American States Water Company Announces First Quarter 2017 Results
First Quarter 2017 Results
The table below sets forth a
comparison of the first quarter diluted earnings per share by business
segment, as reported:
Diluted Earnings per Share | ||||||||||||||||
Three Months Ended | ||||||||||||||||
3/31/2017 | 3/31/2016 | CHANGE | ||||||||||||||
Water | $ | 0.25 | $ | 0.22 | $ | 0.03 | ||||||||||
Electric | 0.04 | 0.03 | 0.01 | |||||||||||||
Contracted services | 0.05 | 0.03 | 0.02 | |||||||||||||
Consolidated diluted earnings per share, as reported | $ | 0.34 | $ | 0.28 | $ | 0.06 |
Water Segment:
For the three months
ended March 31, 2017, diluted earnings per share from the water segment
of AWR’s
-
A decrease in the water gross margin of
$1.5 million was not reflected in the results for the three months endedMarch 31, 2016 due to the delay by theCalifornia Public Utilities Commission (“CPUC”) in issuing a decision on the water general rate case. The water gross margin recorded throughMarch 31, 2016 reflected GSWC's stipulated position in the then pending water general rate case, which assumed the CPUC would adopt GSWC’s positions in its entirety related to capital expenditure requests and executive compensation. The final decision authorized 87% of GSWC’s capital requests in customer rates, and allowed only a portion of the executive incentive programs. When the decision was issued inDecember 2016 with new rates retroactive to January 1, 2016, a cumulative downward adjustment of$5.2 million to the water gross margin was recorded in the fourth quarter of 2016 related to the first three quarters of 2016. Approximately$1.5 million of this amount would have lowered the water gross margin in the first quarter of 2016 had the CPUC decision been issued on time. -
A one-time recovery totaling
$1.5 million related to the CPUC’s approval of GSWC’s drought memorandum account. InFebruary 2017 , the CPUC approved recovery of incremental drought-related costs, which were previously expensed in prior years and related toCalifornia's drought state of emergency. As a result of the approval by the CPUC, during the first quarter of 2017, GSWC recorded a regulatory asset and a corresponding increase to pretax earnings of approximately$1.5 million associated with drought-related items, of which approximately$1.2 million was recorded as a reduction to operation-related expenses and approximately$260,000 was recorded as additional revenue.
Excluding the two items discussed above, these major items impacted the comparability of the two periods in the water segment results:
-
Overall, the water gross margin increased by approximately
$685,000 due primarily to CPUC-approved second-year rate increases effectiveJanuary 1, 2017 , and -
Total operating expenses (excluding supply costs) decreased by
approximately
$1.2 million reflecting primarily lower (i) legal and other outside service costs related to condemnation matters, and (ii) maintenance expense.
Electric Segment:
For the three months
ended March 31, 2017, diluted earnings from the electric segment
increased by
Contracted Services Segment:
For the
three months ended March 31, 2017, diluted earnings per share from
contracted services increased by
Regulatory Matters
In early
On
Other Matters
In
Dividends
Non-GAAP Financial Measures
This press release includes a
discussion on the water gross margin for various periods, which is
computed by subtracting total supply costs from total revenues. The
discussion also includes AWR’s operations in terms of diluted earnings
per share by business segment, which is each business segment’s net
income 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 the water gross margin 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.
Forward Looking Statements
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 most recent Form
10-Q and Form 10-K filed with the
Conference Call
The Company will host a conference call on
About
American States Water Company | ||||||||
Consolidated | ||||||||
Comparative Condensed Balance Sheets | ||||||||
March 31, | December 31, | |||||||
(in thousands) | 2017 | 2016 | ||||||
(Unaudited) | ||||||||
Assets | ||||||||
Utility Plant-Net | $ | 1,137,159 | $ | 1,150,926 | ||||
Goodwill | 1,116 | 1,116 | ||||||
Other Property and Investments | 21,161 | 20,836 | ||||||
Assets Held for Sale | 26,838 | - | ||||||
Other Current Assets | 165,241 | 166,875 | ||||||
Regulatory and Other Assets | 128,753 | 130,740 | ||||||
Total Assets | $ | 1,480,268 | $ | 1,470,493 | ||||
Capitalization and Liabilities | ||||||||
Capitalization | $ | 818,929 | $ | 815,278 | ||||
Liabilities Directly Associated with Assets Held for Sale | 938 | - | ||||||
Other Current Liabilities | 177,735 | 177,944 | ||||||
Other Credits | 482,666 | 477,271 | ||||||
Total Capitalization and Liabilities | $ | 1,480,268 | $ | 1,470,493 | ||||
Condensed Statements of Income | Three months ended | |||||||
(in thousands, except per share amounts) | March 31, | |||||||
2017 | 2016 | |||||||
(Unaudited) | ||||||||
Operating Revenues | ||||||||
Water | $ | 66,404 | $ | 66,312 | ||||
Electric | 10,502 | 10,573 | ||||||
Contracted services | 21,904 | 16,642 | ||||||
Total operating revenues | 98,810 | 93,527 | ||||||
Operating Expenses | ||||||||
Water purchased | 12,106 | 13,799 | ||||||
Power purchased for pumping | 1,597 | 1,632 | ||||||
Groundwater production assessment | 3,375 | 2,700 | ||||||
Power purchased for resale | 3,100 | 2,871 | ||||||
Supply cost balancing accounts | (1,749 | ) | (3,415 | ) | ||||
Other operation | 6,160 | 6,966 | ||||||
Administrative and general | 20,286 | 20,773 | ||||||
Depreciation and amortization | 9,683 | 9,791 | ||||||
Maintenance | 3,464 | 4,070 | ||||||
Property and other taxes | 4,566 | 4,378 | ||||||
ASUS construction | 11,484 | 8,729 | ||||||
Total operating expenses | 74,072 | 72,294 | ||||||
Operating income | 24,738 | 21,233 | ||||||
Other Income and Expenses | ||||||||
Interest expense | (5,905 | ) | (5,623 | ) | ||||
Interest income | 259 | 172 | ||||||
Other, net | 464 | 181 | ||||||
Total other income and expenses | (5,182 | ) | (5,270 | ) | ||||
Income Before Income Tax Expense | 19,556 | 15,963 | ||||||
Income tax expense | 6,855 | 5,813 | ||||||
Net Income | $ | 12,701 | $ | 10,150 | ||||
Weighted average shares outstanding | 36,590 | 36,521 | ||||||
Basic earnings per Common Share | $ | 0.35 | $ | 0.28 | ||||
Weighted average diluted shares | 36,782 | 36,697 | ||||||
Fully diluted earnings per Common Share | $ | 0.34 | $ | 0.28 | ||||
Dividends Declared Per Common Share | $ | 0.242 | $ | 0.224 | ||||
View source version on businesswire.com: http://www.businesswire.com/news/home/20170502006652/en/
Source:
American States Water Company
Eva G. Tang
Senior Vice
President-Finance, Chief Financial Officer,
Corporate Secretary and
Treasurer
909-394-3600, ext. 707