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Edited Transcript of WTR earnings conference call or presentation 5-Nov-19 4:00pm GMT

Q3 2019 Aqua America Inc Earnings Call

BRYN MAWR Nov 10, 2019 (Thomson StreetEvents) -- Edited Transcript of Aqua America Inc earnings conference call or presentation Tuesday, November 5, 2019 at 4:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Brian Dingerdissen

Aqua America, Inc. - Chief of Staff

* Christopher H. Franklin

Aqua America, Inc. - Chairman, President & CEO

* Daniel J. Schuller

Aqua America, Inc. - Executive VP & CFO

* Matthew R. Rhodes

Aqua America, Inc. - Executive VP of Strategy & Corporate Development

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Conference Call Participants

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* Durgesh Chopra

Evercore ISI Institutional Equities, Research Division - Associate

* Ryan Michael Connors

Boenning and Scattergood, Inc., Research Division - Director of Research and Senior Analyst of Water & Environment

* Timothy Michael Winter

Morgan Group Holding Co. - Research Analyst

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Presentation

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Operator [1]

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Good day, and welcome to the Aqua America's Third Quarter 2019 Earnings Call. Today's conference is being recorded.

At this time, I'd like to turn the conference over to Mr. Brian Dingerdissen. Please go ahead, sir.

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Brian Dingerdissen, Aqua America, Inc. - Chief of Staff [2]

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Thank you, Cassidy. Good morning, everyone, and thank you for joining us for Aqua America's Third Quarter 2019 Earnings Call. If you did not receive a copy of the press release, you can find it by visiting the Investor Relations section of our website at aquaamerica.com. The slides we will be referencing and a webcast of this event can also be found on our site.

As a reminder, some of the matters discussed during this call may include forward-looking statements that involve risks, uncertainties and other factors that may cause the actual results to be materially different from any future results expressed or implied by such forward-looking statements.

Please refer to our most recent 10-Q, 10-K and other SEC filings for a description of such risks and uncertainties.

During the course of this call, reference may be made to certain non-GAAP financial measures. A reconciliation of these non-GAAP to GAAP financial measures is included at the end of the presentation and also posted in the Investor Relations section of the website. After the presentation, we will open the call up for questions.

Before handing the call over to Chris, I would like to formally introduce a new addition to the IR team at Aqua. [René Marques], who has been with the company for 5 years in various financial roles has recently been promoted to Director of Investor Relations. She has hit the ground running, and you will start to see her on the road at various investor events.

At this time, I'd like to turn the call over to Chris Franklin.

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Christopher H. Franklin, Aqua America, Inc. - Chairman, President & CEO [3]

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Okay. Thanks, Brian, and thank you, everyone, for joining. I'll add my warm welcome to [René] as well. She, as Brian said, as she really hit the ground running, and happy to have her on our team.

I'm going to start today's call with a couple of highlights from the quarter followed by a brief update on the Peoples transaction, then Dan's going to discuss the financial results as well as our rate activity. Matt Rhodes, you've heard from before, our Executive Vice President of Strategy and Corporate Development, give you an overview of our recent progress on municipal growth. And finally, I'll conclude the call with a review of our guidance for 2019, and then open the call for questions.

So the third quarter was certainly an exciting one. In summary, we continue to deploy a large amount of capital. We reached a significant milestone with the Peoples acquisition. And we saw the Peoples rate case go into effect. And we also announced the largest municipal acquisition in our 133-year company history. So quite a quarter.

Let me give you a little bit more details. We remain on track for record capital spending of about $550 million this year. And in the first 3 quarters of the year, we've already invested over $400 million in infrastructure renewal, which, as you know, consistently delivers value to our customers, communities and the shareholders.

Investing in infrastructure is at the core of our mission to deliver safe and reliable service, and it also helps to drive our earnings growth.

On the financial front, our non-GAAP earnings per share increased by over 9% compared to the same period last year. And on the growth front, our municipal acquisition strategy continues to deliver results. In September, we announced a signed purchase agreement with DELCORA, which, many of you know, is a large municipal wastewater authority in Southeastern Pennsylvania, and Matt's going to give you more details on that in the coming slides. And finally, we received the much anticipated decision from the Pennsylvania Administrative Law Judge, and the recommendation was in favor of the Peoples transaction, which I'll talk a little bit more on the next slide here.

Slide 8 provides an overview of the transaction time line related to the regulatory process for Peoples. As reported on the last earnings call, we received the Kentucky approval in March and West Virginia back in April. And then more recently here on October 28, we received the proposed decision of the ALJ, recommending that the Public Utility Commission here in Pennsylvania issue all approvals necessary for the company to carry out the acquisition of Peoples.

So in terms of next steps, the parties who don't agree with the settlement agreement can file exceptions, disagreeing with the ALJ's recommendation, and the PUC will consider those arguments. A formal vote will take place by all 5 PUC commissioners at a public meeting likely in December or January, based on our projected time line. Not to say that we are pleased with the ALJ's recommendation and respect the process and the procedure which now allows a full review by the Public Utility Commission. And as such, we now anticipate the closing of the Peoples transaction or acquisition in late 2019 or early 2020.

With that, let me turn the call over to Dan to discuss our financials for the third quarter. Dan?

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Daniel J. Schuller, Aqua America, Inc. - Executive VP & CFO [4]

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Thanks, Chris. Good morning, everyone. Let's begin with the third quarter financial highlights. We're again reporting non-GAAP numbers this quarter that adjust for the impact of the Peoples transaction and integration. We reported revenues of $243.6 million in the third quarter of 2019, 7.7% compared to $226.1 million in the third quarter of 2018.

Operations and maintenance expenses were $82 million in the third quarter compared to $68.6 million in last year's third quarter.

Moving on to GAAP net income, which includes items related to the Peoples transaction, we reported $88.5 million compared to $78.2 million in the third quarter of 2018. GAAP earnings per share, including Peoples-related expenses and incremental shares, was $0.38 in the third quarter compared to $0.44 in 2018.

When adjusted for Peoples-related charges, income was up 9.4% from $78.2 million to $85.6 million. And as you can see at the -- on the bottom row of the table, adjusted income per share was up 9.1% to $0.48 per share from $0.44 per share in the third quarter of 2018. This non-GAAP measure removes Peoples-related items, including the equity raised to complete the transaction.

Now let's move on to the revenue of waterfall on Slide 11. Breaking down the 7.7% revenue increase, you'll see that rates and surcharges was the main driver at over $15 million, with Pennsylvania being the primary contributor. Growth added an additional almost $2 million. This was driven primarily by acquisitions in Pennsylvania and Illinois, and organic growth in Pennsylvania, North Carolina and Texas. Volume was up by $429,000, driven by wastewater and other items increased revenue by $216,000.

Next, we'll discuss the O&M waterfall on Slide 12. Operations and maintenance expenses were $82 million for the third quarter compared to $68.6 million in the third quarter of 2018. The main contributors were the 2018 nonrecurring items and costs from the Peoples transaction integration, which increased O&M by $5.8 million and $2.5 million, respectively. Of that $5.8 million, $3.9 million was the favorable reduction to a regulatory liability that we mentioned on last year's third quarter call.

Walking through the other drivers. Other items increased by approximately $2.4 million, employee-related costs increased by less than $2.1 million, growth both from acquisitions and organic growth added $684,000 of expense. Excluding the nonrecurring items and transaction-related expenses, O&M growth would have been in line with our historical expectations.

Next, let's review the drivers of EPS on Slide 13. In walking through the EPS waterfall from left to right, you can see that rates and surcharges increased EPS materially with an incremental $0.064, growth, volume and other also contributed. Expenses were higher, which reduced EPS by $0.046. This brings the adjusted income per share for the third quarter to $0.48, up over 9% from last year's Q3 EPS.

GAAP EPS included 2 additional items from the Peoples transaction, $0.074 to adjust for the dilutive effect of the equity offering as well as $0.024 for transaction and financing expenses. This brought GAAP EPS to $0.38 for the third quarter.

Moving on to rate activity on Slide 14. In 2019, so far, we've completed rate cases or surcharges in Illinois, New Jersey, North Carolina, Ohio and Pennsylvania totaling annualized revenue of $59.8 million. We saw the impact of these increases when we discuss the revenue waterfall a few minutes ago. In the coming months, we expect to file water or wastewater rate cases in North Carolina, New Jersey and Indiana.

On Slide 15, I'd like to give you a brief update on the Peoples Pennsylvania rate case, given its importance. You'll recall that Peoples filed a Pennsylvania rate case in January, requesting $94.9 million an additional annualized revenue. This case was the first consolidated case for the Peoples and Equitable divisions and supported the largest infrastructure rehabilitation program in the company's history. A settlement agreement was filed in this case in July and following a commission order, new rates went into effect on October 29, totaling approximately $59.5 million an additional annualized revenue.

As mentioned previously, Peoples has not elected repair tax in Pennsylvania yet, and we're evaluating how to implement it. This takes a fair amount of work as there are several factors, including defining the unit of property, identifying how much of the capital is repair eligible and conducting repair city to determine the catch-up deduction. As you'd expect, this is something we anticipate implementing in 2020 once we own the company. Given the success that we've had with this mechanism for our Pennsylvania water customers, where we were able to invest over $2 billion in infrastructure without raising rates from 2012 until May of 2019.

We'll be prepared to speak about the potential impact of repair during our upcoming Analyst Day. And with that, I'll hand it over to Executive Vice President, Strategy and Corporate Development, Matt Rhodes.

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Matthew R. Rhodes, Aqua America, Inc. - Executive VP of Strategy & Corporate Development [5]

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Thank you, Dan. As Chris previously mentioned, in September, we announced a signed asset purchase agreement with the Delaware County Regional Water Quality Control Authority known as DELCORA. This is highlighted on Slide 17. The purchase price of the transaction is $276.5 million. This municipal wastewater authority is located in Southeastern Pennsylvania, serves 42 municipalities and approximately 500,000 people and marks the largest municipal acquisition in our company's history. It is also the largest ever municipal deal in the state of Pennsylvania. Aqua estimates that DELCORA provides wastewater service to approximately 165,000 retail customer equivalents.

DELCORA system includes over 180 miles of pipe and has a customer base consisting of retail, commercial and industrial customers as well as large wholesale agreements with municipal authorities. Post acquisition, there are approximately 50 million gallon per day wastewater treatment plant in the western portion of their service territory, will be the largest wastewater treatment plant that we own and operate. The Eastern service territory currently conveys wastewater to the Philadelphia Water Department or PWD through a contract that is set to expire in 2028.

Given this, DELCORA is responsible for a portion of PWD's and Philadelphia's EPA-mandated cost to separate its combined storm and sewer. If DELCORA were to stay with PWD over the long-term, its total expected cost related to the Philadelphia EPA-mandated costs, its own EPA-mandated costs related to combined storm and sanitary sewer in the city of Chester and other work for its wastewater plant and pipeline rehabilitation are expected to be $1.2 billion through 2042. This is expected to increase DELCORA customer rate substantially over the long-term.

To mitigate this, DELCORA plans to build the infrastructure to divert the wastewater flows from PWD, which also requires the expansion of DELCORA's existing plant to approximately 100 million gallons per day. Aqua is uniquely positioned to make these investments given its extensive expertise in large and complex projects.

Total DELCORA CapEx under Aqua ownership through 2028 is estimated to be approximately $700 million, with the majority to be spent in 2026 to 2028. DELCORA intends to use all net proceeds from the sale to establish a rate stabilization plan, which will help to offset customer rate increases in the future due to the large capital cost at DELCORA faces. So we feel that the combination with DELCORA is a win-win for both parties involved.

We expect the transaction to close in late 2020. We plan to fund the DELCORA acquisition with a combination of debt and equity. And as we have discussed on previous calls, this could include an at-the-market equity program.

In addition, Aqua already operates in many of the same communities as DELCORA. As you can see on Slide 18, there's significant overlap in the 2 footprints between Aqua's water service territory and DELCORA's wastewater service territory.

Aqua is deeply entrenched in the local communities where DELCORA operates and is well positioned to effectively serve its customers and these communities as a whole.

Moving to the next slide. As we've noted in the last several calls, we continue to see a strong municipal deal flow, especially in our 7 states with fair market value loss. This slide details our 10 signed agreements, including 9 with municipals for approximately 188,000 customer connections. This includes the DELCORA acquisition, assuming it serves 165,000 retail customer equivalents, which I mentioned earlier.

Just recently, on October 24, the Schuylkill and Cheltenham acquisitions were also approved by the Pennsylvania Public Utility Commission, and these deals are expected to close before year-end. The 2 Illinois transactions shown on the table are also expected to close this year.

Although some of the transactions are expected to close in 2020, we still expect the total new customers added in 2019, along with organic growth to be within our targeted customer growth range of 2% to 3%.

Also, as noted in the last call, it is important to note that for every $100 million in rate base from acquisitions that are added through municipals, we expect approximately $5 million in additional earnings to be generated from this increased rate base excluding any pursuit cost.

In addition to our signed acquisitions, in recent quarters, we have also highlighted some of the opportunities we're pursuing that are still in the earlier stages. As Slide 20 demonstrates, we are actively pursuing acquisition opportunities in several of our existing states, totaling approximately 275,000 customers. We are also seeing more and more larger opportunities, many over 25,000 connections.

Now I'd like to pass the call back to Chris.

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Christopher H. Franklin, Aqua America, Inc. - Chairman, President & CEO [6]

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Thanks, Matt. Let's conclude with a quick review of our '19 guidance, and then we'll open it up for questions. We are reaffirming our stand-alone 2019 guidance for Aqua along with an updated time frame with the expected closing of the Peoples transaction. We expect Aqua stand-alone adjusted income to be $1.45 to $1.50 per share. This excludes the impact of the Peoples transaction, including the associated equity offering. We are on track to spend approximately $550 million on replacing and improving pipes and plants and other infrastructure. This would be another record year of infrastructure spending across the Aqua platform, and through 2021, we expect to invest approximately $1.4 billion, and this will help drive our rate base growth of about 7%.

As mentioned earlier, we have 10 signed acquisition agreements and together with organic growth, our customer count will increase by 2% to 3% this year.

And finally, we've passed most of the important milestones in the regulatory process and in our integration planning for the Peoples acquisition and expect to close in late 2019 or early 2020 after the PAPUC carefully considers the acquisition case.

Given the new closing expectations for Peoples, we are going to delay the Investor Day that was planned for December. We now plan to hold that Investor Day when we announce our full year earnings in New York on February 27.

At that event, it's our intention to provide longer term guidance. And as I said on previous calls, we'll provide that longer term guidance only after we finished the Aqua rate case, which is now complete. The Peoples rate case, again, not complete. Close the Peoples transaction, we've discussed that late '19, early '20, and due to the analysis of the repair tax that Dan discussed in his comments today.

So with that, I'd like to open the call for questions at this point.

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Questions and Answers

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Operator [1]

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(Operator Instructions) Our first question comes from Durgesh Chopra of Evercore.

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Durgesh Chopra, Evercore ISI Institutional Equities, Research Division - Associate [2]

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Good quarter here. So I'm clear on the drivers. Can you just talk about the rate case settlement at Peoples Gas. How does that compare to what you might have had in your models when you were kind of looking at the deals and sort of your first full year of accretion of the combined company. How does it fit versus your internal projections?

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Daniel J. Schuller, Aqua America, Inc. - Executive VP & CFO [3]

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Yes. So Durgesh, simply said that we're pleased with the rate case outcome. And the revenue outcome there is right in the landing zone that we expected in our modeling for the transaction. So very comfortable with that -- where that came out. We've continued as we've talked. This is expected to be. This will be an accretive transaction for us in that first full year of ownership. So no change from that. And so obviously, we'll give more guidance on that when we have our Analyst Day now in February.

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Durgesh Chopra, Evercore ISI Institutional Equities, Research Division - Associate [4]

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Okay. Awesome. And then just -- maybe just walk us through -- and I apologize if you've done this in the previous calls. So just walk us through sort of the gating items on the repair stack selection. So obviously, you have to make a decision whether it makes economic sense and then go to the regulators for approval. How does that process work? And just sort of the -- kind of the gating items to getting there?

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Daniel J. Schuller, Aqua America, Inc. - Executive VP & CFO [5]

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Yes. So the primary gating item is this repair study. And the repair study, Durgesh, what that really does is it has us look back at capital that has been extended over the past several years to determine how much of that capital would have been repair eligible. And that's really the establishment of that catch-up deduction. And so that's one piece of this, which is a gating item, which takes time, obviously, another item is obviously the decision for kind of determining what the framework is, what that unit of property is, as we discussed, what the threshold related to that is. And thus, how much of the capital would be repair eligible. But in terms of the actual kind of course of events, once we have that repair study completed, we can file with the IRS to allow us to implement the repair tax deduction. So we can go ahead and do that. And then -- we would then look to the commission in terms of how do we think about and how do we adjudicate that catch-up deduction. So that's a separate piece that comes after that. Now you'll recall that for Aqua, Pennsylvania, we had a process that allowed us to amortize that catch-up deduction over a 10-year period of time, we'll look for something here to be helpful with that catch-up deduction as well. But the actual implementation of the repair tax comes from that IRS filing that we'll do.

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Durgesh Chopra, Evercore ISI Institutional Equities, Research Division - Associate [6]

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Great. And then just on DELCORA. What -- how should we think about the time line for you getting to the close there?

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Daniel J. Schuller, Aqua America, Inc. - Executive VP & CFO [7]

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So...

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Matthew R. Rhodes, Aqua America, Inc. - Executive VP of Strategy & Corporate Development [8]

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So, yes. So Durgesh, so we're going to expect to file our PUC application sometime in early 2020. And then it would take 6 to 9 months from that point. So we're looking at a late 2020 closing for DELCORA.

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Christopher H. Franklin, Aqua America, Inc. - Chairman, President & CEO [9]

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So Durgesh, we've already been working -- and we've already been working on the assignment of contracts or the number of contracts associated with DELCORA. So some of those public meetings have already begun to take place. And the assignment of the contracts have been going well. So as Matt said, that leads up to the filing at the PUC.

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Operator [10]

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Our next question comes from Ryan Connors of Boenning and Scattergood.

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Ryan Michael Connors, Boenning and Scattergood, Inc., Research Division - Director of Research and Senior Analyst of Water & Environment [11]

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Wanted to actually continue on the topic of DELCORA for a minute. And just -- first of all, just a housekeeping item. DELCORA, my understanding, that's not a Act 12 fair market value deal, is that correct?

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Matthew R. Rhodes, Aqua America, Inc. - Executive VP of Strategy & Corporate Development [12]

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Yes. We would likely file for that under the Fair Market Value legislation...

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Daniel J. Schuller, Aqua America, Inc. - Executive VP & CFO [13]

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So we would -- yes, we would expect it to be.

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Matthew R. Rhodes, Aqua America, Inc. - Executive VP of Strategy & Corporate Development [14]

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Yes.

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Ryan Michael Connors, Boenning and Scattergood, Inc., Research Division - Director of Research and Senior Analyst of Water & Environment [15]

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Okay. Okay. So then I guess my follow-on to that was this whole idea of the trust's account, the money going into a trust for ratepayers to offset future rate increases. I mean that sounds like much different than the prevailing logic of Act 12, which was the selling municipality, maximizing their own financial benefit by being able to sell above book value. So how does that -- how do you square those things that we're going into a trust and yet, it is an Act 12 deal. And who are the owning municipalities? I'm just curious how that all played out.

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Matthew R. Rhodes, Aqua America, Inc. - Executive VP of Strategy & Corporate Development [16]

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Well, I think DELCORA was most focused on keeping customer rates low. And the reason they really started talking to Aqua is they're facing a lot of capital cost over the coming years, which would on a stand-alone basis would increase their customer rates pretty substantially over the next several years. And a lot of their customers are these large other municipal authorities that they serve. They have large industrial customers. They also serve some retail customers in the city of Chester. But all these customers were facing pretty large increases given the capital plan of DELCORA over the coming years. And so DELCORA's main objective in doing a deal with Aqua is to keep rates low. And so it made sense for them to take the proceeds that Aqua paid and put those into a trust, which will be used to offset customer rates for as long as possible. And as you know, Ryan, in some of these transactions, municipal transactions can have implications for what future rates that the municipal will be. And so DELCORA was looking for a purchase price that optimized -- was a fair purchase price but also helps to mitigate longer term rates after this trust was -- is exhausted. So that was really the -- a lot of the rationale for the purchase price and the discussions with Aqua. This trust will be administered fully by DELCORA going forward. But its sole purpose will be to offset any future rate increases that Aqua may have for these customers.

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Christopher H. Franklin, Aqua America, Inc. - Chairman, President & CEO [17]

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Yes, Ryan, I'll add -- I'll just add to what Matt said with -- when DELCORA first talked to us it talked about 3 principles, right? They wanted rates to remain low, they wanted to be able to address this vast capital needs generated by the exit from Philadelphia Water Department. And they wanted to take care of their employees long-term. And so admirably, and as we've discussed before, to take all the proceeds, after the debt is really net proceeds and put it to customer rates, we've not seen before. So this is really using a lot of the tools that have been considered and created over the last several years to have a really nice outcome for customers in the long run. And for that matter, the combined company.

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Ryan Michael Connors, Boenning and Scattergood, Inc., Research Division - Director of Research and Senior Analyst of Water & Environment [18]

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Yes. No, that definitely helps clear it up. Now my only another follow-on regarding DELCORA was just from a scale standpoint, I mean, obviously the pipeline is solid, as you talked about, Matt, but it does seem like it's kind of barbell. You have this very large DELCORA connection and a lot of much smaller ones. I mean what -- is DELCORA sort of a one-off in that size? Are there anything -- is there anything approaching that magnitude out there? Or should we just really, over the next several years, more be looking for kind of the standard smaller-type transactions?

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Christopher H. Franklin, Aqua America, Inc. - Chairman, President & CEO [19]

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I think we have to be careful in how we answer that, Ryan, as you would suspect. But I think as we talk about it here, we have some large things that are in the pipeline and some medium and some smaller. But I would not say that we see DELCORA as a one-off. We think there's other possibilities in that same size range that we could think about across our footprint.

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Operator [20]

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(Operator Instructions) Our next question comes from Tim Winter of Gabelli Funds.

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Timothy Michael Winter, Morgan Group Holding Co. - Research Analyst [21]

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I was wondering if you could talk a little bit more about the potential for wastewater opportunities. It seems like they might be a little bit easier to acquire. And maybe, specifically, in the areas you already serve water?

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Christopher H. Franklin, Aqua America, Inc. - Chairman, President & CEO [22]

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Yes. I mean that's probably the easiest one. I'll give you a thought now and then kick it to Matt. But -- as we look across our water platform, we have a lot of opportunities. When we think about the Tredyffrin pipeline that we purchased about a year ago. There are certainly some interest in that area as well as in some other areas where we currently serve the water. And that's where we should look first, frankly. And so that's a lot of the work we've done, not only here in Pennsylvania but across the footprint. And I would say this generally, and I think, Tim, we've talked about this before. But the politics are at least slightly easier when it comes to wastewater because there's not the same affinity that people find with their water source. And so I think you'll see a lot more wastewater in the coming years. I also would say this, given our new size with the DELCORA acquisition. But even before that, I mean we have about 130,000 wastewater customers before DELCORA. So we've got now a developing -- an existing and a developing level of expertise in wastewater that would make us strong competition in any transaction or potential transaction. With wastewater. Matt, you may?

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Matthew R. Rhodes, Aqua America, Inc. - Executive VP of Strategy & Corporate Development [23]

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Yes. I would just say, as you look at our recent deals that we've done in Pennsylvania and other places. And then if you look at our pipeline, we're starting -- we do see a lot of wastewater opportunities in front of us. And as Chris said, there's less affinity for wastewater compared to water. And also, it can be more difficult to operate in some cases. There can be more violations that some of these municipalities have related to their wastewater. And so it makes more sense for them to look to another option and to sell to Aqua. So we're really seeing a pickup in wastewater and expect that to continue over the coming years.

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Timothy Michael Winter, Morgan Group Holding Co. - Research Analyst [24]

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Do you guys have the ability to sort of socialize the rates across water and wastewater? Sort of like uniform rates or something of that nature to offset the need for rate increases if there are situations like this with DELCORA?

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Christopher H. Franklin, Aqua America, Inc. - Chairman, President & CEO [25]

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Well, let's think about it in 2 ways, right? One is if we think about standard tariff where we would have a single rate for wastewater, which we're moving towards. We -- yes, obviously, single-tariff pricing is a goal. But secondly, then in Pennsylvania, the law allows for some subsidy of wastewater customers by the water customers. But that is solely determined by the Pennsylvania Public Utility Commission. And that the level of that subsidy, if any, would be determined through the normal rate procedure at the commission. But outside of Pennsylvania, Tim, that ability doesn't exist in other states to my knowledge.

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Operator [26]

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At this time, we have no further questions in queue. And I would like to return the conference back to today's speakers.

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Christopher H. Franklin, Aqua America, Inc. - Chairman, President & CEO [27]

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Well, as always, we're available for follow-up. But thank you for joining the call today, and we look forward to seeing you soon.

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Operator [28]

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Thank you, ladies and gentlemen, this concludes today's teleconference. You may now disconnect.