California Water Service Group Announces Results for the 3rd
Quarter of 2013
SAN JOSE, CA--(Marketwired - Nov 5, 2013) - California Water
Service Group (NYSE: CWT) today announced net income of $29.2
million and earnings per share of $0.61 for the third quarter of
2013, compared to net income of $29.8 million and earnings per
share of $0.71 for the third quarter of 2012. The year-to-year
decrease in earnings per share was primarily attributable to the
dilutive effect of the stock offering completed in March 2013.
During the third quarter of 2013, State of California enterprise
zone tax credits for the periods 2008 to 2013 and current year
equipment repairs and maintenance state income tax deductions
contributed $4.1 million to net income. During the third
quarter of 2012, mains repairs and maintenance state income tax
deductions contributed $6.2 million to net income.
Revenue for the third quarter of 2013 was $184.4 million,
compared to revenue of $178.1 million in third quarter of
2012. The increase in revenue was due primarily to an increase
in water usage of $4.0 million, net of WRAM, which includes a $1.1
million increase in accrued unbilled revenue. Rate increases
added $3.5 million in revenue and the effect of other regulatory
mechanisms decreased revenue by $1.2 million.
Total operating expenses for the third quarter of 2013 increased
by $6.8 million, or 4.8%, to $148.6 million. Water production
costs increased by $4.1 million, or 6.2%, to $70.6 million,
primarily due to wholesale water rate increases and increased sales
to existing customers. Administrative costs increased $0.7
million, or 3.1%, to $24.7 million, due primarily to increases in
labor and health care expenses; these increases were partially
offset by a reduction in conservation program expenses. Other
operations expenses remained unchanged at $17.7 million.
Maintenance expense increased $0.2 million, or 4.5%, to $4.6
million, due to an increase in main and service
repair. Depreciation expense increased $0.8 million, or 5.7%,
to $4.6 million due to 2012 capital additions.
Other income and expenses, net of income taxes, decreased $0.1
million primarily due to a decrease in unrealized gains associated
with the Company's non-qualified retirement plans. Interest
expense decreased by $0.1 million, or 1.1%, to $7.1 million.
According to President and Chief Executive Officer Martin A.
Kropelnicki, core results for the third quarter are in line with
expectations and reflect the Company's budget discipline.
"We have remained diligent in our efforts to operate within
budget, which is particularly critical given the fact that we are
in the third year of our three-year rate case cycle in
California. I am also pleased with our progress to reach a
settlement agreement with parties to our 2012 General Rate Case
that will enable us to recover costs, make critical infrastructure
investment, and address affordability issues, assuming it is
approved by the California Public Utilities Commission as
proposed," he said.
Cal Water Files
Settlement Agreement on 2012 General Rate Case On October
31, 2013, the Company announced that its largest subsidiary,
California Water Service Company (Cal Water), had reached a
settlement agreement with the California Public Utilities
Commission's Office of Ratepayer Advocates and other parties to its
2012 General Rate Case. The Commission may or may not approve
the settlement agreement; it is expected to issue a final decision
in early 2014. If the settlement agreement were adopted as
proposed, it would add $45 million in total revenues in 2014 and an
estimated $10 million in 2015 and 2016. Cal Water would be
authorized to invest $447 million in infrastructure improvements
over three years in order to provide safe, reliable water service
to customers throughout the state. It would also be allowed to
increase the discount for qualified low-income customers and the
Rate Support Fund discount for customers residing in higher cost
service areas. For additional information, visit
www.cpuc.ca.gov.
Other
Information All stockholders and interested investors are
invited to listen to the 2013 third quarter conference call on 11
a.m. ET on Wednesday, November 6, 2013, which can be accessed by
dialing 1-888-503-8169 or 1-719-325-2315 and keying in ID# 9201217.
A replay of the call will be available from 2:00 p.m. ET on
Wednesday, November 6, 2013, through January 6, 2014, at
1-888-203-1112 or 1-719-457-0820, ID# 9201217. The call, which will
be hosted by President and Chief Executive Officer Martin A.
Kropelnicki, and Vice President and Chief Financial Officer Thomas
F. Smegal, will also be webcast under the investor relations tab at
www.calwatergroup.com.
California Water Service Group is the parent company of
California Water Service Company, Washington Water Service Company,
New Mexico Water Service Company, Hawaii Water Service Company,
Inc., CWS Utility Services, and HWS Utility Services. Together
these companies provide regulated and non-regulated water service
to nearly 2 million people in California, Washington, New Mexico,
and Hawaii. California Water Service Group's common stock
trades on the New York Stock Exchange under the symbol
"CWT." Additional information is available on our website at
www.calwatergroup.com.
This news release contains forward-looking statements
within the meaning established by the Private Securities Litigation
Reform Act of 1995 ("Act"). The forward-looking statements are
intended to qualify under provisions of the federal securities laws
for "safe harbor" treatment established by the
Act. Forward-looking statements are based on currently
available information, expectations, estimates, assumptions and
projections, and management's judgment about the Company, the water
utility industry and general economic conditions. Such words
as would, expects, intends, plans, believes, estimates, assumes,
anticipates, projects, predicts, forecasts or variations of such
words or similar expressions are intended to identify
forward-looking statements. The forward-looking statements are
not guarantees of future performance. They are subject to
uncertainty and changes in circumstances. Actual results may
vary materially from what is contained in a forward-looking
statement. Factors that may cause a result different than
expected or anticipated include, but are not limited to:
governmental and regulatory commissions' decisions; changes in
regulatory commissions' policies and procedures; the timeliness of
regulatory commissions' actions concerning rate relief; new
legislation; electric power interruptions; increases in suppliers'
prices and the availability of supplies including water and power;
fluctuations in interest rates; changes in environmental compliance
and water quality requirements; acquisitions and our ability to
successfully integrate acquired companies; the ability to
successfully implement business plans; changes in customer water
use patterns; the impact of weather on water sales and operating
results; access to sufficient capital on satisfactory terms; civil
disturbances or terrorist threats or acts, or apprehension about
the possible future occurrences of acts of this type; the
involvement of the United States in war or other hostilities;
restrictive covenants in or changes to the credit ratings on our
current or future debt that could increase our financing costs or
affect our ability to borrow, make payments on debt or pay
dividends; and, other risks and unforeseen events. When
considering forward-looking statements, you should keep in mind the
cautionary statements included in this paragraph, as well as the
annual 10-K, Quarterly 10-Q, and other reports filed from
time-to-time with the Securities and Exchange Commission
(SEC). The Company assumes no obligation to provide public
updates of forward-looking statements.
|
|
|
|
CALIFORNIA WATER SERVICE GROUP |
|
CONDENSED CONSOLIDATED BALANCE SHEETS |
|
Unaudited |
|
|
|
(In thousands, except per share data) |
|
September 30, |
|
|
December 31, |
|
|
|
2013 |
|
|
2012 |
|
ASSETS |
|
|
|
|
|
|
Utility plant: |
|
|
|
|
|
|
|
Utility plant |
|
$ |
2,190,573 |
|
|
$ |
2,096,363 |
|
|
Less accumulated depreciation and amortization |
|
|
(685,351 |
) |
|
|
(639,307 |
) |
|
|
Net
utility plant |
|
|
1,505,222 |
|
|
|
1,457,056 |
|
|
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
|
48,847 |
|
|
|
38,790 |
|
|
Receivables: net of allowance for doubtful accounts of
$815 as of September 30, 2013 and $714 as of December 31, 2012 |
|
|
|
|
|
|
|
|
|
|
Customers |
|
|
42,979 |
|
|
|
29,958 |
|
|
|
Regulatory balancing accounts |
|
|
27,047 |
|
|
|
34,020 |
|
|
|
Other |
|
|
9,802 |
|
|
|
11,943 |
|
|
Unbilled revenue |
|
|
25,815 |
|
|
|
15,394 |
|
|
Materials and supplies at weighted average cost |
|
|
5,689 |
|
|
|
5,874 |
|
|
Taxes, prepaid expenses, and other assets |
|
|
10,373 |
|
|
|
10,585 |
|
|
|
Total
current assets |
|
|
170,552 |
|
|
|
146,564 |
|
|
|
|
|
|
|
|
|
|
Other assets: |
|
|
|
|
|
|
|
|
|
Regulatory assets |
|
|
354,879 |
|
|
|
344,419 |
|
|
Goodwill |
|
|
2,615 |
|
|
|
2,615 |
|
|
Other assets |
|
|
50,165 |
|
|
|
45,270 |
|
|
|
Total
other assets |
|
|
407,659 |
|
|
|
392,304 |
|
|
|
$ |
2,083,433 |
|
|
$ |
1,995,924 |
|
|
|
|
|
|
|
|
|
|
CAPITALIZATION AND LIABILITIES |
|
|
|
|
|
|
|
|
Capitalization: |
|
|
|
|
|
|
|
|
|
Common stock, $.01 par value |
|
$ |
477 |
|
|
$ |
419 |
|
|
Additional paid-in capital |
|
|
327,890 |
|
|
|
221,013 |
|
|
Retained earnings |
|
|
271,887 |
|
|
|
252,280 |
|
|
|
Total
common stockholders' equity |
|
|
600,254 |
|
|
|
473,712 |
|
|
Long-term debt, less current maturities |
|
|
430,227 |
|
|
|
434,467 |
|
|
|
Total
capitalization |
|
|
1,030,481 |
|
|
|
908,179 |
|
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
|
Current maturities of long-term debt |
|
|
48,013 |
|
|
|
46,783 |
|
|
Short-term borrowings |
|
|
11,515 |
|
|
|
89,475 |
|
|
Accounts payable |
|
|
60,414 |
|
|
|
47,199 |
|
|
Regulatory balancing accounts |
|
|
1,699 |
|
|
|
5,018 |
|
|
Accrued interest |
|
|
10,656 |
|
|
|
4,705 |
|
|
Accrued expenses and other liabilities |
|
|
64,716 |
|
|
|
49,887 |
|
|
|
Total
current liabilities |
|
|
197,013 |
|
|
|
243,067 |
|
|
|
|
|
|
|
|
|
|
Unamortized investment tax credits |
|
|
2,180 |
|
|
|
2,180 |
|
Deferred income taxes, net |
|
|
168,091 |
|
|
|
158,846 |
|
Pension and postretirement benefits other than
pensions |
|
|
247,335 |
|
|
|
244,901 |
|
Regulatory and other liabilities |
|
|
91,185 |
|
|
|
92,593 |
|
Advances for construction |
|
|
184,879 |
|
|
|
187,584 |
|
Contributions in aid of construction |
|
|
162,269 |
|
|
|
158,574 |
|
Commitments and contingencies |
|
|
- |
|
|
|
- |
|
|
|
$ |
2,083,433 |
|
|
$ |
1,995,924 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CALIFORNIA WATER SERVICE GROUP |
|
CONDENSED CONSOLIDATED STATEMENTS OF INCOME |
|
Unaudited |
|
(In thousands, except per share data) |
|
|
|
|
|
|
|
|
For the Three-Months ended: |
|
|
|
|
|
|
|
|
September 30 |
|
|
September 30 |
|
|
|
2013 |
|
|
2012 |
|
|
|
|
|
|
|
|
Operating revenue |
|
$ |
184,404 |
|
|
$ |
178,135 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
Operations: |
|
|
|
|
|
|
|
|
|
|
Water
production costs |
|
|
70,614 |
|
|
|
66,489 |
|
|
|
Administrative and general |
|
|
24,670 |
|
|
|
23,925 |
|
|
|
Other
operations |
|
|
17,657 |
|
|
|
17,658 |
|
|
Maintenance |
|
|
4,575 |
|
|
|
4,377 |
|
|
Depreciation and amortization |
|
|
14,505 |
|
|
|
13,720 |
|
|
Income taxes |
|
|
11,165 |
|
|
|
10,387 |
|
|
Property and other taxes |
|
|
5,414 |
|
|
|
5,218 |
|
|
|
Total
operating expenses |
|
|
148,600 |
|
|
|
141,774 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
operating income |
|
|
35,804 |
|
|
|
36,361 |
|
|
|
|
|
|
|
|
|
|
Other income and expenses: |
|
|
|
|
|
|
|
|
|
Non-regulated revenue |
|
|
3,649 |
|
|
|
3,756 |
|
|
Non-regulated expenses, net |
|
|
(2,825 |
) |
|
|
(2,697 |
) |
|
Income tax (expense) on other income and expenses |
|
|
(330 |
) |
|
|
(422 |
) |
|
|
Net
other income |
|
|
494 |
|
|
|
637 |
|
|
|
|
|
|
|
|
|
|
Interest expense: |
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
7,687 |
|
|
|
8,024 |
|
|
Less: capitalized interest |
|
|
(540 |
) |
|
|
(798 |
) |
|
|
Net
interest expense |
|
|
7,147 |
|
|
|
7,226 |
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
29,151 |
|
|
$ |
29,772 |
|
|
|
|
|
|
|
|
|
|
Earnings per share |
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.61 |
|
|
$ |
0.71 |
|
|
Diluted |
|
$ |
0.61 |
|
|
$ |
0.71 |
|
Weighted average shares outstanding |
|
|
|
|
|
|
|
|
|
Basic |
|
|
47,737 |
|
|
|
41,905 |
|
|
Diluted |
|
|
47,770 |
|
|
|
41,905 |
|
Dividends declared per share of common stock |
|
$ |
0.1600 |
|
|
$ |
0.1575 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CALIFORNIA WATER SERVICE GROUP |
|
CONDENSED CONSOLIDATED STATEMENTS OF INCOME |
|
Unaudited |
|
(In thousands, except per share data) |
|
|
|
For the Nine-Months ended: |
|
|
|
September 30 |
|
|
September 30 |
|
|
|
2013 |
|
|
2012 |
|
|
|
|
|
|
|
|
Operating revenue |
|
$ |
450,403 |
|
|
$ |
438,436 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
Operations: |
|
|
|
|
|
|
|
|
|
|
Water
production costs |
|
|
171,956 |
|
|
|
158,119 |
|
|
|
Administrative and general |
|
|
73,106 |
|
|
|
69,110 |
|
|
|
Other
operations |
|
|
50,332 |
|
|
|
59,213 |
|
|
Maintenance |
|
|
12,896 |
|
|
|
14,742 |
|
|
Depreciation and amortization |
|
|
43,625 |
|
|
|
41,383 |
|
|
Income taxes |
|
|
19,567 |
|
|
|
19,477 |
|
|
Property and other taxes |
|
|
16,564 |
|
|
|
13,802 |
|
|
|
Total
operating expenses |
|
|
388,046 |
|
|
|
375,846 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
operating income |
|
|
62,357 |
|
|
|
62,590 |
|
|
|
|
|
|
|
|
|
|
Other income and expenses: |
|
|
|
|
|
|
|
|
|
Non-regulated revenue |
|
|
10,386 |
|
|
|
11,943 |
|
|
Non-regulated expenses, net |
|
|
(8,482 |
) |
|
|
(8,491 |
) |
|
Income tax (expense) on other income and expenses |
|
|
(765 |
) |
|
|
(1,383 |
) |
|
|
Net
other income |
|
|
1,139 |
|
|
|
2,069 |
|
|
|
|
|
|
|
|
|
|
Interest expense: |
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
23,527 |
|
|
|
23,484 |
|
|
Less: capitalized interest |
|
|
(1,619 |
) |
|
|
(2,647 |
) |
|
|
Net
interest expense |
|
|
21,908 |
|
|
|
20,837 |
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
41,588 |
|
|
$ |
43,822 |
|
|
|
|
|
|
|
|
|
|
Earnings per share |
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.91 |
|
|
$ |
1.05 |
|
|
Diluted |
|
$ |
0.90 |
|
|
$ |
1.05 |
|
Weighted average shares outstanding |
|
|
|
|
|
|
|
|
|
Basic |
|
|
45,927 |
|
|
|
41,886 |
|
|
Diluted |
|
|
45,957 |
|
|
|
41,886 |
|
Dividends declared per share of common stock |
|
$ |
0.4800 |
|
|
$ |
0.4725 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1720 North First Street San Jose, CA 95112-4598
Contact: Tom Smegal (408) 367-8200 (analysts) Shannon Dean (310)
257-1435 (media)
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