Cal Water Announces 30% Increase in 3rd Quarter Earnings; Declares 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. 23, 2002 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 2002 earnings of $0.50 per share on net income of $7,675,000 compared to earnings of $0.39 per share on net income of $5,920,000 in the third quarter of 2001. For the twelve months ended September September: see month. 30, 2002, earnings per share were $1.26 versus $1.00 for the twelve months ended September 30, 2001. Revenue for the quarter increased 7% to $81,440,000, which is $5,130,000 higher than revenue in the same period last year. Revenue from increased water usage by existing customers rose $1,763,000 as a result of dry, warm weather. The usage increase was augmented by $2,244,000 of new revenue from rate increases and $1,123,000 from water sales to 8,700 new customers. The revenue increase due to new customers includes revenue from customers added with the July July: see month. 1, 2002 purchase of Rio Grande Rio Grande, city, Brazil Rio Grande (rē`  grän`dĭ), city (1991 pop. Utilities Company in 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). . Additional revenue from rate
cases includes $1,040,000 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: in prior year general rate case decisions, $581,000 from step rate increases effective at the start of 2002 and $623,000 for recovery of higher purchased power costs. "We are encouraged by the improvement shown by the third quarter operating results," said Robert W. Foy, Chairman of the Board. "The Company will continue its efforts to improve performance through 2002 and beyond," he added. 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. increased 5% over the third quarter of 2001. Water production costs, which consist of purchased water, purchased power and pump taxes, rose 2%. Purchased water costs increased $1,571,000 or 7% due to increases in the quantity of water purchased and higher prices charged by wholesale water suppliers. Purchased power necessary to operate pumps and pump taxes declined 6% because less water was pumped from wells. Since mid-May 2002, electric power rates have been equivalent to those paid during the same period last year. Other operations expenses increased 3%. Wages and related benefits increased as a result of labor rate increases effective at the start of the year and the addition of employees with the Company's New Mexico acquisition. Fiscal discipline is continually con·tin·u·al adj. 1. Recurring regularly or frequently: the continual need to pay the mortgage. 2. emphasized and monitored at Cal Water, 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. Peter C. Nelson, President and Chief Executive Officer. "Our expense controls and strong budgetary efforts are yielding real benefits. These efforts are especially critical at this time when the Company has experienced delays in receiving justified and necessary rate relief," he said. Other income from non-regulated operating agreements An operating agreement is an agreement among limited liability company ("LLC") members governing the LLC's business, and Member's financial and management rights and duties. No state requires an LLC to have an Operating agreement. increased $132,000 during the quarter. There were no surplus real property sales completed in the third quarter of either year. In July 2001, the Company filed general rate case applications for 15 of its 24 California districts and the General Office with 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, . The Commission's stated schedule for issuing a decision in general rate case applications is 10 months. Despite completion of evidentiary ev·i·den·tia·ry adj. Law 1. Of evidence; evidential. 2. For the presentation or determination of evidence: an evidentiary hearing. Adj. 1. hearings in May, issuance of a decision for these applications, as other utilities have experienced, has been delayed. A decision for the Company's applications had been expected in late September or early October. However, while the Company now expects a decision in late December, the Commission decision could be issued at a later date. At their meeting today, Directors declared the regular common stock quarterly dividend of $0.28 per share. This is the 232nd consecutive quarterly dividend paid on Company's common stock. It is payable on November 18, 2002 to stockholders of record on November 4, 2002. 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. California Water Service Group is the parent company of California Water Service Company, Washington Water Service Company, New Mexico Water Service Company, 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. The subsidiaries provide regulated and non-regulated water service to over 1.7 million people in 99 communities. The Company's common stock trades on the New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of Stock Exchange 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. intended to qualify 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. " within the meaning of the Federal securities laws as 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. Such statements are based on currently available information, expectations, estimates, assumptions and projections, and management's judgment about California Water Service Group, the water utility industry and general economic conditions. Words such as "expects, intends, plans, believes, estimates, anticipates" 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. Actual results may vary materially from what is contained in a forward-looking statement. Factors which may cause a result different than expected or anticipated include: governmental and regulatory commissions' decisions, changes in regulatory commissions' policies or procedures, the timeliness of regulatory commissions' actions concerning rate relief, new legislation, electric power interruption INTERRUPTION. The effect of some act or circumstance which stops the course of a prescription or act of limitation's. 2. Interruption of the use of a thing is natural or civil. , increases in suppliers' prices and the availability of supplies, changes in environmental compliance requirements Compliance requirements are a series of directives established by United States Federal government agencies that summarize hundreds of Federal laws and regulations applicable to Federal assistance (also known as Federal aid or Federal funds). , acquisitions, the ability to successfully implement business plans, changes in customer water use patterns and the impact of weather on operating results, especially as it impacts water sales. The Company assumes no obligation to provide public updates of forward-looking statements. Additional information is available at our website at www.calwater.com. The "Investor Relations Investor relations The process by which the corporation communicates with its investors. & News" section of the Company's website was recently updated. You are invited to explore the website which includes many new features including a link to Securities and Exchange Commission filings, dividend payment history and news releases.
CALIFORNIA WATER SERVICE GROUP
CONSOLIDATED STATEMENT OF INCOME -- Unaudited
In thousands, except per share data
Three Months Nine Months Twelve Months
Ended Sept 30 Ended Sept 30 Ended Sept 30
2002 2001 2002 2001 2002 2001
Operating
revenue $81,440 $76,310 $202,234 $190,276 $258,778 $245,842
Operating expenses:
Operations 54,271 52,924 134,481 130,776 174,549 168,116
Maintenance 3,010 2,832 8,365 8,678 11,819 11,806
Depreciation
and
amortization 5,263 4,732 16,045 14,325 20,947 18,912
Income taxes 5,047 3,915 10,898 7,846 12,780 9,218
Property and
other taxes 2,334 2,390 7,349 7,291 9,777 9,895
Total
operating
expenses 69,925 66,793 177,138 168,916 229,872 217,947
Net operating
income 11,515 9,517 25,096 21,360 28,906 27,895
Other income
and expenses
Other income
and
expenses,
net 609 425 1,676 1,351 2,286 1,453
Gain (loss)
on sale of
non-utility
property (13) (5) 1,961 1,271 4,554 1,272
596 420 3,637 2,622 6,840 2,725
Income before
interest
expense 12,111 9,937 28,733 23,982 35,746 30,620
Interest expense:
Long-term
debt
interest 4,149 3,525 11,518 10,551 15,155 13,679
Other
interest 287 492 994 1,526 1,310 1,564
4,436 4,017 12,512 12,077 16,465 15,243
Net income $7,675 $5,920 $16,221 $11,905 $19,281 $15,377
Earnings per share
Basic $0.50 $0.39 $1.06 $0.78 $1.26 $1.00
Diluted $0.50 $0.39 $1.06 $0.77 $1.26 $1.00
Weighted average
shares
outstanding
Basic 15,182 15,182 15,182 15,182 15,182 15,182
Diluted 15,185 15,186 15,185 15,186 15,185 15,188
CALIFORNIA WATER SERVICE GROUP
CONSOLIDATED BALANCE SHEET -- Unaudited
September 30, 2002 and 2001
(In Thousands)
2002 2001
ASSETS
Utility plant $973,917 $889,099
Less accumulated depreciation and amortization 300,863 282,208
Net utility plant 673,054 606,891
Current assets:
Cash and cash equivalents 2,982 1,023
Receivables 29,855 25,459
Unbilled revenue 10,887 11,133
Materials and supplies 2,632 2,437
Taxes and other prepaid expenses 8,831 7,161
Total current assets 55,187 47,213
Regulatory assets 39,598 38,673
Other assets 8,171 6,916
$776,010 $699,693
CAPITALIZATION AND LIABILITIES
Capitalization
Common stockholders' equity:
Common stock and additional paid-in capital $50,135 $50,135
Retained earnings 150,653 148,509
Accumulated other comprehensive loss (816) (486)
Total common stockholders' equity 199,972 198,158
Preferred stock 3,475 3,475
Long-term debt, less current maturities 241,789 207,002
Total capitalization 445,236 408,635
Current liabilities:
Current maturities of long-term debt 7,526 2,881
Short-term borrowings 11,000 6,000
Accounts payable 29,098 24,122
Accrued expenses and other liabilities 39,851 35,543
Total current liabilities 87,475 68,546
Unamortized investment tax credits 2,882 2,980
Deferred income taxes 31,075 29,236
Advances for construction 113,475 106,860
Contributions in aid of construction 75,218 63,019
Regulatory and other liabilities 20,649 20,417
$776,010 $699,693
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