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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) March 14, 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 (I.R.S. Employer
incorporation or organization) File Number) 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 (I.R.S. Employer
incorporation or organization) File Number) 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 March 14, 2006 American States Water Company released earnings for the three
and twelve months ended December 31, 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 March 14, 2006
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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: March 14, 2006 /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 March 14, 2006
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Exhibit 99.1
American States Water Company Announces Earnings for the Three and
Twelve Months Ended December 31, 2005
SAN DIMAS, Calif.--(BUSINESS WIRE)--March 14, 2006--American
States Water Company (NYSE:AWR) today reported basic and fully diluted
earnings of $1.58 and $1.57 per share, respectively, for the twelve
months ended December 31, 2005 as compared to basic and fully diluted
earnings of $1.19 and $1.18 per share, respectively, reported for the
same period ended December 31, 2004. Basic and fully diluted earnings
were both $0.30 per share for the three months ended December 31, 2005
as compared to basic and fully diluted earnings of $0.16 per share
reported for the same period ended December 31, 2004.
Full Year 2005 Results - Significant items that impacted the
increase in earnings for 2005 in comparison to the prior year were:
(i) a favorable decision issued by the California Public Utilities
Commission ("CPUC") on July 21, 2005 regarding the Aerojet memorandum
account that increased net income by about $4.3 million or
approximately $0.25 per share; (ii) a significant increase in the
unrealized gain on purchased power contracts due to increased energy
prices that added approximately $5.4 million to pre-tax income in 2005
(or $0.19 per share) compared to an unrealized loss of $136,000, or
less than $0.01 per share for the same period of 2004; (iii) a
favorable decision issued by the CPUC in 2004 that resulted in a net
pre-tax gain of $5.2 million, or approximately $0.20 per share, on the
sale of water rights during the second quarter of 2004; (iv) a 4%
decrease in billed water consumption in 2005 impacted earnings by
approximately $0.12 per share, offset by rate increases; (v) a higher
effective income tax rate in 2005 reduced earnings by $0.08 per share;
and (vi) a decrease in the provision for the supply cost balancing
account. During the year ended December 31, 2005, Golden State Water
Company's ("GSWC's") Region III recorded a reduction to its supply
cost balancing account provision of approximately $4.3 million,
pursuant to approvals in 2005 by the CPUC, for recovery of previous
supply costs of $1.3 million incurred in 2004 and $3.0 million
incurred in 2001 to 2003. Furthermore, a cumulative $2.7 million
over-collection in supply costs was recorded in May 2004 covering
mostly years 2001 to 2003 as a result of advice letter filings
pursuant to a new procedure established by the CPUC. These overall
changes to the supply cost balancing provisions resulted in a net
increase of $0.29 per share in 2005.
Total operating revenues of $236.2 million for the twelve months
ended December 31, 2005 increased by $8.2 million compared to
operating revenues of $228.0 million recorded for 2004. Of the total
increase in revenues, water revenues increased by 2.4% primarily due
to rate increases in 2004 and 2005 at GSWC which contributed
approximately $8.8 million of the higher 2005 total revenues. As
previously mentioned, a 4% decrease in billed water consumption
resulting from near record rainfall in southern California in 2005,
partially offset the effect of the higher water revenues. Electric
revenues increased by 6.4% in 2005 primarily due to a rate increase
related to cost recovery of the company's newly constructed 8.4 MW
natural gas-fueled generation facility. Other revenues increased by
$1.7 million reflecting a full year of operation of the water and
wastewater system at Fort Bliss, Texas, by AWR subsidiary American
States Utility Services, Inc. ("ASUS"). ASUS also signed three new
long-term contracts to operate the water and wastewater facilities at
four U.S. Army installations in Virginia and at Andrews Air Force Base
("Andrews") in Maryland during 2005. ASUS began operations of the
facilities at Andrews and Fort Lee in February 2006 with the
commencement of operations of the remaining three bases scheduled for
April 2006.
Total operating expenses increased by 2.0% to $195.8 million for
the twelve months ended December 31, 2005 as compared to the $191.9
million recorded for the same period in 2004, reflecting: (i) an
increase in groundwater production assessments due primarily to
increases in pump assessment rates, partially offset by a decrease in
well production due to a decline in 2005 consumption; (ii) a $5.2
million net pre-tax gain on sale of water rights during the second
quarter of 2004 with no corresponding gain in 2005; (iii) higher other
operating expenses due to higher wages, staffing levels, and chemicals
and treatment costs; (iv) higher depreciation resulting from increased
utility plant balances; (v) higher administrative and general expenses
due to increases in pension and benefit costs, bonus accruals, and
wages; (vi) increased expenses associated with a full year of
operating the facilities at Fort Bliss; and (vii) higher taxes on
income due to an increase in pre-tax operating income, and a higher
effective tax rate resulting from differences between book and taxable
income that are treated as flow-through adjustments in accordance with
California regulatory requirements, and the recognition in 2005 of the
partial deferral of the federal benefit of state taxes to conform to
the flow-through method required for CPUC rate-making purposes.
These increases were partially offset by: (i) a decrease in power
purchased for resale resulting primarily from accounting adjustments
based on orders from the Federal Energy Regulatory Commission
associated with GSWC's contract with Mirant Marketing; (ii) the
decrease in the provision for supply cost balancing accounts
previously discussed; (iii) the increase in the unrealized gain on
purchased power contracts previously discussed; 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 in Arizona.
Interest charges decreased by 23.8% to $13.6 million in 2005
compared to $17.9 million for the year ended December 31, 2004
primarily due to the CPUC's approval to include in rates previously
incurred and expensed interest costs totaling $5.7 million; all of
which is related to cost recovery of the $21.3 million Aerojet
memorandum account. This was offset by increases in short-term
borrowings, higher interest rates on short-term borrowings, and
additional long-term interest for a $40 million private placement note
issued in October 2005.
Fourth Quarter 2005 Results - Significantly impacting the fourth
quarter results were approximately $5.4 million of reductions (or
$0.19 per share) recorded to GSWC's supply cost balancing account
during the fourth quarter of 2005 associated with recovery of
previously incurred supply costs. During the fourth quarter of 2005,
GSWC recorded a $3.0 million reduction to its supply cost balancing
account provision for increased supply costs incurred in 2001 to 2003,
pursuant to 2005 CPUC orders. There was also a $2.4 million reduction
recorded to the supply cost balancing account for increased supply
costs recognized during prior quarters of 2005. Also during the fourth
quarter of 2005, GSWC recorded a $2.0 million unrealized loss on
purchased power contracts compared to an unrealized loss during the
fourth quarter of 2004 of approximately $0.4 million resulting in a
$0.06 per share reduction in fourth quarter 2005 results compared to
the fourth quarter of 2004.
Total operating revenues of $57.8 million for the fourth quarter
of 2005 increased by $4.8 million compared to revenues of $53.0
million recorded in the fourth quarter of 2004. Of the total increase
in revenues, water revenues increased by 8.8% due to rate increases
implemented since the fourth quarter of 2004 and higher consumption in
2005 due to the extremely wet weather during the fourth quarter of
2004. Electric revenues increased by 12.8% due primarily to a rate
increase in April 2005 discussed previously, partially offset by a
decrease in consumption.
Total operating expenses increased by $2.0 million, a 4.3%
increase, to $47.7 million for the three months ended December 31,
2005. The increase in operating expenses reflects: (i) higher
purchased water expenses due to increased customer usage (over fourth
quarter 2004 levels) caused by changed weather, and increases in
supplier rates; (ii) the increase in the unrealized loss on purchased
power contracts previously described; (iii) higher other operating
expenses due to higher wages and benefits, staffing levels, chemicals,
and treatment costs; (iv) higher administrative and general costs due
to an increase in pension and benefit costs, higher wages, and an
increase in bonuses accrued; (v) higher depreciation resulting from
increased utility plant balances; and (vi) higher taxes on income due
to an increase in pre-tax operating income, and a higher effective tax
rate resulting from differences between book and taxable income that
are treated as flow-through adjustments in accordance with California
regulatory requirements.
These increases in expenses were partially offset by: (i) a
reduction in power purchased for pumping during the fourth quarter of
2005 due to certain wells being shut down; (ii) a reduction in power
purchased for resale due primarily to a decrease in usage and an
increase in income from the sale of surplus electricity into the spot
market; (iii) a decrease in 2005 maintenance as a result of certain
emergency work completed during the fourth quarter of 2004; and (iv)
reductions to the supply cost balancing account discussed previously.
Interest charges increased by $616,000 to $5.2 million for the
quarter ended December 31, 2005 as compared to the quarter ended
December 31, 2004. The increase is due primarily to an increase in
long-term interest for a $40 million private placement note issued in
October 2005.
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.
Q4 and 2005 Earnings Release Conference Call - The Company will
host a conference call today, Tuesday, March 14, 2006 at 11:00 a.m.
Pacific Time (PT), during which management will be making a brief
presentation focusing on the Company's fourth quarter and year end
results, strategies, and operating trends.
Interested parties can listen to the conference call over the
Internet by logging on to www.aswater.com. The call will also be
recorded and replayed beginning Tuesday, March 14, 2006 at 1:00 p.m.
PT and will run through Tuesday, March 21, 2006. The dial-in number
for the audio replay is 800-642-1687, Passcode 5844154.
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
December 31, December 31,
(in thousands) 2005 2004
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(Unaudited)
Assets
Utility Plant-Net $ 713,225 $ 664,165
Other Property and Investments 21,581 21,717
Current Assets 68,866 53,024
Regulatory and Other Assets 73,105 71,371
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$ 876,777 $ 810,277
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Capitalization and Liabilities
Capitalization $ 532,499 $ 480,367
Current Liabilities 77,585 86,336
Other Credits 266,693 243,574
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$ 876,777 $ 810,277
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Condensed Statements of Income
Three Months Ended Twelve Months Ended
(in thousands, except per December 31, December 31,
share amounts)
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2005 2004 2005 2004
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(Unaudited) (Unaudited)
Operating Revenues $57,836 $53,049 $236,197 $228,005
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Operating Expenses:
Operations $18,302 $21,845 $93,147 $101,097
Unrealized (gain) loss on
purchased power contracts 2,047 393 (5,445) 136
Gain on sale of water rights - - - (5,675)
Gain on settlement for
removal of wells - - (760) -
Administration and general
expenses 12,435 10,643 44,133 41,809
Maintenance 3,517 4,033 11,585 11,562
Depreciation and amortization 5,810 4,984 21,846 20,824
Taxes on income 3,363 1,670 21,945 13,390
Property and other taxes 2,261 2,206 9,302 8,772
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Total operating expenses $47,735 $45,774 $195,753 $191,915
Net operating income $10,101 $7,275 $40,444 $36,090
Other Income (Loss), net 86 (70) (79) 301
Interest Charges 5,154 4,538 13,599 17,850
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Net Income $5,033 $2,667 $26,766 $18,541
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Weighted Average Shares
Outstanding 16,792 16,741 16,778 15,633
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Earnings Per Common Share $0.30 $0.16 $1.58 $1.19
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Weighted Average Diluted
Shares 16,832 16,778 16,809 15,663
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Earnings Per Diluted Share $0.30 $0.16 $1.57 $1.18
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Dividends Declared Per Common
Share $0.225 $0.225 $0.90 $0.888
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CONTACT: American States Water Company
Robert J. Sprowls, 909-394-3600, ext. 647