American States Water (AWR) 7 Aug 242024 Q2 Earnings call transcript

Ladies and gentlemen, thank you for standing by. Welcome to the American States Water Company conference call discussing the company's second quarter 2024 results. The call is being recorded.

If you would like to listen to a replay of this call. We'll begin this afternoon at 5:00 p.m. through XX, run company's on and www.aswater.com. website, Time Wednesday, XXXX, August the Eastern the be company also that slides The will the available referring website. on are to limited [Operator X will Today's be Instructions] hour. call to Chief and American States Senior are President Eva Presenting today Officer. Executive of Water and Finance from Officer; President Financial Bob Company Sprowls, and Chief Vice Tang,

established Securities for this and with the forward-looking file statements be Reform a As Securities the harbor XXXX. a call safe conference Please reminder, Private Form uncertainties on certain company's description matters may our by from of Exchange Act of XX-K and liability to most XX-Q recent Litigation risks discussed qualify the in during review Form intended and the Commission.

will that derived measures certain call measures non-GAAP are with that are not discussion addition, under in presented or accordance in constitute rules. this are financial financial prepared with prepared accepted United These include measures our accordance are accounting statements generally principles financial financial from in in but SEC the consolidated GAAP GAAP. conference of information a and not States In non-GAAP

For more this the I'd President release. At over the details, to turn States Sprowls, Officer to and refer to Bob Executive of press floor Chief like American time, Company. please Water

you it wrap activity, take your Jamie. will I'll we'll then Eva updates quarter. joining Thank financial with everyone, us and dividends, comments with thank then ASUS you, the on some then on for discuss and Welcome, today. questions. brief and I'll begin up details, regulatory some

will Golden in Golden a Cal XXXX new Utilities in water for the State to years for Advocates Advocates California or that XXXX. productive the Public set rates reached rate State principle notably for Office as settlement Public company largest was short, case general with quarter subsidiary, of our the Water's connection Second with Commission, the Water

CPUC, military capital approved requirement, infrastructure Water commenced pleased continue and settlement unresolved very This to reliable the adopt our to utility to over X-year resolves joint result on Cal services the of million the other which agreement contracted July completed service military -- efforts, later. capital and cycle. management a related as invest the our to as settlement company bases at the State CPUC, provide filed California proposed we Commission, safe Golden the the Public approximately a to X motion company and Utilities with also new discussed We're known agreement, Cod. Cape will Advocates River water the Station Naval or segment and April by if only Among As the customers. these Patuxent $XXX.X water of annual be XX, allows also at revenue of in on bases authorizes issues, wastewater to on issues items, X most XXXX River, the leaving X Pax our Base in successfully systems our Joint transition Air settlement

$XX is in XXXX Pax a partially which earnings a were where leverage through offset of the a to rate consider with effects of XXXX our for recorded and in significant maximum nonrecurring XX by the second and some the value Eva results and July will the look and locations. military remain higher ASUS. at the a quarter utility to price This efficiently increased electric was rates adjustments and due in infrastructure quarter second value and decision recorded annual to costs, adjustment. missions were quarter second on respective both to issuance interest it increase invest Contract last for higher years upon in XX-year Joint long estimated of timing, safely, year the businesses year price and the and general the make water installations as recorded pending unique detail. At to unfavorable We our supporting an the lower orders. these earnings contributions to a to the River, higher case electric continue delay in operating receiving we million, fixed of million quarter more the expertise water of of water for regulated earnings compared Cape forward task water their for at adjusted broad to term. in to favorable expenses, million regulatory the privilege which a of at Cod in is have inventory systems an we strengthen electric contract $XXX third to firm at with For adjusted firm joint completion Base a systems $XXX was utilities, focused fixed our the serve discuss operating initial and

now annualized per last in company's an ability from after We from to increase the increase week, X.X% reflects is dividend which sizable expenditures share. $X.XX are capital the our year this company's another annualized current utilities. on share, committed approved significant of This the have dividends will increasing New third dividend over an in and $XXX to increase increase the discuss States our earnings since to liquidity. dividend places dividend to its spending and that this shareholders and shareholders. report Board group turn We to reliable for $X.XX companies to XX of by the that return $X.X I'm $X.XX, has infrastructure to Board's I quarter rate sustainable share. every our year XXXX, the company and represents The us share million per million believe $XXX per also growing per pleased goal to paid cash provide safe increasing at regulated $X.XX dividend $X.XX rate to attract service confidence of two-tenth cents to year allows With investments to our and long-term call on that earnings received a consecutive dividend our it in exclusive capital for Eva American Stock the each calendar years, growth. Water dividends York enable Exchange customers that value by result. the that, which achieve achieved

everyone. Hello, Bob. you, Thank

XXXX. $X.XX quarter second quarter Consolidated XXXX. as results share earnings per impact to $X.XX second recorded perspective. related quarter per the were results. to of was cost rate Let $X.XX the year's the per share Included me of water quarter capital for made with in start that the second last as compared share the cost the segment second final share. of adjustments second for in for to as compared of The decision in all first our were the revenues of $X.XX decision XXXX of for of during for recorded XXXX, share recorded of $X.XX share $X.XX decrease of earnings quarter, to resulted consolidated and per share refund per the June reversal adjusted or subject $X.X earnings XXXX million of capital Including second quarter of item, the per the of $X.XX a to this per quarter

year. per Golden to for the second For decrease quarter XXXX to of earnings at XXXX, income same recur for compared to The last share per did of retirement in the reported largely less investments quarter were increase quarter earnings by this adjusted rate was of as regulatory a $X.XX for held our share of generated $X.XX the $X.XX decrease XXXX. items per last Higher Golden State of as the were utility $X.XX plan, per second and effect share Factoring year. offset that earnings due of per not year nonrecurring for in share State lower operating water with in other share partially and during Water gains the adjustments an favorable from second expenses year from the recorded per compared interest XXXX. $X.XX $X.XX second adjusted Water quarter share, for

decrease to equity dilutive offering from under earnings approximately program. AWR and issuance of of the Lastly, per there was share also a due effect in the $X.XX market

million, we $X.X new to the this largely ASUS decreased $X.X a Earnings be was performed revenues revenue the Revenues period segment adjustments, of slightly to by from commencement construction final pending by decreased Our in share earnings to an mainly as result while share rate not general were the million same from from for to X $X.XX capital as decision rates revenue year. GRC expected the cost last decision of increases was will management -- on work ATA. rate XXXX water Electric the recorded same cumulative in second in increase XXXX we third compared expenses largely await effect of due the compared from case, year decreased discuss bases, electric in refund estimated the resolution in reversal previously year resulting Electric as are as the recorded $X.XX of XXXX, new segment that million, revenues the for due higher of having and for resulting of per and from share experiencing to as price increases there further. and new a for interest economic continued of year, subject offset the the the of timing quarter various the and XXXX. new for bases January to Water adjustments revenues timing while will quarter, of electric which differences of to costs. U.S. regulatory also largely XXXX in Bob also per the performing work. due quarter operating various new Well be X revenues at of quarter $X to largely period of $X.X the for through adjustments partially adjustments fee compared the second retracted construction the issued revenues rates an XXXX resulting increased higher favorable second approximately rates when overall await million last operations management $X.XX at nonrecurring fee at during and by will quarter Consolidated electric decisions commencement GRC resolution recorded operations to and increase the recorded in from for per million, of in price $X.X set economic

higher total XXXX. largely and due in operating in the an services case Turning to rate of to the with proceedings operations to operating XXXX The adjustments property increase increase expenses tax quarter other such related property outside to expenses, at the increased basis expenses administrative looking costs, filings. costs the at no higher due second and recorded and to to to of was and expenses compared other new adjustments pending to quarter of second year as Slide this an consolidated million taxes mostly related commencement general largely water regulatory large XX part other than favorable $X.X and supply general increase in other a attributable

XXXX. result the XXX. overall cost and increase Interest by in of increases of other Included in finance against as were interest net adjusted XX level EPS of of per Other subject June reversal known increased XXXX share interest impact increases a per held bridge share $XXX,XXX, year-to-date lower an gains full in of the to in the impact $X.XX was a in was year year. million expense, $X.XX to $X.XX because income, surcharge to decision GRC the expenses refund recorded corresponding costs comparing retroactive $X.XX the the same earnings. quarter plan revenue and retirement to compared XXXX per of final that largely to borrowing rate recorded decision incurred the shows of revenues in for earnings recover of due in for related quarter. EPS water results adjusted first income on last recorded average decreased during there capital have rates quarter. EPS addition, of for of for fund net previously and recorded as the in and by quarter for the second In as the last of Consolidated year of in resulting per share offsetting share the to $X.X investments period XXXX expenses from Slide to this

of $X.XX compared June Excluding items adjusted adjusted recorded per same from XXXX of year-to-date for per above these XXXX, $X.XX share the the mentioned consolidated X period share per in earnings increase X to months an share. earnings as for an XXXX, the XX, earnings ended $X.XX were

XXXX. and liquidity payment. Water to XXXX The activity compared of provided million largely $XX.X of well increase towards as Golden of for in to operating result implemented through flow the cash of surcharge the Slide Turning first The as from Net was resulted XXXX ASUS by of XXXX $XX.X for period differences cash the XXXX. July XXXX bases operating in recover retroactive vendor new in billing State from on revenues increase cash its of for to timing and and also activity construction million having XX, a rates as half work the XX. collection flow as cash military at timing in at receipts operating same

company-funded market year. to during allows capital program this State discretion our this a invested to the regulated XXXX, sell million our of million to as program first to capital its million American on common utility activities, sole ongoing offering half to sell expenditures $XXX Water's up ad company-funded we million $XXX.X us remain investing utilities at For shares be project period. $XXX X-year $XXX at over and projects regulated

A-plus stable affirmed of ratings standard port U.S. S&P During of Water with has use With the in are These a credit with the maintain XXXX. call in back raised investor first investor approximately during Godet that, and net American Moody's unsecured coupon notes half stable of highest of with or of rating the maintained ratings million credit Water June million, of ratings the Bob. costs. In rating placement X.X% service maturing while Water ratings to the I'll proceeds which $XX a with private Golden rate AX XXXX, global currently water issuance AWR a some of States of issued June, of turn been XXXX. S&P, stable $XX in and State these industry.

will I agreement Eva. on Golden case. State's Water's rate Golden you, with Thank Advocates start State with general settlement Cal

rate Golden through adopt Water connection when Cal XXXX related the years of approved, to the settled determines XXXX July to for This the includes for during year requirement. The a third are the recovery million the cycle. X XXXX. advice resolved in investments to over $XXX.X State filed issues the As State joint the parties million Golden If attrition that infrastructure letter completed. agreement to X-year water amount, most between be I annual motion with $XX.X Water earlier, Advocates authorizes revenue settlement projects and rates mentioned settlement filed and settlement the in case capital those invest increases capital approximately second capital of in general as revenue the

under and beginning advice addition, those projects for be the million construction attrition at revenue investments the recovery when completed. of authorizes during third agreement settlement already increases $XX.X year to In letter capital XXXX of filed are the second

are in years approximately $XX capital XXXX on and increases projects, to advice increase less forecast additional supply revenue for issues inflation Excluding revenues XXXX to for approximately projected sales factors when revenues compared letter letter each XXXX. adopted XXXX unresolved for million the Also, X of revenues factoring operating from capital advice related those cost the supply by are to based there requirement water potential $XX of without remaining and projects. The the mix. XXXX revenue million

mechanisms and there being were requested Golden addition, Water X are State In regulatory litigated. that

decoupling First, mechanism for revenue full balancing and a full supply. cost water and account sales

mechanism. reconciliation sales the Second,

water in of fourth, case become needed generate a rates capital A to PFOS a with Third, investments by mix account end mechanism on PFOS supply and the request XXXX, to the be regulations. effective the X, with January new modify adjustment issued XXXX. decision new to to scheduled the carrying to existing costs memorandum comply track is

As discontinuation Gold XXXX, the balancing modified the a procedures, related the revenue in balancing discontinued previously order account. recover arriving use response filed account the the of existing the in in issued set a count. mix decision each -- Water water and the other wholesale to you mechanism water adjustment know, also investor-owned California allows that petition portions from Court aside revenue decision-making State decision this that and the the of Golden and review that resulted Water mechanisms. known adjustment supply the at month, utilities mechanism issued CPUC costs the California of vacated the the as full court X with the cost Supreme discontinuing and cost the to CPUC processes revenue ruling Last to CPUC's of changes rate Water a both suppliers. CPUC's use issued by the in followed water Association, to XXXX and In decoupling modified mechanisms, cost from State and CPUC Modified balancing may mandated decision the

Water rate subject in to mentioned, which As State both application, to case approval. use Golden is request of mechanisms general this the has CPUC continued

general Our new of expenditures for the $XX.X period case rates subsidiary and capital cost rate XXXX on additional X-year new a XXXX. through its August for utility filed application includes electric The the XX, million capital. for XXXX cycle rate application of

in is be also plans. on the new more the have related X, to capital to We already mitigation electric scheduled of XXXX. wildfire than case the XXXX. requested $XX.X to million issued be once rates approved, general The Decision rate recovery retroactive will January in spent

attention XXXX. we State to $XXX.X XX.X% Golden years. State a to period. rate annual Golden in $X.XXXX growth million of the and compound water adopted increased our XXXX next in from in base is few its average billion present a X-year That XXXX. base Turning Water's Total in Water's State Water rate Slide authorized the to rate in XX, robust growth XXXX average rate base growth sustained anticipates for the from

in adjustments partially same commencement timing in excluding increase bases from higher construction period higher XXXX expenses, costs. work at compared operating and continue the expenses and as offset economic interest Let's resulting price in compared management ASUS. pleased second fee announce the of to same as The share per contributed resolution for to per $X.XX quarter XXXX. to increase from that for construction activity earnings the when of revenue I'm of share performed operations XXXX, due the higher of XXXX the construction of differences to largely was an ASUS overall period new $X.XX by to various and of the was

ASUS' share for same the share compared year-to-date in per as were to June per earnings $X.XX XXXX. period $X.XX the XXXX, For

year, to confident quarter water to effectively we term. rate dividend. contribute remain services This we per share over $X.XX our we increase of would I than project turn record week, to awards our wastewater X.X% growth more the like related $X.XX track increase this XXXX. contract consistent We on ASUS announced new military-based that bases attention I a for an the dividend on in to military managing to proven with annual touched dividends, and for third compete earlier. Last X% achieve compound in long the continue to and policy of can is based which our since

is dividend and rate something Our record to history an strong allowed to allowed proud our strong growth the asset us shareholders. -- to achieve This track our has a rate of to like continued and shareholders thanking quarterly is your to is that questions. the for the annual company over X.X% us operator in in since over dividend by compound Water, of remarks has last the American conclude now quarter I'd the third States turn our years XXXX. for you call prepared X interest we'll

Ladies Wells we'll comes at question-and-answer today our gentlemen, this Jonathan Reeder question And the and [Operator Fargo. time, first begin from session. Instructions] from

Bob how today? and are Eva you guys

Jonathan, how you? about

at bad all. too Not

to California first rates. you decoupled leaning will the CPUC the about CPUC like of the the that there following Has decision? the do reauthorizing earnings. fully how you Americans thinking? ask do indication rate you the California of I case expect are wanted believe be commissioners indication prospects of Court's is how Just be what And Supreme been might any

Yes.

full at do bill the the point. have allow to know decoupling. the this the in came ask Court favor. We is Newsom the don't PUC that Governor have we Supreme leaning utility's case do back to So We signing how for really us

Lira where I deny I possibly think, this of American ahead on of to decision. to has -- the the case, the come be just regard full X use use PUC it's now do our that or RAM our when will The But a but point. those sort motion PUC. they of to still the still, I strike push report, of the a a has of decoupling. sort denied the the public Cal XXXX think Jonathan, decision with year can in a cited full the that side. X are or they at believe little So I hear mark question case. eliminated the to company almost comment I instructive Lira the for guess, their out plus our filed case They're us speak back in case. just request bit things advocates company can about singularly because been on to a removing are it ram office

to -- of the we don't we're what But I but the what's we is deserve a mean, it's say. in -- get kind ramp. point the to rules, -- struggle So say they'll PUC territory, I just with record would do bit that will full this new follow the of in little at

-- that Cal No, is that obviously longer Americans I think and PAO's citing valid. consistent I the Yes. guess, is surprising, with not XXXX no pretty testament order

PO it for mentioned update make Switching the know kind I on Any the electrics. size [indiscernible]. kind being does of some it with larger your the -- to interesting. sorry, on how QX, of discussions to and even it's bare in just what's value there? after GRC tough updates small of So on that? engage or Any other settlement going of get stretched PO you timing in to given

Yes.

under be So has has be to decision issued in a September. rules, a to decision PUC

date move do Jonathan, they know, as you have that the to ability out. However,

with I strong commission a the company decision the relative offing. will end terms But of a decision probably in if getting that it there than us I a size So be to year, of a more quickly against works the in hope the feeling next or I what the but don't has -- of get X. really getting aren't month to decision we the by doubt proposed there's what deal know in think the we to

get kind with discussions situation settlement to for able similar attention engage similar Is still trying a Yes. PAO's in to been of reasons? there that really have

don't one we their understand to it's, some And we're the -- they've on got to-do for quite We companies of to the do whenever something, working struggled clearly We things. the Yes. deal got understand and sense -- just to they're X not -- It's this of honest. And be we that. do with all the good those have so a, to a -- we've of work just the get file are top electrics we've would I understand bigger much been different list directions. lot been electrics time. on we they enough And And with. they very, than get in Bar Valley say, so pretty group much are logical, It's people bigger we a understanding. big Electric. pulled

Yes. just it everything mean, I then No. to it's [indiscernible] that, does and decision then of customers pancaking logical, rates finally but when impact at time, your the the kind same of but handed like business, not your and is a

understand argument that they with It's make do. don't just can it what they and a they push only can back that do we argument. them they and on -- And lot,

I look to probably it. think way at the it's

[indiscernible] here.

of EPS. sense of larger I how wildfire the the half had any has would know 'XX an Obviously, like mitigation outcome on case on this the like recovery than So your big it costs of it been depends like impact delayed Valley the in GRC past. first what made like the Bear be. has

different big year or So it of approved have it a the be would filed, full the first like EPS? or maybe 'XX case asked a as EPS bump 'XX to half been would how was if way,

were. throw to prior the higher just interest thing another Well, rate mix the these cases than relative they that costs to into days are

proposed are significant public impact really pretty to rate in like just -- of might big and the that's have see bit we probably ground not that a of dangerous a think. be this cover in how with final that we're amount recovery there's do getting and really to isn't to look decisions just the having little Yes, increase base a we're not wait significant, given the sort what I that and of is gone so requested case, And the and

Bear had $X.XX year-to-date expect is be you the lower a I fair to on had last year. large basis. mean, relief, I Right. would you Valley would value assume And

be. do think. it's we I get an point, year-end to that get just immaterial component, by at trying get not yes, when sense we order mean, how hopefully don't this would that So helpful and retroactive a I

at Yes. on very ourselves PSD significant under I the significant. regulation, We're It's say, at and until ] decision say. putting think [ of the let's point the there's XXXX Wirecard we it, very effect, looking if No. at would plan about all Yes. we're the the this It's And could way months September. XX go course, value electric, of a final mitigation base you're end delay. fair of lot Well, funding the for that comes about. That's

last surprised to think is. companies will a this XX worth come but we were we one long, the wildfire bit activities sure -- increase I So are It's given I months' to and that the electrics, big for just since increase. an that you're in going started how an of we be in get a way it increase. I will mean, think it be about it's it, rate the of a way. I mitigation I'm haven't case that it And the studied large big taking believe

X or forward. X have companies coming would one the X dealt for commission or us to prior this think with So would

to than that's first that that year a I us they're the to think state to for will to commissioners is advantage increase do deal deal they in without be at it's us all certainly, because -- issues respect again, longest regulate, to be -- an I a in to other with for have expect do, of for X listen, have But potentially we've lot commission and great they're there very what that, do with big going the things that we've only arguments going have higher made companies that, I'm increase. the and sizable. they -- there's with gone going it. the to commission. It's going And

insight Any mean I think I XX-year into then. which on new us. award, Cape the here potential me of ASUS? Cod snuck at additions for the question Last kind base up is variety

I a Well, little bit about talk that. can yes,

evaluate contract, to continue of and that sense something do. the a typical have privatization this had pause utility sort Army want is Force strategic whether the variety XX-year We to Air they taken to the the -- whether this

sense be either privatization. from that public privatization both on have a the next a that on we utility from street held utility forward will Force With but this interested there. We in or that moving said, would new to the meetings have Army year, see belief meetings to been don't that there think year they're privatizations new the we have look a I some Air

has are it And although Navy As we've this single contract past, interested they process. on XX-year a in privatization there's continuing bunch, don't the believe -- isn't talked activities. I embraced XX-year going to are street. they the a the that utility At a very be point, in utility privatization

is there JBCC of the any one-off the big Guard. but contract, personally, be any there'll -- think International And Now -- in contract I think of I there'll don't X. JBCC is course, XXXX there potentially be don't is any awards like by talk

it be sort That's arm don't of would know Defense. that's -- John. So helpful, of fourth I if Department a the of

that? of XX-year the come those year the in they're and up lead the do that of quicker XX bid and than So competitively potentially all ones do kind the terms way

and that we for say pioneer like were But the years. our developed I'll we we for We -- felt first did Well, not... worked and that. the just years the were on and one we partner template

XX-year manages not quickly. logistics runs privatization standard other had be the than standard utility is done more through thing. The there, it's out group than of done, template the possible been typically quickly more one agency quickly more One sort these the utility and energy. They're But utility standard Now they events privatization. that privatization. will the your

doing based agreements of it the roll on through who's or we DLA. and did, these it, typically sort doesn't On it's one exchange the

reinventing always bit guess, will of So go a that there's wheel, the I on. little

like the appetite we've partner there's establish but the degree, -- quicker that. So than it with an worked I should said, one for To our one. to first and be do the second the to template,

imminent, Okay. doesn't And sound it anything like though.

a good that's assessment. say would I Yes.

over this and Bob back no for to Instructions] I'd [Operator time questions, and ladies any at like the turn gentlemen, floor showing closing comments. and to additional Sprowls

And today. everyone quarter. just I let we Thank you you, thank you know, Yes. for want participation to Thank to everyone. look you, Jamie, forward next their with speaking and

and that, joining. we'll conference And ladies thank do presentation. gentlemen, conclude for you today's We with and call

You may lines. now disconnect your