EX-99.1
Published on October 29, 2009
Exhibit 99.1
NEWS RELEASE
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CALIFORNIA WATER SERVICE GROUP |
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1720 North First Street | October 28, 2009 | |||
San Jose, CA 95112-4598 | For Immediate Release | |||
Contact:
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Marty Kropelnicki (408) 367-8200 (analysts) | |||
Shannon Dean (310) 257-1435 (media) |
CALIFORNIA WATER SERVICE GROUP ANNOUNCES RESULTS FOR
3RDQUARTER 2009
3RDQUARTER 2009
SAN JOSE, CA California Water Service Group (NYSE : CWT) today announced net income of
$19.6 million and earnings per share of $0.94 for the third quarter of 2009, compared to net income
of $22.2 million and earnings per share of $1.06 in the third quarter of 2008.
Revenues increased by $7.5 million, or 6%, to $139.2 million, with rate increases adding $12.5
million and water usage by new customers adding $3.3 million. A decrease in water usage by
existing customers and other charges reduced revenue by $8.3 million.
Total operating expenses for the third quarter of 2009 increased by $10.1 million, or 10%, to
$115.1 million. Water production costs increased by $2.4 million, or 5%, due to higher power costs
and wholesale water rates. Administrative costs increased $4.1 million, or 27%, due to increased
pension & benefits costs, and increased legal costs. Other operations expenses increased by $1.7
million to $14.6 million as a result of higher costs for pumping and distributing water.
Maintenance expense increased by 15% to $4.4 million as a result of additional water main
repairs. Depreciation expense increased by 11% to $10.3 million as a result of
increases in capital
expenditures. Taxes other than income increased $0.4 million to $4.4 million, primarily due to
property tax increases.
Other income, net of income taxes, added $1.0 million of net income for the quarter, while
interest expense increased by 33% to $5.5 million due to the new debt offering in April 2009.
For the twelve months ended September 30, 2009, net income was $41.4 million and diluted
earnings per share were $1.99, compared to net income of $40.5 million and diluted earnings per
share of $1.94 for the same period last year. Revenues for the trailing twelve months were $443
million, compared to $396 million for the same period in the prior year.
During the quarter, the Company filed its 2009 General Rate Case for all 24 California
districts and corporate costs, said President and Chief Executive Officer Peter C. Nelson. This
is significant because we are now filing for rate relief in California for all
regulated districts and corporate costs at the same time, which will allow for more timely
rate relief of prudently incurred costs, said Nelson.
While we cannot predict the outcome of this filing, the rate case was filed on time and is
currently proceeding on schedule, Nelson said.
Other Information
All stockholders and interested investors are invited to listen to the 2009 third quarter
conference call on October 29, 2009, at 11:00 a.m. (EST), by dialing 1-866-814-8476 and keying in
ID# 1399873. A replay of the call will be available from 2:00 p.m. (EST) October 29, 2009, through
December 28, 2009, at 1-888-266-2081, ID# 1399873. The call, which will be hosted by President and
CEO, Peter Nelson and Vice President and Chief Financial Officer, Martin A. Kropelnicki, 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. Groups 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 managements 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 Web site at www.calwatergroup.com.
Attachments (2).
###
CALIFORNIA WATER SERVICE GROUP
CONDENSED CONSOLIDATED BALANCE SHEETS
Unaudited
(In thousands, except per share data)
CONDENSED CONSOLIDATED BALANCE SHEETS
Unaudited
(In thousands, except per share data)
September 30, | December 31, | |||||||
2009 | 2008 | |||||||
ASSETS |
||||||||
Utility plant: |
||||||||
Utility plant |
$ | 1,676,287 | $ | 1,583,079 | ||||
Less accumulated depreciation and amortization |
(501,704 | ) | (470,712 | ) | ||||
Net utility plant |
1,174,583 | 1,112,367 | ||||||
Current assets: |
||||||||
Cash and cash equivalents |
47,581 | 13,869 | ||||||
Receivables: |
||||||||
Customers |
31,722 | 22,786 | ||||||
Regulatory balancing accounts |
15,592 | 4,629 | ||||||
Other |
10,752 | 7,442 | ||||||
Unbilled revenue |
21,352 | 13,112 | ||||||
Materials and supplies at average cost |
5,457 | 5,070 | ||||||
Taxes, prepaid expenses and other assets |
7,922 | 12,890 | ||||||
Total current assets |
140,378 | 79,798 | ||||||
Other assets: |
||||||||
Regulatory assets |
201,442 | 198,293 | ||||||
Goodwill |
2,615 | 3,906 | ||||||
Other assets |
30,455 | 23,743 | ||||||
Total other assets |
234,513 | 225,942 | ||||||
$ | 1,549,474 | $ | 1,418,107 | |||||
CAPITALIZATION AND LIABILITIES |
||||||||
Capitalization: |
||||||||
Common stock, $.01 par value |
$ | 207 | $ | 207 | ||||
Additional paid-in capital |
214,715 | 213,922 | ||||||
Retained earnings |
204,570 | 188,820 | ||||||
Total common stockholders equity |
419,492 | 402,949 | ||||||
Long-term debt, less current maturities |
373,541 | 287,498 | ||||||
Total capitalization |
793,033 | 690,447 | ||||||
Current liabilities: |
||||||||
Current maturities of long-term debt |
12,424 | 2,818 | ||||||
Short-term borrowings |
12,000 | 40,000 | ||||||
Accounts payable: |
||||||||
Trade and other |
46,894 | 39,187 | ||||||
Regulatory balancing accounts |
7,486 | 2,585 | ||||||
Accrued interest |
9,096 | 3,295 | ||||||
Accrued expenses and other liabilities |
42,938 | 35,311 | ||||||
Total current liabilities |
130,838 | 123,196 | ||||||
Unamortized investment tax credits |
2,392 | 2,392 | ||||||
Deferred income taxes, net |
83,512 | 72,344 | ||||||
Pension and postretirement benefits other than pensions |
152,467 | 152,685 | ||||||
Regulatory and other liabilities |
83,357 | 83,312 | ||||||
Advances for construction |
182,763 | 176,163 | ||||||
Contributions in aid of construction |
121,112 | 117,568 | ||||||
Commitments and contingencies |
| | ||||||
$ | 1,549,474 | $ | 1,418,107 | |||||
CALIFORNIA WATER SERVICE GROUP
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Unaudited
(In thousands, except per share data)
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Unaudited
(In thousands, except per share data)
September 30, | September 30, | |||||||
For the three months ended | 2009 | 2008 | ||||||
Operating revenue |
$ | 139,167 | $ | 131,702 | ||||
Operating expenses: |
||||||||
Operations: |
||||||||
Water production costs |
48,898 | 46,455 | ||||||
Administrative and general |
19,084 | 14,995 | ||||||
Other operations |
14,639 | 12,935 | ||||||
Maintenance |
4,405 | 3,824 | ||||||
Depreciation and amortization |
10,259 | 9,281 | ||||||
Income taxes |
13,417 | 13,510 | ||||||
Property and other taxes |
4,371 | 3,940 | ||||||
Total operating expenses |
115,073 | 104,940 | ||||||
Net operating income |
24,094 | 26,762 | ||||||
Other income and expenses: |
||||||||
Non-regulated revenue |
5,194 | 3,805 | ||||||
Non-regulated expenses, net |
(3,464 | ) | (4,501 | ) | ||||
Gain on sale of non-utility property |
| | ||||||
Income taxes (expense) benefit on other income and expenses |
(702 | ) | 288 | |||||
Net other income and expenses |
1,028 | (408 | ) | |||||
Interest expense: |
||||||||
Interest expense |
6,480 | 5,233 | ||||||
Less: capitalized interest |
(950 | ) | (1,065 | ) | ||||
Net interest expense |
5,530 | 4,168 | ||||||
Net income |
$ | 19,592 | $ | 22,186 | ||||
Earnings per share |
||||||||
Basic |
$ | 0.94 | $ | 1.06 | ||||
Diluted |
$ | 0.94 | $ | 1.06 | ||||
Weighted average shares outstanding |
||||||||
Basic |
20,745 | 20,717 | ||||||
Diluted |
20,767 | 20,740 | ||||||
Dividends declared per share of common stock |
$ | 0.2950 | $ | 0.2925 | ||||
CALIFORNIA WATER SERVICE GROUP
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Unaudited (In thousands, except per share data)
Unaudited (In thousands, except per share data)
September 30, | September 30, | |||||||
For the nine months ended | 2009 | 2008 | ||||||
Operating revenue |
$ | 342,447 | $ | 310,204 | ||||
Operating expenses: |
||||||||
Operations: |
||||||||
Water production costs |
119,468 | 112,162 | ||||||
Administrative and general |
57,331 | 42,248 | ||||||
Other operations |
41,425 | 37,766 | ||||||
Maintenance |
13,352 | 12,884 | ||||||
Depreciation and amortization |
30,739 | 27,779 | ||||||
Income taxes |
21,438 | 20,127 | ||||||
Property and other taxes |
12,371 | 11,163 | ||||||
Total operating expenses |
296,124 | 264,129 | ||||||
Net operating income |
46,323 | 46,075 | ||||||
Other income and expenses: |
||||||||
Non-regulated revenue |
11,173 | 9,452 | ||||||
Non-regulated expenses, net |
(6,826 | ) | (9,715 | ) | ||||
Gain on sale of non-utility property |
675 | 7 | ||||||
Income taxes (expense) benefit on other income and expenses |
(2,032 | ) | 118 | |||||
Net other income and expense |
2,990 | (138 | ) | |||||
Interest expense: |
||||||||
Interest expense |
17,480 | 15,405 | ||||||
Less: capitalized interest |
(2,270 | ) | (1,955 | ) | ||||
Net interest expense |
15,210 | 13,450 | ||||||
Net income |
$ | 34,103 | $ | 32,487 | ||||
Earnings per share |
||||||||
Basic |
$ | 1.64 | $ | 1.55 | ||||
Diluted |
$ | 1.64 | $ | 1.55 | ||||
Weighted average shares outstanding |
||||||||
Basic |
20,740 | 20,707 | ||||||
Diluted |
20,765 | 20,731 | ||||||
Dividends declared per share of common stock |
$ | 0.8850 | $ | 0.8775 | ||||