American States Water Company (NYSE:AWR) Q4 2015 Earnings Conference Call - Final Transcript

Feb 25, 2016 • 02:00 pm ET

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American States Water Company (NYSE:AWR) Q4 2015 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Welcome to the American States Water Company Conference Call discussing the company's Fourth Quarter and Full Year 2015 Results. The call is being recorded. If you would like to listen to the replay of this call, it will begin this afternoon at approximately 5 o'clock PM Eastern Time and run through Thursday, March 3, 2016 on the company's website, www.aswater.com.

After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] This call will be limited to an hour. As a reminder, certain matters discussed during this conference call may be forward-looking statements intended to qualify for the Safe Harbor from liability established by the Private Securities Litigation Reform Act of 1995. Please review a description of the company's risks and uncertainties in our most recent Form 10-K on file with the Securities and Exchange Commission.

At this time, I would like to turn the call over to Eva Tang, Chief Financial Officer of American States Water Company.

Executive
Eva Tang

Thank you, Carrie. Good afternoon and welcome, everyone. Thank you for joining us today. On the call with me today is our President and CEO, Bob Sprowls. I'll start by reviewing our financial results. Diluted earnings for the year ended 2015 were $1.60 per share, which is $0.03 per share increase as compared to $1.57 in 2014. For the fourth quarter of 2015, diluted earnings were $0.31 per share compared to $0.35 per share for the same period in 2014. I'll first discuss the key items that affected our first -- fourth quarter results. For the quarter, revenue at our Water segment decreased $830,000, due mainly to a delay in recognizing $1.4 million of Water Revenue Adjustment Mechanism or the WRAM revenue, partially offset by rate increases approved by the California Public Utilities Commission.

As we discussed in our third quarter earnings call, under the accounting guidance for alternative revenue programs, we can only recognize WRAM revenue for amounts collectable within 24 months following the year in which they are recorded. Please note that the accounting guidance affects the timing of when we can recognize the WRAM revenue, but not the collectability of the WRAMs. We have just filed that with the CPUC for recovery of the 2015 WRAM balances, including the $1.4 million. Under the current CPUC amortization guidelines, we expect to collect the balances between 12 months to 36 months. The $1.4 million will be recognized as revenue when it becomes collectable within 24 months. At this time, we estimate the majority of the $1.4 million will be recognized as revenue in 2016.

As part of our pending water general rate case, the forecasted consumption used to set rates for 2016 through 2018 reflects state-mandated consumption levels. Therefore, we do not expect the WRAM balances during the next rate case cycle to continue growing at the same rate as in 2015. First quarter revenue for electric operations were -- was $9.2 million as compared to $7 million for the same period in 2014. The increase in revenue resulted from