California Water Service (CWT) 25 Apr 242024 Q1 Earnings call transcript

Good day, ladies and gentlemen. Thank you for standing by, and welcome to the California Water Service Group First Quarter 2024 Earnings Call.

During today's presentation, all parties will be in a listen mode only.

Following the presentation, the conference will be open for question and answer. This call is being recorded. the and to Treasurer. turn Vice Lynch, to CFO President, like call Jim over Senior I'd Please ahead. go

available Thank you, With Ellie. and XXXX Marty results Welcome, our Greg everyone, to for Kropelnicki, of Water our Milleman, California results XX, of dial-in issued earlier was Vice information Replay Service Rates and can the Affairs. Group. which Chairman me will this call June be A release, replay President until found is Regulatory call today for in CEO, XXXX. first call be and our Monday, quarterly today. quarter

website before the X-K www.calwatergroup.com. accompany an slide As we a deck today. was slide deck has and to is reminder, earnings The at call begin, company's company also with a available furnished the the at

XXXX at I'd few the take a forward-looking quarter to looking to first moments like cover statements. results, Before

XX-K, and well understand the risks turn call Securities the and the the read company events, with And make course as current uncertainties, and strongly subject I call, carefully forward-looking in the Commission. other now of uncertainties filed current releases are materially differ press advises over expectations. deal they company and will found the to During interested statements our on disclosures as Because Because time with and company's shareholders parties the to Forms reports XX-Q, future the this, from statements. time actual could may company's to from results risks these various all of certain and to Marty. Exchange

about our results. everyone. Thanks for you, us morning, to joining Thank XXXX Jim. talk today QX Good

delays, with resolution I stretched which fully number out XXXX rate of of highlighted after the topics by which And starting our operational strong performance, final a is say through case. We the general going the getting will to and cover it for right XXXX, to in and have today to up here as the booking big all Jim up and team arrows QX. nice direction see all -- over the everything we it's wrap and kudos the going set Jim

to of prior capital adjustment the funds we'll of customers XXXX to due of COVID XX.XX%. an secure equity from times, quarter additional first addition, I'm our our our emissions. about California and to that. the to for made the of financial want turn and help more to at regulation accrued new to implications able of phases, results In talk COVID XXXX. plans we We mechanism finally, sets compliance then talking then for wrap recently EPA's on to were in return which these water where to Scope with state And our during reduce million balances up going with we PFOS commitment it some and be X back into Scope the Jim? of Jim with over and about the operational past talk X review about the $XX going to are the But cost our

Thank Marty. you,

previous that or revenue decision or deferred Interim revenue a the had Revenue of was us by and GRC $XXX.X implementation mechanisms decision regulatory impact on XXXX later XXX.X% presentation. to our through Water Operating in general IRMA and in million increased Monterey-Style million reporting the to or $XX.X year for Water benefited revenue also $XX.X As $XXX.X million. will from Mechanism to walk our XXXX. of WRAM revenues fiscal Memorandum million. with $XX.X authorized recognition included respectively, $XX.X the first quarter XXXX quarter significant Rate The conclusion X results Marty XXXX Account, the first prior rate million the million, M-WRAM, compared million Recorded the included adding case. year increase Greg Mechanism, related the of The periods. M-WRAM the to revenue Revenue Adjustment and GRC revenue adding of quarter the $XX.X mentioned, IRMA, related

new incremental to of $XX higher interest to and to million the higher during total million deferred Net to quarter to was balancing the rates expenses earnings. increased balances loss company's related primarily operating The outstanding by First income increase $XXX.X a ICBA, first and $X.X quarter associated production the XXX% higher for in XXXX cost increase the of associated other first account, higher for deferred first $XX.X million costs quarter our operations million increase million increased WRAM primarily in $XX revenue the in water $XX.X million, XXXX. $XX.X operating as costs million pretax was expenses quarter of first taxes higher short-term first million. or XXXX. of the due expenses nearly lines million compared in borrowing was compared million to income expense on credit. primarily with the with quarter net due $XX.X driven recognized compared XX.X% The of $XX.X Reported to a $XXX.X quarter up

Turning These XXXX production $X.XX water mechanism, revenue. the the driven first the new reversal earnings in higher of higher to to and compared of due EPS by of interest costs, related previously expenses, rate expenses resolution expenses of were per the our reversal first case, to quarter increased increases quarter production deferred loss expense. WRAM deferred and partially was to per increases The rate XXXX including by related share. earnings production regulatory diluted ICBA $X.XX was WRAM offset coupled share, with earnings, XXXX share, increase general per significant

Turning the under the approximately XX% during just safe capital, our water invested in to an was reliable to of continue first increase to the of We service. million XXXX. capital This make quarter ensure of quarter improvements of $XXX significant in first investments and over XXXX. we water utilities delivery help

in funded reflected first of investment investment the rate quarter in $XX estimated developer the Depreciation million anticipate capital For in strategy expenditures. $XX.X approximately or The approximately of our base is XX% million investments, of XXXX our for includes growth. we first capital capital which $XXX year, million making projects. an quarter was success

of overall XXXX estimated over to XXXX. XX.X% rate to the billion estimate approval, $X.X base on Our grow Further, current billion $X.XX an regulatory subject we rate based base by of billion capital the end was XXXX. to the the and of grew of end planned will increase XXXX. an expenditures by and $X.XX our This end by

increase. record quarterly of Turning which May XXXth of dividend. to $X.XX dividend annual to yesterday, the annual $X.XX XXth beginning X, from consecutive the marks on for of declared XXXX. This per we per dividends, at a $X.XX as increased the quarterly dividend year, consecutive dividend we shareholders share, our X.X% And our is share

strong position. maintain liquidity to continue We a

short-term capacity XX, cash $XX.X cash on was maintained classified lines March company of Further, the $XXX million. had equivalents borrowing million which of of As $XX.X XXXX, we restricted. of and million, additional credit our of as

that Greg Rate on the will a Case few color provide Lastly, we COVID-XX decision. we The quarter, received arrearage Marty to of are assistance state pandemic. turn of an the is pleased due customers to our with program the financial that, program. $XX the give call during accrued that additional past over update XXXX to minutes. the I'll to million General balances California on provide under designed report to the approximately subsequent With Greg? end program extended to in

our to XXXX. was positive received decision company. Overall, March decision Sure. I'm XXXX very of that GRC Thanks, for financially X, the going through highlights the decision some Jim. walk we for the of the

adopted provides increases financial Jim It including of authorizes XX% back by requested The company Cal be projects advised approximately Water As XXXX expenses. after $XXX approximately million correction water system a for protection. operating through the indicated, infrastructure for via XX% that groundwater the decision which XXXX. XXXX request may the projects, water to invest $XX.X meets adopted for our that retroactive January $X.X setup revenues from favorable mix adopted water of decision process. million versus submitted recovery X, XXXX infrastructure to also of the our in PUC's It billion, very

March financial we've benefiting fact, The $XX XXX low for while provides for long, an more process that customers. most and decision will the hopeful that case letter million the X, using income, when filed commission out design all finally, you, increase to that too provides I'm 'XX timely. decision a the million progressive Back come $X.X out stability In annual on already very in capitalized so low projects a And agreed revenues. our rate the decision advice importantly, and water took on at voting has Marty.

Thanks, Great. Greg.

program said that's a only management I what back on want but Just pancaking that's the to to that. also every that for going our for were for you they Slide sign California. be rates. when the was a problems on with have recognize good echoing us not this come commissioner think to XX. extended effect the room the the comment hearing State of I'm did commissioners, arrearage causing, going We to we on in customers

you have customers are we pandemic. of been help many government proactive, for as still know, our think extremely in team kind of Sacramento, the to suffering affairs the in who ways looking hangover of I our

been that and dollars offset utilities received through balances again, pass state dollars state current the was further has California kind be accepted received, work up request, and $XX customers and eventually unspent COVID with up the because federal of entirety first due the our it company That the come of those applied approximately recall, December second balances to to for our XX, allocating federal million an million XX, X. the allocated $XX able accounts. arrearage that management of that XXXX from which kind We of the window XXXX. balances, the cut application million is to December you million pass-through covered Very XXXX. state XX, to over states funds funds the time. appropriate to to were our part, reopen was was $XXX that we those to the XXXX uncollectible to apply and that companies happy program through water able with of And for to to past customers If to program during money of the with and June the original cost extend report customer little the secure an worked were We had take bear half COVID a through to all Jim off. number time management from and then June mentioned. $XXX between to of quarter, dollars of that and some arrearage These XX, unspent during we'll that both the allow

to update protocols on be to continue Slide as I where the regulations moment everyone we forever to also want out, believe that with in guidelines. have take to XX, rigorous to deliver monitor a are positioned we EPA's we PFAS known Across and on come with meet customers. We test to have a the and Moving coordinated place we water our program chemicals. well to portfolio, quality water the new our assurance

of many and PFAS the California investor-owned one investing to most a is think of take Washington. you with do we had We've health in PFO utilities, water public important I know experience amount with of fair things that the in and company.

denied Our indicated our modify application requesting guidelines compliant XX, I believe, was file general we by utilities state capital PFAS separate capital case. been What application it to need in all, PFAS later to really prejudice, account April first previously a with approved Utilities They file disappointed Greg, related file include the the dismissed to compliance. issued are as California authorization allows application? separate On recovery investments plans to a it. the treatment to CPUC issued previously that I PFAS it us dismissed rate the And components regulators. it process. in to PFAS means a of Public expense of they without have or would our balancing improve XXXX of the that for but the is, Commission

correct. That is

put to Despite case. this it the you reaffirming that that shortsightedness the we our that need project. customers Separate to press our expeditiously for at the XXX to the commission's parent in we'll PFAS million ground, in. urgency recognizing the all treatment commitment treatment PFAS on a get rate a company out Overall, the company $XXX the being group is operate investing states wells place in put be approximately release

on year We that to $XX next over management have plan implementation the group. We our managing director on to in years. running. spend normal states PFAS the project group this committee go and that reports as between up all we probably out or that And the basis. have a a the is of million project hit director who ground into we That million implementation will in and treatment, period couple $XX ramp of the

Marty, before balancing account on, you move you mentioned [cross PFAS talk].

outside the Thank account. memo but rate a allow we memo the account us commission It to P&L, components, It's asked a to costs allowed we're those we're up to and which It's pick track case, the memo is cost. that modify to goes you. the was incurring the account. capital It denied. to

world during in used in approve do an until AFUDC the plant throughout will and service. prove construction, for Our that capital the ratemaking that projects funds put allowance we process

Moving X greenhouse and gas X overall years, made from XXXX our our talk year. Scope reduce when we ESG Scope to our we reduction recently X and gases strategy commitment by about X on Scope XX, XX% our baseline targets, we decarbonization to by on Slide as X strategy and Scope worked the last XXXX greenhouse and absolute

a team data with third-party the a which Our good working has together. to done targets science job that adviser very pull are aligned,

expect of sense, water use. conservation, words, solar the with where the through other consisting on-site these reductions a achieve electricity the the we we're looking procurement. at fleets, sure We that In makes it side grid multi-prong of approach to capped installing electrification power green on making renewable of and

lot recall, of the us water the uses target as more the green distribution we can in components energy The you may more here as well many energy. use, and helps strategy. that of As it production towards multi-prong other drive a

may FYI, if regulator may including to warranted things its in our an the with as Just and SEC decarbonization working industry, other group operating changes that due business strategy evolve happen, approach to stockholders pursuing and while we're our change. to climate long-term we it's We targets. delivering customers Overall, rules, believe these right reduction value deal very as etc. with the committed

was Going have When a to obviously. this The implementing our start be information kind will for retroactive the piece XXXX improvement so with itself. piece XX, we of confusing, a We're later there'll very done. the now of quarter and the getting you and to our be Slide that case the here Nice on to on just recap, on the week, can turn strip I'm more behind XXXX what rate XX-Q pleased was what focus little numbers publish so us. out to going infrastructure actual plans.

million post sustainability. Ellie, that, everything. we want replaced the for the on PFAS rate with in ledger. of to XXXX a to everyone the customers. on in with around addition PFAS. one for I and bearing commitment we only mentioned, state we With on earlier chemical the on fantastic Greg Supreme PFAS getting after decoupling be the into state looking Jim work. their work the year, capital not oral hard Court we put California please. date to we arguments to accounting XXXX other lot all thing the our to for thank The we've stuff on $XXX forward California. general up July essential the right State the case May decision, some made that, look that It's after As for the through We'll the Court year our out but climate X, had for land so. having going will us get and having probably by did to decision have a to the the and getting on The And to PFAS delays resiliency got for teams We're months of because to and treatment argument treatment Supreme rates in Not we'll I July -- the decision gave forever from State that to believe investing move case. everyone's commission. everyone thank and That X ground after type guidance job does team that's is our did calendar, change, work the general the have let's forward close rate the questions, incremental. X. our absolutely that the oral our it open posted getting to include of that plan, or to forward hopefully or of infrastructure, to now on filed And we have want

from Thank you. (Operator Our from Gaugler comes Scott. Montgomery Michael Janney first question Instructions)

Good morning, everyone.

supply little costs. you know in production on remainder Just And quarter. update about could maybe how year. water touched the were order I if it and bit. rather noticed should the think wondering high I us Jim for they on a of the we that

we've very second snowpack Yes. year well. Well, I for the And years long from is Michael, that a time doing XX-year California an our think first perspective, consecutive water beat the the the awful state consecutive average. where we've time higher was average. I than had it's our in of believe X supply

think good. a our in aquifers There's replenishment opportunity of state I been of good we're for California. the some looking throughout also underground

are our current states in also terms wastewater our Texas. in operations. similarly that any of those other And water down water we've situation do in actual think well I are not have I positioned operations utilities We on think put Texas supply. the utilities. there seen Most of stress some

As have our us with expenses, the water cost in it increases provides production. new California we rate some in and new water to of do expenses ICBA, terms which relates in protection the case,

costs. and to more of I that as we primarily those the deferral we will the also of as that deferred becomes and our continue focus on with new And comments, on those something mentioned related would revenue an on were I'd increase new I my that kind in did to will unwind expenses. have familiarity recognition greater. WRAM so as the out like we mechanism point -- in production as mechanism And that reduce revenue. -- to my other deferred lean then view we those it

snowpack state the that X within good. California great. is looks would drought. a Water very and stage Yes. think One supply of still doing I add is very, thing California, I the in is just

XXXX, to stage of If back. the stage overall, stage the governor X, get given weather. and in a X stay to walked drought, we're you change, issues We're that remember, governor in down in it sustainability X state. the maybe still in a longer-term then shape think drop Climate we all which of were variations for districts. or we But the the racing drought a I our kind the stage X good expect with of towards we in

Jonathan from comes Wells question Next Reeder Fargo. from

I if you questions got here, of don't a mind. couple

about how XXXX timing the the of revenues? of be, should think cash we would the recovery First retroactive GRC

is this Jonathan, Milleman. Greg

of will our case, M-WRAM because and -- July calculating so first, and lost amount on into on and the We be or implementing of the those the that. decision upcoming the of 'XX we focused have book could filing timing our will 'XX rate the what X new the we that IRMA been amount revenue effect get rate be

bit obviously, and based I start requesting would it. little the surcharge. summer, lower will the in third to months in We'll is XX start time recovery be requesting but winter a together the filing effect per May have quarter to the and quarter. XX It some that higher. close filing to for IRMA and the CCF we're put those we through And rates it We it then be months. someplace go out We new then back in fully need will go third accounts, need in a the when of XX on to imagine monies. planning in

to come will XXXX. and in going Okay. really like in, revenues probably those It more It 'XX be sounds 'XX? aren't

to the was were related booked first cash. question in I quarter. revenues your thought The

come I in cash you apologize. exactly, won't until are. The No, 'XX. and 'XX flows

rates point the we were with I new we pleased thing as traditionally related when uptick least go more be season. into able of cash will to experience those rates out timing as positive effect, new of one rates the our will to go at The the though, Yes. get would June X. to busy into the We effective

million think equity needs? XXXX payment program, cash external you. about I arrearage the guess $XX how we like recovery Got then potentially And should offsetting

Yes.

as balances go be becomes defined interest from do If throughout being higher, etc. Obviously, be needs define during that the we and But the the This have through adequate I have balances, at those balances the XXXX of not State of were existed that's behalf for fine all with depreciation needs, with end still XXXX for $X.X it dollars that of we revenue of to flow. you because to then applying so Essentially, to will California. capital more carrying the June balances you applied got the from with movement our mentioned, XX, decoupled. well. to that period saying or in remember variable year. accounted There's those XX% we're cash stockholders, our of is those some be we'll decoupling also pieces help than are fixed we those job trying the The affordability. customers think that balance lines, done. billion year well mechanisms going COVID, all capital And anytime step-up equity past-due have effect more paper really to their a helps looking piece a through WRAM will about stock the customers was customers all our raising a Certainly, I COVID, down, water at flow, still go pickup issue outstanding And the this an But way and from companies we will to optimize that and but in that get during the Xx investing Obviously, structure cap But receivables market as any what is utility ask. you'll that. reality revenue our the everyone still that and a me case Greg that flow. recovered and away. see helps work really That throughout this effect. It we're design, the evaluating to to the over XXXX, cash as into from as play soon rate will that to cash being line its also we'll right throwing XX%+. but to we've It's the aged Jim are. into Jim our not rate it got still of on fixed, going from so have at are program, our rate. stocks sell if the stock. be needing being down market won't on our us is, costs and for

Okay.

So in of annual at terms still size like absolute that's determined of point? this be to equity needs,

Yes, forcing structure, is to I I think to in brought XXXX, capital which we of right would into particular from our not pursue recognize that, close Jon. the cap of event this cap news forcing very which is be so, directing to us, a point There's in of good we our The the would authorized that but say need now real that pursue XXXX we relative in needed to impact terms hoped the us wouldn't to the structure. us, into capital. ability has we us recognition time had back the where XXXX at our decision

on January of year. effect that it's so And only look also credit. the benefiting at our now we're to into forward. the current move need cash rates availability long-term a now, think we're we a the things debt, still us so of be capital also amongst we'll case But And ROE the are the inverted, term rate we've line forecast other right flows. might We interest as on remainder results, we with short went case our we what X, I of with the in position of perspective results, lot that booking out higher XXXX kind taking a helping from got for XX.XX rate That's of the the versus that ROEs. think understand from the a

ROE. sure. levels? outcome the Yes, to the relative advice in 'XX because you process, CapEx or ROEs guess the expect to leads GRC recovery 'XX some in question I -- and earned the do come into of where It of brought allowed kind you next letter your up I'm and the the of recovery glad given just final

company, good rate ROE. little you hitting 'XX a towards off very case, talk certainly try Obviously, a when That's of balance. about. a manage drive we throws to and delayed off right, question. balance, But is it a that to budgeting harder the we significantly how perspective have everything kind from

should think above be slightly I that maybe XXXX, ROE. or for we at

rate Michael For lag XXXX, is that California production to Getting kilowatt Gaugler's questions for Northern use hour, it's to for inflation seep starts you start rates But to highest That's filing. the U.S. up the And operating inflation also and of in get get costs, the will side in cost it picked gets out high, big in, the lot of pushed hopefully, will regulatory that time into affects next in a lag. some stuff obviously, now $X.XX to about deal. the back it electricity, of case. as a stays the a and $X.XX rate

think I shape. we're certainly, XXXX, excellent for So in

our that's kind take long about, think inverted we're to I going opportunity ROE, of things, interest that our short an rates as stockholders And a Jim going operate hard because finance for budget how while to talked and to going our affordable term, our hard to customers. job. 'XX, rates we there's and as comment we're XXXX, for our of at is versus all efficiently ROE with earning look drive is as on. possible into For keeping ROE. we're 'XX term job to

filed How about much to total XXXX? XXXX? And recovery in what then $XX I you of file in Okay. projects you expect know the for And you advice in already. do million said lastly, then letter

X through XXX know, focused projects. it Those rate the in talked got only proceeding, rate One company we on failures just of anyone the to even numbers now the If California. done so thought or that state process And were had relevant, listened total get in Jonathan. focused you didn't are of completed. on failure of as is X they the There's or period, go in to see about, probably done. I X-year didn't projects XXX fascinating X But case X the determined, be these recognize X,XXX, get rate-making the projects was during because we that right? that cycles. projects commission this done kind of aren't To was X,XXX they these X that kind these I or XXX really projects

want to California, land, you go the put testing, years. through the well, it's you it service, build If treatment, put design in in sign-off a the the well time treatment, X by longer Southern procure on get than the

And rate making are these projects. projects so to California process in recognize multi-cycle fails the now

out the commission Xx associated hitting time, that ground, the keep in time, doing, has the what XXXX contingencies within numbers rate these both the but lead It's focusing reality the of The to and XXXX, going rate while but are on you in our inbred I recognize the on rate-making benefits second a because the focusing about have projects the those listened to our followed making affordability. rate, out the we're X the case. level Obviously, we're at the tossed commission really is we'll if the projects of for regulatory to Those to X keep stockholders process things you've as And next, these making those things depreciation investing very the good lot that see on in process of to and getting and things kind is, thing we're the for the capital help process, backside, rate get think commitment We'll and are happens which on those process hearing, farther work contingency efficiency about what be and in the into the I And fails a right? up. complicated capital long Greg making go think doing to on rate the to lag. California, goes of process. us in going we're projects. with they're State that more of

Okay. still? But out XXXX? case the of next fall the do of the course them XXX into of million cycle might expect like to you projects, all those XXXX and complete some rate over Or

two, we to point, are we'll with for process is what that those the we sense identify found of think going that we that these confirm underway, to now point, the other X on and out projects are better sure projects for. We're of Yes. to timing two, have couple really remain effort projects that put that to And the -- XXX make the have a time a One, service, still for from weeks. I And alternatives perspectives. At those going to in million. in just to make, and weren't complete subsequently right they to that period them still first regards of this here needed. concerted reevaluate next

Our Partners. Storozynski Seaport Angie comes next from question Research from

perspective will have First other maybe, impacts give XX EPS it reported? the to earnings. you information the about which can like you retroactive that first from the more an just what roughly XX-Q, versus a the quarter on But alluded is sense us you

an was perspective, related Well, that, to earnings the was relatively included an And million million of that of in down the there from but per that we XXXX it speaking, quarter to there of earnings, that in haven't about share expenses addition broken the related first decision. approximately incremental $XX $X.X decision. was revenue to

Okay. you to for forward. I basis guidance, -- that's from, actually to have us going have appreciate mean don't would we important extrapolate a so right? probably it's Again, it

Secondly, this will associated on with booking the flow PFAS be statement? earnings you through the income CapEx? AFUDC it Will spending,

AFUDC expenditures. Well, use at as with are yes, we forward eligible AFUDC, those we to the mechanism move

projects. think be extent those you're year will at the our we to reduce expenditures the the related question, are asking expense AFUDC making to to for we able interest the that way I

on just related general utilities how past. protect forever against earnings in the can water losses compress allow or wondering fact would anything the there then impact? see distributed to -- on to investor-owned just that I'm limit Is general, we're in you California to you in Okay. from PFAS, in utilities were attempting risk you the the not that And -- remove importantly, some yourself. and And more any limit chemicals to starting litigation

Yes.

don't XXX data of to the an perspective, California costs as the says, the a that incremental From product Jim capital. attract a well, get capital if and we other memo in forth that we capital of on of once I well it's at will then out regulator, set which accordance basically We'll picked -- terms wells said, operating the in associated through the which X,XXX up we'll worried on earnings have account I'm operating our seeing costs, California, about I that accumulate wells water, production, treatment and we're liability compared with later basically East accrue group. Coast with too stuff etc. date. vessels by within think from liability and is seek put have protection. of those standpoint costs we're recovery we those into the rules AFUDC And the not in on projects. decision, AFUDC we pull Most part our some that have

have. I the did the put was standard to of now we disappointed that there, the commission's pieces need all because got in not to that think I recognize EPS timeline. we've implementation decision the the place kind capital they just out extend new in

versus you don't PFAS it's implement think got we're PFAS But Jim's going know wants he If away. that's over to it treated, to water now. treatment to I X.X of we're sort hear now X want customers years drinking X. right the years that kicking -- from

getting that's put despite decision. pointed we the so the disappointed in commitment press And were our quickly commission's we've we possible. ground out as our capital when reaffirmed we why that, to out, as that on release And

is as about for too quickly And water it. so from capital an I'm sure To as operating and the cost safe it's possible. that worried perspective, about implementing making not customers me,

with Angie, issue on liability. And potential grant pursuing we any that be as as well that, one then third-party PFAS the out full to there just are other may assist point available

the action in some polluters offset PFAS the of get putting implementation member we of dollars cost the want a litigation get polluters. of of lot of PFAS ton against actually to there because a and there's costs to don't that. a the around into capital we're case the place. but has treatment the on the And press to been back believe I polluters, particulars Yes, from we'll

lastly, you and I'm percent. then the dividend And of X%, Okay. mentioned by the wondering, your just raised future X-something weak performance because stocks your XXXX I you equity. of think timing

on Is -- if growth lever the the this you to Again, to? use in So plus depending for to dividends stock you going environment this have potentially X% in that performance, do linked is high you rate a well? interest this as a adjust forward, is higher this needs? downward equity lever think what is

Sure, over been inflation. you X if back go –- they've looked you our dividend the years, last at above if to increases

that a manage try range. annual drivers compound personally growth We believe have of valuation XX%. the and dividends marketplace. payout ratio I that to XX% to equity between the of We one key within target is rate the in

Jim dividend mentioned, number, the as for years. every grown CAGR the that last XX we've at year Looking

when conditions, down dividend reason looks So can depreciation think Obviously, those are rate, believe utilities, If at long sure guess But the look that, to operating what the rate Xx that no I things quality fourth customer outstanding it path. we have run things, of stays of and yes, water see that XXXX. we what's they value general most is I service capital important our to growth do, what we most at making continue personally, growing board me, was keep expect in won't other we that continue and year thing the our like me for And we create the our bear do best-in-class. thing dividend. the on for I that was that our a the and utilities for like think obviously, all stability needs, to balance. try dividend investors is make thing the we the in To at investing important company. and stockholders. a sure market is and keep But key I growth they X water water list, in

Sunderland comes Baird. Davis from question from next Our

created typically up] PFAS aggressive guys a have PFAS take interested [audio that the may at be question, reaching for systems business you any difficulty guess or to I but On any opportunity look more closer that has breaks or them?

Do You cutting of you got about we every you -- guys there, know, one third you out. word were – Davis,

business took I'm the interest may there, for question if we are out opportunities those a we think be at right now coloring pursuing, I that I desire in sounded And like opportunities? asked our in Davis, I'll Marty. to a answer at also that question out you said potential or that the considering liability? of are is we that market rephrase potential some think PFAS least the how you the look PFAS or going with it

That's that incredible. right Was Wow, you talk]. Davis? could hear [cross question? that question, the in that

[Indiscernible]

gray area. I think a it's said he

very we in I seen bit expensive. that slowdown cost team into the of our business answer haven't more standpoint, Yes, to business little continues things a a question. development business think going go that to maybe we've from of has gotten development standpoint. I'm capital development lot our pipeline be And a – But obviously, from busy. very, a

going As and in states. Texas Jim on they mentioned, the stuff doing we're in got other things other

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for the time, guys. apologize audio. I the Appreciate

Jim, That that decipher that. was good could you impressive ears.

Thank you.

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for have a all you day. attending Thank today's conference We you hope wonderful call.

disconnect all now may your You session.