Exhibit 99.1
NEWS RELEASE
         
(CALIFORNIA WATER SERVICE GROUP LOGO)   CALIFORNIA WATER SERVICE GROUP   (CWT LOGO)      
         
 
  1720 North First Street   October 28, 2009
 
  San Jose, CA 95112-4598   For Immediate Release
 
       
Contact:
  Marty Kropelnicki (408) 367-8200 (analysts)    
 
  Shannon Dean (310) 257-1435 (media)    
CALIFORNIA WATER SERVICE GROUP ANNOUNCES RESULTS FOR
3
RDQUARTER 2009
 
     SAN JOSE, CA — California Water Service Group (NYSE : CWT) today announced net income of $19.6 million and earnings per share of $0.94 for the third quarter of 2009, compared to net income of $22.2 million and earnings per share of $1.06 in the third quarter of 2008.
     Revenues increased by $7.5 million, or 6%, to $139.2 million, with rate increases adding $12.5 million and water usage by new customers adding $3.3 million. A decrease in water usage by existing customers and other charges reduced revenue by $8.3 million.
     Total operating expenses for the third quarter of 2009 increased by $10.1 million, or 10%, to $115.1 million. Water production costs increased by $2.4 million, or 5%, due to higher power costs and wholesale water rates. Administrative costs increased $4.1 million, or 27%, due to increased pension & benefits costs, and increased legal costs. Other operations expenses increased by $1.7 million to $14.6 million as a result of higher costs for pumping and distributing water.
     Maintenance expense increased by 15% to $4.4 million as a result of additional water main repairs. Depreciation expense increased by 11% to $10.3 million as a result of

 


 

increases in capital expenditures. Taxes other than income increased $0.4 million to $4.4 million, primarily due to property tax increases.
     Other income, net of income taxes, added $1.0 million of net income for the quarter, while interest expense increased by 33% to $5.5 million due to the new debt offering in April 2009.
     For the twelve months ended September 30, 2009, net income was $41.4 million and diluted earnings per share were $1.99, compared to net income of $40.5 million and diluted earnings per share of $1.94 for the same period last year. Revenues for the trailing twelve months were $443 million, compared to $396 million for the same period in the prior year.
     “During the quarter, the Company filed its 2009 General Rate Case for all 24 California districts and corporate costs,” said President and Chief Executive Officer Peter C. Nelson. “This is significant because we are now filing for rate relief in California for all regulated districts and corporate costs at the same time, which will allow for more timely rate relief of prudently incurred costs,” said Nelson.
     “While we cannot predict the outcome of this filing, the rate case was filed on time and is currently proceeding on schedule,” Nelson said.
     Other Information
     All stockholders and interested investors are invited to listen to the 2009 third quarter conference call on October 29, 2009, at 11:00 a.m. (EST), by dialing 1-866-814-8476 and keying in ID# 1399873. A replay of the call will be available from 2:00 p.m. (EST) October 29, 2009, through December 28, 2009, at 1-888-266-2081, ID# 1399873. The call, which will be hosted by President and CEO, Peter Nelson and Vice President and Chief Financial Officer, Martin A. Kropelnicki, will also be webcast under the investor relations tab at www.calwatergroup.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., CWS Utility Services, and HWS Utility Services. Together these companies provide regulated and non-regulated water service to nearly 2 million people in California, Washington, New Mexico, and Hawaii. 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 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, but are not limited to: 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, as well as the annual 10-K, Quarterly 10-Q, and other reports filed from time-to-time with the Securities and Exchange Commission (SEC). The Company assumes no obligation to provide public updates of forward-looking statements.
     Additional information is available at our Web site at www.calwatergroup.com.
     Attachments (2).
###

 


 

CALIFORNIA WATER SERVICE GROUP
CONDENSED CONSOLIDATED BALANCE SHEETS


Unaudited
(In thousands, except per share data)
                 
    September 30,     December 31,  
    2009     2008  
ASSETS
               
 
               
Utility plant:
               
Utility plant
  $ 1,676,287     $ 1,583,079  
Less accumulated depreciation and amortization
    (501,704 )     (470,712 )
 
           
Net utility plant
    1,174,583       1,112,367  
 
           
 
               
Current assets:
               
Cash and cash equivalents
    47,581       13,869  
Receivables:
               
Customers
    31,722       22,786  
Regulatory balancing accounts
    15,592       4,629  
Other
    10,752       7,442  
Unbilled revenue
    21,352       13,112  
Materials and supplies at average cost
    5,457       5,070  
Taxes, prepaid expenses and other assets
    7,922       12,890  
 
           
Total current assets
    140,378       79,798  
 
           
 
               
Other assets:
               
Regulatory assets
    201,442       198,293  
Goodwill
    2,615       3,906  
Other assets
    30,455       23,743  
 
           
Total other assets
    234,513       225,942  
 
           
 
  $ 1,549,474     $ 1,418,107  
 
           
 
               
CAPITALIZATION AND LIABILITIES
               
 
               
Capitalization:
               
Common stock, $.01 par value
  $ 207     $ 207  
Additional paid-in capital
    214,715       213,922  
Retained earnings
    204,570       188,820  
 
           
Total common stockholders’ equity
    419,492       402,949  
Long-term debt, less current maturities
    373,541       287,498  
 
           
Total capitalization
    793,033       690,447  
 
           
Current liabilities:
               
Current maturities of long-term debt
    12,424       2,818  
Short-term borrowings
    12,000       40,000  
Accounts payable:
               
Trade and other
    46,894       39,187  
Regulatory balancing accounts
    7,486       2,585  
Accrued interest
    9,096       3,295  
Accrued expenses and other liabilities
    42,938       35,311  
 
           
Total current liabilities
    130,838       123,196  
 
               
Unamortized investment tax credits
    2,392       2,392  
Deferred income taxes, net
    83,512       72,344  
Pension and postretirement benefits other than pensions
    152,467       152,685  
Regulatory and other liabilities
    83,357       83,312  
Advances for construction
    182,763       176,163  
Contributions in aid of construction
    121,112       117,568  
Commitments and contingencies
           
 
           
 
  $ 1,549,474     $ 1,418,107  
 
           

 


 

CALIFORNIA WATER SERVICE GROUP
CONDENSED CONSOLIDATED STATEMENTS OF INCOME


Unaudited
(In thousands, except per share data)
                 
    September 30,     September 30,  
For the three months ended   2009     2008  
Operating revenue
  $ 139,167     $ 131,702  
 
           
 
               
Operating expenses:
               
Operations:
               
Water production costs
    48,898       46,455  
Administrative and general
    19,084       14,995  
Other operations
    14,639       12,935  
Maintenance
    4,405       3,824  
Depreciation and amortization
    10,259       9,281  
Income taxes
    13,417       13,510  
Property and other taxes
    4,371       3,940  
 
           
Total operating expenses
    115,073       104,940  
 
           
Net operating income
    24,094       26,762  
 
           
 
               
Other income and expenses:
               
Non-regulated revenue
    5,194       3,805  
Non-regulated expenses, net
    (3,464 )     (4,501 )
Gain on sale of non-utility property
           
Income taxes (expense) benefit on other income and expenses
    (702 )     288  
 
           
Net other income and expenses
    1,028       (408 )
 
           
 
               
Interest expense:
               
Interest expense
    6,480       5,233  
Less: capitalized interest
    (950 )     (1,065 )
 
           
Net interest expense
    5,530       4,168  
 
           
 
               
Net income
  $ 19,592     $ 22,186  
 
           
 
               
Earnings per share
               
Basic
  $ 0.94     $ 1.06  
 
           
Diluted
  $ 0.94     $ 1.06  
 
           
 
               
Weighted average shares outstanding
               
Basic
    20,745       20,717  
 
           
Diluted
    20,767       20,740  
 
           
 
               
Dividends declared per share of common stock
  $ 0.2950     $ 0.2925  
 
           

 


 

     CALIFORNIA WATER SERVICE GROUP CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Unaudited (In thousands, except per share data)
                 
    September 30,     September 30,  
For the nine months ended   2009     2008  
Operating revenue
  $ 342,447     $ 310,204  
 
           
 
               
Operating expenses:
               
Operations:
               
Water production costs
    119,468       112,162  
Administrative and general
    57,331       42,248  
Other operations
    41,425       37,766  
Maintenance
    13,352       12,884  
Depreciation and amortization
    30,739       27,779  
Income taxes
    21,438       20,127  
Property and other taxes
    12,371       11,163  
 
           
Total operating expenses
    296,124       264,129  
 
           
Net operating income
    46,323       46,075  
 
           
 
               
Other income and expenses:
               
Non-regulated revenue
    11,173       9,452  
Non-regulated expenses, net
    (6,826 )     (9,715 )
Gain on sale of non-utility property
    675       7  
Income taxes (expense) benefit on other income and expenses
    (2,032 )     118  
 
           
Net other income and expense
    2,990       (138 )
 
           
 
               
Interest expense:
               
Interest expense
    17,480       15,405  
Less: capitalized interest
    (2,270 )     (1,955 )
 
           
Net interest expense
    15,210       13,450  
 
           
 
               
Net income
  $ 34,103     $ 32,487  
 
           
 
               
Earnings per share
               
Basic
  $ 1.64     $ 1.55  
 
           
Diluted
  $ 1.64     $ 1.55  
 
           
 
               
Weighted average shares outstanding
               
Basic
    20,740       20,707  
 
           
Diluted
    20,765       20,731  
 
           
 
               
Dividends declared per share of common stock
  $ 0.8850     $ 0.8775