(Source: Business Wire)Aqua America, Inc. (NYSE: WTR) today reported increased operating revenues for the quarter ending September 30, 2009 compared to the same period last year, despite extremely unfavorable weather conditions, including a historically wet summer in the company's Mid-Atlantic operation, which led to actual declines in customer water usage. Revenues for the quarter ending September 30, 2009 were $180.8 million compared to $177.1 million in 2008, a 2.1 percent increase.

The Board of Directors has declared a 7.4 percent dividend increase of $0.01 per share from $0.135 to $0.145 per share effective for the December 1, 2009 quarterly dividend, to shareholders of record on November 16, 2009. This increase is equivalent to $0.04 above the current annualized dividend rate of $0.54, to $0.58 per share and is the nineteenth time in the last 18 years that the dividend has been increased. Aqua has paid a consecutive quarterly dividend for more than 60 years.

For the quarter, net income was $33.5 million versus $35.4 million in 2008. Corresponding diluted earnings per share for the quarter were $0.25, compared to $0.26 for 2008 on 0.8 percent more shares outstanding. In the third quarter of 2008, the company's results were positively affected by a $0.02 per share gain related to a utility system sale in Woodhaven, IL under the company's "pruning policy" -- a strategy to continually evaluate and sell under-performing operations. There was no comparable gain in the third quarter of 2009. Aqua estimates that the wet weather in the third quarter of 2009 resulted in an approximate $0.03 reduction in basic and diluted earnings per share.

Operating revenues for the first nine months of 2009 totaled $502.6 million, an increase of 7.6 percent from revenues of $467.1 million for the same period in 2008. For the first three quarters of 2009, net income increased 7.5 percent to $77.7 million from $72.3 million and corresponding diluted earnings per share increased to $0.57 from $0.54 for the same period last year. The 2008 earnings included the $0.02 per share gain from the Woodhaven, IL system sale.

Aqua America Chairman and CEO Nicholas DeBenedictis said, "Our results this quarter were impacted by the loss of revenue due to wet weather in several of our operating areas, including Pennsylvania, where sendout was down more than 9 percent. U.S. weather service records show 2009 was the eighth wettest summer in the last 137 years in southeastern Pennsylvania, and it was a similar story in neighboring New Jersey, where sendout was down more than 19 percent. The slowing economy and its effect on the company's organic customer growth, as well as the $0.02 per share gain from the system sale in the third quarter of 2008, also affected the net income and earnings per share comparison for the quarter. With normal weather and operating earnings adjusted for the utility system sale gain in 2008, the third quarter results would have compared very favorably year-over-year."

The company's cost containment culture produced further improvements. For the quarter, operations and maintenance expenses increased by $1.75 million, or 2.6 percent. DeBenedictis said, "The limited expense growth is a reflection of management's continued emphasis on efficiency as well as lower water production costs due to the reduced sendout in those states that were negatively impacted by weather. In fact, adjusting for the $4.1 million one-time system sale gain (taken as an expense reduction) in the third quarter 2008, our operations and maintenance expense actually decreased for the quarter. Even though we have the lowest operations and maintenance expense to revenue ratio of any major water utility, I expect Aqua's efficiency ratio to improve further for the full year of 2009 compared to 2008, given the efforts made to minimize increases in our controllable expenses."

To date in 2009, Aqua America's operating companies have been granted rate relief intended to increase annual operating revenues by $29.3 million. The company currently has collective rate requests pending in New York, Indiana, Missouri, Virginia, and North Carolina totaling $12 million and expects to seek additional rate relief of approximately $57 million through rate filings in the fourth quarter of 2009. The timing and extent to which rate increases might be granted by the applicable regulatory agencies will vary by state. Most cases filed or expected to be filed in 2009 will not impact revenues until 2010, given that a typical case takes 9 to 12 months to complete.

DeBenedictis said, "Our continued efforts to recover our capital investments have enabled us to grow earnings over the last 12 months despite facing obstacles including unfavorable weather, lower organic customer growth due to the housing market, and overall economic conditions. I remain confident that Aqua is positioned to benefit as weather patterns return to normal, the housing market improves, and the overall economy expands."

In October, the company's largest subsidiary, Aqua Pennsylvania, Inc., announced plans to issue up to $75 million of aggregate principal amount of long-term first mortgage bonds. The bonds were rated by Standard and Poor's (S&P) at AA- with a 1+ recovery rating. The proceeds from this financing will be used by Aqua to help finance part of the company's $1 billion multi-year capital plan to improve the distribution infrastructure for its customers in Pennsylvania. DeBenedictis said, "Due to the company's access to financing markets, Aqua expects to lower its embedded cost of debt for the tenth consecutive year. This helps us keep costs down for our customers and allows us to further enhance water quality and service reliability for our customers. In 2009, Aqua expects to invest approximately $300 million in infrastructure improvements."

So far in 2009, Aqua America companies have continued to expand their operations and have completed 15 acquisitions of systems that provide water or wastewater service to approximately 13,400 people.