American States Water Company announces earnings for third quarter of 2015
American States Water Company has reported a net income of $21.1 million, or basic and fully diluted earnings per share of $0.57 and $0.56, respectively, for the quarter ending Sept. 30, 2015.
SAN DIMAS, CA, Nov. 3, 2015 -- Today, American States Water Company, a U.S. water and electricity utility organization, reported a net income of $21.1 million, or basic and fully diluted earnings per share of $0.57 and $0.56, respectively, for the quarter ending Sept. 30, 2015, as compared to a net income of $21.2 million, or basic and fully diluted earnings per share of $0.54 for the quarter ending Sept. 30, 2014.
For the three months ending Sept. 30, diluted earnings from the water segment increased by $0.03 to $0.43 per share as compared to $0.40 per share for the same period in 2014. Excluding surcharges approved by the California Public Utilities Commission (CPUC) for the recovery of previously incurred costs, which have no impact on operating income, the following items impacted the comparability of the two periods:
- An increase in the water gross margin of $672,000, or $0.01 per share, due to CPUC-approved third-year rate increases and advice letter filings for the completion of certain capital projects not previously included in rates.
- Excluding supply costs, a decrease in operating expense of $1.3 million, or $0.02 per share, due primarily to lower administrative and general expenses, which declined by $1.4 million, resulting mostly from lower legal and other outside service costs related to condemnation and other activities, as compared to the same period in 2014.
- A decrease in other income, net of other expenses of $534,000, or $0.01 per share, due to a decrease in interest income, as well as losses recorded on investments held for a retirement benefit plan resulting from market conditions during the third quarter of 2015.
- An increase in the effective income tax rate (ETR), decreasing earnings by $0.01 per share as compared to the same period in 2014. The increase in the ETR was due primarily to changes between book and taxable income that are treated as flow-through adjustments in accordance with regulatory requirements.
- The cumulative impact of lower common shares outstanding, resulting from the 2014 and 2015 stock repurchase programs, increasing water earnings by approximately $0.02 per share as compared to the third quarter of 2014.
Billed water consumption for the third quarter of 2015 decreased by approximately 24 percent as compared to the same period in 2014 due to water conservation by customers in response to the ongoing drought conditions in California.
Mandatory water conservation and rationing have been implemented across all of the water systems at Golden State Water Company (GSWC) to help the communities it serves meet the state's reduction mandates; therefore, water consumption is expected to continue to be lower during the remainder of 2015 as compared to the same period last year.
GSWC records the difference between what it bills its water customers and that which is authorized by the CPUC in the Water Revenue Adjustment Mechanism accounts, as regulatory assets for future recovery. Excluding surcharges, which have no impact on operating income, GSWC's water gross margin generally approximates the authorized gross margin approved by the CPUC.
About American States Water Company
American States Water Company is the parent of Golden State Water Company and American States Utility Services, Inc. Through its utility subsidiary, Golden State Water Company, AWR provides water service to approximately 260,000 customers located within 75 communities throughout 10 counties in Northern, Coastal and Southern California. The company also distributes electricity to approximately 24,000 customers in the City of Big Bear and surrounding areas in San Bernardino County, Calif. For more information, visit www.aswater.com.