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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) November 9, 2005
AMERICAN STATES WATER COMPANY
(Exact name of registrant as specified in its charter)
California 001-14431 95-4676679
(State or other jurisdiction of (Commission File Number) (I.R.S. Employer
incorporation or organization) Identification No.)
630 East Foothill Blvd.
San Dimas, California 91773
(Address of principal executive (Zip Code)
offices)
Registrant's telephone number, including area code: (909) 394-3600
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GOLDEN STATE WATER COMPANY
(Exact name of registrant as specified in its charter)
California 001-12008 95-1243678
(State or other jurisdiction of (Commission File Number) (I.R.S. Employer
incorporation or organization) Identification No.)
630 East Foothill Blvd.
San Dimas, California 91773
(Address of principal executive (Zip Code)
offices)
Registrant's telephone number, including area code: (909) 394-3600
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing requirement of the registrant under any of the
following provisions (see General Instruction A.2 below):
|_| Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the exchange Act (17 CFR
14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Section 2-Financial Information
Item 2.02. Results of Operations and Financial Condition
On November 9, 2005 American States Water Company released earnings for the
three and nine months ended September 30, 2005. A copy of the Company's press
release is attached hereto as Exhibit 99.1.
This Form 8-K and the attached exhibits are furnished to, but not filed with,
the Securities and Exchange Commission.
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Section 9-Financial Statements and Exhibits
Item 9.01. Financial Statements and Exhibits
The following exhibit is furnished hereunder:
Exhibit 99.1: Press Release dated November 9, 2005
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
AMERICAN STATES WATER COMPANY
Date: November 9, 2005 /s/ Robert J. Sprowls
-----------------------------------
Robert J. Sprowls
Sr. Vice President, Chief Financial
Officer, Treasurer and Corporate
Secretary
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EXHIBIT INDEX
Exhibit No. Description
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99.1 Press Release dated November 9, 2005
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Exhibit 99.1
American States Water Company Announces Earnings for the Three and
Nine Months Ended September 30, 2005
SAN DIMAS, Calif.--(BUSINESS WIRE)--Nov. 9, 2005--American States
Water Company (NYSE:AWR) today reported basic and fully diluted
earnings of $0.72 per share for the quarter ended September 30, 2005
as compared to $0.52 per share for the quarter ended September 30,
2004. Basic and fully diluted earnings were $1.29 per share for the
nine months ended September 30, 2005 as compared to basic and fully
diluted earnings of $1.04 per share for the nine months ended
September 30, 2004.
Third Quarter 2005 Results
Significantly impacting the third quarter results was a favorable
decision by the California Public Utilities Commission ("CPUC"). As
the Company's news release announced on July 22, 2005, AWR's
subsidiary, Golden State Water Company ("GSWC") received the CPUC's
approval to collect the balance of a litigation memorandum account
totaling approximately $21.3 million, through a rate surcharge, which
will continue for no longer than 20 years. The memorandum account was
authorized and established in 2000 to allow GSWC to track costs it
incurred in prosecuting the lawsuit filed against Aerojet-General
Corporation ("Aerojet") for causing the contamination of the
Sacramento County Groundwater Basin and the lawsuit against the State
of California, which had regulatory oversight of the clean-up process.
As a result of this decision, GSWC recorded an increase of
approximately $6.2 million in its regulatory assets, to include
previously expensed carrying and other costs, and recorded a
corresponding pretax gain in its results of operations during the
third quarter of 2005. In addition, GSWC was authorized to restore to
the appropriate plant accounts those amounts that have been reimbursed
by Aerojet pursuant to the settlement. This resulted in GSWC recording
an approximate $1.0 million decrease to depreciation expense during
the third quarter of 2005. This favorable decision added about $0.25
per share to earnings.
Also impacting the results for this quarter was a significant
increase in the unrealized gain on purchased power contracts due to an
increase in forward energy prices. This unrealized gain added
approximately $0.14 per share to the three months ended September 30,
2005, as compared to the unrealized loss of $0.01 per share for the
same period of 2004. The Company's purchased power contracts are
deemed to be derivative instruments under SFAS No. 133, "Accounting
for Derivative Instruments and Hedging Activities".
Total operating revenues of $68.1 million for the third quarter of
2005 decreased by approximately $900,000 compared to revenues of $69.0
million recorded in the third quarter of 2004. The decrease reflects:
(i) a favorable CPUC decision in August of 2004 resulted in the
recording of approximately $2.0 million in the third quarter of 2004
related to retroactive water revenues associated with GSWC's Region II
rate increases for which there were no corresponding retroactive
revenues recorded in 2005; (ii) decreases in billed water consumption
of approximately 2.7%, an impact of approximately $0.03 per share, due
to changes in weather conditions, which were partially offset by
increases in water rates in 2005; (iii) electric rate increases
related to the 8.4 MW generation facilities offsetting a 3.0% decrease
in electric usage, and (iv) additional revenues at American States
Utility Services, Inc. ("ASUS") associated with the operation of the
water and wastewater systems at Fort Bliss, located near El Paso,
Texas that commenced on October 1, 2004.
Total operating expenses increased by 0.8% to $56.7 million for
the quarter ended September 30, 2005 as compared to the same period in
2004. The increase in operating expenses reflects: (i) an overall
increase in supply costs due to suppliers' rate increases, offset
partially by a decline in consumption; (ii) increased maintenance
expenses due to increases in scheduled maintenance and emergency
repairs at GSWC and higher maintenance expenses at ASUS due to the
commencement of operations of the water and wastewater system at Fort
Bliss; (iii) higher taxes on income due to an increase in pretax
operating income, and a higher effective tax rate that reduced
earnings by about $0.07 per share resulting from differences between
book and taxable income that are treated as flow-through adjustments
in accordance with regulatory requirements, and (iv) an increase in
other taxes reflecting additional property taxes resulted from higher
assessed values and increases in payroll taxes.
These increases in operating expenses were offset by: (i) a
significant increase in the unrealized gain on purchased power
contracts mentioned earlier; (ii) a decrease in the provision for
supply cost balancing accounts; (iii) a decrease in administrative and
general expenses, and (iv) decreases in depreciation and amortization
expense resulting from the favorable CPUC decision on the Aerojet
matter, discussed previously.
Interest charges decreased by 121.0% to ($959,000) compared to
$4.6 million for the quarter ended September 30, 2004 primarily due to
the CPUC's approval to include in rates previously incurred and
expensed interest costs totaling $5.7 million in the Aerojet
memorandum account. This was offset by increases in short-term
borrowings and higher interest rates on short-term borrowings.
Year to Date 2005 Results - Significant items that impacted the
increase in earnings for the nine months of 2005 in comparison to the
prior year were: (i) a favorable decision issued by the CPUC in 2004
that resulted in a net pretax gain of $5.2 million, or approximately
$0.20 per share, on the sale of water rights during the second quarter
of 2004; (ii) an increase in the unrealized gain on purchased power
contracts due to increased energy prices that added approximately $7.5
million (or $0.26 per share) to the nine months ended September 30,
2005 compared to the unrealized gain of $300,000 (or $0.01 per share)
for the same period of 2004; (iii) a favorable decision issued by the
CPUC on July 21, 2005 regarding the Aerojet memorandum account that
increased net income by about $4.3 million in July 2005 or
approximately $0.25 per share; (iv) a 6.9% decrease in water
consumption in 2005 impacted earnings by approximately $0.15 per
share, offset by rate increases, and (v) a decrease in the provision
for supply cost balancing account. With respect to the supply cost
balancing account, GSWC recorded a cumulative $2.7 million regulatory
liability in May 2004 with a corresponding charge booked to the
provision for supply cost balancing account for GSWC's Regions I and
II. During the nine months ended September 30, 2005, there was no
similar charge for over-collection. In addition, an approximate $1.3
million under-collection in GSWC's Region III memorandum supply cost
account was approved by the CPUC and recorded during the nine months
ended September 30, 2005 as a reduction to the provision.
Total operating revenues of $178.4 million for the nine months
ended September 30, 2005 increased by $3.4 million compared to
operating revenues of $175.0 million recorded for the nine months
ended September 30, 2004. Of the total increase in revenues, water
revenues increased slightly for the nine months ended September 30,
2005 reflecting rate increases offset by a 6.9% decrease in billed
water consumption due to near-record rainfall in Southern California.
Electric revenues increased by 4.3% due to a rate increase related to
the 8.4 MW natural gas-fueled generator facility offset by a slight
decrease in consumption. Other operating revenues increased by $1.8
million due primarily to the additional revenues associated with the
operation of the water and wastewater systems at Fort Bliss.
Total operating expenses increased to $148.0 million for the nine
months ended September 30, 2005 as compared to the $146.1 million
recorded for the same period in 2004, reflecting: (i) an increase in
the groundwater production assessments due primarily to increases in
pump assessment rates, offset by a decrease in well production due to
a decline in consumption; (ii) a $5.2 million net pretax gain on sale
of water rights during the second quarter of 2004 with no
corresponding gain in 2005; (iii) higher maintenance costs due to
expenses for ASUS Fort Bliss operations and increased scheduled work
in one of GSWC's regions, and (iv) higher taxes on income due to an
increase in pretax income and a higher effective tax rate that
impacted earnings by approximately $0.07 per share, reflecting
flow-through adjustments as discussed in the quarterly result. These
increases were partially offset by: (i) a decrease in purchased water
supply costs and the cost of power for pumping, both reflecting a
reduction in customer usage; (ii) a decrease in the provision for
supply-cost balancing accounts; (iii) an increase in the unrealized
gain on purchased power contracts, and (iv) a net gain of $760,000
recorded in the first quarter of 2005 on a settlement reached for the
removal of wells at the Chaparral City Water Company subsidiary.
Other income was a loss of $165,000 as compared to income of
$371,000 for the nine months ended September 30, 2004. This was
primarily due to a reduction in GSWC's estimate of customer refunds
associated with lease revenues from the city of Folsom in June 2004.
Interest charges decreased to $8.4 million for the nine months
ended September 30, 2005 as compared to $13.3 million for the nine
months ended September 30, 2004. The decrease reflects the CPUC's
approval of previously incurred and expensed carrying costs totaling
$5.7 million in the Aerojet memorandum account, offset by increases in
short-term borrowings and higher rates.
Other - 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 and Form 10-K filed with the
Securities and Exchange Commission.
Q3 2005 Earnings Release Conference Call - The Company will host a
conference call on Wednesday, November 9, 2005 at 11:00 a.m. Pacific
Time ("PT"), during which time, management will be making a brief
presentation focusing on the Company's results, strategies, and
operating trends.
Interested parties can listen to the conference call over the
Internet by logging onto www.aswater.com. The call will also be
recorded and replayed beginning Wednesday, November 9, 2005 at 3:00
p.m. PT and will run through Wednesday, November 16, 2005. The dial-in
number for the audio replay is (800) 642-1687, Conference ID# 1800322.
American States Water Company is the parent of Golden State Water
Company, American States Utility Services, Inc. and Chaparral City
Water Company. Through its subsidiaries, AWR provides water service to
1 out of 30 Californians located within 75 communities throughout 10
counties in Northern, Coastal and Southern California (approximately
252,800 customers) and to approximately 13,000 customers in the city
of Fountain Hills, Arizona, and portions of Scottsdale, Arizona. The
Company also distributes electricity to approximately 23,000 customers
in the Big Bear recreational area of California. Through its
non-regulated subsidiary, American States Utility Services, Inc., the
Company contracts with various municipalities, the U.S. government and
private entities to provide various services, including billing and
meter reading, water marketing and operation and maintenance of water
and wastewater systems.
American States Water Company
Consolidated
Comparative Condensed Balance Sheets
September 30, December 31,
(in thousands) 2005 2004
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(Unaudited)
Assets
Utility Plant-Net $ 698,230 $ 664,165
Other Property and Investments 21,627 21,717
Current Assets 56,455 53,024
Regulatory and Other Assets 68,045 71,371
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$ 844,357 $ 810,277
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Capitalization and Liabilities
Capitalization $ 491,498 $ 480,367
Current Liabilities 103,927 86,336
Other Credits 248,932 243,574
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$ 844,357 $ 810,277
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Condensed Statements of Income
Three Months Ended Nine Months Ended
(in thousands, except per share September 30, September 30,
amounts)
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2005 2004 2005 2004
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(Unaudited) (Unaudited)
Operating Revenues $ 68,071 $ 68,961 $ 178,361 $174,956
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Operating Expenses:
Operations $ 29,785 $ 29,371 $ 74,845 $ 79,252
Unrealized (gain) loss on
purchased power
contracts (4,018) 224 (7,492) (257)
Gain on sale of water
rights - - - (5,675)
Gain on settlement for
removal of wells - - (760) -
Administration and
general expenses 10,074 10,591 31,698 31,166
Maintenance 3,080 2,593 8,068 7,529
Depreciation and
amortization 4,705 5,589 16,036 15,840
Taxes on income 10,558 5,692 18,582 11,720
Property and other taxes 2,548 2,235 7,041 6,566
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Total Operating Expenses $ 56,732 $ 56,295 $ 148,018 $146,141
Net Operating Income $ 11,339 $ 12,666 $ 30,343 $ 28,815
Other Income (Loss), net (64) (84) (165) 371
Interest Charges (959) 4,564 8,445 13,312
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Net Income $ 12,234 $ 8,018 $ 21,733 $ 15,874
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Weighted Average Shares
Outstanding 16,782 15,318 16,773 15,264
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Earnings Per Common Share $ 0.72 $ 0.52 $ 1.29 $ 1.04
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Weighted Average Diluted Shares 16,887 15,338 16,845 15,288
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Earnings Per Diluted Share $ 0.72 $ 0.52 $ 1.29 $ 1.04
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Dividends Declared Per Common
Share $ 0.225 $ 0.221 $ 0.675 $ 0.663
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CONTACT: American States Water Company
Robert J. Sprowls, 909-394-3600, ext. 647