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GEORGE TOWN, GRAND CAYMAN, CAYMAN ISLANDS--(Marketwire -05/10/12)- Consolidated Water Co. Ltd. (CWCO), which develops and operates seawater desalination plants and water distribution systems in areas of the world where naturally occurring supplies of potable water are scarce or nonexistent, today reported its operating results for the first quarter of 2012. The Company will host an investor conference call tomorrow -- Friday, May 11, 2012 -- at 11:00 a.m. EDT (see details below).

Total revenues for the three months ended March 31, 2012 increased 20% to approximately $16.7 million, compared with approximately $13.9 million for the first quarter of 2011.

Retail water revenues rose 3% to approximately $6.6 million (39% of total revenues) in the most recent quarter, versus approximately $6.4 million (46% of total revenues) for the comparable prior-year quarter, reflecting (i) an increase to the Company's base rates of approximately 4% due to an upward movement in the consumer price indices used to determine such rate adjustments in the first quarter of each year; and (ii) higher energy price pass-through charges resulting from higher energy prices. These factors were partially offset by a 5% decline in the number of gallons of water sold by the retail segment.

Bulk water revenues increased 41% to approximately $10.1 million (60% of total revenues) in the first quarter of 2012, compared with approximately $7.2 million (52% of total revenues) in the year-earlier quarter, reflecting (i) a 34% increase in the number of gallons of water sold, which was primarily attributable to the expansion of the Company's Blue Hills plant in the Bahamas during the fourth quarter of 2011; and (ii) energy pass-through charges resulting from higher energy prices.

Services revenues declined to approximately $0.1 million in the three months ended March 31, 2012, compared with approximately $0.4 million in the first quarter of 2011, reflecting (i) the expiration of the management services contract for the Bermuda plant on June 30, 2011; and (ii) lower fees earned on the Company's management agreement with OC-BVI (the Company's equity investment affiliate) due to the incremental fees earned on the higher earnings generated by this affiliate in 2011 versus 2012.

Net income increased 18% to $2,342,666, or $0.16 per diluted share, for the quarter ended March 31, 2012, compared with net income of $1,993,010, or $0.14 per diluted share, for the quarter ended March 31, 2011. A 67% increase in operating income, to $2,433,164 during the most recent quarter versus $1,458,225 in the comparable prior-year quarter, was partially offset by a 90% reduction in OC-BVI's earnings. During the three months ended March 31, 2012, the Company recognized earnings on its investment in OC-BVI of $56,938, compared with $543,494 in the comparable 2011 period.

Consolidated gross profit rose 13% to approximately $5.9 million (36% of total revenues) in the first quarter of 2012, compared with approximately $5.3 million (38% of total revenues) in the prior-year period. Gross profit on retail revenues was relatively unchanged at approximately $3.5 million in the most recent quarter (54% of retail revenues), compared with approximately $3.5 million (55% of retail revenues) in the quarter ended March 31, 2011. The modest decline in retail gross profit as a percentage of retail revenues reflected the increase in energy pass-through charges and higher non-revenue water volumes during the first quarter of 2012 versus the prior-year quarter. Gross profit on bulk revenues increased 54% to approximately $2.4 million (24% of bulk revenues) in the most recent quarter, from approximately $1.6 million (22% of bulk revenues) a year earlier. The improvement in the bulk segment's gross profit as a percentage of bulk water revenues was due to the increase in revenues, as a significant portion of the bulk segment's production costs are relatively fixed in nature and do not increase proportionately with an increase in the volume of water sold. The services segment recorded a gross profit of $10,703 for the three months ended March 31, 2012, compared with a gross profit of approximately $193,444 in the first quarter of 2011. The decline in services segment gross profits in the 2012 quarter reflected the previously-noted decrease in the segment's revenues.

General and administrative expenses declined 7% to $3,514,685 in the first quarter of 2012, versus $3,792,330 in the corresponding period of 2011, primarily due to (i) a decrease of approximately $779,000 in expenses related to the project development activities of the Company's consolidated Mexico affiliate, N.S.C. Agua, S.A. de C.V. ("NSC"), partially offset by an increase of approximately $200,000 in employee costs due to the hiring of additional management and information technology personnel and approximately $158,000 in added business development costs.

Interest income decreased 38% to $215,430 for the quarter ended March 31, 2012, versus $347,660 in the first quarter of the previous year. Interest expense increased 9% to $383,635 in the 2012 quarter, from $350,372 in the comparable 2011 period.

"We are very pleased to report an 18% increase in first quarter earnings, when compared with the prior-year period, due primarily to increased profitability in our bulk water business segment and a reduction in general and administrative expenses that more than offset a loss in our services segment and significantly lower earnings from our OC-BVI affiliate," stated Rick McTaggart, Chief Executive Officer of Consolidated Water Co. Ltd. "The performance of our bulk water segment reflects, to a large degree, the increase in water volumes resulting from a 67% expansion in the production capacity of our Blue Hills plant in the Bahamas that came on line in the fourth quarter of 2011. As a result of this expansion, the Bahamas now represent the Company's largest geographic market, when measured in terms of the volume of water produced and delivered to customers. Gross margins in the bulk segment improved to 24% of bulk revenues, from 22% a year earlier, primarily due to increased water production, a strict cost-control program, and efficiency gains resulting from various operational improvement programs that we have implemented over the past four years."

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Consolidated Water Co. Ltd. Reports 18% Increase in First Quarter Net Income

A group trying to develop housing for veterans in historic structures at the Veterans Administration Montana Health Care System at Fort Harrison has sued the Montana Board of Housing, trying to overturn the boards April 9 decision denying the group low-income housing tax credits that may be essential for the project to move forward.

A Florida group hopes its Freedoms Path project will provide 40 units of housing for veterans who are homeless or at risk of homelessness. It would use historic buildings that may not fit with the VAs future needs, and sought to get more than 80 percent of its funding from low-income housing tax credits, which give investors a tax shelter and enable funding for specific projects.

But after looking at scoring of the 14 applications for the credits, the Board of Housing did not allocate any to Freedoms Path. Six of the 14 applicants received credits.

The lawsuit, filed Wednesday in District Court in Helena, repeats an earlier claim by the developer that the scoring was erroneous and cites other problems with the boards decision. The suit wants to send the matter back to board with instructions to make the decision again with the correct scoring.

It also seeks an injunction preventing the board from allocation the credits until the matter is settled. It says the matter is time-sensitive because the project depends on cooperation with the VA, availability of historical preservation tax credits, and other factors.

More here:
Veterans group sues housing board

Date: Friday May. 11, 2012 9:55 AM PT

A B.C. tax protester who preached a bogus scheme to evade the Canada Revenue Agency has been sentenced to four years, six months in jail and fined $274,815.

Chilliwack resident Russel Anthony Porisky was convicted on two counts of tax evasion and one count of counselling to commit a crime in January after both following and prescribing the repeatedly-disproven "natural person" theory.

The legally flawed presumption is that one can avoid paying taxes by declaring themselves a "natural person" rather than a taxpayer an argument Canadian courts have consistently rejected.

The CRA responded to Porisky's sentence, handed down Thursday in B.C. Supreme Court, with a warning to others of his ilk who subscribe to what the agency describes as dangerous "tax myths."

"Individuals who plan to use the tactics of tax protesters should know that this could have significant personal and financial consequences, including fines, imprisonment, or seizure of goods," the CRA said in a statement.

Those convicted of tax fraud are on the hook for past taxes owing, plus interest, and can be fined up to 200 per cent of their unpaid taxes, it added. They can also faceup to five years in prison.

Porisky's common-law wife Elaine Gould was also fined $27,434 for one count of tax evasion and given a six-month conditional sentence.

Together, the couple ran a company called Paradigm Education Group, which offered seminars, consulting services and other products teaching clients how to apply the "natural person" theory.

Porisky earned $555,782 from 2004-2008, all from Paradigm. The company's "educators" charged seven per cent of a student's income for two years -- a system resembling taxation and funneled a portion of that back to their boss, who also profited from the sale of his books, brochures and DVDs.

Continued here:
B.C. tax protester sentenced to 4.5 years in jail

11 May 2012

The Court of Justice of the European Union (ECJ) has decided the Italian provision that private operators should have a share capital of at least EUR10m (USD13m) in order to be entitled to collect local taxes is contrary to European law on freedom of establishment and freedom to provide services.

It was noted that Italian local authorities may choose to award the tasks of assessment and collection of taxes to third party operators. In that case, those activities are awarded by means of concessions which comply with EU legislation on the tendering of the management of local public services.

Italian legislation also provides, however, that private companies seeking to carry out those activities must have a fully paid-up share capital of EUR10m, whereas companies in which a majority of the share capital is in public ownership are not subject to that condition.

In consequence, the Italian Regional Administrative Court in Lombardy has been asked to rule in several sets of proceedings between private companies and regional municipalities, as the former submitted tenders for the award of concessions but were then excluded from the procedure because they did not have the required EUR10m share capital.

The Italian court, in turn, referred questions to the ECJ concerning the compatibility of the Italian legislation with EU law and, in particular, with the rules on freedom to provide services and freedom of establishment.

In its judgment, the ECJs reply is that the Italian legislation does amount to a restriction on freedom of establishment and freedom to provide services inasmuch as it contains a condition relating to minimum share capital. Consequently, such a provision impedes or renders less attractive the freedom of establishment and the freedom to provide services.

In addition, however, the ECJ then goes on to examine whether such a restriction may be justified by overriding reasons in the public interest, with the only ground of justification raised before the court being the need to protect public authorities against possible non-performance by a concession holder, in the light of the high overall value of the contracts which have been awarded.

The ECJ notes that a restriction of fundamental freedoms may be justified only if the relevant measure is appropriate for ensuring the attainment of the legitimate objective pursued and does not go beyond what is necessary to attain that objective; but that the Italian court had given other provisions capable of providing adequate protection for public authorities, including other proof of the operators technical and financial capacity, creditworthiness and solvency, or the application of minimum thresholds for share capital that vary depending on the value of the contracts actually awarded to the concession holder.

Consequently, the ECJ finds that, as the Italian provision goes beyond the objective of protecting the public authorities against non-performance by concession holders, it also contains disproportionate, and therefore unjustified, restrictions of fundamental freedoms.

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Restrictions On Italian Private Tax Collectors Declared Illegal

TUSCALOOA, Ala. Proponents of an American Nanny State have a plan to improve your health: Tax sugar and junk food so you will eat less of it.

These plans for bureaucrats and politicians to remake your diet are bad news for four reasons.

First, it is no ones business but yours what you eat. The freedom to eat a slice of apple pie might not sound quite as stirring as freedom of speech, but the ability to choose how to live our lives is the most fundamental freedom. What you eat is no ones business but yours.

Second, even if the government has a role to play in guiding our dietary choices, efforts at restructuring Americans lives via the tax code are fundamentally flawed.

This strategy has given us a tax system of unimaginable complexity: The Internal Revenue Code is almost 10 million words long. The leading publication for tax professionals takes up nine feet of shelf space. And that doesnt count the tens of thousands of pages of laws and regulations concerning sales, use, property, excise, and other taxes levied by government.

Taxes need to be simple and easy to administer. As tax laws get fatter, they clog our economic arteries and stifle growth. Trying to fine tune Americans diets via a junk food tax will further fatten the tax laws, and the wallets of accountants and tax lawyers.

If there are any Americans unaware that sugar and potato chips are fattening despite our $35 billion per year diet industry we dont need a tax to enlighten them, just some public service announcements.

Third, the governments record on dietary control is problematic. The federal government has been involved in the sugar market since the War of 1812. Nanny Staters promise that this time theyll get things right, but if they havent managed to do so in 200 years, why should we believe them now?

The details of official rules are written in back rooms in Congress and government agencies. When those details are drafted, those best able to influence the results are the lawyers and lobbyists for special interest groups.

For sugar, thats the manufacturers of high fructose corn syrup and the 17 domestic sugar cane producers who reap millions of dollars annually under our current agricultural subsidies and sugar tariffs.

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Morriss: Attack of the Nanny State