American Water Works Company, Inc. (NYSE:AWK) today reported solid gains in first quarter 2000 net income to common stock and earnings per share. For the quarter, net income to common stock totaled $26.1 million, compared with $19.4 million reported for the first quarter of 1999. Earnings per common share for the quarter this year were 27 cents, compared to 20 cents last year. Revenues in the quarter increased 11 percent from $277 million in 1999 to $308 million this year.
Revenue growth for the first quarter of 2000 was driven by a 2 percent increase in water sales over 1999, and authorized increases in charges for water service from rate cases concluded in 1999. Increased water sales were attributable to growth in the number of customers. Also included in revenues this year was approximately $10 million in management fees, earned by American Water Services (AWS), the Company's wholly-owned contract operations subsidiary. On December 31, 1999 the Company acquired the partnership interest of Anglian Water Plc. in what is now AWS. As a result, AWS financial results are consolidated with the Company's. Previously they were reported under the equity method of accounting.
American Water Works Company President and Chief Executive Officer J. James Barr said, "We are very pleased with the results for the first quarter of 2000. They clearly demonstrate our ability to recover from the unusual events which depressed earnings in the first quarter of 1999. We are solidly back on the track of growth in earnings, which has been the long-term trend for American."
Operation and maintenance (O & M) expenses were up 7 percent to $144 million in 2000 from $134 million in the first quarter of 1999. The increased O & M expenses this quarter are entirely the result of consolidating American Water Services results of operations in the Company's income statement. Other expenses, such as depreciation and general taxes increased $4.9 million, reflecting an ongoing commitment to build necessary utility facilities. Utility subsidiary interest expenses in 2000 increased $3.4 million over amounts reported in the first quarter of 1999, due to utility plant construction.
American Water Works Company is the largest US-based, investor-owned water service enterprise. The Company's subsidiaries serve more than 10 million people in 23 states. The Company is committed to continued growth and is involved in a number of industry consolidation and privatization initiatives, including water and wastewater system acquisition, contract operation and other water resource management initiatives. The Company's prepared comments for the earnings review conference call with analysts will be available on the Company's website (www.amwater.com) at 3:00 PM today.
This release may contain certain forward looking statements, including, without limitation, statements relating to the Company's plans, strategies, objectives, expectations, intentions and adequacy of resources, which are made pursuant to the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward looking statements involve known and unknown risks, uncertainties, and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward looking statements. These factors include, among others, the following: general economic and business conditions; competition; success of operating initiatives, advertising and promotional efforts; existence of adverse publicity or litigation; changes in business strategy or plans; quality of management; availability, terms and development of capital; business abilities and judgement of personnel; changes in, or the failure to comply with governmental regulations; and other factors described in the filings of the Company with the SEC. The Company undertakes no obligation to publicly update or revise any forward looking statement, whether as a result of new information, future events or otherwise.
For the three and twelve month periods ended March 31, American Water Works Company, Inc. reports unaudited consolidated operating results as follows:
