American States Water Announces Earnings for the Fourth Quarter and the Year 2013
Fourth Quarter 2013 Results
The table below sets forth a comparison of the fourth quarter diluted earnings per share by business segment:
Q4 2013 | Q4 2012 | Change | |||||||||||||||
Water | $0.18 | $0.13 | $0.05 | ||||||||||||||
Electric | 0.01 | 0.02 | (0.01 | ) | |||||||||||||
Contracted services | 0.10 | 0.12 | (0.02 | ) | |||||||||||||
AWR (parent) | 0.01 | — | 0.01 | ||||||||||||||
Totals | $0.30 | $0.27 | $0.03 | ||||||||||||||
Water
For the three months ended December 31, 2013, fully diluted earnings
from the water segment of AWR’s
-
An increase in the water gross margin of approximately
$3.1 million , or$0.05 per share, due primarily to a higher adopted gross margin effective January 1, 2013 approved by theCalifornia Public Utilities Commission ("CPUC") on May 9, 2013 in connection with the water general rate case. In addition, there was an increase of$2.8 million in revenues with a corresponding increase in operating expenses, representing new surcharges billed to customers during the fourth quarter of 2013 as compared to the same period in 2012 to recover previously incurred costs. These surcharges had no impact to net earnings; -
Excluding supply costs and the
$2.8 million of surcharges discussed above, operating expenses decreased by approximately$1.0 million , or$0.02 per share, due primarily to decreases in: (i) depreciation expense as a result of lower composite depreciation rates approved in the water general rate case; (ii) planned maintenance expense, and (iii) administrative and general expenses resulting primarily from lower employee-related benefits, and -
An increase in the effective income tax rate for the water segment
during the quarter ended December 31, 2013 as compared to the same
period in 2012, which decreased earnings by
$0.02 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 2013 Results
Basic and fully diluted earnings per share for the year ended
December 31, 2013 were
Year Ended December 31, | |||||||||||||||||
2013 | 2012 | Change | |||||||||||||||
Water | $1.19 | $0.90 | $0.29 | ||||||||||||||
Electric | 0.06 | 0.12 | (0.06 | ) | |||||||||||||
Contracted services | 0.30 | 0.39 | (0.09 | ) | |||||||||||||
AWR (parent) | 0.06 | — | 0.06 | ||||||||||||||
Totals | $1.61 | $1.41 | $0.20 | ||||||||||||||
|
Increase/ | ||
Reconciliation of changes in EPS from 2012 to 2013: |
(decrease) |
||
Water Segment: |
|||
Water gross margin contribution due to rate increases (excluding surcharges) |
$0.20 | ||
One-time recovery of previously incurred costs | 0.04 | ||
Higher operating expenses – primarily planned maintenance costs (excluding surcharges) |
(0.01 | ) | |
Lower depreciation & amortization expense (excluding surcharges) |
0.04 | ||
Lower effective income tax rate due to flow-through adjustments | 0.02 | ||
Electric Segment: |
|||
A decrease in the recovery of costs associated with the Renewables Portfolio Standard, an increase in A&G expenses due primarily to the processing of the general rate case, and a higher effective income tax rate |
(0.06 |
) |
|
Contracted Services Segment: |
|||
Lower construction activities due to weather conditions and other delays |
(0.10 |
) |
|
Higher operating and administrative expenses due, in part, to pursue new military base opportunities | (0.03 | ) | |
Lower effective income tax rate due to a cumulative tax deduction on construction activities ($0.03 per share relates to periods prior to 2013) | 0.04 | ||
AWR parent: |
|||
Increase due primarily to a cumulative tax benefit related to an employee benefit program ($0.03 per share relates to periods prior to 2013) |
0.06 |
||
2013 Consolidated EPS increase |
$0.20 |
||
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 measures regularly and compares them to historical periods and to the operating budget.
Other - Certain matters discussed in this press 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 December 31,
2013 as filed with the
Fourth Quarter 2013 Earnings Release Conference Call - The
Company will host a conference call on February 27, 2014 at
The call will also be archived on our website and can be replayed
beginning Thursday, February 27, 2014 at
American States Water Company | ||||||||||||
Consolidated | ||||||||||||
Comparative Condensed Balance Sheets | ||||||||||||
December 31, | ||||||||||||
(in thousands) | 2013 | 2012 | ||||||||||
(Unaudited) | ||||||||||||
Assets | ||||||||||||
Utility Plant-Net | $981,477 | $917,791 | ||||||||||
Goodwill | 1,116 | 1,116 | ||||||||||
Other Property and Investments | 15,806 | 13,755 | ||||||||||
Current Assets | 191,617 | 184,033 | ||||||||||
Regulatory and Other Assets | 120,167 | 164,248 | ||||||||||
$1,310,183 | $1,280,943 | |||||||||||
Capitalization and Liabilities | ||||||||||||
Capitalization | $818,483 | $787,042 | ||||||||||
Current Liabilities | 100,906 | 93,697 | ||||||||||
Other Credits | 390,794 | 400,204 | ||||||||||
$1,310,183 | $1,280,943 | |||||||||||
Condensed Statements of Income | Three months ended | Twelve months ended | ||||||||||
(in thousands, except per share amounts) | December 31, | December 31, | ||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||
(Unaudited) | (Unaudited) | |||||||||||
Operating Revenues | ||||||||||||
Water | $72,897 | $67,564 | $320,131 | $305,898 | ||||||||
Electric | 10,429 | 9,298 | 38,409 | 37,033 | ||||||||
Contracted services | 26,590 | 34,679 | 113,537 | 123,977 | ||||||||
Total operating revenues | $109,916 | $111,541 | $472,077 | $466,908 | ||||||||
Operating Expenses | ||||||||||||
Water purchased | $12,282 | $11,753 | $58,930 | $54,010 | ||||||||
Power purchased for pumping | 2,133 | 1,713 | 9,518 | 8,355 | ||||||||
Groundwater production assessment |
3,875 | 3,504 | 15,541 | 14,732 | ||||||||
Power purchased for resale | 3,498 | 3,395 | 13,392 | 12,120 | ||||||||
Supply cost balancing accounts | 223 | 2,149 | 214 | 11,709 | ||||||||
Other operation | 8,609 | 7,943 | 27,767 | 29,790 | ||||||||
Administrative and general | 21,188 | 18,106 | 77,291 | 70,556 | ||||||||
Depreciation and amortization | 10,753 | 10,258 | 40,090 | 41,385 | ||||||||
Maintenance | 4,259 | 4,472 | 17,772 | 15,887 | ||||||||
Property and other taxes | 3,861 | 3,682 | 15,865 | 15,381 | ||||||||
ASUS construction | 17,574 | 23,444 | 76,627 | 81,957 | ||||||||
Net gain on sale of property | 10 | - | (2 | ) | (68 | ) | ||||||
Total operating expenses | 88,265 | 90,419 | 353,005 | 355,814 | ||||||||
Operating income | $21,651 | $21,122 | $119,072 | $111,094 | ||||||||
Other Income and Expenses | ||||||||||||
Interest expense | (5,017 | ) | (4,957 | ) | (22,415 | ) | (22,765 | ) | ||||
Interest income | 195 | 204 | 707 | 1,333 | ||||||||
Other, net | 432 | (4 | ) | 1,105 | 431 | |||||||
Total other income and expenses | (4,390 | ) | (4,757 | ) | (20,603 | ) | (21,001 | ) | ||||
Income from Operations Before Income Tax Expense | $17,261 | $16,365 | $98,469 | $90,093 | ||||||||
Income tax expense | 5,481 | 6,074 | 35,783 | 35,945 | ||||||||
Net Income | $11,780 | $10,291 | $62,686 | $54,148 | ||||||||
Basic Earnings Per Share | $0.30 | $0.27 | $1.61 | $1.42 | ||||||||
Fully Diluted Earnings Per Share | $0.30 | $0.27 | $1.61 | $1.41 | ||||||||
Weighted average shares outstanding | 38,717 | 38,444 | 38,639 | 37,998 | ||||||||
Weighted average diluted shares | 38,956 | 38,738 | 38,869 | 38,262 | ||||||||
Dividends Declared Per Common Share | $0.2025 | $0.1775 | $0.760 | $0.635 |
Source:
American States Water Company
Eva G. Tang
Senior Vice
President-Finance, Chief Financial Officer,
Corporate Secretary and
Treasurer
(909) 394-3600, ext. 707