Exhibit 99
NEWS RELEASE
[CALIFORNIA WATER SERVICE GROUP SEAL] [CWT Listed NYSE OBJECT OMITTED]
CALIFORNIA WATER SERVICE GROUP
1720 North First Street
San Jose, CA 95112-4598 October 22, 2003
For Immediate Release
Contact: Richard Nye (408) 367-8216 (analysts)
Shannon Dean (310) 257-1435 (media) 03GO9
CAL WATER ANNOUNCES 12% INCREASE
IN THIRD QUARTER 2003 NET INCOME;
BOARD DECLARES 236th CONSECUTIVE QUARTERLY DIVIDEND
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SAN JOSE, CA - California Water Service Group (NYSE : CWT) 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.
According to President and CEO 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.
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Third quarter revenues reflect approval by the California Public
Utilities Commission (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 9, 2003. Pursuant to a previous decision to establish April 3, 2003 as
an effective date for the new rates, the Commission also authorized 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 16, 2003, the Commission also approved the Company's request
to recover an annual $4.2 million in costs associated with the Bakersfield
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 2002 and January 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
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. 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
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equipment, water lines, and services. Depreciation expense increased 11% due to
capital expenditures. Other operating costs 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 was
also declared.
On Thursday, 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 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 Water Service Company, New Mexico Water
Service Company, Hawaii Water Service Company, Inc. and CWS Utility Services.
Together these companies provide regulated 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 under
the symbol "CWT".
This news release contains forward-looking statements within the
meaning established by the Private Securities Litigation Reform Act of 1995
("Act"). The forward-looking statements are intended to qualify under provisions
of the federal securities laws for "safe harbor" treatment established by the
Act. Forward-looking statements are based on currently available information,
expectations, estimates, assumptions and
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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. 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; 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 or terrorist
threats or acts, or apprehension about the possible future occurrences of acts
of this type; the involvement of the United States in war or other hostilities;
restrictive covenants 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.
Attachments (3).
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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
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Other assets:
Regulatory assets 53,017 46,089
Other assets 16,907 14,518
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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
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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
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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 -- --
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$ 875,191 $ 800,582
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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
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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
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Total operating expenses 75,678 69,843
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Net operating income 12,519 11,597
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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
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Earnings per share
Basic $ 0.53 $ 0.50
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Diluted $ 0.53 $ 0.50
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Weighted average shares outstanding
Basic 16,209 15,182
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Diluted 16,222 15,185
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Dividends per share of common stock $0.28125 $0.28000
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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
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Operating revenue $207,502 $202,234
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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
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Total operating expenses 184,809 176,879
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Net operating income 22,693 25,355
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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
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Total interest expense 13,616 12,512
Net income $ 12,404 $ 16,221
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Earnings per share
Basic $ 0.79 $ 1.06
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Diluted $ 0.79 $ 1.06
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Weighted average shares outstanding
Basic 15,528 15,182
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Diluted 15,539 15,185
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Dividends per share of common stock $0.84375 $0.84000
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