Cal Water Announces a 27% Increase in Net Income for 2002; Board Increases Dividend to $1.125.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)--Jan. 29, 2003 California Water Service Group (NYSE NYSE See: New York Stock Exchange :CWT cwt 112 pounds avoirdupois weight. ) today announced year-end 2002 earnings per share of $1.25 and net income of $19,073,000, compared to earnings per share of $0.97 and net income of $14,965,000 in 2001. For the year, revenue was $263,151,000, a 7% increase over 2001. Favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. weather resulted in increased water sales to existing customers, adding $6,887,000 to revenue. Also adding to revenue was $2,813,000 in sales to new customers and $6,631,000 in rate increases. 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 by 5% in 2002, reflecting increases in both purchased water and purchased power costs. Purchased water costs rose because higher quantities were purchased to meet customer demand and wholesale suppliers' rates increased in several districts. Purchased power costs increased because more power was needed to pump higher quantities of well water and because power rates were higher in the first five months of the year compared to 2001. Other operations expense increased because of wage and related benefit increases effective at the start of the year, state and federal income tax increases, and higher depreciation expense. Offsetting these increased costs was a reduction in maintenance expense resulting from lower expenditures for main repairs and work at pump stations. In 2002, other income was lower than last year because the Company sold $884,000 less in surplus property than it did in 2001. However, results from the non-regulated contract business improved and offset a portion of the lower property sales. Interest costs for the year increased by $1.4 million as a result of the issuance of additional long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. . Some savings were realized from refinancing Refinancing An extension and/or increase in amount of existing debt. several series of first mortgage bonds with lower interest cost senior notes. Fourth Quarter Results Fourth quarter net income was $2,852,000 or $0.19 per share, compared to $3,060,000 or $0.20 last year. Earnings per share in 2002 include $0.04 from surplus property sales, compared to $0.10 from surplus property sales in 2001. Revenue for the period was $60,917,000, an 8 percent increase over the same period last year. Usage by existing customers added $2,856,000 to revenue, while sales to new customers contributed $822,000 and rate increases added $695,000. Total operating expenses increased 6 percent over the fourth quarter of 2001. Water production costs were 9 percent higher because of a one-time refund TO REFUND. To pay back by the party who has received it, to the party who has paid it, money which ought not to have been paid. 2. On a deficiency of assets, executors and administrators cum testamento annexo, are entitled to have refunded to them legacies of $1,389,000 from wholesale suppliers in the fourth quarter of 2001. There was no similar refund in 2002. Other operations expense increases included wage and related benefits increases that were effective at the start of the year. Lower maintenance expenses and income taxes partially offset these increases. The bond refinancing program undertaken in the fourth quarter offset a portion of the interest cost on new debt. The Company expects the refinancing program to save approximately $1.5 million on an annual basis when completed in 2003. Pending Rate Case Applications The Company filed general rate applications for 14 of its 25 California districts plus the General Office operation in mid-2001. 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, has finally issued a draft decision on the applications, and is expected to issue a final decision in the first or second quarter of 2003. If the draft decision were adopted without modification, it would increase annual revenue by $12.8 million. The Company has also applied to recover increases in purchased water and electricity costs incurred prior to November 29, 2001, and not yet billed to customers. The Company anticipates decisions on those requests, which total $4.6 million, late in the first quarter 2003. An additional $1.7 million will be requested later in the first quarter of 2003. In January 2003, the Company was 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: step rate increases in several California districts totaling $1.6 million in annual revenue. Decisions on the general rate case applications submitted in 2002 are not expected until late this summer. Dividend Information At their meeting today, Directors increased the annual dividend on common stock from $1.12 to $1.125. The increase is the Company's 36th consecutive annual dividend increase. It is payable on February 21, 2003 to stockholders of record on February 7, 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. Quarterly Teleconference On Thursday, January 30, 2003 at 1 p.m. California time, 4 p.m. Eastern Standard Time, the Company will conduct a teleconference call at which time management will provide comments about the fourth quarter and full year 2002 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 1-800-966-6338, call ID #54606. Additional information concerning the call, including replay information, is available at the Company's website: www.calwater.com. Other Information California Water Service Group is the parent company of California Water Service Company, Washington 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 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 operating companies operating company A business that engages in transactions with outsiders. provide regulated and non-regulated water service to over 2 million people in 98 communities. The Company'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. 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 (Company), 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 Web site at www.calwater.com.
CALIFORNIA WATER SERVICE GROUP
CONSOLIDATED STATEMENT OF INCOME - Unaudited
Three Months Twelve Months
Ended Dec 31 Ended Dec 31
2002 2001 2002 2001
Operating revenue $60,917 $56,544 $263,151 $246,820
Operating expenses:
Operations 43,151 40,068 177,632 170,844
Maintenance 3,222 3,453 11,587 12,131
Depreciation and amortization 5,193 4,900 21,238 19,226
Income taxes 1,670 1,882 12,568 9,728
Property and other taxes 2,480 2,449 9,829 9,740
Total operating expenses 55,716 52,752 232,854 221,669
Net operating income 5,201 3,792 30,297 25,151
Other income and expenses
Other income and expenses, net 961 629 2,637 1,979
Gain on sale of non-utility
property 1,019 2,593 2,980 3,864
1,980 3,222 5,617 5,843
Income before interest expense 7,181 7,014 35,914 30,994
Interest expense:
Long-term debt interest 4,036 3,637 15,554 14,187
Other interest 293 317 1,287 1,842
4,329 3,954 16,841 16,029
Net income $2,852 $3,060 $19,073 $14,965
Earnings per share
Basic $0.19 $0.20 $1.25 $0.98
Diluted $0.19 $0.20 $1.25 $0.97
Weighted average shares
outstanding
Basic 15,182 15,182 15,182 15,182
Diluted 15,185 15,188 15,185 15,186
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