Exhibit 99.1
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NEWS RELEASE
CALIFORNIA WATER SERVICE GROUP
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![(CWT LOGO)](f50284f5028402.gif) |
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1720 North First Street
San Jose, CA 95112-4598
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October 29, 2008
For Immediate Release |
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Contact:
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Marty Kropelnicki (408) 367-8200
(analysts)
Shannon Dean (310) 257-1435 (media) |
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CAL WATER ANNOUNCES RESULTS FOR THE 3RD QUARTER OF 2008
SAN JOSE, CA California Water Service Group (NYSE : CWT) today announced net income of
$22.2 million for the third quarter of 2008, up 61% compared to $13.8 million in the third quarter
of 2007. Earnings per diluted share were $1.06 for the third quarter of 2008, up 58% compared to
earnings per diluted share of $0.67 in the third quarter of 2007.
Revenues increased by $17.9 million, or 16%, to $131.7 million, with rate increases adding
$18.0 million and water usage by new customers adding $1.1 million. Other changes reduced revenues
by $1.2 million.
Total operating expenses for the third quarter of 2008 increased by $8.6 million to $104.9
million. Water production costs increased by $1.4 million compared to the same period last year.
Administrative and general costs increased $0.3 million, or 2%. Other operations costs
increased
$1.2 million, due primarily to increases in water quality laboratory fees, purchases of chemicals
and filters, conservation program costs, and uncollectable accounts.
Fewer water system repairs resulted in a $0.4 million decrease in maintenance expense, which
was $3.8 million for the quarter. Depreciation expense increased $0.9 million to $9.3 million as a
result of increases in capital expenditures.
Other income, net of income taxes, was a loss of $0.5 million, compared to a gain of $0.8
million last year, due primarily to a mark-to-market adjustment associated with the market value of
assets in the companys non-qualified retirement plans.
For the twelve months ended September 30, 2008, net income was $40.5 million and diluted
earnings per share were $1.94, compared to net income of $29.5 million and diluted earnings per
share of $1.43 for the same period in the prior year. Revenues for
the trailing twelve months were $396.1 million, compared to $361.8 million for the same period last
year.
During the third quarter, Cal Water accomplished many significant milestones. First, the
Company completed its 2007 General Rate Case and, as a result, received timely rate relief on a
number of significant items. With the
support of the California Public Utilities Commission
(CPUC), the rate case was completed on schedule with rate relief starting in early July. Further,
effective July 1st, the Company implemented the Water Rate Adjustment Mechanism (WRAM), the
Modified Cost Balancing Account (MCBA), and tiered rates. With these three new mechanisms in
place, Cal Water can further pursue water efficiency programs that benefit ratepayers and reduce
overall water demand. These new mechanisms support the CPUCs goals set forth in the Water Action
Plan to improve water efficiency throughout the state, said President and Chief Executive Officer
Peter C. Nelson.
As reported on September 3, 2008, the Company also completed its acquisition of Waikoloa
Resort Utilities, Waikoloa Water Company, Inc., and Waikoloa Sanitary Sewer Company, Inc.
(collectively known as West Hawaii Utilities), which together provide water utility services to
1,970 customer accounts and wastewater services to 300 customer accounts on the Big Island of
Hawaii.
We are excited to welcome our new customers on the big island of Hawaii and look forward to
serving them with the same quality and care we have become known for, added Nelson.
All stockholders and interested investors are invited to listen to the 2008 third quarter
conference call on
October 30, 2008, at 11:00 a.m. (EDT), by dialing 1-866-259-1024 and keying in
ID# 1285532. A replay of the call will be available from 2:00 p.m.
(EDT) October 30, 2008, through December 29, 2008, at 888-266-2081, ID# 1285532. 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 communities. 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).
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CALIFORNIA WATER SERVICE GROUP
CONDENSED CONSOLIDATED BALANCE SHEETS
Unaudited
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September 30 |
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December 31 |
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(In thousands, except per share data) |
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2008 |
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2007 |
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ASSETS |
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Utility plant: |
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Utility plant |
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$ |
1,552,267 |
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$ |
1,447,047 |
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Less accumulated depreciation and amortization |
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(463,375 |
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(436,851 |
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Net utility plant |
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1,088,892 |
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1,010,196 |
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Current assets: |
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Cash and cash equivalents |
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9,409 |
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6,734 |
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Receivables |
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Customers |
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30,466 |
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18,600 |
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Other |
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10,030 |
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8,617 |
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Unbilled revenue |
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19,896 |
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12,911 |
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Materials and supplies at average cost |
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4,914 |
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4,744 |
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Taxes, prepaid expense, and other assets |
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8,992 |
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8,369 |
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Total current assets |
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83,707 |
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59,975 |
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Other assets: |
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Regulatory assets |
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90,894 |
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90,908 |
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Goodwill |
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4,672 |
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Other assets |
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22,881 |
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23,420 |
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Total other assets |
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118,447 |
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114,328 |
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$ |
1,291,046 |
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$ |
1,184,499 |
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CAPITALIZATION AND LIABILITIES |
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Capitalization: |
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Common stock, $.01 par value |
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$ |
207 |
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207 |
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Additional paid-in capital |
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213,596 |
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211,885 |
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Retained earnings |
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187,565 |
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173,617 |
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Total common stockholders equity |
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401,368 |
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385,709 |
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Preferred stock |
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3,475 |
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Long-term debt, less current maturities |
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288,663 |
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289,220 |
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Total capitalization |
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690,031 |
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678,404 |
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Current liabilities: |
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Current maturities of long-term debt |
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2,701 |
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2,701 |
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Accounts payable |
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45,616 |
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36,694 |
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Notes payable |
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40,284 |
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Accrued expenses and other liabilities |
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57,448 |
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30,258 |
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Total current liabilities |
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146,049 |
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69,653 |
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Unamortized investment tax credits |
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2,467 |
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2,467 |
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Deferred income taxes, net |
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69,948 |
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69,712 |
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Pension and postretirement benefits other than pensions |
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39,747 |
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39,444 |
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Regulatory and other liabilities |
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47,076 |
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38,783 |
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Advances for construction |
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177,056 |
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168,024 |
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Contributions in aid of construction |
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118,672 |
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118,012 |
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Commitments and contingencies |
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$ |
1,291,046 |
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$ |
1,184,499 |
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CALIFORNIA WATER SERVICE GROUP
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Unaudited
(In thousands, except per share data)
For the Three-Months ended:
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September 30, |
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September 30, |
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2008 |
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2007 |
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Operating revenue |
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$ |
131,702 |
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$ |
113,851 |
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Operating expenses: |
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Water production costs |
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46,455 |
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45,063 |
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Admistrative and General |
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14,995 |
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14,733 |
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Other operations |
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12,935 |
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11,762 |
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Maintenance |
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3,824 |
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4,233 |
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Depreciation and amortization |
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9,281 |
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8,392 |
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Income taxes |
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13,510 |
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8,426 |
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Property and other taxes |
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3,940 |
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3,707 |
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Total operating expenses |
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104,940 |
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96,316 |
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Net operating income |
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26,762 |
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17,535 |
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Other income and expenses: |
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Non-regulated revenue |
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3,805 |
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3,418 |
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Non-regulated expenses |
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(4,501 |
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(2,136 |
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Gain (loss) on sale of non-utility property |
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Less: income taxes on other income and expenses |
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288 |
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(522 |
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(408 |
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760 |
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Interest expense: |
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Interest Expense |
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5,233 |
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4,936 |
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Less: capitalized interest |
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(1,065 |
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(450 |
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Net interest expense |
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4,168 |
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4,486 |
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Net income |
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$ |
22,186 |
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$ |
13,809 |
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Earnings per share |
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Basic |
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$ |
1.06 |
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$ |
0.67 |
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Diluted |
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$ |
1.06 |
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$ |
0.67 |
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Weighted average shares outstanding |
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Basic |
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20,717 |
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20,667 |
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Diluted |
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20,740 |
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20,691 |
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Dividends per share of common stock |
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$ |
0.2925 |
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$ |
0.2900 |
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CALIFORNIA WATER SERVICE GROUP
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Unaudited
(In thousands, except per share data)
For the Nine-Months ended:
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September 30, |
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September 30, |
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2008 |
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2007 |
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Operating revenue |
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$ |
310,204 |
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$ |
281,203 |
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Operating expenses: |
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Water production costs |
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112,162 |
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108,147 |
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Admistrative and General |
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42,249 |
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41,568 |
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Other operations |
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37,766 |
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33,857 |
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Maintenance |
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12,884 |
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13,983 |
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Depreciation and amortization |
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27,779 |
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25,173 |
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Income taxes |
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20,126 |
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13,761 |
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Property and other taxes |
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11,163 |
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10,548 |
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Total operating expenses |
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264,129 |
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247,037 |
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Net operating income |
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46,075 |
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34,166 |
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Other income and expenses: |
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Non-regulated revenue |
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9,452 |
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9,883 |
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Non-regulated expenses |
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(9,715 |
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(5,853 |
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Gain (loss) on sale of non-utility property |
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7 |
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(83 |
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Less: income taxes on other income and expenses |
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118 |
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(1,608 |
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(138 |
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2,339 |
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Interest expense: |
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Interest Expense |
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15,405 |
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14,788 |
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Less: capitalized interest |
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(1,955 |
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(1,400 |
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Net interest expense |
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13,450 |
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13,388 |
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Net income |
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$ |
32,487 |
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$ |
23,117 |
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Earnings per share |
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Basic |
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$ |
1.55 |
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$ |
1.11 |
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Diluted |
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$ |
1.55 |
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$ |
1.11 |
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Weighted average shares outstanding |
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Basic |
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20,707 |
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20,664 |
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Diluted |
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20,731 |
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20,688 |
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Dividends per share of common stock |
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$ |
0.8775 |
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$ |
0.8700 |
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