American States Announces Earnings for the Fourth Quarter and the Year 2012
Contracted Services Contributed to Record 2012 Earnings Due to
“We are very pleased with our fourth quarter and full year earnings,
particularly the performance of our contracted service business
segment,” said President and Chief Executive Officer
The table below sets forth a comparison of the fourth quarter diluted earnings per share by business segment:
Q4 2012 | Q4 2011 | Change | |||||||||||
Water | $ | 0.25 | $ | 0.22 | $ | 0.03 | |||||||
Electric | 0.05 | 0.06 | (0.01 | ) | |||||||||
Contracted services | 0.23 | 0.06 | 0.17 | ||||||||||
AWR (parent) | --- | 0.01 | (0.01 | ) | |||||||||
Totals | $ | 0.53 | $ | 0.35 | $ | 0.18 | |||||||
Water
For the three months ended
-
An increase in the water gross margin of approximately
$2.4 million , or$0.07 per share, during the three months endedDecember 31, 2012 as compared to the same period in 2011 due primarily to rate increases in 2012 approved by theCalifornia Public Utilities Commission (“CPUC”) to recover infrastructure improvements and operating costs; -
An increase in operating expenses (other than supply costs) of
$1.9 million , or$0.06 per share, due primarily to an increase in: (i) depreciation expense resulting from additions to utility plant; (ii) other operation expense resulting from higher labor and related employee benefits, and water treatment costs; (iii) maintenance expense resulting from an increase in planned maintenance activities during the fourth quarter of 2012, and (iv) property and other taxes. These increases were partially offset by a decrease in administrative and general expense resulting from lower outside service costs; -
An increase in interest and other non-operating expenses (net of
interest income) of
$355,000 , or$0.01 per share, due primarily to the reversal of redemption costs in the fourth quarter of 2011 associated with high interest-rate senior notes. The redemption costs were capitalized in the fourth quarter of 2011 to be amortized over the life of new notes pursuant to the cost of capital proceeding; and -
A decrease in the effective income tax rate for the water segment
during the quarter ended
December 31, 2012 as compared to the same period in 2011, which increased earnings by$0.03 per share, primarily due to changes between book and taxable income that were treated as flow-through adjustments in accordance with regulatory requirements.
Electric
Diluted earnings from GSWC’s electric operations decreased by
Contracted Services
Diluted earnings from AWR’s contracted services subsidiary,
Full Year 2012 Results
Basic and fully diluted earnings per share for the year ended
Continuing Operations:
The table below sets forth a comparison of the diluted earnings per share contribution from continuing operations by business segment:
Year Ended December 31, | |||||||||||||
2012 | 2011 | Change | |||||||||||
Water | $ | 1.80 | $ | 1.66 | $ | 0.14 | |||||||
Electric | 0.24 | 0.18 | 0.06 | ||||||||||
Contracted services | 0.78 | 0.38 | 0.40 | ||||||||||
AWR (parent) | --- | 0.01 | (0.01 | ) | |||||||||
Totals from continuing operations | $ | 2.82 | $ | 2.23 | $ | 0.59 | |||||||
Water
For the year ended
-
An increase in the water gross margin of
$5.9 million , or$0.18 per share, during the year ended December 31, 2012 compared to the same period of 2011 primarily as the result of CPUC-approved rate increases effectiveJanuary 1, 2012 to recover infrastructure improvements and operating costs; -
An increase in operating expenses (other than supply costs) of
approximately
$4.5 million , or$0.14 per share, due, in large part, to an increase in depreciation expense of$2.5 million resulting from additions to utility plant. There was also an increase in: (i) other operation expense due primarily to higher labor and other employee related benefits and bad debt expense, and (ii) property and other taxes. These increases were partially offset by decreases in maintenance costs and administrative and general expense resulting primarily from lower outside service costs; -
An overall decrease in interest expense (net of interest income and
other non-operating items) of approximately
$2.0 million , or$0.06 per share, due primarily to: (i) a decrease in short-term bank borrowings; (ii) the redemption onOctober 1, 2012 of$8 million of notes with a 7.55% interest rate; (iii) a reduction in interest expense in connection with the CPUC’s final decision issued inJuly 2012 on the water cost of capital proceeding; (iv) higher interest income earned on regulatory assets and a refund claim approved by theInternal Revenue Service , and (v) gains recorded on one of GSWC’s investments; and -
A decrease in the effective income tax rate for the water segment
during the year ended
December 31, 2012 as compared to 2011 which increased earnings by approximately$0.04 per share primarily resulting from changes between book and taxable income that are treated as flow-through adjustments in accordance with regulatory requirements.
Electric
Diluted earnings from electric operations increased by
Contracted Services
Diluted earnings from contracted services increased by
Discontinued Operations:
On
Regulatory Matters
In
In
Contracted Services
In
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 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.
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
The call will also be archived on our website and can be replayed
beginning Thursday, February 28, 2013 at
American States Water Company | ||||||||||||||||||||
Consolidated | ||||||||||||||||||||
Comparative Condensed Balance Sheets | ||||||||||||||||||||
December 31, | ||||||||||||||||||||
(in thousands) | 2012 | 2011 | ||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Assets | ||||||||||||||||||||
Utility Plant-Net | $ | 917,791 | $ | 896,500 | ||||||||||||||||
Goodwill | 1,116 | 1,116 | ||||||||||||||||||
Other Property and Investments | 13,755 | 11,803 | ||||||||||||||||||
Current Assets | 184,033 | 165,601 | ||||||||||||||||||
Regulatory and Other Assets | 164,248 | 163,342 | ||||||||||||||||||
$ | 1,280,943 | $ | 1,238,362 | |||||||||||||||||
Capitalization and Liabilities | ||||||||||||||||||||
Capitalization | $ | 787,042 | $ | 749,061 | ||||||||||||||||
Current Liabilities | 93,697 | 107,583 | ||||||||||||||||||
Other Credits | 400,204 | 381,718 | ||||||||||||||||||
$ | 1,280,943 | $ | 1,238,362 | |||||||||||||||||
Condensed Statements of Income | Three months ended | Twelve months ended | ||||||||||||||||||
(in thousands, except per share amounts) | December 31, | December 31, | ||||||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||||||
(Unaudited) | (Unaudited) | |||||||||||||||||||
Operating Revenues | $ | 111,541 | $ | 95,245 | $ | 466,908 | $ | 419,913 | ||||||||||||
Operating Expenses: | ||||||||||||||||||||
Water purchased | $ | 11,753 | $ | 9,851 | $ | 54,010 | $ | 47,530 | ||||||||||||
Power purchased for pumping | 1,713 | 1,756 | 8,355 | 8,598 | ||||||||||||||||
Groundwater production assessment | 3,504 | 3,243 | 14,732 | 13,550 | ||||||||||||||||
Power purchased for resale | 3,395 | 3,807 | 12,120 | 13,574 | ||||||||||||||||
Supply cost balancing accounts | 2,149 | 4,374 | 11,709 | 18,748 | ||||||||||||||||
Other operation | 7,943 | 7,051 | 29,790 | 28,312 | ||||||||||||||||
Administrative and general | 18,106 | 19,057 | 70,556 | 74,061 | ||||||||||||||||
Depreciation and amortization | 10,258 | 9,520 | 41,385 | 38,349 | ||||||||||||||||
Maintenance | 4,472 | 4,662 | 15,887 | 17,357 | ||||||||||||||||
Property and other taxes | 3,682 | 3,570 | 15,381 | 14,210 | ||||||||||||||||
ASUS construction | 23,444 | 12,804 | 81,957 | 50,648 | ||||||||||||||||
Net gain on sale of property | - | - | (68 | ) | (128 | ) | ||||||||||||||
Total operating expenses | $ | 90,419 | $ | 79,695 | $ | 355,814 | $ | 324,809 | ||||||||||||
Operating income | $ | 21,122 | $ | 15,550 | $ | 111,094 | $ | 95,104 | ||||||||||||
Interest expense | (4,957 | ) | (4,874 | ) | (22,765 | ) | (23,681 | ) | ||||||||||||
Interest income | 204 | 359 | 1,333 | 859 | ||||||||||||||||
Other | (4 | ) | 183 | 431 | (196 | ) | ||||||||||||||
Total other income and expenses | (4,757 | ) | (4,332 | ) | (21,001 | ) | (23,018 | ) | ||||||||||||
Income from continuing operations before income tax expense | $ | 16,365 | $ | 11,218 | $ | 90,093 | $ | 72,086 | ||||||||||||
Income tax expense | 6,074 | 4,508 | 35,945 | 30,076 | ||||||||||||||||
Income from continuing operations | 10,291 | 6,710 | 54,148 | 42,010 | ||||||||||||||||
Income (loss) from discontinued operations, net of taxes | - | (1 | ) | - | 3,849 | |||||||||||||||
Net Income | 10,291 | 6,709 | $ | 54,148 | $ | 45,859 | ||||||||||||||
Basic Earnings Per Share | ||||||||||||||||||||
Income from continuing operations | $ | 0.54 | $ | 0.36 | $ | 2.83 | $ | 2.24 | ||||||||||||
Income from discontinued operations | - | - | - | 0.20 | ||||||||||||||||
Net Income | $ | 0.54 | $ | 0.36 | $ | 2.83 | $ | 2.44 | ||||||||||||
Fully Diluted Earnings Per Share | ||||||||||||||||||||
Income from continuing operations | $ | 0.53 | $ | 0.35 | $ | 2.82 | $ | 2.23 | ||||||||||||
Income from discontinued operations | - | - | - | 0.20 | ||||||||||||||||
Net Income | $ | 0.53 | $ | 0.35 | $ | 2.82 | $ | 2.43 | ||||||||||||
Weighted Average Shares Outstanding | 19,222 | 18,756 | 18,999 | 18,693 | ||||||||||||||||
Weighted Average Diluted Shares | 19,369 | 18,919 | 19,131 | 18,837 | ||||||||||||||||
Dividends Declared Per Common Share | $ | 0.355 | $ | 0.280 | $ | 1.27 | $ | 1.10 |
Source:
American States Water Company
Eva G. Tang
Senior Vice
President-Finance, Chief Financial Officer,
Corporate Secretary and
Treasurer
(909) 394-3600, ext. 707