Q1 2025 SJW Group Earnings Call

April 29, 2025

Yeah.

Speaker Change: Ladies and gentlemen, thank you for standing by and welcome to SJW Group first quarter 2025 financial results call. At this time all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question.

Speaker Change: The session you will need to press star one on your telephone you will then hear an automated message it bites in your hand to trade.

Anne Kelly: Draw. Your question. Please press Star one again, please be advised that today's conference is being recorded I would like now to turn the conference over to Anne Kelly Chief Accounting Officer, Sir. Please go ahead.

Speaker Change: Thank you Michelle welcome to the first quarter of 2025 financial results Conference call for SJW group I'll be presenting today with Eric Thornburg Chair of the board President and Chief Executive Officer.

Youre Walters: And Youre Walters, Chief Financial Officer and Treasurer.

Speaker Change: Bruce Hauk, Chief operating Officer, and Christian Johnson, Senior Vice President and Chief administrative officer.

For those who would like to follow along slides accompanying our remarks are available on our website at SJW group Dotcom.

Speaker Change: Before we begin today I would like to remind you that this presentation and the related materials posted on our website and contain forward looking statements.

Speaker Change: These statements are based on estimates and assumptions made by the company in light of its experience historical trends current conditions and expected future results as well as other factors that the company believes are appropriate under the circumstances.

Speaker Change: Many factors could cause the company's actual results and performance to differ materially from those expressed or implied by the forward looking statements.

Speaker Change: For a description of some of the factors that could cause actual results to be different from the statements. In this presentation. We refer you to the financial results press release and to our most recent forms 10-K, 10-Q, and 8-K filed with the Securities and Exchange Commission copies of which may be obtained on our website.

Speaker Change: All forward looking statements are made as of today and SJW group disclaims any duty to update or revise such statements.

Speaker Change: You will have an opportunity to ask questions at the end of the presentation.

Speaker Change: Webcast is being recorded and an archive of the webcast will be available until July 21, 2025, you can access the press release and the webcast at SJW group's website.

Speaker Change: In addition, some of the information discussed today includes the non-GAAP financial measures of adjusted net income and adjusted diluted earnings per share that have not been calculated in accordance with generally accepted accounting principles in the United States or GAAP.

Speaker Change: Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are presented in the table in the appendix of our presentation.

Andrew: I will now turn the call over to Andrew.

Andrew: Thank you Anne.

Andrew: Welcome everyone and thank you for joining us.

Speaker Change: I am honored to serve as Chief Financial Officer, and Treasurer SJW group.

Speaker Change: And I'm looking forward to becoming the Chief Executive Officer, following Eric Laurinburg plant and well deserved retirement on July 1st.

Speaker Change: I want to add my sincere gratitude to Eric for his leadership and fellowship over the years.

Speaker Change: I look forward to continued partnership with Bruce Christian Edin, Willie and my colleagues at SJW Group as we chart, our course for journey of continuous improvement and excellence through circuit leadership.

Speaker Change: I am pleased to share that in the first quarter of 2025, we continue to beat drinking water and environmental regulations.

Speaker Change: Liver on our public health and environmental stewardship commitments.

Speaker Change: <unk> high quality water service to customers.

Speaker Change: We also delivered strong financial results, including a nearly 41% increase in net income for the first quarter of 2024 on a GAAP basis.

Speaker Change: Our performance reflects our continued execution of our proven growth strategy focus on investments in our infrastructure and water systems across our national footprint and constructive engagement and consensus building with key local stakeholders.

Speaker Change: All with an eye at affordability.

Some highlights from the first quarter.

Speaker Change: San Jose Water's 2025 to 2027 General rate case was delivered on time and was effective on January 1st.

Speaker Change: Connecticut, water's water infrastructure and conservation adjustments and water revenue adjustment filings were approved.

Speaker Change: Yeah.

Speaker Change: Main waters petition to unify our 10 different rate districts and our rate case for the Camden Rockport Division are progressing before the Maine public utility Commission.

Speaker Change: Texas water second system improvement charge applications before the public utilities Commission of Texas.

Speaker Change: In quarter one.

Speaker Change: $78 million was invested in water and wastewater utility infrastructure across all four states and we are on track to meet our 2025 capital plan.

Speaker Change: Importantly, we continue to create long term shareholder value with earnings per diluted share of <unk> 49.

Speaker Change: And adjusted non-GAAP earnings per diluted share or 50.

Speaker Change: In the first quarter.

Speaker Change: And as you will hear later, we remain laser focused on operating efficiency.

Speaker Change: And we recognized colleagues each local operation for their contributions to our safety culture.

Speaker Change: As expected 2025 looks to be a strong year for SJW group as we build on our foundation for sustained growth and long term value creation.

Speaker Change: And I want to thank our talented team across the nation for making that happen.

Speaker Change: The completion of successful general rate cases in our two largest jurisdictions in 2024 has reduced potential regulatory risk for the next couple of years. These two states generated 90% of our water utility services net income in 2024.

Speaker Change: Our 2025 capital plan is a 34% increase over 2024 actual step.

Speaker Change: We don't foresee any significant issues from current U S economic conditions.

Speaker Change: The vast majority of our suppliers are domestic.

Speaker Change: Some use components and materials from other countries.

Speaker Change: The leadership transition, Eric announced last quarter is progressing smoothly.

Speaker Change: Our new team is complete with the exception of a new chief accounting officer to assume and his duties as she becomes our new Chief Financial Officer effective July 1st.

Kristian: Kristian will also share details about the newest impactful leader, who just joined our team last week.

Kristian: Our long term growth strategy beyond 2025 will continue to focus on timely recovery of our robust 2 billion dollar five year capital plan that is needed to maintain reliable service and high quality water as well as solid regulatory relationships that are built on outcomes that serve customers.

Kristian: And capital providers.

While not in our baseline growth plan, we will continue to pursue opportunistic acquisitions that benefit our customers that make financial and strategic fit.

Kristian: We will do that with a focus on financial discipline, and our steadfast commitment to affordability.

Kristian: We are leveraging our scale operational efficiencies and technological advancements to manage costs, while providing for our systems to remain robust.

Elliot and reliable.

Kristian: As evidence of our financial discipline S&P raised our credit outlook for SJW group two stable.

Kristian: We will continue to focus on important credit metrics as we are committed to maintaining our a category credit rating.

Kristian: We will discuss all of this in more detail later in the call, but for now let me turn the call back to Ed to take you through our financial results.

Speaker Change: Thank you Andrew yesterday after the market close we released our first quarter operating results.

Speaker Change: As Andrew mentioned, we are pleased to report 49 of GAAP diluted EPS and 50 adjusted diluted EPS for the first quarter.

Speaker Change: These strong first quarter results, we are affirming our 2025 guidance range of adjusted diluted earnings per share of $2 90 to $3.

Speaker Change: We are also affirming SJW group's 5% to 7% earnings growth rate through 2029, and we expect to be in the top half of the range.

Speaker Change: Turning to slide nine in the first quarter, we reported revenue of $167 6, Million% to 12% increase over the $149 4 million reported in 2024, primarily reflecting the rate increases in California in Connecticut that Andrew referred to.

Speaker Change: This increase in sales along with prudent cost management resulted in GAAP net income of $16 6 million, which increased 41% over 2024, and adjusted net income was $16 7 million or 43% increase over the prior year. We also reported a 39% increase in our adjusted diluted.

EPS of <unk> 50 cents.

Speaker Change: The factors impacting 2024 earnings per share are shown on slide 10 at.

Speaker Change: At a high level increase revenue from rates and usage drove a revenue increase of 41.

Speaker Change: The revenue increase was partially offset by higher water production expenses 16 other.

Speaker Change: Other operating expense of six cents, an increase in interest expense of two <unk> and an additional two cents due to an increase in the number of shares outstanding.

Speaker Change: Turning to the next slide I'll provide more detail on each of these areas.

Speaker Change: As I mentioned earlier, our revenues increased 12% in the first quarter.

Speaker Change: Rate increases from the general rate cases in California, Connecticut, along with increases from our infrastructure mechanisms in Connecticut, Maine, and Texas contributed $11 9 million to the revenue increase.

Speaker Change: $5 3 million is attributable to pass through water cost for our wholesalers as these costs continue to increase each year.

Speaker Change: Higher customer usage added another $1 million as increased usage in California more than offset a reduction in Texas due to the increasing severity of the droughts.

Speaker Change: And revenue increases associated with new customer growth was offset by a reduction in regulatory mechanism.

Speaker Change: With a new rate case in effect in California, and lower authorized usage, we would expect regulatory mechanisms to be less pronounced than the current rate structure.

Speaker Change: Water production expenses increased 14% in the quarter and was primarily driven by an increased cost of $5 6 million from our water wholesaler. However, these costs.

Speaker Change: Are largely offset in revenue.

Speaker Change: And $2 4 million in expense associated with higher production volumes.

Speaker Change: Yeah.

Speaker Change: For the quarter, we reported a 4% increase in other operating expenses.

Speaker Change: General and administrative expenses increased $2 million, primarily driven by customer credit losses, and insurance costs, along with $800000 increase in maintenance costs and 200 thousands of other cost increase.

Speaker Change: On the financing side in the first quarter, we raised approximately $27 million of our $120 million to $140 million expected annual equity equity proceeds through our at the market program or ATM.

Speaker Change: At the end of the quarter, we had $153 million drawn on our $350 million bank lines of credit, which left $197 million available for short term financing of utility plant additions and operating activities.

Speaker Change: We were also pleased to see that the average borrowing rate for our line of credit advances in the first quarter was approximately 547% compared to $6 five 4% in the prior year.

Speaker Change: And on the tax front consolidated income tax rates were pretty steady quarter over quarter with a 1% increase in our effective tax rate, primarily due to higher pre tax earnings.

Speaker Change: Yeah.

Speaker Change: Turning to slide 15.

Speaker Change: In addition to affirming our long term growth rate in EPS guidance mentioned earlier on the call. We are also affirming equity issuances of $120 million to $140 million plan through our ATM, excluding any acquisition growth.

Speaker Change: And our $473 million capital plan in 2025.

Speaker Change: We are now seeing construction activity pick up with the return of warmer weather, especially in Connecticut and Maine.

Speaker Change: And lastly, I'd like to take a moment to reiterate our long term targets. We are affirming our 5% to 7% long term growth rate and continue to expect to be in the top half of the range.

Speaker Change: We have established a robust five year $2 billion capital plan.

Speaker Change: And we continue to focus on our credit metrics with a target at that voted that 12% by 2028, which will give us 100 basis points of cushion over 11% downgrade thresholds from S&P.

Speaker Change: And with that I will turn the call over to Bruce to discuss the state updates.

Bruce Hauk: Thank you Anne.

Bruce Hauk: As Andrew mentioned earlier, new rates went into effect for San Jose water on January one 2025 as planned.

Bruce Hauk: The new rates support $450 million in capital expenditures for the three years covered by this general rate case, and $53 1 million or nine 4% total revenue increased to 25 through 27 authorized sales and customer forecast.

Bruce Hauk: We will also see greater revenue recovery through the service charge now at 48%.

Bruce Hauk: Further alignment of authorized actual usage through a lower sales forecast.

Bruce Hauk: The approved 2025 rate increase is $21 3 million or $3, 91%.

Bruce Hauk: The annual step increases for 2026, and 2027 or $14 4 million and $17 4 million respectively.

Bruce Hauk: I also want to note that our ongoing advanced metering infrastructure project is separate from the <unk> capital plan.

Bruce Hauk: <unk> is a $100 million project with the bulk of the spending plan for 2025 and 2026, our spend for this project will be recovered via annual rate base offset filings with the California Public Utilities Commission to become effective on July one we.

Bruce Hauk: We anticipate filing for recovery in May 2025 for rates.

Bruce Hauk: <unk> of July 2025, and I will share more details during the second quarter call.

Bruce Hauk: Turning to Connecticut last month, the Connecticut public utilities regulatory authority authorized a $1 6 million revenue increase in the Companys water infrastructure and conservation adjustment.

Bruce Hauk: The increase was effective on April one.

Bruce Hauk: The cumulative with a surcharge is now four 9%.

Bruce Hauk: PURA also approved Connecticut water's proposed annual reconciliation of the water revenue adjustment to collect the 2024 revenue shortfall the.

Bruce Hauk: The approved adjustment reconciled 2024 revenues as authorized in Connecticut Water's June 2024 General rate case and provides for recovery of an additional $627000 as a result of achieving performance metrics established by PURA in the 2020 for <unk> decision.

Bruce Hauk: <unk>.

Bruce Hauk: The amount is prorated and only covers the period between July one 2024 and December 31, 2020 for the performance based revenue opportunity for a full year is approximately one $1 million.

Bruce Hauk: Connecticut water has applied for approximately $19 4 million in drinking water state revolving fund loans that the company plans to use for water system improvements.

Bruce Hauk: In a lead service line identification program PURA issued a proposed final decision on April 11, 2025, approving our request a final decision is forthcoming taking.

Bruce Hauk: Taking advantage of lower interest loan programs when they make sense is another way we work to maintain affordability for customers.

Bruce Hauk: We are continuing to work with state lawmakers and regulators on a wicker like mechanism called the water quality and treatment adjustment that would allow cost recovery for water treatment and remediation infrastructure between general rate cases.

Bruce Hauk: If enacted it would help smooth the rate impacts for <unk> compliance by distributing costs more predictably over time.

Bruce Hauk: The Bill has been voted out of committee, we expect a decision on the WQ Ta by the time, the Connecticut Legislature Germs on June four.

Bruce Hauk: In Maine, our petition to unify the Companys 10 different rate districts into a single tariff is pending before the Maine public Utilities Commission.

Bruce Hauk: If approved it would streamline general rate case in water infrastructure charge applications, which are currently filed on a district by district basis.

Bruce Hauk: A decision is.

Bruce Hauk: Expected in the fourth quarter of this year.

Bruce Hauk: Our general rate case for the Camden Rocklin Division is also pending before the E&P UC. We are requesting a revenue increase of $1 1 million or 15, 9% above current authorized revenue a decision is expected in this quarter.

Bruce Hauk: In our Texas service area, we have been experiencing experiencing significant and persistent drought.

Bruce Hauk: As we discussed on our last call we have a multi pronged approach to make our Texas water systems more resilient to weather extremes. So that we can enhance system reliability and availability of water supply for our current customers.

Bruce Hauk: Our highest priority is bringing the 6000 acre feet of water supply online from R. K T water acquisition to serve customers by the end of 2026.

Bruce Hauk: However, this is a multi phase multi year project that requires approximately six miles of transmission main storage and pump stations. This project represents a significant investment that is reflected in our capital budget.

Bruce Hauk: Turning to regulatory matters, Texas water second system improvement charge application is pending before the public utilities Commission of Texas, We have requested $4 $1 million in revenue.

Bruce Hauk: A hearing was held on our application last month, and we could see a decision as early as this quarter.

Bruce Hauk: With that I will turn the call over to Kristin.

Bruce Hauk: Okay.

Bruce Hauk: One moment.

Bruce Hauk: Please.

Bruce Hauk: We're experiencing technical difficulties.

Bruce Hauk: Thank you Bruce.

Speaker Change: Turning to slide 22, as Bruce mentioned, our capital investments are increasing to meet higher water quality standards and evolving customer expectations. At the same time, we know affordability is essentially our customers don't have unlimited resources and we're committed to ensuring every dollar we invest.

Bruce Hauk: <unk> delivers maximum value.

Bruce Hauk: That's why we're laser focused on efficiency scrutinizing every aspect of our business to ensure we're operating as effectively as possible.

Bruce Hauk: By leveraging our national scale, and optimizing operation, we're creating the financial flexibility needed to support these critical investments, while helping to moderate future rate increases.

Bruce Hauk: One of the biggest opportunities to improve efficiency is through business transformation as.

Bruce Hauk: As we continue to enhance our operations, we are investing in standardized enterprise wide platforms to drive efficiencies improve service and support long term growth.

Bruce Hauk: Key part of this effort is to transition to a unified customer service system, which will mean faster more efficient service for our customers are more resilient workforce, where employees can support operations across different locations and ultimately improve service reliability.

Bruce Hauk: And as you heard earlier, we're investing in advanced metering infrastructure in San Jose and a majority of our customers in Texas are already experiencing the benefits of this technology.

Bruce Hauk: Ami will reduce operating costs improved billing accuracy enhance leak detection and generate long term savings for both our customers and our company.

Bruce Hauk: We are currently considering the development of the Ami in Connecticut and Maine.

Bruce Hauk: These technology advancements are just upgrades they are part of our broader strategy to drive efficiencies that translate directly into cost savings for customers and long term system resilience.

Bruce Hauk: Our strong execution strategy requires strong leadership and we continue to build a world class team last week, we welcomed another highly accomplished leader to SJW group team.

Bruce Hauk: <unk>, who is our new chief Human Resources Officer, She joins us from Ivan grid, where he recently served as vice president of rewards and employee experience <unk>.

Speaker Change: He brings deep expertise in human resources, and I know she'll make a positive impact on our people and our culture.

Eric: And with that I'll turn the call over to Eric.

Eric: Thank you Kristen.

Eric: We continue to prioritize building a culture of safety because protecting our people and the communities. We serve is foundational to everything we do well.

Eric: Whether our employees or in the office in the field are at a construction site, we want them to return home safely each day and.

Eric: And we want the public to feel confident that the work we do is being done with care integrity and safety top of mind.

Eric: Safety isn't just a checklist, it's really a mindset.

Eric: And when your team understands how our central water is to the health and strength of a community it can be tempting to jump in and solve problems quickly.

But we know that doing things the right way, sometimes means slowing down.

Eric: Risks and putting safety first.

Speaker Change: In March our state presidents of National leadership team recognize for employees, whose actions protected co workers contractors and community members alike.

Speaker Change: These included exercising stop work authority, requiring contractors to follow safety Tailboard and taking the time to educate others on the consequences of unsafe practices.

Speaker Change: As I close my final earnings remarks, as CEO I wanted to express how proud I am of this team.

Speaker Change: The care you bring to your work each day your integrity Youre disciplined and your heart is what makes this company special.

Speaker Change: We talk often about our purpose to protect whats precious that.

Speaker Change: That means water, yes, but it also means people are.

Speaker Change: Our employees, our customers and the communities who count on US every single day.

Michelle: And now I'll turn the call back over to Michelle for questions.

Michelle: Thank you as a reminder to ask a question. Please press star one on your telephone and wait for your name to be announced.

Michelle: To withdraw your question. Please press star one one again and.

Speaker Change: The first question is going to come from Richard Sunderland with Jpmorgan Securities. Your line is now open.

Richard Sunderland: Hi, Good morning can you hear me.

Speaker Change: Yes, we can Richard thanks for joining us today.

Speaker Change: Thanks, Eric and best of luck with the retirement here I know, it's not quite the yen for you yet, but the last earnings call. So best of luck.

Hey, Thank you Brian I appreciate that very much.

Speaker Change: So just trying to unpack the results a little bit and thinking about both the revenue uptick on the quarter and I guess, the Texas drought impacts to the business as well are you able to frame kind of where you're trending relative to guidance for the year is this a matter of kind of the rate impacts.

Speaker Change: California, and the fixed charge, there and is there any offset to <unk>.

Speaker Change: Excess or are you trending kind of ahead in any areas. Thank you.

Speaker Change: Yes, I'll take that thanks.

Speaker Change: I would say we are trending right on plan for this year and in connection with our guidance is still expect to be and then $2 90 to $3. A couple of things just to talk about this year versus maybe some other quarters.

Speaker Change: As you mentioned, we do have full year rate cases, so for California in Connecticut with both have a full year starting in Jan one so that is that is helpful.

Speaker Change: We do have a little bit more front loading this year compared to previous years.

Speaker Change: CMA, which is the adjustment mechanism in San Jose does have some volatility with it doesn't exactly follow the trend of our revenues, but we do expect it for the full year to come in line with plan and then when you think about 2023 and 2024, there were some variability between the quarters, especially related to some <unk>.

Speaker Change: Adjustments for the tax accounting method change and some.

Speaker Change: Release of uncertain tax reserves. So you wouldn't expect those to happen this year. So.

Speaker Change: Just summarize where we are on track and.

Speaker Change: Expect a great year.

Speaker Change: And as I recall, when we built the business plan for 2025, we did assume that Texas would remain in drought is that correct. We did assume some level of job for this year, yes, you're right alright. Thank you. Thank you Richard.

Speaker Change: Understood and then.

Speaker Change: W. E T a opportunity could you speak a little bit about what the earnings impact of that mechanism might be.

Speaker Change: Could impact regulatory strategy in the states any other thoughts or considerations. Thank you.

Speaker Change: Thank you Richard.

Speaker Change: Start with Bruce and then I'll ask him to make some comments as well.

Speaker Change: Thank you Richard VW acute ta.

Bruce Hauk: As I mentioned in my prepared remarks made it out of committee and we're hopeful that that will be subtle June 4th of the year.

Bruce Hauk: That mechanism is going to be very much like our existing wick alike mechanism in Connecticut. However is designated for those environmental incremental improvements that we need to make from a capital standpoint for recovery. So if you put that in perspective, we had $130 million plus I believe in Connecticut.

Bruce Hauk: And another 110 in California, So we would expect that that $130 million would be recovered in future filings that would be considered <unk> filings. So when you look at the entire capital picture. It really improves the regulatory lag that would've may have existed with that type of investment that we didn't have a vehicle other than in general.

Bruce Hauk: Rate case to recover so it actually streamlines the improvements streamlines, the recovery and enhances our regulatory capabilities for return in terms of timeliness of recovery.

Bruce Hauk: And I don't expect that that would have a impact on 2025, but rather the reducing the laboratory regulatory lag in the outer years.

Speaker Change: Bruce can you refresh my memory on that is there.

Bruce Hauk: Our percent cap on the billing and the and the Bill currently anticipated I don't recall.

Speaker Change: Yes, there was a cap set at 15%.

Speaker Change: Obviously things can change in a regulatory process, but we are hopeful that that will continue to go through as was approved through committee.

Speaker Change: To put that in perspective, our Wicca mechanism has a 10% cap.

Speaker Change: Please stand by we are experiencing a technical issue.

Andrew: Operator, this is Andrew I'm still operator are there any other questions for the leadership team here.

Speaker Change: Yes, one moment please for the next question.

Angie: And that comes from Angie <unk> with Seaport. Your line is open.

Speaker Change: Thank you. Thank you congratulations Erik and.

Speaker Change: Hello to all of you guys actually.

Speaker Change: So just one question so Andrew keep talking about potential M&A or.

Speaker Change: Or your willingness to acquire assets.

Speaker Change: And I'm just wondering do you have.

Speaker Change: Any.

Speaker Change: State of mind.

Speaker Change: Not actually easy to find the sizable water or wastewater assets that would be available for sale in your.

Speaker Change: Core states.

Speaker Change: Yeah, Angie that's an it's an excellent question and I would I would.

Speaker Change: Start off by saying is that there are opportunities within the states that we operate in in particular, the state of Texas as a place that we have had a number of successful acquisitions close with a very positive impact on our business. So that is a prime area that I would expect to see continued activity.

Speaker Change: In addition to that we are expanding our.

Speaker Change: Views in California, Connecticut may be more restrained on certainly the big opportunities, but there are some additional smaller opportunities that we will continue to work on as well as made.

Speaker Change: As for other states, we always remain open to other states as you as you highlight it's not like you just go to the grocery store and you pick.

Speaker Change: A water company off the shelf they are something that comes by from time to time, but that being said there are still a number of <unk>.

Speaker Change: Solid opportunities out there for a company our size to be able to.

Speaker Change: Look at AD engage yet and I would expect us to continue to do that time goes on.

Speaker Change: I think the key that we stay focused on though is making sure that we deliver the financial results.

Speaker Change: Sure.

Speaker Change: Accretion happens the timeframe as well as the.

Speaker Change: Leverage does not go beyond what our stated goals.

Speaker Change: Okay. Good that's all I have thank you. Thank.

Speaker Change: Thank you.

Speaker Change: Thank you Andy.

Speaker Change: I show no further questions in the queue at this time I.

Speaker Change: I would now like to turn the call back over to Eric Thornburg for closing remarks.

Eric Thornburg: Thank you again for joining us today, the first quarter was really strong for SJW group. When we have even more to look forward to in the rest of 2025, we remain committed to investing in infrastructure and exploring solutions to maintain affordability as capital needs continue to grow in the water industry.

Eric Thornburg: SJW group proudly leverages, our national platform to support our distinct local operations.

Eric Thornburg: All United by a shared mission delivering reliable service and high quality water to $1 6 million people across four states at.

Eric Thornburg: At the same time, we continue executing our growth strategy and delivering shareholder value, including our unwavering commitment to the dividend, which we paid for more than 80 consecutive years.

Eric Thornburg: Our success is built on a culture of service to our customers communities the environment and shareholders.

Eric Thornburg: And I couldnt be prouder of our team, whose dedication makes it all possible.

Eric Thornburg: This is my last financial results call as President and CEO of SJW group.

Eric Thornburg: It's been an honor of the life of my lifetime to serve in this industry for more than 43 years.

Eric Thornburg: And I've been blessed with a very talented group of people surrounding me here at SJW group.

Eric Thornburg: I have great confidence that Andrew Bruce Kristen in hand, and the rest of the highly motivated and passionate teams across the country. We will build on the solid foundation that we've laid to continue delivering for customers employees communities shareholders and the environment.

Speaker Change: Andrew Bruce Kristen and Ann are always available for follow up for me I'll be around until June 30.

Eric Thornburg: We appreciate your interest and trust in SJW Group God bless.

Speaker Change: This concludes today's conference call. Thank you for participating you may now disconnect.

Eric Thornburg: Okay.

Eric Thornburg: [music].

Eric Thornburg: Okay.

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Eric Thornburg: Okay.

Eric Thornburg: [music].

Eric Thornburg: Yes.

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Eric Thornburg: Yes.

Eric Thornburg: Mhm.

Eric Thornburg: [music].

Eric Thornburg: Yes.

Eric Thornburg: [music].

Speaker Change: Ladies and gentlemen, thank you for standing by and welcome to SJW Group first quarter 2025 financial results call. At this time, all participants are in a listen only mode.

After the speaker's presentation, there will be a question and answer session to ask a question. During this session you will need to press star one on your telephone.

Speaker Change: People didn't hear an automated message advising your hands raised.

Speaker Change: I would draw your question. Please press star one again, please be advised that today's conference is being recorded I would like now to turn the conference over to Anne Kelly Chief Accounting Officer, Sir. Please go ahead.

Anne Kelly: Thank you Michelle welcome to the first quarter of 2025 financial results Conference call for SJW group.

Speaker Change: Presenting today with Eric Thornburg Chair of the Board, President and Chief Executive Officer, Andrew Walters, Chief Financial Officer, and Treasurer, Bruce Hauk, Chief Operating Officer, and Christian Johnson, Senior Vice President and Chief administrative officer.

Speaker Change: For those who would like to follow along slides accompanying our remarks are available on our website at SJW group Dotcom.

Speaker Change: Before we begin today I would like to remind you that this presentation and the related materials posted on our website contain forward looking statements.

Speaker Change: Many factors could cause the company's actual results and performance to differ materially from those expressed or implied by the forward looking statements.

Speaker Change: All forward looking statements are made as of today and SJW group disclaims any duty to update or revise such statements.

Speaker Change: You will have an opportunity to ask questions at the end of the presentation.

Speaker Change: Webcast is being recorded and an archive of the webcast will be available until July 21, 2025, you can access the press release and the webcast at SJW group's website.

Speaker Change: non-GAAP financial measures should be considered as a supplement to the financial information prepared on a GAAP basis, rather than an alternative to their respective GAAP financial measures reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are presented in the table in the appendix of our presentation.

Andrew Walters: I will now turn the call over to Andrew.

Anne Kelly: Thank you Anne.

Andrew Walters: Welcome everyone and thank you for joining us.

Speaker Change: I am honored to serve as Chief financial Officer, and Treasurer of SJW group.

Speaker Change: Looking forward to becoming the Chief Executive Officer of Halloween, Eric Laurinburg plant and well deserved retirement on July 1st.

Speaker Change: I want to add my sincere gratitude to Eric for his leadership and fellowship over the years.

Speaker Change: I am pleased to share that in the first quarter of 2025, we continue to beat drinking water and environmental regulations.

Speaker Change: Oliver on our public health and environmental stewardship commitments.

Speaker Change: Provide high quality water service to customers.

Speaker Change: We also delivered strong financial results, including a nearly 41% increase in net income from the first quarter of 2024 on a GAAP basis.

Speaker Change: All with an eye at affordability.

Speaker Change: Some highlights from the first quarter.

Speaker Change: San Jose Water's 2025 to 2027 General rate case was delivered on time and was effective on January 1st.

Speaker Change: Connecticut, water's water infrastructure and conservation adjustments in water revenue adjustment filings were approved.

Speaker Change: Yeah.

Speaker Change: Main waters petition to unify our 10 different rate districts and our rate case for the Camden Rockport Division are progressing before the Maine public utility Commission.

Speaker Change: Texas water second system improvement charge applications before the public utilities Commission of Texas.

Speaker Change: In quarter one.

Speaker Change: $78 million was invested in water and wastewater utility infrastructure across all four states and we are on track to meet our 2025 capital plan.

Speaker Change: Importantly, we continue to create long term shareholder value with earnings per diluted share a 49.

Speaker Change: And adjusted non-GAAP earnings per diluted share of <unk> 50.