American States Water Company Announces Earnings for the Fourth Quarter and the Year 2011
Q4 2011 | Q4 2010 | $ | Change | ||||||||||||||
Income from continuing operations | $ | 0.35 | $ | 0.44 | ($0.09 | ) | |||||||||||
Income from discontinued operations | --- | 0.04 | (0.04 | ) | |||||||||||||
Total diluted earnings per share | $ | 0.35 | $ | 0.48 | ($0.13 | ) | |||||||||||
Fourth Quarter 2011 Results
Continuing Operations:
Included in the results of the fourth quarter of 2010 from continuing
operations was approximately
Q4 2011 | Q4 2010 | $ | Change | |||||||||||
Water, as adjusted | $ | 0.22 | $ | 0.32 | ($0.10 | ) | ||||||||
Electric | 0.06 | 0.03 | 0.03 | |||||||||||
Contracted services | 0.06 | (0.04 | ) | 0.10 | ||||||||||
AWR (parent) | 0.01 | --- | 0.01 | |||||||||||
Adjusted diluted earnings from continuing operations (a non-GAAP financial measure) |
$ |
0.35 |
$ |
0.31 |
$ |
0.04 |
||||||||
Although adjusted diluted earnings from GSWC’s water operations
decreased by
-
An increase in the water margin of approximately
$1.0 million , or$0.03 per share, for the three months endedDecember 31, 2011 compared to the same period of 2010 due primarily to CPUC-approved rate increases effectiveJanuary 1, 2011 for all water regions. -
An increase in operating expenses (other than supply costs) of
$1.5 million , or$0.05 per share, due primarily to: (i) a change in allocation methodology causing higher amounts of costs from the general office allocated to the water segment and less to electric; (ii) an increase in legal and consulting costs, and (iii) higher labor and other employee benefits. These increases were partially offset by a decrease in maintenance expense. -
A
$645,000 net gain or 0.02 per share, on the sale of property in 2010 that did not recur in 2011. -
An increase in interest and other non-operating expenses (net of
interest income) of
$937,000 , or$0.03 per share, due primarily to interest income of approximately$1.3 million recorded during the fourth quarter of 2010 for a settlement reached with theIRS related to the Company’s refund claims associated with a tax-method change, which did not recur in 2011. -
An increase in the effective income tax rate for the water segment
during the quarter ended
December 31, 2011 as compared to the same period in 2010, decreasing water earnings by approximately$0.03 per share, primarily resulting from changes between book and taxable income that are treated as flow-through adjustments in accordance with regulatory requirements, and changes in other permanent items.
Diluted earnings from GSWC’s electric operations increased by
Diluted earnings from AWR’s contracted services subsidiary,
Diluted earnings from AWR (parent) increased by
Discontinued Operations:
On
Full Year 2011 Results
Basic and fully diluted earnings per share for the year ended
Years Ended December 31, | |||||||||||||||
2011 | 2010 | $ | Change | ||||||||||||
Income from continuing operations | $2.23 | $ | 1.66 | $ | 0.57 | ||||||||||
Income from discontinued operations | 0.20 | 0.11 | 0.09 | ||||||||||||
Total diluted earnings per share | $2.43 | $ | 1.77 | $ | 0.66 | ||||||||||
Continuing Operations:
Earnings for 2010 were largely impacted by: (i) a pretax charge of
The table below sets forth a comparison of the year-to-date diluted earnings per share contribution from continuing operations by each business segment (as adjusted in 2010):
Years Ended December 31, | ||||||||||||||
2011 | 2010 | $ | Change | |||||||||||
Water, as adjusted |
$ | 1.66 | $ | 1.74 | ($0.08 | ) | ||||||||
Electric | 0.18 | 0.11 | 0.07 | |||||||||||
Contracted services, as adjusted |
0.38 | 0.19 | 0.19 | |||||||||||
AWR (parent) | 0.01 | (0.02 | ) | 0.03 | ||||||||||
Adjusted diluted earnings from continuing operations (a non-GAAP financial measure) |
$ |
2.23 |
$ |
2.02 |
$ |
0.21 |
||||||||
Fully diluted earnings per share contributed by GSWC’s water operations
decreased by
-
An increase in the water margin of
$7.9 million , or$0.25 per share, during the year endedDecember 31, 2011 compared to the same period of 2010 due primarily to CPUC-approved rate increases for all water regions effectiveJanuary 1, 2011 . -
An increase in operating expenses (other than supply costs) of
approximately
$5.0 million , or$0.16 per share, due primarily to: (i) an increase in administrative and general expenses of$4.8 million due primarily to a change in allocation methodology as previously discussed, and higher labor and other employee benefits; (ii) an increase in depreciation expense of$1.1 million resulting primarily from additions to utility plant, and (iii) a decrease of$512,000 in the pretax gain on the sale of property due primarily to the sale in 2010 of land that did not recur in 2011. These increases were partially offset by a$1.7 million decrease in other operation and maintenance expenses due to a decrease in water treatment and planned and unplanned maintenance costs. -
An increase in interest and other non-operating expenses (net of
interest income) of
$3.3 million , or$0.11 per share, due primarily to: (i) the issuance of$62.0 million in new long-term notes inApril 2011 , of which$22 million of the proceeds were used inMay 2011 to redeem notes with higher interest rates, and (ii) interest income of$1.3 million recorded in 2010 resulting from a proposed settlement reached with theInternal Revenue Service related to AWR’s refund claims associated with a tax-method change. There was no similar amount of interest income recorded in 2011. -
An increase in the effective income tax rate for the water segment
during the year ended
December 31, 2011 as compared to the same period in 2010, decreasing water earnings by approximately$0.06 per share, primarily resulting from changes between book and taxable income that are treated as flow-through adjustments in accordance with regulatory requirements, and changes in other permanent items.
Diluted earnings from electric operations increased by
Diluted earnings from contracted services were
Diluted earnings from AWR (parent) increased by
Discontinued Operations:
Net income from discontinued operations for the year ended
Regulatory Matters
On
In
Contracted Services
ASUS is currently in negotiations with the U.S. government on the price
redetermination for
During the fourth quarter of 2011,
Non-GAAP Financial Measures
This press release includes a presentation of “adjusted diluted earnings
from continuing operations”, which excludes: (i) the retroactive impact
recorded during the fourth quarter ended
The non-GAAP financial measures supplement our GAAP disclosures and should not be considered an alternative to GAAP measures. Furthermore, the non-GAAP financial measures may not be comparable to similarly titled non-GAAP financial measures of other registrants. Registrant uses water and electric gross margins and earnings per share by business segment as important measures in evaluating its operating results. Registrant believes these measures are useful internal benchmarks in evaluating the performance of its operating segments. Registrant reviews these measurements regularly and compares them to historical periods and to our operating budget.
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-K for the year ended
Fourth Quarter 2011 Earnings Release Conference Call - The
Company will host a conference call today,
The call will also be archived on our website and can be replayed
beginning Monday, March 12, 2012 at
American States Water Company | ||||||||||||||||||
Consolidated | ||||||||||||||||||
Comparative Condensed Balance Sheets | ||||||||||||||||||
December 31, | ||||||||||||||||||
(in thousands) | 2011 | 2010 | ||||||||||||||||
(Unaudited) | ||||||||||||||||||
Assets | ||||||||||||||||||
Utility Plant-Net | $ | 896,500 | $ | 854,956 | ||||||||||||||
Goodwill | 1,116 | 1,116 | ||||||||||||||||
Other Property and Investments | 11,803 | 10,981 | ||||||||||||||||
Current Assets | 165,601 | 152,489 | ||||||||||||||||
Assets of Discontinued Operations | - | 50,883 | ||||||||||||||||
Regulatory and Other Assets | 163,342 | 121,610 | ||||||||||||||||
$ | 1,238,362 | $ | 1,192,035 | |||||||||||||||
Capitalization and Liabilities | ||||||||||||||||||
Capitalization | $ | 749,061 | $ | 677,380 | ||||||||||||||
Current Liabilities | 104,370 | 151,811 | ||||||||||||||||
Liabilities of Discontinued Operations | - | 27,031 | ||||||||||||||||
Other Credits | 384,931 | 335,813 | ||||||||||||||||
$ | 1,238,362 | $ | 1,192,035 | |||||||||||||||
Condensed Statements of Income | Three months ended | Twelve months ended | ||||||||||||||||
(in thousands, except per share amounts) | December 31, | December 31, | ||||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||||
(Unaudited) | (Unaudited) | |||||||||||||||||
Operating Revenues | $ | 95,241 | $ | 103,700 | $ | 419,274 | $ | 398,942 | ||||||||||
Operating Expenses: | ||||||||||||||||||
Supply costs | $ | 23,031 | $ | 24,018 | $ | 102,000 | $ | 101,151 | ||||||||||
Other operation expenses | 7,392 | 7,450 | 28,841 | 29,184 | ||||||||||||||
Administrative and general expenses | 19,270 | 25,657 | 75,144 | 87,135 | ||||||||||||||
Maintenance | 4,662 | 5,267 | 17,357 | 18,149 | ||||||||||||||
Depreciation and amortization | 9,520 | 12,284 | 38,349 | 37,405 | ||||||||||||||
Property and other taxes | 3,570 | 3,696 | 14,210 | 14,165 | ||||||||||||||
ASUS construction expenses | 12,246 | 9,352 | 48,397 | 38,577 | ||||||||||||||
Net gain on sale of property | - | (645 | ) | (128 | ) | (643 | ) | |||||||||||
Total operating expenses | $ | 79,691 | $ | 87,079 | $ | 324,170 | $ | 325,123 | ||||||||||
Operating income | $ | 15,550 | $ | 16,621 | $ | 95,104 | $ | 73,819 | ||||||||||
Interest expense | (4,874 | ) | (5,145 | ) | (23,681 | ) | (21,636 | ) | ||||||||||
Interest income | 359 | 1,421 | 859 | 2,406 | ||||||||||||||
Other | 183 | 95 | (196 | ) | (463 | ) | ||||||||||||
Income from continuing operations before income tax expense | $ | 11,218 | $ | 12,992 | $ | 72,086 | $ | 54,126 | ||||||||||
Income tax expense | 4,508 | 4,730 | 30,076 | 23,035 | ||||||||||||||
Income from continuing operations | 6,710 | 8,262 | 42,010 | 31,091 | ||||||||||||||
Income (loss) from discontinued operations, net of taxes | (1 | ) | 818 | 3,849 | 2,106 | |||||||||||||
Net Income | 6,709 | 9,080 | $ | 45,859 | $ | 33,197 | ||||||||||||
Basic Earnings Per Share | ||||||||||||||||||
Income from continuing operations | $ | 0.36 | $ | 0.44 | $ | 2.24 | $ | 1.67 | ||||||||||
Income from discontinued operations | - | 0.04 | 0.20 | 0.11 | ||||||||||||||
Net Income | $ | 0.36 | $ | 0.48 | $ | 2.44 | $ | 1.78 | ||||||||||
Fully Diluted Earnings Per Share | ||||||||||||||||||
Income from continuing operations | $ | 0.35 | $ | 0.44 | $ | 2.23 | $ | 1.66 | ||||||||||
Income from discontinued operations | - | 0.04 | 0.20 | 0.11 | ||||||||||||||
Net Income | $ | 0.35 | $ | 0.48 | $ | 2.43 | $ | 1.77 | ||||||||||
Weighted Average Shares Outstanding | 18,756 | 18,621 | 18,693 | 18,585 | ||||||||||||||
Weighted Average Diluted Shares | 18,919 | 18,787 | 18,837 | 18,736 | ||||||||||||||
Dividends Declared Per Common Share | $ | 0.28 | $ | 0.26 | $ | 1.10 | $ | 1.04 | ||||||||||
Source:
American States Water Company
Eva G. Tang
Senior Vice
President-Finance, Chief Financial Officer,
Corporate Secretary and
Treasurer
Telephone: (909) 394-3600, ext. 707