QUOTE AND NEWS
SeekingAlpha  Sep 20  Comment 
By Stock Market Sherpa: Over the last several years, the idea of investing in water has become a somewhat popular trend. Water is an essential commodity which every living being requires to survive and only a handful of companies control the...
SeekingAlpha  Aug 11  Comment 
By Alpha Source: Aqua America (NYSE:WTR), the second-biggest publicly traded U.S. water utility, reported second quarter earnings for 2014 on August 5th. Following the release, its shares had the biggest daily rise since last August. This was a...
Benzinga  Aug 4  Comment 
Aqua Resources, Inc., the unregulated subsidiary of Aqua America, Inc. (NYSE: WTR) today announced that it has purchased Tri-State Grouting LLC (TSG) of Newark, DE, which specializes in storm and wastewater infrastructure and rehabilitation....
TheStreet.com  Jun 25  Comment 
NEW YORK (TheStreet) -- Aqua America Inc. , which is the second-largest publicly traded water company in the U.S., is looking for new assets to expand its footprint as American cities with debt issues consider partnerships with utilities,...
Market Intelligence Center  Jun 6  Comment 
For a hedged play on Aqua America Inc (WTR) MarketIntelligenceCenter.com’s patented trade-picking algorithms recommend the Dec. '14 $25.00 covered call for a net debit in the $24.14 area. That is also the break-even stock price for the covered...
SeekingAlpha  May 28  Comment 
By George Fisher: I have followed various water stocks since 1997. There is a chapter concerning purchasing water utilities in my book published in 2002. In May of 2002, Philadelphia Suburban - now Aqua America (WTR) - offered to buy Nashua...
DailyFinance  May 16  Comment 
Aqua America announced that the Fort Wayne City Council has unanimously voted to approve the purchase of Aqua Indiana’s drinking water system assets in southwest Allen County, Indiana, for $67 million, which comprises $50.1...
SeekingAlpha  May 8  Comment 
Aqua America (WTR) Q1 2014 Earnings Call May 08, 2014 11:00 am ET Executives Brian Dingerdissen - Director of Investor Relations Nicholas DeBenedictis - Chairman, Chief Executive Officer, President, Chairman of Executive Committee,...




RELATED WIKI ARTICLES
 

Aqua America (NYSE:WTR) is a water and wastewater company that provides water to homes, offices, and industrial customers across 14 state boundaries. The state of Pennsylvania accounts for 52% of the company's revenue (the next largest region, Texas, accounts for just 8.2% of revenue). Residential customers make up more than half of Aqua America's client base.[1] The company earned $953 million in revenue and $104 million in net income in 2009.[2]

Over 90% of the water provided to customers is drawn directly from lakes, reservoirs, and wells in customers' home states. During times of drought, Aqua America sustains signifcant extra costs transporting water to their customers; however, they have been successful passing these costs on to their customers in the form of rate increases.

Company Overview

Aqua America's utility services reach 2.8 million residential customers in Pennsylvania, Ohio, North Carolina, Illinois, Texas, New Jersey, New York, Florida, Indiana, Virginia, Maine, Missouri, South Carolina, and Georgia. Though the company began in Pennsylvania and remains headquartered in Bryn Mawr, over the past 5 years the company has purchased smaller private utilities across the 13 states, gradually extending southward. Such acquisition comprises the bulk of Aqua America's stated business model. The company's water utility operations draw water from natural and manmade bodies of water like lakes, reservoirs, and wells purchasing less than 10% of water supplies from other suppliers.[1]

Business Segments[1]

  • Residential Water - 58.5% of net sales
  • Commercial Water - 14% of net sales
  • Fire Protection - 4.4% of net sales
  • Industrial Water - 2.9% of net sales
  • Other Water - 6.1% of net sales
  • Wastewater - 10.5% of net sales
  • Other Utility - 1.9% of net sales

Geographic Segments[1]

  • Pennsylvania - 52.3% of net sales
  • Texas - 8.2% of net sales
  • Ohio - 6.3% of net sales
  • Illinois - 6.3% of net sales
  • North Carolina - 6.2% of net sales
  • Other states - 19% of net sales

Business Growth

FY 2009 (ended December 31, 2009)[2]

  • Net revenue increased by less than 1% to $953 million.
  • Net income increased 6.6% to $104 million.

Trends and Forces

Residential demand for water stays relatively steady during rough economic patches.

The demand for water is price inelastic, particularly among residential customers, which means the need for water and wastewater services does not decline or disappear during periods of sluggish economic activity.

Unpredictable droughts can affect water supply, which can affect revenue.

In the mid 2000s, severe droughts in Texas forced Aqua America's local water systems to truck water from elsewhere to meet customer needs. Over the past century, drought like this has become an increasingly common occurrence in much of the continental United States. When such drought occurs, the natural bodies of water Aqua America draws supplies from dwindle. Droughts can affect supply and scarcity of water as a resource and empirically, utilities like Aqua America have raised water prices post-drought to make up for lost revenue. Due to their random nature, droughts are difficult to predict or prepare for. In a drought, managing water resources can prove very difficult for municipalities and water companies alike.

Some new acquisitions suffer environmental compliance issues.

Regulations and laws sponsored and enforced through the Environmental Protection Agency, such as the Safe Drinking Water Act and Clean Water Act, require utilities providing commercial and residential water supplies to meet federal standards of cleanliness. Such improvements come at significant cost to Aqua America Inc. as a conglomerate. 37 subsidiary water systems with smaller groundwater facilities have exceeded EPA radionuclide standards, requiring treatment. Of the approximately 53,000 municipal water companies in the U.S., over 80% have 3,000 or fewer customers. [3] Aqua America's primary growth strategy is the acquisition of these smaller utility companies, but in the past these acquisitions have brought their own compliance issues with them once consolidated in the Aqua America fold.

Competition

Aqua America's major competitors are other water utility conglomerates, particularly American Water Works Company (AWK) and privately held companies like United Water and Utilities Inc.

  • American Water Works Company is the largest public water utility conglomerate in the U.S. Like Aqua America, American Water Works Co. provides both residential and commercial water services to customers across the United States.
  • United Water is a private water utility company providing water services to 7 million customers over 20 U.S. states. The company manages utilities for 20 states across the U.S.

References

  1. 1.0 1.1 1.2 1.3 WTR 2009 10-K "The Company" pg. 4-5
  2. 2.0 2.1 WTR 2009 10-K "Consolidated Selected Financial and Operating Statistics" pg. 7
  3. Aqua America Inc. 2007 10-K "Acquisitions and Water Sale Agreements" pg. 6  
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