American States Water (AWR) 7 Nov 242024 Q3 Earnings call transcript

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

If you would like to listen to the replay of this call, it will begin this afternoon at 5:00 p.m. Eastern Time and run through Thursday, November 14, 2024, on the company's website www.aswater.com. company website. referring the available are that the on slides will to be also The This will Bob Instructions] Senior Officer. American Chief [Operator call Officer; Vice States today X Executive and Water from President hour. Presenting of Company Chief Eva are and Sprowls, Finance and be President Tang, limited Financial to

reminder, a statements during Reform the of meaning discussed of within Securities Act call Litigation conference As this matters XXXX. the certain forward-looking may Private be

financial guarantees to Forward-looking of assurances upon or results, statements outcomes, and not levels performance any cautioned them. not place achievements or are activity, of reliance are undue

Commission. Forward-looking affect other statements the and of the to factors. the our most on file forward-looking assumptions update and XX-K law, by of and and and review Exchange conference the and should any risks and description call any statements undertake Form the in or known of this Statements with are as revise subject speak Form statement. date XX-Q on to forward-looking obligation Listeners call the company recent uncertainties not made publicly does could required only unknown as Securities this and that risks, company's except estimates uncertainties

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

President Chief States will now press the to Executive to Officer Please this turn Bob ahead. Water refer go Company. I over American please time, details, more For of the call and Sprowls, release. At

expenses, of and our report a and our operating brief and was Thank of details, thank decision fund partially joining to which some timing, discuss I'll today. questions. I'm large on third-year pending in compared the Welcome, quarter. earnings share you, then to everyone, in investments The segment wrap I'll dividends, a were that on for we'll in per some higher water and take quarter on the in up rate the electric Eva to detail. higher delay begin some financial pleased offset general then then receiving it updates results are the cost and regulatory last quarter increases activity, Eva case. share ASUS, with you to comments third will gains retirement in we third us due with Dave. rate your to recorded for part per higher year. discuss a by the more increase plan, due will interest $X.XX

$XXX.X in million million high Our capital this company-funded $XXX regulated year. a utilities expenditures million have to and infrastructure investing $XXX record be we'll invested year-to-date, on

joint Utilities the a invest to State adopt agreement million California the CPUC. the with July capital Commission $XXX.X motion filed discussed Water connection will we rate Commission, Golden for California Public the State Advocates in Golden the general last agreement As rates through years in Golden Water Public capital short, set items, Public in other XXXX. Parties Utilities XXXX and for case infrastructure or water a quarter, settlement the authorizes reached Water's settlement new Among of that over cycle. Advocates to State the or settlement Office with Cal X-year

assets in the connection other Advocates in joint intervener with Additionally, Valley a the Among invest proceeding authorizes new and week, January settlement all will electric that general rate agreement will capital utilities in advice XXXX electric enable case issues parties, Bear between million infrastructure and to the Electric to rates these and Bear and XXXX XXXX. detail filed including in upon other for rates a through systems in for water investing later completion. The for million to over adopt revenue continue electric strengthen ensure settlements Valley to the and XXXX approved, call. our their settlement, new Electric, $XX.X retroactive more XXXX, letters I our set joint recovery to with customers. things, through X, if the resolving be in safety the service will the $XX.X last Cal discuss project filed reliability motion settlement through

for year-to-date ASUS last of same per year For $X.XX September, the share ahead the period. is

turn year than consolidated earnings to You'll U.S. I'm the announce to discuss high to new construction XXXX. to $X.XX in that the that We will X per a to $X.XX contract to provided projects awarded this that, earnings record that new year, range contributed per $X.XX months during previously. construction to recall full higher has XX, XXXX. With continues $X.XX I'll XXXX. project pleased are modifications been ASUS upgrade Eva we capital awarded now over during XXXX million September for ASUS to $XX into These contribute through completed awarded government expected projects. $X.XX and call ASUS share projects the the very ASUS liquidity. newly be share ended enter for

everyone. Thank you, Bob, and hello,

the results. Let as as $X.XX third third recorded quarter the our share per with Consolidated quarter to per of me quarter $X.XX were earnings share compared for XXXX. start third for

expenses. largely The earnings of compared gains last increase third-year retirement year. the rate, Water, for water base to reported $X.XX per on an share to generated authorized utility, as rate Golden income investment per from an overall For in interest $X.XX share increase $X.XX per in due taxes, held was partially higher water our in share were State rate by offset and increase lower and XXXX, plans return the operating

dilutive of share at-the-market the AWR's $X.XX was effects from equity there of approximately under per earnings issuance due of program. decrease to offering a Lastly, the

compared new issued, per quarter rates set share will for effect decision Our through electric we on consistent were from share to for will adjustments as interest that at electric decision rates a revenue compared mainly of XXXX GRC decrease authorized increase $X.XX the cumulative to last consistent retroactive on year. rate await general increases return a be in third new having the were XXXX water due when XXXX, XXXX, revenues quarter new and compared continued of rates decision and for as the not to for to in increase are segment's for waiting rate million, expected $X.XX experiencing earnings $X.XX also to per as rate third-year overall primarily water base XXXX for share January on time. Earnings as in the When with in ASUS quarter largely effect electric remains the recorded the XXXX. Electric while by to from electric are an the cost. a million be $X.X that resulting for to we case. due of rate the by in rounding. Consolidated is the per increased Revenues segment increased $XX

fee revenue of systems of Station higher price Cod there $X.X water of due and operations Joint Cape management the Base a an ASUS resolution in primarily While was resulting various at economic wastewater River. of Patuxent from million to Naval revenue from increase and adjustments and commencement the

increased increase to supply Slide million XX commencement the and operations case expenditures income expenses interest pending expenses impacted of and quarter for average related utilities. increased to during other net water to to rate operating are general The higher the than as service increases due mainly by [ in interest cost. were costs bases. increases ] property million the which administrative and the to expenses XXXX. total overall by lower offset filings new related X partially of Consolidated tax third to increased was at compared increase and capital at borrowing expenses. Interest The regulatory the operating levels of $X.X both and maintenance $X.X and outside Higher an rate the quarter. depreciation Turning by proceeding to due other looking insurance expense the in regulated in of an due expenses and our increase costs other expenses general

period Lastly, the $X.XX to capital the quarter same other per segment. and largely XXXX cost recorded in originally revenue share XXXX. same case retirement results share for last XX, investments the per Both in the as to recorded gains the for impact because final period year. Slide to were on the quarter of as EPS related fund against $X.XX of share general Included third by items months per subject one in decision of in result reported of net million, to recorded full of were expenses the the of compared other of earnings water the to XXXX $X.XX from of period the plans shows water held company's EPS XXXX. first year. losses the decision in year year-to-date last income the for year rate compared as related increased share $X.XX of rate last bridge in third for same June the of comparing the of Consolidated final of X XXXX refund of our to of a per a retroactive reversal $X.X

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

flow flow retroactive activities at differences XXXX. million construction was higher liquidity. $XXX.X cash as in period collection also for September Turning the timing from of July for an and The for as Net and implemented of billing the cash Golden ended XXXX was XXXX, the X activities of receipts State provided XXXX, cash as surcharges at XXXX, XX, resulted of primarily as to in payments. consumption well in same bases timing water $XX.X a operating operating of military work to by recover in Water to increase XXXX from rates through from the and new months vendor of XXXX. having ASUS in cash operating increase million compared result The the revenues

project during our For as sell Bob of at $XXX remains million million offering activities, $XXX over its sole ongoing XX, the capital million utility reach discretion million the X-year full $XXX company-funded period. allow company earlier, this program mentioned year up as projects XXXX. American Waters' to to for to at-the-market on to $XXX.X to shares the we XXXX, invested State regulated months X and ended September this investing program sell common a

costs an currently X Ratings and net State S&P, Standard months Water costs issuance million, maintained proceeds legal and Golden a incurred. American with the ended of A or Water stable State During $XX.X raised credit Poor's maintain of the XX, A+ while rating call the AWR affirmed back stable XXXX, XXXX. service. of Global has I'll with ratings to highest turn of rating during rating been S&P these investor-owned credit AX water ratings utility in with These Each stable Bob. the of and U.S. Moody's some that, are industry. With investor September

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

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

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

adopted for increase letter to projected advice XXXX million compared capital projects, for XXXX. $XX are revenues when by cost operating water to revenues supply Excluding approximately less

in of mix. million factors In supply from project. The XXXX sales addition, issues additional inflation those increases of revenues revenue potential remaining forecast X the approximately advice revenue factoring and XXXX there the XXXX for and relate each based unresolved are on letter requirement years capital $XX the without to

determines in capital approved, to XXXX supply of debt structure to a adopted balancing mix adopts mechanism years sales XX% to needed to issues with granted and return modify all and adopts investments If an on decoupling a through from that and rate joint decision other equity In the parties the XX% of construction PFAS rate with PFAS Advocates that a rate lowers carrying $XX.X X, proposed requested be agreement the reconciliation in case filed argument on utility case. Proposed new through rates with electric in were requirements comply January connection of years rate. Golden and full administrative to in the adjustment investment included And XXXX State front requested addition, week, infrastructure in authorizes cycle, cost the through the on the debt. proposed prior resolves XXXX, issued motion for its the the for account capital X.X%, XXXX. effective mitigation regulatory a million unresolved and electric are equity to maintains memorandum proceeding to capital of completed, the regulation. We full the the for projects These over all judge requested and scheduled XXXX. Last subsidiary, rates the the law costs revenue mechanism, have rate $XX.X operating investments request agreement an when for track mechanism, by the end will and a wildfire water in costs between been settlement that general are intervener adopt cost supply, account A existing sales recovery increases our funds and in the capital oral the to X-year the settlement be the incremental cost A connection and settlement costs approves Cal general of that capital with Water litigated. letter million X.XX% include in and mechanisms XX.X% of case general plans. expenditures advice revenue used water XXXX incurred during will including X of capital XXXX not the to issues. is there become new allowance current a

XXXX Electric's from things, among costs that $X.X less compared for less discussed, accounts. higher under they because plans settlement revenues not Bear electric to approximately included additional the revenues related previously letter were as are rates other the the terms the costs operating To tracked increase Bear wildfire as electric being operating requirement million recorded cover, and Valley to the XXXX revenues expensed projects memorandum in Valley the and advice were revenue supply Excluding settled costs. incremental in the adopted customer in capital just by of mitigation projected to agreement, operating supply adopted Electric's not

completed, for projects for advice for the XXXX. million In adopted test. Previously expected million funds revenues of of filed $XX.X projects when the $X.X XXXX the XXXX, at to addition, the the approved, once for expect XXXX. to decision January terms not to the in the issued. XXXX. rates extended a be the don't new the to If be deadline of issued application reflect is related service for XXXX The rate in the construction settlement and million, provides an of the subject annual XXXX discussed operating used to during this customer XXXX processing generate through agreement rates each to million are new and impact allowance letter will and X, retroactive year, revenues the XXXX, years, XXXX will plus are in operating recovery CPUC are be the rates. The full at previously in time increases additional $X to XXXX is mentioned January recorded time decision of therefore, from for $X.X finally placed earnings by XX, in approximately decision increases respective has time, statutory and not issued an in settlement cumulative in we this adjustments

impact to settlement related combined be to Assuming we to $X.XX XXXX per is the $X.XX estimate a agreement XXXX approved, share. the and

period to water in XXXX Water's from a Slide anticipates increased adopted for the calculation. the State rate $X,XXX.X as in for year the X-year Turning $XXX.X XXXX XX.X% XXXX. growth XXXX, XXXX using We through robust million few annual base rate That's Water the and compound attention sustained over million present next State in a our base base growth XX. in growth Golden rate years. of Golden from the to average which its

were with of for decrease of to period ASUS. per in in the XXXX. share was the to third XXXX continue to quarter $X.XX period compared as Let's the for effects $X.XX same XXXX. as earnings per due mainly consistent contributed of rounding earnings same the share The ASUS

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

for we a now year year. XXXX. share We're has of increase also $XX.X this $X.XX in new As very ASUS $X.XX project will mentioned, per through to significant the pleased that previously as in ASUS contribute awards upgrade XXXX to received of capital to million $XX.X million September compared full total

existing military-based the serve, we to ASUS With of $X.XX next to ahead on this work XXXX, part look our like we per project continued contribute $X.XX to our share that new turn story. attention a year. I'd will in can for we we addition awards. remains to we compete mind, remain effectively bases contract compelling investment In dividends, that which as confident to

compound growth at X.X% over the with the years quarterly consistent a dividend the year grown is your to These has dividend operator and you thanking for we'll X% Our to than conclude CAGR in of in turn are over achieve X% by long American rate rate term. I'd dividend in of over annual the to calendar last of a a policy like the interest call States and questions. our the annual now compound achieve Water, XX-year rate pace payments. on prepared for remarks growth X or more to our increases CAGR

from Wells Jonathan Instructions] first with Fargo. comes [Operator Our Reeder question

place the remarks, for Bear addressed a I in same period electric trying the the I the literally been? been couple EPS XXXX, you contributed operations start the year-to-date in GRC year. hopped excluding have I'm Valley decision them of power what your EPS have the But portion so understand on, questions. during to I just to EPS have know of would would year-to-date just proposed at retroactive obviously, related approved the $X.XX of the in I looked or kind apologize versus prepared have that. Bear Valley And I what if got and apologize. $X.XX If XXXX. last of do like, would

Okay.

and for the don't if you heard I estimate Jonathan, 'XX 'XX know to So $X.XX $X.XX together.

That would the be cumulative?

Yes, both combined. years

Okay.

when full So the you that? would final the be recording you order, retroactive of get year impact think the

Yes.

For...

For X years.

yes. years, the For X

Some of advice letter is the CapEx, of projects. course,

moved cycle it's So rate of in sort the out a bit. been

Okay.

to when is Okay. kind that report year-end you were order? I if XXXX in to get results, you it say like cumulative by get before gain? able you it January if recorded But to it's need of or decision -- I you be -- when don't Is be Or And it in in like XXXX a then then, XXXX. just going earnings? think able a you book do to expect until heard will early to final get you February, a

Yes.

from depends flexibility So fully get have, if it it's Then we decision of the decision book fully decision it's the proposed more proposed settlement we want if more the -- commission to difficult decision agreement financial ALJ's to... book you into to a makes would do -- Eva, what results. if I it say, the into XXXX. proposed is it XXXX settlement, the adopts different

Yes. If XX-K, the of before course, a be book we'll able decision, to it. final we have then

a and month -- Yes. between at a Takes final. month least proposed

but... possible it's mean, I -- So

Yes.

-- might booking might adopts So then if that just be you fully proposed then the occurs feel before that comfortable you settlement you your you it well? got to and XX-K file to get as able a decision

Yes.

Yes.

added that increase it the authorized? you like ASUS bases in new capital does drove work kind of in Or recent Is then mitigation of that big Does work? increase? a Got PFAS reflection reflect what the you. years? like you've think just that do Okay. And

to some heard hard on their to the rush really work contracting the capital to think of devote. that year, And had with awarding there's of money I've XXth. new continue the relationship build spent a is government the of operations. Usually, these I be I which government. Well, strong big and in wastewater water officers hand by feel end also like raised September a fiscal upgrades for money the we the some to some

government million. a for lying we'd But great we going be we number these to thought projects new taken get $XX for we we've -- upgrades. thought to us. meaningful care That's are big present said capital that to So if we the if were

of I Okay. extra leads you before forward be spent that Yes, that to will one-off that don't the could parts, little kind end sounds money that needed of well, question. guess. new know was level of going think my just a bit this believe normal the next a of be like if X into maybe year. it -- Do like the that there kind be I -- you

Yes.

the think sort approximately -- has I it's recent average average what been. -- double our of

to what number. historical normal. too the it's So that's the those I I that X this, new future, we NCU then in early to whether bases think the the help will one say awards tell the think average bases And of will increase from been. new contributed has

many Sure. think of ASUS that we expense annual to for million kind for years. of And like range million has as the been $XX it $XX construction in

given total? projects I to get kind and what award, ways of $XX in range for of to assuming expense historical Just construction other know annual relative million XXXX are that everything, million kind guidance the $XX you there's that for you approved and

$X.XX $X.XX. estimate XXXX sort to you to our on side. that Yes. goes heard if I the to know the don't earnings of back $X.XX It $X.XX

expense look embedded is, everything, XXXX the then still what's the fold awards? higher over So got like like in estimate you've expense, that $XX I course have to wondering was whatever that like that and you million appropriation. of like construction when million, historically, million, in other come terms what given million $XX in right? And the know annual might gotten you've $XX into of kind construction that more construction year I the of Yes. $XX knowing it projects there's expense in or

we up through the take depending to of replacement. is other that the upon new -- upgrade XXXX efforts million place have on the move that the for ability capital part need $XX We the to period or And work. The number and construction expenses down XXXX. renewal is

to saying. our typically estimate are here, an lot -- a we're be. revenues we we've So got or given is I guess, expenses what to But haven't construction manage going I'm for what

Okay. in I XXXX, expect like because guess, like that construction $XX we shouldn't around huge if $XX million that $XX can award annual stuff some higher guess maybe it's I you a expense, in but not $XX like But I of increase mean, saying million the and move maybe jump and million. that million versus or

I you. and that Right. all I move wouldn't the awarded it renewal very, all do if manage -- I to replacement in we've all very nice were it's wouldn't along work. manage of to there mean to this, because got got it's we've I this. with that but be

NCU a award And usually, to years. X annual the Jonathan, X long runway, has

So healthy we because capital backlog able than manage to year. plan bumping a to better allow rather plan way have our new capital we and X our program X, this be X of upgrades can years ahead

it involved out. So it's planning schedule to more just

than we're to sideline Jonathan, per $X.XX little this just year. what that's the higher on share a expecting $X.XX why and

Some the or XX. new We over on Xst of and a that full having is year call basis for took JBCC it, April X X.X months. on Pax April due River versus to

were given have but due we some contribution, increase that capital we'll of helps. upgrade year higher to awards full their a that a of level is -- that So new of also

$X.XX $X.XX, if at now mentioned guess, because more I you helpful. increase don't midpoint the that that's then was the like I you're No, or think $X.XX. what very XXXX in drove and guidance know And I the range?

Yes.

is So we I pretty fewer a weather cooperative site from than would of standpoint. a and construction a One say good we've very had unforeseen year encountered couple anticipated. conditions We've a things. had

Station Base a perhaps range bit bases what And us the a operations us Naval providing contributed. We Air the as were for when were were better. River in going Cod at done these generate to Joint they've conservative we bit for XXXX. and Additionally, Cape new and Patuxent X to

which a combination So than better it's I had what is say. would better and better new contributing we of really would situation base good a sign, anticipated, then the is say, construction -- I

Yes. it No, contribution No, thinking. being terms than stuff. their an like you're ongoing and in would thing what that good sounds that's higher be of

conference our [Operator question-and-answer over would This remarks. the for any closing to concludes turn Instructions] to back session. Bob like Sprowls I

Yes, today, their just you all. up as quarter. we everyone you want forward and next I thank today, speaking participation with to to I wrap for look Thank

The today's conference now for concluded. presentation. you has Thank attending

disconnect. now may You