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)
August
8, 2013
AMERICAN
STATES WATER COMPANY
(Exact
name of registrant as specified in its charter)
California |
001-14431 |
95-4676679 |
(State or other jurisdiction of incorporation or organization) |
(Commission File Number) |
(I.R.S. Employer Identification |
630 East Foothill Blvd. San Dimas, California |
91773 |
|
(Address
of principal executive |
(Zip Code) |
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 obligation 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 August 8, 2013, American States Water Company released earnings for the second quarter ended June 30, 2013. 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.
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 August 8, 2013
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: |
August 8, 2013 |
/s / Eva G. Tang |
Eva G. Tang |
||
Senior Vice President-Finance, Chief Financial Officer, |
||
Corporate Secretary and Treasurer |
EXHIBIT INDEX
Exhibit No. |
Description |
99.1 |
Press Release dated August 8, 2013 |
Exhibit 99.1
American States Water Company Announces Earnings for the Second Quarter of 2013
SAN DIMAS, Calif.--(BUSINESS WIRE)--August 8, 2013--American States Water Company (NYSE:AWR) today reported net income of $16.6 million, or basic and fully diluted earnings of $0.85 per share for the quarter ended June 30, 2013, as compared to net income of $15.1 million, or basic and fully diluted earnings of $0.79 per share for the quarter ended June 30, 2012, a 7.6% increase in diluted earnings per share.
Second Quarter 2013 Results
The table below sets forth a comparison of the second quarter diluted earnings per share by business segment:
3 Months Ended | ||||||||||||
6/30/2013 | 6/30/2012 | CHANGE | ||||||||||
Water | $ | 0.66 | $ | 0.56 | $ | 0.10 | ||||||
Electric | 0.05 | 0.04 | 0.01 | |||||||||
Contracted services | 0.14 | 0.19 | (0.05 | ) | ||||||||
Consolidated diluted earnings per share, as reported | $ | 0.85 | $ | 0.79 | $ | 0.06 | ||||||
Water
For the three months ended June 30, 2013, diluted earnings per share from the water segment of AWR's Golden State Water Company ("GSWC") subsidiary increased by $0.10 to $0.66 per share, as compared to $0.56 per share for the same period of 2012. Impacting the comparability of the two periods were the following items:
Electric
For the three months ended June 30, 2013, diluted earnings from GSWC’s electric segment were $0.05 per share as compared to $0.04 per share for the same period in 2012. Electric revenues and gross margin for the three months ended June 30, 2013 were relatively unchanged as compared to the same period in 2012. Due to the delay in the electric rate case, electric revenues for the three months ended June 30, 2013 have been recorded at 2012 adopted levels. A proposed decision on this rate case is expected later in 2013. In May 2013, the CPUC approved recovery of legal and outside services costs previously expensed in connection with GSWC's effort to procure renewable resources under the CPUC's renewables portfolio standard ("RPS"). As a result, GSWC recorded a regulatory asset of $834,000 with a corresponding reduction in other operating expenses, increasing earnings by $0.03 per share. This was partially offset by an increase in administrative and general expenses and the electric effective income tax rate, which decreased earnings by $0.02 per share as compared to the three months ended June 30, 2012. The change in the tax rate is primarily due to changes between book and taxable income that are treated as flow-through adjustments in accordance with regulatory requirements.
In December 2011, a new RPS law went into effect which, among other things, requires GSWC's electric division to procure RPS-eligible resources to meet certain multi-year procurement targets. In July 2013, the CPUC approved a ten-year agreement that GSWC entered into with a third party to purchase renewable energy credits (“RECs”). This agreement will allow Bear Valley Electric Service to meet the RPS requirements for the next ten years and any shortfalls to date. The costs of the RECs will be recovered through purchased power costs.
Contracted Services
For the three months ended June 30, 2013, diluted earnings from contracted services operating at AWR's American States Utility Services ("ASUS") subsidiary decreased by $0.05 per share as compared to the same period in 2012. This decrease was due, in large part, to a contract modification received in April 2012 for a major water and wastewater pipeline replacement project at the Fort Bragg military base in North Carolina, resulting in additional pretax operating income of $820,000, or $0.03 per share for the three months ended June 30, 2012. There was no similar contract modification received during the second quarter of 2013.
There was a further decrease in diluted earnings for contracted services due to: (i) an increase in administrative expenses primarily related to labor and other employee related benefits, in part, to prepare for new military base opportunities, and (ii) a lower profit margin on construction projects during the three months ended June 30, 2013 as compared to the same period in 2012.
Year-to-Date 2013 Results
The table below sets forth a comparison of the year-to-date (“YTD”) diluted earnings per share contribution by business segment:
6 Months Ended | ||||||||||||
6/30/2013 | 6/30/2012 | CHANGE | ||||||||||
Water | $ | 1.17 | $ | 0.83 | $ | 0.34 | ||||||
Electric | 0.09 | 0.15 | (0.06 | ) | ||||||||
Contracted services | 0.27 | 0.34 | (0.07 | ) | ||||||||
AWR parent | 0.01 | — | 0.01 | |||||||||
Consolidated diluted earnings per share, as reported | $ | 1.54 | $ | 1.32 | $ | 0.22 | ||||||
Basic and fully diluted earnings for the six months ended June 30, 2013 increased by $0.22 per share, or 16.7%, over the prior year’s fully diluted earnings per share (“EPS”).
Reconciliation of changes in YTD EPS from 2012 to 2013: |
Increase/
(decrease) |
|||
Water gross margin contribution due to rate increases | $ | 0.24 | ||
One-time recovery of previously incurred costs from water segment | 0.08 | |||
Higher planned maintenance costs at the water segment | (0.05 | ) | ||
Lower depreciation & amortization expense at the water segment | 0.04 | |||
Decrease in other operating expenses and tax rate at the water segment | 0.03 | |||
Decrease in the electric gross margin and RPS recovery, and higher A&G expenses and tax rate at the electric segment |
(0.06 | ) | ||
Higher operating and construction expenses at contracted services |
(0.04 | ) | ||
Contract modification received in 2012 which did not recur in 2013 at contracted services |
(0.03 | ) | ||
AWR parent | 0.01 | |||
YTD 2013 EPS increase | $ | 0.22 | ||
Dividends and Stock Split
American States Water Company has paid dividends to shareholders every year since 1931, increasing the dividends received by shareholders each calendar year since 1954. On May 20, 2013, the Board of Directors of AWR approved a 14.1% increase in the third quarter cash dividend from $0.355 per share to $0.405 per share on the common shares of the Company. This increase is equivalent to $0.20 per share above the prior annualized dividend rate of $1.42 to $1.62. Dividends on the common shares will be paid on September 3, 2013 to shareholders of record at the close of business on August 15, 2013.
On May 20, 2013, the Board of Directors of AWR also approved a two-for-one stock split of the Company's common shares. On or about September 3, 2013, shareholders will receive one additional share for each AWR common share they own.
Non-GAAP Financial Measures
This press release includes a discussion on water and electric gross margins, which are computed by taking total water and electric 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 United States. These items constitute "non-GAAP financial measures" under Securities and Exchange Commission rules.
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 Form 10-Q for the quarter ended June 30, 2013 to be filed with the Securities and Exchange Commission.
Second Quarter 2013 Earnings Release Conference Call
The Company will host a conference call today, August 8, 2013 at 11:00 a.m. Pacific Time (“PT”). Interested parties can listen to the live conference call over the Internet by logging on to www.aswater.com.
The call will also be archived on our website and can be replayed beginning Thursday, August 8, 2013 at 2:00 p.m. PT and will run through Thursday, August 15, 2013. After logging on to the website, click the “Investors” button at the top of the page. The archive is located just above the “Stock Quote” section.
About American States Water Company
American States Water Company is the parent of Golden State Water Company and American States Utility Services, Inc. Through its utility subsidiary, Golden State Water Company, AWR provides water service to approximately 256,000 customers located within 75 communities throughout 10 counties in Northern, Coastal and Southern California. The Company also distributes electricity to over 23,000 customers in the City of Big Bear and surrounding areas in San Bernardino County, California. Through its contracted services subsidiary, American States Utility Services, Inc., the Company provides operations, maintenance and construction management services for water and wastewater systems located on military bases throughout the country through 50-year privatization contracts with the U.S. government.
American States Water Company | ||||||||||||||||||||||
Consolidated | ||||||||||||||||||||||
Comparative Condensed Balance Sheets (unaudited) | ||||||||||||||||||||||
(in thousands) | June 30, 2013 | December 31, 2012 | ||||||||||||||||||||
Assets | ||||||||||||||||||||||
Utility Plant – Net | $ | 946,740 | $ | 917,791 | ||||||||||||||||||
Goodwill | 1,116 | 1,116 | ||||||||||||||||||||
Other Property and Investments | 14,005 | 13,755 | ||||||||||||||||||||
Current Assets | 181,120 | 184,033 | ||||||||||||||||||||
Regulatory and Other Assets | 170,005 | 164,248 | ||||||||||||||||||||
$ | 1,312,986 | $ | 1,280,943 | |||||||||||||||||||
Capitalization and Liabilities | ||||||||||||||||||||||
Capitalization | 797,744 | 787,042 | ||||||||||||||||||||
Current Liabilities | 102,448 | 93,697 | ||||||||||||||||||||
Other Credits | 412,794 | 400,204 | ||||||||||||||||||||
$ | 1,312,986 | $ | 1,280,943 | |||||||||||||||||||
Condensed Statements of Income (unaudited) |
Three Months Ended June 30, |
Six Months Ended June 30, |
||||||||||||||||||||
(in thousands, except per share amounts) | 2013 | 2012 | 2013 | 2012 | ||||||||||||||||||
Operating Revenues | $ | 120,695 | $ | 114,582 | $ | 231,247 | $ | 221,474 | ||||||||||||||
Operating Expenses: | ||||||||||||||||||||||
Water purchased | $ | 16,670 | $ | 13,831 | $ | 27,402 | $ | 23,383 | ||||||||||||||
Power purchased for pumping | 2,332 | 2,019 | 3,971 | 3,575 | ||||||||||||||||||
Groundwater production assessment | 3,823 | 3,982 | 7,010 | 7,305 | ||||||||||||||||||
Power purchased for resale | 2,828 | 2,680 | 6,508 | 5,871 | ||||||||||||||||||
Supply cost balancing accounts | (377 | ) | 4,163 | 994 | 7,600 | |||||||||||||||||
Other operation expenses | 6,519 | 6,851 | 11,973 | 14,277 | ||||||||||||||||||
Administrative and general expenses | 18,113 | 18,063 | 36,020 | 34,892 | ||||||||||||||||||
Depreciation and amortization | 9,768 | 10,407 | 19,584 | 20,897 | ||||||||||||||||||
Maintenance | 4,913 | 3,852 | 8,847 | 7,183 | ||||||||||||||||||
Property and other taxes | 3,748 | 3,716 | 7,896 | 7,821 | ||||||||||||||||||
ASUS construction expenses | 19,064 | 14,896 | 39,797 | 35,181 | ||||||||||||||||||
Net gain on sale of property | — | (3 | ) | (12 | ) | (3 | ) | |||||||||||||||
Total operating expenses | $ | 87,401 | $ | 84,457 | $ | 169,990 | $ | 167,982 | ||||||||||||||
Operating Income |
$ | 33,294 | $ | 30,125 | $ | 61,257 | $ | 53,492 | ||||||||||||||
Other Income and Expenses | ||||||||||||||||||||||
Interest expense | (5,768 | ) | (5,720 | ) | (11,546 | ) | (11,790 | ) | ||||||||||||||
Interest income | 140 | 495 | 327 | 710 | ||||||||||||||||||
Other, net | 84 | (13 | ) | 426 | 216 | |||||||||||||||||
Total other income and expenses | (5,544 | ) | (5,238 | ) | (10,793 | ) | (10,864 | ) | ||||||||||||||
Income from operations before income tax expense | 27,750 | 24,887 | 50,464 | 42,628 | ||||||||||||||||||
Income tax expense | 11,148 | 9,809 | 20,397 | 17,435 | ||||||||||||||||||
Net Income | $ | 16,602 | $ | 15,078 | $ | 30,067 | $ | 25,193 | ||||||||||||||
Basic Earnings Per Common Share | $ | 0.85 | $ | 0.79 | $ | 1.54 | $ | 1.33 | ||||||||||||||
Fully Diluted Earnings Per Common Share | $ | 0.85 | $ | 0.79 | $ | 1.54 | $ | 1.32 | ||||||||||||||
Weighted Average Common Shares Outstanding, Basic | 19,306 | 18,882 | 19,285 | 18,857 | ||||||||||||||||||
Weighted Average Common Shares Outstanding, Diluted | 19,346 | 18,945 | 19,324 | 18,988 | ||||||||||||||||||
Dividends Paid Per Common Share | $ | 0.355 | $ |
0.280 |
$ |
0.710 |
$ |
0.560 |
||||||||||||||
CONTACT:
American States Water Company
Eva G. Tang
Senior Vice
President-Finance, Chief Financial Officer,
Corporate Secretary and
Treasurer
(909) 394-3600, ext. 707