359,820 | 387,817 | 415,331 | 435,258 |
| All interest-bearing debt | ||||||||||||||
| Current portion of long-term debt | 2,981 | 12,194 | 3,943 | 14,935 | 34,265 | 39,386 | 50,195 | 24,645 | - 0 | - 0 | - 0 | - 0 | - 0 | - 0 |
| Loans payable | 63,550 | 103,069 | 100,994 | 109,668 | 115,113 | 96,459 | 74,810 | 138,505 | 324,539 | 527,578 | 723,214 | 914,159 | 1,094,723 | 1,236,096 |
| Long-term debt, excluding current portion | 374,374 | 413,752 | 468,769 | 516,520 | 582,910 | 696,666 | 784,461 | 878,438 | 853,793 | 829,148 | 804,503 | 779,858 | 755,213 | 730,568 |
| TOTAL INVESTORS FUNDS | 920,802 | 1,034,444 | 1,157,771 | 1,282,533 | 1,412,857 | 1,681,936 | 1,881,821 | 2,105,408 | 2,347,574 | 2,603,587 | 2,861,928 | 3,117,685 | 3,365,486 | 3,566,204 |
| Change in Invested Capital (with goodwill) | 127,252 | 133,509 | 136,543 | 157,609 | 330,252 | 290,430 | 264,002 | 233,883 | 301,213 | 303,952 | 300,912 | 291,550 | 236,156 | |
| Change in Invested Capital (without goodwill) | 127,252 | 133,509 | 136,543 | 157,609 | 330,252 | 270,308 | 263,944 | 233,883 | 301,213 | 303,952 | 300,912 | 291,550 | 236,156 | |
| Depreciation | 30,612 | 32,271 | 37,979 | 41,424 | 48,522 | 54,564 | 60,747 | 61,559 | 68,290 | 75,802 | 83,382 | 90,887 | 98,158 | |
| GROSS INVESTMENT (WITH GOODWILL) | 157,864 | 165,780 | 174,522 | 199,033 | 378,774 | 344,994 | 324,749 | 295,442 | 369,503 | 379,754 | 384,294 | 382,437 | 334,313 | |
| GROSS INVESTMENT (WITHOUT GOODWILL) | 157,864 | 165,780 | 174,522 | 199,033 | 378,774 | 324,872 | 324,691 | 295,442 | 369,503 | 379,754 | 384,294 | 382,437 | 334,313 | |
| NOPLAT AND FREE CASH FLOW CALCULATION | ||||||||||||||
| 31-Dec | 31-Dec | 31-Dec | 31-Dec | 31-Dec | 31-Dec | 31-Dec | 31-Dec | |||||||
| TAXES ON EBIT | 1998 | 1999 | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | PF 2006 | PF 2007 | PF 2008 | PF 2009 | PF 2010 | PF 2011 |
| Provision for income taxes | 30,118 | 26,531 | 34,105 | 38,976 | 42,046 | 45,923 | 52,124 | 56,913 | 69,132 | 74,649 | 81,317 | 87,645 | 93,863 | 98,366 |
| Tax shield on interest expense | 11,914 | 10,495 | 13,491 | 15,418 | 16,633 | 18,166 | 20,619 | 22,514 | 27,347 | 29,530 | 32,168 | 34,670 | 37,130 | 38,912 |
| TAXES ON EBIT OR EBITA | 42,032 | 37,026 | 47,596 | 54,394 | 58,679 | 64,089 | 72,743 | 79,427 | 96,479 | 104,178 | 113,485 | 122,315 | 130,993 | 137,277 |
| NOPLAT | ||||||||||||||
| Operating Revenue | 250,771 | 257,326 | 274,014 | 307,280 | 322,028 | 367,233 | 442,039 | 496,779 | 556,392 | 617,596 | 679,355 | 740,497 | 799,737 | 847,721 |
| Operations and maintenance | 100,139 | 98,758 | 101,741 | 111,885 | 117,735 | 140,602 | 178,345 | 203,088 | 213,710 | 237,218 | 260,940 | 284,425 | 307,179 | 325,610 |
| Depreciation | 27,189 | 30,612 | 32,271 | 37,979 | 41,424 | 48,522 | 54,564 | 60,747 | 61,559 | 68,290 | 75,802 | 83,382 | 90,887 | 98,158 |
| Amortization | 2,275 | 1,291 | 1,829 | 2,189 | 2,898 | 2,941 | 4,300 | 4,741 | 4,073 | 4,454 | 4,944 | 5,438 | 5,928 | 6,402 |
| Taxes other than income taxes | 21,930 | 21,833 | 22,520 | 20,887 | 19,467 | 21,607 | 27,596 | 31,696 | 34,959 | 41,261 | 44,554 | 48,534 | 52,310 | 56,021 |
| Restructuring costs (recovery) | - 0 | 3,787 | (1,136) | - 0 | - 0 | - 0 | - 0 | - 0 | - 0 | - 0 | - 0 | - 0 | - 0 | - 0 |
| EBIT | 99,238 | 101,045 | 116,789 | 134,340 | 140,504 | 153,561 | 177,234 | 196,507 | 242,092 | 266,372 | 293,115 | 318,718 | 343,433 | 361,530 |
| Taxes on EBIT | 42,032 | 37,026 | 47,596 | 54,394 | 58,679 | 64,089 | 72,743 | 79,427 | 96,479 | 104,178 | 113,485 | 122,315 | 130,993 | 137,277 |
| Change in deferred taxes | 9,719 | 15,190 | 15,859 | 19,723 | 3,095 | 33,492 | 26,459 | 55,553 | 24,413 | 29,507 | 27,997 | 27,515 | 19,926 | |
| NOPLAT | 54,300 | 54,003 | 64,087 | 62,102 | 86,377 | 70,999 | 90,621 | 90,060 | 137,780 | 150,123 | 168,406 | 184,926 | 204,327 | |
| Change in Net PPE | 119,170 | 116,063 | 116,688 | 118,588 | 337,588 | 245,521 | 210,138 | 249,313 | 278,219 | 280,748 | 277,941 | 269,294 | 218,128 | |
| Change in working capital | 2,807 | 6,801 | (5,936) | 1,915 | (9,354) | 12,026 | (8,596) | (9,140) | (2,344) | (2,365) | (2,342) | (2,269) | (1,838) | |
| FREE CASH FLOW | (67,677) | (68,861) | (46,665) | (58,401) | (241,857) | (186,548) | (110,920) | (150,113) | (138,094) | (128,259) | (107,193) | (82,099) | (11,963) | |
| ROIC (WITH GOODWILL) | 5.00% | 4.45% | 4.76% | 4.19% | 5.27% | 3.60% | 4.01% | 3.57% | 4.99% | 4.91% | 5.01% | 5.05% | 5.16% | |
| ROIC (WITHOUT GOODWILL) | 5.00% | 4.45% | 4.76% | 4.19% | 5.27% | 3.60% | 4.04% | 3.60% | 5.03% | 4.94% | 5.04% | 5.07% | 5.19% |
HISTORICAL FS
| APPENDIX U - RESIDUAL EARNINGS ANALYSIS AND ROIC | ||||||||||||||
| AQUA AMERICA, INC. AND SUBSIDIARIES | ||||||||||||||
| RESIDUAL EARNINGS ANALYSIS AND ROIC | ||||||||||||||
| (In thousands of dollars, except per share amounts) | ||||||||||||||
| INVESTED CAPITAL CALCULATION | ||||||||||||||
| 31-Dec | 31-Dec | 31-Dec | 31-Dec | 31-Dec | 31-Dec | 31-Dec | 31-Dec | |||||||
| 1998 | 1999 | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | PF 2006 | PF 2007 | PF 2008 | PF 2009 | PF 2010 | PF 2011 | |
| Curr. Assets (excl. excess cash and mktbl. Sec.) | 56,666 | 59,525 | 65,735 | 69,872 | 70,908 | 80,557 | 85,852 | 88,020 | 114,060 | 126,607 | 139,268 | 151,802 | 163,946 | 173,783 |
| Non-interest bearing curr. Liabl. | 68,498 | 68,550 | 67,959 | 78,032 | 77,153 | 96,156 | 89,425 | 100,189 | 135,370 | 150,261 | 165,287 | 180,163 | 194,576 | 206,251 |
| OPERATING WORKING CAPITAL | (11,832) | (9,025) | (2,224) | (8,160) | (6,245) | (15,599) | (3,573) | (12,169) | (21,310) | (23,654) | (26,019) | (28,361) | (30,630) | (32,468) |
| NET PROPERTY, PLANT, EQUIPMENT | 1,016,194 | 1,135,364 | 1,251,427 | 1,368,115 | 1,486,703 | 1,824,291 | 2,069,812 | 2,279,950 | 2,529,263 | 2,807,482 | 3,088,230 | 3,366,171 | 3,635,465 | 3,853,592 |
| OTHER ASSETS | 80,641 | 85,916 | 96,561 | 122,352 | 159,458 | 161,476 | 194,359 | 256,819 | 250,529 | 275,868 | 301,437 | 326,750 | 351,275 | 371,141 |
| INVESTED CAPITAL (WITH GOODWILL) | 1,085,003 | 1,212,255 | 1,345,764 | 1,482,307 | 1,639,916 | 1,970,168 | 2,260,598 | 2,524,600 | 2,758,483 | 3,059,696 | 3,363,647 | 3,664,559 | 3,956,110 | 4,192,266 |
| INVESTED CAPITAL (WITHOUT GOODWILL) | 1,085,003 | 1,212,255 | 1,345,764 | 1,482,307 | 1,639,916 | 1,970,168 | 2,240,476 | 2,504,420 | 2,738,303 | 3,039,516 | 3,343,467 | 3,644,379 | 3,935,930 | 4,172,086 |
| Equity | 353,088 | 368,901 | 432,347 | 473,833 | 493,269 | 659,030 | 748,468 | 813,474 | 863,343 | 916,548 | 974,391 | 1,035,851 | 1,100,218 | 1,164,282 |
| Deferred income taxes | 126,809 | 136,528 | 151,718 | 167,577 | 187,300 | 190,395 | 223,887 | 250,346 | 305,899 | 330,313 | 359,820 | 387,817 | 415,331 | 435,258 |
| All interest-bearing debt | ||||||||||||||
| Current portion of long-term debt | 2,981 | 12,194 | 3,943 | 14,935 | 34,265 | 39,386 | 50,195 | 24,645 | - 0 | - 0 | - 0 | - 0 | - 0 | - 0 |
| Loans payable | 63,550 | 103,069 | 100,994 | 109,668 | 115,113 | 96,459 | 74,810 | 138,505 | 324,539 | 527,578 | 723,214 | 914,159 | 1,094,723 | 1,236,096 |
| Long-term debt, excluding current portion | 374,374 | 413,752 | 468,769 | 516,520 | 582,910 | 696,666 | 784,461 | 878,438 | 853,793 | 829,148 | 804,503 | 779,858 | 755,213 | 730,568 |
| TOTAL INVESTORS FUNDS | 920,802 | 1,034,444 | 1,157,771 | 1,282,533 | 1,412,857 | 1,681,936 | 1,881,821 | 2,105,408 | 2,347,574 | 2,603,587 | 2,861,928 | 3,117,685 | 3,365,486 | 3,566,204 |
| Change in Invested Capital (with goodwill) | 127,252 | 133,509 | 136,543 | 157,609 | 330,252 | 290,430 | 264,002 | 233,883 | 301,213 | 303,952 | 300,912 | 291,550 | 236,156 | |
| Change in Invested Capital (without goodwill) | 127,252 | 133,509 | 136,543 | 157,609 | 330,252 | 270,308 | 263,944 | 233,883 | 301,213 | 303,952 | 300,912 | 291,550 | 236,156 | |
| Depreciation | 30,612 | 32,271 | 37,979 | 41,424 | 48,522 | 54,564 | 60,747 | 61,559 | 68,290 | 75,802 | 83,382 | 90,887 | 98,158 | |
| GROSS INVESTMENT (WITH GOODWILL) | 157,864 | 165,780 | 174,522 | 199,033 | 378,774 | 344,994 | 324,749 | 295,442 | 369,503 | 379,754 | 384,294 | 382,437 | 334,313 | |
| GROSS INVESTMENT (WITHOUT GOODWILL) | 157,864 | 165,780 | 174,522 | 199,033 | 378,774 | 324,872 | 324,691 | 295,442 | 369,503 | 379,754 | 384,294 | 382,437 | 334,313 | |
| RESIDUAL EARNINGS ANALYSIS | ||||||||||||||
| EQUITY | Actual 2005 | Assume CAPM stays constant over time. | ||||||||||||
| 10 yr T-bond (2/17/06) | 4.98% | |||||||||||||
| Risk premium | 5.00% | |||||||||||||
| Market Cap (4/9/2006) | 3,440,000 | |||||||||||||
| Beta | 0.5 | |||||||||||||
| Ke | 7.4800% | |||||||||||||
| 31-Dec | 31-Dec | 31-Dec | 31-Dec | 31-Dec | 31-Dec | 31-Dec | 31-Dec | |||||||
| 1998 | 1999 | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | PF 2006 | PF 2007 | PF 2008 | PF 2009 | PF 2010 | PF 2011 | |
| # Shares outstanding | 105,990 | 106,800 | 111,830 | 113,980 | 113,190 | 123,482 | 127,227 | 129,031 | 130,401 | 131,771 | 133,141 | 134,511 | 135,881 | 137,251 |
| EPS | $ 0.43 | $ 0.34 | $ 0.49 | $ 0.53 | $ 0.59 | $ 0.60 | $ 0.65 | $ 0.71 | $ 0.81 | $ 0.87 | $ 0.93 | $ 1.00 | $ 1.06 | $ 1.10 |
| DPS | $ 0.28 | $ 0.25 | $ 0.27 | $ 0.30 | $ 0.33 | $ 0.32 | $ 0.36 | $ 0.40 | $ 0.43 | $ 0.46 | $ 0.50 | $ 0.54 | $ 0.58 | $ 0.63 |
| BVPS | $ 3.33 | $ 3.45 | $ 3.87 | $ 4.16 | $ 4.36 | $ 5.34 | $ 5.88 | $ 6.30 | $ 6.30 | $ 6.62 | $ 6.96 | $ 7.32 | $ 7.70 | $ 8.10 |
| RE per share | $ 0.09 | $ 0.23 | $ 0.24 | $ 0.28 | $ 0.27 | $ 0.25 | $ 0.27 | $ 0.34 | $ 0.39 | $ 0.44 | $ 0.48 | $ 0.51 | $ 0.52 | |
| ROIC (WITH GOODWILL) | 0.90% | 2.11% | 2.00% | 2.12% | 2.06% | 1.59% | 1.55% | 1.75% | 1.88% | 1.91% | 1.90% | 1.88% | 1.80% | |
| ROIC (WITHOUT GOODWILL) | 0.90% | 2.11% | 2.00% | 2.12% | 2.06% | 1.59% | 1.56% | 1.76% | 1.90% | 1.92% | 1.91% | 1.89% | 1.81% |
IC COMMON
| APPENDIX V - EARNINGS GROWTH ANALYSIS AND ROIC | ||||||||||||||
| AQUA AMERICA, INC. AND SUBSIDIARIES | ||||||||||||||
| EARNINGS GROWTH ANALYSIS AND ROIC | ||||||||||||||
| (In thousands of dollars, except per share amounts) | ||||||||||||||
| INVESTED CAPITAL CALCULATION | ||||||||||||||
| 31-Dec | 31-Dec | 31-Dec | 31-Dec | 31-Dec | 31-Dec | 31-Dec | 31-Dec | |||||||
| 1998 | 1999 | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | PF 2006 | PF 2007 | PF 2008 | PF 2009 | PF 2010 | PF 2011 | |
| Curr. Assets (excl. excess cash and mktbl. Sec.) | 56,666 | 59,525 | 65,735 | 69,872 | 70,908 | 80,557 | 85,852 | 88,020 | 114,060 | 126,607 | 139,268 | 151,802 | 163,946 | 173,783 |
| Non-interest bearing curr. Liabl. | 68,498 | 68,550 | 67,959 | 78,032 | 77,153 | 96,156 | 89,425 | 100,189 | 135,370 | 150,261 | 165,287 | 180,163 | 194,576 | 206,251 |
| OPERATING WORKING CAPITAL | (11,832) | (9,025) | (2,224) | (8,160) | (6,245) | (15,599) | (3,573) | (12,169) | (21,310) | (23,654) | (26,019) | (28,361) | (30,630) | (32,468) |
| NET PROPERTY, PLANT, EQUIPMENT | 1,016,194 | 1,135,364 | 1,251,427 | 1,368,115 | 1,486,703 | 1,824,291 | 2,069,812 | 2,279,950 | 2,529,263 | 2,807,482 | 3,088,230 | 3,366,171 | 3,635,465 | 3,853,592 |
| OTHER ASSETS | 80,641 | 85,916 | 96,561 | 122,352 | 159,458 | 161,476 | 194,359 | 256,819 | 250,529 | 275,868 | 301,437 | 326,750 | 351,275 | 371,141 |
| INVESTED CAPITAL (WITH GOODWILL) | 1,085,003 | 1,212,255 | 1,345,764 | 1,482,307 | 1,639,916 | 1,970,168 | 2,260,598 | 2,524,600 | 2,758,483 | 3,059,696 | 3,363,647 | 3,664,559 | 3,956,110 | 4,192,266 |
| INVESTED CAPITAL (WITHOUT GOODWILL) | 1,085,003 | 1,212,255 | 1,345,764 | 1,482,307 | 1,639,916 | 1,970,168 | 2,240,476 | 2,504,420 | 2,738,303 | 3,039,516 | 3,343,467 | 3,644,379 | 3,935,930 | 4,172,086 |
| Equity | 353,088 | 368,901 | 432,347 | 473,833 | 493,269 | 659,030 | 748,468 | 813,474 | 863,343 | 916,548 | 974,391 | 1,035,851 | 1,100,218 | 1,164,282 |
| Deferred income taxes | 126,809 | 136,528 | 151,718 | 167,577 | 187,300 | 190,395 | 223,887 | 250,346 | 305,899 | 330,313 | 359,820 | 387,817 | 415,331 | 435,258 |
| All interest-bearing debt | ||||||||||||||
| Current portion of long-term debt | 2,981 | 12,194 | 3,943 | 14,935 | 34,265 | 39,386 | 50,195 | 24,645 | - 0 | - 0 | - 0 | - 0 | - 0 | - 0 |
| Loans payable | 63,550 | 103,069 | 100,994 | 109,668 | 115,113 | 96,459 | 74,810 | 138,505 | 324,539 | 527,578 | 723,214 | 914,159 | 1,094,723 | 1,236,096 |
| Long-term debt, excluding current portion | 374,374 | 413,752 | 468,769 | 516,520 | 582,910 | 696,666 | 784,461 | 878,438 | 853,793 | 829,148 | 804,503 | 779,858 | 755,213 | 730,568 |
| TOTAL INVESTORS FUNDS | 920,802 | 1,034,444 | 1,157,771 | 1,282,533 | 1,412,857 | 1,681,936 | 1,881,821 | 2,105,408 | 2,347,574 | 2,603,587 | 2,861,928 | 3,117,685 | 3,365,486 | 3,566,204 |
| Change in Invested Capital (with goodwill) | 127,252 | 133,509 | 136,543 | 157,609 | 330,252 | 290,430 | 264,002 | 233,883 | 301,213 | 303,952 | 300,912 | 291,550 | 236,156 | |
| Change in Invested Capital (without goodwill) | 127,252 | 133,509 | 136,543 | 157,609 | 330,252 | 270,308 | 263,944 | 233,883 | 301,213 | 303,952 | 300,912 | 291,550 | 236,156 | |
| Depreciation | 30,612 | 32,271 | 37,979 | 41,424 | 48,522 | 54,564 | 60,747 | 61,559 | 68,290 | 75,802 | 83,382 | 90,887 | 98,158 | |
| GROSS INVESTMENT (WITH GOODWILL) | 157,864 | 165,780 | 174,522 | 199,033 | 378,774 | 344,994 | 324,749 | 295,442 | 369,503 | 379,754 | 384,294 | 382,437 | 334,313 | |
| GROSS INVESTMENT (WITHOUT GOODWILL) | 157,864 | 165,780 | 174,522 | 199,033 | 378,774 | 324,872 | 324,691 | 295,442 | 369,503 | 379,754 | 384,294 | 382,437 | 334,313 | |
| EARNINGS GROWTH ANALYSIS | ||||||||||||||
| EQUITY | Actual 2005 | Assume CAPM stays constant over time. | ||||||||||||
| 10 yr T-bond (2/17/06) | 4.98% | |||||||||||||
| Risk premium | 5.00% | |||||||||||||
| Market Cap (4/9/2006) | 3,440,000 | |||||||||||||
| Beta | 0.5 | |||||||||||||
| Ke | 7.4800% | |||||||||||||
| 31-Dec | 31-Dec | 31-Dec | 31-Dec | 31-Dec | 31-Dec | 31-Dec | 31-Dec | |||||||
| 1998 | 1999 | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | PF 2006 | PF 2007 | PF 2008 | PF 2009 | PF 2010 | PF 2011 | |
| # Shares outstanding | 105,990 | 106,800 | 111,830 | 113,980 | 113,190 | 123,482 | 127,227 | 129,031 | 130,401 | 131,771 | 133,141 | 134,511 | 135,881 | 137,251 |
| EPS | $ 0.43 | $ 0.34 | $ 0.49 | $ 0.53 | $ 0.59 | $ 0.60 | $ 0.65 | $ 0.71 | $ 0.81 | $ 0.87 | $ 0.93 | $ 1.00 | $ 1.06 | $ 1.10 |
| DPS | $ 0.28 | $ 0.25 | $ 0.27 | $ 0.30 | $ 0.33 | $ 0.32 | $ 0.36 | $ 0.40 | $ 0.43 | $ 0.46 | $ 0.50 | $ 0.54 | $ 0.58 | $ 0.63 |
| BVPS | $ 3.33 | $ 3.45 | $ 3.87 | $ 4.16 | $ 4.36 | $ 5.34 | $ 5.88 | $ 6.30 | $ 6.30 | $ 6.62 | $ 6.96 | $ 7.32 | $ 7.70 | $ 8.10 |
| RE per share | $ 0.09 | $ 0.23 | $ 0.24 | $ 0.28 | $ 0.27 | $ 0.25 | $ 0.27 | $ 0.34 | $ 0.39 | $ 0.44 | $ 0.48 | $ 0.51 | $ 0.52 | |
| AEG per share | $ 0.14 | $ 0.01 | $ 0.04 | $ (0.00) | $ (0.03) | $ 0.02 | $ 0.07 | $ 0.06 | $ 0.04 | $ 0.04 | $ 0.03 | $ 0.01 | ||
| ROIC (WITH GOODWILL) | 2.11% | 2.00% | 2.12% | 2.06% | 1.59% | 1.55% | 1.75% | 1.88% | 1.91% | 1.90% | 1.88% | 1.80% | ||
| ROIC (WITHOUT GOODWILL) | 2.11% | 2.00% | 2.12% | 2.06% | 1.59% | 1.56% | 1.76% | 1.90% | 1.92% | 1.91% | 1.89% | 1.81% |
| APPENDIX W - CONSOLIDATED HISTORICAL FINANCIAL STATEMENTS | |||||||||
| AQUA AMERICA, INC. AND SUBSIDIARIES | |||||||||
| CONSOLIDATED HISTORICAL FINANCIAL STATEMENTS | |||||||||
| (In thousands of dollars, except per share amounts) | |||||||||
| 31-Dec | 31-Dec | 31-Dec | 31-Dec | 31-Dec | 31-Dec | 31-Dec | 31-Dec | ||
| STATEMENT OF INCOME AND COMPREHENSIVE INCOME | 1998 | 1999 | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | |
| OPERATING REVENUES | 250,771 | 257,326 | 274,014 | 307,280 | 322,028 | 367,233 | 442,039 | 496,779 | OPERATING REVENUES |
| COST AND EXPENSES | COST AND EXPENSES | ||||||||
| Operations and maintenance | 100,139 | 98,758 | 101,741 | 111,885 | 117,735 | 140,602 | 178,345 | 199,698 | Operations and maintenance |
| Depreciation (including lease capitalization) | 27,189 | 30,612 | 32,271 | 37,979 | 41,424 | 48,522 | 54,564 | 62,949 | Depreciation (including lease capitalization) |
| Amortization | 2,275 | 1,291 | 1,829 | 2,189 | 2,898 | 2,941 | 4,300 | 4,741 | Amortization |
| Taxes other than income taxes | 21,930 | 21,833 | 22,520 | 20,887 | 19,467 | 21,607 | 27,596 | 31,696 | Taxes other than income taxes |
| Restructuring costs (recovery) | - 0 | 3,787 | (1,136) | - 0 | - 0 | - 0 | - 0 | - 0 | Restructuring costs (recovery) |
| OPERATING INCOME | 99,238 | 101,045 | 116,789 | 134,340 | 140,504 | 153,561 | 177,234 | 197,695 | OPERATING INCOME |
| OTHER EXPENSE (INCOME) | OTHER EXPENSE (INCOME) | ||||||||
| Interest expense, net | 31,888 | 33,698 | 40,360 | 39,859 | 40,396 | 44,662 | 48,679 | 53,250 | Interest expense, net |
| Allowance for funds used during construction | (1,245) | (1,995) | (2,688) | (1,222) | (1,389) | (2,127) | (2,304) | (2,447) | Allowance for funds used during construction |
| Gain on sale of water systems | (6,680) | - 0 | - 0 | - 0 | (5,676) | - 0 | - 0 | - 0 | Gain on sale of water systems |
| Gain on sale of other assets | - 0 | (780) | (5,076) | (3,384) | (2,079) | (5,692) | (1,272) | (1,177) | Gain on sale of other assets |
| Merger transaction costs (recovery) | - 0 | 6,334 | (2,905) | - 0 | - 0 | - 0 | - 0 | - 0 | Merger transaction costs (recovery) |
| INCOME BEFORE INCOME TAXES | 75,275 | 63,788 | 87,098 | 99,087 | 109,252 | 116,718 | 132,131 | 148,069 | INCOME BEFORE INCOME TAXES |
| Provision for income taxes | 30,118 | 26,531 | 34,105 | 38,976 | 42,046 | 45,923 | 52,124 | 56,913 | Provision for income taxes |
| NET INCOME | 45,157 | 37,257 | 52,993 | 60,111 | 67,206 | 70,795 | 80,007 | 91,156 | NET INCOME |
| DIVIDENDS ON PREFERRED STOCK | 337 | 202 | 209 | 106 | 52 | 10 | - 0 | - 0 | DIVIDENDS ON PREFERRED STOCK |
| NET INCOME AVAILABLE TO COMMON STOCK | 44,820 | 37,055 | 52,784 | 60,005 | 67,154 | 70,785 | 80,007 | 91,156 | NET INCOME AVAILABLE TO COMMON STOCK |
| NET INCOME | 45,157 | 37,257 | 52,993 | 60,111 | 67,206 | 70,795 | 80,007 | 91,156 | |
| OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX: | OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX: | ||||||||
| Minimum pension liability adjustment | - 0 | - 0 | - 0 | - 0 | - 0 | - 0 | (1,742) | (1,340) | Minimum pension liability adjustment |
| Unrealized gain on securities | - 0 | 2,020 | 908 | 39 | 104 | 455 | 59 | - 0 | Unrealized gain on securities |
| Reclassification adjustment for gains reported in net income | - 0 | - 0 | (2,002) | (239) | (767) | (347) | (230) | - 0 | Reclassification adjustment for gains reported in net income |
| COMPREHENSIVE INCOME | 45,157 | 39,277 | 51,899 | 59,911 | 66,543 | 70,903 | 78,094 | 89,816 | COMPREHENSIVE INCOME |
| BALANCE SHEET | |||||||||
| Cash and cash equivalents | 8,247 | 4,658 | 4,087 | 1,010 | 5,915 | 10,757 | 14,192 | 11,872 | Cash and cash equivalents |
| Account receivables and unbilled revenues, net | 40,768 | 44,399 | 50,242 | 56,331 | 57,680 | 62,320 | 64,538 | 62,690 | Account receivables and unbilled revenues, net |
| Inventory, materials and supplies | 3,857 | 3,948 | 4,352 | 4,446 | 4,555 | 5,841 | 6,903 | 7,798 | Inventory, materials and supplies |
| Prepayments and other current assets | 7,026 | 6,520 | 7,054 | 8,085 | 2,758 | 5,051 | 5,570 | 7,596 | Prepayments and other current assets |
| TOTAL CURRENT ASSETS | 59,898 | 59,525 | 65,735 | 69,872 | 70,908 | 83,969 | 91,203 | 89,956 | TOTAL CURRENT ASSETS |
| Property, plant and equipment, at cost | 1,248,621 | 1,393,027 | 1,536,162 | 1,677,061 | 1,836,892 | 2,302,304 | 2,626,151 | 2,900,585 | Property, plant and equipment, at cost |
| Less: Accumulated Depreciation | 232,427 | 257,663 | 284,735 | 308,946 | 350,189 | 478,013 | 556,339 | 620,635 | Less: Accumulated Depreciation |
| TOTAL FIXED ASSETS | 1,016,194 | 1,135,364 | 1,251,427 | 1,368,115 | 1,486,703 | 1,824,291 | 2,069,812 | 2,279,950 | TOTAL FIXED ASSETS |
| Regulatory assets | 57,697 | 58,287 | 67,470 | 79,669 | 92,313 | 98,761 | 122,935 | 130,953 | Regulatory assets |
| Deferred charges an other assets, net | 22,944 | 27,629 | 25,129 | 22,915 | 23,391 | 34,277 | 34,106 | 37,061 | Deferred charges an other assets, net |
| Funds restricted to construction activity | - 0 | - 0 | 3,962 | 19,768 | 43,754 | 28,438 | 17,196 | 68,625 | Funds restricted to construction activity |
| Goodwill | - 0 | - 0 | - 0 | - 0 | - 0 | - 0 | 20,122 | 20,180 | Goodwill |
| TOTAL ASSETS | 1,156,733 | 1,280,805 | 1,413,723 | 1,560,339 | 1,717,069 | 2,069,736 | 2,355,374 | 2,626,725 | TOTAL ASSETS |
| Current portion of long-term debt | 2,981 | 12,194 | 3,943 | 14,935 | 34,265 | 39,386 | 50,195 | 24,645 | Current portion of long-term debt |
| Loans payable | 63,550 | 103,069 | 100,994 | 109,668 | 115,113 | 96,459 | 74,810 | 138,505 | Loans payable |
| Accounts payable | 25,248 | 24,286 | 20,635 | 27,667 | 31,058 | 32,321 | 34,915 | 55,455 | Accounts payable |
| Accrued interest | 8,406 | 8,994 | 10,199 | 10,199 | 9,269 | 11,126 | 12,029 | 13,052 | Accrued interest |
| Accrued taxes | 14,382 | 12,689 | 15,815 | 22,865 | 14,500 | 16,779 | 8,975 | 1,111 | Accrued taxes |
| Other accrued liabilities | 20,462 | 22,581 | 21,310 | 17,301 | 22,326 | 35,930 | 33,506 | 30,571 | Other accrued liabilities |
| TOTAL CURRENT LIABILITIES | 135,029 | 183,813 | 172,896 | 202,635 | 226,531 | 232,001 | 214,430 | 263,339 | TOTAL CURRENT LIABILITIES |
| Long-term debt, excluding current portion | 374,374 | 413,752 | 468,769 | 516,520 | 582,910 | 696,666 | 784,461 | 878,438 | Long-term debt, excluding current portion |
| Deferred income taxes and investment tax credits | 126,809 | 136,528 | 151,718 | 167,577 | 187,300 | 190,395 | 223,887 | 250,346 | Deferred income taxes and investment tax credits |
| Customers' advances for construction | 57,781 | 59,494 | 58,718 | 59,886 | 69,790 | 72,500 | 73,095 | 74,828 | Customers' advances for construction |
| Regulatory liabilities | - 0 | - 0 | - 0 | - 0 | - 0 | - 0 | 11,942 | 11,751 | Regulatory liabilities |
| Other | 8,735 | 8,434 | 9,109 | 9,204 | 13,330 | 9,419 | 21,283 | 31,969 | Other |
| Contributions in aid of construction | 100,917 | 109,883 | 120,166 | 130,684 | 143,939 | 209,725 | 277,808 | 302,580 | Contributions in aid of construction |
| TOTAL OTHER LIABILITIES | 668,616 | 728,091 | 808,480 | 883,871 | 997,269 | 1,178,705 | 1,392,476 | 1,549,912 | TOTAL OTHER LIABILITIES |
| STOCKHOLDER'S EQUITY | STOCKHOLDER'S EQUITY | ||||||||
| Common stock at $0.50 par value | 20,617 | 20,814 | 27,260 | 34,650 | 35,034 | 46,635 | 48,036 | 64,829 | Common stock at $0.50 par value |
| Capital in excess of par value | 244,457 | 251,440 | 291,013 | 304,039 | 317,871 | 413,008 | 468,524 | 478,508 | Capital in excess of par value |
| Retained earnings | 91,683 | 101,533 | 123,911 | 149,682 | 180,047 | 210,915 | 245,115 | 285,132 | Retained earnings |
| Treasury stock at cost | (9,478) | (11,270) | (15,346) | (17,167) | (40,421) | (12,611) | (12,702) | (12,914) | Treasury stock at cost |
| Accumulated other comprehensive income | - 0 | 2,020 | 926 | 726 | 63 | 171 | (1,742) | (3,082) | Accumulated other comprehensive income |
| Unearned compensation | - 0 | - 0 | - 0 | - 0 | - 0 | - 0 | - 0 | (550) | Unearned compensation |
| 6.05% Series B Preferred Stock | 3,220 | 1,760 | 1,760 | 1,116 | 172 | - 0 | - 0 | - 0 | 6.05% Series B Preferred Stock |
| Minority interest | 2,589 | 2,604 | 2,823 | 787 | 503 | 912 | 1,237 | 1,551 | Minority interest |
| TOTAL SHAREHOLDER'S EQUITY | 353,088 | 368,901 | 432,347 | 473,833 | 493,269 | 659,030 | 748,468 | 813,474 | TOTAL SHAREHOLDER'S EQUITY |
| TOTAL LIABILITIES & SE | 1,156,733 | 1,280,805 | 1,413,723 | 1,560,339 | 1,717,069 | 2,069,736 | 2,355,374 | 2,626,725 | TOTAL LIABILITIES & SE |
| Shares (in thousands) | |||||||||
| (Figures are weighted averages) | |||||||||
| # Shares | 40,362 | 63,850 | 64,759 | 84,841 | 85,674 | 117,700 | 124,329 | 127,364 | |
| Diluted # Sh. | 40,854 | 64,539 | 65,414 | 85,943 | 86,538 | 118,993 | 125,710 | 129,206 | |
| Stock Split | 02-Dec-03 [5:4] | 02-Dec-03 [5:4] | 02-Dec-03 [5:4] | 02-Dec-03 [5:4] | 02-Dec-05 [4:3] | 02-Dec-05 [4:3] | 02-Dec-05 [4:3] | Stock Split | |
| # Shares adjusted for stock split (source: Bloomberg) | 105,990 | 106,800 | 111,830 | 113,980 | 113,190 | 123,450 | 169,570 | 128,970 | |
| 0.4024269154 | 0.4270186456 | 0.4385396367 | 0.4252928925 | 0.4469766604 | 0.5710951902 | 0.6284694337 | 0.6090837173 | 49.36% |
| APPENDIX X - CONSOLIDATED STATEMENTS OF INCOME AND COMPENHENSIVE INCOME - COMMON | |||||||||
| AQUA AMERICA, INC. AND SUBSIDIARIES | |||||||||
| CONSOLIDATED STATEMENTS OF INCOME AND COMPENHENSIVE INCOME - COMMON | |||||||||
| (In thousands of dollars, except per share amounts) | |||||||||
| 31-Dec | 31-Dec | 31-Dec | 31-Dec | 31-Dec | 31-Dec | 31-Dec | 31-Dec | ||
| 1998 | 1999 | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | ||
| OPERATING REVENUES | 100.00 | 100.00 | 100.00 | 100.00 | 100.00 | 100.00 | 100.00 | 100.00 | OPERATING REVENUES |
| COST AND EXPENSES | COST AND EXPENSES | ||||||||
| Operations and maintenance | 39.93 | 38.38 | 37.13 | 36.41 | 36.56 | 38.29 | 40.35 | 40.20 | Operations and maintenance |
| Depreciation (including lease capitalization) | 10.84 | 11.90 | 11.78 | 12.36 | 12.86 | 13.21 | 12.34 | 12.67 | Depreciation (including lease capitalization) |
| Amortization | 0.91 | 0.50 | 0.67 | 0.71 | 0.90 | 0.80 | 0.97 | 0.95 | Amortization |
| Taxes other than income taxes | 8.75 | 8.48 | 8.22 | 6.80 | 6.05 | 5.88 | 6.24 | 6.38 | Taxes other than income taxes |
| Restructuring costs (recovery) | - 0 | 1.47 | (0.41) | - 0 | - 0 | - 0 | - 0 | - 0 | Restructuring costs (recovery) |
| OPERATING INCOME | 39.57 | 39.27 | 42.62 | 43.72 | 43.63 | 41.82 | 40.09 | 39.80 | OPERATING INCOME |
| OTHER EXPENSE (INCOME) | OTHER EXPENSE (INCOME) | ||||||||
| Interest expense, net | 12.72 | 13.10 | 14.73 | 12.97 | 12.54 | 12.16 | 11.01 | 10.72 | Interest expense, net |
| Allowance for funds used during construction | (0.50) | (0.78) | (0.98) | (0.40) | (0.43) | (0.58) | (0.52) | (0.49) | Allowance for funds used during construction |
| Gain on sale of water systems | (2.66) | - 0 | - 0 | - 0 | (1.76) | - 0 | - 0 | - 0 | Gain on sale of water systems |
| Gain on sale of other assets | - 0 | (0.30) | (1.85) | (1.10) | (0.65) | (1.55) | (0.29) | (0.24) | Gain on sale of other assets |
| Merger transaction costs (recovery) | - 0 | 2.46 | (1.06) | - 0 | - 0 | - 0 | - 0 | - 0 | Merger transaction costs (recovery) |
| INCOME BEFORE INCOME TAXES | 30.02 | 24.79 | 31.79 | 32.25 | 33.93 | 31.78 | 29.89 | 29.81 | INCOME BEFORE INCOME TAXES |
| Provision for income taxes | 12.01 | 10.31 | 12.45 | 12.68 | 13.06 | 12.51 | 11.79 | 11.46 | Provision for income taxes |
| NET INCOME | 18.01 | 14.48 | 19.34 | 19.56 | 20.87 | 19.28 | 18.10 | 18.35 | NET INCOME |
| DIVIDENDS ON PREFERRED STOCK | 0.13 | 0.08 | 0.08 | 0.03 | 0.02 | 0.00 | - 0 | - 0 | DIVIDENDS ON PREFERRED STOCK |
| NET INCOME AVAILABLE TO COMMON STOCK | 17.87 | 14.40 | 19.26 | 19.53 | 20.85 | 19.28 | 18.10 | 18.35 | NET INCOME AVAILABLE TO COMMON STOCK |
| NET INCOME | 18.01 | 14.48 | 19.34 | 19.56 | 20.87 | 19.28 | 18.10 | 18.35 | |
| OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX: | OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX: | ||||||||
| Minimum pension liability adjustment | - 0 | - 0 | - 0 | - 0 | - 0 | - 0 | (0.39) | (0.27) | Minimum pension liability adjustment |
| Unrealized gain on securities | - 0 | 0.78 | 0.33 | 0.01 | 0.03 | 0.12 | 0.01 | - 0 | Unrealized gain on securities |
| Reclassification adjustment for gains reported in net income | - 0 | - 0 | (0.73) | (0.08) | (0.24) | (0.09) | (0.05) | - 0 | Reclassification adjustment for gains reported in net income |
| COMPREHENSIVE INCOME | 18.01 | 15.26 | 18.94 | 19.50 | 20.66 | 19.31 | 17.67 | 18.08 | COMPREHENSIVE INCOME |
| 8 YEAR AVERAGE OF SALES | |||||||||
| OPERATING REVENUES | 100.00 | ||||||||
| COST AND EXPENSES | |||||||||
| Operations and maintenance | 38.41 | ||||||||
| Depreciation (including lease capitalization) | 12.25 | ||||||||
| Amortization | 0.80 | ||||||||
| Taxes other than income taxes | 7.10 | ||||||||
| Restructuring costs (recovery) | 0.13 | ||||||||
| OPERATING INCOME | 41.31 | ||||||||
| OTHER EXPENSE (INCOME) | |||||||||
| Interest expense, net | 12.49 | ||||||||
| Allowance for funds used during construction | (0.58) | ||||||||
| Gain on sale of water systems | (0.55) | ||||||||
| Gain on sale of other assets | (0.75) | ||||||||
| Merger transaction costs (recovery) | 0.18 | ||||||||
| INCOME BEFORE INCOME TAXES | 30.53 | ||||||||
| Provision for income taxes | 12.03 | ||||||||
| NET INCOME | 18.50 | ||||||||
| DIVIDENDS ON PREFERRED STOCK | 0.04 | ||||||||
| NET INCOME AVAILABLE TO COMMON STOCK | 18.46 | ||||||||
| NET INCOME | 18.50 | ||||||||
| OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX: | |||||||||
| Minimum pension liability adjustment | (0.08) | ||||||||
| Unrealized gain on securities | 0.16 | ||||||||
| Reclassification adjustment for gains reported in net income | (0.15) | ||||||||
| COMPREHENSIVE INCOME | 18.43 |