Cal Water Announces 12% Increase in Third Quarter 2003 Net Income; Board Declares 236th Consecutive Quarterly Dividend.Business Editors SAN JOSE San Jose, city, United States San Jose (sănəzā`, săn hōzā`), city (1990 pop. 782,248), seat of Santa Clara co., W central Calif.; founded 1777, inc. 1850. , Calif.--(BUSINESS WIRE)--Oct. 22, 2003 California California (kăl'ĭfôr`nyə), most populous state in the United States, located in the Far West; bordered by Oregon (N), Nevada and, across the Colorado River, Arizona (E), Mexico (S), and the Pacific Ocean (W). Water Service Group (NYSE NYSE See: New York Stock Exchange : CWT cwt 112 pounds avoirdupois weight. ) today announced third quarter net income of $8.6 million and earnings of $0.53 per share, compared to net income of $7.7 million and earnings of $0.50 per share in the third quarter of 2002. Revenue for the third quarter increased $6.8 million or 8% to $88.2 million. Higher water usage by existing customers added $1.5 million, rate increases added $3.2 million, and sales to new customers added $2.0 million, $.9 million of which is attributable to customers added with the acquisition of the Kaanapali Water Corporation in Hawaii Hawaii, island, United States Hawaii, island (1990 pop. 120,217), 4,037 sq mi (10,456 sq km), largest and southernmost island of the state of Hawaii and coextensive with Hawaii co.; known as the Big Island. . According to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. Peter C. Nelson, securing fair and timely rate relief continues to be a key driver of the Company's financial performance. "Our approach in the rate setting process is beginning to yield results. We will continue our focus in this area, because it is critical to our continued success," Nelson said. Third quarter revenues reflect approval by the California Public Utilities Commission The California Public Utilities Commission (CPUC; also often commonly referred to as simply the PUC) [1] is a state Public Utilities Commission which regulates privately-owned utilities in the state of California, including electric power, (Commission) of the Company's 2001 rate cases. In its decision, the Commission granted an 8.9% rate of return on rate base for 14 of the Company's California Districts and approved rate increases that will add $12.8 million to annual revenues. The Company began charging the new rates on September September: see month. 9, 2003. Pursuant to a previous decision to establish April 3, 2003 as an effective date for the new rates, the Commission also authorized au·thor·ize tr.v. au·thor·ized, au·thor·iz·ing, au·thor·iz·es 1. To grant authority or power to. 2. To give permission for; sanction: the Company to collect $5.0 million in surcharges for the period from April 3, 2003 to September 9, 2003, which will be collected over a 12-month period. On October October: see month. 16, 2003, the Commission also approved the Company's request to recover an annual $4.2 million in costs associated with the Bakersfield Bakersfield, city (1990 pop. 174,820), seat of Kern co., S central Calif., at the southern end of the San Joaquin valley; inc. 1898. It is an oil, mining, and agricultural center and one of the fastest-growing U.S. cities. Treatment Plant. That decision will add $.3 million to revenues in the fourth quarter of 2003 and $4.2 million to revenues in 2004. Pending applications to the Commission include general rate case filings made in November November: see month. 2002 and January January: see month. 2003. In the third quarter of 2003, the Company also requested recovery of $6 million in "balancing-type memorandum accounts," which primarily reflect electricity rate increases that were not included in rates. The Company cannot predict the amount or the timing of CPUC CPUC California Public Utilities Commission CPUC Current Procurement Unit Cost decisions on pending applications. Higher revenues in the third quarter of 2003 were partially offset by an 8% or $5.8 million increase in total operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. . Water production costs, which consist of purchased water, power, and pump taxes, increased 8%, reflecting increases in water purchases and higher rates for purchased water as well as a 7% increase in power costs. Maintenance expense increased 5% because more repairs were made to pumping equipment, water lines, and services. Depreciation expense increased 11% due to capital expenditures. Other operating costs operating costs npl → gastos mpl operacionales increased 7%, primarily due to increases in payroll, related benefit costs, and changes made to the pension plan effective January 1, 2003. At their meeting today, the Directors declared a dividend on common stock in the amount of $0.28125 per share, which is the 236th consecutive quarterly dividend. It is payable on November 14, 2003, to stockholders of record on October 31, 2003. The regular dividend on Series C preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. was also declared. On Thursday Thursday: see week. , October 23, 2003, at 1 p.m. Pacific Standard Time (4 p.m. Eastern Standard Time), the Company will conduct a teleconference call, at which time management will provide comments about third quarter 2003 operating results and other pertinent PERTINENT, evidence. Those facts which tend to prove the allegations of the party offering them, are called pertinent; those which have no such tendency are called impertinent, 8 Toull. n. 22. By pertinent is also meant that which belongs. Willes, 319. matters. Any stockholder or interested investor can listen to the teleconference or a replay. The dial-in number to access the teleconference is 1-800-482-2225, call ID #266638. Additional information about the call, including replay information, is available at the Company's web site, at www.calwater.com. California Water Service Group is the parent company of California Water Service Company, Washington Washington, town, England Washington, town (1991 pop. 48,856), Sunderland metropolitan district, NE England. Washington was designated one of the new towns in 1964 to alleviate overpopulation in the Tyneside-Wearside area. Water Service Company, New Mexico New Mexico, state in the SW United States. At its northwestern corner are the so-called Four Corners, where Colorado, New Mexico, Arizona, and Utah meet at right angles; New Mexico is also bordered by Oklahoma (NE), Texas (E, S), and Mexico (S). Water Service Company, Hawaii Water Service Company, Inc. and CWS CWS Chicago White Sox CWS College World Series CWS Church World Service CWS Child Welfare Services CWS Canadian Wildlife Service CWS Community Water System (EPA) CWS Canada-Wide Standard CWS Compressed Work Schedule Utility Services. Together these companies provide regulated reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. and non-regulated water service to over 2 million people in 99 California, Washington, New Mexico and Hawaii communities. Group's common stock trades on the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. under the symbol "CWT". This news release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning established by the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995 ("Act"). The forward-looking statements are intended to qualify under provisions of the federal securities laws for "safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. " 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 CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or . 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: governmental and regulatory commissions' decisions; changes in regulatory commissions' policies and procedures Policies and Procedures are a set of documents that describe an organization's policies for operation and the procedures necessary to fulfill the policies. They are often initiated because of some external requirement, such as environmental compliance or other governmental ; 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 Group acts of violence and disorder prejudicial to public law and order. See also domestic emergencies. or terrorist threats or acts, or apprehension The seizure and arrest of a person who is suspected of having committed a crime. A reasonable belief of the possibility of imminent injury or death at the hands of another that justifies a person acting in Self-Defense against the potential attack. about the possible future occurrences of acts of this type; the involvement of the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. in war or other hostilities hos·til·i·ty n. pl. hos·til·i·ties 1. The state of being hostile; antagonism or enmity. See Synonyms at enmity. 2. a. A hostile act. b. hostilities Acts of war; overt warfare. ; restrictive covenants Restrictive covenants Provisions that place constraints on the operations of borrowers, such as restrictions on working capital, fixed assets, future borrowing, and payment of dividends. 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. The Company assumes no obligation to provide public updates of forward-looking statements. Additional information is available at our Web site at www.calwater.com.
CALIFORNIA WATER SERVICE GROUP
CONDENSED CONSOLIDATED BALANCE SHEETS
Unaudited
(In thousands, except per share data) September 30, December 31,
2003 2002
------------- --------------
ASSETS
Utility plant:
Utility plant $1,063,323 $1,001,310
Less accumulated depreciation and
amortization 320,594 304,322
------------- --------------
Net utility plant 742,729 696,988
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Current assets:
Cash and cash equivalents 12,396 1,063
Receivables 26,438 23,961
Unbilled revenue 12,684 7,969
Materials and supplies at average cost 2,934 2,760
Taxes and other prepaid expenses 8,086 7,234
------------- --------------
Total current assets 62,538 42,987
------------- --------------
Other assets:
Regulatory assets 53,017 46,089
Other assets 16,907 14,518
------------- --------------
Total other assets 69,924 60,607
------------- --------------
$875,191 $800,582
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CAPITALIZATION AND LIABILITIES
Capitalization:
Common stock, $.01 par value $169 $152
Additional paid-in capital 93,773 49,984
Retained earnings 148,695 149,215
Accumulated other comprehensive loss (134) (134)
------------- --------------
Total common stockholders' equity 242,503 199,217
Preferred stock 3,475 3,475
Long-term debt, less current maturities 270,909 250,365
------------- --------------
Total capitalization 516,887 453,057
------------- --------------
Current liabilities:
Current maturities of long-term debt 900 1,000
Short-term borrowings 2,479 36,379
Accounts payable 29,020 23,706
Accrued expenses and other liabilities 44,070 30,456
------------- --------------
Total current liabilities 76,469 91,541
Unamortized investment tax credits 2,875 2,774
Deferred income taxes 38,414 31,371
Regulatory and other liabilities 34,123 28,804
Advances for construction 120,919 115,459
Contributions in aid of construction 85,504 77,576
Commitments and contingencies - -
------------- --------------
$875,191 $800,582
============= ==============
CALIFORNIA WATER SERVICE GROUP
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
Unaudited
For the three months ended: September 30, September 30,
2003 2002
------------- -------------
Operating revenue $88,197 $81,440
------------- -------------
Operating expenses:
Operations 58,398 54,190
Maintenance 3,172 3,010
Depreciation and amortization 5,830 5,263
Income taxes 5,587 5,047
Property and other taxes 2,691 2,333
------------- -------------
Total operating expenses 75,678 69,843
------------- -------------
Net operating income 12,519 11,597
------------- -------------
Other income and expenses:
Non-regulated income, net 623 527
Gain on sale of non-utility property 24 (13)
------------- -------------
647 514
Interest expense:
Long-term debt interest 4,234 4,149
Other interest 345 287
------------- -------------
Total interest expense 4,579 4,436
Net income $8,587 $7,675
============= =============
Earnings per share
Basic $0.53 $0.50
============= =============
Diluted $0.53 $0.50
============= =============
Weighted average shares outstanding
Basic 16,209 15,182
============= =============
Diluted 16,222 15,185
============= =============
Dividends per share of common stock $0.28125 $0.28000
============= =============
CALIFORNIA WATER SERVICE GROUP
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
Unaudited
For the nine months ended: September 30, September 30,
2003 2002
------------- -------------
Operating revenue $207,502 $202,234
------------- -------------
Operating expenses:
Operations 141,851 134,222
Maintenance 9,488 8,365
Depreciation and amortization 17,428 16,045
Income taxes 8,348 10,898
Property and other taxes 7,694 7,349
------------- -------------
Total operating expenses 184,809 176,879
------------- -------------
Net operating income 22,693 25,355
------------- -------------
Other income and expenses:
Non-regulated income, net 1,792 1,417
Gain on sale of non-utility property 1,535 1,961
------------- -------------
3,327 3,378
Interest expense:
Long-term debt interest 12,451 11,518
Other interest 1,165 994
------------- -------------
Total interest expense 13,616 12,512
Net income $12,404 $16,221
============= =============
Earnings per share
Basic $0.79 $1.06
============= =============
Diluted $0.79 $1.06
============= =============
Weighted average shares outstanding
Basic 15,528 15,182
============= =============
Diluted 15,539 15,185
============= =============
Dividends per share of common stock $0.84375 $0.84000
============= =============
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