American States Water Company Announces Earnings for the Third Quarter of 2015
Third Quarter 2015 Results
The table below sets forth a comparison of the third quarter diluted earnings per share by business segment, as reported:
Three Months Ended | ||||||||||||||||||||
9/30/2015 | 9/30/2014 | CHANGE | ||||||||||||||||||
Water | $ | 0.43 | $ | 0.40 | $ | 0.03 | ||||||||||||||
Electric | 0.01 | 0.01 | — | |||||||||||||||||
Contracted services | 0.12 | 0.12 | — | |||||||||||||||||
AWR (parent) | — | 0.01 | (0.01 | ) | ||||||||||||||||
Consolidated diluted earnings per share, as reported | $ | 0.56 | $ | 0.54 | $ | 0.02 | ||||||||||||||
Water
For the three months ended September 30, 2015, diluted earnings from the
water segment increased by
-
An increase in the water gross margin of
$672,000 , or$0.01 per share, due to CPUC-approved third-year rate increases and advice letter filings for the completion of certain capital projects not previously included in rates. -
Excluding supply costs, a decrease in operating expense of
$1.3 million , or$0.02 per share, due primarily to lower administrative and general expenses, which declined by$1.4 million resulting mostly from lower legal and other outside service costs related to condemnation and other activities, as compared to the same period in 2014. However, GSWC expects to incur additional legal costs to defend two of its water systems from condemnation actions. -
A decrease in other income, net of other expenses of
$534,000 , or$0.01 per share, due to a decrease in interest income, as well as losses recorded on investments held for a retirement benefit plan resulting from market conditions during the third quarter of 2015. -
An increase in the effective income tax rate ("ETR"), decreasing
earnings by
$0.01 per share as compared to the same period in 2014. The increase in the ETR was due primarily to changes between book and taxable income that are treated as flow-through adjustments in accordance with regulatory requirements. -
The cumulative impact of lower common shares outstanding resulting
from the 2014 and 2015 stock repurchase programs, increasing water
earnings by approximately
$0.02 per share as compared to the third quarter of 2014.
Billed water consumption for the third quarter of 2015 decreased by
approximately 24% as compared to the same period in 2014 due to water
conservation by customers in response to the ongoing drought conditions
in
Electric
For the three months ended September 30, 2015 and 2014, diluted earnings
from the electric segment were
Contracted Services
For the three months ended September 30, 2015 and 2014, diluted earnings
from contracted services were
AWR (parent)
Diluted earnings from AWR (parent) decreased by
Year-to-Date 2015 Results
Basic and fully diluted earnings per share were
Year-to-Date |
||||||||||||||||||
9/30/2015 |
9/30/2014 |
Change |
||||||||||||||||
Water | $ | 1.00 | $ | 0.94 | $ | 0.06 | ||||||||||||
Electric | 0.05 | 0.06 | (0.01 | ) | ||||||||||||||
Contracted services | 0.22 | 0.20 | 0.02 | |||||||||||||||
AWR (parent) | 0.02 | 0.02 | — | |||||||||||||||
Consolidated diluted earnings per share, as reported | $ | 1.29 | $ | 1.22 | $ | 0.07 | ||||||||||||
Increase/ | ||||||
Reconciliation of Changes in YTD EPS from 2014 to 2015: |
(Decrease) |
|||||
Water Segment: |
||||||
Water gross margin contribution due to rate increases (excluding surcharges*) | $ | 0.03 | ||||
Lower operating expenses | 0.01 | |||||
Higher effective tax rate (“ETR”) | (0.01 | ) | ||||
Cumulative impact of lower common shares outstanding resulting from the 2014 and 2015 stock repurchase programs | 0.03 | |||||
Electric Segment: |
||||||
Lower electric margin due to a change in the monthly revenue allocation and a higher ETR |
(0.01 | ) | ||||
Contracted Services Segment: |
||||||
Increase in O&M management fees including the impact of increased retroactive amounts by $0.02 per share due to successful price redeterminations | 0.04 | |||||
Higher operating expenses | (0.03 | ) | ||||
Lower construction activity, partially offset by favorable changes in cost estimates | (0.01 | ) | ||||
Lower state income taxes | 0.01 | |||||
Cumulative impact of lower common shares outstanding resulting from the 2014 and 2015 stock repurchase programs | 0.01 | |||||
YTD 2015 EPS Increase |
$ |
0.07 |
||||
* | 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 earnings and are excluded from the table above. | ||
Acquisition
In
Dividends
Non-GAAP Financial Measures
This press release includes a discussion on the water and electric gross
margins for various periods, which are each computed by subtracting
total supply costs from total revenues. 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 and electric 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 most recent Form 10-Q and Form 10-K filed with the
Conference Call
The company will host a conference call tomorrow,
The call will also be archived on our website and can be replayed
beginning
About
American States Water Company | ||||||||||||
Consolidated | ||||||||||||
Comparative Condensed Balance Sheets | ||||||||||||
September 30, | December 31, | |||||||||||
(in thousands) | 2015 | 2014 | ||||||||||
(Unaudited) | ||||||||||||
Assets | ||||||||||||
Utility Plant-Net | $1,032,119 | $1,003,520 | ||||||||||
Goodwill | 1,116 | 1,116 | ||||||||||
Other Property and Investments | 18,301 | 17,536 | ||||||||||
Current Assets | 135,463 | 209,451 | ||||||||||
Regulatory and Other Assets | 175,165 | 146,675 | ||||||||||
Total Assets | $1,362,164 | $1,378,298 | ||||||||||
Capitalization and Liabilities | ||||||||||||
Capitalization | 795,573 | 832,599 | ||||||||||
Current Liabilities | 123,976 | 99,290 | ||||||||||
Other Credits | 442,615 | 446,409 | ||||||||||
Total Capitalization and Liabilities | $1,362,164 | $1,378,298 | ||||||||||
Condensed Statements of Income | Three months ended | Nine months ended | ||||||||||||||||||||||||
(in thousands, except per share amounts) | September 30, | September 30, | ||||||||||||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||||||||||||
(Unaudited) | (Unaudited) | |||||||||||||||||||||||||
Operating Revenues | ||||||||||||||||||||||||||
Water | $ | 97,273 | $ | 96,700 | $ | 256,358 | $ | 253,689 | ||||||||||||||||||
Electric | 7,946 | 8,614 | 26,804 | 27,398 | ||||||||||||||||||||||
Contracted services | 27,756 | 33,013 | 65,364 | 74,826 | ||||||||||||||||||||||
Total operating revenues | $ | 132,975 | $ | 138,327 | $ | 348,526 | $ | 355,913 | ||||||||||||||||||
Operating Expenses | ||||||||||||||||||||||||||
Water purchased | $ | 18,127 | $ | 17,837 | $ | 46,833 | $ | 45,324 | ||||||||||||||||||
Power purchased for pumping | 2,982 | 3,914 | 7,122 | 8,448 | ||||||||||||||||||||||
Groundwater production assessment | 3,146 | 4,291 | 10,657 | 12,684 | ||||||||||||||||||||||
Power purchased for resale | 2,299 | 2,383 | 7,364 | 7,070 | ||||||||||||||||||||||
Supply cost balancing accounts | 4,824 | 3,179 | 8,453 | 3,891 | ||||||||||||||||||||||
Other operation | 7,056 | 6,958 | 20,578 | 20,990 | ||||||||||||||||||||||
Administrative and general | 19,272 | 20,142 | 59,270 | 59,733 | ||||||||||||||||||||||
Depreciation and amortization | 10,512 | 10,549 | 31,596 | 31,604 | ||||||||||||||||||||||
Maintenance | 4,393 | 4,390 | 12,075 | 12,206 | ||||||||||||||||||||||
Property and other taxes | 4,326 | 4,359 | 12,662 | 12,649 | ||||||||||||||||||||||
ASUS construction | 14,853 | 20,430 | 35,311 | 47,651 | ||||||||||||||||||||||
Total operating expenses | $ | 91,790 | $ | 98,432 | $ | 251,921 | $ | 262,250 | ||||||||||||||||||
Operating income | $ | 41,185 | $ | 39,895 | $ | 96,605 | $ | 93,663 | ||||||||||||||||||
Other Income and Expenses | ||||||||||||||||||||||||||
Interest expense | (5,484 | ) | (5,519 | ) | (16,239 | ) | (16,924 | ) | ||||||||||||||||||
Interest income | 118 | 224 | 332 | 459 | ||||||||||||||||||||||
Other, net | (346 | ) | 47 | 4 | 443 | |||||||||||||||||||||
Total other income and expenses | (5,712 | ) | (5,248 | ) | (15,903 | ) | (16,022 | ) | ||||||||||||||||||
Income Before Income Tax Expense | $ | 35,473 | $ | 34,647 | $ | 80,702 | $ | 77,641 | ||||||||||||||||||
Income tax expense | 14,394 | 13,476 | 31,826 | 30,095 | ||||||||||||||||||||||
Net Income | $ | 21,079 | $ | 21,171 | $ | 48,876 | $ | 47,546 | ||||||||||||||||||
Weighted average shares outstanding | 37,063 | 38,704 | 37,653 | 38,744 | ||||||||||||||||||||||
Basic earnings per Common Share | $ | 0.57 | $ | 0.54 | $ | 1.29 | $ | 1.22 | ||||||||||||||||||
Weighted average diluted shares | 37,266 | 38,930 | 37,853 | 38,963 | ||||||||||||||||||||||
Fully diluted earnings per Common Share | $ | 0.56 | $ | 0.54 | $ | 1.29 | $ | 1.22 | ||||||||||||||||||
Dividends Paid Per Common Share |
$ | 0.224 | $ | 0.213 | $ | 0.650 | $ | 0.618 | ||||||||||||||||||
View source version on businesswire.com: http://www.businesswire.com/news/home/20151103006745/en/
Source:
American States Water Company
Eva G. Tang
Senior Vice
President-Finance, Chief Financial Officer,
Corporate Secretary and
Treasurer
(909) 394-3600, ext. 707