Q1 2025 American States Water Co Earnings Call

May 8, 2025

Okay.

Operator: Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to the American States Water Company conference call discussing the company's first quarter 2025 results. The call is being recorded. If you would like to listen to the replay of the call, it will begin this afternoon at 5 p.m. Eastern time and run through May 15th on the company's website, www.aswater.com. The slides that the company will be referring to are also available on the website. All participants will be in a listen-only mode. Should you need assistance, please email a conference specialist by pressing the star key followed by zero.

Speaker Change: Good afternoon, ladies and gentlemen, thank you for standing by and welcome to the American States Water Company Conference call discussing the company's first quarter 2025 results.

The call is being recorded if you would like to listen to the replay of the call. It will begin this afternoon at five P. M. Eastern time and run through May 15 on the company's website www dot a S water dotcom.

The slides that the company will be referring to are also available on the website.

All participants will be in a listen only mode.

Should you need assistance please signal.

Specialists by pressing the star key followed by zero.

Operator: After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star and then one. To withdraw your questions, you may press star and two. This call will be limited to an hour.

Speaker Change: After todays presentation, there will be an opportunity to ask questions.

Speaker Change: I'll ask a question you May press Star and then one it's all your questions you May press Star two.

Speaker Change: This call will be limited to an hour.

Operator: Presenting today from American States Water Company are Bob Sprowls, President and Chief Executive Officer, and Eva Tang, Senior Vice President of Finance and Chief Financial Officer. As a reminder, certain matters discussed during this conference call may be forward-looking statements within the meaning of the Private Securities Litigation and Reform Act of 1995. Fully listed statements are not guarantees or assurances of any outcome, financial results, levels of activity, performance or achievement, and listeners are cautioned not to place undue reliance upon them. Forward-looking statements are subject to estimates and assumptions and known and unknown risks, uncertainties, and other factors.

Speaker Change: Presenting today from American States water company are Bob Sprowls.

Eva Tang: President and Chief Executive Officer, and Eva Tang Senior Vice President of Finance and Chief Financial Officer.

Eva Tang: As a reminder, certain matters discussed during this conference call may be forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995.

Eva Tang: Forward looking statements are not guarantees or assurances of any outcomes financial results.

Eva Tang: All of that activity performance or achievements.

Eva Tang: Listeners are cautioned not to place undue reliance upon them.

Eva Tang: Forward looking statements are subject to estimates and assumptions and known and unknown risks uncertainties and other factors.

Operator: Listeners should review the description of the company's risks and uncertainties that could affect the forward-looking statements in our most recent Form 10-K and Form 10-Q on file with the securities and exchange commission. Statements made on this conference call speak only as of the date of this call and are accepted as required by law. The company does not undertake any obligation to publicly update or revise any forward-looking statements.

Eva Tang: Listeners should review the description of the company's risks and uncertainties that could affect these forward looking statements.

Eva Tang: Most recent Form 10-K and Form 10-Q on file with the Securities and Exchange Commission.

Eva Tang: Statements made on this conference call speak only as of the date of this call and except as required by law. The company does not undertake any obligation to publicly update or revise any forward looking statement.

Operator: In addition, this conference call will include a discussion of certain measures that are not prepared in accordance with Generally Accepted Accounting Principles, or GAAP, in the United States and constitute non-GAAP financial measures under SEC rules. These non-GAAP financial measures are derived from consolidated financial information that are not presented in our financial statements that are prepared in accordance with GAAP.

Eva Tang: In addition, this conference call will include a discussion of certain measures that are not prepared in accordance with generally accepted accounting principles or GAAP in the United States and constitute non-GAAP financial measures under SEC rules.

Eva Tang: These non-GAAP financial measures are derived from consolidated financial information, but are not presented.

Eva Tang: In our financial statements that are prepared in accordance with GAAP.

Operator: For more details, please refer to the press release.

Eva Tang: For more details please refer to the press release.

Bob Sprowls: At this time, I would like to turn the floor over to Bob Sprowls, President and Chief Executive Officer of the American States Water Company. Thank you, Jamie. Welcome, everyone, and thank you for joining us today. I'll begin with a brief discussion on the quarter.

Eva Tang: At this time I would like to turn the floor over to Bob Sprowls, President and Chief Executive Officer of American States water company.

Speaker Change: Thank you Jamie.

Speaker Change: Welcome everyone and thank you for joining us today.

Speaker Change: I'll begin with a brief discussion on the quarter.

Bob Sprowls: Eva will then discuss some financial details, and then I'll wrap it up with updates on regulatory activity, ASUS. Dividend and then we'll take your questions. We started 2025 with strong financial results. Consolidated Earnings Per Share for the first quarter were $0.08. higher compared to the same quarter in 2024. Favorable variance is attributable to the receipt of final decisions from the California Public Utilities Commission, or CPUC, in the water and electric general rate cases. which authorized new water rates for 2025 to 2027 and authorized new electric rates for 2023 to 2026. these favorable variants. These favorable variances were partially offset by higher operating expenses.

Kevin: Kevin will then discuss some financial details.

Kevin: And then I'll wrap it up with updates on regulatory activity.

Kevin: Divvy.

Kevin: Dividends.

Kevin: And then we'll take your questions.

Kevin: We started 2025 with strong financial results.

Kevin: Consolidated earnings per share for the first quarter were eight cents.

Kevin: Higher compared to the same quarter in 2024.

Kevin: Favorable variance is attributable to the receipt of final decisions from the California Public Utilities Commission or CPUC.

Kevin: In the water and electric general rate cases.

Kevin: Which authorized new water rates for 2025 to 2027 and <unk>.

Kevin: <unk>, new electric rates for 2023 to 2026.

Kevin: This favorable variance.

Kevin: These favorable variances were partially offset by higher operating expenses.

Bob Sprowls: A $0.05 per share unfavorable variance from losses incurred on our investments to fund one of the company's retirement plans. and the dilutive effects from the issuance of equity. under American States Water's At-The-Market Offering Program. which decreased consolidated earnings by two cents per share.

Kevin: Five cent per share unfavorable variance from losses incurred on our investments to fund one of the company's retirement plans.

Kevin: And the dilutive effects from the issuance of equity.

Kevin: Under American States water's aftermarket offering program.

Which decreased consolidated earnings by <unk> <unk> per share.

Bob Sprowls: Our regulated utilities are on pace to invest a combined $170 to $210 million in infrastructure investments this year.

Kevin: Our regulated utilities are on pace to invest a combined $170 million to $210 million in infrastructure investments this year.

Eva Tang: With that, I will turn the call over to Eva to discuss earnings and liquidity. Thank you, Bob. Hello, everyone. Let me start with our first quarter results. recorded consolidated earnings worth $0.70 per share for the quarter as compared to $0.62 per share for the first quarter of last year. For our water utility, Golden State Water reported earnings worth $0.52 per share compared to $0.48 per share last year. The $0.04 per share increase in 2025 was largely due to the new 2025 water rate as a result of receiving a final decision in connection with Golden State Water's general rate case.

Eva Tang: With that I will turn the call over to Eva to discuss earnings and liquidity.

Eva Tang: Thank you, Bob and Hello, everyone, Let me start with our first quarter results.

Eva Tang: We recorded a consolidated 70 cents per share for the corner that's come characteristic teacher pence per share for the first quarter of last year.

Eva Tang: While they attended Golden State water is poised to actual of 52 cents per share compared to 48 tenths of a share last year.

Eva Tang: Four cents per share increased <unk> 75.

Judy: Hi, Judy.

Judy: And you're trying to you're trying to fight water rate.

Judy: Without receiving a final decision and kind of extra week, so that they want at getting a rate case.

Eva Tang: Partially offset by higher operating expenses and losses generated on investments held to fund a retirement plan as compared to gains during the same period in 2024 due to financial market conditions. Lastly, there was a decrease in earnings of $0.02 per share due to the dilutive effect from the issuance of equity on the AWR at the market offering program. Our electric segment earnings were $0.07 per share for the quarter as compared to $0.05 per share for the same quarter in 2024, a $0.02 per share increase. primarily due to receiving the final CPUC decisions on the electric general rate case with the new 2025 electric rates as compared to 2022 rates used to record revenues during the first quarter of 2024.

Judy: Partially offset by higher operating expenses and in Austin.

Judy:

Judy: Oh, it's 258 retirement plan, that's compared to a game.

Judy: Period quite transport.

Judy: Due to financial market condition.

Judy: Biopsy that was decreasing.

Judy: Sure.

Judy: Got it.

Judy: Uh Huh issue in South Africa or.

Judy: The ATR aftermarket offering program.

Judy: Our electric segment earnings were seven cents per share for the quarter as compared to five cents per share for the second quarter and quite frankly for it.

Judy: Two cents per share increase.

Judy: They're truly seeking to find out.

Judy: On the electric general rate case.

Judy: We're trying to trying to file electric rate as compared to try and try and Peter right is to record revenue during the first quarter 'twenty to 'twenty four.

Eva Tang: Earnings from its U.S. were $0.13 per share for the quarter, which was consistent with the same period in 2024.

Judy: Earnings from ex U S.

Judy: <unk> per share for the quarter, which was consistent with the same period in 2024.

Eva Tang: which Bob will discuss further. Lastly, losses from our parent company were $0.02 per share for the quarter when compared to losses of $0.03 the same quarter in 2024, due largely to a decrease in interest expense resulting from lower average interest rate and lower borrowing levels at AWR's credit facility. Consolidated revenues for the first quarter increased by $12.7 million when compared to the first quarter last year. Revenues for the water segment increased by $11.7 million, largely due to new 2025 water rates as a result of receiving a final decision in Golden State Water's General Rate Case Proceedings.

Bob Sprowls: Which Bob will discuss further.

Bob Sprowls: Vaccine doses somehow parent company or two cents per share for the quarter when compared to losses of three since the same quarter. In 2004 was largely due to a decrease in interest expense, resulting from lower average interest rate and lower borrowing levels at acre.

Bob Sprowls: He got the credit facility.

Bob Sprowls: Consolidated revenues for the first quarter increased by $12 $7 million when compared to the first quarter of last year revenue for the water segment increased by $11.7 million largely due to it when you were trying to trying to fight a wider rate activity.

Bob Sprowls: I'll go off receiving a final decision in Golden State water's getting a rate case proceeding.

Bob Sprowls: Effective January 1st try 25 Golden state water transitioned from a full revenue decoupling Bakken et cetera.

Bob Sprowls: Modified rate adjustment mechanism.

Speaker Change: I've seen blown away style, either revenue adjustment mechanism or the Amazon.

Eva Tang: Zero water consumption for the first quarter of 2025. Approximated consumption levels adopted in the new 2025 rate. And therefore, Gwinnett State Water's transition to the NBRAM did not have a mature impact to revenues recorded during the first quarter. Revenue for the electric segment increased by $2.8 million, mainly due to new 2025 electric rates as compared to 2022 rates used to record revenues during the first quarter of last year. Revenue from FUS decreased $1.8 million, primarily due to lower construction activities during the quarter as they were negatively impacted by unfavorable weather conditions. which were less impactful during Q1 in 2024.

Speaker Change: They all water consumption for the first quarter of 25 approximate it consumption that was adopted in the new 'twenty 'twenty fight right.

Speaker Change: And therefore Golden state water has transitioned to the AMT, Brad did not have a material impact to revenue recorded during the first quarter.

Speaker Change: Revenue for the electric segment increased by $2.8 million, mainly due to <unk>.

Speaker Change: And even trying to quantify electric rate as compared to contracts to rates used to record revenue during the first quarter of last year.

Speaker Change: I think as far as U S decreased $1 $8 million, primarily due to lower construction activities during the quarter.

Speaker Change: They were negatively impacted by unfavorable weather conditions.

Speaker Change: Which was less impactful during Q1 and two I tried before.

Eva Tang: Turning to slide 9. Supply costs increased by $4.3 million, mostly due to an increase in customer water usage and higher overall per unit water supply costs. Also effective this year, Golden State Water transitioned from a full-cost supply cost balancing account to an incremental cost balancing account for supply cost. As a result, Golden State Water's earnings are now subject to favorable and unfavorable changes in the water supply source mix as compared to adopted supply source mix reflected in the revenue requirement. During the first quarter, our pumped water sources, which cost less than purchased water, were capable of meeting a greater portion of customer demand.

Speaker Change: Turning to slide nine.

Speaker Change: Supply costs increased by $4 $3 million, mostly due to an increase in customer water usage and higher overall put you in their water supply cost.

Speaker Change: Also effective this year Golden state water transitioned from a full cost power supply cost balancing account true incremental cost balancing account for supply costs.

Speaker Change: Results Golden State Water's earned is now subject to favorable and unfavorable changes in the water supply source mix as compared to adopted the price towards the back.

Speaker Change: Reflected in the revenue requirement.

During the first quarter, a pump the water sources, which cost less and purchased water. We're capable of meeting a greater portion of customer demand.

Eva Tang: However, the favorable supply cost experience from the favorable supply mix during the first quarter may or may not continue during the remainder of the 2025 year. Looking at total operating expenses, other than supply costs, consolidated expenses increased by $2 million compared to 2024. This increase includes the impact of the electric general rate case decision issued in January, which authorized recovery of higher operating expenses, primarily for vegetation management and other wildfire mitigation efforts. These costs were previously excluded from customer rates and not expensed in the first quarter of last year. that they were being tracked in their Miranda account.

Speaker Change: However, this favorable supply costs experienced founders.

Speaker Change: The favorable supply mix during the first quarter may or may not continue.

Speaker Change: The reason that they're also trying to kind of five year.

Speaker Change: Looking at total operating expenses other than supply costs consolidated expenses increased by two $2 million compared to 24.

Speaker Change: Increase in crew includes the impact of the electric General rate case decision issued in January which authorizes recovery of higher operating expenses.

Speaker Change: Lower therefore vegetation management other wildfire mitigation efforts.

Speaker Change: These costs were previously excluded from customer rates.

Speaker Change: And not expensed in the first quarter of last year.

Speaker Change: They were being tracked in memoranda accounts.

Eva Tang: They are now included in adopted electric revenue. In addition, the increase was due to higher overall operating expenses, partially offset by lower U.S. construction expenses. Lastly, there was an overall decrease in other expenses, net of other income of $2.5 million due largely to losses generated on investment held to fund a retirement plan during the quarter, as compared to gains on investments during the same quarter in 2024 due to financial market.

Speaker Change: Now included in adopted electric revenue.

Speaker Change: In addition, the increase was due to higher overall operating expenses.

Speaker Change: Actually offset by lower as U S construction expenses.

Speaker Change: Lastly, there wasn't a decrease in other expenses.

Speaker Change: Other expense net of other income of $2 $5 million.

Speaker Change: It was actually two losses generated on investments held to fund a retirement plan during the quarter.

Speaker Change: That's compared against our investment in the same quarter in 2024 due to financial market conditions.

Eva Tang: This slide shows ETS bridge comparing reported ETS for the first quarter of this year against the same period for 2024. Turning to liquidity, net cash provided by operating activity was $45.1 million for the quarter as compared to $45.8 million for the same quarter last year. with the change primarily due to timing of working capital items and the change in billed water consumption. With the CPUC approved decision received for both regulated utilities in January, we have implemented new water and electric rates during the quarter. In addition, both of our utilities have either filed or received approval of various advice letters based on previously approved regulatory mechanism.

Speaker Change: This slide shows EPS bridge, comparing reported EPS for the first quarter of this year against the same period for 'twenty you said before.

Speaker Change: Turning to liquidity net cash provided by operating activity was $45 $1 million for the quarter.

Compared to $45 $8 million for same quarter last year.

Speaker Change: With the change primarily due to timing of working capital items and the change in billed water consumption.

Speaker Change: With the CPUC approved the decision receipts for both regulated utilities in January we have implemented a new water and electric rates during the quarter.

Speaker Change: In addition, both of our utilities have either filed or received approval of ferrous advice letter based on previous they approved the regulatory mechanism to.

Eva Tang: to implement surcharges or additional base rates. For investing activities, our regulated utility invested $45.5 million on company-funded capital projects in the first quarter, and we will be on target to reach $170 to $210 million for 2025.

Speaker Change: To implement surcharges or additional base rate.

Speaker Change: For investing activities, a regulated utility invested $45 $5 million on company funded capital projects in the first quarter.

Speaker Change: And we will be on target to reach $170 million to $210 million for 2025.

Eva Tang: in terms of financing activities. American States Water, under its at-the-market offering program, raised a proceeds of $25.8 million during the first quarter, net of issuing costs and legal costs. In February, our electric segment completed an issue of $50 million in unsecured private placement notes that matured in 2013. In addition, earlier this week, American States Water and Golden State Water executed amendments to their credit agreement to extend the credit facility term from June 2028. to June 2029. As part of this amendment, American States Water also expanded its credit facility borrowing capacity from $165 million to $195 million.

Speaker Change: In terms of financing activities.

Speaker Change: I can say is water under its aftermarket offering program raised proceeds of $25 $8 million during the first quarter net of issuance costs and legal costs.

Speaker Change: In February our electric Beckman completed an issue of it.

Speaker Change: Millions of dollars in unsecured private placement notes that matured in 2013.

Speaker Change: In addition earlier this week American states water and Golden State water executed amendments to the credit agreement to extend the credit facility term from June 28, two.

Speaker Change: Through June twice, she tried to deny that.

Speaker Change: As part of this Amendment American States water also extended its credit facility borrowing capacity from $165 million $295 million.

Eva Tang: American States Water currently maintains a credit rating of A-Stable with Standard & Poor's Global Ratings for S&P while Golden State Water maintains an A-Plus Stable Ratings with S&P and an A-Two Stable Ratings with Moody's Investors Service.

Speaker Change: American States water currently maintaining our credit rating of a staple with standard <unk> Poor's global ratings for it or S&P while.

Speaker Change: Golden State water maintained its AA plus stable rating with S&P and <unk> stable rating with Moody's investors service.

Eva Tang: These are some of the highest credit ratings in the U.S.

Speaker Change: These are some of the highest credit ratings in the U S investor owned water utility industry.

Bob Sprowls: Investor Owned Wallet to be in the With that, I'll turn the call back to Bob.

Bob Sprowls: With that I'll turn the call back to Bob.

Bob Sprowls: Thank you, Eva. I'll begin with Golden State Water's General Rake. On January 30th, the CPUC issued a final decision in connection with the recent general rate case. covering 2025 through 2027. Final decision adopts the settlement agreement between Golden State Water and the Public Advocates Office at the CPUC or Cal Advocates. Among other items, the decision authorizes Golden State Water to invest $573.1 million and Capital Infrastructure over the three-year capital cycle. This includes $17.7 million of advice letter capital investments. to be filed for revenue recovery during the second and third year attrition increases. When those projects are complete.

Bob Sprowls: Thank you Eva.

Speaker Change: I'll begin with Golden State Water's General Richards.

Speaker Change: On January 30, the CPUC issued a final decision in connection with the recent general rate case.

Speaker Change: Covering 2025 through 2027.

Speaker Change: Final decision adopts the settlement agreement between Golden State water and the public advocates office at the CPUC or tell advocates.

Speaker Change: Among other items the decision authorizes Golden state water to invest $573 $1 million.

Speaker Change: In capital infrastructure over the three year capital cycle.

Speaker Change: This includes $17 $7 million of advice letter capital investments.

Speaker Change: To be filed for revenue recovery during the second and third year attrition increases.

Speaker Change: When those projects are completed.

Bob Sprowls: In addition, the approved settlement agreement includes $58.2 million of advice letter capital investments that began construction in 2023, which we expect to file for revenue recovery during the second and third year attrition increases when those projects are completed. For all of the Advice Letter projects, Golden State Water is allowed to accrue interest during construction at the adopted cost of debt and recover the full rate of return, including all applicable components of the revenue requirement. After the assets are placed in service, up until the assets are included in customer rates. Excluding Revenues for Advice Lettered Capital Projects adopted operating revenues, less water supply costs for 2025.

Speaker Change: In addition, the approved settlement agreement includes $58 $2 million of advice letter capital investments.

Speaker Change: <unk> began construction in 2023.

Speaker Change: Which we expect to file for revenue recoveries during the second and third your attrition increases when those projects are completed.

Speaker Change: For all of the advice letter projects Golden State water has allowed to accrue interest during construction.

Speaker Change: And cost of debt.

Speaker Change: And recover the full rate of return, including all applicable components of the revenue requirement.

Speaker Change: After the assets are placed in service up until the assets are included in customer rates.

Speaker Change: Excluding revenues for advice letter capital projects.

Speaker Change: Adopted operating revenues less water supply cost for 2025.

Bob Sprowls: projected increase by approximately $23 million when compared to 2024. As we mentioned previously, the final decision ordered Golden State Water to transition from a full decoupling mechanism. and a full supply cost balancing account. which we again requested in the general rate case application. to a Modified Rate Adjustment Mechanism, a Monterey-style Water Revenue Adjustment Mechanism, or MRAS. and an incremental cost balancing account for supply costs. effective January 1st, 2025. Without the continuation of a full revenue decoupling mechanism and a full cost balancing account for water supply. Company may be subject to future volatility in revenues and earnings as a result of fluctuations in water consumption by its customers.

Speaker Change: Our projected to increase by approximately $23 million when.

Speaker Change: When compared to 2024.

Speaker Change: As we mentioned previously the final decision ordered Golden state water to transition from a full decoupling mechanism.

Speaker Change: Yeah.

Speaker Change: And a full supply cost balancing accounts.

Speaker Change: Which we again requested in the general rate case application.

Speaker Change: Two a modified rate adjustment mechanism Monterey Monterey style water revenue adjustment mechanism or M ramp.

Speaker Change: And the incremental cost balancing account for supply cost effective January one 2025.

Speaker Change: Without the continuation of a full revenue decoupling mechanism.

Full cost balancing account for water supply.

Speaker Change: The company may be subject to future volatility in revenues and earnings.

Speaker Change: As a result of fluctuations in water consumption by our customers.

Bob Sprowls: and Changes in Water Supply, Sourc Final decision also adopted the company's MRAM rate design proposal. which authorized Golden State Water to increase the revenue requirement in its fixed service charges. to between 45 and 48 percent of the revenue requirement depending on the rate making area. Representing approximately 65% of Golden State waters. as Eva mentioned earlier. Bill water consumption for this first quarter was similar to consumption levels adopted in the new 2025 rate. and therefore the transition from a full revenue decoupling mechanism to the MRAM did not have a material impact to revenues recorded during the first quarter.

Speaker Change: And changes in water supply source mix.

Speaker Change: Final decision also adopted the company's M Ram rate design proposals.

Speaker Change: Which authorizes Golden state water to increase the revenue requirement and its fixed service charges.

Speaker Change: To between 45, and 48% of the revenue requirement, depending on the rate making area.

Speaker Change: Representing approximately 65% of Golden State waters.

Speaker Change: Fixed costs in aggregate.

Eva Tang: As Eva mentioned earlier.

Speaker Change: Billed water consumption for this first quarter was similar to consumption levels are adopted in the new 2025 rate.

Speaker Change: And therefore, the transition from a full revenue decoupling mechanism to the M. Ram did not have a material impact to revenues recorded during the first quarter.

Bob Sprowls: In terms of water supply costs, in the first quarter, our pumped water sources, which cost less than purchased water. We're capable of meeting a greater portion of customer demand. However, this favorable water supply mix experienced during the first quarter may or may not continue during the remainder of the 2025 year. And our water utilities earnings will be subject to future volatility as a result of favorable and unfavorable changes in the water supply. compared to the adapt.

Speaker Change: In terms of water supply costs in the first quarter.

Speaker Change: <unk> pumped water sources.

Speaker Change: Which cost less and purchase water.

Speaker Change: We're capable of meeting a greater portion of customer demand.

Speaker Change: However, this favorable water supply mix experienced during the first quarter.

Speaker Change: May or may not continue during the remainder of the 2025 year.

Speaker Change: And our water utilities earnings will be subject to future volatility.

Speaker Change: Result of favorable and unfavorable changes in the water supply source mix.

Speaker Change: Paired to the adopted mix.

Bob Sprowls: On March 5th of this year, Gold State Water filed an application for rehearing of the CPUC's decision in the 2025 to 2027 general rate case. asserting that the final decision's denial of Golden State Water's revenue decoupling proposal was not supported by the record. At this time, management cannot predict the outcome of this matter.

Speaker Change: On March 5th of this year Golden State water filed an application for rehearing of the Cpuc's decision.

Speaker Change: In the 2025 to 2027 general rate case.

Speaker Change: Asserting that the final decisions denial of Golden State Water's revenue decoupling proposal was not supported by the record.

Speaker Change: At this time management cannot predict the outcome of this matter.

Bob Sprowls: On January 14th of this year, the CPUC approved a request to defer the cost of capital application by one year to May 1st, 2026. With the deferral, Golden State Water will retain its authorized return on equity of 10.06%. and a 57% equity ratio. through the end of 2026.

Speaker Change: On January 14th of this year.

Speaker Change: The CPUC approved a request to defer the cost of capital application by one year to May one 2026.

Speaker Change: With the deferral Golden State water will retain its authorized return on equity of 10.06%.

Speaker Change: And a 57% equity ratio.

Speaker Change: Through the end of 2026.

Bob Sprowls: Turning our attention to slide 14, we present the growth in Golden State Water's adopted average water rate base. from 2018 through 2024. increased from $752.2 million in 2018. at $1,357,500,000 in 2024. That is a compound annual growth rate of 10.3% for the six year period. Releasing 2018. as the base year for the calculation. Anticipates a robust and sustained growth in its rate base over the next few years as a result of receiving its recent general rate case decision. that not only authorized it to invest $573.1 million in capital infrastructure. But in addition to that, capital investments of certain projects through advice letter filings.

Speaker Change: Turning our attention to slide 14, we present the growth in Golden State Water's adopted average water rate base.

Speaker Change: From 2018 through 2024.

Speaker Change: Which increased from $752 $2 million in 2018.

Speaker Change: The 1 billion $357 5 million in 2024.

Speaker Change: That is a compound annual growth rate of 10, 3% for the six year period using.

Speaker Change: Using 2018.

Speaker Change: As the base year for the calculation.

Speaker Change: Golden State water anticipates, a robust and sustained growth in its rate base over the next few years.

Speaker Change: As a result of receiving its recent general rate case decision.

Speaker Change: Not only authorized it to invest $573 $1 million in capital and infrastructure.

Speaker Change: But in addition to that.

Speaker Change: Capital investments of certain projects through advice letter filings.

Bob Sprowls: upon completion will contribute to a further growth in rate base in the second and third year of this cycle.

Speaker Change: Upon completion will contribute to further growth in rate base in the second and third year of this cycle.

Bob Sprowls: On January 16th of this year, our electric utility subsidiary received a final CPUC decision.

Speaker Change: On January 16th of this year, our electric utility subsidiary received a final CPUC CPUC decision.

Bob Sprowls: Danish General Raid Case. that approves the settlement agreement between Bear Valley Electric Cal Advocates, and the other intervener in the proceeding in its entirety. The proceeding sets rates retroactive to January 1st, 2023, and determines electric rates for the years 2023 through 2026. The decision, among other things, allows Bear Valley Electric to invest $75.6 million in capital infrastructure, including at least $23.1 million of advice letter projects over the four-year rate cycle. adopts a return on equity of 10.0% and a 57% equity ratio. and approves recovery of requested capital expenditures and incremental operating costs incurred prior to 2023 in connection with its wildfire mitigation plan.

Speaker Change: And its general rate case.

Speaker Change: That approves the settlement agreement between Bear Valley Electric.

Speaker Change: <unk> advocates and the other intervenors in the proceeding in its entirety.

Speaker Change: Proceeding sits rates retroactive to January one 2023.

Speaker Change: And determines electric rates for the years 2023 through 2026.

Speaker Change: The decision among other things allows bear valley electric to invest $75 $6 million and capital infrastructure, including at least $23 $1 million of advice letter projects over the four year rate cycle.

Speaker Change: Adopts a return on equity of 10.0% and a 57% equity ratio.

Speaker Change: And approves recovery of requested capital expenditures.

Speaker Change: Incremental operating costs incurred prior to 2023 and.

Speaker Change: In connection with its wildfire mitigation plans.

Bob Sprowls: These costs were not previously included in customer rates. In addition, the settlement provides increases in the adopted operating revenues of $2.2 million for 2025. and $3.3 million in 2026. Similar to 2024, the rate increases for 2025 and 2026 will not be subject to an earnings tax. previously mentioned advice letter projects of at least $23.1 million. are expected to generate additional annual operating revenues of approximately $3 million when the respective projects are completed, placed in service, and filed for recovery and customer rates. Projects also accrue allowance for funds used during construction. that will further increase. revenue requirement.

Speaker Change: These costs were not previously included in customer rates.

In addition, the settlement provides increases and the adopted operating revenues of $2 $2 million for 2025.

Speaker Change: And $3 $3 million in 2026.

Speaker Change: Similar to 2020 for the.

Speaker Change: So rate increases for 2025, and 2026 will not be subject to an earnings test.

Speaker Change: The previously mentioned advice letter projects of at least $23 $1 million.

Speaker Change: Are expected to generate additional annual operating revenues.

Speaker Change: Of approximately $3 million when the respective projects are completed and placed in service and filed for recovery in customer rates.

Speaker Change: These projects also accrue allowance for funds used during construction.

That will further increase.

Speaker Change: Our revenue requirement.

Bob Sprowls: That's sweet.

Speaker Change: Lastly.

Bob Sprowls: In April, our electric utility implemented new base rates to recover the revenue requirement associated with $11.6 million Capital Projects Approved for Recovery through Advice Letter.

Speaker Change: In April our electric utility implemented new base rates to recover the revenue requirement associated with 11 $6 million.

Speaker Change: Of capital projects approved for recovery through advice letters.

Bob Sprowls: Let's continue to ASUS, which contributes the same earnings per share. year-over-year of 13 cents. There was an increase in management fee revenues resulting from the commencement of water and wastewater operations. in April 2024 at the new bases Naval Air Station Patuxent River and Joint Base Cape Cod. and the resolution of various economic price adjustments at Legacy Basin. These increases were offset by a decrease in construction activity. and higher overall operating expenses. During the quarter, construction activities were negatively impacted by unfavorable weather conditions. which we didn't experience to the same degree last year. The delays on construction activities are expected to be caught up during the remainder of 2025.

Speaker Change: Let's continue to S U S, which contribute the same earnings per share.

Speaker Change: Year over year of 13.

Speaker Change: There was an increase in management fee revenues, resulting from the commencement of water and wastewater operations.

Speaker Change: In April 2024.

At the new bases.

Speaker Change: It will air station Patuxent River and joint base Cape Cod.

Speaker Change: And the resolution of various economic price adjustments at legacy basis.

Speaker Change: These increases were offset by a decrease in construction activity.

Speaker Change: And higher overall operating expenses.

Speaker Change: During the quarter construction activities were negatively impacted by unfavorable weather conditions.

Speaker Change: Which we didn't experience to the same degree last year.

Speaker Change: The delays on construction activities are expected to be caught up during the remainder of 2025.

Bob Sprowls: During 2024, ASUS was awarded $56.5 million in new capital upgrade projects on all military bases served. for completion in 2024 through 2027. This is a record high for ASUS. We continue to project ASUS to contribute $0.59 to $0.63 per share this year and remain confident that we can effectively compete for new military-based contract awards.

Speaker Change: During 2024, <unk> was awarded $56 $5 million in new capital upgrade projects.

Speaker Change: On all military bases served.

Speaker Change: For completion in 2024 through 2027.

Speaker Change: This is a record high for <unk>.

Speaker Change: We continue to project <unk> to contribute 59 cents to <unk> 63 per share this year.

Speaker Change: I remain confident that we can effectively compete for new military base contract Awards.

Bob Sprowls: I'd like to turn our attention to dividends, which remain a compelling part of our investment story. Our board of directors have approved a second quarter cash dividend. Our quarterly dividend rate has grown at a compound annual growth rate, or CAGR, of 8.8% over the last five years through 2024. We continue to exceed our policy goal of achieving a compound annual growth rate in the dividend of more than 7% over the long term.

Speaker Change: I'd like to turn our attention to dividends, which remain a compelling part of our investment story.

Speaker Change: Our board of directors have approved a second quarter cash dividend.

Speaker Change: Our quarterly dividend rate has grown at a compound annual growth rate or CAGR of eight 8% over the last five years through 2024.

Speaker Change: We continue to exceed our policy goal of achieving a compound annual growth rate in the dividend of more than 7% over the long term.

Bob Sprowls: I'd like to conclude our prepared remarks by thanking you for your interest in American States Water.

Speaker Change: I'd like to conclude our prepared remarks by thanking you for your interest in American States water and we'll now turn the call over to the operator for questions.

Operator: And we'll now turn the call over to the operator for questions. Ladies and gentlemen, at this time, we will begin that question and answer session. To ask a question, you may press star and then one using a touch-tone telephone. To withdraw your question, you may press star and two. If you are using a speakerphone, we do ask that you please pick up the handset prior to pressing the key to ensure the best sound quality. Once again, that is star and then one, so join the question queue. We'll pause momentarily to assemble the roster.

Speaker Change: Ladies and gentlemen at this time.

Speaker Change: We will begin the question and answer session.

Speaker Change: You ask a question you May press Star and then one using a touchtone telephone.

Speaker Change: It's all your questions you May press star two.

Speaker Change: You are using to speak with you at the half.

Speaker Change: Handset part of the price of the key to ensure the best sound quality.

Speaker Change: Once again that is star then one.

Speaker Change: A question for you.

Speaker Change: We will pause momentarily to assemble the roster.

Jonathan Reeder: And our first question comes from Jonathan Reeder from Wells Fargo. Please go ahead with your question. Hey, good morning, Bob and Eva. Your apps on a good Q1 pretty straightforward update following the year and one just two months ago. But I had two quick questions for you. Eva, I know you said you raised a little more than $25 million of equity via the ATM in Q1. Are you still, you know, expecting to raise about $60 million over the full year 2025? Yeah, I think in terms of full year, $60 million probably is our target, but, you know, right now we have some capacity in our credit facility, and so we'll reassess how much we need to fund the market for this year, but over the three-year vacancy cycle, we plan to do the $200 million.

Speaker Change: And our first question comes from Jonathan Reeder from Wells Fargo. Please go ahead with your question.

Jonathan Reeder: Hey, good morning, Bob and Eva.

Jonathan Reeder: Congrats on a good Q1 pretty straightforward update.

Jonathan Reeder: Following the year end, one just two months ago.

Jonathan Reeder: But had.

Speaker Change: Two quick questions for you Steve I know you said you raised a little more than 25 billion of equity via the ATM in Q1.

Jonathan Reeder: Are you still expecting to raise about $60 million over the full year 2025.

Speaker Change: Yeah.

Speaker Change: Oh.

Speaker Change: Yeah, I think in terms of fully 60 million copies of our targets, but you know right now we.

Speaker Change: Have some capacity.

Speaker Change: Our credit facility and so when we assess how much we may decide to market this year.

Speaker Change: Over the three year vacate cycle, we trying to do the $209 well he did I want to say 100.

Eva Tang: We already did, I want to say, $100 million. $190 million, $117 million, oh no, $117 million so far, so we still have a total of $83 to $85 million left Jonathan, so we're playing out for this next Okay, so think of it as that 85 million now spread out over over two years.

Speaker Change: And good night.

Speaker Change: Okay.

Speaker Change: I don't know 117.

Speaker Change: $17 million so far so we still have a total of $83 million to $85 million last count there. So so we're playing playing out.

Speaker Change: The next two years.

Speaker Change: Okay. So think of it of that $85 million spread out over two years.

Speaker Change: Oh absolutely.

Bob Sprowls: Okay. What about on ASUS? Bob, is there, you know, any update on new military base privatization efforts? You know, are there any, any bases that have, you know, come up for RFP that are progressing and, you know, we could get some sort of decision in, you know, the next couple years or, you know, has... I guess, Trump administration's, you know, efforts around Doge or anything impacted the way you see that business evolving either, you know, more privatization is occurring or consolidation of bases or kind of anything like that. Yes, and hello Jonathan, hope you're doing well.

Okay.

Speaker Change:

Speaker Change: What about on the ASU.

Speaker Change: S U S. Bob is there any update on new military base privatization efforts are there any.

Speaker Change: Any basins that have come up for RFP that are progressing and we could get.

Speaker Change: Some sort of decision.

Speaker Change: The next couple of years or you know has.

Speaker Change: I guess the Trump administration's.

Speaker Change: Let's wrap those are anything impacted the way you see that business evolving either you know more privatizations occurring or consolidation of basis or kind of anything like that.

Jonathan Reeder: Yes, Hello, Jonathan Hope you're doing well.

Bob Sprowls: Yeah, so on the military front, as we've talked in the past, we sort of bifurcate the military program by a branch, and so we've got the Army, the Air Force, and the Navy. Do we see any actual privatizations in 2025? There are no 50-year privatizations out on the street at this point. Um, so. And the expectation there is. We probably won't see a privatization this year. In fact, an award is what I would say. We do expect the Army to be putting Perhaps one or two privatizations up later this year. Although, you know, things are a little bit in a state of flux there, you know, not from a, hey, we've heard this or we've heard that.

Jonathan Reeder: Yeah, so on the military front.

Jonathan Reeder: We've talked in the past we sort of.

Jonathan Reeder: Bifurcate military program by <unk>.

Jonathan Reeder: Ranch and so we've got the army the Air Force and the Navy.

Jonathan Reeder:

Speaker Change: Do we see any actual privatizations in 2025.

There are no 50 year privatizations out on the street at this point.

Speaker Change: So the expectation there is.

Speaker Change: It would probably won't see a prioritization this year.

Speaker Change: And in fact, an award is what I would say, we do expect the army.

Speaker Change: To be putting.

Speaker Change: Perhaps one or two privatizations up later this year.

Speaker Change: Although you know things are a little bit in a state of flux there.

Speaker Change: You know not not from Hey, we've heard this where we've heard that it's just more.

Bob Sprowls: It's just more us trying to read the tea leaves that everyone else is reading. I'm not sure that means we're going to see a slowdown or an increase, but we recognize that we have a new administration in office, and it could have an impact on water quality. Military-based privatizations, we're not sure which direction either at this But it looks like the Army is sort of completed, they're in the process of completing their assessment. Approximately a year ago, our team was at a presentation where they were. talking very favorably about doing, sort of cranking back up the privatization program.

Speaker Change: Just trying to read the tea leaves that everyone else is reading.

Speaker Change: I'm not sure that means we're going to see a slowdown or an increase but we recognize that we have.

Speaker Change: A new administration in office and it could have an impact on.

Speaker Change:

Speaker Change: Military based privatizations were not sure which direction either at this point.

Speaker Change: But you know it looks like the army is sort of completed or in the process of completing their assessment approximately a year ago. Our team was at a presentation, where they were talking very favorably about doing.

Speaker Change: Sure Cranking back up the privatization program.

Bob Sprowls: As you may know, we, the Army had sort of taken a pause since the end of 2020 on that. Do we think the Air Force is perhaps a little bit behind the Army in reinstituting their program? But the Navy has been, I would say. are the most excited about the program. As you know, they've done a couple of privatizations, one of which and the Tuxet River that we And then we have the JBCC contract, which is a 15-year contract. And it's possible we'll see something similar to that that could get worked on during 2025, but it's not entirely clear.

Speaker Change: As you May know.

Speaker Change: The army has sort of taken a pause since the end of 2020 on that program.

Speaker Change:

Speaker Change: The Air Force is perhaps a little bit behind the army.

Speaker Change: Re instituting their program.

Speaker Change: But the Navy has been.

Speaker Change: I would say.

Speaker Change: The most excited about the about the program and.

As you know they've done a couple of privatizations, one of which is the Patuxent River.

We had one.

Speaker Change:

Speaker Change: And then we have the <unk>.

Speaker Change: <unk> contract, which is a 15 year contract.

Speaker Change: And it's possible and we'll see.

Speaker Change: Something similar to that that could get.

Speaker Change: Worked on during 2025, but it's not entirely clear.

Speaker Change: Hum about that so there's a number of irons in the fire.

Bob Sprowls: about that. So there's a number of irons in the fire, some non-traditional. Those non-traditional are a little more difficult to bring to closure. Similar to JBCC, we had to spend quite a bit of time on that, but we're glad to have that contract. It's sort of a new contracting vehicle that is available to the Department of Defense at this point. We're proud that we know how to make that work. And perhaps that gives us a leg up on the competition, at least on those kinds of private projects. That was a long-winded answer, I'm happy to expand and hopefully answer your questions.

Speaker Change: Some non traditional non traditional or a little more difficult to bring to closure.

Speaker Change: Similar terms like JBC we.

Speaker Change: We did spend quite a bit of time on that but we're glad to have that contract and it's a.

Speaker Change: It's sort of a new contracting vehicle that is available to the department of defense at this point.

Speaker Change: We're proud that we know how to how to make that work and perhaps that gives us a leg up on the competition at least on those kinds of privatizations.

Speaker Change: So that was a long winded answer.

Speaker Change: Happy to expand I hope hopefully I answered your question.

Bob Sprowls: No, that was a great answer. It was a lot more detail and good detail than I was anticipating, so I'm kind of chuckling a little bit, but I thank you for it, Bob, and just following up. I don't expand. Oh, well, it must be a rough morning for me. No, I mean, I love when management teams give real answers to questions. It's refreshing. Yeah, that's kind of where we're at, Jonathan. I mean, as you know, there's uncertainty at the DOD right now, and as there is at a lot of different government agencies, but So far, everything's going fine on the bases we have.

Speaker Change: That was a great answer.

Speaker Change: A lot more detail in a good detailed than I was anticipating so I'm kind of chuckling, a little bit, but I think you for Bob just calling up [laughter] I don't expand.

Speaker Change: Oh, well [laughter] Morgan from here.

Speaker Change: No I I mean, I I Love I Love when management teams give get real time answers to questions.

Speaker Change: Fresh it so.

Speaker Change: That's that's kind of where we're at Jonathan I mean its a.

Speaker Change: As you know there is uncertainty at the Dod right now and is there isn't a lot of different government agencies, but.

Speaker Change: So far everything is going good.

Speaker Change: Going fine on the bases, we have and.

Speaker Change:

Bob Sprowls: You know, we continue to make a lot of A lot of sales calls, so that's always important. Yeah, on on those non traditional like kind of the 15 year contracts. Do those like tend to be or do they necessarily have to be like kind of the smaller bases out there, whereas the larger ones would, you know, always go to the 50 year variety or you know, not necessarily Yeah, I think the I think the 15 year variety is I think it's just a little easier for the bases to get their arms around. 50 years is a long time.

Speaker Change: You know we continue to make a lot of.

Speaker Change: A lot of sales calls so that's that's always important.

Speaker Change: Yeah.

Speaker Change: Those non traditional like kind of the 15 year contracts.

Speaker Change: Do those like.

Speaker Change: Tend to be or do they necessarily have to be like kind of the smaller bases out there, whereas the larger ones.

Speaker Change: You know always go to the 50 year variety or not necessarily.

Speaker Change: Yes, it's I think the I think the 15 year variety is.

Speaker Change: I think there's just a little easier for the basis to get their arms around 50 years is a long time.

Speaker Change: Where obviously, we liked the 50 year contracts those are very very well run privatizations by the defense Logistics Agency energy.

Bob Sprowls: Obviously, we like the 50-year contracts. Those are very, very well-run privatizations by the Defense Logistics Agency Energy. Very, very sort of efficient bidding processes. Exchange for Services, the one we did at JBCC, it took a long time. kind of invented. us and JBC sort of invented a roadmap for that, and now it's, I guess, another tool in the tool belt for the government that maybe... You know, it might make it easier for them to sign up to a 15-year contract than a 50-year contract. So we'll see if there's those kinds of things out there. You know, we are pursuing at least one of those.

Speaker Change: Very very sort of efficient bidding processes.

Speaker Change: Exchange for services is the one we did at JBC took a long time.

Speaker Change: We kind of invented.

Speaker Change: Some JBC sort of embedded in the roadmap for that and and now its I guess another tool in the tool belt for the for the government that maybe.

Speaker Change: Yeah, it might make it easier for them to sign up to a 15 year contract and a 50 year contract.

Speaker Change:

Speaker Change: So we'll see if there's those kinds of things out there.

Speaker Change: We are we are pursuing at least one of those and then we're also seeing.

Bob Sprowls: And then we're also seeing other, I wanna say non-traditional type privatizations that will take probably several years. run to ground if in fact they come to fruition. So I guess my point is, it's not just the 50-year utility privatization template, but we do hope that the Army and the Air Force are back pursuing that.

Speaker Change: Other I want to say non traditional.

Speaker Change: Privatization that will take.

Speaker Change: Probably several several years.

Speaker Change: Run to ground if in fact, they come to fruition.

Speaker Change: So I guess my point is it's not just the 50 year utility privatization template.

Speaker Change: But we do hope that the RMB and the ear for start back.

Speaker Change: Pursuing that.

Bob Sprowls: Got it. Okay, well, good luck as you pursue those, you know, contracts and continue executing on the regulatory front. You can at least take a little bit of pause, be in between all the rate cases and the cost of capital extension. So that's good from a regulatory risk perspective. But thanks for the update and the time. Yeah, thank you, Jonathan. A little less activity on the regulatory front this year so far. So that's, that's nice. Last year was A lot of work and a lot of... Well, I mean, you know, we think we got two good decisions, and, you know, you just got to work hard on those things and try to get settlements, and we think we got a couple good ones.

Speaker Change: Got it okay well.

Speaker Change: Good luck as you pursue those contracts and.

Speaker Change: Continue executing on on the regulatory front that you can always take a little bit of pause in.

Speaker Change: In between.

Speaker Change: All the rate cases.

Speaker Change: Cost of capital extension.

Speaker Change: So that's good from a regulatory risk perspective, but thanks for the update on the time.

Jonathan Reeder: Thank you Jonathan.

Speaker Change: Less activity on the regulatory front this year. So far so that's that's nice last year was a.

Speaker Change: A lot of a lot of work and a lot of.

Speaker Change: Yes.

Speaker Change: Yeah, We think we've got two good decisions and you know you just got to work hard on those things and try to get settlements and we think we are.

Speaker Change: Got a couple of good ones so.

Operator: Thank you for your questions. Once again, if you would like to ask a question, please press star and then 1. To withdraw your questions, you may press star and 2. Okay, well, Jamie, if we aren't getting any other questions, we can wrap it up.

Speaker Change: Thank you for your for your questions.

Speaker Change: Once again, if you would like to ask a question. Please press star and then one so it's all your questions you May press Star two.

Speaker Change: Okay, Jamie if we arent getting any other questions. We can wrap it up is that okay.

Operator: Is that okay? Absolutely.

Bob Sprowls: With no further questions, I'll turn the floor back over to you, Mr. Sprowls, for closing remarks. Thank you, Jamie. I just I just wanted to thank everyone today for their participation and say that we look forward to speaking with you next quarter.

Speaker Change: Absolutely.

No further questions I'll turn the floor back over to you Mr. Sprowls for closing remarks.

Bob Sprowls: Thank you Jamie I, just I just wanted to thank everyone today for their participation and we look forward to speaking with you next quarter.

Operator: So have a good rest of your week, everybody.

Bob Sprowls: However have a good rest of your week everybody.

Operator: And with that, ladies and gentlemen, we'll conclude today's conference call and presentation. We do thank you for joining. You may now disconnect your line.

Bob Sprowls: And with that ladies and gentlemen, we will conclude today's conference call and presentation. We do thank you for joining you may now disconnect your lines.

Bob Sprowls: Okay.

Bob Sprowls: Yeah.

Bob Sprowls: [music].

Speaker Change: The call is being recorded if you would like to listen to the replay of the call. It will begin this afternoon at <unk> PM Eastern time and run through May 15 on the company's website www dot Aaas water dot com.

Speaker Change: The slides that the company will be referring to are also available on the website.

Speaker Change: All participants will be in a listen only mode.

Speaker Change: Should you need assistance. Please signal conference specialist by pressing the star key followed by zero.

Operator: After today's presentation, there will be an opportunity to ask a question. To ask a question, you may press star and then one. To withdraw your questions, you may press star and two. It's called We'll Be Limited to an Hour.

Speaker Change: After todays presentation, there will be an opportunity to ask questions.

Speaker Change: Ask a question you May press Star and then one to withdraw your question you May Press Star two.

Speaker Change: This call will be limited to one hour.

Operator: Presenting today from American States Water Company are Bob Sprowls, President and Chief Executive Officer, and Eva Tang, Senior Vice President of Finance and Chief Financial Officer. As a reminder, certain matters discussed during this conference call may be forward-looking statements within the meaning of the Private Securities Litigation and Reform Act of 1995. Fully looking statements are not guarantees or assurances of any outcomes, financial results, levels of activity, performance or achievements, and listeners are cautioned not to place under-reliance upon them. Forward-looking statements are subject to estimates and assumptions and known and unknown risks, uncertainties, and other factors.

Speaker Change: Presenting today from American States water company, Alright, Bob Sprowls.

Eva Tang: <unk>, Chief Executive Officer, and EBIT Tang Senior Vice President of Finance and Chief Financial Officer.

Eva Tang: As a reminder, certain matters discussed during this conference call may be forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995.

Eva Tang: Forward looking statements are not guarantees or assurances of any outcomes financial results levels of activity performance or achievements.

Eva Tang: Listeners are cautioned not to place undue reliance upon them.

Eva Tang: Forward looking statements are subject to estimates and assumptions and known and unknown risks uncertainties and other factors.

Operator: Listeners should review the description of the company's risks and uncertainties that could affect the forward-looking statements in our most recent Form 10-K and Form 10-Q on file with the Securities and Exchange Commission. Statements made on this conference call speak only as of the date of this call and are accepted as required by law. The company does not undertake any obligation to publicly update or revise any forward-looking statements.

Eva Tang: Listeners should review the description of the company's risks and uncertainties that could affect the forward looking statements.

Eva Tang: Most recent Form 10-K and Form 10-Q on file with the Securities and Exchange Commission.

Eva Tang: Statements made on this call speak only.

Eva Tang: As of the date of this call and except as required by law. The company does not undertake any obligation to publicly update or revise any forward looking statement.

Eva Tang: In addition, this conference call will include a discussion of certain measures that are not prepared in accordance with generally accepted accounting principles.

Eva Tang: In the United States and constitute non-GAAP financial measures under SEC rules.

Eva Tang: These non-GAAP financial measures are derived from consolidated financial information, but are not presented.

Eva Tang: In our financial statements that are prepared in accordance with GAAP.

Operator: For more details, please refer to the press release.

Eva Tang: For more details please refer to the press release.

Eva Tang: At this time I would like to turn the floor over to Bob Sprowls, President and Chief Executive Officer of American States water company.

Speaker Change: Thank you Jamie.

Speaker Change: Welcome everyone and thank you for joining us today.

Bob Sprowls: I'll begin with a brief discussion on the quarter. Eva will then discuss some financial details, and then I'll wrap it up with updates on regulatory activity, ASUS, dividends. And then we'll take your questions. We started 2025 with strong financial results. Consolidated Earnings Per Share for the first quarter were $0.08. higher compared to the same quarter in 2024. Favorable variance is attributable to the receipt of final decisions from the California Public Utilities Commission, or CPUC, in the water and electric general rate cases. which authorized new water rates for 2025 to 2027. and authorized new electric rates for 2023 to 2026.

Speaker Change: I'll begin with a brief discussion on the quarter.

Speaker Change: He will then discuss some financial details.

Speaker Change: And then I'll wrap it up with updates on regulatory activity.

U S divvy.

Speaker Change: Dividends.

Speaker Change: And then we will take your questions.

Speaker Change: We started 2025 with strong financial results Consol.

Speaker Change: Consolidated earnings per share for the first quarter were <unk>.

Speaker Change: Higher compared to the same quarter in 2024.

Speaker Change: Favorable variance is attributable to the receipt of final decisions from the California Public Utilities Commission or CPUC in the water and electric general rate cases.

Speaker Change: Which authorized new water rates for 2025 to 2027 and.

Speaker Change: And authorized new electric rates for 2023 to 2026.

Bob Sprowls: these favorable variants. These favorable variances were partially offset by higher operating expenses. A $0.05 per share unfavorable variance from losses incurred on our investments to fund one of the company's retirement plans. and the dilutive effects from the issuance of equity. under American States Water's At-The-Market Offering Program. which decreased consolidated earnings by two cents per share.

Speaker Change: These favorable variance.

Speaker Change: These favorable variances were partially offset by higher operating expenses.

Speaker Change: Our <unk> per share unfavorable variance from losses incurred on our investments to fund one of the company's retirement plans.

Speaker Change: And the dilutive effects from the issuance of equity.

Speaker Change: Under American States water's at the market offering program.

Speaker Change: Which decreased consolidated earnings by <unk> <unk> per share.

Bob Sprowls: Our regulated utilities are on pace to invest a combined $170 to $210 million in infrastructure investments this year.

Speaker Change: Our regulated utilities are on pace to invest a combined $170 million to $210 million in infrastructure investments this year.

Eva Tang: With that, I will turn the call over to Eva to discuss earnings and liquidity. Thank you, Bob. Hello, everyone. Let me start with our first quarter results. recorded consolidated earnings worth $0.70 per share for the quarter as compared to $0.62 per share for the first quarter of last year. For our water utility, Golden State Water, reported earnings worth $0.52 per share compared to $0.48 per share last year. The $0.04 per share increase in 2025 was largely due to the new 2025 water rate as a result of receiving a final decision in connection with Golden State Water's general rate case.

Eva Tang: With that I will turn the call over to Eva to discuss earnings and liquidity.

Eva Tang: Thank you, Bob and Hello, everyone, Let me start with our first quarter retail.

Eva Tang: Recorded a consolidated earnings of <unk> 70 cents per share for the quarter.

Eva Tang: Compared to 52 cents per share for the first quarter of last year.

Eva Tang: While their utility Golden State water reported <unk> 52 cents per share compared to 48 cents per share last year.

Eva Tang: <unk> per share increase.

Eva Tang: Five largely due to the new 2025 widely as we can.

Eva Tang: Receiving a final decision in connection with Golden State water General rate case proceeding.

Eva Tang: Partially offset by higher operating expenses and losses generated on investments held to fund a retirement plan as compared to gains during the same period in 2024 due to financial market Lastly, there was a decrease in earnings of $0.02 per share due to the dilutive effect from the issuance of equity on the AWR as a market offering program. Our electric segment earnings were $0.07 per share for the quarter as compared to $0.05 per share for the same quarter in 2024, a $0.02 per share increase. primarily due to receiving the final CPUC decisions on the electric general rate case with the new 2025 electric rate as compared to 2022 rates used to record revenues during the first quarter of 2024.

Partially offset by higher operating expenses and loss generated in fact.

Eva Tang: Hello.

Rick: Hey, Rick haven't attacked as compared to a gain during the same period.

Paul.

Eva Tang: Due to financial market condition.

Rick: So I'll say that was it.

Rick: Decreasing <unk>.

Rick: <unk> per share.

Rick: Got it.

Rick: In fact issuance of equity.

Rick: The API at the market offering program.

Rick: Our electric segment earnings were seven cents per share for the quarter as.

Rick: Compared to five cents per share for Courtenay.

Rick: For <unk> per share increase.

Rick: Primarily due.

Rick: To financing.

Rick: On the electric general rate case, with the new 2025 electric rate.

Speaker Change: <unk> is to record revenue during the first quarter of 2024.

Eva Tang: Earnings from ASUS were $0.13 per share for the quarter, which was consistent with the same period in 2024.

Rick: Earnings from ex U S. Thanks.

Rick: Per share for the quarter, which was consistent with the same period in 2024.

Bob Sprowls: Which Bob will discuss Sega.

Speaker Change: Laxmi boxes from our parent company <unk> per share for the quarter when compared to losses of three the.

Bob Sprowls: The same quarter in 2004.

Bob Sprowls: Largely due to a decrease in interest expense, resulting from lower average interest rate and lower borrowing level at a caveat he got the credit facility.

Bob Sprowls: Consolidated revenues for the first quarter increased by $12 $7 million when compared to the first quarter.

Bob Sprowls: Revenue for the water segment increased by $11 $7 million.

Bob Sprowls: Largely due to it when you were trying to trying to fight a wider rate as a result of receiving a final transmission and Golden state water general rate case proceeding.

Eva Tang: Effective January 1, 2025, Golden State Water transitioned from a full revenue decoupling mechanism to a modified rate adjustment mechanism, known as the Monterey-Style Water Revenue Adjustment Mechanism, or the MBRAS. Zero water consumption for the first quarter of 2025. Approximated consumption levels adopted in the new 2025 rate. And therefore, Golden State Water's transition to the Ambram did not have a mature impact to revenues recorded during the first quarter. Revenue for the electric segment increased by $2.8 million, mainly due to new 2025 electric rates as compared to 2022 rates used to record revenues during the first quarter of last year.

Bob Sprowls: Effective January five 2025 Golden State water transitioned from April revenue decoupling back netting to a modified rate adjustment mechanism.

Bob Sprowls: The Monterrey style revenue adjustment mechanism or the <unk>.

Bob Sprowls: The whole water consumption for the first quarter of 'twenty.

Bob Sprowls: Hi, approximated function that was adopted in the new 2025.

Bob Sprowls: And therefore Golden state water transition to ban did not have a material impact to revenue.

Bob Sprowls: Nice quarter.

Bob Sprowls: Revenue for the electric segment increased by $2 $8 million, mainly due to <unk>.

Bob Sprowls: Even trying to quantify election rate as compared to <unk> core revenue during the first quarter of last year.

Eva Tang: Revenue from S.U.S. decreased $1.8 million, primarily due to lower construction activities during the quarter as they were negatively impacted by unfavorable weather conditions. which were less impactful during Q1 in 2024.

Bob Sprowls: As far as the U S decreased to $1 $8 million.

Due to lower construction activity accordingly.

Bob Sprowls: They were negatively impacted by unfavorable weather conditions.

Bob Sprowls: Quick that's impactful during Q1 and 2024.

Eva Tang: Turning to slide 9. Supply costs increased by $4.3 million, mostly due to an increase in customer water usage and higher overall per unit water supply costs. Also effective this year, Golden State Water transitioned from a full cost balance, supply cost balancing account to an incremental cost balancing account for supply cost. As a result, Golden State Water's earnings are now subject to favorable and unfavorable changes in the water supply source mix as compared to adopted supply source mix reflected in the revenue requirements. During the first quarter, our pumped water sources, which cost less than purchased water, were capable of meeting a greater portion of customer demand.

Bob Sprowls: Turning to slide nine.

Bob Sprowls: Supply costs increased by $4 $3 million, mostly due to an increase in customer water usage and higher overall.

Bob Sprowls: Why the supply cost.

Bob Sprowls: Also effective this year.

Bob Sprowls: Golden State water transmission.

Bob Sprowls: Cost power supply cost balance account true incremental cost balancing account for supply costs.

Bob Sprowls: As a result.

Bob Sprowls: Got it.

Bob Sprowls: Now subject to favorable and unfavorable changes in the wireless supply source mix.

Bob Sprowls: Compared to adopted the product choices to make.

Bob Sprowls: Reflected in the revenue requirement.

Bob Sprowls: During the first quarter, our pump water sources, which cost less and purchased water was capable of meeting a greater portion of customer demand.

Eva Tang: However, the favorable supply cost experience from the favorable supply mix during the first quarter may or may not continue during the remainder of the 2025 year. Looking at total operating expenses other than supply costs, consolidated expenses increased by $2 million compared to 2024. This increase includes the impact of the electric generator's decision issued in January, which authorized recovery of higher operating expenses, primarily for vegetation management and other wildfire mitigation efforts. These costs were previously excluded from customer rates and not expensed in the first quarter of last year. that they were being tracked in their Miranda account.

Bob Sprowls: However, this favorable supply cost experience.

Bob Sprowls: The favorable supply mix during the first quarter.

Bob Sprowls: Or may not continue during the remainder.

Bob Sprowls: At the time to kind of fight here.

Bob Sprowls: Looking at total operating expenses other list of high cost consolidated expenses increased by $2 million.

Bob Sprowls: 24 <unk>.

Bob Sprowls: Crazy income includes the impact of the electric General rate case decision issued in January which authorizes recovery of higher operating expenses.

Margaret Thatcher: Margaret Thatcher.

Margaret Thatcher: Vegetation management, either wildfire mitigation asset base.

Margaret Thatcher: <unk> costs were previously excluded customer rate.

Margaret Thatcher: And that expense in the first quarter of last year.

Margaret Thatcher: They were being tracked in memoranda accounts.

Eva Tang: They are now included in adopted electric revenue. In addition, the increase was due to higher overall operating expenses partially offset by lower U.S. construction expenses. Lastly, there was an overall decrease in other expenses, net of other income of $2.5 million due largely to losses generated on investment held to fund a retirement plan during the quarter, as compared to gains on investments during the same quarter in 2024 due to financial market.

Margaret Thatcher: Now included in adopted electric revenue.

Margaret Thatcher: In addition, the increase due to higher overall operating expenses.

Margaret Thatcher: Partially offset by lower U S construction expenses.

Margaret Thatcher: Lastly, there was an RFP.

Margaret Thatcher: Other expenses.

Margaret Thatcher: Other expense net of other income of $2 $5 million.

Margaret Thatcher: You would actually two losses generated investment held to finally I retirement plans during the quarter.

Margaret Thatcher: That's compared against our investment in the same quarter in 2010.

Margaret Thatcher: Four.

Margaret Thatcher: Financial market conditions.

Margaret Thatcher: This slide shows EPS bridge, comparing reported EPS for the first quarter of this year against the same period, 412% before.

Margaret Thatcher: Turning to liquidity net cash provided by operating activities was $45 $1 million for the quarter at the.

Margaret Thatcher: Compared to $45 8 million got looks like second quarter last year.

Margaret Thatcher: With the change primarily due to the timing of working capital items and <unk>.

Margaret Thatcher: <unk>.

Margaret Thatcher: A lot of cost out of here.

Margaret Thatcher: With the CPUC approved an efficient Macy's shop, both regulated utilities in January we have implemented a new electric rates during the quarter.

Margaret Thatcher: In addition, both of our utilities.

Margaret Thatcher: Neither file only seek approval of ferric advice letter phase out previously approved by regulatory mechanisms too.

Margaret Thatcher: To implement surcharges or additional base rate.

Eva Tang: For investing activities, our regulated utility invested $45.5 million on company-funded capital projects in the first quarter, and we will be on target to reach $170 to $210 million for 2025.

Margaret Thatcher: For investing activities, a regulated utility invested $45 5 million gallon a company funded capital projects in the first quarter.

Margaret Thatcher: And we will be our target to reach $170 million to $210 million for 2025.

Eva Tang: in terms of financing activities. American States Water, under its at-the-market offering program, raised a proceeds of $25.8 million during the first quarter, net of issuing costs and legal costs. In February, our electric segment completed an issue of $50 million in unsecured private placement notes that matured in 2030. In addition, earlier this week, American States Water and Golden State Water executed amendments to their credit agreement to extend the credit facility term from June 2028. to June 2029. As part of this amendment, American States Water also expended its credit facility borrowing capacity from $165 million to $195 million.

Margaret Thatcher: In terms of financing activity.

Margaret Thatcher: I can say is while they're under its aftermarket offering program great support.

<unk> of $25 8 million during the first quarter net of issuance costs and legal costs.

Margaret Thatcher: In February.

Margaret Thatcher: We expect when complete and issuing a $50 million unsecured private placement notes that matured in 2000.

Margaret Thatcher: In addition earlier this week American states water and Golden State water executed amendments to the credit agreement.

Margaret Thatcher: The credit facility term filing June 'twenty to 'twenty eight.

Margaret Thatcher: I do not.

Margaret Thatcher: As part of the Amendment American States water also expanded its credit facility borrowing capacity.

Margaret Thatcher: $65 million $295 million.

Eva Tang: American States Water currently maintains a credit rating of A-Stable with Standard & Poor's Global Ratings for S&P, while Golden State Water maintains an A-Plus Stable Rating with S&P and an A-2 Stable Rating with Moody's Investors Service.

Margaret Thatcher: American States water currently maintaining our credit rating of a stable with standard <unk> Poor's ratings.

Margaret Thatcher: <unk> well.

Margaret Thatcher: Golden State water maintained its AA plus stable rating with S&P and a <unk> stable rating.

Margaret Thatcher: Okay.

Eva Tang: These are some of the highest credit ratings in the U.S.

Margaret Thatcher: These are some of the highest credit ratings in the USA backfill into why the U S.

Bob Sprowls: investor-owned wallets in the With that, I'll turn the call back to Bob.

Margaret Thatcher: With that I'll turn the call back to Bob.

Bob Sprowls: Thank you, Eva. I'll begin with Golden State Water's General Rake. On January 30th, the CPUC issued a final decision in connection with the recent general rate case. covering 2025 through 2027. Final decision adopts the settlement agreement between Golden State Water and the Public Advocates Office at the CPUC or Cal Advocates. Among other items, the decision authorizes Golden State Water to invest $573.1 million and Capital Infrastructure over the three-year capital cycle. This includes $17.7 million of advice letter capital investment. to be filed for revenue recovery during the second and third year attrition increases. When those projects are complete.

Bob Sprowls: Thank you Eva.

Bob Sprowls: I'll begin with Golden State Water's general rate case.

Bob Sprowls: On January 30, the CPUC issued a final decision in connection with the recent general rate case covering.

Bob Sprowls: Covering 2025 through 2027.

Final decision adopts the settlement agreement between Golden State water and the public advocates office at the CPUC or <unk> advocates.

Bob Sprowls: Among other items the decision authorizes Golden state water to invest $573 $1 million.

Bob Sprowls: In capital infrastructure over the three year capital cycle.

Bob Sprowls: This includes $17 $7 million of advice letter capital investments to.

Bob Sprowls: To be filed for revenue recovery during the second and third year attrition increases.

Bob Sprowls: When those projects are completed.

Bob Sprowls: In addition, the approved settlement agreement includes $58.2 million of advice letter capital investments that began construction in 2023, which we expect to file for revenue recovery during the second and third year attrition increases when those projects are completed. For all of the advice letter projects, Golden State Water is allowed to accrue interest during construction at the adopted cost of debt and recover the full rate of return, including all applicable components of the revenue requirements. After the assets are placed in service, up until the assets are included in customer rates. Excluding Revenues for Advice Lettered Capital Projects adopted operating revenues, less water supply costs for 2025.

Bob Sprowls: In addition, the approved settlement agreement includes $58 $2 million of advice letter capital investments.

Bob Sprowls: It began construction in 2023.

Bob Sprowls: Which we expect to file for revenue recovery during the second and third year attrition increases when those projects are completed.

Bob Sprowls: For all of the advice letter projects Golden State water is allowed to accrue interest during construction at the adopted cost of debt.

Bob Sprowls: And recover the full rate of return, including all applicable components of the revenue requirement.

Bob Sprowls: After the assets are placed in service up until the assets are included in customer rates.

Bob Sprowls: Excluding revenues for advice letter capital projects.

Bob Sprowls: Adopted operating revenues less water supply cost for 2025.

Bob Sprowls: projected increase by approximately $23 million when compared to 2024. As we mentioned previously, the final decision ordered Golden State Water to transition from a full decoupling mechanism. and a full supply cost balancing account. which we again requested in the general rate case application. to a Modified Rate Adjustment Mechanism, a Monterey-style Water Revenue Adjustment Mechanism, or MRAS. and an incremental cost balancing account for supply costs. Effective January 1st, 2025. Without the continuation of a full revenue decoupling mechanism and a full cost balancing account for water supply. Company may be subject to future volatility in revenues and earnings as a result of fluctuations in water consumption by its customers.

Bob Sprowls: Are projected to increase by approximately $23 million.

Bob Sprowls: When compared to 2024.

Bob Sprowls: As we mentioned previously the final decision ordered Golden state water to transition from a full decoupling mechanism.

Speaker Change: Excuse me.

Speaker Change: And a full supply cost balancing account.

Speaker Change: Which we again requested in the general rate case application.

Speaker Change: Two a modified rate adjustment mechanism Monterey Monterey style water revenue adjustment mechanism or M ramp.

Speaker Change: And an incremental cost balancing account for supply costs effective January one 2025.

Speaker Change: Without the continuation of a full revenue decoupling mechanism.

Speaker Change: Full cost balancing account for water supply.

The company may be subject to future volatility in revenues and earnings.

Speaker Change: As a result of fluctuations in water consumption by our customers.

Bob Sprowls: and Changes in Water Supply, Sourc Final decision also adopted the company's MRAM rate design proposal. which authorized Golden State Water to increase the revenue requirement in its fixed service charges. to between 45 and 48% of the revenue requirement, depending on the rate-making area. representing approximately 65% of Golden State waters. Fixed Costs in Aggregate as Eva mentioned earlier. bill water consumption for this first quarter was similar to consumption levels adopted in the new 2025 rate And therefore, the transition from a full revenue decoupling mechanism to the MRAM did not have a material impact to revenues recorded during the first quarter.

Speaker Change: And changes in water supply source mix.

Speaker Change: Final decision also adopted the company's M Ram rate design proposals.

Speaker Change: Which authorizes Golden state water to increase the revenue requirement and its fixed service charges too.

Speaker Change: Between 45, and 48% of the revenue requirement, depending on the rate making area.

Speaker Change: Representing approximately 65% of Golden State waters.

Speaker Change: Fixed costs in aggregate.

Eva Tang: As Eva mentioned earlier.

Eva Tang: Billed water consumption for this first quarter was similar to consumption levels adopted in the new 2025 rate.

Eva Tang: And therefore, the transition from a full revenue decoupling mechanism to the M. Ram did not have a material impact to revenues recorded during the first quarter.

Bob Sprowls: In terms of water supply costs in the first quarter, our pumped water sources, which cost less than purchased water, were capable of meeting a greater portion of customer demand. However, this favorable water supply mix experienced during the first quarter may or may not continue during the remainder of the 2025 year. And our water utilities earnings will be subject to future volatility as a result of favorable and unfavorable changes in the water supply.

Eva Tang: In terms of water supply cost in the first quarter.

Eva Tang: <unk> pumped water sources.

Eva Tang: Which cost less and purchase water.

Eva Tang: We're capable of meeting a greater portion of customer demand.

Eva Tang: However, this favorable water supply mix experienced during the first quarter.

Eva Tang: May or may not continue during the remainder of the 2025 year.

Eva Tang: And our water utilities earnings will be subject to future volatility as a result of favorable and unfavorable changes in the water supply source mix.

Eva Tang: Compared to the adopted mix.

Eva Tang: On March five of this year Golden State water filed an application for rehearing of the Cpuc's decision.

Eva Tang: In the 2025 to 2027 general rate case.

Eva Tang: Asserting that the final decisions denial of Golden State Water's revenue decoupling proposal was not supported by the record.

Eva Tang: At this time management cannot predict the outcome of this matter.

Eva Tang: On January 14th of this year.

Eva Tang: The CPUC approved a request to defer the cost of capital application by one year to May one 2026.

Eva Tang: With the deferral Golden State water will retain its authorized return on equity of 10.06%.

Eva Tang: And a 57% equity ratio.

Eva Tang: Through the end of 2026.

Eva Tang: Turning our attention to slide 14, we present the growth in Golden State Water's adopted average water rate base.

Eva Tang: From 2018 through 2024.

Eva Tang: Which increased from $752 $2 million in 2018.

Eva Tang: The 1 billion $357 5 million in 2024.

Eva Tang: That is a compound annual growth rate of 10, 3% for the six year period using.

Eva Tang: Using 2018.

Eva Tang: As the base year for the calculation.

Eva Tang: Golden State water anticipates, a robust and sustained growth in its rate base over the next few years.

Eva Tang: As a result of receiving its recent general rate case decision.

Eva Tang: Not only authorized it to invest $573 1 million and capital infrastructure.

Eva Tang: But in addition to that capital investments of certain projects through advice letter filings.

Bob Sprowls: upon completion will contribute to a further growth in rate base in the second and third year of this cycle.

Eva Tang: Upon completion will contribute to further growth in rate base in the second and third year of this cycle.

Bob Sprowls: On January 16th of this year, our electric utility subsidiary received a final CPUC decision. and its general rate case. that approves the settlement agreement between Bear Valley Electric Cal Advocates, and the other intervener in the proceeding in its entirety. The proceeding sets rates retroactive to January 1st, 2023, and determines electric rates for the years 2023 through 2026. The decision, among other things, allows Bear Valley Electric to invest $75.6 million in capital infrastructure, including at least $23.1 million of advice letter projects over the four-year rate cycle. adopts a return on equity of 10.0% and a 57% equity ratio.

Eva Tang: On January 16th of this year, our electric utility subsidiary received a final CPUC CPUC decision.

Eva Tang: Dan its general rate case.

Eva Tang: That approves the settlement agreement between Bear Valley Electric.

Eva Tang: Cal advocates and the other intervenor and are proceeding in its entirety.

Eva Tang: Proceeding sits rates retroactive to January one 2023.

Eva Tang: And determines electric rates for the years 2023 through 2026.

Eva Tang: The decision among other things allows bear valley electric to invest $75 $6 million and capital infrastructure, including at least $23 one.

Eva Tang: $1 million of advice letter projects over the four year rate cycle.

Eva Tang: Adopts a return on equity of 10.0% and a 57% equity ratio.

Bob Sprowls: and approves recovery of requested capital expenditures and incremental operating costs incurred prior to 2023 in connection with its wildfire mitigation plan. These costs were not previously included in customer rates. In addition, the settlement provides increases in the adopted operating revenues of $2.2 million for 2025. and $3.3 million in 2026. Similar to 2024, the rate increases for 2025 and 2026 will not be subject to an earnings tax. previously mentioned advice letter projects of at least $23.1 million. are expected to generate additional annual operating revenues of approximately $3 million when the respective projects are completed, placed in service, and filed for recovery and customer rate.

Eva Tang: And approves recovery of requested capital expenditures and.

Eva Tang: And incremental operating costs incurred prior to 2023.

Eva Tang: In connection with its wildfire mitigation plans.

Eva Tang: These costs were not previously included in customer rates.

Eva Tang: In addition, the settlement provides increases and the adopted operating revenues of $2 $2 million for 2025.

Eva Tang: And $3 3 million in 2026.

Eva Tang: Similar to 2024.

Eva Tang: The rate increases for 2025, and 2026 will not be subject to an earnings test.

Eva Tang: The previously mentioned advice letter projects of at least $23 $1 million.

Eva Tang: Are expected to generate additional annual operating revenues.

Eva Tang: Of approximately $3 million when the respective projects are completed and placed in service and filed for recovery in customer rates.

Bob Sprowls: These projects also accrue allowance for funds used during construction. that will further increase. and Revenue Requirements.

Eva Tang: These projects also accrue allowance for funds used during construction.

Eva Tang: That will further increase.

Eva Tang: The revenue requirement.

Bob Sprowls: Lastly In April, our electric utility implemented new base rates to recover the revenue requirement associated with $11.6 million Capital Projects Approved for Recovery through Advice Letter.

Eva Tang: Lastly.

Eva Tang: In April our electric utility implemented new base rates to recover the revenue requirement associated with $11 $6 million.

Eva Tang: Of capital projects approved for recovery through advice letters.

Bob Sprowls: Let's continue to ASUS, which contributes the same earnings per share. year-over-year of 13 cents. There was an increase in management fee revenues resulting from the commencement of water and wastewater operations. in April 2024 at the new basis. Naval Air Station Patuxent River, and Joint Base Cape Cod. and a resolution of various economic price adjustments at Legacy Basin. These increases were offset by a decrease in construction activity. and higher overall operating expenses. During the quarter, construction activities were negatively impacted by unfavorable weather conditions. which we didn't experience to the same degree last year. The delays on construction activities are expected to be caught up during the remainder of 2025.

Eva Tang: Let's continue to ask us, which contribute the same earnings per share.

Eva Tang: Year over year of 13.

Eva Tang: There was an increase in management fee revenues, resulting from the commencement of water and wastewater operations.

Eva Tang: In April 2024.

Eva Tang: At the new bases.

Eva Tang: Aerospace in Patuxent River and joint base Cape Cod.

Eva Tang: And the resolution of various economic price adjustments at legacy basis.

Eva Tang: These increases were offset by a decrease in construction activity.

Eva Tang: And higher overall operating expenses.

Eva Tang: During the quarter construction activities were negatively impacted by unfavorable weather conditions.

Eva Tang: Which we didn't experience to the same degree last year.

Eva Tang: The delays on construction activities are expected to be caught up during the remainder of 2025.

Eva Tang: During 2024.

Eva Tang: <unk> was awarded $56 $5 million in new capital upgrade projects on.

Eva Tang: On all military basis served.

Eva Tang: For completion in 2024 through 2027.

Eva Tang: This is a record high for <unk>.

Eva Tang: We continue to project <unk> to contribute 59 to <unk> 63 per share this year and remain confident that we can effectively compete for new military base contract Awards.

Eva Tang: I'd like to turn our attention to dividends, which remain a compelling part of our investment story.

Eva Tang: Our board of directors have approved a second quarter cash dividend.

Eva Tang: Our quarterly dividend rate has grown at a compound annual growth rate or CAGR of eight 8% over the last five years through 2024.

Eva Tang: We continue to exceed our policy goal of achieving a compound annual growth rate in the dividend of more than 7% over the long term.

Eva Tang: Yeah.

Bob Sprowls: I'd like to conclude our prepared remarks by thanking you for your interest in American States Water.

Eva Tang: I'd like to conclude our prepared remarks by thanking you for your interest in American states water and well.

Operator: And we'll now turn the call over to the operator for questions. Ladies and gentlemen, at this time, we will begin that question and answer session. To ask a question, you may press star and then one using a touch-tone telephone. To withdraw your questions, you may press star and two. If you are using a speakerphone, we do ask that you please pick up the handset prior to pressing the key to ensure the best sound quality. Once again, that is star and then one, so join the question queue. We'll pause momentarily to assemble the roster.

Eva Tang: Now I'll turn the call over to the operator for questions.

Speaker Change: Ladies and gentlemen at this time.

Eva Tang: We'll begin the question and answer session.

Eva Tang: Ask a question you May press Star and then one using a touchtone telephone to.

To withdraw your question you May press Star two.

Eva Tang: If you are using a speaker phone would you add.

Speaker Change: Please pick up the handset part of the price is the key.

Eva Tang: You are the best sound quality.

Speaker Change: Once again that is star and then one for.

Eva Tang: John the question queue.

Eva Tang: We will pause momentarily to assemble the roster.

Jonathan Reeder: And our first question comes from Jonathan Reeder from Wells Fargo. Please go ahead with your question. Hey, good morning, Bob and Eva. Your apps on a good Q1 pretty straightforward update following the year and one just two months ago. But had two quick questions for you. Eva, I know you said you raised a little more than $25 million of equity via the ATM in Q1. Are you still, you know, expecting to raise about $60 million over the full year 2025? Yeah, I think in terms of full year, $60 million probably is our target, but, you know, right now we have some capacity in our credit facility, and so we'll reassess how much we need to fund the market for this year, but over the three-year vacancy cycle, we plan to do the $200 million.

Speaker Change: And our first question comes from Jonathan Reeder from Wells Fargo. Please go ahead with your question.

Jonathan Reeder: Hey, good morning, Bob and Eva.

Speaker Change: Congrats on a good Q1 pretty straightforward update.

Speaker Change: Following the year end, one just two months ago.

But.

Jonathan Reeder: Two quick questions for you Steve I know you said you raised a little more than $25 million of equity via the ATM in Q1.

Jonathan Reeder: Are you still expecting to raise about $60 million over the full year 2025.

Yeah.

Jonathan Reeder:

Jonathan Reeder: Yes, I think in terms of fully 60 million copies to our target, but right now we have some capacity.

Jonathan Reeder: Credit facility and so we'll reassess how much we may decide to market.

Jonathan Reeder: Over the three vacate cycle, we plan to do that $200 million well it did.

Eva Tang: We already did, I want to say, $100 million. $190 million, $170 million, oh no, $117 million so far, so we still have a total of $83 to $85 million left Jonathan, so we're playing out for this next Okay, so think of it as that 85 million now spread out over over two years. pop. Okay.

Speaker Change: Let's say 100.

Jonathan Reeder: Good night.

Speaker Change: Hi, Jay.

Speaker Change: 107.

Speaker Change: $17.

Speaker Change: So far so we still have a total of $83 million to $85 million last calendar. So so we're playing playing out.

Speaker Change: The next two years.

Speaker Change: Okay. So think of it of that $85 million spread out over two years.

Bob.

Speaker Change: Okay.

Bob Sprowls: What about on ASUS? Bob, is there, you know, any update on new military base privatization efforts? You know, are there any, any bases that have, you know, come up for RFP that are progressing and, you know, we could get some sort of decision in, you know, the next couple years or, you know, has... I guess the Trump administration's, you know, efforts around Doge or anything impacted the way you see that business evolving, either, you know, more privatizations occurring or consolidation of bases or kind of anything like that. I hope you're doing well. Yeah, so on the military front, as we've talked in the past, we sort of bifurcate the military program by a branch, and so we've got the Army, the Air Force, and the Navy.

Speaker Change: What about on <unk>.

Bob is there any update on new military base privatization efforts are there any.

Speaker Change: Any basins that have come up for RFP that are progressing and we could get some sort of decision.

Speaker Change: The next couple of years or.

Speaker Change: It has.

Speaker Change: I guess the Trump administrations.

Speaker Change: Efforts around those or anything.

Speaker Change: Packages the way you see that business evolving either.

Speaker Change: More privatization is occurring or consolidation of basis or kind of anything like that.

Jonathan Reeder: Yes, Hello, Jonathan Hope you're doing well.

Speaker Change: Yes, so on the military front.

Speaker Change: As we've talked in the past we sort of.

Speaker Change: Bifurcate military program by.

Speaker Change: Branch and so we've got the army the Air Force Navy.

Bob Sprowls: Do we see any actual privatizations in 2025? There are no 50-year privatizations out on the street at this point. Um, so. We probably won't see a privatization this year. fact, an award is what I would say. We do expect the Army to be putting Perhaps one or two privatizations up later this year. Although, you know, things are a little bit in a state of flux there, you know, not from a, hey, we've heard this or we've heard that. It's just more us trying to read the tea leaves that everyone else is reading. I'm not sure that means we're going to see a slowdown or an increase, but we recognize that we have a new administration in office and it could have an impact on water quality.

Speaker Change: Do we see any actual privatizations in 2025.

Speaker Change: There are no 50 year privatizations out on the street at this point.

Speaker Change: So the expectation there is.

Speaker Change: We probably won't see a prioritization this year.

Speaker Change: And in fact, an award is what I would say, we do expect the army.

Speaker Change: To be putting.

Speaker Change: Perhaps one or two privatizations up later this year.

Speaker Change: Although you know things are a little bit in a state of flux there.

Speaker Change: Not not from Hey, we've heard this where we've heard that it's just more.

Speaker Change: Just trying to read the tea leaves that everyone else is reading.

Speaker Change: I'm not sure that means we're going to see slowdown or an increase but we recognize that we.

Speaker Change: A new administration in office and it could have an impact on.

Bob Sprowls: Military-based privatizations, we're not sure which direction either at this But, you know, it looks like the Army is sort of completed, they're in the process of completing their assessment. Approximately a year ago, our team was at a presentation where they were... talking very favorably about doing, sort of cranking back up the privatization program. As you may know, we, the Army had sort of taken a pause since the end of 2020 on that. Do we think the Air Force is perhaps a little bit behind the Army in re-instituting their program? But the Navy has been, I would say, are the most excited about the program.

Speaker Change: Military based privatizations were not sure which direction either at this point.

Speaker Change: But it looks like the army is sort of completed they are in the process of completing their assessment approximately a year ago. Our team was at a presentation where they were.

Speaker Change: Talking very favorably about doing.

Speaker Change: Sure Cranking back up the privatization program.

Speaker Change: As you May know.

Speaker Change: The army has sort of taken a pause since the end of 2020 on that program.

Speaker Change: We think the air force is perhaps a little bit behind the army and re instituting their program.

Speaker Change: But the Navy has been.

Speaker Change: I would say.

Speaker Change: The most excited about the about the program and.

Bob Sprowls: As you know, they've done a couple of privatizations, one of which and the Tuxet River that we have. And then we have the JBCC contract, which is a 15-year contract. And it's possible we'll see something similar to that that could get worked on during 2025, but it's not entirely clear. about that. So there's a number of irons in the fire, some non-traditional. Those non-traditional are a little more difficult to bring to closure. Similar to JBCC, we had to spend quite a bit of time on that, but we're glad to have that contract. It's sort of a new contracting vehicle that is available to the Department of Defense at this point.

Speaker Change: As you know they've done a couple of privatizations, one of which is the Patuxent River that we had won.

And then we have the JBC contract, which is a 15 year contract.

Speaker Change: And it's possible that we'll see.

Speaker Change: Something similar to that that could get.

Speaker Change: I worked on during 2025, but it's not entirely clear.

Speaker Change: About that so.

Speaker Change: A number of irons in the fire.

Speaker Change: Some non traditional non traditional or a little more difficult to bring to closure.

Speaker Change: Similar terms like JBC we.

Speaker Change: We did spend quite a bit of time on that but we're glad to have that contract in it.

Speaker Change: It's sort of a new contracting vehicle that is available to the department of defense at this point.

Bob Sprowls: We're proud that we know how to make that work. And perhaps that gives us a leg up on the competition, at least on those kinds of private projects. That was a long-winded answer, I'm happy to expand and hopefully answer your questions. No, that was a great answer. It was a lot more detail and good detail than I was anticipating, so I'm kind of chuckling a little bit, but I thank you for it, Bob, and just following up. I don't expand. Oh, well, it must be a rough morning for me. No, I mean, I love when management teams give real answers to questions.

Speaker Change: We're proud that we know how to how to make that work and perhaps that gives us a leg up on the competition at least on those kinds of privatizations.

Speaker Change: So that was a long winded answer.

Speaker Change: Happy to.

Speaker Change: <unk> I hope hopefully I answered your question.

Speaker Change: That was a great answer, but there's a.

Speaker Change: A lot more detail in a good detailed than I was anticipating so I'm kind of chuckling, a little bit but thank you for Bob just currently.

Speaker Change: I just want to expand.

Good morning.

Speaker Change: No.

Speaker Change: I Love when management teams give give real answers to questions.

Bob Sprowls: It's refreshing. Yeah, that's kind of where we're at, Jonathan. I mean, as you know, there's uncertainty at the DOD right now, and as there is at a lot of different government agencies, but You know, we continue to make a lot of A lot of sales calls, so that's always important. Yeah, on on those non traditional like kind of the 15 year contracts. Do those like tend to be or do they necessarily have to be like kind of the smaller bases out there, whereas the larger ones would, you know, always go to the 50 year variety or you know, not necessarily Yeah, I think the I think the 15 year variety is I think it's just a little easier for the bases to get their arms around.

Speaker Change: Refreshing so.

Speaker Change: That's that's kind of where we're at Jonathan I mean its.

Speaker Change: So as you know there is uncertainty at the Dod right now and there is a lot of different government agencies, but.

Speaker Change: So far everything is going.

Speaker Change: Going fine on the bases, we have and.

Speaker Change:

Speaker Change: We continue to make a lot of.

Speaker Change: A lot of sales calls so that's always important.

Speaker Change: Gordon.

Speaker Change: Yes on those non traditional like kind of the 15 year contracts.

Speaker Change: Do those.

Speaker Change: Tend to be where do they necessarily have to be like kind of the smaller bases out there, whereas the larger ones.

Speaker Change: All of these go to the 50 year variety or not necessarily.

Speaker Change: Yes.

Speaker Change: I think the 15 year variety is.

Speaker Change: And I think that's just a little easier for the basis to get their arms around 50 years is a long time.

Bob Sprowls: 50 years is a long time. Obviously, we like the 50-year contracts. Those are very, very well-run privatizations by the Defense Logistics Agency Energy. Very, very sort of efficient bidding processes. Exchange for Services, the one we did at JBCC, took a long time. kind of invented. us and JBC sort of vetted a road map for that, and now it's, I guess, another tool in the tool belt for the government that may be... You know, it might make it easier for them to sign up to a 15-year contract than a 50-year contract. So we'll see if there's those kinds of things out there.

Speaker Change: We're obviously, we like the 50 year contracts those are very very well run privatizations by the defense Logistics Agency energy.

Speaker Change: Various various sort of efficient bidding processes.

Speaker Change: Exchange for services is the one we did at JBC took a long time.

Speaker Change: We kind of invented.

Speaker Change: US in JBC sort of embedded a roadmap for that and and now its I guess another tool in the tool belt for the further government that may be.

Speaker Change: It might make it easier for them to sign up to a 15 year contracts and a 50 year contract.

Speaker Change: So we'll see if there is.

Speaker Change: Those kinds of things out there.

Bob Sprowls: You know, we are pursuing at least one of those. And then we're also seeing other, I wanna say non-traditional type privatizations that will take probably several years. run to ground if in fact they come to fruition. So I guess my point is it's not just the 50-year utility privatization template, but we do hope that the Army and the Air Force are back... pursuing that. Got it. Okay.

Speaker Change: We are we are pursuing at least one of those and then we're also seeing.

Speaker Change: Other I want to say non traditional.

Speaker Change: Type privatizations that will take.

Speaker Change: Probably several several years.

Speaker Change: Run to ground if in fact, they come to fruition.

So I guess my point is does not just the 50 year utility privatization template.

Speaker Change: But we do hope that the army and Air Force are back.

Speaker Change: Pursuing that.

Speaker Change: Got it okay well.

Bob Sprowls: Well, good luck as you pursue those, you know, contracts and continue executing on the regulatory front. You can at least take a little bit of pause, be in between all the rate cases and the cost of capital extension. So that's good from a regulatory risk perspective. But thanks for the update and the time. Yeah, thank you, Jonathan. A little less activity on the regulatory front this year so far. So that's, that's nice. Last year was lot of a lot of work and a lot of Well, I mean, you know, we think we got two good decisions, and, you know, you just got to work hard on those things and try to get settlements, and we think we got a couple good ones.

Speaker Change: Good luck as you pursue those contracts end.

Speaker Change: Continue executing on on the regulatory front that you can always take a little bit of pause.

Speaker Change: In between.

Speaker Change: All the rate cases.

Speaker Change: Our cost of capital extension.

Speaker Change: So that's good from a regulatory risk perspective, but thanks for the update on the time.

Jonathan Reeder: Thank you Jonathan.

Jonathan Reeder: A little less activity on the regulatory front. This year. So far so that's nice last year was a.

Jonathan Reeder: A lot of a lot of work and a lot of.

Speaker Change: Uh huh.

Speaker Change: Well I mean, we think we've got two good decisions.

Speaker Change: You just got to work hard on those things and try to get settlements and we think we are.

Got a couple of good ones so thank.

Operator: Thank you for your questions. Once again, if you would like to ask a question, please press star and then 1. To withdraw your questions, you may press star and 2.

Speaker Change: Thank you for your for your questions.

Speaker Change: Once again, if you would like to ask a question. Please press star and then one.

Speaker Change: All your questions you May press star two.

Operator: Okay, well, Jamie, if we aren't getting any other questions, we can wrap it up. Is that okay? Absolutely. With no further questions, I'll turn the floor back over to you, Mr. Sprowls, for closing remarks. Thank you, Jamie. I just want to thank everyone today for their participation and say that we look forward to speaking with you next quarter. Well, have a good rest of your week, everybody. And with that, ladies and gentlemen, we'll conclude today's conference call and presentation. We do thank you for joining. You may now disconnect your line.

Jamie: Okay, Jamie if we arent getting any other questions. We can wrap it up is that okay.

Jamie: Absolutely with no further questions I'll turn the floor back over to you Mr. <unk> for closing remarks.

Speaker Change: Thank you Jamie I would just I just wanted to thank everyone today for their participation and we look forward to speaking with you next quarter.

Speaker Change: Have a good rest of your week everybody.

Speaker Change: And with that ladies and gentlemen, we will conclude today's conference call and presentation. We do thank you for joining you may now disconnect your lines.

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