American States Water Company Announces Earnings for the Third Quarter of 2014
Third Quarter 2014 Results
The table below sets forth a comparison of the third quarter diluted earnings per share by business segment, as reported:
Diluted Earnings per Share | |||||||||||||||
Three Months Ended | |||||||||||||||
9/30/2014 | 9/30/2013 | CHANGE | |||||||||||||
Water | $ | 0.40 | $ | 0.42 | $ | (0.02 | ) | ||||||||
Electric | 0.01 | 0.01 | — | ||||||||||||
Contracted services | 0.12 | 0.06 | 0.06 | ||||||||||||
AWR (parent) | 0.01 | 0.04 | (0.03 | ) | |||||||||||
Consolidated diluted earnings per share, as reported | $ | 0.54 | $ | 0.53 | $ | 0.01 | |||||||||
Water
For the three months ended September 30, 2014, diluted earnings from the
water segment decreased by
-
An increase in the water gross margin (excluding surcharges) of
approximately
$1.6 million , or$0.02 per share, resulting from second-year rate increases approved by theCalifornia Public Utilities Commission ("CPUC"). -
An increase in operating expenses (excluding supply costs and
surcharges) of approximately
$1.4 million , or$0.02 per share, primarily due to increases in legal and outside services costs and depreciation expense. These increases were partially offset by lower planned maintenance expense. -
An increase in the effective income tax rate, decreasing water
earnings by
$0.02 per share. The change in the tax rate is primarily due to changes between book and taxable income from items that are treated as flow-through adjustments in accordance with regulatory requirements.
Electric
For the three months ended September 30, 2014 and 2013, diluted earnings
from the electric segment were
Contracted Services
For the three months ended September 30, 2014, diluted earnings from
contracted services increased by
AWR (parent)
Diluted earnings from AWR (parent) decreased
Year-to-Date 2014 Results
Basic and fully diluted earnings per share were
Diluted Earnings per Share | |||||||||||||||
Nine Months Ended | |||||||||||||||
9/30/2014 | 9/30/2013 | CHANGE | |||||||||||||
Water | $ | 0.94 | $ | 1.00 | $ | (0.06 | ) | ||||||||
Electric | 0.06 | 0.06 | — | ||||||||||||
Contracted services | 0.20 | 0.20 | — | ||||||||||||
AWR (parent) |
0.02 | 0.05 | (0.03 | ) | |||||||||||
Consolidated diluted earnings per share, as reported | $ | 1.22 | $ | 1.31 | $ | (0.09 | ) | ||||||||
Reconciliation of changes in YTD EPS from 2013 to 2014: |
|
Increase/ |
|||
Water Segment: |
|||||
Recovery of previously incurred costs in 2013 (did not recur in 2014) | $ | (0.05 | ) | ||
Water gross margin contribution due to rate increases (excluding surcharges*) | 0.04 | ||||
Higher depreciation expense | (0.03 | ) | |||
Higher other operating expenses (excluding surcharges*) | (0.03 | ) | |||
Lower planned maintenance expense | 0.02 | ||||
Higher effective income tax rate due to flow-through adjustments | (0.01 | ) | |||
Contracted Services Segment: |
|||||
Lower capital upgrade work in 2014 as several large construction projects were completed or nearing completion in 2013 |
|||||
(0.05 | ) | ||||
Retroactive revenues based on resolution of price redeterminations at Fort Bragg, Fort Jackson and Andrews Air Force Base |
|||||
0.04 | |||||
Lower operating expenses | 0.01 | ||||
AWR (parent): |
|||||
Cumulative tax benefit recorded during the third quarter of 2013 for deductions taken related to an employee benefit program (similar amount did not recur in 2014) |
|||||
(0.03 | ) | ||||
YTD 2014 EPS decrease |
$ | (0.09 | ) |
* Surcharges billed to customers for previously incurred costs are recorded as revenues with a corresponding increase in operating expenses. These surcharges have no impact to net earnings and therefore, are excluded in the table above.
Regulatory Matters
In
Military Privatization
In
During the third quarter of 2014, the U.S. government also awarded ASUS
approximately
Dividends
On
Non-GAAP Financial Measures
This press release includes a discussion on the water gross margin for
various periods, which is computed by taking total water revenues, less
total supply costs. The discussion also includes AWR’s operations in
terms of diluted earnings per share by business segment, which is each
business segment’s earnings divided by the Company’s weighted average
number of diluted shares. These items are derived from consolidated
financial information but are not presented in our financial statements
that are prepared in accordance with Generally Accepted Accounting
Principles (“GAAP”) in
The non-GAAP financial measures supplement our GAAP disclosures and should not be considered as alternatives to the GAAP measures. Furthermore, the non-GAAP financial measures may not be comparable to similarly titled non-GAAP financial measures of other registrants. The Company uses water gross margins and earnings per share by business segment as important measures in evaluating its operating results and believes these measures are useful internal benchmarks in evaluating the performance of its operating segments. The Company reviews these measurements regularly and compares them to historical periods and to the operating budget.
Forward Looking Statements
Certain matters discussed in this news release with regard to the
Company’s expectations may be forward-looking statements that involve
risks and uncertainties. The assumptions and risk factors that could
cause actual results to differ materially include those described in the
Company’s Form 10-Q for the quarter ended September 30, 2014 filed with
the
Third Quarter 2014 Earnings Release Conference Call
The Company will host a conference call today,
The call will also be archived on our website and can be replayed
beginning
American States Water Company | ||||||||||||||||
Consolidated Comparative Condensed Balance Sheets |
||||||||||||||||
September 30, | December 31, | |||||||||||||||
(in thousands) | 2014 | 2013 | ||||||||||||||
(Unaudited) | ||||||||||||||||
Assets | ||||||||||||||||
Utility Plant-Net | $995,443 | $981,477 | ||||||||||||||
Goodwill | 1,116 | 1,116 | ||||||||||||||
Other Property and Investments | 17,509 | 15,806 | ||||||||||||||
Current Assets | 186,555 | 191,617 | ||||||||||||||
Regulatory and Other Assets | 125,492 | 120,167 | ||||||||||||||
Total Assets | $1,326,115 | $1,310,183 | ||||||||||||||
Capitalization and Liabilities | ||||||||||||||||
Capitalization | 821,119 | 818,483 | ||||||||||||||
Current Liabilities | 120,593 | 100,906 | ||||||||||||||
Other Credits | 384,403 | 390,794 | ||||||||||||||
Total Capitalization and Liabilities | $1,326,115 | $1,310,183 | ||||||||||||||
Condensed Statements of Income | Three months ended | Nine months ended | ||||||||||||||
(in thousands, except per share amounts) | September 30, | September 30, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
(Unaudited) | (Unaudited) | |||||||||||||||
Operating Revenues | ||||||||||||||||
Water | $ | 96,700 | $ | 93,932 | $ | 253,689 | $ | 247,234 | ||||||||
Electric | 8,614 | 8,849 | 27,398 | 27,980 | ||||||||||||
Contracted services | 33,013 | 28,133 | 74,826 | 86,947 | ||||||||||||
Total operating revenues | $ | 138,327 | $ | 130,914 | $ | 355,913 | $ | 362,161 | ||||||||
Operating Expenses | ||||||||||||||||
Water purchased | 17,837 | 19,246 | 45,324 | 46,648 | ||||||||||||
Power purchased for pumping | 3,914 | 3,414 | 8,448 | 7,385 | ||||||||||||
Groundwater production assessment | 4,291 | 4,656 | 12,684 | 11,666 | ||||||||||||
Power purchased for resale | 2,383 | 3,386 | 7,070 | 9,894 | ||||||||||||
Supply cost balancing accounts | 3,179 | (1,003 | ) | 3,891 | (9 | ) | ||||||||||
Other operation | 6,958 | 7,185 | 20,990 | 19,158 | ||||||||||||
Administrative and general | 20,178 | 20,083 | 59,769 | 56,103 | ||||||||||||
Depreciation and amortization | 10,549 | 9,753 | 31,604 | 29,337 | ||||||||||||
Maintenance | 4,390 | 4,666 | 12,206 | 13,513 | ||||||||||||
Property and other taxes | 4,359 | 4,108 | 12,649 | 12,004 | ||||||||||||
ASUS construction | 20,430 | 19,256 | 47,651 | 59,053 | ||||||||||||
Net gain on sale of property | (36 | ) | — | (36 | ) | (12 | ) | |||||||||
Total operating expenses | $ | 98,432 | $ | 94,750 | $ | 262,250 | $ | 264,740 | ||||||||
Operating income | $ | 39,895 | $ | 36,164 | $ | 93,663 | $ | 97,421 | ||||||||
Other Income and Expenses | ||||||||||||||||
Interest expense | (5,519 | ) | (5,852 | ) | (16,924 | ) | (17,398 | ) | ||||||||
Interest income | 224 | 185 | 459 | 512 | ||||||||||||
Other, net | 47 | 247 | 443 | 673 | ||||||||||||
Total other income and expenses | (5,248 | ) | (5,420 | ) | (16,022 | ) | (16,213 | ) | ||||||||
Income Before Income Tax Expense | $ | 34,647 | $ | 30,744 | $ | 77,641 | $ | 81,208 | ||||||||
Income tax expense | 13,476 | 9,905 | 30,095 | 30,302 | ||||||||||||
Net Income | $ | 21,171 | $ | 20,839 | $ | 47,546 | $ | 50,906 | ||||||||
Weighted average shares outstanding | 38,704 | 38,696 | 38,744 | 38,613 | ||||||||||||
Basic earnings per Common Share | $ | 0.54 | $ | 0.54 | $ | 1.22 | $ | 1.31 | ||||||||
Weighted average diluted shares | 38,930 | 38,923 | 38,963 | 38,835 | ||||||||||||
Fully diluted earnings per Common Share | $ | 0.54 | $ | 0.53 | $ | 1.22 | $ | 1.31 | ||||||||
Dividends Paid Per Common Share |
$ | 0.2130 | $ | 0.2025 | $ | 0.6180 | $ | 0.5575 |
Source:
American States Water Company
Eva G. Tang
Senior Vice
President-Finance, Chief Financial Officer,
Corporate Secretary and
Treasurer
(909) 394-3600, ext. 707