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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) May 9, 2007
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 offices) (Zip Code)
Registrant's telephone number, including area code: (909) 394-3600
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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 May 9, 2007 American States Water Company released earnings for the three
months ended March 31, 2007. 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 May 9, 2007
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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: May 9, 2007 /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
- ----------- -----------
99.1 Press Release dated May 9, 2007
Exhibit 99.1
American States Water Company Announces Earnings
for the Three Months Ended March 31, 2007
SAN DIMAS, Calif.--(BUSINESS WIRE)--May 9, 2007--American States
Water Company (NYSE:AWR) today reported basic and fully diluted
earnings of $0.40 per share for the three months ended March 31, 2007
as compared to basic and fully diluted earnings of $0.35 per share,
reported for the same period ended March 31, 2006.
Significant items that impacted the earnings for the first quarter
of 2007 in comparison to the same period of 2006 were:
-- The recording of a pretax unrealized gain of $2.7 million, or
$0.09 per share, on purchased power contracts in 2007 due to
increasing forward energy prices versus a pretax unrealized
loss of $2.2 million, or $0.08 per share on purchased power
contracts in 2006, a positive change of $0.17 per share from
2006 to 2007;
-- A favorable decision issued by the California Public Utilities
Commission ("CPUC") on April 13, 2006 regarding the treatment
of Golden State Water Company's ("GSWC") water rights lease
revenues received for 2004 and 2005 increased pretax income by
about $2.3 million in March 2006, or approximately $0.08 per
share when compared to the same period in 2007;
-- An increase in pretax operating income of $1.2 million, or
$0.04 per share, in 2007 contributed from American States
Utility Services, Inc. ("ASUS") and its subsidiaries for
operating, maintaining and improving the water and wastewater
systems at military bases for the U.S. government, when
compared to the same period of 2006; and
-- A delay by the CPUC in processing GSWC's general rate
applications for rate increases in Region II and to cover
general office expenses.
Other items that impacted the results of operations as compared to
the same period of 2006 are described below.
Total operating revenues increased by $8.0 million to $72.3
million for the first quarter of 2007, compared to revenues of $64.3
million recorded in the first quarter of 2006, an increase of 12.4%.
The table below sets forth summaries of operating revenues by segment
(in thousands):
2007 2006 $ Change % Change
-----------------------------------------
Water $50,327 $50,749 ($422) -0.8%
Electric 8,869 8,346 523 6.3%
Contracted services 13,074 5,220 7,854 150.5%
-----------------------------------------
Total operating revenues $72,270 $64,315 $7,955 12.4%
=========================================
Water revenues from GSWC and Chaparral City Water Company
decreased by 0.8% reflecting the recognition of $2.3 million of water
rights lease revenues in the first quarter of 2006 for years 2004 and
2005 as discussed above. This decrease was partially offset by rate
increases approved by the CPUC and effective January 1, 2007 and
higher consumption in 2007 due to weather changes from the first
quarter of 2006.
Included in the rate increases in 2007 was an interim rate
increase effective January 1, 2007, subject to refund, totaling
approximately $260,000 for the first quarter ($1.2 million for the
entire 2007 year) due to the CPUC's delays in processing GSWC's
general rate applications for rate increases in Region II and to cover
general office expenses at the corporate headquarters. If GSWC
receives a favorable CPUC decision on the items that are still
contested, we estimate that it will add annualized revenues of
approximately $5.2 million for 2007. If the CPUC's decision favors the
position recommended by the Division of Ratepayer Advocates at the
CPUC, it could result in an estimated $1.5 million reduction in annual
revenues. In addition, a portion of the rate decision to cover general
office expenses at the corporate headquarters will affect the rates in
Region III because the application was previously filed in 2005 with
the Region III rate case and was deferred for one year to be combined
with the Region II case as discussed. The final decision by the CPUC
on the general office expenses filing would either add to Region III's
annualized revenues by approximately $3.8 million or reduce the
revenues by $1.3 million. Region III received an interim annual rate
increase of $135,000 effective January 1, 2007.
It is important to note that the amount of increase or decrease
ultimately decided on by the CPUC will be retroactive to January 1,
2007, after netting the increases from the interim rates. The Company
will true up the cumulative difference when the CPUC issues the final
decision, which is expected in mid-2007.
Electric revenues from GSWC's Bear Valley Electric Division
increased by 6.3% due to higher residential usage, offset by lower
industrial usage due to cooler weather conditions.
Contracted services operating revenues increased by $7.9 million
during the first quarter of 2007 primarily due to a $7.3 million
increase in ASUS construction revenues for special projects performed
by its Fort Bliss Water Services Company ("FBWS") subsidiary. The
contracted amount for this special project is approximately $20
million to be completed in August 2007. There was also an increase in
revenues due to the operation of water and wastewater systems at one
base in Maryland and three bases in Virginia and the wastewater system
at an additional base in Virginia for the entire first quarter of
2007, while the operation of these systems commenced at various times
during the first and second quarters of 2006.
Total operating expenses for the first three months of 2007
increased to $55.4 million as compared to the $50.3 million recorded
for the same period in 2006, reflecting: (i) a slight decrease in
supply costs resulting from a favorable water supply mix change caused
by less purchased water needed to replace groundwater supply not
pumped in the prior year; (ii) a pretax unrealized gain of $2.7
million on purchased power contracts in 2007 compared to a $2.2
million pretax unrealized loss in 2006 as discussed; (iii) increases
in other operating expenses due to higher chemical and water treatment
costs, and a full quarter of military base water and wastewater
operations in 2007 compared to a partial quarter of operations at
certain military bases in 2006; (iv) increases in administrative and
general expenses due primarily to higher labor costs and increased tax
and legal outside services; (v) an increase in required and emergency
maintenance activities on GSWC's wells and water supply sources; (vi)
increased depreciation and amortization expense reflecting, among
other things, the effects of closing approximately $73 million of
additions to utility plant during 2006; (vii) higher property taxes
and payroll taxes; (viii) a significant increase in construction
expenses reflecting primarily the costs incurred for the special
project at Fort Bliss; and (ix) a net pretax gain of $367,000 on the
sale of property.
In summary, the table below sets forth operating income by segment
(in thousands):
2007 2006 $ Change % Change
-----------------------------------------
Water $11,130 $14,277 ($3,147) -22.0%
Electric 3,652 (1,096) 4,748 433.2%
Contracted services 2,163 929 1,234 132.8%
AWR parent (94) (50) (44) 88.0%
-----------------------------------------
Total operating income $16,851 $14,060 $2,791 19.9%
=========================================
Interest expense increased to $5.5 million compared to $5.3
million for the same period of 2006 primarily reflecting an increase
in short-term cash borrowings at higher interest rates. Interest
income decreased by $333,000 due primarily to the initial recording in
the first quarter of 2006 of interest accrued on the uncollected
balance of the Aerojet litigation memorandum account authorized by the
CPUC.
The first quarter 2007 income tax expense increased to $5.0
million compared to $3.8 million for the same period of 2006, due
primarily to a 23.6% increase in pretax income and a higher effective
income tax rate.
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.
First Quarter 2007 Earnings Release Conference Call - The Company
will host a conference call today, Wednesday, May 9, 2007 at 10:00
a.m. Pacific Time (PT), during which management will be making a brief
presentation focusing on the Company's first quarter 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 Wednesday, May 9, 2007 at 3:00 p.m. PT
and will run through Wednesday, May 16, 2007. The dial-in number for
the audio replay is (800) 642-1687, conference ID# 6508138.
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
254,000 customers) and to over 13,000 customers in the city of
Fountain Hills, Arizona, and portions of Scottsdale, Arizona. The
Company also distributes electricity to over 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.
Comparative Condensed Balance Sheets
March 31, December 31,
(in thousands) 2007 2006
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(Unaudited)
Assets
Utility Plant-Net $753,513 $750,601
Other Property and Investments 21,592 21,591
Current Assets 71,712 64,436
Regulatory and Other Assets 102,962 100,327
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$949,779 $936,955
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Capitalization and Liabilities
Capitalization $555,095 $551,567
Current Liabilities 88,388 85,903
Other Credits 306,296 299,485
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$949,779 $936,955
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Condensed Statements of Income
Three Months Ended
(in thousands, except per share amounts) March 31,
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2007 2006
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(Unaudited)
Operating Revenues $72,270 $64,315
-------------------------
Operating Expenses:
Supply costs $16,831 $17,081
Unrealized (gain) loss on purchased
power contracts (2,710) 2,155
Other operating expenses 6,597 4,700
Administration and general expenses 13,007 11,114
Maintenance 2,973 2,473
Depreciation and amortization 7,089 6,483
Property and other taxes 2,930 2,547
Construction expenses 9,069 3,702
Net gain on sale of property (367) -
-------------------------
Total operating expenses $55,419 $50,255
Operating income $16,851 $14,060
Interest expense (5,496) (5,256)
Interest income 566 899
Other 69 -
-------------------------
Income From Operations Before Income Tax
Expense $11,990 $9,703
Income tax expense 5,006 3,804
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Net Income $6,984 $5,899
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Weighted Average Shares Outstanding 17,055 16,806
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Earnings Per Common Share $0.40 $0.35
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Weighted Average Diluted Shares 17,114 16,909
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Earnings Per Diluted Share $0.40 $0.35
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Dividends Declared Per Common Share $0.235 $0.225
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CONTACT: American States Water Company
Robert J. Sprowls, 909-394-3600, ext. 647
Senior Vice President, Chief Financial Officer,
Treasurer and Corporate Secretary