Advertisement
U.S. markets closed
  • S&P 500

    5,254.35
    +5.86 (+0.11%)
     
  • Dow 30

    39,807.37
    +47.29 (+0.12%)
     
  • Nasdaq

    16,379.46
    -20.06 (-0.12%)
     
  • Russell 2000

    2,124.55
    +10.20 (+0.48%)
     
  • Crude Oil

    83.11
    -0.06 (-0.07%)
     
  • Gold

    2,254.80
    +16.40 (+0.73%)
     
  • Silver

    25.10
    +0.18 (+0.74%)
     
  • EUR/USD

    1.0790
    -0.0003 (-0.03%)
     
  • 10-Yr Bond

    4.2060
    +0.0100 (+0.24%)
     
  • GBP/USD

    1.2619
    -0.0003 (-0.02%)
     
  • USD/JPY

    151.3470
    -0.0250 (-0.02%)
     
  • Bitcoin USD

    69,964.91
    -503.04 (-0.71%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • FTSE 100

    7,952.62
    +20.64 (+0.26%)
     
  • Nikkei 225

    40,369.44
    +201.37 (+0.50%)
     

California Water Service Group Announces Results for the 3rd Quarter of 2012

SAN JOSE, CA--(Marketwire - Nov 6, 2012) - California Water Service Group (NYSE: CWT) today announced net income of $29.8 million and earnings per share of $0.71 for the third quarter of 2012, compared to net income of $20.9 million and earnings per share of $0.50 in the third quarter of 2011. Included in earnings per share was a $0.15 nonrecurring income tax benefit related to 2011 and prior years due to required tax regulation changes.

Operating revenue for the third quarter increased $8.9 million, or 5.2%, to $178.1 million compared to the third quarter of 2011. Sales to new customers added $0.3 million, general rate increases added $4.3 million, offset rate increases to recover increases in purchased water costs added $4.1 million, and increased usage by existing customers and other activities added $0.2 million.

Total operating expenses for the third quarter of 2012 increased $2.6 million, or 1.9%, to $141.8 million. Water production costs increased $4.9 million, or 7.9%, to $66.5 million, primarily due to wholesale water rate increases. Administrative costs increased $2.3 million, or 10.5%, to $23.9 million, due primarily to labor and benefit expenses. Changes in pension costs for regulated California operations do not affect earnings because the Company is allowed by the California Public Utilities Commission (CPUC) to track pension cost changes in a balancing account for future recovery which creates a corresponding change to operating revenues. Other operations expenses increased $0.2 million, or 0.9%, to $17.7 million, due primarily to increases in conservation, water treatment and water quality expenses. Conservation program expenses in California do not affect earnings because they are tracked in a balancing account for future recovery which creates a corresponding change to operating revenues.

Maintenance expense decreased $0.3 million, or 5.9%, to $4.4 million. Depreciation expense increased $1.0 million, or 7.8% to $13.7 million, due to increases in utility plant. Income taxes charged to operating expenses and other income and expenses decreased $3.8 million due to a nonrecurring income tax benefit related to 2011 and prior years for repairs costs previously capitalized for book and income tax purposes. Effective January 1, 2012, the corporate federal income tax repairs and maintenance deduction for qualified tangible property became mandatory for property placed into service during 2012 and prior years. The new tax regulations require the Company to deduct a significant amount of costs previously capitalized for book and tax purposes. The amount of the Company's 2011 and prior years repairs and maintenance deduction was finalized and recorded during the third quarter of 2012.

Other income, net of income taxes, increased $2.4 million to $0.6 million, due primarily to an unrealized mark-to-market gain associated with the change in value of long-term assets held by the Company's non-qualified retirement plans. Interest expense decreased $0.1 million, or 1.5% to $7.2 million due to lower interest rates on short-term borrowings.

"Our third quarter earnings are in line with our expectations, given the impact of the new tax rule and positive mark-to-market adjustment. More important for the long term is our continued success in operating within our budget and obtaining timely recovery of prudently incurred costs in water rates. Our team continues to focus on these key areas," said Peter C. Nelson, Chairman of the Board and CEO.

Other Information
All stockholders and interested investors are invited to listen to the 2012 third quarter conference call on 11 a.m. ET on Wednesday, November 7, 2012, which can be accessed by dialing 1-888-539-3696 and keying in ID# 6942093. A replay of the call will be available from 2:00 p.m. ET on Wednesday, November 7, 2012, through January 6, 2013, at 888-203-1112, ID# 6942093. The call, which will be hosted by Chairman and Chief Executive Officer Peter C. Nelson, President and Chief Operating Officer Martin A. Kropelnicki, and Vice President, Chief Financial Officer and Treasurer Thomas F. Smegal, will also be webcast under the investor relations tab at www.calwatergroup.com.

California Water Service Group is the parent company of California Water Service Company, Washington Water Service Company, New Mexico Water Service Company, Hawaii Water Service Company, Inc., CWS Utility Services, and HWS Utility Services. Together these companies provide regulated and non-regulated water service to nearly 2 million people in California, Washington, New Mexico, and Hawaii. California Water Service Group's common stock trades on the New York Stock Exchange under the symbol "CWT."

This news release contains forward-looking statements within the meaning established by the Private Securities Litigation Reform Act of 1995 ("Act"). The forward-looking statements are intended to qualify under provisions of the federal securities laws for "safe harbor" treatment established by the Act. Forward-looking statements are based on currently available information, expectations, estimates, assumptions and projections, and management's judgment about the Company, the water utility industry and general economic conditions. Such words as expects, intends, plans, believes, estimates, assumes, anticipates, projects, predicts, forecasts or variations of such words or similar expressions are intended to identify forward-looking statements. The forward-looking statements are not guarantees of future performance. They are subject to uncertainty and changes in circumstances. Actual results may vary materially from what is contained in a forward-looking statement. Factors that may cause a result different than expected or anticipated include, but are not limited to: governmental and regulatory commissions' decisions; changes in regulatory commissions' policies and procedures; the timeliness of regulatory commissions' actions concerning rate relief; new legislation; electric power interruptions; increases in suppliers' prices and the availability of supplies including water and power; fluctuations in interest rates; changes in environmental compliance and water quality requirements; acquisitions and our ability to successfully integrate acquired companies; the ability to successfully implement business plans; changes in customer water use patterns; the impact of weather on water sales and operating results; access to sufficient capital on satisfactory terms; civil disturbances or terrorist threats or acts, or apprehension about the possible future occurrences of acts of this type; the involvement of the United States in war or other hostilities; restrictive covenants in or changes to the credit ratings on our current or future debt that could increase our financing costs or affect our ability to borrow, make payments on debt or pay dividends; and, other risks and unforeseen events. When considering forward-looking statements, you should keep in mind the cautionary statements included in this paragraph, as well as the annual 10-K, Quarterly 10-Q, and other reports filed from time-to-time with the Securities and Exchange Commission (SEC). The Company assumes no obligation to provide public updates of forward-looking statements.

Additional information is available at our website at www.calwatergroup.com.

1720 North First Street
San Jose, CA 95112-4598

CALIFORNIA WATER SERVICE GROUP

CONDENSED CONSOLIDATED BALANCE SHEETS

Unaudited

(In thousands, except per share data)

September 30,

December 31,

2012

2011

ASSETS

Utility plant:

Utility plant

$

2,065,679

$

1,960,381

Less accumulated depreciation and amortization

(622,553

)

(579,262

)

Net utility plant

1,443,126

1,381,119

Current assets:

Cash and cash equivalents

16,971

27,203

Receivables

Customers

48,087

28,418

Regulatory balancing accounts

33,171

21,680

Other

12,277

6,422

Unbilled revenue

23,474

15,068

Materials and supplies at average cost

6,029

5,913

Taxes, prepaid expense, and other assets

10,089

9,184

Total current assets

150,098

113,888

Other assets:

Regulatory assets

334,000

319,898

Goodwill

2,615

2,615

Other assets

45,994

37,067

Total other assets

382,609

359,580

$

1,975,833

$

1,854,587

CAPITALIZATION AND LIABILITIES

Capitalization:

Common stock, $.01 par value; 68,000 shares authorized, 41,905 and 41,817, outstanding in 2012 and 2011, respectively

$

419

$

418

Additional paid-in capital

220,642

219,572

Retained earnings

253,875

229,839

Total common stockholders' equity

474,936

449,829

Long-term debt, less current maturities

479,460

481,632

Total capitalization

954,396

931,461

Current liabilities:

Current maturities of long-term debt

6,677

6,533

Short-term borrowings

60,675

47,140

Accounts payable

58,839

48,923

Regulatory balancing accounts

5,533

2,655

Accrued interest

11,046

4,756

Accrued expenses and other liabilities

47,464

41,868

Total current liabilities

190,234

151,875

Unamortized investment tax credits

2,254

2,254

Deferred income taxes, net

164,245

116,368

Pension and postretirement benefits other than pensions

234,432

232,110

Regulatory liability and Other

87,037

79,050

Advances for construction

188,249

187,278

Contributions in aid of construction

154,986

154,191

$

1,975,833

$

1,854,587

CALIFORNIA WATER SERVICE GROUP

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

Unaudited

(In thousands, except per share data)

For the Three-Months ended:

September 30,

September 30,

2012

2011

Operating revenue

$

178,135

$

169,254

Operating expenses:

Operations:

Water production costs

66,489

61,593

Administrative and General

23,925

21,646

Other operations

17,658

17,506

Maintenance

4,377

4,651

Depreciation and amortization

13,720

12,729

Income taxes

10,387

15,881

Property and other taxes

5,218

5,170

Total operating expenses

141,774

139,176

Net operating income

36,361

30,078

Other income and expenses:

Non-regulated revenue

3,756

3,425

Non-regulated expenses, net

(2,697

)

(6,489

)

Income tax (expense) benefit on other income and expenses

(422

)

1,254

Net other income

637

(1,810

)

Interest expense:

Interest Expense

8,024

8,007

Less: capitalized interest

(798

)

(674

)

Net interest expense

7,226

7,333

Net income

$

29,772

$

20,935

Earnings per share

Basic

$

0.71

$

0.50

Diluted

$

0.71

$

0.50

Weighted average shares outstanding

Basic

41,905

41,780

Diluted

41,905

41,789

Dividends per share of common stock

$

0.15750

$

0.15375

CALIFORNIA WATER SERVICE GROUP

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

Unaudited

(In thousands, except per share data)

For the Nine-Months ended:

September 30,

September 30,

2012

2011

Operating revenue

$

438,436

$

398,800

Operating expenses:

Operations:

Water production costs

158,119

138,296

Administrative and General

69,110

62,702

Other operations

59,213

47,879

Maintenance

14,742

15,138

Depreciation and amortization

41,383

37,690

Income taxes

19,477

23,278

Property and other taxes

13,802

14,236

Total operating expenses

375,846

339,219

Net operating income

62,590

59,581

Other income and expenses:

Non-regulated revenue

11,943

11,497

Non-regulated expenses, net

(8,491

)

(13,360

)

Income tax (expense) benefit on other income and expenses

(1,383

)

776

Net other income

2,069

(1,087

)

Interest expense:

Interest Expense

23,484

24,556

Less: capitalized interest

(2,647

)

(1,906

)

Net interest expense

20,837

22,650

Net income

$

43,822

$

35,844

Earnings per share

Basic

$

1.05

$

0.86

Diluted

$

1.05

$

0.86

Weighted average shares outstanding

Basic

41,886

41,743

Diluted

41,886

41,756

Dividends per share of common stock

$

0.47250

$

0.46125

Advertisement